CA Inter P6 · Chapter 10 · Question 10 of 10
Prakash Engineering has made pumps for 40 years. The board now decides to use its free cash to acquire a chain of diagnostic laboratories. At which level of strategy is this decision taken, and what type of strategy is it?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: A) Corporate level: unrelated (conglomerate) diversification
Explanation
Choosing to enter a new industry that has no link with existing products, markets or technology is a corporate-level decision about the firm's business portfolio. Since diagnostic laboratories have no relation to pump manufacturing, this is unrelated or conglomerate diversification.
More Introduction to Strategic Management MCQs
- Q2Which level of strategy deals with the question 'What businesses should we be in, and how should resources be allocated among them?'
- Q3Arogya Foods, one of five divisions of a diversified group, decides to compete in the packaged millet snacks market by offering clearly…
- Q4Which of the following best describes the difference between a vision and a mission?
- Q5Which of the following is NOT usually regarded as an element of strategic intent?
- Q6Which sequence correctly shows the stages of the strategic management process?