discuss 4 (xt)

Read the 3 questions to answer completely

Discuss the importance of market power in a related diversification strategy.
Describe the reasons why firms pursue unrelated diversification
Describe the major political and economic risks associated with an international strategy.

1.5 pages

Solution Preview

Discussion

Question 1

Market power occurs when a firm can exceed the amount it charges on products in the firm without affecting the sales level or volume. Market power is very important during a diversification strategy by a firm. This is mainly because the consumers in the industry continue to purchase products from the firm regardless of the products that are competing against the firm. When a firm diversifies its product range, it delivers new products into the market. A firm that has considerate market power, consumers are bound to believe that the new products will provide the same value that is being provided in the current products

(466 words)