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)