1. The Kelly Bottling Company, located in a large metropolitan area of some 5 million people, produced and marketed a line of carbonated beverages consisting mainly of flavored soft drinks (not including colas), soda water, and tonics. They were sold in different types of packages and sizes to a wide variety of retail accounts. How might such a company expand its revenues by pursuing each of the different expansion strategies discussed in Exhibit 2.5?

2. Which diversification strategy is illustrated by each of the following acquisitions? What synergies or benefits might each purchase produce?

a. A packaged food companys acquisition of a fast-food company that features hamburgers and french fries.

b. A large retailers purchase of an interest in a company producing small appliances.

c. A tobacco companys acquisition of a beer company. d. An oil companys acquisition of an insurance company.

3. Critics argue that the BCG portfolio model sometimes provides misleading advice concerning how resources should be allocated across SBUs or product markets. What are some of the pos- sible limitations of the model? What might a manager do to reap the benefits of portfolio analysis while avoiding at least some shortcomings you have identified?