A corporate$-$level strategy is a plan of action that involves choosing industries and countries in which a company should invest its resources to achieve its mission and goals. In choosing a corporate$-$level strategy, managers ask, $$How should the growth and development of our company be managed to increase its ability to create value for customers $($and thus increase its performance$)$ over the long run?$$ Managers of effective organizations actively seek new opportunities to use a company$$s resources to create new and improved goods and services for customers.

The four principal corporate$-$level strategies that managers use to help a company grow and keep it at the top of its industry, or to help it retrench and reorganize to stop its decline, are $(1)$ concentration on a single industry, $(2)$ vertical integration, $(3)$ diversification, and $(4)$ international expansion. An organization will benefit from pursuing any of these strategies only when the strategy helps further increase the value of the organization$$s goods and services so that more customers buy them. This exercise will give you the opportunity to differentiate among these strategies by recognizing the situations in which each is most appropriate.

Instructions: For each descriptor, decide which type of strategy is used.

$1.$ Apple $-$ Apple opened stores to sell the computers and other electronic devices it makes.

Concentration in a single industry

$2.$ Nike $-$ Nike reinvests profits into its sportswear product development.

Forward vertical integration

$3.$ Coca$-$Cola $-$ Coca$-$Cola buys a company that makes artificial sweetener that it will use to produce its sugar$-$free beverages.

Backward vertical integration

$4.$ McDonald$$s $-$ McDonald$$s buys chicken ranches to provide eggs to its restaurants.

Related diversification

$5.$ Kraft Foods $-$ Kraft Foods acquires a toy manufacturing company.

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$6.$ Gallo Wines $-$ Gallo Wines opened a new division to make the bottles it would use for the wines it produces.

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$7.$ General Electric $-$ General Electric purchases a plumbing supply manufacturing company.

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$8.$ Eggo Waffles $-$ Eggo Waffles buys a syrup$-$producing company to increase its market share in the breakfast foods industry.

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$9.$ Redken $-$ Redken manufactures shampoo, rinse, and other hair products. It buys a company that manufactures blow dryers, curling irons, and flat irons.

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$10.$ Campbell $-$ Campbell sold Godiva Chocolates and invested the money in its core soups business.

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