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CS Professional · Strategic Management and Corporate Finance · Introduction to Strategic Management

A company's business strategy is differentiation based on product quality and brand. Which functional level action would be most consistent with, and directly support, this strategy?

Investing in quality assurance and brand-building marketing is the consistent functional action. Functional strategies implement the business level strategy through departmental plans. Cutting quality spending contradicts differentiation, while unrelated acquisitions and divestments are corporate level decisions rather than functional ones.

  1. AReducing R&D and quality testing expenditure to cut costs
  2. BEntering an unrelated industry through acquisition
  3. CInvesting in quality assurance and brand-building marketing programmesCorrect
  4. DSelling off the business unit to the holding company

Explanation

Functional strategies must align with and implement the business strategy. Quality assurance and brand-building directly support differentiation. Cutting quality spend contradicts it, while acquisitions into unrelated industries and divestment are corporate level decisions, not functional ones.

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