Skip to content

CMA Intermediate · Operations Management and Strategic Management · Formulation and Implementation of Strategy

A Pune auto-components maker, which earlier supplied only to two-wheeler makers, starts supplying similar components to tractor manufacturers using its existing product line. Which growth strategy does this represent?

This is market development, because the firm is taking its existing component line into a new customer segment, tractor manufacturers. No new product is created, so it is not product development or diversification, and it has not moved into input supply, so it is not backward integration.

  1. AMarket developmentCorrect
  2. BProduct development
  3. CConcentric diversification
  4. DBackward integration

Explanation

The firm sells an existing product to a new customer segment, which is market development. Product development would need new products for existing markets. Concentric diversification would involve new related products for new markets, and backward integration concerns moving into supply of inputs.

Did you get it right without looking?

One question tells you little. A timed set on Formulation and Implementation of Strategy shows your real accuracy, how long you take and where you lose marks.

Practise Formulation and Implementation of StrategyFree diagnostic mock

More Formulation and Implementation of Strategy questions