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CS Professional · Strategic Management and Corporate Finance · Business Policy and Formulation of Functional Strategy

Kaveri Auto Ltd's business strategy is rapid market-share growth through new variants. Its marketing head plans aggressive pricing and wide distribution, but the finance head restricts funds to protect liquidity and the HR head freezes hiring. What is the core strategic problem illustrated?

The problem is a lack of integration and consistency among functional strategies. Marketing pursues growth, while finance and HR restrict funds and hiring, so the functions do not support the growth-oriented business strategy. Effective functional strategy requires coordination across functions and alignment with the business-level plan.

  1. ALack of integration and consistency among functional strategies with the business strategyCorrect
  2. BExcessive diversification at the corporate level
  3. CWrong choice of vision statement
  4. DOveruse of outsourcing in the value chain

Explanation

Functional strategies must be mutually consistent and support the business strategy. Here marketing pursues growth while finance and HR constrain resources, so the functions pull in different directions. Nothing in the case concerns diversification, vision wording or outsourcing.

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