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CA Intermediate · Financial Management and Strategic Management · Introduction to Strategic Management

Kaveri Pharma's corporate office decides to enter the veterinary medicines market through a new subsidiary. Separately, the head of its existing cardiac-drugs division decides how to compete against rival brands in that division using pricing and distribution. Which pair correctly matches these decisions to the levels of strategy?

Entering a new market through a subsidiary is a corporate-level strategy because it decides the portfolio of businesses, while the cardiac division's competitive approach on price and distribution is a business-level strategy because it concerns competing within one business.

  1. AEntering veterinary medicines is business-level; the cardiac division's competition is corporate-level
  2. BEntering veterinary medicines is corporate-level; the cardiac division's competition is business-levelCorrect
  3. CBoth are functional-level strategies
  4. DEntering veterinary medicines is functional-level; the cardiac division's competition is corporate-level

Explanation

Choosing which businesses or markets to enter is a corporate-level matter, concerning the scope of the whole portfolio. How a single business unit competes in its own market is business-level strategy. The first option reverses the two levels.

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