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

Rohan Pharma Ltd has a corporate office that decides which of its three businesses (generics, diagnostics and consumer health) to invest in or exit. The head of the diagnostics business then decides how to compete against rival labs, and the diagnostics marketing manager plans the advertising spend for the year. Which of the following correctly matches the levels of strategy in this order?

The correct sequence is corporate, business, functional. Deciding which businesses to invest in or exit is corporate strategy, deciding how diagnostics competes with rivals is business strategy, and planning the marketing department's advertising spend is a functional strategy supporting the business strategy.

  1. ACorporate level, business level, functional levelCorrect
  2. BBusiness level, corporate level, functional level
  3. CFunctional level, business level, corporate level
  4. DCorporate level, functional level, business level

Explanation

Choosing which businesses to be in is a corporate-level decision. How to compete within one business is a business-level (competitive) strategy. The marketing plan supports the business strategy and is functional-level. Hence the sequence is corporate, business, functional; the other orders misplace at least one level.

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