Which one of the following is a defensive strategy?
A. Diversification
B. Vertical integration
C. Concentration
D. Divestiture
divestiture
The defensive strategy among the given options is Divestiture (Option D).
To determine which strategy is a defensive strategy among the options given (A. Diversification, B. Vertical integration, C. Concentration, D. Divestiture), we need to understand the characteristics of each strategy.
A. Diversification: This strategy involves expanding a company's products or services into new markets or industries. It is often seen as a way to reduce risk by spreading investments across different sectors.
B. Vertical integration: This strategy involves merging or acquiring companies that are either suppliers or customers of the acquiring company. It aims to increase control over the supply chain, improve efficiency, and reduce dependence on external partners.
C. Concentration: This strategy involves focusing on a single product, service, or market niche. It seeks to achieve a competitive advantage by specializing and becoming the dominant player in a specific area.
D. Divestiture: This strategy involves selling off parts of a company's assets or business units. It is usually done to improve the company's financial situation, refocus on core operations, or streamline operations.
Now, among these strategies, a defensive strategy typically aims to protect an organization from potential threats or risks. In this context, the defensive strategy is:
C. Concentration.
Concentration strategy allows a company to focus resources on a specific market or niche, becoming dominant and building competitive advantages. By concentrating efforts, the company can solidify its position and protect itself from external competitive forces.
To answer this type of question independently, it is crucial to have a good understanding of the concepts and definitions in the field of business strategy. Additionally, referring to reputable sources or textbooks on business strategy can provide further guidance and understanding.