Greyzone,a company that creates customized furniture,is based in Terrania,but is looking to enter other countries as well.The company identifies the country of Nyevka as a good option,as the entry barriers to new companies are low.Which of the following would most indicate that Greyzone is following a diversification strategy?
A)As the lifestyles of the people in the two countries are similar, Greyzone did not need to modify its products in the new market.
B)Greyzone leaves the Terranian market entirely in order to establish itself in the Nyevkan market.
C)Noting that Nyevka lacks well-established suppliers of office equipment, Greyzone begins to supply these products.
D)Greyzone manufactures furniture in Terrania itself, and ships it to Nyevka without setting up outlets in Nyevka.
E)Noting that the production costs would be lower in Nyevka, Greyzone shifts its production operations entirely to Nyevka.

Question

Quizplus · Accepted Answer

By diversifying into supplying office equipment in addition to customized furniture, Greyzone is expanding its product range and entering a new market. Options A and D describe an expansion strategy within the same product line or market. Option B describes an exit strategy from one market and entry into another. Option E describes a cost-reduction strategy, which is not necessarily related to diversification. Therefore, option C is the most indicative of a diversification strategy.

Greyzone,a Company That Creates Customized Furniture,is Based in Terrania,but Is