Sweet Leaf Tea,a Texas-based maker of bottled iced tea,is a small but fast-growing firm that has gained a loyal following for its use of fresh,organic ingredients in its beverages.Although beverage industry experts recommended that Sweet Leaf replace the organic cane sugar and honey it uses with less costly high-fructose corn syrup,Sweet Leaf refused because of the company's mission to provide a high-quality,organic beverage to consumers.The 11-year-old company has 50 employees,and its products are available in 30% of the U.S.market.Sweet Leaf Tea recently received multimillion dollar investments which will enable the business to expand its national presence. Which of the following,if TRUE,would best support the argument that Sweet Leaf Tea should implement a corporate-level strategy of concentration?
A) Sweet Leaf Tea can expand its customer base and reduce costs by selling its products directly at Sweet Leaf stores.
B) Sweet Leaf Tea can develop a national name by adding new product lines, such as organic snack foods and organic coffee.
C) Sweet Leaf Tea's marketing research indicates that customers would purchase the organic beverages more frequently if the prices were lower.
D) Sweet Leaf Tea can achieve growth by aggressively selling its beverages in current markets where loyal customers will help boost word-of-mouth.

Question

Quizplus · Accepted Answer

A corporate-level strategy of concentration means that the firm limits itself to one line of business, which in this case means focusing only on making tea. Sweet Leaf could boost sales of its current products by more aggressively selling and marketing in its current markets. Vertical integration involves establishing Sweet Leaf Tea stores, while diversification means adding new product lines.

Sweet Leaf Tea,a Texas-Based Maker of Bottled Iced Tea,is a Small