ConAgra, a diversified food producer, increases its power over suppliers by centrally purchasing huge quantities of packaging materials for all of its food divisions. This is an example of using
A)related diversification to acquire economies of scope by leveraging pooled negotiating power.
B)related diversification to acquire market power by leveraging pooled negotiating power.
C)unrelated diversification to acquire financial synergies through portfolio management.
D)unrelated diversification to acquire parenting, restructuring, and financial synergies through restructuring and parenting.

Question

Quizplus · Accepted Answer

ConAgra uses pooled negotiating power to enhance market power. They do this to increase their power over suppliers by centrally purchasing huge quantities of packaging materials for all of its food divisions.

ConAgra, a Diversified Food Producer, Increases Its Power Over Suppliers