Akins Corp. had focused only on alcoholic beverages for the last two decades. Now, the company is considering entering the soft drink market. Which of the following corporate strategies will most likely be adopted by the company?
A) vertical integration
B) related diversification
C) unrelated diversification
D) concentration
E) low-cost strategy

Question

Quizplus · Accepted Answer

Akins Corp. currently operates in the alcoholic beverage market and is now considering entering the soft drink market. This suggests that the company is pursuing a related diversification strategy, as it is expanding into a market that is somewhat related to its current operations. Vertical integration would involve the company acquiring businesses that are part of its supply chain or distribution network, which is not directly relevant to Akins Corp.'s situation. Unrelated diversification would involve the company entering a market that is not related to its current operations, which is not the case here. Concentration would involve the company focusing even more on its current alcoholic beverage market, rather than expanding into a new market. Low-cost strategy is a functional-level strategy that involves reducing costs in a specific area, and is not relevant to Akins Corp.'s decision to enter a new market.