Financial ManagementMCQQuestion 5511 of 217
All Questions ADevelop a new range of organic produce to attract a new segment of
customers.
BImprove functional efficiency of its farm equipment to increase
productivity and reduce cost of production.
CPurchase a number of farms to increase production.
DAdd a few channels of distribution to attract customers in related market
areas.
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Correct Answer
✅ Option B — Improve functional efficiency of its farm equipment to increase productivity and reduce cost of production.
All Options:
- ADevelop a new range of organic produce to attract a new segment of customers.
- BImprove functional efficiency of its farm equipment to increase productivity and reduce cost of production. ✓
- CPurchase a number of farms to increase production.
- DAdd a few channels of distribution to attract customers in related market areas.
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Detailed Solution & Explanation
Correct Answer: Option **B**
Explanation:
A **Stability Strategy** is a corporate-level strategy where a firm is satisfied with its current position and focuses on maintaining its status quo, consolidating its position, and focusing on incremental improvements in functional efficiency rather than aggressive expansion.
* **Option B** (*Improve functional efficiency of its farm equipment to increase productivity and reduce cost of production*) directly supports a stability strategy because it aims to optimize existing operations internally to survive competitive pressures without expanding the scope of the business. * **Option A** (*Develop a new range of organic produce to attract a new segment of customers*), **Option C** (*Purchase a number of farms to increase production*), and **Option D** (*Add a few channels of distribution to attract customers in related market areas*) are all characteristics of **Expansion (Growth) Strategies** (such as product development, horizontal acquisition, and market development respectively).
Hence, **Option B** is the correct answer.
* **Option B** (*Improve functional efficiency of its farm equipment to increase productivity and reduce cost of production*) directly supports a stability strategy because it aims to optimize existing operations internally to survive competitive pressures without expanding the scope of the business. * **Option A** (*Develop a new range of organic produce to attract a new segment of customers*), **Option C** (*Purchase a number of farms to increase production*), and **Option D** (*Add a few channels of distribution to attract customers in related market areas*) are all characteristics of **Expansion (Growth) Strategies** (such as product development, horizontal acquisition, and market development respectively).
Hence, **Option B** is the correct answer.
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