Accounting

1. What is corporate-level strategy and why is it important? A specific action firms takes to gain a competitive advantage by selecting and managing a group of different business competing in different product markets. Corporate level strategies held companies select new strategic positions-positions that are expected to increase the firm’s value.

The importance of corporate level strategy is as follows:

These types of strategies will help companies decide what strategic positions to use depending on each market is doing during a specified time period.

They play a vital role in deciding the competitive position of the firm in the market.

They help in retaining the customer base.

If properly taken, reduce the level of risk to be faced by the firm.

They are very helpful in the organizations sustainability.

2. What are the different levels of diversification firms can pursue by using different corporate-level strategies? There are three different levels of diversification that firms may pursue by using different corporate-level strategies.

Low level diversification: includes single and dominant level business strategy. In such business strategies companies generate their maximum revenue from their core business areas.

Moderate to high level diversification: is the strategy where companies use related diversification strategy for their business. All the businesses in these cases are linked to each other.

Very high level diversification: is where companies use unrelated diversification strategy for their business purposes. Companies that generally use such strategy are known as conglomerates

3. What are three reasons firms use to diversify their operations? To increase a company's value: This is one of the major reasons why a company may choose to diversify its operations. Diversifying its business will lead to the company creating an edge over rest of its competitors which lead to sustainability of the business.

To decrease a company's value: Here the...