Final answer:
A company in a single product market typically has one business-level strategy to manage its core product and one corporate-level strategy to guide the overall direction. Diversification can be a risk mitigation strategy, but it may dilute the company's focus on its core competencies.
Step-by-step explanation:
A company competing in a single product market often focuses on its core competency, which can lead to more success than trying to offer a wide range of products. Typically, such a company would have one business-level strategy centered on the production and sales of that single product, which includes defining its competitive position and determining how to create value for customers. Additionally, it would also have one corporate-level strategy which involves decisions made at the highest level of the organization concerning the overall scope and direction of the corporation.
While having a singular focus can be beneficial, especially in establishing a competitive advantage, it also poses risks, such as vulnerability to market changes and dependence on a single product line. Some argue that diversification can mitigate these risks. However, diversification may not always be the best option for a company, especially if it strays too far from its core competencies. In business strategy, there's no one-size-fits-all approach, and each company must carefully assess its unique situation and competitive environment.