Final answer:
Cummins showcases a strategy of diversification as it manages multiple product lines across different sectors, applying this strategy to mitigate risks and take advantage of synergies.
So option (A) is correct.
Step-by-step explanation:
Cummins, with its multiple product lines spanning engines, power generation, fuel systems, turbo technologies, filtration, and emissions solutions, is displaying a strategy of diversification. This involves expanding into multiple products or services beyond its original or primary product line. Companies often diversify to manage risks by smoothing out potential fluctuations in a single market, as well as to leverage existing capabilities and create synergies between different product lines.
Integration, on the other hand, relates to how a company may streamline its supply chain by owning or controlling its suppliers or distributors. Specialization refers to focusing on a single or a few core competencies to generate a competitive advantage. Standardization involves making products or components uniform to reduce costs and improve quality.
Therefore, the correct answer to the student's question is A. Diversification.