Question

Scott Paper Co. has a paper towel and baby diaper business, both of which use paper products. The firm's paper production plant produces inputs for both businesses. Scott MOST likely uses the __________ diversification strategy to create __________.

Answer 1

Answer: Scott MOST likely uses the RELATED CONSTRAINED diversification strategy to create OPERATIONAL RELATEDNESS.

Answer 2

Scott MOST likely uses the RELATED CONSTRAINED diversification strategy to create OPERATIONAL RELATEDNESS.

Step-by-step explanation:

Generally a corporation that earns more than 70% of its income from one business unit, is said to use a related constrained diversification strategy.

Scott Paper's main business unit is not specified in this question, but we can assume it is baby diapers. Since baby diapers are Scott's main product, most of the company's resources will focus on producing baby diapers and selling baby diapers. Even the related product, paper towels, will be conditioned by the production and sales of baby diapers.

For example, if more baby diapers are needed, its production can use resources that were initially allocated to paper towels. If you need to sell more baby diapers, marketing resources that were previously allocated to paper towels can be reassigned to baby diapers.