What strategy involves a business focusing on its core areas by cutting back on minor activities?

What strategy involves a business focusing on its core areas by cutting back on minor activities?

• A. De-integration
• B. Consolidation
• C. Diversification
• D. Vertical Integration

Answer: (A)

The strategy that involves a business focusing on its core areas by cutting back on minor activities is specifically known as de-integration. This approach allows a company to streamline its operations and concentrate resources and management efforts on its primary objectives, which can enhance efficiency and profitability. By stepping away from less essential activities, a business can better align its strengths and resources with its strategic goals, leading to improved overall performance. In contrast, consolidation often refers to the merging or combining of departments or companies to strengthen the market position, rather than cutting back on activities. Diversification entails a business expanding into new markets or product lines to reduce risk and reliance on core areas, which does not align with the idea of focusing solely on core functions. Vertical integration involves a company taking over different stages of production or supply chains, rather than cutting back, which also diverges from the concept of refocusing on core activities.

The strategy that involves a business focusing on its core areas by cutting back on minor activities is specifically known as de-integration. This approach allows a company to streamline its operations and concentrate resources and management efforts on its primary objectives, which can enhance efficiency and profitability. By stepping away from less essential activities, a business can better align its strengths and resources with its strategic goals, leading to improved overall performance.

In contrast, consolidation often refers to the merging or combining of departments or companies to strengthen the market position, rather than cutting back on activities. Diversification entails a business expanding into new markets or product lines to reduce risk and reliance on core areas, which does not align with the idea of focusing solely on core functions. Vertical integration involves a company taking over different stages of production or supply chains, rather than cutting back, which also diverges from the concept of refocusing on core activities.