Statement – II : A “Star” is the market leader in a high-growth market, but it does not necessarily provide much cash.

Reason (R) : Organizations rightly try to diversify in order to spread their risks across several industries.

Statement – II : An industry analysis gives information regarding probable sources of competition.

(a) Environmental scanning (b) Strategy for outplay (c) Strategy formulation (d) Strategy implementation (e) Evaluation and control

(a) Threat of new potential entrants (b) Threat of substitute product / service (c) Bargaining power of suppliers (d) Bargaining power of buyers (e) Rivalry among current competitors (f) Rivalry among prospective competitors

(a) As rivalry among competing firm intensifies, generally industry profits decline or in few cases, industry becomes inherently unattractive. (b) Whenever new firms are allowed to enter a particular industry, the intensity of competitiveness among firms becomes haphazard. (c) Generally competitive pressures arising from the substitute products decrease as the relative price of substitute products […]

Reasoning (R) : There is evidence that internal development might be preferable to acquisition because of differences between culture and shared valued.