question archive (A) One way companies grow is to launch new businesses into market segments where they have not previously competed
(A) One way companies grow is to launch new businesses into market segments where they have not previously competed
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(A)
One way companies grow is to launch new businesses into market segments where they have not previously competed. For example, GE, starting with an incandescent lamp business, has moved to businesses covering more than 700 product markets. By all counts, GE's diversification strategies have been successful.
On the other hand, consider the case of McDonald's' diversification strategy of entering the hotel business in Switzerland. In March of 2001, they opened two hotels, and as a result of poor performance, by August 2003 the decision was made to sell the hotels.
Review the video clip
https://www.youtube.com/watch?v=FcD-Fn-LzU0&feature=youtu.be and then comment on why you think their diversification strategy failed?
(b). To act ethically in business it is only necessary to follow the law. Do you agree or disagree with this statement? Why or why not?
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Answer:
A. From the clip, I think McDonald's strategy failed because they began with a very high standard restaurant whereby it is highly computerized with limited human customer care service. Their strategy aimed at high profile people which locked out low profile people. Also, they didn't do thorough research on the implications of using mainly IT to operate. Hence, someone could miss to find the room number after getting the key. Moreover, their high end technology in the restaurant could not favor those who didn't know how to operate them.
B. I disagree with the statement because law does not cover all ethical guidelines that business should follow. Ethics can be driven by current events and the business owner will make judgement based on what seems to be right. Law will provide limited scope of standards. Ethics are person's instinct to do right. Therefore, businesses should consider what is moral to do and it shall have covered wider scope beyond what laws should have covered.
