Question

Coca-Cola used to have a line of snack foods called Snax. Several years ago they stopped making all snack foods and have left the snack food industry entirely. Therefore, they were most likely employing which consolidation strategy?

		Divesting
		Relational
		Pruning
		Retrenchment

Given the following information... What is the Manufacturer's selling price and the Retailer's selling price?

Manufacturer’s cost = $15

Manufacturer’s markup = 10%

Wholesaler’s markup = 20%

Retailer’s markup = 30%

		Manufacturer SP = 16 Retailer SP = 29.76
		Manufacturer SP = 16.66 Retailer SP = 29.76
		Manufacturer SP = 16 Retailer SP = 28.57
		Manufacturer SP = 16.66 Retailer SP = 28.57

Answer 1

In the above case, Coca-Cola is adopting pruning strategy.

In pruning strategy, company start various divisions in the phase of expansion. Then, it starts removing the divisions which are not adding value to company.

Question 2:

Selling price = Cost / (1-markup)

	Cost	Markup	Selling price
Manufacturer	15.00	10%	16.67
Wholesaler	16.67	20%	20.83
Retailer	20.83	30%	29.76

Therefore option 2 is correct