What is the primary goal of corporate strategy in a multi-business firm?

• A. Explain how a multi-business firm creates value across its portfolio.
• B. Focus only on cost reduction within a single unit.
• C. Achieve rapid short-term profits at any cost.
• D. Align marketing campaigns across products.

Answer: (A)

Creating value across the entire portfolio by choosing which businesses to own, how to allocate capital among them, and how to leverage shared capabilities is the central aim. In a multi-business firm, corporate strategy asks how the whole set of businesses fits together to raise overall value, not just how to improve a single unit. This involves decisions about which markets to compete in, how to distribute resources (money, people, technology) across units, and how to realize synergies—shared platforms, brands, buying power, or knowledge transfer—that make the whole greater than the sum of its parts. It also considers risk diversification and the financial structure needed to stabilize performance over time. The other ideas focus on narrower goals or short-term tactics that don’t capture the portfolio-wide objective of maximizing total corporate value. For example, cutting costs in one unit, chasing quick profits at any cost, or aligning marketing across products are more about individual-unit performance or specific functions than about optimizing the entire portfolio.