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Transcription of this question: 4.Top Star (TS)Top Star (TS) manufactures sports footwear. Its products are sold through retail outlets andonline. Sales of TS’ footwear in retail outlets are falling. However, because e-commerceis growing rapidly, online sales are increasing. In 2018, TS’ total domestic sales were$5 000000 and total domestic market sales for the same time period were $50 000000.TS must consider several challenges:• Some businesses in the sports footwear industry are finding that selling online leads tomany problems and higher costsTS’ website is not user friendly. Customer complaints about the website and orderingproblems are increasingTS’ presence in international markets is weak and its product range is limited. Thedirectors of TS want to develop a new line of running shoes but the company hasinsufficient finance for research, development and creating brand awareness.The directors think that TS should follow an external growth strategy. Two options are beingconsidered:Option 1: Some directors propose a merger with a footwear manufacturer, themultinational company All Champion, which would allow TS to be more competitiveOption 2: Other directors propose a merger with a footwear retailer that has a strongpresence in domestic and international markets.The finance manager believes that merging with All Champion could hurt TS’ reputation.TS’ factories may have to close, which the local population may resent.

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