Corporate Strategy Analysis Discussion Essay
Corporate Strategy Analysis Discussion
The Destination CEO videos offered a great insight into the lives of the people that have to run the huge organizations. It seems as if all of them have been faced with a challenge somewhere within their careers. The following paper will discuss the different corporate strategies: growth, stability, and renewal. It will also discuss how each CEO used the planning function of management which are concentration, vertical integration, and diversification.
I agreed with my teammates discussions of the CEOs of the companies. We discussed four CEOs: Neville Isdell, Coca-Cola CEO, Gary Kelly, Southwest Airline CEO, Mackey McDonald, VF Corporation CEO, and Anne Mulcahy, Xerox CEO. The corporate strategy that was used by Neville Isdell is growth and the planning function used is diversification. This is due to the fact that he is seeking to branch out by selling non-carbonated beverages. Such as Coca-Cola Black, a coffee and buying all or part of vitamin water from Glasso. The corporate strategies used by Gary Kelly are growth and stability, and planning function of management is concentration. The reason for this is locking up the hedge fund contracts, and keeping cost down. Continuing to fly the same planes (737) so that parts and maintenance are easy is a great strategy.
He also promotes treating customers like kings and queens, and employees even better! The corporate strategy used by Mackey McDonald is growth and the planning function is vertical integration and concentration. This is because of the focus on their lifestyle brands, such as Vans and Reef. They avoid getting involved in the high risk fashion brands & stayed with the commodity brands. Concentrate more on what the consumer would use every day. The corporate strategy used by Anne Mulcahy is renewal and the planning function is concentration. She took over when Xerox was on the brink of bankruptcy. She had to cut cost to be able to make the company successful. She even had to shut down the division that she herself had started (Destination CEO video). Kathleen McWain wrote, “Neville Isdell or the Indiana Jones of Coke displayed innovation and commitment to employee morale. Isdell handled flat sales growth, low morale and high turnover with aggressive globalization.
Coca-Cola decided to be a total beverage company introducing Dasani water and Fuze tea. Isdell convinced his board that just because Pepsi had branched into other markets successful Coke needed to go more towards global domination than diversification. Cokes sales are no longer sluggish, moral is high and employee turn over is low. I applaud Gary Kelly’s fuel hedge fund and that he is keeping Southwest airlines in the black. His flying in coach to experience what his passenger do gives Mr. Kelly a better insight into how his company runs, which I feel really helps him make tough resource allocation calls. That being said I do not think that Mr. Kelly’s Band-Aid patch of Southwest’s underfunded, profit destroying, pension plan dealt with the problem. (all pension plans paid after the employee retires are profit destroyers) I think it only delayed the fact that either the pension plan needs to be funded or pensioners must have their pensions reduced.
As Southwest is not the only underfunded pension plan in the country. I feel Southwest is waiting to see if another company is successful in reducing pension payments to retirees. I also feel that as soon as a company is successful in either dumping or strongly cutting pensioners pay other companies will follow and it will be like domino falling.” As stated in the introduction, my team wrote the same things about the videos. The CEOs of each company made the same impact on us all. They stories of the CEOs and what they went they endured, and in some cases still enduring, is motivational. I personally would have probably given up by now. However, the most motivational one to me is Anne Mulcahy, because she took a company on the brink of bankruptcy and turned Xerox around into a powerhouse. How awesome is that!
Bateman, T. (2011). Management: Leading and Collaborating in a Competitve World(9th ed.).
Retrieved from http//: www.ecampus.phoenix.edu.
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