Corporate Strategy Analysis Discussion Summary Essay
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“Corporate strategy identifies the set of businesses, markets, or industries in which the organization competes and the distribution of resources among those businesses” (Bateman & Snell, 2011). There are four basic alternatives for corporate strategy. These strategies include concentration, vertical integration, concentric diversification and conglomerate diversification. Every company has their type of corporate strategy that they follow to include Coca-Cola, Xerox, Southwest Airlines, and VF. In 2004 Coca-Colas CEO Neville Isdell agrees to come out of retirement and becomes cokes new chief executive.
Coca-Cola’s worse drop in sales at 24% resulted in the return of Neville Isdell (Foust, 2014). With the return of Neville, Coca-Cola agreed to use a corporate strategy of their own (vertical integration) when they bought Glaceau’s vitamin water. Coca-Cola also came out with their coffee cola (Coke Blak) and their green tea (Envigo).
The decision to purchase vitamin water was vital to the increase of Coca-Cola’s sales and bring them back into competition with PepsiCo. Coca-Cola is using an aggressive strategy to expand globally with their carbonated and non-carbonated drinks.
To this day Coca-Cola is still expanding with their products such as Fuze and Gold Peak tea. Anne Mulcahy began the transformation of Xerox by following a concentrated strategy by focusing on a single industry. She pursed concentrated strategy by first reducing Xerox nearly $18 billion in debt. She accomplished this by cutting billions of dollars through slashing of jobs and selling off divisions. Anne Mulcahy then evaluated alternatives by pouring resources into a consulting division; this made the company more accessible for potential clients and customers.
She developed a new business strategic plan, although a risky choice helped the organization seize new opportunities or thwart challenges. She also closed the desk top printers division and moved away from expensive consumer printers with functions nobody wanted. Xerox took new technology and moved into colored digital printing and started developing high end color commercial printers. Xerox made this decision because the profit margin of color pages was five times that of black and white copies. Xerox used the strategy of concentric diversification by moving into a new business that was related to the company’s core business. Xerox then purchased office Services Company and Image Services for 1.5 billion dollars to demonstrate its new marketable high end color digital printers and copier services.
Bateman,T.S., & Snell, S.A. (2011). Management:Leading & collaborating in a competitive world (9th ed.). New York,NY: McGraw-Hill Irwin. Foust, D. (2014). Gone Flat. Retrieved from http://www.businessweek.com/stories/2004-12-19/gone-flat