Corporate Strategy Analysis
Corporate Strategy Analysis
The four basic alternatives when using corporate strategy in the planning function of management are concentration, vertical integration, concentric diversification, and, conglomerate diversification. After viewing the Destination CEO videos regarding Coco-Cola, Southwest Airlines, VF Corporation, and, Xerox, I can easily identify the strategy used by each CEO. Coca-Cola CEO Neville Isdell retired from Coca-Cola in 2001 after serving 35 years with the company. When Mr. Isedell left Coca-Cola sales began to drop, there was high turnover, and low morale threatened the company’s future. Mr. Isdell recognized the need for a new strategy and change, after seeing what other competitors were doing. He seen that Pepsi had diversified their options and Coca-Cola needed to do the same. I believe vertical integration strategy was used here. Coca-Cola bought the product vitamin water, in order to dive into the non-carbonated beverage sector market and expand within the industry. Coca Cola is trying to control the global market through aggressive strategy and branding campaigns, with its carbonated and non-carbonated beverages.
Southwest Airlines CEO Gary Kelly has managed to keep the company afloat as one of the most profitable airlines in the country. Mr. Kelly always travels at the back of the aircraft, talking to customers and taking notes of their expectations and complaints. I believe that Mr. Kelly used the concentration strategy to focus only on the airline industry to sustain the company’s profitability. In order to maintain profits, CEO Gary Kelly’s strategy was to keep cost low, fly the same 737 aircrafts so that parts and maintenance stay easy, and treat all customers like kings and queens including employees. Business week (2014) However, Southwest Airlines must expand in the future to remain a profitable company. VF Corporation is the largest apparel maker in the world. They are the biggest seller of jeans, such as wrangler and, lee brands. VF CEO Mackey McDonalds focus on planning and preparation for the unexpected and customer connection. Mr. McDonalds biggest challenges was the restructuring of the company in 2001, cutting 13,000 jobs, and moving manufacturing jobs overseas to countries as China and India due to cheap labor.
The company model was the taste for branding the lifestyle behind the brand; they believe that investing in strong consumer recognition is better than high-fashion brands. VF Corporation continues to expand their brands with the recent acquisition of the Eagle Creek travel bag Company, and Majestic Athletic Company, which sells baseball gear. I think that the CEO used vertical integration strategy to expand their line of products and, distribution channels. Anne Mulcathy became the first female CEO of Xerox. On the verge on bankruptcy due to weak sales, Xerox CEO decided to cut one billion in cost, cut numerous jobs, and shut down the desk-jet printer division. The company vision was to keep the corporate culture intact while pouring money into new technology, such as digital printing and imaging systems.
CEO Anne Mulcathy decided it was time for a complete transformation away from expensive consumer printer functions that nobody wanted, to high-end digital color printer and copier. In order for this new strategy to work, Xerox bought Global imaging systems for one and a half billion dollars. The gamble paid off with increase profits and sales. In conclusion, all organizations require different corporate strategies based on their current situation. Corporate strategies are important in order to sustain profits or to establish a change in direction when the organization fails to reach intended goals. In today’s competitive global markets, organization must consider diversification and expansion into unrelated markets.
Bateman, T.S & Scott, AS. (2011), Management: Leading & collaborating in a competitive world (9th ed.); Retrieved from The University of Phoenix eBook Collection database. Business week (2014). Destination CEO video, Southwest Airlines [Video file].Retrieved from http://mhlearningsolutions.com/cs/cs.php Business week (2014). Destination CEO video, VF Corporation [Video file]. Retrieved from http://mhlearningsolutions.com/cs/cs.php Business week (2014). Destination CEO video, Coco Cola [Video file]. Retrieved
fromhttp://mhlearningsolutions.com/cs/cs.php Business week (2014). Destination CEO video, Xerox [Video file]. Retrieved fromhttp://mhlearningsolutions.com/cs/cs.php