Week 4 Assignment-Urgent

Running head: PUBLIC CORPORATIONS 1

PUBLIC CORPORATIONS 2

Assignment 4: Public Corporation

Désta N. Golden

Business 499 Capstone

Bachelor of Business Administrations

Strayer University

Professor David Kimble

July 25, 2015

1. For the corporation that has acquired another company, merged with another company, or been acquired by another company, evaluate the strategy that led to the merger or acquisition to determine whether or not this merger or acquisition was a wise choice. Justify your opinion.

The Coca-Cola Company is an American company best known for the flagship of the Coca-Cola product invented by Stith Pemberton in Columbus in 1886 and has its headquarters in Atlanta, Georgia. It is an international beverage company and a producer, retailer and a marketer of non-alcoholic beverage syrups and concentrates. Basically, the company operates a franchised distribution system dating from 1889 where the Coca-Cola company only makes the syrup concentrate which is then sold to various bottlers throughout the world who hold an exclusive territory. The company has had a long history of acquisitions, one being the acquisition of Minute Maid in the 1960 (Kumar, 2012).

In the early 1950s and towards its end, the Coca-Cola company was facing stiff competition from other beverage companies such as pepsi-cola among others soft drinks which were also doing so well although it was still the leading boss in the international arena with operations in over 100 countries worldwide. So basically, the coca-cola company was not competing with peps-cola alone but also with a host of beverage companies with a host of different brands. The single brand strategy was abandoned and diversification was embraced and this was made possible by the acquisition of the Minute Maid company in the 1960 (Fmcg (n.d.) S.l).

Minute maid business had picked pace during the Second World War on the back of its discovery of a powdered orange juice process it made for the army. This process was then developed into a concentrated frozen orange juice that was by far the category brand leader. The diversification of the coca-cola company to include the minute maid was a smart move during this time of crisis, competition. Majorly, the diversification in itself was not to do the company much good, but it encouraged more brand developments in the name of the same company such as Hi-C fruit drinks and even instant coffee and tea (Fmcg (n.d.) S.l.). In my view, the best outcome of the move to acquire the minute maid company by the coca-cola was on marketing of the company and its products. Coca-colacompany was loosing a greater share in the corporate world and to get this back it need to act and act fast. Although putting orange juicy into the world and making it a drink of the day did not mean that people would have it or go for coke, since there were many other alternatives from other brands, it made that an added share for the coca-cola company, though not from coke, was there, which could help it take on the competition head on.

2. For the corporation that has not been involved in any mergers or acquisitions, identify one (1) company that would be a profitable candidate for the corporation to acquire or merge with and explain why this company would be a profitable target. 

CarMax is known as United States largest used-car vendor and a fortune 500 company. This company was developed by Richard Sharp the then CEO of the company. It was basically developed for over a year using the code name “Project X”. Its first location to open was in 1993 and as of today it has over 147 locations. So far, the company has no history of acquisition or mergers and this is why in my own view, has remained less popular in America and more so continues to operate solely in the United States (Rainer, 2008).

CarMax has faced many challenges from the shortage of cars due to credit crisis which mostly means the business will be out of market due to high competition and lack of something to sell. Direct supply from people allows CarMax to resell those cars at lower prices than the competition, resulting to more traffic to its dealers. Based on the current market and dealers opinion “The Price is no longer right” deducing the CarMax original slogan. Although it has a place in the corporate world, CarMax cannot match up to and general motors and Ford this implies it cannot acquire any of them(Rainer, 2008). For it however to succeed and still remain relevant, it will be highly beneficial to be acquired or merge with a company like General Motors. This will be highly profitable for the company because, General Motors is a world recognized corporation and with a reputable name. Again, it is really diversified in its spare parts distribution and sell of cars and hence the inclusion of used authentic cards will attract attention. Thirdly, and most importantly, its market and the marketing strategies have an added advantage to the CarMax. This is a company which has won the trust of the public and it will not have to sell used cars at a cheaper price than competition and thus will keep the CarMax relevant in the market.

3. For the corporation that operates internationally, briefly evaluate its international business-level strategy and international corporate-level strategy and make recommendations for improvement. 

One aspect that makes Coca-Cola company different from the other beverage related companies is its ability to differentiate itself from other companies, hence the differentiation strategy is the business strategy used by the company instead of overall leadership and focus strategy. Overall leadership strategy is not applicable for the Coca-Cola because they are already well established worldwide and as for the focus strategy, the company already offers different products to its end users and hence no particular focus to a particular product is required (Schermerhorn, 2010).

Since its inception in 1886, the company has been able to distinguish itself by being the world’s largest producer, retailor and marketer of non-alcoholic syrups and beverages. Having more than 3000 products bearing their famous trademark in more than 200 countries and this gives the Coca-Cola Company an advantage (Schermerhorn, 2010). The differentiation strategy generally involves spending large amounts of money in advertising to differentiate and give a unique quality to the Coca-Cola brands. Moreover, the company provides varied products to the consumers and this has enabled them to attain the top position in the competitive world.

For the internal corporate strategy, the most effective strategy the company has and continues to use is the global strategy (Schermerhorn, 2010). The Coca-Cola long-durable strength originates from operating as a “multi-local” business relying from insights from local bottlers from all countries within their sphere of operations. The globalization aspects in the context of the Coca-Cola success emanates from the assumed global strategy of Coca-Cola in all its countries which enables the partners to act according for local tradition and cultures, local laws, and local needs and wants among others. It is also enables the locals to brand and package, distribute and advertise in regards to the locals preferences in a given geographical location. Generally, Coca-Cola international corporate strategy is all about, thinking globally, act locally. This implies that people from given geographical location come up with idea that best suits the locals but at the same time maintains the policies, fundamental values and the quality and integrity of the Coca-Cola company as a whole.

However, both strategies have their own limitations and these has seen the company face stiff competition and also face challenges in the business and global corporate world. for better performance the company should not only use the differentiation strategy and incorporate it with the overall leadership strategy to define and improve on the slow performances incurred in some regions mostly perpetuated by poor management and marketing of the product in such areas. Globalization comes with its own challenges too despite giving a good name and diversification of the company’s products. Among the many challenges are such as some countries prohibiting the use of Coca-Cola products for health issues such as obesity, infiltration by other beverages, favoritism on the health cover of its workers among others. To overcome these challenges, the company has to look into the needs of the customers and not to assume the differentiation strategy works magic and for the healthy issues milestones have been done but there is still a long walk to take.

For the corporation that does not operate internationally, propose one business-level strategy and one corporate-level strategy that you would suggest the corporation consider. Justify your proposals.

CarMax Company has thrived for so many years to loose relevance in the competitive market. For it to gas up just like General motors and Ford, the company has to adopt some strategies both at the business and corporate level (Ireland, Hoskisson & Hitt, 2008). A business strategy entails actions undertaken to provide value to customers and achieve a competitive advantage by developing core competencies in specific, individual product or service markets. There is several business strategies that would work well in improving CarMax performance such as focused and cost leadership strategies but the most effective one would be the integrated cost leadership/differentiation strategy. The cost differentiation strategy will handle the efficacy stuff of the products sold by the company while the differentiation will bend mostly on the innovative capabilities of the company (Ireland, Hoskisson & Hitt, 2008). It will mean that the company would work hard to keep user-friendly prices and also be flexible enough depending on the economic times. Thus, the company will strive to provide not only used cars to the end users but also things like spare parts of vehicles and also repair and delivery services. Thus, for a business strategy, the integrated cost leadership/differentiation strategy.

Corporate strategies are majorly concerned with the major decisions a business makes such as merger and acquisitions, human resource management among others that impact on the whole organization. There are about three types of corporate strategies that a business can use such as deciding on a strategy, value-reducing strategy and value-neutral strategy (Sowell, 2006). In the case of CarMax, I magnanimously propose the value-creating strategy due to the current status of the company. Value-creating strategy is the one whereby a business seeks to cut off its competitors by attaining a more market share. Basically, the strategies aim at adding both real and assumed value to the businesses’ services and products by using the resources and capabilities of the businesses that can be shared within and across the organization to increase efficiency and reduce costs. All in this strategy is basically about diversification (Sowell, 2006). CarMax should hence adopt a mechanism in which it can expand its business other than the provision of used cars to its customers. The diversification would put it competitors out of business in an effort to match up as the CarMax offers more products to more customers within the same market as the likes of the General Motors in an effort to dominate all or part of the overall market share.

References

Fmcg. (n.d.). S.l.: First Edition Design Publ.

Kumar, B. R. (2012). Mega mergers and acquisitions: Case studies from key industries. Houndmills, Basingstoke, Hampshire: Palgrave Macmillan.

Ireland, R. D., Hoskisson, R. E., & Hitt, M. A. (2008).Understanding business strategy: Concepts and cases. Mason, OH: South-Western Cengage Learning.

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Rainer, R. K. (2008).Introduction to information systems: Supporting and transforming business. Hoboken, N.J: Wiley.

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Sowell, T. J. (2006). Strategic manufacturing management: Strategies to achieve managerial competitiveness. Place of publication not identified: Xlibris Corp.

Schermerhorn, J. R. (2010). Management. Hoboken, N.J: Wiley.