Merger, Acquisition, and International Strategies - Coursework Example

Running head: merger, acquisition, and international strategies 24th May Question 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. In its effort to compete effectively with its rivals including PepsiCo and Starbucks, Coca Cola Company has a strong culture of acquiring other companies within the soft drink industry. Besides strengthening its marketing strategies, acquisition assists the company to share knowledge with other companies. One of the major acquisitions by Coca Cola Company was the one that involved Fuze Beverage. Fuze Beverage, a beverage company that was established by Lance Collinzs operated in US. Major issue that made the company to be competitive in the soft drink industry is the quality of its brands that were marketed as natural health brands. The company also focuses at producing quality with a variety of electrolytes, vitamins as well as antioxidants. As the result of the brand improvement and rapid expansion in 2004 and 2005, the company sales greatly improved in 2006. Just like Coca Cola Company, Fuze was aiming at creating strong positive customer brand relationship. Based on its improved performance, Coca Cola Company acquired Fuze beverage in 2007. Fuze is well known based on its fruit flavored drinks that meet the needs of its customers. Thus, quality of its brands was one of the key issues that attracted the attention of Coca Cola during the acquisition. One of the major aspects that made the acquisition a wise decision by Coca Cola Company was that during the acquisition time, the company lagged behind its major competitor, PepsiCo in terms of market share of the noncarbonated beverages. As the result of reduction in the market share of the non carbonated brands, some Coca Cola bottlers became worried while others decided to provide brands from other competing firms (Kotler and Kevin, 2009). This led to reduction in sales for the company. The acquisition, which was valued at $250 million made Coca Cola to gain rights to water plus and NOS Energy Drinks making the company portfolio to expand resulting to more customers. Since it was launched, Fuze had more than 40 brands most of them being noncarbonated thus ensuring that it was the right option for Coca Cola Company during that time. Based on the expansion strategies and improved distribution systems that Coca Cola Company adopted after acquisition, the company sales greatly improved in 2008. Question 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. Merger and acquisition is one of the main aspects that make company to expand their market share. In US, beverage industry is characterized by stiff competition due to the emergence of many firms. As the result of improved brands and use of modern technology, various companies have embarked on diversifying their brand portfolio in order to effectively compete with Coca Cola Company which is a market leader. One of the notable companies that have not emulated merger or acquisition in US is A-Treat Bottling Company. A-Treat Bottling Company, which is headquartered in Allentown, Pennsylvania, is mostly known for the production of carbonated brands. The company was established in 1918. Being a company that is known for production of brands through traditional manner, A-Treat has more than 16 brands. These include black berry, cola, cream soda, fruit punch, grape, pineapple, grapefruit and ginger ale among others. The company revenue stands at USD 10 Million annually. In order to ensure that the company improves its revenue while at the same time expanding its operations, it is imperative that A-Treat Bottling Company merges or acquires a well established company. A profitable candidate that A-Treat would acquire is Adirondack Beverages. Adirondack Beverages, a firm based in New York state is known for production of wide range of brands including Adirondack Cranberry Lime Seltzer, Adirondack Orange Sparkling Water, Adirondack Seltzer, Adirondack Raspberry Sparkling Water , Adirondack Citrus Seltzer, Adirondack Raspberry Lime Seltzer and Adirondack Wild Cherry ClearnNatural among others. Having being established in 1967, Adirondack Beverages relies on modern technology to produce new products annually. This means that by acquiring Adirondack Beverages, A-Treat Bottling Company will be in a position to diversify its product portfolio not only regularly but also the costs of operations will reduce (Pine and Gilmore, 1997). Based on its extensive marketing campaign by the use of social media as well as effective distribution network in the entire northeastern United States, Adirondack Raspberry will offer a number of benefits in the marketing strategies of A-Treat. Having being in the market for a long time, the two companies have experienced workforce thus implying that A-Treat Bottling Company productivity and revenue will greatly improve as the result of skilled manpower. Question 3. For the corporation that operates internationally, briefly evaluate its international business-level strategy and international corporate-level strategy and make recommendations for improvement. As the competition in the beverage industry becomes stiff, companies have come up with various business strategies in order to create a difference between themselves and the competitors. In order to remain competitive and effectively face off the competitors, Coca Cola Company uses differentiation strategy. This strategy is used by the company in order to indicate how unique it is while at the same time separating itself from other companies within the soft drink industry (David, 1988). Through the use of differentiation strategy, the company creates brands and services that are of high value. Another notable aspect that makes Coca Cola Company a unique firm is the extensive marketing as well as advertising campaigns in order to create strong customer loyalty. The company packaging strategies are also unique due to the shape of it bottles. The slim and curvy body shape of the company bottlers makes majority of the consumers to feel better. Another key differentiation strategy that makes the company unique is the Coca Cola freestyle machine. Through the machine, the consumers can mix their beverages by using many flavors. In reference to international corporate-level strategy, Coca Cola Company has many establishments in various countries. The company is currently the largest soft drink globally. By operating in more than 200 countries, Coca Cola engages in manufacturing, selling and distributing syrups and concentrates. The mission of the company is to strive to refresh the world, inspire happiness and optimism as well as to creating value. The production of unique brands that meet the need of the consumers in the international market is a major strategy that the company emulates thus remaining strong in the market. Additionally, the company has emulated innovation that makes it to expand its product portfolio. The sponsorship of the FIFA World cup is a key strategy that makes the company to create a positive image internationally. One of the major recommendations is that Coca Cola Company should embark on sponsoring sporting events in the emerging economies as a way of enhancing brand image. Even though the company is generally known by many consumers, majority of the customers in the developing countries are not aware of the various brands produced by the company and their benefits. This implies that in third world countries, there is a gap as far as Coca Cola Company information is concerned (Evens and Wurster, 1997). This calls for more advertisement and education by Coca Cola in such areas. Question 4. For the corporation that does not operate internationally, propose one business-level strategy and one corporate-level strategy that you would suggest the corporation to consider. Justify your proposals. A-Treat Bottling Company needs to come up with ways to win the trust of the consumers in its market. The major strategy that I would suggest the corporation to consider is focused differentiation. This implies that the company does not only become unique by differentiating itself, by it also entails selecting a small segment that it aims at providing quality services and brands. It is vital to note that firms that emulate focused differentiation are in a position to serve the smaller segment as compared to the competitors who are covering huge areas (Pine and Gilmore, 1999). Additionally, since the firms that cover smaller areas are able to identify the special needs of their consumers, it implies that they are in a position to serve them in a better way as compared to the rivals. In reference to corporate-level strategy, A-Treat Bottling Company should adopt value-creating strategy. This means expanding market share through diversification of products. By producing different brands, the company will be able to meet the needs of different people from various regions an aspect that will make it expand its share of the market. References David, A. (1988). Developing Business Strategies. New York: John Wiley and Sons, 1988 Evens, P. and Wurster, T. (1997). Strategy and the New Economics of Information, Harvard Business Review, Sept/Oct 1997. Kotler, P and Kevin, K. (2009). "1". A Framework for Marketing Management. New York: Pearson Prentice. Pine, J. and Gilmore, J. (1997). The Four Faces of Mass Customization, Harvard Business Review, Vol 74, No 2. Pine, J. and Gilmore, J. (1999). The Experience Economy. Boston: Harvard Business School Press. Read More