Corporate Strategy Analysis Discussion Summary

Corporate Strategy Analysis Discussion Summary

Adrianna Odell

MGT 230

12/8/14

Don Driscoll

Corporate Strategy Analysis Discussion Summary

        Corporate strategy is defined as the set of businesses, markets, or industries, in which an organization competes and the distribution of resources among the entities (Bateman & Snell 2011 pp.144). Chief Executive officers, or CEO, have to make decisions everyday about what direction the company needs to go in or what needs to be focused on. There are many different strategies, but vertical integration, concentric diversification, conglomerate diversification, and concentration are the ones focused on the CEOs in the Destination CEO videos. Each CEO had to make tough decisions in order to make their company more successful and therefore profitable.

Chief Executive Officers

Neville Isdell is the CEO for Coca Cola, one of the leaders in the beverage industry. Isdell had to use a couple corporate strategies in order to keep his company competitive in the growing beverage industry. He used vertical integration and conglomerate diversification. Vertical integration is the acquisition or development of a new business that produces parts or components of the organization product. Isdell stayed with the same Coke product, but added coffee for a new product Coke Blak. There are other variations of the original Coke product, such as Cherry Coke, Vanilla Coke, and Coke Zero (All Brands 2012). Isdell also used conglomerate diversification to keep his company competitive. Conglomerate diversification is the strategy to add new business that produces unrelated products or unrelated markets (Bateman &Snell 2012 pp. 146). Coke started to produce non-carbonated beverages, such as sports drinks and flavored waters. This helped keep them competitive as their market became more health conscience.  

Gary Kelly, the CEO of Southwest Airlines, had to stay competitive as rising fuel costs were starting to impact the costs of airline tickets. Kelly decided to use the corporate strategy of concentration. Concentration is when an organization that operates a single business and competes in a single industry (Bateman & Snell 2012 pp.144). Gary Kelly focused on making his product better and more cost effective by having all the same airplanes and making a deal that kept fuel costs down. All the same airplanes keeps repair costs down, since the planes can use the same parts. This strategy kept Southwest Airlines competitive and profitable.