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Week 3 - Corporate Strategy Analysis Discussion Summary

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Corporate Strategy Analysis Discussion Summary
Javier Mendoza
MGT/230
October 22, 2015
Linda Torres-Kleinhans

Corporate Strategy Analysis Discussion Summary
In each of the videos that I analyzed. Each of the chief executive officers has a method of either centralization or diversification utilizing some or no vertical integration in the planning function of management. There is little mention of other markets, businesses or industries in which each the CEOs tries to tackle instead they stay within their industry perhaps for lack of experience, creativity or for fear of risking to return to a poor performing era.
Coca-Cola CEO Neville Isdell
Coca-Cola's performance was out marketed by Pepsi when Pepsi-Cola went into a plan to diversify not just in its beverage industry but in the chips and snacks industry as well. Coca-Cola's CEO Neville Isdell did not want to move in the same direction as Pepsi. He perhaps did not feel it was a great idea to follow Pepsi into diversifying since they were dominated by Pepsi before. Instead, Mr. Isdell stuck with staying within the realm of the beverage industry and sought to have a breakthrough with the non-carbonated drinks. Pepsi-Cola had already captured this market and went further into becoming a more diverse conglomerate over Coca-Cola. Coca-Cola's CEO spoke during the interview and stated he had no real aspirations of becoming a CEO but felt compelled to do the best job he could for the company. (Flock, unk) His management planning for vertical integration seemed limited to just the non-carbonated drinks that left the company flat in my opinion and lacked real innovation.
Southwest Airlines CEO, Gary Kelly Gary Kelly was more renowned in the video as a typical person who had a charm for his employees and his customers from being the average guy. He also did not have high aspirations for becoming CEO as Mr. Isdell did with Coca-Cola. His limitation in my opinion came from his also lack for innovation and true expansion of the company. It was apparent by his cutting costs by slashing fuel prices rather than invest in either buying fuel companies or creating a business that would help cut the fuel costs if Southwest Airlines had also invested in the fuel industry. His vision seemed limited as the finite amount of time of the hedged fuel contracts he made to help Southwest Airlines keep costs down. But the sacrifices came from the employees who had to take pay cuts and there were no particular active measures taken with the pilot's negotiations.
VF Corporation CEO Mackey McDonald
The third CEO in the series that I viewed and analyzed was Mr. Mackey McDonald, who was brought up in the apparel business. Although he was at first comfortable with selling jeans, I felt he was the strongest and more of a risk taker when it came to diversification. Although it wasn't as dramatic as Pepsi-Cola, Mr. Mackey did make some concessions to his diversification by introducing the athletic wear and travel bag industry part of VF Corporations portfolio. He also made strides in the vertical integration by selling not only jeans but also boots, sneakers and other apparel that had been varied from casual to western wear. In my opinion, he was the most innovative in this group.
Xerox CEO Anne Mulcahy
Anne Mulcahy came into becoming a CEO when Xerox was in turmoil. Her planning suggested a reactive response because of a volatile situation and not so much into making large-scale decisions to diversify into other industries by using the strength of the company. Since the company was facing near bankruptcy, it would explain its focus and concentration in the printing business. It did acquire Global Imaging Systems to vertically integrate with Xerox however it would not be until its President, Ursula Burns came into the CEO position and then made strides into diversification. Mulcahy was in the sales department and headed the human resources and did some research and development in the desktop printer division. However, it was apparent that Mulcahy did not have the vision to diversify further according to the video. (Rogers, unk)
Conclusion
After looking at what each of the CEO's did and how they got each of their respective company from becoming a complete failure. I can understand better the reasons for no diversification being planned because of the current state of the business. Whether it was in crisis or if each CEO had time to plan better for diversification. Typically expansion usually can bring higher profits if vertical integration is strategically put into place to not only increase the profitability but also morph the cost-cutting decisions into an advantageous money-making diversification especially in the case of Southwest Airlines.

References
Flock, J. (Speaker). (unk). Coca-Cola CEO [Video podcast]. Business Week Weekend. Retrieved from http://http://mhlearningsolutions.com/cs/cs.php
Rogers, C. (Speaker). (unk). CEO Exchange [Video podcast]. Xerox CEO. Retrieved from http://mhlearningsolutions.com/cs/cs.php

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