Diversification Strategy and Types
Diversification is a growth strategy where a company may merge or acquire another business with the aim of expanding its market share, increasing productivity, synergy and sales. There are two forms of diversification strategies which include concentric and conglomerate diversification. Concentric diversification involves acquiring a business similar to the current one, while the conglomerate entails obtaining a business unrelated to the current one. The Coca-Cola Company is well known for its lion share in the beverage market. The beverage giant acquired an orange juice business that produced Minute Maid in 1960, a strategy that led to owning more than 500 brands of beverages ranging from sodas to energy drinks (He & Balmer, 2017). Since then, the company's management has used the concentric diversification strategy to increase its sales with a recent acquisition is the Chi. Limited, a Nigerian based dairy and juice company.
Corporate-Level Strategies and Competitiveness
Additionally, the company's competitiveness is increased by corporate-level strategies. Consequently, the Coca-Cola Company has an added advantage against its rivals given that it combines growth strategies and renewal strategies to gain more market share and introduce new products, diversification strategy (Olender et al., 2015). For instance, the introduction of Coke-Zero was a renewal strategy after the company was accused of selling sugary drinks unhealthy for the body. Founded as a soft drink company, Coca-Cola has ventured into related businesses like coffee, juice, fruit juices, tea, and mineral water. The application of stability strategies helps retain customers of coke despite introducing water and coffee as their products. Consequently, the company pockets most of its profits from operational diversification enabled by growth strategies.
Success and Promoting Growth
Over 500 brands controlled or partially owned by Coca-Cola are leading beverages across the globe. Success following the acquisition and merges like in the case of Minute Maid is existing proof that diversification of operation works. Moreover, the company promotes diversity through its diversification operations that promote health and wellness. After starting off as a carbonated drinks company, acquiring fruit juice companies like Chi. Limited and Minute Maid are examples of how companies can increase their sales while maintaining market and product stability and care for their customers. The success rate accompanied by Coca Cola's operational diversification promotes the strategy as an approach to promote an organization's growth.
References
He, H. W., " Balmer, J. M. (2017). Alliance Brands: Building Corporate Brands through Strategic Alliances. In Advances in Corporate Branding (pp. 72-90). Palgrave Macmillan, London.
Olender, J., Fry, G., Robinson, S., Anicic, S., " Hall, K. (2015). Thinking Big: Student Led Research on the World's Largest Global Corporations.
