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Business Strategies

– 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.
Mergers and acquisitions are some of the business strategies that companies pursue in order to remain competitive in their industries. Mergers involve at least two companies coming together to pursue common ideologies without the dissolution of any of the companies (Hill et al 2007). Acquisition means that one company has to fit into the systems of the other and hence its structures and especially its executive management get dissolved and it basically becomes a department or division within the acquiring or the mother company (Hill et al, 2007). The acquisition of Wm. Wrigley Jr. Co. (Wrigley) by Mars Inc. in April 2008 was one of the most publicized business news around the world. In the acquisition Mars Inc. acquired Wrigley for approximately $23 billion and 28% premium over Wrigley stock price (foodprocessing. com, 2008). The acquisition was strategic as it was deemed to reshape the candy industry which was overly reliant on bar candies and chocolate.
Several strategies informed Mars’s decision to acquire Wrigley. First the acquisition would enhance Mars Inc’s development and marketing of its six strong brands in the categories of chocolate confectionary, non-chocolate confectionary, foods, drinks, gum and petcare products (foodprocessing. com, 2008). Wrigley is best known manufacturing the world-famous orbit now PK chewing gums. In itself, the name Wrigley is a strong brand name that would help Mars market its big range of products.
The deal was also strategic because Mars would benefit from the large retail network that Wrigley had created in populous markets such as China. As Wrigley’s president/CEO William Perez put it, “ Wrigley is China’s largest confectionary companyWe have built greater retail network than any other consumer product company” (foodprocessing. com, 2008). Mars Inc was the winner of the 2007 Processor of the Year Award and therefore the acquisition of Wrigley would propel its strong establishment in emerging markets. Mars Inc was heavily reliant on sales outside the Americas since 60% of its total sales were obtained outside the America’s. The acquisition of Wrigley was therefore strategic in helping Mars cement its international presence and gain solid market shares especially in populous emerging markets in developed and developing countries (foodprocessing. com, 2008).
The acquisition of Wrigley by Mars was wise because it enhanced the latter’s efficiency in business through expanded markets as well as adoption of new processes and technology and human resource talents. In this instance, Mars executives retained William Perez as head of Wrigley while they moved their non-chocolate brands to be manufactured at Wrigley factories in Chicago. This increased specialization and division of labor is expected to increase Mars-Wrigley’s annual sales to $27 billion in 2012 from less than $10 billion for a combined total of the two companies in 2007 (foodprocessing. com, 2008).
– One 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.
The benefits of companies in the related industries merging far outweigh the demerits when well planned. Several companies around the world would expand tremendously if they got into mergers or acquisitions with other companies in the same or related industries. For instance, a merger between Regenon Pharmaceuticals and a biotechnology company could prove really profitable to both companies. This is because Regenon Pharmaceuticals has developed a star product that is currently generating a lot of excitement in the name of Eylea. Eylea treats neovascular age-related macular degeneration (AMD) – which is the leading cause of blindness among people aged 65years and above (marketwatch. com, 2012). The drug is the only one of its kind approved by the Food and Drugs Administration (FDA) for the treatment of wet AMD.
Since Regenon Pharmaceuticals introduced the drug into the market, they sold $124 million in the first quarter of 2012 and later on made more than $500 million in sales for that year (marketwatch. com, 2012). This means that the market for Eylea is extensive and is bound to grow greatly in future. Regenon Pharmaceuticals is basically an upcoming company and it would be advisable for the company to merge with a well established biotechnology company. First a merger with a big company would boost Regenon Pharmaceuticals inventory and enable it cope with huge demands. Secondly, the merger would enable Regenon Pharmaceuticals in patenting and protecting their star product from counterfeiting. The pharmaceuticals industry is rife with counterfeits and it is imperative for Regenon Pharmaceuticals to ensure they jealously watch over their product (marketwatch. com, 2012). This could means enlisting the help of a more experienced partner company in a merger. In a merger, big companies offer their smaller partners not only cash for expansion but also innovative technologies and attractive patents.
Since Regenon Pharmaceuticals already has two other exciting products in the offing, it becomes very attractive to big pharmaceutical companies that are looking to increase their profitability. In the face of increased health conditions, people are increasingly demanding for better healthcare through effective drugs such as Eylea. The healthcare industry is one of the most profitable industries and therefore any prospects such as mergers and acquisitions arising in the industry are worth pursuing.
– For the corporation that operates internationally, briefly evaluate its international business-level strategy and international corporate-level strategy and make recommendations for improvement.
In order for a company to succeed in international business, there is need for it to develop business-level and corporate-level strategies. Business Coca cola is one of the most recognizable multinationals in the world. The soft drinks giant is present in more than 200 countries around the world. The success of coca cola in establishing such as strong global presence can be attributed to a set of business level strategies and international corporate-level strategies (Hill et al, 2007). The basic strategy of coca cola’s business is solid, simple and timeless. The company strives to provide soft drinks that are environmentally safe and accepted. Coca cola appeals to long term interests of its shareholders, customers and employees in order to implement its plans (Hill et al, 2007).
Coca cola’s international-level corporate strategy ensures that all it products are standardized across all national markets. This is evident in the maintenance of coca cola’s formula as the best guarded corporate secret. Coca cola’s international corporate strategy also targets at low cost, low control methods of entry into new markets. The company uses exporting (of coca cola concentrate) and licensing franchises as its methods of entry into new markets. Recently, coca cola has gotten into strategic alliances with companies such as minute maid to help obtain presence in different countries. The company also uses vertical integration as a corporate strategy. Coca cola does this by combining several steps along the distribution chain either as inputs or outputs of organizational controls. The Coca cola Enterprises (CCE) acts as an independent bottling company subsidiary to coca cola. To enhance this strategy coca cola buys struggling bottlers and sells them to CCE (Hill et al, 2007).
The strategy also involves centralizing business-level strategic decisions. Strategic business units are also assumed to be interdependent. There is a strong emphasis on economies of scale. The strategy also requires resources coordination and sharing across borders. Moreover, the company uses related diversification strategy in areas such as sharing of technology, similarity in managerial and operating methods, the ability to pool common employee skills/suppliers/distribution channels/ and raw materials (Hill et al, 2007). Coca cola’s international business-level strategy and international corporate-level strategy enhances cost leadership, focus and differentiation thereby enabling the company to accomplish profitable growth.
– 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.
Checkers and Rallys restaurants operate in more than 30 states across the United States. According to Hill et al, (2007) an effective business-level strategy is informed by the core competencies of the company. The core competencies of Checkers and Rallys are resources (human resources and competent suppliers) and capabilities to handle erratic product demands. The core competencies inform for a coordinated set of actions to exploit them and gain competitive advantage in individual product markets. For Checkers and Rallys one of the most effective business-level strategies is the establishment of a firm strategy and structure. This means the establishment of common technical training to ensure that all restaurant employees in all the restaurants are exposed to common training and therefore expected to offer standardized services in all of the company’s restaurants.
The company also places a lot of emphasis on products standardization. In this regard the company ensures that the employees and especially the cooks adhere to standardized timelines to prepare each of the given recipes. There are also strict steps to be adhered to when preparing the recipes. The business-level strategy that is most viable is the two-value adding configurations that is minimizing the cost of products and differentiating the products. The lowest possible cost relative to that of competitors in should be set. This is bearing in mind the high competition in the fast foods industry. The features borne in mind when setting the lowest possible price for the restaurant’s products reflect relatively standardized products and features that are appreciable by many consumers. The cost saving that are required by this strategy include controlling overhead costs and production costs. It also includes minimizing the cost of research and development, building efficient preparation facilities and simplifying food preparation processes in all of Checkers and Rallys’s restaurants.
The differentiation of products ensures that the restaurants shall be able to cater for diversified tastes and preferences for their clients. Moreover, the differentiation shall accommodate consumers from different economic classes. Differentiation therefore has the potential to increase the sales volumes of the restaurant and consequently the profit margins.
There are more than 160, 000 fast food companies in the United States! As such business-level strategies that target at differentiating products and reducing the product prices augurs well with the market. Checkers and Rallys should be able to gain larger market shares and increase the sales volume and consequently more profitability.


Mars’ Wrigley purchase should reshape the candy industry. Retrieved March 4, 2013 from http://www. foodprocessing. com/industrynews/2008/037. html
Hill, Charles W L., Jones, Gareth R., Galvin, P. and Haidar, A. (2007), Strategic Management: An integrated approach, 2nd ed. Melbourne, Wiley, 114-115.
5 potential merger & acquisition targets. Retrieved March 4, 2013 from http://www. marketwatch. com/story/5-potential-merger-acquisition-targets-2012-07-19