Running Head: DIVERSIFICATION STRATEGY 1 DIVERSIFICATION STRATEGY 8 Diversification strategy Name College Course Tutor Date Diversification is one of the strategies that the company will use so as to stay afloat in the highly competitive market. It is a risk management technique which involves mixing a wide range of investments in the same portfolio (Kenny, 2009). Most companies use the strategy so as to grow, spread risk, to fully utilize the existing resources and to escape from the undesirable industry environment. The essence of using the strategy is that on average, the different product types will yield higher returns to the company and at the same time reduce risks in comparison to individual products. Since the company market is a highly competitive one, the organization should diversify its products and services so as to attract more customers and reap as much benefits as it can from the potential market. Diversification of the business The advantages associated with the diversification strategy are: It creates opportunities to achieve economies of scale. It creates opportunities to expand product offerings and expand into new geographical areas. It reduces the cyclical fluctuations in sales and revenues and cash flows and it lets the company continue to grow after the core business has matured. The disadvantage is that it may be complex and difficult to coordinate the different but related businesses. The other problem with the strategy is that the managers of the firm may lack the knowledge of the firms’ businesses. The strategy may therefore be useful if well implemented and follow ups carried out so as to ensure that the strategy is effective and advantageous to the firm. Strategy for diversification indicating the products and industries for the diversification and how synergies may be gained from the diversified activities Diversification could either be related or unrelated to the products currently on offer. In the case of the APAtizer Company, since not all tutors require the assignments to be written in the APA format, tutorials for the other formatting styles such as Turabian, Chicago, MLA and Harvard could also be offered at the APAtizer website. That will highly increase the sales volumes due to the increase in the market size. That will be as a result of different services offered. The site could also use other retailers to offer their services. That could be through affiliate companies which would increase the company’s market. Synergies may be gained from the diversified activities in the human resource department since there will be no need to acquire new staff as long as the diversified strategy is related. The technology will also not be acquired as the existing one will be shared in the processing of the new products and services. The few resources will be used to produce the new products and increase revenue. By using the unrelated product differentiation strategy, the synergies to be gained w.

1. Running Head: DIVERSIFICATION STRATEGY
1
DIVERSIFICATION STRATEGY
8
Diversification strategy
Name
College
Course
Tutor
Date
Diversification is one of the strategies that the company will
use so as to stay afloat in the highly competitive market. It is a
risk management technique which involves mixing a wide range
of investments in the same portfolio (Kenny, 2009). Most
companies use the strategy so as to grow, spread risk, to fully
utilize the existing resources and to escape from the undesirable
industry environment. The essence of using the strategy is that
on average, the different product types will yield higher returns
to the company and at the same time reduce risks in comparison
to individual products. Since the company market is a highly
competitive one, the organization should diversify its products

2. and services so as to attract more customers and reap as much
benefits as it can from the potential market.
Diversification of the business
The advantages associated with the diversification strategy are:
It creates opportunities to achieve economies of scale. It creates
opportunities to expand product offerings and expand into new
geographical areas. It reduces the cyclical fluctuations in sales
and revenues and cash flows and it lets the company continue to
grow after the core business has matured. The disadvantage is
that it may be complex and difficult to coordinate the different
but related businesses. The other problem with the strategy is
that the managers of the firm may lack the knowledge of the
firms’ businesses. The strategy may therefore be useful if well
implemented and follow ups carried out so as to ensure that the
strategy is effective and advantageous to the firm.
Strategy for diversification indicating the products and
industries for the diversification and how synergies may be
gained from the diversified activities
Diversification could either be related or unrelated to the
products currently on offer. In the case of the APAtizer
Company, since not all tutors require the assignments to be
written in the APA format, tutorials for the other formatting
styles such as Turabian, Chicago, MLA and Harvard could also
be offered at the APAtizer website. That will highly increase
the sales volumes due to the increase in the market size. That
will be as a result of different services offered. The site could
also use other retailers to offer their services. That could be
through affiliate companies which would increase the
company’s market.
Synergies may be gained from the diversified activities in the
human resource department since there will be no need to
acquire new staff as long as the diversified strategy is related.
The technology will also not be acquired as the existing one
will be shared in the processing of the new products and

3. services. The few resources will be used to produce the new
products and increase revenue. By using the unrelated product
differentiation strategy, the synergies to be gained will be in
terms of reduced risks of the overall investments as compared to
the individual investment.
Identification of the foreign markets that the company should
enter and the strategy that it should use to enter the market
The company should enter the international market since there
are University students all over the world who need the kind of
services offered by APAtizer. Before entering the market,
assessment of the market should be done. It could be done by
researching on issues such as the regulations associated with the
business (Tallman, 2007). The kind of requirements of running
the business in the new market should be known. The costs of
the licenses and the application processes should not be
ignored. There should also be competitive assessment to know
the size of the market, the market trends and other situations
that might affect competition.
The other kind of assessment will be the distribution channel
assessment. That will be done so as to know the overall strategy
of the potential channel partner, their channel coverage, the
product category that they offer and their core strengths and
weaknesses. The organization should then carry out internal
assessment to know its current position and whether it can enter
the market. It should know the critical success factors of
entering the market and the organizational changes that would
be necessary.
The challenges that the company may face in the foreign market
and how it might respond strategically to minimize the impact
of these challenges
There are certain challenges that the company may face in the
foreign market. The political environment of the country of

4. operation affects the company’s operation. If the environment is
not stable or it is characterized by strict regulations, the
company may have difficulties in operation. That would most
likely lead to the company reducing its sales and revenues. To
minimize the impact of such a challenge, the company ought to
do research on the extent of government control and know what
is less likely to lead to law suits.
The new foreign market entrant may also be faced with the
challenge of identifying a true market need. Identifying the
market needs of clients in such a big market may not be easy. It
may also be difficult due to the fact that one has not grown in
the foreign cultural background therefore the people’s needs
may not be that which one is used familiar with. The internet
technology and applications such as Google analytics may
effectively assist to match the needs of the numerous clientele
bases rather cheaply.
The other challenge faced may be the societal beliefs of the new
foreign markets. Some cultural values and beliefs of the people
in the country in which the company is hosted may be difficult
to get along with. To minimize the effects of such difficulties,
the should may ensure that it understands the peoples believe
and train its staff on the importance of respecting peoples
believes (Luo, 1999).
Language may also be a challenge of the company entering into
a foreign market. The main language used for communication by
the host country dwellers may hinder the execution of a
company’s operations. The operational staff should therefore be
individuals who understand the language and for the strategic
managers, they should be taught the basics of the language and
they should also have translators to assist them.
Scenario when it would not make sense for the company to
diversify or expand into a foreign market and Support for the
rationale
Case scenario: A company, on expanding into the foreign

5. market, incurs high operational expenses and low returns on
investments. The company incurs a high cost of managing the
complex infrastructure. The cost has outweighed the benefits of
increased scale. If anything it operates at a loss since the
expansion into the market. Before it undertook the expansion
into the foreign market, the company incurred low costs of
managing its infrastructure and generally made profits. Since it
is the objective of any company to maximize profits and
increase the shareholders wealth, there would be no need of the
company to enter the foreign market.
Assessment of how the company will create a business
environment conducive to ethical behavior
The company’s management and the supervisors will be
instrumental in creating a business environment conducive to
ethical behavior. The values and attitude of the leaders
determine the staffs’ behavior. The management and the
company’s leaders will therefore lead by example and will
exhibit the appropriate ethical behavior. The staff will take the
leaders actions as the guiding force to make right choices when
faced with ethical dilemmas (Donaldson & O'Toole, 2007).
Since the firm is an operates on the internet technology, it is
also a means by which malpractice can thrive. The company
will be protected from the risks of dishonest IT experts who
may manipulate the systems. Adequate security measures will
be put in place so as to ensure high level of integrity standards
among the staff.
The management will ensure that they abide by the laws and
regulations of doing business. They will also abide by the PBO
and the specific codes that are laid down by the relevant
regulators and professional bodies. The management will
generally put integrity into practice by setting up a code of
conduct, strengthen the system of controls and Foster ethical
culture within the company. By setting up a code of conduct,
the management will have prevented corruption and fraud. The

6. codes should be enforceable, practical and up to date according
to the principle of fair competition.
Strong system controls will allow for the business to be
conducted in an orderly manner. It will help in the detections of
irregularities thus allowing the management to carry out
corrective measures at an early age. The corruption loopholes
will thus be sealed early in advance. With the adoption of
ethical culture, the organization will enhance its profitability
and operational efficiency. Equipping the staff with the
knowledge on the legal requirements through training will give
them the skills of handling ethical dilemmas.
References
Donaldson, B., & O'Toole, T. (2007). Strategic market
relationships: From strategy to implementation. Hoboken, NJ:
Wiley.
Kenny, G. (2009). Diversification strategy: How to grow a
business by diversifying successfully. London: Kogan Page.
Luo, Y. (1999). Entry and cooperative strategies in international
business expansion: [...]. Westport, Conn. [u.a.: Quorum.
Tallman, S. B. (2007). A new generation in international
strategic management. Cheltenham, UK: Edward Elgar.
The Coca – Cola Company
Market Position Analysis
1
The Coca – Cola Company
Market Position Analysis
2

7. Market Position Analysis
Dwayne Woods
Capstone Experience in Integration & Strategy
Dr. Thomas H. Kemp
December 18, 2013
Assignment 3: Market Position Analysis: The Coca-Cola
Company
The Coca-Cola Company is a leading world brand that makes
soft drinks that are ready to drink. The company makes products
such as Coke, Fanta, Sprite, Minute Maid, Dasani water among
others. It has managed to hold its market position as the leading
beverage producer in the world, facing competition from
PepsiCo. Coca-Cola sells its products in the whole world,
having divided its operation areas in regions such as Africa,
Eurasia, Latin America, European Union, North America and
Pacific. The company’s mission statement is ‘refreshing the
world –in mind, body and spirit’.
Coca-Cola Company’s target market is any person who likes
soft drinks, but lately they have been targeting teenagers and
people below thirty. In short, its main target market is the
youth. According to Vendredi (2012), the company uses several
strategies to reach its target market. The company has partnered
with restaurants and fast foods such as McDonald. This is
because most of these young people eat in such places. The
company has also made adverts for their current slogan, ‘Open
happiness’ with teenagers as the cast. Most of the adverts show
young people below the age of thirty having fun while taking
their products. Their target market consists of both male and
female youth. The young people are seen buying lots of
beverages and Coca-Cola has set out to have them as their target
audience.
Coca-Cola does not segment its market by age. From, an
interview with a Coca-Cola manager, she claimed that their

8. market is undifferentiated. Ali and Mohammad (2011) argue
that their market is segmented on the basis of geographic
region, demography, climate and behavior. Geographically, it
sells higher quality products in the developed nations since per
capita income is high. It also sells more in urban areas around
the world than in the rural areas. The company segments its
market according to climate because it sells its products in hot
areas more than in cold areas. All its products are served cold.
During summer, Coca-Cola sales are high in most areas around
the world. The company also segments its market according to
demographics. It has products for children between 4 and 12
since it has some that have flavors such as cherry, vanilla and
lime. The Coke, Fanta and Sprite brands mostly targets the
youth. The company also packs its products for families, that is,
in the economy pack that usually has six cans. It also segments
by income and this is seen in packing for example, plastic bottle
soda is more expensive that the glass bottle.
The Coca-Cola Company is positive that their products satisfy
their customer’s needs. This is because their customers are
loyal. They also know this through the interaction with their
customers on social media. The company’s website also has a
segment left for customers to post their complaints and
comments on their products. The company takes care of all their
customers’ needs since they have different flavors to suit their
consumers’ tastes. For those who don’t take soda, the company
makes fruit juices by the brand name of Minute Maid. The
company has however been unable to provide low calorie and
low sugar soda in all their flavors to the customers. Only the
Coke brand has a low sugar and calorie product know as Coke
Zero.
Coca-Cola’s main competitor is PepsiCo. PepsiCo makes drinks
such as Mirinda, Pepsi, 7Up, Gatorades and Tropicana fruit
juice among others. From these two companies, their most
famous brands are the cola drinks, with Coca-Cola’s going by
the brand name Coke while that of PepsiCo is Pepsi. Let’s
compare these two drinks. In the USA, their price is the same

9. with the 2 liters bottle going for $1.79. The two brands have
several products produced under them. For coke there’s Diet
Coke, Coke Zero and Coke Classic. The Pepsi portfolio has
Pepsi, Diet Pepsi and Pepsi-MAX. According to Lubin (2012)
Pepsi was found sweeter in a sip test. He argues that Pepsi has a
citrus flavor burst while Coke has a vanilla-raisin taste. Both
are made with almost the same products but Coke is more
carbonated than Pepsi, Pepsi has more caffeine, sugar and
calories while coke has more sodium. Their qualities are
difficult to differentiate since they taste almost the same, but
each brand has its loyal customers. They are both in the market
to quench the thirst of their customers. Coke is found world-
wide while Pepsi is not available in all countries. Coke is easily
available even in remote areas but in some countries Pepsi is
only available in leading supermarkets. Coca-Cola is branded in
white and red while Pepsi has blue as the major with red and
white. Coca-Cola is more valuable than Pepsi with the former
worth $79 billion while Pepsi is worth $17 million (Anuar
2013). Coca-Cola is associated with fun and happiness. Pepsi
has branded itself using celebrities such as Beyoncé, Britney
Spears and Michael Jackson and good music.
Coca-Cola’s competitive advantage lies in their image and
availability. Their products are available worldwide and are
affordable in every country since pricing is different in each
country. The image of the company as well as that of their
products has given it a first place before Pepsi. The company is
known to have good products and to be a world leader in
beverage production. Their products are advertised in fun-filled
adverts that target its market segment. They also are packed in
well-designed packs that are attractive to the consumer.
The Coca-Cola Company has a sustainable competitive
advantage. Its competitive advantage stems from the Coca-Cola
brand itself. It is a known brand in the whole world. Its other
sources of competitive advantage are; the secret recipe,
developing new products and re-inventing new ones and its
production techniques that have produced high quality products

10. at low costs (So Opinionated 2012). The company is able to
sustain its competitive advantage through re-branding and re-
inventing its products and associating them with fun things.
The company has therefore been able to hold a top position
against its competitors in the whole world. Even during the US
economic boom, Coca-Cola made negligible losses since it sold
in other continents and its sales in the US changed slightly. It is
also a highly valuable company worth billions of dollars.
Table Showing Coca-Cola’s Market Position
Coca-Cola
Pepsi
Satisfaction
2
1
Refreshment
2
2
Health
1
0
Quality
2
2
Sweetness
1
2
Total
8
7
References
Ali, S. and Mohammad, S. (2011). Target market and market
segmentation of Coca-Cola. Retrieved from:

11. http://www.slideshare.net/sikander22/target-market-and-market-
segmentation-of-cocacola
Anuar, D. (2013). Comparison of brands: Pepsi Cola vs. Coca
Cola. Retrieved from:
http://www.academia.edu/4977803/Comparison_of_brands_Peps
i_Cola_vs_Coca_Cola
Lubin, G. (2012). Here’s the real difference between Coke and
Pepsi. Retrieved from: http://www.businessinsider.com/the-
difference-between-coke-and-pepsi-2012-12
So Opinionated. (2012). The Coca-Cola business model and
their competitive advantage. Retrieved from:
http://sopinion8ed.wordpress.com/2012/11/23/the-coca-cola-
business-model-and-their-competitive-advantage/
Vendredi. (2012). Coca Cola targeting and positioning.
retrieved from:
http://softdrinkcolawar.blogspot.com/2012/12/coca-cola-
targeting-and-positioning.html