Discussion Board 4 Discussion Topic I'm Done Should Coca-Cola Build, Borrow, or Buy? Complete Exercise 5B graded Overview Comparing what is planned versus what you recommend is an important part of the case analysis. Do not recommend what the firm actually plans, unless in-depth analysis of the situation reveals those strategies to be best among all feasible alternatives. This exercise gives you experience conducting research to determine what a firm is doing now as well as what they should do in the next fiscal year. Challenge Complete the Strategies in Action; Assurance of Learning Exercise 5B of your text. · Step 1: Go to the Coca-Cola corporate website and click on Press Center. Read through the most recent ten press releases. · Step 2: Determine two strategies that Coca-Cola is actually pursuing. Give some pros and cons of those two strategies in light of the guidelines presented in Chapter 5. · Step 3: Determine two strategies that Coca-Cola is not pursuing. Give some pros and cons of those two strategies in light of the guidelines presented in Chapter 5. Long-Term Objectives 1. LO 5.1 Identify and discuss 5 characteristics and 10 benefits of clear objectives. Long-term objectives represent the results expected from pursuing certain strategies. Strategies represent the actions to be taken to accomplish long-term objectives. The time frame for objectives and strategies should be consistent, usually from 2 to 5 years. Without long-term objectives, an organization would drift aimlessly toward some unknown end or become too focused on short-term fads and stray away from the firm’s mission. Exemplary Strategist Showcased Tim Cook, CEO of Apple, Inc. The editor of Businessweek, Megan Murphy, recently asked the CEO of Apple, Tim Cook, what he thought his legacy at Apple would be. Tim responded: “To be honest I don’t think about it; I think about doing stuff.” Cook went on to explain how and why Apple’s founder, Steve Jobs, rather than himself, should be the person revered forever as Apple’s supreme strategist extraordinaire. Cook told Megan that Apple in the past, present, and future is all about its founder Jobs. Tim explained that Job’s “DNA” or “ethos” is and always will be Apple’s “Constitution” or guiding set of principles. According to Cook, Jobs’s ethos ingrained into Apple forever include the following items (paraphrased): Ildogesto/Shutterstock 1. Pay acute attention to detail. 2. Keep it simple and genuinely care. 3. Focus on the user and user experience. 4. Focus on building the best. 5. Follow the motto “good isn’t good enough”; every product and process must be, as Jobs’s often said, “insanely great.” 6. Apple should own the proprietary technology it uses to control its own quality of product and user experience. 7. Walk away and be honest with yourself when you do something wrong. 8. Never get married to your position or pride. 9. Invest for the long-term rather than striving to be the first to market with a product. Source:  ...

1. Discussion Board 4
Discussion Topic
I'm Done
Should Coca-Cola Build, Borrow, or Buy?
Complete Exercise 5B
graded
Overview
Comparing what is planned versus what you recommend is an
important part of the case analysis. Do not recommend what the
firm actually plans, unless in-depth analysis of the situation
reveals those strategies to be best among all feasible
alternatives. This exercise gives you experience conducting
research to determine what a firm is doing now as well as what
they should do in the next fiscal year.
Challenge
Complete the Strategies in Action; Assurance of Learning
Exercise 5B of your text.
· Step 1: Go to the Coca-Cola corporate website and click on
Press Center. Read through the most recent ten press releases.
· Step 2: Determine two strategies that Coca-Cola is actually
pursuing. Give some pros and cons of those two strategies in
light of the guidelines presented in Chapter 5.
· Step 3: Determine two strategies that Coca-Cola is not
pursuing. Give some pros and cons of those two strategies in
light of the guidelines presented in Chapter 5.
Long-Term Objectives
1. LO 5.1 Identify and discuss 5 characteristics and 10 benefits
of clear objectives.
Long-term objectives represent the results expected from
pursuing certain strategies. Strategies represent the actions to
be taken to accomplish long-term objectives. The time frame for

2. objectives and strategies should be consistent, usually from 2 to
5 years. Without long-term objectives, an organization would
drift aimlessly toward some unknown end or become too
focused on short-term fads and stray away from the firm’s
mission.
Exemplary Strategist Showcased
Tim Cook, CEO of Apple, Inc.
The editor of Businessweek, Megan Murphy, recently asked the
CEO of Apple, Tim Cook, what he thought his legacy at Apple
would be. Tim responded: “To be honest I don’t think about it; I
think about doing stuff.” Cook went on to explain how and why
Apple’s founder, Steve Jobs, rather than himself, should be the
person revered forever as Apple’s supreme strategist
extraordinaire. Cook told Megan that Apple in the past, present,
and future is all about its founder Jobs. Tim explained that
Job’s “DNA” or “ethos” is and always will be Apple’s
“Constitution” or guiding set of principles. According to Cook,
Jobs’s ethos ingrained into Apple forever include the following
items (paraphrased):
Ildogesto/Shutterstock
1. Pay acute attention to detail.
2. Keep it simple and genuinely care.
3. Focus on the user and user experience.
4. Focus on building the best.
5. Follow the motto “good isn’t good enough”; every product
and process must be, as Jobs’s often said, “insanely great.”
6. Apple should own the proprietary technology it uses to
control its own quality of product and user experience.
7. Walk away and be honest with yourself when you do
something wrong.
8. Never get married to your position or pride.
9. Invest for the long-term rather than striving to be the first to
market with a product.
Source: Based on Megan Murphy, “Tim Cook,” Bloomberg
Businessweek, June 19, 2017, pp. 52–56.

3. It is hard to imagine an organization or an individual being
successful without clear objectives. You probably have worked
hard the last few years striving to achieve an objective to
graduate with a business degree. Success rarely occurs by
accident; rather, it is the result of hard work directed toward
achieving certain objectives.
Characteristics and Benefits of Objectives
Objectives should be quantitative, understandable, challenging,
compatible (consistent vertically and horizontally in a chain of
command), and obtainable. Each objective should also be
associated with a timeline. Objectives are commonly stated in
terms such as growth in assets, growth in sales, profitability,
market share, degree and nature of diversification, degree and
nature of vertical integration, earnings per share, and social
responsibility. (NOTE: Do not emulate many Annual
Reports that print really vague objectives for the firm, such as
Macy’s Annual Report that states as objectives “to grow sales
profitably” and “to improve return on invested capital.” Such
statements are useless in strategic planning.
Clearly established objectives offer many benefits. They
provide direction, allow synergy, assist in evaluation, establish
priorities, reduce uncertainty, minimize conflicts, stimulate
exertion, and aid in both the allocation of resources and the
design of jobs. Objectives provide a basis for consistent
decision making by managers whose values and attitudes differ.
Objectives serve as standards by which individuals, groups,
departments, divisions, and entire organizations can be
evaluated.
Table 5-1 and Table 5-2 summarize the desired characteristics
and benefits, respectively, of having clear objectives.
Table 5-1 Five Characteristics of Objectives
1. Quantitative: measurable
2. Understandable: clear
3. Challenging: achievable
4. Compatible: consistent vertically and horizontally in a chain
of command

4. 5. Obtainable: realistic
Table 5-2 10 Benefits of Having Clear Objectives
1. Provide direction by revealing expectations .
2. Allow synergy.
3. Assist in evaluation by serving as standards.
4. Establish priorities.
5. Reduce uncertainty.
6. Minimize conflicts.
7. Stimulate exertion.
8. Aid in allocation of resources.
9. Aid in design of jobs.
10. Provide basis for consistent decision making.
Types of Strategies
1. LO 5.2 Define and give an example of 11 types of strategies.
Defined and exemplified in Table 5-3, alternative strategies that
an enterprise could pursue can be categorized into 11 actions:
forward integration, backward integration, horizontal
integration, market penetration, market development, product
development, related diversification, unrelated diversification,
retrenchment, divestiture, and liquidation. Each alternative
strategy has countless variations. For example, market
penetration can include adding salespersons, increasing
advertising expenditures, couponing, and using similar actions
to increase market share in a given geographic area. Note for a
particular company the strategy is very specific; be speci fic to
the extent possible in all aspects of strategic planning.
Table 5-3 Alternative Strategies Defined and Recent Examples
Given
Strategy
Definition
Example
Forward Integration
Gaining ownership or increased control over distributors or
retailers
Nike opening 100 outlet stores and selling 30% more products
on its website

5. Backward Integration
Seeking ownership or increased control over suppliers
Boeing building 80% of its wing flap motors in-house
Horizontal Integration
Seeking ownership or increased control over competitors
Nestlé purchasing Sweet Earth Foods
Market Penetration
Seeking increased market share for present products in present
markets through greater marketing
Cristiano Ronaldo and LeBron James sign lifetime endorsement
deal with Nike
Market Development
Introducing present products into new geographic area
Publix building 20 new supermarkets in North and South
Carolina
Product Development
Seeking increased sales by improving present products or
developing new ones
Ford shifting one-third of its scheduled R&D budget on
gas/diesel engines to electric engines
Related Diversification
Adding new but related products
Walmart acquired Jet.com for $3.3 billion
Unrelated Diversification
Adding new, unrelated products
CVS pharmacy acquiring Aetna insurance
Retrenchment
Regrouping through cost and asset reduction to reverse
declining sales and profit
Eli Lilly laying off 3,500 employees
Divestiture
Selling a division or part of an organization
Toshiba aims to sell its memory-chip unit to Bain Capital
Liquidation
Selling all of a company’s assets, in parts, for their tangible
worth

6. Ringling Bros. and Barnum & Bailey Circus liquidated (last
performance was on May 21, 2017)
Most organizations simultaneously pursue a combination of two
or more strategies, but a combination strategy can be
exceptionally risky if carried too far. No organization can
afford to pursue all the strategies that might benefit the firm;
priorities must be established. Difficult decisions must be made.
Organizations, like individuals, have limited resources. Both
organizations and individuals must choose among alternative
strategies and avoid excessive indebtedness.
Strategic planning thus involves “choices that risk resources,
and trade-offs that sacrifice opportunity.” In other words, if you
have a strategy to go north, then you must buy snowshoes and
warm jackets (spend resources) and forgo the opportunity of
“faster population growth in southern states.” You cannot have
a strategy to go north and then take a step east, south, or west
“just to be on the safe side.” Strategy is all about “what to do”
and “what not to do.”
Firms spend resources and focus on a finite number of
opportunities in pursuing strategies to achieve an uncertain
outcome in the future. Strategic planning is much more than a
roll of the dice; it is an educated wager based on predictions
and hypotheses that are continually tested and refined by
knowledge, research, experience, and learning. Survival of the
firm often hinges on an excellent strategic plan.3
Organizations cannot excel in multiple different strategic
pursuits because resources and talents get spread thin and
competitors gain advantage. In large, diversified companies, a
combination strategy is commonly employed when different
divisions pursue different strategies. Organizations struggling
to survive may simultaneously employ a combination of several
defensive strategies, such as divestiture and retrenchment.
Levels of Strategies
Strategy making is not just a task for top executives. Middle-
and lower-level managers also must be involved in the strategic-
planning process to the extent possible. In large firms, there are

7. actually four levels of strategies: corporate, divisional,
functional, and operational—as illustrated in Figure 5-2.
However, in small firms, there are three levels of strategies:
company, functional, and operational.
Figure 5-2 Levels of Strategies with Persons Most Responsible
Figure 5-2 Full Alternative Text
The persons primarily responsible for having effective
strategies at the various levels include the CEO at the corporate
level; the president of segments at the divisional level; the chief
finance officer (CFO), chief information officer (CIO), human
resource manager (HRM), chief marketing officer (CMO), other
executives at the functional level, and the plant manager,
regional sales manager, and so on at the operational level. It is
important that all managers at all levels participate and
understand the firm’s strategic plan to help ensure coordination,
facilitation, and commitment, while avoiding inconsistency,
inefficiency, and miscommunication.
Long-term objectives are needed at the corporate, divisional,
functional, and operational levels of an organization. They are
an important measure of managerial performance. Bonuses or
merit pay for managers today should be based to a greater
extent on long-term objectives and strategies. An example
framework for relating objectives to performance evaluation is
provided in Table 5-4. A particular organization could tailor
these guidelines to meet their own needs, but incentives should
be attached to both long-term and annual objectives.
Table 5-4 Varying Performance Measures By Organizational
Level
Organizational-Level
Basis for Annual Bonus or Merit Pay
Corporate: overall firm
75% based on long-term objectives
25% based on annual objectives
Divisional
such as by product or region 50% based on long-term objectives

8. 50% based on annual objectives
Functional
such as marketing and finance 25% based on long-term
objectives
75% based on annual objectives
Operational
such as manufacturing plants or stores 25% based on long-term
objectives
75% based on annual objectives
Means for Achieving Strategies
1. LO 5.9 Compare and contrast when companies should “build,
borrow, or buy” as key means for achieving strategies.
Companies are under continual pressure from stockholders to
maintain top line (revenues) and bottom line (net income)
growth (usually 4+ percent) and pay higher dividends. To
accomplish this end, firms are often faced with a BUILD,
BORROW, or BUY decision. Building is growing internally
(organically), borrowing is growing externally using means such
as partnerships, joint ventures, and alliances; finally, buying
includes mergers and acquisitions. Let’s look at build, borrow,
or buy options a bit closer.
BUILD from Within to Grow
When firms build from within, sometimes called organic
growth, as a means for achieving strategies, strategists must
consider how well current internal resources match the
capabilities needed to grow (4+ percent). Building from within
can include new training programs, hiring new employees,
building (instead of buying rival’s) stores, or developing a
“blue ocean strategy.” A blue ocean strategy aims to target a
new market where competition is not yet present, thus creating a
“blue ocean” as opposed to a red ocean where many firms are
competing often on price, and the gains of one firm are often at
the expense of another. Blue ocean strategy is similar to being a
first mover seeking market space not yet occupied by rivals.
Kim and Mauborgne’s research on blue oceans revealed that
existing line extensions account for 86 percent of new products

9. created; only 14 percent of new ventures are targeted at new
markets or industries.21 Blue ocean thinking in developing
news markets and products can provide benefits far greater than
competing in traditional markets. Apple’s development of the
PC and smartphone were blue ocean examples where customers
did not even know they desired the products before they were
brought to market by Apple. However, the blue ocean
environment did not last long for Apple on either product
because competitors entered quickly, forcing Apple to operate
under what Porter would classify as a differentiation strategy.
Netflix, Southwest, eBay, and Amazon, like Apple, were all
derived partly from blue ocean thinking. These examples are of
blue oceans where there was no defined industry or market for
the products previously, but according to Kim and Mauborgne,
blue oceans can arise from already established industries as
well. It is likely blue oceans within current industries will not
be as sustainable and may even erode a firm’s mission, moving
it away from its core competencies. Extra care should be taken
when considering blue ocean thinking while operating within an
already established industry. However, a firm does not have to
have a blue ocean to build.
Book
David F. R., David F. R., & David M. E. (2019). Strategic
Management. [VitalSource Bookshelf]. Retrieved from
https://bookshelf.vitalsource.com/#/books/9780135203736/