Strategic Management and Joint Venture

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The Quantitative Strategic Planning Matrix (QSPM) is a viable tool for making strategy-formulation decisions. This powerful basis will assist managers of a firm to take alternative feasible strategies for their particular business. For developing a QSPM, there are six major steps as follows: Step 1

Make a list of the firm’s key external opportunities/threats and internal strengths/weaknesses. As we have done in SWOT analysis before. Step 2
Assign weights to each key external and internal factor. This part is already done in SWOT analysis. Step 3
Examine matrices, and identify alternative strategies than the company should consider implementing. In this part, three alternative strategies grasp from previous analysis based on SWOT matching. These alternative strategies are: -Product Centric diversification – include new unrelated products or services. In this case products like Coke Diet, Juices, Vitamin water, etc. could be considered as centric diversification part. -Joint venture – a kind of strategy that occurs when two or more company form a temporary partnership for the purpose of capitalizing on some opportunity. Joint venture with Cadbury has been suggested in this part. -Conglomerate Diversification – include new unrelated products. Entering into snack business is an example of this strategy for coke. Step 4

Determine the attractiveness scores (AS) defined as numerical values which indicate the relative attractiveness of each factor in a strategy. Step 5
Compute the total attractiveness scores (TAS) multiplying the weights from step 2 by the attractiveness scores from step 4.

Step 6
Compute the sum total attractiveness score. The total attractiveness score identifies which strategy is most attractive in set of strategies and is the best way for decision-making.

Strategic Alternatives
1 Product Centric Diversification

2 Joint Venture with Cadbury

3 Entering into snack business Alternative Strategy 1
Alternative Strategy 2
Alternative Strategy 3

Key FactorsweightASTSASTSASTAS
1New industries such as snacks and confectionary business0.10011.044.044.0 2Growing in bottling business 0.05020.1020.1010.050
3Bottled tea is one of the fastest growing drinks in the industry0.08040.3220.1610.080 4Sports events such as Olympic and FIFA World Cup with more than 3 billion audience0.06030.1830.1840.24 5Coffee business market in Japan0.07530.22520.15010.075 6Juice/Sports drinks market in Latin America0.05040.2020.1020.10 7High growth in e-business market 0.045------

8 trend towards more healthy eating & drinking0.10044.044.011.0 9Increase in raw material costs0.06510.06520.1320.13 10Strong Competitors in industry0.07530.22540.310.075 11Government policies - for disclosure of health warning0.08030.2420.1610.08 12Ban in public schools due to obesity issues0.06520.1310.06510.065 13Federal regulations prohibit Coke from bidding for Cadbury’s Products0.06540.2610.06540.26 14Low value of Dollar in global environment0.015------ 15Not to advertise to target audience under the age of 12 0.040------ 16The limitation of water (main component) in different parts of the world0.04510.04520.0930.135 Grand Total1.000

1The World’s largest beverage Company0.10044.044.033.0 2The most favorite drink in South Africa0.05030.1520.1010.05 3Success of Coke Zero in Australia & Thailand0.08040.3220.1610.08 4New product combination, innovative packaging and good collaborating with customer in 2006 FIFA World Cup in Germany0.060------ 5Digital marketing platform in Latin America with more than 5 million visitors0.075------ 6Top seller of nonalcoholic beverage in Russia0.04530.13520.0920.09 7Growth in unit case volume in huge China market0.065------ 8Strong leadership team0.10-----...
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