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Identify and provide
company strategic details and consider what circumstances existed that motivated
this company to diversify.
Diversification
is very important for all types of the organization because diversification
adopted by the organization when the company has enough profit and also offers a
new type of product with its regular product to attract the maximum number of
customers. Here we are going to discuss the diversification strategies of the Almarai
which offers a larger number of beverage and food item especially dairy
products and attract a maximum number of customers towards its variety of foods
and also offer items according to the need of the customers. The mission of the
Almarai is to provide quality products to its customers, which could be paid at
any cost. With the change in the people’s taste and demand in the market,
companies are most likely to change strategies to get competitive advantages. Almarai
wants to grow its business with expansion in the product line, e.g. juice and
dairy products
Almarai Follows different strategies that help to maintain and
achieve the competitive advantages of the market but it has to diversify its
strategies which necessary to get the best place in the market because it
increases the growth of the organization and also increases the range of
products that the company offers to a different class of customers. The
strategies make the company strong in the market because one of the best
strategy was to enter in the new market by making new market segments. The
company expanded its business for the diversification of the assets to protect
the bottom line of the company against the events. Diversification
strategy is also known as the strategy of corporate-level because it includes
value creation with the coordination and configuration of activities of multi
markets. Almarai is very famous because it offers a different variety and range
of products and they also offer high-quality products all over the country. Almarai
Partners with PepsiCo to build an internationally recognized juicy and dairy
drink which acquires the customers from the world. Almarai adopted strategies
for diversification.
Increasing Sales and
Productivity of
Corporate strategy for Diversifications of PepsiCo Company
The decision to make a strong relationship with PepsiCo Company was
really good because it make the company strong as well as it did expand the
company into the new markets which increase the total sales and enhanced the
productivity. For the adoption of the diversification,
the company improved it growth by increasing the sales beyond the regions and
races. The company also focused on the new technique to grab high market share
as well as to become a strong competitor in the market. Furthermore, it did
make a beneficial relationships with other company like Pesico to adopt the
strategies for the betterment. This strategy urges the management of the
company to get corporate advantages of the market.
The company has to implement growth strategies because when the
company focuses on its growth strategies then the company explore new products
in the market and also increase the level of competition for different
competitors of international level and also capture maximum market share as it
will also help to enhance the revenue of the company which a little cost which
will grow the business of Almarai For growth. When there is
expand the business, there must be some risk that will be linked with the
profit margin. Alamarai could overcome the risk related to one product which
could compensate for the new product or if new products will fail in the market
it could be compensated with existing products. Companies diversified the strategies
for these two objectives which could increase the part of shareholder value in
the market
The company did also attain the competitive advantage into the
market. Diversification minimizes the
systematic risk because the risk of the company spread on multiple businesses
and if one area fails then the loss must be adjustable due to other areas that
earn more profit as compare to others. So when the company is moving in a profitable
direction and also maintains its reputation in the market, then the
diversification strategy help to motivate its operations and also enhances
product development ineffective way and also maintain a strong position in the
market
What mode of
diversification did the company adopt? How does this relate to their resources
and capabilities?
Almarai
utilizes the diversification strategies that help to get the expansion in the
business and to maintain a strong position of the company in the market and
also help to maintain the level of the company according to customer
requirements. Alamarai co adopts expansion of product line and other three
basic modes for diversification that include market penetration, market
development, and product development. Almarai uses the market development
approach for the diversification strategy as it wants to develop its market among
different countries with the help of PepsiCo. The company wants to capture more
customers and also show its product diversity in different locations according
to the demand of people of that location. So diversification in strategy also
helpful in market development because helps to attract new customers with new
taste and demand, and they also want a new type of product according to their
changing demand.
The
organization moves to a healthier product as juices and dairy beverages, which
is appreciable by the customers. So the company offer new product segment for
the customers and launch in the market and develop a healthy market related to
food items. There are also different product segment that company offer for the
customers and its prices are very reasonable for the product, so their
diversification approach help to expand its market reputation although it is
highly recognized in the KSA, but they want to get fame in other regions as
well.
Market
penetration is also very helpful for the implementation of diversification
strategy as it reaching more customers through its operations and also connect
to mote growth strategies that helping global expansion and when the company
implement low cost and low prices then the company can penetrate the market
easily and also help in the development of the company according to its
objectives. For supporting its diversification strategy, the company also
utilizes the product development approach to obtain the market at maximum level
and also makes the company more profitable. With product development, new
advancement and technology involvement also appear in the organization’s
product and also motivate the operations of the organization according to
market demand. Almarai co adopts the product diversification strategies by
launching new cafes and products in the market according to the requirement and
demand.
There
are also numerous other competitors present in the market which are offered the
same range of products and also attract multiple customers, but the Almarai has
its reputation and scope of the market, and due to its effective corporate
strategy, the Almarai help to expand its scope in the market. There are also
many issues that arise that handle the new product development and also the production
of new food items according to new market conditions. Market diversification
strategies help to maintain the level of product at a high level and also
explore new ways of entering the market and hold high market share
What are the benefits
of diversification in this industry and how significant are they in the shape
and growth of the industry
The
main focus of diversification is to discover the business in the different aspects
which could get the business at a place where the company gets maximum profits.
Internal Economies transections
of Corporate strategy
for Diversifications of PepsiCo Company
The capabilities resources as well as the scope of the economies
can be browbeaten simply by selling or licensing the use of the capability or resource
to alternative company. Diversification strategies are very helpful in
maintaining the position of the company in the market and also explore new ways
of production and investment for the future. Diversification strategies is also
known as growth strategies so the diversification strategies also provide many
benefits to the organization to run in long terms and also beneficial for the
future because when the company is moving in a profit-generating way then its
investment and further production help to maintain a high level of company in
its production sector and also promote its methodologies in an effective way.
With the economies of the scope there may be benefits of cost-saving and sharing
the advertisement to the people within the same cost
Scope of Economy
of Corporate strategy
for Diversifications of PepsiCo Company
With
the expansion in the product line of the Almarai, co is helpful to get the
economies of the scope. As we know that economies of scope is referred to the
term which means that the company will get more benefits in large number of
product within the same cost bears. Almarai co is getting higher returns with
the increase in product variety. This may be further explained that the company
is getting tangible and intangible resources such as tangible resource; there
may be change in the product as the intangible resources are to meet the market
requirements.
Parenting advantages of
Corporate strategy for Diversifications of PepsiCo Company
As
Almarai co is already a well-established company in the KSA, therefore, it is
easy for the company to get maximum satisfaction with the new product line as
it is already parent company and get partnered with PepsiCo to introducing the juice
and dairy product which will add the value of business with the as the company
is already capable of getting these parental advantages os the market value. There
is always successful diversification in the business when there is relationship
between the existing product and new one. Other than the above benefits, there
may be other advantages of the diversification are given as under, generating
returns, minimizing the risk of loss and preserving capital.
What are the
implications of the strategy chosen for the organizational structure,
management systems, and allocation of decision making within the diversified
firm?
Diversification
is an effort, or you can say a trick that causes the companies to expand their
business into a world full of innovations,
and different things are going to have happened with this diversification of
the company. There are many different aspects that not only manages the things
in a way that not only disturbs the overall functioning but also of the overall
aspects of the success of the country. Due to diversification, the structure of
the organization increases, and it expands to a high level so that it creates
very high demand among all of its consumers. The more people able to work in
such a diversify atmosphere, the better they are going to develop their trust
in the organization and towards its employees and all staff as well
For
powerful enhancement, a legitimate broadening procedure is exceptionally useful
and executed in the association to make the interest in a better way and give
another approach to use their speculation and make its market position progressively
solid and aggressive. Expansion procedures help to bring new and creative items
run in the market and improve the market rivalry since when the new and
inventive item comes in the market then it is imperative to use the interest in
new items and furthermore meet the prerequisite of the market. Various
components of broadening and its powerful methodology additionally help to keep
up the development of the association and furthermore shape the association in a
better way
Expansion
techniques are extremely useful to keep up the situation of the organization in
the market and investigate better approaches for creation and speculation for
what's to come. Enhancement systems is otherwise called development techniques
so the broadening procedures likewise give numerous advantages to the
association to run in long terms and furthermore valuable for the future since
when the organization is moving in benefit creating way then its speculation
and further generation help to keep up an elevated level of organization in its
creation area and furthermore advance its philosophies in a viable manner.
Three fundamental preferences of the broadening are given as under, producing
returns, limiting ascent of misfortune and protecting capital
For
supporting its enhancement system the organization likewise use the item
advancement way to deal with get the market at a most extreme level and make
the organization increasingly beneficial. With the item improvement, new
headway and innovation association additionally show up in the association's
item and furthermore persuade the activities of the association as indicated by
showcase request. Almarai embrace the item enhancement methodologies by propelling
new bistros and items in the market as indicated by the necessity and request
Expansion
limits the methodical hazard because the danger of the organization spread on
various businesses, and on the off chance that one territory comes up short, at
that point, the misfortune must be movable because of different zones that
procure more benefit as the contrast with others. The expansion procedure of Almarai
likewise began for numerous years. The expansion in product line will be
beneficial for the organization as it creates the revenue of the company with the
same cost of the business and also provides the opportunity for growth of the
business
References of Corporate strategy
for Diversifications of PepsiCo Company
Grant, R. (2018). Contemporary
strategy analysis by Grant. Hoboken: Wiley & Sons.
Grant, R. M. (2018). Contemporary strategy analysis . Wiley & Sons.
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