MERGER, ACQUISITION, AND INTERNATIONAL STRATEGIES 1

MERGER, ACQUISITION, AND INTERNATIONAL STRATEGIES

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MERGER, ACQUISITION, AND INTERNATIONAL STRATEGIES 2

Mergers and acquisitions involve purchasing, offering, partitioning, and joining of

various organizations with comparable substances that can augment their aggregate benefits. The

key goal of mergers and acquisitions is to guarantee that diverse organizations can profit within

their particular enterprise. They are able to do this without creating a subsidiary, joint venture, or

a child entity. An acquisition is the corporate action in which a company purchases another

company or business entity. It is very common that the acquisition is a larger firm purchases a

smaller firm. The larger firm will normally acquire the management control of the smaller firm

and keep the initial name of the maintained company. (Hitt, 2013) PepsiCo Inc. is a leading

beverage production company that has merged with many smaller companies over the years.

(PepsiCo) Gullah Gourmet Inc. is an organization that offers gourmet suppers, plunges, treats,

dressings, sauces, and breads. (Gullah Gourmet) They have no history of any mergers and

acquisitions and work exclusively in the United States. Both of these organizations can benefit

from quality business and corporate level strategies in which I will further discuss.

The corporation that has gained another organization, merged with another

organization, or been gained up by another organization.

Pepsi-Cola was made by a drug specialist named Caleb Bradham in the late 1890s. Frito

Company was made in 1932 by Elmer Doolin, which soon converged with Pepsi-Cola to make

PepsiCo and Frito-Lay in 1965. At that point PepsiCo procured Pizza Hut Inc. in 1977, Gamesa

in 1990, Tropicana Products in 1998, South Beach Beverage Company (Sobe) in 2000, Quaker

in 2001, IZZE Beverage Company in 2006, Naked Juice Company in 2006, Sandora in 2006, and

Wimm-Bill-Dann in 2010. PepsiCo Inc. is an American based multinational corporation that is

headquartered in the United States and distributed internationally. (PepsiCo)

MERGER, ACQUISITION, AND INTERNATIONAL STRATEGIES 3

The best merger decision that PepsiCo has ever made was with Quaker in 2001. This

transaction gave PepsiCo control of Quaker’s products which included their sports drink

Gatorade. This merger nearly doubled PepsiCo’s share of noncarbonated market putting them in

the lead to Coca-Cola by 12 percent. Since Gatorade is one of the best-selling sports drink in the

world, Coca-Cola has begun to feel threatened by PepsiCo’s new beverage. Currently Gatorade

revenues tower Coca-Cola’s Powerade by about $300 million. This huge amount of their

revenues is now coming for just this one acquisition. (Winter, G.)

Powerade’s main benefit over Gatorade is their price. They both offer very similar

nutritional benefits but Powerade is approximately $0.50 less expensive per 20 fluid ounce

bottle. Even though sales have decreased for Gatorade over the years, their revenues are still

almost double that of Powerade. The benefit that Gatorade has over Powerade is the better brand

name. Between the acquisition of Tropicana and the merger with Quaker, PepsiCo is now

distributing these products to over 200 countries and bringing in new revenues of $43.5 billion

dollars. (Winter, G.)

The corporation that has not been involved in any mergers or acquisitions

Gullah Gourmet Inc. was created in 1994 by Deborah Nelson and is headquartered in

Charleston, South Carolina. They offer homemade gourmet bagged foods that are quick, easy

and delicious to make at home as well as bottled, canned, and jarred products. They currently

have one retail location, an online store, and are commonly sold at local markets. Their products

are currently marketed to tourists and customers with a heart for good southern foods. (Gullah

Gourmet)
MERGER, ACQUISITION, AND INTERNATIONAL STRATEGIES 4

They have not yet been involved in any mergers or acquisitions. I think that Gullah

Gourmet Inc. would make a great candidate for a larger corporation to acquire or merge with.

They have a proven track record and annual sales volume of about $2.1 million. I believe that

Gullah Gourmet’s award winning foods would help create a better success for any large retail

grocery store. (Gullah Gourmet)

The corporation that works internationally

PepsiCo’s corporate-level strategy is to provide value to customers through product

diversification. Through mergers and acquisitions, they have built a huge arrangement of items.

They are giving their clients distinctive items, which make solid brand acknowledgment to

coordinate the business-level procedure of separation. PepsiCo is reliably making and achieving

new items to keep up their upper hand. Each of PepsiCo's specialty units are all after a similar

business-level system of separation in their individual geographic location. These units include:

*Americas

*Europe

*Asia

*Middle East

*Africa

This business-level strategy engages in a low cost differentiation strategy through taste

and marketing. They are taking advantage of the economies by mass producing the products to

create lower costs. In 2009, PepsiCo had begun pursuing a low price strategy due to the

recession. They began creating new products at a more affordable price for their customers. Ever
MERGER, ACQUISITION, AND INTERNATIONAL STRATEGIES 5

since then PepsiCo has continued to offer discounts on their beverages and Frito-Lay snacks as

cost leadership. (PepsiCo) (Karanis, 2013)

The corporation that does not work internationally, one business-level strategy and

one corporate-level strategy that the corporation consider

I propose Gullah Gourmet Inc. to identify market niches within a larger geographical

area. Currently their market is limited to mostly tourists and locals. By conducting an economic

analysis to discover new customers, they can have the opportunity to more than double in size.

I also propose that Gullah Gourmet Inc. find a partnership with a prestigious grocery

store. Not only that, perhaps they could be included in that stores distribution to reduce overall

product prices. Gullah Gourmet Inc. is currently offering new products that you don’t normally

see at grocery stores. By creating a partnership with a much larger company, both parties can

benefit greatly. (Vitez, O.)

In conclusion, there are many different strategies that a company can adopt to increase its

level of business operations and revenues. PepsiCo has been such an enthusiastic company to

continuously venture into so many new markets. Their drive to become the world’s premier

consumer products company definitely shows. They have succeeded in acquiring and merging

with companies that have created more growth and an enriched brand name. These great

decisions have helped PepsiCo become successful and are continuing to produce financial

rewards to investors, business partners, employees, and the communities in which they operate.

(PepsiCo)
 MERGER, ACQUISITION, AND INTERNATIONAL STRATEGIES 6

Gullah Gourmet Inc. has created a successful path towards building their companies size

and revenues. If they create good business and corporate level strategies, they have the

opportunity to mass produce their products and gain a larger market for sales. I trust that it is just

a short time some time recently Gullah Gourmet Inc. begins acquiring new partnerships and/or

mergers. (Gullah Gourmet)

References

About Us. Gullah Gourmet. Retrieved February 27, 2015, from http://www.gullahgourmet.com/

Bradley, J. Types of Corporate Level Strategy. Chron. Retrieved February 27, 2015, from

http://smallbusiness.chron.com/types-corporate-level-strategy-60147.html
 MERGER, ACQUISITION, AND INTERNATIONAL STRATEGIES 7

(2010, April 1). Gatorade Marketing Campaign Analysis. Slide share. Retrieved February 27, 2015,

from http://www.slideshare.net/jwangen/gatorade-marketing-campaign-analysis-rebranding-

quotgquot

Hitt, M. A., Ireland, R. D., & Hoskisson, R. E. (2013). Strategic management: Concepts and cases:

Competiveness and globalization (10th Ed.). Mason, OH: South-Western Cengage Learning.

Karanis, M. (2013, January 4). Pepsi Co. Business-Level Strategy. Prize. Retrieved February 27, 2015,

from https://prezi.com/rxjdhos7cyuq/pepsi-co-business-level-strategy/

Vitez, O. Five Types of Business-Level Strategies. Chron. Retrieved February 27, 2015, from

http://smallbusiness.chron.com/five-types-business-level-strategies-781.html

Who We Are. PepsiCo. Retrieved February 27, 2015, from http://www.pepsico.com/

Winter, G. (2000, December 4). PepsiCo Said to Acquire Quaker Oats for $13.4 Billion in Stock. NY

Times. Retrieved February 27, 2015, from

http://www.nytimes.com/2000/12/04/business/pepsico-said-to-acquire-quaker-oats-for-13.4-

billion-in-stock.html