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The risk associated with acquisition is higher, as this includes the price paid for the acquisition and then the cost of managing the operations. However, the acquisition is likely to result in the greatest revenue growth in the short-term.
Question 2 - Size and International Opportunities The products may be present in many markets, but in developing markets they have only a low level of penetration compared to the more developed markets. As the countries develop economically and disposable income increases there will be a greater potential market for these products. In addition the current presence in many markets is limited to the core products, as the brand names grow in their presence and become better known there are also growth opportunities through related goods, such as the different flavor cola varieties. Therefore, the growth reflects the potential for the size of the target market to increase and the ability to pursue brand extensions in those markets.
There are certain circumstances in which the size of a firm is not affected by intentional opportunities. If a firm uses strategies such as licensing of franchising there is a great potential to undertake international growth without the actual size of the firm increasing. For example, many firms such as KFC, McDonalds and Starbucks will use the franchise model to expand internationally, as this requires only minimal support from the firm and the size increases only slightly. Operations in a virtual environment (the internet) may also facilitate increased access to international markets without the need to increase the size of the firm, this is particularly true where the products or service is some type of digital content due tot he limited resources needed to satisfy the demand (Chaffey, 2009).
Question 3 - Coca-Cola and PepsiCo International Opportunities
References
Chaffy D (2009), E-Business and E-Commerce Management (Second edition), London, FT Prentice hall.
Kotler Philip; Keller Kevin, (2008), Marketing Management (13th Edition), Prentice Hall.
Thompson JL, (2007), Strategic Management; Awareness and Change, London, Thompson Business Press.
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