Essay Sample on Essential Business Aspects

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Carnegie Mellon University
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The aim of this discussion is to present various aspects that are related to successful business management. In a technological-driven era, the only way for a company to maintain a competitive edge is through strategic implementation of proposed business initiatives. The two factors covered in this discussion are a business strategy and business model innovation.

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Business Strategy

Key Ideas Extracted from the e-Learning Activity

In the current business environment, the term strategy has been overused to the point that deduction of its meaning from a liegemans perspective is inevitable. According to the narrator of the short clip, tactics, goals, objectives and descriptions are mostly confused as strategies (Kryscynski 2015). For instance, the statement, pursue a global strategy sounds very strategic but the narrator indicates that it is not the real plan. Rather, it is a strategy statement, which is a small component of the actual strategy. Moving forward, the narrator indicates that a good strategy needs to put into perspective four principal components. The first aspect is where the business operates. The area of operation will determine a companys primary rivals. This consideration puts into perspective the structure of the industry and the competitive markets that a business will indulge in. The second aspect is that a good strategy should be able to extrapolate the unique value brought by a business into the versatile marketplace. According to the narrator, this can be achieved through differentiation and other relatable strategies (Kryscynski 2015).

The third aspect of a good strategy covers the business capabilities and resources used to deliver the unique value sponsored by a firm. This can be accomplished by either having a strong capital base, extensive networking, or superior technology among other unique factors. Reputation is also an intangible factor that can be used as a resource to leverage a unique value.The fourth aspect of a comprehensive strategy is sustainability.This is accomplished through deducing factors that can be used to maintain a long-term business success with regards to value provision. A good strategy adopted by a company also embraces right timing (Kryscynski 2015).

Application of the Ideas

In the current economic conditions, strategy underlies every initiative taken by an entity, be it in the human resource department or market penetration capabilities. In explaining better the conceptualization of a business strategy, this discussion takes PepsiCo as the perfect example. For a long time, PepsiCo has operated in the shadows of Coca-Cola. It was not until the company decided to diversify into food and snacks in the 90s and 2000s (Bailey 2014). Although dealing with different products, PepsiCo is now an equivalent competitor of Coca-Cola, a company that is globally known for its reputation in sparkled and carbonated soft drinks. More than 60 percent of PepsiCos revenue is generated from the acquired snack and food businesses, thanks to the diversification strategy followed (York 2012). Narrowing down to the carbonated soft drink market, PepsiCo needs a developed strategy to compete with Coca-Cola. With increased revenue output, substantial resources can be committed to the dockets of R&Dand great marketing. As such, the primary strategy to be adopted by PepsiCo is product development. Considering the four aspects mentioned by the narrator, PepsiCo does not need to penetrate new markets, but it can use new soft drink flavors to penetrate new regions.The unique value will be defined by PepsiCos ability to offer new flavors of carbonated soft drinks. With a strong capital base generated from food and snacks, PepsiCo can sustain thorough marketing and subsequent product development. PepsiCo expenditure on marketing has been expanding in the previous years, an aspect that has acted positively on its revenue growth.

Business Model Innovation

Key Ideas

The most significant aspect that the narrator begins with is the radical innovation. In a world ruled by technology, constant innovation by tech companies is the strategic way to maintain a competitive edge. Companies such as Nokia have lost their edge while others such as Polaroid have demised because of neglecting radical innovation. Innovation is not all about pioneering new products but rather initiating business ideas that have not been implemented anywhere else. Fourteen of the twenty-five most innovative firms have survived by innovating their business models and not solely concentrating on enhancing products or services only (HSGUniStGallen 2013).

Four important factors dictate a standard business model.The first aspect is the target customer. No business can thrive without having defined their target customer in the highly competitive economic dispensation. The second point is what is offered to the client. The third factor is how value proposition of the offered product is created. The final aspect touches on revenue generation. When narrowed down to a business model innovation, the narrator indicates that four elements need be followed. The steps include initiation, ideation, integration, and implementation. Initiation involves studying the current business model. Ideation conceptualizes new ideas based on razor-blade strategy. Integration scans for consistencies. To ensure success, one business model should be implemented at a time. The new business model should be communicated thoroughly to the relevant stakeholders. Short term success factors should not be over-emphasized. In addition to all these, the commitment of the top management is required (HSGUniStGallen 2013). Without adequate sponsorship and organizational commitment, most business model innovations tend to fall.


Using the same case of PepsiCo, it is important to shed more light on the business approach taken by the company. Compared to its main rival Coca-Cola, PepsiCo has a strategic advantage because it deals with other beverages, foods, and snacks. As such, there are several loopholes through which business model innovation can be carried out. The company currently relies on the diversification business model strategy to remain competitive (Bailey, 2014). While this is significant, the carbonated drinks department needs to be revived to compete favorably in the versatile market largely dictated by Coca-Cola. The key idea here is for PepsiCo to hit the ground running in emerging economies. The model will rely on the companys ability to the razor-blade model innovation. To increase the sale of its soft drinks in emerging markets, PepsiCo has to be willing to be willing to outspend Coca-Cola in the market promotion. A good example is the provision of free freezers and vending machines to relevant retailers. It is important to note that it is not a new model, but the company can use it to penetrate emerging markets.

In conclusion, it is relevant to note that businesses cannot grow without a well-defined strategy. It is the strategy that a significant business model is deduced. Therefore, businesses have to adapt these two factors carefully to remain viable in the high competitive technological era.


Bailey, S. 2014. PepsiCo: A company overview. [online] Available at [Accessed 16 Dec 2016].

HSGUniStGallen. 2013. Business model innovation. [video online] Available at [Accessed 16 Dec 2016]

Kryscynski, D. 2015. What is Startegy. [video online] Available at: [Accessed 16 Dec 2016]

York, E. B. 2012. Pepsi says three drinks now billion-dollar brands. [online] Available at [Accessed 16 Dec 2016]

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