COCA COLA 8
GeneralOverview and the External Environment
Established in 1886, the Coca-Cola Company has extended itsoperations beyond 200 countries. The firm markets more than 2,800beverage products that comprise of both still and sparkling beveragessuch as juices, juice drinks, coffee, tea, energy drinks, sportsdrinks and water. Coca-Cola boasts about having produced four of thetop global sparkling brands of beverages that include: Diet Coke,Fanta, Sprite, and Coca-Cola (Hnatko et al., 2014). Despite havingits headquarters in Atlanta, United States, Coca-Cola engages in theproduction, distribution, and marketing of its non-alcoholic beveragebrands across different countries. In the recent years, thecompetitor environment and the shifting demand of products suffice tobe the major aspects of the external environment that impact on theoperations of the company. Consequently, the company has aligned itsexpansion strategy to meet the increasing demand for carbonatedbeverages in Africa and the Middle East.
Whilestriving to attain market dominance and competitive advantage in suchmarkets, the firm has also adjusted its brands due to the increasinghealth concerns of consuming sugary beverages. As a result, Coca-Cola has launched sugar-free drinks such as Diet-Coke, Coca-Cola Lifeand Coca-Cola Zero to serve the affected markets. Coca-Cola facesintense competition from Pepsi Co., a rival food and beverage firmthat has also stretched its operations to more than 200 countries.PepsiCo has maintained its pursuit of substituting Coca-Cola as thelargest beverage producer by integrating customer demands and healthconcerns into its beverage brands. PepsiCo also boasts of well-knownbrands such as Gatorade and Pepsi (PepsiCo, 2014). The externalenvironment also provides many substitutes for Coca-Cola’s productssuch as coffees, teas, energy drinks, and water. As a strategy fordealing with the threat, Coca-Cola uses intensive advertisements todifferentiate its products from those of its competitors.
Inagreement with its 2020 vision, Coca-Cola has four strategic goalsand objectives (Dan, 2013).
To enforce environmental sustainability by focusing on bottling that is friendly to the environment
To minimize expenses by enhancing the efficiency of its production and distribution facilities
To attain a 6-8% increment in the annual operating income in the quest to double revenue by 2020
To capitalize on partnerships and innovations in the production of a diversified portfolio of customer-centric beverages.
TheCompany’s performance in the near future
Itis evident that Coca cola’s success emanates from its operationalprinciples. The values have enabled the enterprise to become the mostrecognizable brand. Simplicity suffices to be the first operationalstrategy that will yield positive achievement for the firm in thenext five years (Warkentin, 2014). Even though the business hasundergone an immense growth in value and reputation, it has neverderailed from integrating straightforward and timeless ideals intoits beverage brands. Coca-Cola’s advertisements focus oncommunicating the compelling and strong message of pleasure to itsconsumers. The continued application of simple and long-lastingslogans such as “happiness” and “enjoy” have also beeninstrumental in the unrelenting success gained by the company. As aresult, it is apparent that the firm will continue realizingincreased sales and revenue over the next several years.
Personalizedcommunication with consumers is also responsible for the sustainedpreference of the company’s products as compared to those of itscompetitors (Warkentin, 2014). The “Share a Coke” campaignindicates that Coca-Cola has endeavored to maintain a personal touchwith its consumers regardless of its status as a global icon. Thecampaign is a proper application of the positioning strategy thatfirms should use to position themselves on the global frontier.Consequently, the business will increase its global coverage andmarket dominance if it adheres to the strategy. The company has alsoused the socialization strategy on social media to advertise itsproducts to consumers. The firm’s social media strategy operates onthe premise that there is an increasing capability of potentialcustomers to access the internet and the social media. It is evidentthat Coca-Cola has made efficient utilization of the platform ininternational marketing.
Theother important strategy used by the company to achieve success inthe beverage industry is its focus on brand rather than product(Warkentin, 2014). Rather than selling the drink contained in thebottle, Coca-Cola sells the “happiness” associated with drinkingthe beverage. The approach turns out to be the use of the“experience” strategy. Advertisements that focus on experiencelure customers to familiarize with the happiness contained in thedrink. The marketing campaigns of the company make consumers feellike they are unique and extraordinary following their decision toconsume its products such as Diet Coke. The persistent use of themarketing strategy is a guarantee to the success of the businesssince consumers will still purchase its different products if theyare linked to the Coca-Cola brand.
Thelong-term affirmative accomplishments of the company depend on theproper implementation of strategies aimed at enhancing the image ofthe company as well as increasing sales. As the CEO of the business,I would cultivate the strategy of adopting the master brand ratherthan focusing on individual products in marketing. The decision wouldplay a pivotal role in reducing the marketing expenses incurred bythe company, as well as the confusion created in the minds of thecustomers by the different product portfolios offered by the business(O’Reilly, 2015). The other advantage associated with using themaster brand is the shift of focus from unhealthier drinks to the nocalorie or low- calorie products.
Itis also necessary to understand that majority of consumers fall underthe millennium generation. Consequently, this fact necessitatesunderstanding the attributes and product preferences of thegeneration. In addition to the traditional marketing approaches suchas using physical distribution channels, shifting emphasis on onlinemarketing will have an immense contribution towards guaranteeing thesuccess of the company in the future. Individuals born between thelate 1980s and early 2000s consider the internet to be an importantaspect of their livelihoods. As a result, they require firms to availdifferent product portfolios from which they can select products oftheir choice. In essence, they expect the selection of goods to beunlimited (Dan, 2013). The evolving innovation of Coca cola’sbrands is a necessity for their progression and nimbleness in themarket.
Onthe aspect of innovative packaging, the major areas that requireinnovation encompass consumer provocations, cultural leadership,products and equipment, partnerships and packaging (Dan, 2013).Customizable packaging has resulted in improvement of customerresponse to the products. For instance, rather than using traditionalpackages that have been in place for approximately 125 years, the useof renowned names of persons in various markets would serve toincrease the demand for products. The application of the strategy wassuccessful in Australia. Accordingly, the persistent use of thestrategy in other global markets would also improve the salesrealized from the company’s brands.
CompetitiveStrategies of Coca cola’s competitors
Apparently,PepsiCo is Coca cola’s greatest competitor it is proper toconsider the strategies employed by the company to attain competitiveadvantage in the beverage industry. The use of acquisitions andmergers to achieve growth suffices to be one of the competitivestrategies employed by PepsiCo (Dudovskiy, 2016). There are severaladvantages associated with the use of mergers and acquisitions. Someof the merits include: a reduction of overheads and direct costs,increased access to infrastructure and competencies and theattainment of organic growth. PepsiCo’s recent mergers andacquisitions include the purchase of dairy and juice businesses invarious parts of the world. For instance, the firm acquired Mabelcookies and Lucky snacks in Brazil, Dilexies cookies in Argentina,and Wimm-Bill-Dann and Lebedyansky in Russia.
Theother competitive strategy employed by PepsiCo is the formation ofglobal strategic alliances. The strategic partnership that PepsiCoformed with China’s Tingyi is fundamental towards increasing thefirm’s share of the growing Chinese market. The PepsiCo-Tata jointventure and PepsiCo-Almarai strategic partnership are also playing acrucial role in expanding the company’s coverage of the globalbeverage market. Just like Coca-Cola, PepsiCo has also exhibitedincreasing focus on emerging markets, organizational culture and thedevelopment and promotion of the On PepsiCo idea (Dudovskiy, 2016).In order to combat PepsiCo’s strategies, Coca -Cola shouldimplement parallel competitive strategies to buffer its existingstrengths over PepsiCo.
Dan,A. (2013). Just How Does Coca Cola Reinvent Itself in a ChangedWorld? CMONetwork. Retrievedfrom:http://www.forbes.com/sites/avidan/2013/10/07/just-how-does-coca-cola-reinvent-itself-in-a-changed-world/#5feaabc5896d
Dudovskiy,J. (2016). PepsiCoBusiness Strategy and Competitive Advantage.Retrieved from:http://research-methodology.net/pepsico-analysis-of-corporate-strategy/
Hnatko,C., Sidhu, R., & Zhang, L. (2014). TheCoca cola Company: Case Synopsis.
O’Reilly,L. (2015). The end of the Coke era. BusinessInsider. Retrievedfrom:http://www.businessinsider.com/what-is-the-future-for-the-coca-cola-brand-soda-sales-decline-2015-4
PepsiCo.(2014). 2014Annual Report. Retrievedfrom:https://www.pepsico.com/docs/album/default-document-library/pepsico-2014-annual-report_final.pdf?sfvrsn=0
Warkentin,S. (2014). What Can We Learn from Coca Cola’s Global MarketingSuccess? Smartling.Retrievedfrom:https://www.smartling.com/blog/what-can-we-learn-from-coca-colas-global-marketing-success/