The Coca-Cola Company Analysis

The Coca-Cola Company Analysis

This paper intends to evaluate the corporate-level and business-level strategies of the Coca-Cola company to recognize the most critical approach, which has primarily contributed to the firm’s success in the past and can enable the organization to compete effectively in the future. The firm’s competitive environment has also been analyzed to examine and compare the strategies used by other competitors in the industry to compete slow and fast cycle environment.

The Coca-Cola Company

The Coca-Cola Company is the biggest manufacturer and distributor of beverage products in the world. It is an American international company involved in the manufacture, promotion, and distribution of a variety of beverages such as soft drinks, sodas and fruit juices, sports and sparkling drinks, coffee, tea, mineral water, and yogurt drinks (The Coca-Cola Company, 2020). The organization manufactures more than 3,500 products under 500 different brand names. Some of the Coca-Cola company’s top brands include Dasani, Coca-Cola, Power Ade, Fanta, Mello Yello, Sprite, and minute maid. The firm operates in more than 200 countries around the world, and it serves more than 1.8 billion consumers daily.

Business-level strategy for Coca-Cola Company

The organization uses the following business-level strategy to support its local and international operations

1. Differentiation strategies

The differentiation strategy is implemented by the Coca-Cola Company to operate in the competitive beverage industry competitively and uniquely. Since the firm’s inception, it has always concentrated on differentiating its products from those of its competitors so that it can occupy the first position in the global beverage market. Brands such as Coca-Cola, Fanta, and Sprite are processed under strict quality standards and using unique formulas. Differentiation strategy has enabled Coca-Cola to maintain the top leadership position in the global beverage market (Volberda, Morgan, Reinmoeller, Hitt, Ireland & Hoskisson, 2011). Differentiation is found in many aspects of the firm’s business operations. For example, The Coca-Cola Company uses exceptional marketing campaigns, bottle shapes, and advanced plants and types of machiner

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1. Low-Cost Leadership

Besides providing high-quality products, the Coca-Cola company monitors its increasing marketing and operational expenses. The firm understands the benefits of cost control for gaining a competitive advantage in the industry. The company has been pursuing a low-cost leadership strategy since its inception. The management focuses on internal efficiency to ensure that its products are manufactured at a minimum cost (The Coca-Cola Company, 2020). Though the company makes a wide variety of products, there is high standardization in their manufacturing processes, packaging, and marketing. The firm has also maintained substantial control over its processing, overhead, marketing, and research and development costs.

1. Focus strategy

The company uses the focus strategy in both differentiation and low-cost aspects of business-level strategy. For the focused low-cost strategy, the Coca-Cola company has defined a particular brand of its beverage products that can use to target a market and use the low-cost strategy in manufacturing its products under competent manufacturing processes. For example, the firm’s Coca-Cola brand is always manufactured and advertised under a focused, low-cost approach. The organization produces its Coca-Cola brand in large for a target market to meet the low-cost leadership in the market. The firm also focuses on the needs of the target when designing its advertisements and choosing a distribution network.

After evaluating these business-level strategies of the Coca-Cola company, it can be said that the most effective strategy that enables the firm to remain competitive in the beverage company is the differentiation strategy. The firm’s products are easily recognizable because of its unique test. The firm keeps innovating its products to meet the changing customer needs and wants.

Corporate-level strategies of the Coca-Cola Company

This section discusses Coca-company’s corporate-level strategies

1. Growth strategies

The Coca-Cola Company uses a considerable amount of money on its business expansion projects throughout the world. Currently, the firm operates in more than 200 countries across the globe. Because of the organization’s size, it uses different growth strategies for varying needs and different situations. For example, when the firm aims at attracting new customers, launching new products, or entering new markets, it uses a horizontal growth strategy. However, if the firm is focusing on investing in its supply chain as an aspect of cost-leadership strategy, it focuses on vertical growth strategy. The Coca-Cola Company has established its supply and distribution system in many markets across the world, which significantly assists the firm in regulating the enormous costs used in heavy manufacturing and distribution processes (The Coca-Cola Company, 2020).

Furthermore, the Coca-Cola company has been using the diversification strategy in many situations since its inception. The firm started as a soft drink company. However, it has ventured into the production of many other products such as coffee, mineral water, tea, soda, and fruit juices. These diversification strategies have enabled the firm to compete with other top brands in the market effectively.

1. Stability Strategies

Under some situations, the Coca-Cola Company is always forced to suspend its growth strategy to establish stability in its current markets. The firm uses a stability strategy when it feels that the growth strategy is not practical. When the firm is operating in countries experiencing unfavorable economic conditions or when it was experiencing some internal issues, the firm is always forced to suspend its growth strategy and implement stability strategy to ensure that it performs well in that particular market even though the prevailing market conditions may not be favorable.

1. Retrenchment strategies

The Coca-Cola company implements the retrenchment strategy for business units that shows no or little growth after a particular period. The firm retrenches these business units in different ways, such as budget cuts for manufacturing processes, marketing and research, and development in the market, and the firm can also shut down the business units in cases where the business has not grown for over a long period. The firm can also decide to sell out the whole business unit to investors so that the firm can concentrate on other business units, make them stable and focus on opening other branches in countries with a target market.

The important corporate-level strategy is the growth strategy because it enables the company to expand its operations across the world and serve more customers. By pursuing continuous growth in its services, the Coca-Cola company can compete effectively with its rivals such as PepsiCo. The growth strategy not only assists the firm in strengthening its market position but is also ensures that the organization can achieve its goals through business-level strategies such as differentiation and cost-leadership. For example, the vertical growth strategy ensures that the firm’s chain and distribution networks are efficient and are under the control of the company’s management.

Diversification strategies have enabled the firm to manufacture products that increase the sales volume of the leading brands (Volberda, Morgan, Reinmoeller, Hitt, Ireland & Hoskisson, 2011). The firm should establish more growth strategies to ensure that the firm holds its leadership and market share in the international market. The Coca-Cola Company is operating in a very competitive market, which is highly concentrated with both large and small producers such as PepsiCo, Red Bull GmbH, Starbucks, and Nestle Water, among others. Therefore, the firm should focus on the growth strategy so that it may stop depending on the domestic market.