The Coca-Cola company is one of the world’s leading soft drink maker, operating in more than 200 countries, selling more than 400 brands of non-alcoholic beverages including diet and light beverages, waters, juices and juice drinks, teas, coffees, sports and energy drinks. Coca-Cola is one of the most valuable brands in the world and is also recognized as one of the most successful brands globally. The success of this brand revolves around five main factors.
1. A unique and recognized brand
2. Quality
3. Marketing
4. Global presence
5. Innovation
For these factors to be successful, Coca Cola builds strategy on both a global and local level. Hence, although Coca-Cola appears to be a universal brand, the company operates in local environments
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The first holding company was Pure Beverages (Private) Limited, and then over the years the company changed ownership three times. Two years ago it was taken over by The Bottling Investments Group of India, and is now locally known as Coca-Cola Beverages Sri Lanka Limited (CCBSL). The company has earned a loyal consumer base for its soft drink products spearheaded by its biggest and most Iconic Brand Coca-Cola, being the market leader and a major player in the carbonated beverage industry in the island. The company serves up to 50,000 local retail stores, Super markets, Hotel, Restaurants and Cafés (HoReCa) through partnerships with 86 authorized …show more content…
Exploiting economies of scope – This can be achieved from the efficiency gains through applying the company’s existing resources and competencies to the newly acquired businesses and vice versa.
2. Stretching corporate management competencies – Similar to economies of scope, diversification has the potential to apply the skills of talented cooperate level managers to the new business. This also known as cooperate parenting.
3. Exploiting superior and internal processes – Internal processes within the diversified cooperation can be more efficient that of its competitors.
4. Increasing market power – Being diversified into many business will increase the power Coca Cola has over its competitors.
2.2 Business Unit Strategy
A strategic business unit (SBU) can be defined as a distinct business within a large diversified cooperation. Coca-Cola can gain three distinctive advantages by following this model.
1. SBU’s can decentralize initiative to smaller units within the cooperation. – Hence, at Coca Cola each region or country can take their own initiative in making business decisions.
2. SBU’s allow large corporations to vary their strategy based on the local market conditions – This allows Coca-Cola to compete with local market
Coca Cola is more interested in penetrating all markets and is willing to invest heavily in areas that will support distribution to emerging markets like South Africa. Coca Cola does this by establishing bottling plants as close to their consumers as possible. This puts the production and distribution (and jobs) directly in the hands of the local territories; this allows communities to be invested in the success and distribution of Coca Cola. As an example; in South Africa they have the first all-Black managed bottling plant which has won Coca Cola a tremendous amount of respect and continues to perpetuate brand loyalty in that region. This Model has allowed Coca Cola to expand to 56 countries with 160 plants alone on the African
One of the Coca-Cola Company’s strongest strengths lies in its ability to conduct business on a global scale while maintaining a local approach, one of the most intelligent strategies thought up by the human resource department of Coca-Cola.
...le the business units to prepare strategic plans and budget and submit them to senior management to review and approve. This will benefit the company because in an unrelated diversified corporation, business unit managers have a greater influence in developing their strategies and budgets as they, not the corporate office, possess most of the information about their respective product/market.
...ative aspects of diversification, for example through better corporate planning, human recourse management and reaching further synergies between its various business lines.
Therefore, the long-term brand of Coca cola and better pricing strategies would help in competing with Pepsi. Unlike, Pepsi, Coca cola had targeted entering into partnership and alliances with local distributors and firms. This helps to develop strong relationship within the domestic firms to reduce the domestic barriers and thus, enhance the company’s competitiveness (Thabet, 2015). Lastly, the Asian markets consist of related and supporting industries to the soft drink industry that helps the companies in gaining a strong competitive position in the markets. Based on the competitive advantage of nation’s model, Coca cola has more home based advantages to develop a competitive advantage in relation to other countries on a global
... objects and customer regions. Do making a clear differentiation image between its soft drinks and bottled water. Because the consumers may believe that bottled water of Nestle sounds healthier than Coca-Cola brand since Nestle tend to emphasize their image on healthy food products. Then do market test for new taste, new packaging, or new innovation according to each regions, and especially for Europe, the company should launch the new one to replace Dasani image in order to seize their market shares. They may renew all nutrients and packaging. Finally Coca-Cola should continue its joint ventures with the regional companies in order to protect their products from barriers to entry both international trade restrictions and distribution channels. Furthermore, joint venture with local brand is a long term contract guarantee to make it easier for HOD to a specific region.
The Coca-Cola Company was founded in 1892. Since its inception, the organization has seen a steady increase in its market share over the years, and to this day has operations in over 200 countries worldwide. To achieve such success in its competitive market, Coca-Cola has employed sound strategies that have helped it become among the leaders in its industry. The Coca-Cola Company utilizes Market Based Management (MBM) techniques as well as Value Driven Management (VDM) techniques within the organization and in its market to help the firm sustain its stronghold of the market.
... middle of paper ... ... Strategic planning kit for dummies, 2nd edition. Retrieved from http://www.dummies.com/how-to/content/strategic-planning-diversification.html “Starbucks”.
Without a doubt, no beverage company compares to Coca-Cola’s social popularity or brand notoriety. Some people buy coke, not only because of its taste, but because it is also the most socially accepted brand. Another strength that is very important to Coca-Cola is customer loyalty. For instance, in a household where parents are avid Coke drinkers, this will be passed down to their children. Customers will continuously but Coke.
As well as mounting political persecution of its products, like they are facing today. They must rely on past experiences to get through, but likely will need to start studying the new trends to stay relevant. Learning from Others Coca-Cola has been able to learn not just from their own blunders, but from other beverage companies they’ve acquired for either product expansion or for resources they have that could help them.
A diversified company has two levels of strategy: business unit (or competitive) strategy and corporate (or companywide) strategy. Competitive strategy concerns how to create competitive advantage in each of the businesses in which a company competes. Corporate strategy concerns two different questions: what businesses the corporation should be in and how the corporate office should manage the array of business units.
Key success factors in the industry are a strong brand presence, maintaining customer loyalty as exploring new markets and distribution channels as well as offering a diversified product line. Implications of these factors are strong competition and dependency of company’s behavior and marketing strategies on competitors’ behavior. This is especially true for Coca-Cola and PepsiCo since their flagship products are very much alike in look and taste.
The Coca-Cola Company is global well known company. The Company re-entered Indian markets in year 1993. The company had to leave earli...
Coca-Cola is a company with sustainable competitive advantage. The company is innovative and has an extensive business model with boasts of a sustainable distribution network. The company was incorporated in the late 1800s to commence the production of a sweet fizzy beverage that has become the world's most known brand. Presently, the company is still on an upward trajectory as it remains one of the world's most sought-after stocks. The company's competitive advantage has shown resilience and sustainability over the years.
At the business unit level, the strategic issues are less about the coordination of operating units and more about developing and sustaining a competitive advantage for the goods and services that are produced. At the business level, the strategy formulation phase deals with: · Positioning the business against rivals · Anticipating changes in demand and technologies and adjusting the strategy to accommodate them. · Influencing the nature of competition through strategic actions such as vertical integration and through political actions such as lobbying. Michael porter identified three generic strategies (cost leadership, differentiation, and focus) that can be implemented at the business unit level to create a competitive advantage and defend against the