Strategic Planning: A Dynamic Duty

Strategic Planning: A Dynamic Duty

Coca-Cola and Pepsi Cola are household names. Together they control soft drink market. Their success can be attributed to their overall strategy to produce and promote their products. They both decided to build global brands to bottlers throughout the world. And a portion of the proceeds goes toward advertising to build and maintain brand awareness. The bottlers are responsible for producing and distributing to vending machines, supermarkets, restaurants, and other retail outlets. However, the advertising is left up to Coca-Cola and Pepsi. In addition, the bottlers must sign an agreement that prohibits them from distributing competing cola brands. Their strategy is simple, yet dynamic. It forces bottlers to enter into exclusive agreements, which creates a high barrier to entry into the industry. Any potential competitor must create their distribution network rather than use the existing one. And the large amounts of money spent on advertising helps to develop a global brand name and differentiate their products. Furthermore, brand loyalty allows both companies to charge high prices. Accordingly, managers must study the way other organizations behave and identify their strategies. In an uncertain or unstable competitive environment, managers must hold fast in thorough planning to find a strategy that allows them to compete effectively. Strategic planning involves three major steps: determining an organization’s mission and major goals, choosing strategies to realize the mission and goals, and implementation of the strategies.

Determining the organization’s mission and goals is the first step of the planning process. To define the mission managers must ask themselves “Who are our customers, are their needs being satisfied, and how are we satisfying them?” These questions allow the manager to identify the needs for the present and future. They also help the managers to plan and establish appropriate goals and disregard inappropriate goals. Developing goals give an organization a sense of direction. Coca-Cola’s mission to maximize shareowner value over time is backed by six key beliefs: 1) Consumer demand drives everything we do. 2) Brand Coca-Cola is the core of our business. 3) We will serve customers a broad selection of the nonalcoholic ready to drink beverages they want to drink throughout the day. 4) We will be...

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...ot carefully implemented because people are naturally resistant to change. Coca-Cola recognizes there is a right time and place for their product; therefore, their strategy makes room for adjustments.

There is more than one way to enter and compete in any industry; however, gaining efficiency, quality, innovation, and responsiveness to customers requires that a strategic plan be in tact. It can help an organization achieve a competitive advantage by lowering the cost of creating value, or by adding value above ad beyond that offered by rivals. Coca-Cola strives to create value for their consumers, customers, bottlers and the community. They believe their success depends on their ability to satisfy their beverage consumption demands and their ability to add value for their customers. Nevertheless, attaining efficiency, quality, innovation, and responsiveness to customers requires a strategic plan.

Bibliography

“Contemporary Management,” The Manager as a Planner and Strategist. 196-222 McGraw-Hill 1998

“Entarga Business Planning” Strategic Planning for the Business of the Future

Webmaster 2000 (10-7-99)

www.thecocacolacompany.com “Visit the World of Coca Cola” 2000