Case Study Of Coca Cola's Business Strategy

The group decided to add emphasis on their revenue and profit growth, starting with building clear well defined segmented roles for their products in different markets. in the emerging markets, they focused on increasing the volume of their products to raise awareness with great volume, In developing markets they focused lesser on volume productivity and made pricing their priority.

The company began to refocus on some key core business model of building their brand as well as leading an unrivalled global system of bottling partners by speeding up their refranchising process in North America. furthermore, Coca cola worked with bottling partners in key markets for more resilient future growth in the industry which included a couple of investments

The source of the savings will come from three main areas, which are; being more efficient in the production and distribution of their products, a third from lowering operating expenses and the rest from marketing by designing more effective and well organised global campaigns.

Lastly, Coca cola began to streamline sand simplify their operating model, which included reducing the size of the group level organizations worldwide, standardising their operating approach and key process across business units and lowering the number of business units they had in western Europe from 3 to 1 to cut cost and make decision making easier.

The result of these steps taken by Coca cola will potentially hasten decision making as well as increase their market focus locally and across nations, the strategies will help the company achieve growth in revenue which will have a positive effect on their targeted dividend payouts, these strategies will help Coca cola have a more active organisation equipped to deal with the fast changes in the beverages

The fact is, in order to maximise shareholder wealth in any company there has to be a steady increase in profits with each common stock Coca cola has in the market. Therefore, an effective manager will focus more on ways to generate more profit within the company, for Coca cola, the company makes money by maintaining the strong brand name, and the production of a very enjoyable consumer product which is easily accessible to customers, because of its high demand in the beverage industry. Therefore, to fully maximise its shareholder value the company must sustain and prolong its brand name and products. In most cases, according to Brealey and Myers (2000) effective managers have a conscious to set long-term target payout ratios (dependant on their profits) so managers often smooth dividend payments by moving partly towards their target payout in each year. They also revisit and study past earnings to try and set future dates for dividend payments to shareholders, investors are usually aware of this process and they know dividend increases often represents a sign of optimism by the management