Coca Cola Company Case Study Essay

Tags: advertising brand business coca cola competitive advantage market share marketing swot analysis

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Executive Summary



In this paper, Coca-Cola Company which is the biggest beverage company in the world has been analysed. A comprehensive strategic analysis to ascertain its competitive advantage has been conducted using the following analytical tools: SWOT analysis and Porter’s generic strategies. Out of the four generic strategies, it has been revealed that Coca-Cola Company follows the differentiation strategy.



By integrating the differentiation strategy with the strengths, weaknesses, opportunities, and threats of the organization key insights were noted. The strengths pinpointed and selected in the SWOT analysis comprise of distribution system, company valuation, and brand equity. Coca-Cola Company’s system of distribution is unique and inimitable. Second, its high market value facilitates sustaining differentiation and brand equity aids in ensuring its different products are purchased across the world. The three items selected in the weaknesses area in the SWOT analysis include the intense market rivalry with Pepsi, lack of a healthy beverage offering, and low product diversification. It is imperative for Coca-Cola Company to diversify the range of products being offered in the market. In addition, the company should roll out a range of healthy products.



Coca-Cola Company ought not to alter its vision and mission. This process of strategic analysis has reconfirmed the company’s vision and mission. The organization is intentional in what they undertake and within its business operations, which can be seen even through its marketing. Their marketing videos inspire happiness principally and afterward the product. Furthermore, Coca-Cola Company emphasize on relationships rather than solely generating revenues and its advertising and marketing focuses on accomplishing its key goal, which is spreading happiness and endorsing kindness.

Coca-Cola Company Generic Strategies



In accordance to Porter’s Generic Strategies model, there are four basic strategies that firms can utilize in order to gain a competitive advantage over their market rivals. These strategies comprise of cost leadership, differentiation, cost focus, and differentiation focus (Porter, 1985). With respect to the cost leadership strategy, an organization endeavours to establish itself as the low-cost manufacturer in its industry. If an organization can attain and maintain general cost leadership, then its performance in the market will be above average, on the condition that it can command the prevailing prices at or almost the industry average (Porter, 1985). Secondly, in a differentiation strategy, an organization strives to attain uniqueness and distinctiveness in industry of operation, which comes along with a premium price. The third and fourth strategies ate the cost focus and differentiation focus strategies. First, with regard to cost focus, an organization endeavours to attain a cost advantage its target market segment. Second, with regard to differentiation focus, an organization endeavours to attain differentiation in its target segment (Porter, 1985).



Of the four generic strategies, Coca-Cola Company follows the differentiation strategy. From the time the company was founded in 1886, Coca-Cola Company has become a reputable and well-known trademark not only in the United States but across the globe. Imperatively, the organization has successfully differentiated itself by being renowned as the biggest producer, distributor, and marketer of non-alcoholic beverages in the world.

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In the contemporary, Coca-Cola Company retails more than 3,000 products marked with its famed trademark in over 200 nations across the globe. Despite facing competition from Pepsi, the company has been able to maintain its significant success and market domination. Moreover, the organization follows the generic differentiation strategy by spending substantial amounts of money for marketing and advertising campaigns in order to differentiate itself and generate a distinctive image for its various products. According to Bailey (2014), advertising and marketing campaigns have substantially increased the organization’s brand supremacy throughout the years. For instance, in the 2013 fiscal year, Coca-Cola Company spend almost $4 billion, equivalent to 7 percent of its 2013 revenues generated on advertisements. In particular, the recipe for manufacturing Coca-Cola has been kept a secret and the company is able to advertise that its drink is inimitable and cannot be copied by industry rivals. Up until now, no individual is able to pinpoint the manner in which Coca-Cola is manufactured. This ensures that the product continues to be perceived as being unique in the market as compared to other products such as energy drinks and juices. Moreover, the Coca-Cola Company has an emblematic red marker with white calligraphy that can be recognized anyplace in Moreover, the organization can be perceived to follow the differentiation strategy by positioning its brand in numerous dissimilar merchandise ranging from vehicles, clothing, and also in sponsorships of events such as the Olympics and the World Cup. These sponsoring activities have ensured that the company has continued to be distinctive in the market as compared to other companies in the market with consumers being aware of the brand.

Coca-Cola Company’s Strategic Choices



In Module 2 Case Study, the SWOT analysis of Coca-Cola Company was recorded as follows (Bhasin, 2018):

Strengths

Weaknesses



1. Brand Equity

2. Company Valuation

3. Extensive International Presence

4. Greatest Market Share

5. Brilliant Marketing Plans

6. Customer Loyalty

7. Distribution System

1. Competition with Pepsi

2. Low Product Diversification

3. Lack of a healthy beverage offering

4. Water management



Opportunities

Threats



1. Diversification

2. Focusing on developing countries

3. Packaged drinking water

4. Supply chain management

5. Market lesser selling offerings

1. Sourcing of raw materials

2. Indirect competition



In this section, three points from each of the four areas of the SWOT analysis will be integrated with the differentiation strategy. The strengths pinpointed and selected in the SWOT analysis comprise of distribution system, company valuation, and brand equity. These three strengths are all in support of the company’s generic strategy. The distribution system of Coca-Cola Company is distinctive and is very hard for industry rivals to match. In fact, the size of the system is second to none. The closest company to challenging this system is Pepsi and significantly falls short in its international distribution. Secondly, company valuation aids the company in maintaining its differentiation. In accordance to Statista (2015) Coca-Cola.....

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References

Bailey, S. (2014). Advertising is a key strategy for Coca-Cola’s growth. Market Realist. Retrieved from: https://marketrealist.com/2014/12/advertising-key-strategy-coca-colas-growth

Bhasin, H. (2018). SWOT of Coca Cola. https://www.marketing91.com/swot-coca-cola/

Coca-Cola Company. (2017). Mission, Vision, & Values. Retrieved from: http://www.coca-colacompany.com/our-company/mission-vision-values

Mullane, J. (2002). The mission statement is an important strategic tool: When used properly. Management Decision. Vol. 40 (5) 448-455.

Porter, M. E. (1985). Competitive Advantage. New York: The Free Press.

Stewart, J. B. (2014). For Coke, Challenge is Staying Relevant. The New York Times. Retrieved from: https://www.nytimes.com/2014/03/01/business/challenges-for-coke-to-stay-on-top.html

Svendsen, S. E. (2013). Refresh. Create. Inspire: A Rhetorical Analysis of the Mission, Vision and Values Behind The Coca-Cola Company and the Digital Marketing Strategies of the" Open Happiness" Campaign (Doctoral dissertation, Liberty University).

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