Coca-Cola's Strategies Coca Cola's Business Strategy Is Essay

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Coca-Cola's Strategies

Coca Cola's business strategy is built upon differentiation. It uses both types of differentiation, quality and branding, to set itself apart from its competition. The success of Coca Cola is literally built upon the strength of the Coke brand, even though Coca Cola now markets thousands of products in addition to the original Coca Cola. This branding has proven a significant source of the company's strength, as seen when one examines the brand in connection with a SWOT analysis of the company. However, when Coca Cola faces any type of threat as a brand, that threat can leave the entire company vulnerable. Moreover, the company's largest opportunities are in areas outside of its traditional soft-drink market.

Introduction

This paper will provide an internal overview of the business strategy employed by the Coca Cola Company, differentiation, and how it uses both a quality strategy and effective branding to set itself apart from competition. A quality strategy is where a company uses superior quality to set itself apart from competition. The secretiveness surrounding Coca Cola's formulations is an element of a quality strategy. Branding is where a company uses a recognizable brand to build familiarity, loyalty, and trust. The recent uproar over Coca Cola replacing its traditional red cans with white ones for the Christmas season is an example of how strongly the product is identified with its branding. However, while Coca Cola's differentiation strategy is the source of its greatest strengths, it can also expose Coca Cola to some vulnerability. The challenge for the company is to continue to capitalize on the strength of its brand, while incorporating other elements of business strategy that can help surmount the challenges the company faces in the future.

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Discussion

Strengths

Coca Cola's largest strength is its brand recognition, which is also its business strategy. It is recognized across the globe and is the world's largest beverage manufacturer. It has successfully incorporated differentiation into its strategies, because people believe that they can perceive a difference between Coca Cola products and competing products, even if they actually cannot. This easy recognition means that even people in emerging markets, which is another area of strength for the company, are likely to have some familiarity with the product, even if they are not yet loyal to the market. Furthermore, Coca Cola has acquired local products with high customer loyalty in local areas in order to drive brand recognition in those areas.

Coca Cola's most significant weakness is that it is facing some opposition in the United States, which has been its strongest market. Unlike rival PepsiCo, which has businesses outside of beverages, the correlation between soft drinks and obesity has the potential to really harm the Coke brand, because the Coca Cola Company is seen as interchangeable with Coca Cola the product, despite the Coca Cola Company's significant diversity. How does the link between soft drinks, even diet soft drinks, impact beverage companies? Soft drink consumption has been linked, not only to obesity but also to diabetes (Medical News Today, 2007). While soft drinks are certainly not the cause of the modern obesity problem, they have become an easy target for people advocating for change. Furthermore, the differentiation strategy means….....

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