Coca Cola's Business & Corporate Strategies: Driving Profits & Growth - Research Paper

Introduction

The company has two significant levels of strategy; business-level and corporate-level strategy. The business-level strategies are used in the local and international operations, and they include differentiation strategies, low-cost leadership, and focus strategy. Corporate-level strategies include growth strategies, stability strategies, and retrenchment strategies.

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Currently, the Coca Cola Company has three primary business strategies. The company focusses on driving revenue and profits growth. Coca Cola Company serves more than 200 nations, and each of these nations is key in its growth plan. The company employs the use of segmented revenue growth strategies as per the market type. The company also align incentives accordingly to their employees. The three current strategies include choice, convenience, and customer. Being a consumer-centric brand is a move from what the company wants to sell to what the customers want to buy, and this is precisely what Coca Cola is doing. The company focusses on where the customers are going, and they formulate the products in line with the needs of the customers. This brings in the aspect of convenience to the consumers. Coca Cola Company starts by asking, "Where are the customers going?" This question, when answered through production, helps in staying ahead of evolving tastes and trends.

Porter’s Generic Strategies for Coca-Cola 200

The three generic strategies developed by Michael Porter include Cost leadership, differentiation, and cost focus strategies.

Differentiation Strategy

A company uses the differentiation strategy in positioning its product in such a way that it is different or stands out from the products from other companies that are in the same category. Despite being the oldest carbonated drinks company, Coca Cola has managed to stand out through the use of differentiation strategy, making its products stand out among others. To maintain the differentiation strategy, Coca Cola spends up to 20% of its budget on advertisements (Sharma, 2019). The logo is another outstanding feature forming part of the differentiation strategy as it helps the company to be different from all the other companies.

Cost Leadership

This strategy is where the company tries to position its product as being cheaper in the market compared to that of the competitors, and through this, the company minimizes the production cost. There are efficient ways used by the company to manage this. It manages cash flows in the organization and administers the operating expenses (Eldring, 2009). Investments are only made in the areas that deem profitable to the organization. Coca Cola also uses another winning factor whereby it does not change the prices as soon as the product becomes popular. The static price factor used by the company for several years has helped it in cost leadership (Sharma, 2019).

Focus Strategy

The focus strategy used by Coca Cola is on creating g the cost and differentiation focus. The primary aim of the focus strategy is to serve the niche marketing, whereby a particular segment of customers is served and their preferences and needs catered. The differentiation of the company is whereby it focuses on the development of its size, design, and taste to match the customers' requirements.

(Eldring, 2009).

Impact of Strategic Choice Within Coca-Cola 200

The strategic choices made by a company can either have positive or negative impacts to the company. This can be through competitive advantage, management control systems, and profits. For Coca-Cola Company, its strategic choices had certain impacts on it, and looking at the consolidated statement of income (Appendix A), Coca Cola Company has been experiencing a constant decrease in its gross profit between 2016 and 2018. In 2016, the gross profit was $25,398, then $22,155 in 2017, and $20,086 in 2018. This is an indication that the strategic choice by Coca Cola has a negative impact on the company's gross profits. Under the consolidated balance sheets (Appendix C), there is a fall in the cash, cash equivalents and short term investments. In2017, the figure for this was $15,358, and it dropped drastically in 2018 to $10,951.

Analysing the Effectiveness of Organisational Strategy Within Coca-Cola 200

Coca-Cola is one of the most successful companies in existence. It has managed to effectively brand itself through creative advertisements and an excellent inbound marketing strategy. The organizational strategy by Coca Cola is incredibly effective, and it have enabled the company to be successful over the years since its creation over a century ago (Puravankara, 2007). The first effective strategy is the aspect of creativity, whereby the company sums it up that creativity is everything. The content marketing strategy has been able to surprise and inspire the masses, hence turning their viewers into fans, then to devoted customers.

Coca Cola has also managed to create a robust visual identity, which is working for it significantly. Everyone knows that the company strictly sells beverages, but somehow, the label design of its products is everywhere. Their packaging designs are not only simplistic but also eye-catching. The effective here comes that simplistic product packaging design is genuinely appealing to consumers, and they are therefore more likely to purchase the item. On the external frameworks, Coca-Cola has at the center of its work the stakeholder collaboration. Through its engagements with the stakeholders, the company has been able to hit a substantial competitive advantage due to cooperation and public acceptance.

Resource Based View (RBV) for Coca-Cola internal 300

The resource-based view is an ideal way of looking at organizational competencies and also exposing some of the internal weaknesses. There are significant categories of resources, which are tangible and intangible. Primarily, the resources used by Coca Cola are intangible, and the assets are tailored uniquely to compete in the non-alcoholic beverage industry. The company has functional strengths in innovation, marketing, human resource management, and leadership, and all these suits it to the competition it is facing. The Coca-Cola Company, therefore, has more strengths than it has weaknesses. While Coke appears to be having few opportunities, the company has been able to remain successful because it has a focus on exploiting any possible opportunities that may come its way while creating opportunities where there are none. Coca-Cola has its competencies in the name of its brand, and the unique taste offered by Coke (UKEssays, 2018).

The Coca Cola Company has some specific competencies as the secret concentration and model of licensed bottlers have not had any successful imitation by the competitors. It has also managed to achieve uniqueness in the industry through the use of a formula for their product that has remained a top-secret. Core competencies that are specific to a firm only come as a result of the company or its consumers' desire to develop it. The administrative competency is another core internal competency of the company. The public domain competencies also form the administrative competencies of the human category, and its definition is the procedures for administrative activities like administrative capabilities or organizational structure. Coke has an excellent organizational structure that is well-organized, giving it administrative competency (UKEssays, 2018). The structure ensures that the company is in a position to function well and achieve its targets. In summarizing the total core competencies of Coca-Cola, it can be stated as strong brand value, cost control, franchise network, administrative control, and distribution network.

PESTLE Analysis for Coca-Cola external 300

Since the company serves customers from around the world with its soda, it has to follow stringent regulations, use the best available technology, and adhere to the demands of its customers. The PESTEL analysis of The Coca-Cola Company is as follows.

Political Factors

The products of Coca-Cola are at the mercy of the FDA. To put its products on the shelves in stores, the company has to meet the regulations provided by the government. In case of any changes in the established laws, then Coca-Cola may be stopped from distributing its drinks. Other political factors that may affect the company in this way are the changes in internal markets, accounting, taxes, and labour (Frue, 2016).

Economic Factors

Hundreds of countries receive the products of Coca-Cola. In all these countries, there are different cultures, tastes, customs, and desires, and to accommodate these countries, Coca-Cola must update and change how it handles its products through the creation of new flavours. The company has equity worth $80+ billion, the majority coming from the beverage industry, and over 70% of its income is from countries outside the United States (Frue, 2016). Besides people looking for healthy alternatives, the company is not making any moves towards that direction.

Social Factors

Most of the destination for Coca-Cola products are cultured countries, and they meet these customers' demands. It has created more than 30 flavours in Japan and China alone to appeal to these customers. The American people focus on their health, hence swapping sugary drinks for teas and waters. What Coca-Cola needs to do is create a product that will gain a positive response from American customers (Frue, 2016).

Technical Factors

The use of machinery is essential in the manufacturing of products with better quality and high quantities. The machinery in Britain have some of the top names, and they ensure fast delivery times and development of quality products.

Environmental Factors

The accessibility of water is a significant factor affecting Coca-Cola. Soft drink development requires water as one of the critical materials. In case of anything like changes in the climate, the Coca-Cola Company may be under fire. Such factors will also affect its competitor, Pepsi. However, since Coca-Cola products are primarily soft drinks, issues with water accessibility will lead to severe losses.

Legal Factors

The company retains all rights related to the Coca-Cola business, and they include future and past products developed through a patented process.

SWOT Analysis for Coca-Cola’s Current Business Strategy 300

Strengths

The company has a strong brand making it a highly popular brand with a brand identity that is unique. In history, the Coca Cola drinks are the most selling. Another strength is that it has the highest brand equity. Undoubtedly, Coca Cola is one of the most renowned brands having the highest brand equity, with a 2011 award. The third strength is that the company has an extended global reach with its product selling in more than 200 countries. It has a brand association and customer loyalty. Coca Cola also enjoys a dominant market share with Sprite, Coke, Diet Coke, Maaza, Fanta, and Limca being the highest growth drivers.

Weaknesses

The first weakness in the aggressive competition with Pepsi, which it's the biggest rival. The second one is product diversification, whereby the company has a low product diversification as compared to Pepsi, that has launched many snacks items. There are also health concerns surrounding the Coca Cola products and carbonated drinks at large, which result in two grave issues; diabetes and obesity.

Opportunities

The company can introduce new products and diversify its segments. These products can contribute to its revenue, and it can also ben...