Global Strategy of Coca Cola Company

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Coca Cola Company

Coca Cola Company is the leading beverage firm in the world. This firm has managed to be one of the World’s most profitable companies. Its trademark was officially registered in the United States in 1944. This firm is one of the leading beverage companies in the United Arabs Emirates. Kline (20) reports that the firm has experienced a consistent growth in its market share in the local market.

The firm is currently operational in over 200 countries across the world. The brand ‘Coca Cola’ has been rated as one of the best brand in the world. In the year 2008, it was rated the most valuable brand in UAE and the world at large, beating some of the renowned brands like Apple, General Electric, and Amazon.com.

The firm has been experiencing consistent growth even in the face of the economic slowdown in most parts of the world. According to Biswas (43), it has been in a position to withstand some of the external challenges posed by various factors in the environment.

The vision of this firm is entrenched in satisfaction of customers with innovative products. The firm has also maintained its values in this market by ensuring that all its products are within the industry standards.

The Purpose of the Company

Coca Cola Company is a leading beverage firm that produces various types of beverage in the market. In order to understand the mission of this firm, the researcher will analyze its objects, which its mission is entrenched.

Marketing Objectives

For Coca Cola Company, the following are some of the objectives that it may need to achieve in order to maintain its market position.

To broaden the scope of the Cola brands. The current brands are broad enough, but given the new competition that is emanating from the fruit juices, the firm must refocus its strategy. The objective of broadening the scope of the Cola brands is aimed at ensuring that this firm would be in a position to introduce new competitive fronts that would counter the effect of new market competition. This would also result in increased profitability.
Enhance creativity in the process of serving the customers. The research and development team of Coca Cola Company has always ensured that it provides its customers with new products often enough. However, the rate at which market is experiencing changes demands that this firm becomes more creative. This creativity can be demonstrated in the way of packaging the products. Customers should be made to feel that there are changes happening within the firm, which are geared towards ensuring that the customers are satisfied.
Transform the bottling companies into active partners who are able to be the drivers of positive change for this firm. For a long time, the bottling companies have relied on the Coca Cola Company to issue directives and necessary advice in the production process. They have acted as the processing centers, which would not give any advice on the management, production or any other concern to the company. By transforming them into partners, this company will be empowering them to be in a position to develop creative ways of conducting their production. The partners can also be of great benefit to this firm because they can be the managers of local competition in various countries.
Embrace technology as the agent of positive change. The society is greatly influenced by the changing technologies around the world. The current business society has embraced technology. Coca Cola can rely on technology to reduce the cost of production hence lower the prices of the products to competitive levels.
Develop market proposition that would make it be seen as the preferred firm in this industry. This firm’s main objective is to attract and retain its customers through consistent customer satisfaction (Manaschi, 19). As such, the firm plans to re-engineer its marketing strategies to reflect its new production methods and products that are responsive to customer needs.

Stakeholders of Coca Cola Company

As was stated in the introductory section, this is an international firm operating in many other countries besides the United Arabs Emirates. The parent firm of this company is in the United States. It is a public firm traded in the New York Stock Exchange market.

However, the firm operates as a franchised firm in overseas countries, including in the United Arabs Emirates. In this country, the firm has bottling companies that runs its activities within various towns and cities.

Al Ahlia Gulf Line General Trading Company is one of the firms that the Coca Cola Company contracted to process and distributes its products in various regions in this country. It is worth noting that the focus of this firm is on the Coca Cola Company, and not Al Ahlia Gulf Line General Trading Company.

Given the fact that this firm operates in over 230 countries across the world, it has been keen to ensure that it allows locals firms like Al Ahlia Gulf Line General Trading Company to perform operational activities. Locally, private individuals most of whom are Emirati Businessmen own these contracted firms.

Internationally, Muhtar Kent is the Chairman and Chief Executive Office. A board of directors determines operations of the firm from time to time. Coca Cola does not dictate the management of the various bottling companies in overseas country, including in the United Arabs Emirates.

Strategic Analysis of Coca Cola Company

Strategic Analysis of this firm can be done from various fronts. In order to conduct an internal analysis of the firm, SWOT analysis would be important.

SWOT Analysis

The strength of this company lies in various factors. One of the major strengths of this firm is its brand name. As Stated above, the brand Coca Cola is one of the strongest brands in the world. This has made it be able to maintain its market share in the face of an increasingly competitive market. This firm also has financial strength.

It has been in operation for over 100 years, amassing huge wealth in the process. As such, this firm is in a position to implement its projects, including those of research and extension.

The firm also operates in various countries outside the home market. As such, it has been able to balance its production when one section of its market is experiencing economic growth while the other has recession.

Despite the above strengths of this firm, Lippman (44) says that there are some weaknesses that it has, a fact that has seen some of its competitors like Pepsi Cola eat up a section of its market share. One of the weaknesses that many environmentalists have repeatedly talked about is environmental degradation.

The plastic bottles that this firm uses in packing its drinks are causing havoc to the environment. It is apparent that this firm is yet to develop solution to this problem because as Tanke (51) notes, Coca Cola Company is yet to replace the plastic bottles with better alternatives.

Within the environment that this firm operates are some opportunities that have made it experience massive growth in its market share. According to Panagariya (8), Coca Cola Company has exploited vacuum that existed in many countries in the world, especially in the developing countries.

Weiss (61) says that there was no competition for this firm in the overseas markets and this Company was able to make the most out of it. Technological advancements have also enabled the firm to conduct trade much easily due to improved means of communication and transport means. The economic boom that America experienced soon after the Second World War was another opportunity that helped this firm to expand its market.

The threats that this firm has had to deal with include competition. The market has gotten increasingly competitive. Charantimath (36) notes that many firms like Pepsi Cola have come up with products, which are close substitutes of those that are offered by Coca Cola. They have eaten into the markets of Coca Cola. Political instability in some countries is another threat that this firm has had to deal with.

When there is an internal strife, like the one experienced in Egypt and Libya in the recent past, this firm would lose millions of dollars due to the destruction of its assert in those countries. During such periods, the firm would also lose the profits they get from the country, while yet they will have to pay the employees. This would hurt the firm financially.

Analysis of the External Business Environment (PESTEL)

Environmental scanning can be done using PESTEL Analysis. This involves the analysis of political, economic, social, technological, and legal environments.

Politically, this firm has not met challenges in various countries that it operates. The United States of America, where its headquarters are located, is the leading democracy in the world.

It has a very stable government that is supportive of business operations. United Arabs Emirates, which makes one of the leading markets for this firm, is one of the most stable countries in the Middle East. This has seen the firm prosper in most of its undertakings.

Economically, this firm has had both difficulties. The firm has been faced with economic recession that hit various countries in the world, especially the US economy, which is its main market. This had serious negative effects on the firm’s revenues as many of the customers considered the products as non-basic.

However, there are other reasons why the firm has experienced economic boom in various markets hence increasing its revenues. Currently, the United States, and many other countries making up the market of this firm including the UAE are experiencing steady economic growth, making it have a favorable economic environment.

The socio-cultural environment of this company is diversified. This is because this firm operates in the global market. There are those countries that cherish equality, and women have equal economic strength just as men. In such countries, the firm does not segment the market based on sex, but age.

The United Arabs Emirates is one such country. However, other countries like the neighboring Saudi Arabia have women as subordinates to men. It forces this firm to target the male members of the society because they have bigger purchasing power.

The technological environment of this firm is very dynamic. Technology inventions and innovations, especially in the field of communication have been the main challenge and strength of this firm at the same time.

While this firm is left with nightmares of trying to guess what its competitors like the Pepsi Cola Company are going to come up with overnight, it has used this technology to emerge as the leader in the market. Its recent introduction of Dasani bottled water found other firms unawares. The dynamism of technology in this sector has made this firm be seen as the most innovative.

Legally, the firm has not faced major challenges. The laws that govern trade in the US, UAE and many other countries in the world have been very favorable to this firm.

There are no occasions that this firm has faced a major litigation over an infringement of another firm’s right. In most of its markets, especially in the emerging markets in Africa, parts of Asia and South America, this firm has met very friendly markets with laws that are conducive to foreign technological firms like it.

Porters Five Forces

The strategic analysis of this firm can also be done through porter’s five forces.

It has been able to implement Porters five forces. To tackle the threat of new competition, the firm has been keen on producing new products to rival those of new competitors. It has been keen to introduce new products in the market to counter any possible threat.

To manage the threat of substitute products, Coca Cola has developed different lines of products to satisfy different markets so that it may not be adversely affected if substitute products invade one line. Such new line of products is the bottled water called Dasani.

To increase its bargaining power with the buyers, it has continued to produce high products with qualities that make it easy for the customers to appreciate their high prices. In so doing, the firm has been keen to ensure that the lower end of the market is not assumed. To increase their bargaining power with the suppliers, it has created a scenario where it is a single buyer with various sellers.

This makes it able to dictate the terms of buying the products. To counter the intensity of competition, it has been able to acquire a special niche in this market, rendering its competitors irrelevant as their products are turned into mere substitutes of this company’s products.

Key Success Factors

The market has been very competitive, especially in this country. However, the firm has employed some key success factors helped it remain competitive in the market. The Brand name Coca Cola has been one such success factor. This brand name is very strong in the market. The financial base of the firm is another success factor. The firm has a large financial base that makes it easy to undertake various activities.

Organizational Strategies Growth

The ultimate objective of every firm is always to ensure that it experiences growth in the market share and assert base. As Majer (17) notes, this may not be easy to achieve, given the current market competition. Many upcoming are emerging with similar products. Besides Pepsi Cola, which is the main competitor of Coca Cola Company, there are the local firms in various countries that are producing the fruit juices.

These products are direct substitutes to the Cola products. Growth strategies must therefore be developed in order to secure this firm from a possible negative growth. One of the strategies that this firm should consider developing is the increment of its product lines. This should be one of the main objectives the firm, especially in those countries where most people are shifting from consuming Cola products.

It should consider going local by producing the line of products that are acceptable. This would help it regain the section of the market share that it might have lost to the local firms. It would also help it attract new market segments that were not previously covered by its initial products. This would lead to growth of this firm both in its market share and capital base.

Selection of Competitive Advantage and Strategy Measurements

Sandwick (87) once said that in the current world where the market is very dynamic, it is very important for a firm to develop competitive advantage as early as possible and make the maximum of it as fast as it can. This is because the in the current market, no competitive advantage is permanent.

What is considered as a competitive advantage today may not be the case tomorrow. Coca Cola has to be in a position to select competitive advantage early enough and put in place structures that would enable it exploit it maximally. Given the competition from the local firms that are producing fruit juices, this firm has the financial advantage against them.

These firms have the potential of driving the Cola products out of the world market and therefore they should not be taken lightly. The firm should use their economic strength and develop a different line from its current products that would directly compete with this local firm (Minja, 93).

Although the ultimate goal may not be a total elimination of these local firms, Coca Cola should make an effort to put to check their effects on its products. To other firms like Pepsi Cola, Coca Cola should take advantage of the fact that it has broader market coverage and therefore can make more profits.

The measure of the success of this firm’s strategies will be based on three main facets. The first facet is the customer base. When the market share of this firm within this country increases, it would be said that the strategy is successful. The second facet is the profitability of the firm. It would be said that the strategy is effective only if the profitability of the firm is increased.

The last facet is the ability to protect its market. It is always said that the biggest challenge for firms is not to get new customers, but to maintain the existing customers. If the firm will be in a position to protect existing market, then the strategy will be considered successful.

The effectiveness of any business strategy depends on the formulation procedure. Therefore, all procedures must be followed when designing business strategies.

Works Cited

Biswas, Stephen. Commitment, involvement, and satisfaction as predictors of employee performance. South Asian Journal of Management, 18.2 (2011): 92-107. Print.

Charantimath, John. Total Quality Management. New Delhi: Pearson Education, 2006. Print.

Kline, Jane. Ethics for International Business: Decision-Making in a Global Political Economy. New York: Routledge, 2010. Print.

Lippman, Thomas. Inside The Mirage: America’s Fragile Partnership with Saudi Arabia. New York: Basic Books, 2004. Print.

Majer, Christie. The silent killers of productivity and profit. T+D, 65.2 (2011): 62.

Manaschi, Andrew. Comparative Advantage in International Trade: A Historical Perspective. Cheltenham: Edwards Elgar Publishing, 1998. Print.

Minja, Devis. Ethical leadership practices. KCA Journal of Business Management, 2.1 (2009): 1-14. Print.

Panagariya, Arnold. India: The Emerging Giant. Oxford: Oxford University Press, 2008. Print.

Sandwick, Janet. The Gulf Cooperation Council: moderation and stability in an interdependent world. Michigan: West View Press, 1987. Print.

Tanke, Moses. Human Resources Management for the Hospitality Industry. Albany: Cengage Learning, 2000. Print.

Weiss, Williams. Building morale, motivating, and empowering employees. Supervision, 72.9 (2011): 61. Print.

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