Coca-Cola Company: Strategic Management

NB: We do not resell your papers. Upon ordering, we do an original paper exclusively for you.

NB: All your data is kept safe from the public.

Time Context

The problem under discussion came up in 2015 when Coca-Cola was accused of manipulating consumers’ behavior by sponsoring research on obesity (Ward, 2015). The incident has had a diverse impact on the company’s image. The active criticism accompanied by the naturally declined demand for soft drinks has caused a 4% sales fall (Reuters, 2016). Hence, the problem needs to be addressed promptly in order to raise the company’s revenues.

Point of View

It is assumed that the company should launch new research that will be more transparent or diversify its product line in order to restore its reputation and revive the interest in its production. Otherwise, the company’s image might always be associated with the ethics scandal.

Main Problem

The main problem is that the Coca-Cola Company tried to raise the declining demand for its products and push up the sales by carrying out research on obesity that emphasized the importance of sport and intentionally overlooked the harmful effect of the sugar fizzy drinks. The incident provoked a large scope of public criticism that influenced the company’s image. The company’s sales have been falling for the past four quarters.

Sub-Problems

There is also a series of sub-problems related to the issue. First and foremost, the fact that the University of Colorado returned the money, which Coca-Cola invested in the research project, makes the matter worse. Hence, it overtly admitted the invalidity of the research findings (O’Connor, 2015).

Secondly, the soft drink tax implemented in Europe has had a negative impact on the company’s sales. Thus, a recent study has revealed that the increased costs of low-calorie drinks that compose a significant part of the Coca-Cola product line make consumers reshape their behavior (Tiffin, Kehlbacher, & Salois, 2015).

Finally, it is the general public interest in a healthy lifestyle that encourages consumers to withdraw from sweet beverages. Therefore, Coca-Cola’s products seem to be gradually losing its competitive advantage.

Objectives

It is critical that the company revives the public interest in its products and pushes up the sales. In order to achieve this aim, it is important to restore the company’s reputation that was influenced negatively by the ethics scandal in 2015. Recent studies prove the assumption that a positive reputation that implies social responsibility helps to improve a company’s performance significantly (Chernev & Blair, 2015).

Areas of Consideration: SWOT

SWOT

Strengths	The company has the highest brand equity in the relevant market. It is present in 200 countries worldwide. Coca-Cola has powerful advertising tools.
Weaknesses	The company does not offer healthy products. Coca-Cola has to compete with another strong market player – Pepsi. The company’s sustainability strategy is widely criticized.
Opportunities	The company has good prospects for the products’ diversification. Coca-Cola can strengthen its presence in developing countries to improve the image. It can continue its collaboration with Kinley on the basis of packaged drinking water (Rani, Maheshwari, & Prasad, 2012).
Threats	The popularity of a healthy lifestyle can affect consumers’ demand. The ethics scandal can have a long-term negative impact on the company’s reputation. Competitors might offer a more diversified product line so that the company will lose the customers’ loyalty.

Table 1 “Coca-Cola SWOT Analysis”

Alternative Courses of Action (ACA)

There are two alternative courses of action that can be proposed in the framework of this case study:

The Coca-Cola Company performs an efficient diversification of its product line. The company can design new products that will meet the modern demand for a healthy lifestyle. Recent studies show that the number of customers that prefer organic and natural products keeps growing (Glanz et al., 2016).
The Coca-Cola Company carries out new research that will be both transparent and, at the same time, will revive public interest in the company’s products.

Decision Criteria

The decision should base on the analysis of the long-term perspectives. Hence, it is considered rational to choose the alternative solution that can bring profit not only in the nearest quarter but in prospect as well.

Recommendation

In accordance with the set decision criteria, it is assumed reasonably to select the first alternative course of action. Thus, it is recommended that the Coca-Cola Company focuses on diversifying its product line. This decision will help to gain an additional competitive advantage. It will also enable the company to restore its reputation after the ethics scandal of 2015.

The Case Plan

First and foremost, the company needs to study the changing market environment. In other words, it is essential to point out the key characteristics of a new healthy product. Secondly, the company will design and produce the product. Finally, it will add it to the product line and launch a powerful advertising campaign to attract the consumers’ attention. It is critical that the advertising campaign puts a particular focus on the healthy qualities of the promoted product.

The Implementation Plan

The table below represents the targeted timeline for the plan’s implementation.

Stage #	Description	Timeline
Stage 1	examining the consumers’ demand	1 month
Stage 2	designing a new healthy product	2 moths
Stage 3	launching a powerful advertising campaign	1 month
Stage 4	adding the product to the product line	1 month

Table 2 “Implementation Plan”.

Reference List

Chernev, A. & Blair, S. (2015). Doing well by doing good: the benevolent halo of corporate social responsibility. Journal of Consumer Research, 41(6), 1412- 1425.

Glanz, K., Johnson, L., Yaroch, A. L., Phillips, M., Ayala, G. X., & Davis, E. L. (2015). Measures of retail food store environments and sales: review and implications for healthy eating initiatives. Journal of Nutrition Education and Behavior, 48(14), 280-288.

O’Connor, A. (2015). University returns a $1 million grant to Coca-Cola. The New York Times. Web.

Rani, B., Maheshwari, R., & Prasad, M. (2012). Bottled Water – A Global Market Overview. Bulletin of Environment, Pharmacology, and Life Sciences, 1(6), 1-4.

Reuters. (2016). Coca-Cola sales fall on strong dollar, weak Europe demand. Web.

Tiffin, R., Kehlbacher, A., & Salois, M. (2015). The effects of a soft drink tax in the UK. Health Economics, 24(5), 583- 600.

Ward, V. (2015). Coca-Cola spends millions on research to prove that fizzy drinks don’t make you fat’. The Telegraph. Web.

Click Here To Order Now!