The Coca-Cola Company’s Differentiation Strategy

Executive summary

The Coca Cola Company remains one of the most profitable firms in the carbonated and non-alcoholic beverage industry. The firm uses a powerful differentiation strategy in order to deal with competition and attract more customers. Coca Cola also embraces new strategic choices in an attempt to produce the best results. Some of these choices include product development, cost leadership, and market research.

The corporation also faces various challenges such as waste management issues and competition (“The Coca Cola Company: Mission, Vision and Values” par. 8). The company should therefore identify new business practices in order to respond to different needs of the targeted customers. It will also be appropriate for the firm to address various environmental sustainability issues. Powerful strategies should also be implemented in order to identify and satisfy every consumer.

Introduction

The Coca Cola Company was established in the year 1886 (Butler and Tischler 5). The corporation has become “the leading marketer, manufacturer, and distributor of both syrups and non-alcoholic beverages across the globe” (Butler and Tischler 12). The company has some of the most competitive, powerful, and profitable brands in the world. The paper examines how the firm reinvents its generic strategic in order to address the opportunities, threats, and weaknesses affecting its business performance. The completed study seeks to identity the current strategic choices embraced by the company. This understanding will be used to present powerful recommendations that can deliver the best business outcomes. The discussion will also outline new measures that can be undertaken to support the firm’s mission and vision.

Thesis Statement

Coca Cola should use new strategic choices to its differentiation model in order to continually address the needs of different stakeholders such as community members, employees, shareowners, and consumers.

A Detailed Analysis of Coca Cola Company

Porter’s Generic Strategies

The four generic strategies have the potential to support the performance and profitability of any given company (Ormanidhi and Stringa 57). Coca Cola borrows a lot from the four strategies in order to have the most competitive and successful business model. Coca Cola’s business model is characterized by specific aspects of cost leadership and differentiation strategy (Butler and Tischler 10). This strategy makes it possible for the organization to offer a valuable brand to the targeted customers. The organization’s competitive advantage cannot be copied by competitors such as Pepsi.

In order to support its differentiation strategy, Coca Cola has identified precise approaches that cannot be easily copied by different competitors. For example, the company focuses on the best product offerings (Butler and Tischler 10). Coke’s products are superior, properly-designed, and effectively distributed. The firm has understood how to respond to various consumer health needs using different products such as Diet Coke. The firm also believes strongly in the power of its superior brand (Yoffie and Kim 4).

The generic strategy makes it possible for the firm to improve its brand. This is achieved through continued inclusion of new ingredients. The firm also uses additional services in order to support the ever-changing needs of different consumers. For instance, Coca Cola is a pioneer in corporate social responsibility (Butler and Tischler 18). The company uses various campaigns to support the best environmental practices and support different causes in every community (Kotler and Armstrong 28). This differentiation approach continues to affect the profitability of its immediate competitors. Coke also uses the concept of product offering in order to add value to the targeted customers. Coca Cola’s unique products satisfy the changing needs of the customers. Some of the company’s successful products include Coke, Fanta, Diet Coke, Sprite, Minute Maid, and Dasani (Yoffie and Kim 7).

Cost leadership is achieved through the use of an effective supply chain system. Coca Cola uses its supply chain to deliver different products to the targeted customers. It partners with different supermarkets, distributors, and hypermarkets in order to ensure every consumer purchases its products. The “product design is also exemplary thus encouraging more people to consume Coke’s products to improve their health and become energized” (Yoffie and Kim 7). These strategic methods have played a significant role towards creating a sense of value to every client.

Analyzing Coca Cola’s Strategic Choices and Generic Strategy

Many companies will encounter different threats and opportunities within the external market environment. Such challenges force corporations to devise powerful strategic choices that can support their performances. Coca Cola’s SWOT Analysis identifies “various threats such as competition, changing consumer needs, and rivalry” (Butler and Tischler 76). The presence of noncarbonated drinks in the global market also affects the company’s competitive advantage (Yoffie and Kim 11).

This argument explains why the company’s deviates from its generic strategy. The company’s strategy focuses on a differentiation approach that can produce and promote its internationally-recognized brand. However, the nature of competition in the external market has forced the firm to come up with new strategic choices. Coca Cola also “adds new value to its products” (Yoffie and Kim 4).

This strategy is undertaken to ensure every customer is ready to support the company’s brand. Coca Cola has also identified new designs and strategies in order to improve the level of brand recognition. The firm also embraces the use of revolutionary advertisements and campaigns in order to inform more customers about its superior brands (Ormanidhi and Stringa 58). Packaging, transportation, and service delivery are some of the strategic choices used to deliver the best value to different customers.

Coca Cola is also “a leader in cost leadership” (Yoffie and Kim 3). More often than not, cost leadership is used by different companies as an effective generic strategy. However, Coca Cola embraces the approach as a powerful strategic choice that can augment its generic strategy. Coke uses powerful “economies of scale to achieve its business potentials” (Yoffie and Kim 3). The firm also embraces the power of learning in order to deliver the best services and products to different consumers. The company focuses on “different operational processes, production strategies, and effective distribution” (Ormanidhi and Stringa 59). These strategies make it easier for Coca Cola to improve its business strategy. Research and development (R&D) is usually implemented in accordance with the feedbacks obtained from different consumers.

A powerful Market Development Strategy (MDS) is used to ensure the company competes successfully across the globe. This strategy is usually informed by the changing economic opportunities experienced in different growing economies such as China (Ormanidhi and Stringa 60). These new markets make it possible for Coke to develop powerful products that can address the health needs of the targeted local consumers. Coke’s Product Development (PD) strategy focuses on such needs thus producing competitive brands. Market research is also undertaken to promote the best business practices (Sweo and Pate 68).

Coca Cola: Altering Strategic Choices

Coca Cola has unique strengths that make it the leading player in the carbonated drinks industry. The company has a diverse supply and distribution network across the globe (Yoffie and Kim 9). The firm’s “presence in over 200 nations explains why it is one of the most successful multinational companies” (Yoffie and Kim 4). Coca Cola’s brand is also recognized by many potential consumers (“The Coca Cola Company: Mission, Vision and Values” par. 5). Many people are aware of the firm’s logo and unique colors. Yoffie and Kim believe that “Coke’s brand appeals to consumers from all backgrounds” (8). New opportunities continue to emerge in this industry. For example, the company has “expanded its operations by acquiring new distribution chains and bottlers” (“The Coca Cola Company: Mission, Vision and Values” par. 6).

More customers are currently consuming different noncarbonated drinks. The growing world is also characterized by an increasing number of potential customers. This scenario should encourage Coca Cola to realign its strategic choices in order to achieve the best outcomes. For instance, R&D should be taken seriously in order to produce improved products. Such products will support the changing health needs of many consumers (Yoffie and Kim 5). Some of the firm’s products such as Diet Coke continue to satisfy the needs of many customers. However, improved products will make it easier for the firm to fulfill the needs of individuals with various health complications. For example, Coke can introduce a new non-carbonated beverage. Fruit juices can be produced and market to many customers in different parts of the world (Yoffie and Kim 6).

Market research is also done in a professional manner. However, new opportunities have emerged due to the current use of social media networks. Many youths are using these networks today. Coke can change its marketing strategy by embracing the power of social media. The important goal is to inform more customers about its diverse products (Yoffie and Kim 5).

The financial strength and brand superiority enjoyed by Coca Cola should be used effectively to produce the best results. For example, Coke can change its strategic focus by identifying underserved countries and populations. The “growing world presents a huge pool of talents and opportunities for different multinational firms” (Sweo and Pate 29). Many people in these nations are getting good salaries. Their disposable income should be an opportunity for giant corporations such as Coca Cola. The company should use its strengths to produce quality beverages.

Coke uses its business model to support the changing needs of different communities. The firm’s approach to corporate social responsibility (CSR) has continued to support the company’s business goals. However, Coca Cola ignores some of its weaknesses such as ineffective waste and water management. The global population is currently facing numerous threats such as environmental degradation and water shortage. Coca Cola fails to recognize the fact that water shortage might affect its future profitability (“The Coca Cola Company: Mission, Vision and Values” par. 6). This gap should encourage the firm to embrace new CSR-guided approaches in order to conserve the environment. This strategic focus will make it easier for the company to support the needs of more people, conserve the environment, and become more profitable (Butler and Tischler 38).

Personal View of Coca Cola’s Mission and Vision

Coca Cola’s mission focuses on three core issues. These issues include “inspiring moments of happiness and optimism, creating value and making a difference, and refreshing the world” (“The Coca Cola Company: Mission, Vision and Values” par. 3). The firm’s vision focuses on the needs of different partners, people, the planet, productivity, and profitability (“The Coca Cola Company: Mission, Vision and Values” par. 4). The ultimate goal is “to maximize the firm’s returns to different shareowners while at the same time engaging in the most responsible business activities” (“The Coca Cola Company: Mission, Vision and Values” par. 5). Coke’s mission and vision are therefore reconfirmed by this strategic discussion. This is true because every organizational process is expected to empower different stakeholders.

The firm uses its business practices and strategies to maximize the outcomes of different customers, employees, and communities. This fact explains why Coca Cola should not change its vision and mission. However, the corporation should take the idea of sustainability more seriously. It should use evidence-based ideas to reduce water usage and promote the best waste-management practices (Kotler and Armstrong 49). A new entrepreneurial model can be designed in order to support the ever-changing expectations of different global consumers (Butler and Tischler 109).

Conclusion

Coca Cola’s differentiation strategy has made it the leading competitor with a revered brand name. The firm should therefore use new business choices and practices to support its current generic strategy. For example, the firm can focus on its market orientation and analyze its operations. New market researches will be needed in order to address the needs of the targeted customers. A new concentration on environmental sustainability will support the firm’s mission and make it profitable (Sweo and Pate 87). The firm’s R&D, marketing, and product development departments should embrace the best business strategies. The strategy will identify, anticipate, and satisfy the ever-changing needs of every customer.

Works Cited

Butler, David, and Linda Tischler. Design to Grow: How Coca-Cola Learned to Combine Scale and Agility, New York: Simon and Schuster, 2015. Print.

Kotler, Philip, and Gary Armstrong. Principles of Marketing, Upper-Saddle River, NJ: Prentice Hall, 2009. Print.

Ormanidhi, Orges and Omer Stringa. “Porter’s model of generic competitive strategies.” Business Economics 43.3 (2003): 55-64. Print.

Sweo, Robert, and Sandra Pate. International Business: A Practical Approach, New York: CreateSpace Independent Publishing Platform, 2014. Print.

The Coca Cola Company: Mission, Vision and Values 2015. Web. 25. Nov. 2015. .

Yoffie, David and Renee Kim. “Coca Wars Continue: Coke and Pepsi in 2010.” Harvard Business School 1.1 (2011): 1-22. Print.