The Fundamental Business Success of Coca Cola Company - Case Study Example

Coca Cola Company Case Study Executive summary This paper seeks to establish the sound fundamental business success concepts that will be obtained from the firm under question. With the emergence of globalization, competition in the business world has taken a new direction and therefore redefining of strategies and managerial approaches to achieve any meaningful return in the otherwise crowded market. This paper therefore focuses on Coca Cola Company to take a deeper study on all the economic practices it has instigated over the years to gain a competitive edge against similar firms in similar industry. By taking it as a case study, the business structure of many firms will also be analyzed through what it will reflect concerning the competitive strategies that firms across the globe are lining up to stamp their authority in the local and international market. The company under study is the Coca Cola Company limited (Bowdin et al. 2005: 12-16). This company is one of the largest multinational with numerous subsidiary branches in over two hundred countries. It is known to be boasting of the greatest level of publicity through its appealing promotion mix that includes involvement of entertainment. Use of entertainment like sports, music and drama has put Coca-Cola at the peak of the global firms’ performance. In that regard Coca-Cola Company is one of the best choice for case study for deeper analytical information about other firms. Background information Coca-Cola Company limited is a multinational corporation which its formation dates back to 1886 when a renowned Atlanta pharmacist Dr. John Pemberton started to produce the Coca-Cola syrup in fountain drinks for sale. However meaningful entrepreneurial venture under the Coca-Cola name was taken up by Benjamin F Thomas and Joseph B Whitehead who were the first people to establish a bottling plant through acquisition of patents in 1899 from the Coca-Cola Company. This great company evolved thereafter through various phases characterized by franchising and gained market command to its current global substantial presence. Mission Statement of Coca-Cola The roadmap to success of Coca-Cola lies on its mission which is quite enduring. It do declare the purpose of the company and it serves as the standard of measure for the actions and the decisions of the company. Among these missions are: To refresh the whole world To inspire moments of happiness and optimism in the entire global community To create value to the customer and make a difference Vision of Coca-Cola Company The vision provide the framework of operations and serves as the guide to every aspect of the business by giving a sound description of what need to be accomplished in order to continue achieving a sustainable and quality growth. This will be achieved by considering different aspects which includes; To be a great place to work where people are inspired to actualize their potential Availing beverage brands that will meet and conform to the peoples’ desire and needs (Wesley, 1956: 52). Promoting a long term supplier and consumer relationships that will create mutual benefits and prosperous co-existence Uphold high standards of efficiency and productivity Attain high profit targets while considering the firm’s responsibility to the society. Winning Culture of Coca-Cola This company has established a tradition of positive attitude and behavior that will guide it in realizing its 2020 vision. This culture entails their positive values, focus on the market, working smart, acting with a sense of responsibility and manifesting the brand through action. Strengths of the company Coca-Cola has built a name and consequently brands over a long period of time and it boasts of the greatest globally publicized firm. Due to this long standing branding and superb performance, it commands a relatively lager global market through its internationally dispersed value creation and sales branches. Globalization has opened up flood gates for the multinationals and this is only advantages to companies with large asset bases like Coca-Cola. In this regard, it has dispersed its value creation activities t o different geographical locations thereby enjoying economies of production (Benssoussan & Fleisher, 2003; 45). Coca-Cola has always employed the best promotion mix where it involves the influential power of entertainment to penetrate deeper into the market. The social corporate responsibilities like sponsoring of various sports activities exemplified by Copa Coca-Cola football fiestas organized across the world further boosts its image above other competitors. Technological advancement is financially demanding and through this Coca-Cola almost experience monopoly through high set up costs to any potential entrant to the industry this has always left it to rule the world beverage market. Weaknesses In the wake of the globalization era, other competing companies like Pepsi can now find their way into the previously Coca-Cola dominated markets. It should also be noted that local upcoming beverages firms offer a substantial competition to Coca-Cola as far as cultural differences do influence. This is as a result of some wines and spirit and beer breweries divesting to other soft drinks as well that will reduce the market share of Coca-Cola. This corporation has also felt the negative side of technology where unsubstantiated rumours go around it especially in its markets in the Arab countries. Current engagements Coca-Cola has pre-dominantly been involved in various corporate responsibility engagements as observed during the 2011/2012 period. It sponsored the tour of the world cup trophy through the continents in the globe besides sponsoring a number of region and local based football tournaments. An example is the Copa Coca-Cola Cup. Future plans Coca-Cola is currently working on new products that will meet the dynamic market and marketing strategy that is set to be in place by 2015.It is also planning to come up with a new beverage vessels that is environmentally friendly in a bid to show its global corporate social responsibility. Marketing Strategy Being a multinational organization, Coke has to develop international marketing strategies aimed at capturing large market share and dominance. Coke has to listen to the changing needs of its customers worldwide. The company specializes in beverages and soft drinks and therefore has to adjust its market products to match changes in consumer tastes and preferences, and span to the occasions. The consumer demand for beverages and soft drinks is normally a reflection of relaxation, recharge and self realization (Benssoussan & Fleisher, 2003; 45). The company takes into consideration all the changing needs of the consumers globally by producing range of products, from bottled water, refreshments, juice drinks, to non-alcoholic drinks. As a company Coke is not only determined to making great drinks but also participating in corporate social responsibilities across the globally through our continued commitment and financial funding to educational, wellness, health, and diversity sectors. In doing so, the company focuses on being a good neighbor, who consistently shape and improve the living standard of the entire community in doing business. Marketing Plan Objectives The marketing objectives of Coca-Cola Company are; Changing the company’s brands to match the global branding standard and meet the dynamic market condition of every local market serves by the company. Investing in product invention and innovations Keep their customers informed about the changes in branding and new products Boosting company sales volume based on the company’s 2015 marketing plan Replacing carbonated drinks and beverages by health drinks come 2015 Increasing its market share and dominance in the soft drink and beverages industry International products standardization to compete other beverages producing companies such as Pepsi. Product Description The company focuses on introducing new products in annually aimed at meeting the changing demand of its consumers. For instance, Coke produces fruit juice to meet her customer demands. The changing product portfolio of the Coca-Cola Company through branding, packing and advertising attracts a lot of interest from new customer base. Bottling of the products is appealing to certain group of customers, hence committing their loyalty to the company brands (Wesley, 1956: 18). These improvements on the company products create the impression of concern about the company’s sensitivity to technological improvements. Features • Sports and fitness design • Use of trademark in bottling which restores customer confidence and acts as a sign of quality. • Ergonomically Designed Benefits • Coke-Cola lifestyle connotations • Health and fitness lifestyle connections • Fair-trade, sustainability, eco-friendly connections. • relatively cheaper product both in the short and long run Pricing Strategy Following stiff competition in the industry, customers are price sensitive, which further affected the volume of sales. Economically customers demonstrate price elasticity of demand for soft products. Since these products are fast moving, the company develops penetration strategy to keep their market dominance. In doing so, Coke practices price discrimination in the three domains. Penetration pricing mechanism adopted by the company implies setting lower prices for the products rather than focusing on profitability. Market dominance of Coke-Cola is attributed to its ability to practice penetration pricing. Since the major competitors are skimmers, Coke uses the alternative which works well for her. The company is not profit driven but dominance minded. Neutral pricing strategy is also used by the company during fair competition periods. Marketing Communications In the marketing plan for Coke, the company marketing department uses the following methods to communicate relevant information to their customers. Advertising: Coke popularizes its product through advertising in local media, internets, social networks, and newsletters. Personal Selling: the firm has an efficient team of personnel who make sales and build on customers relationships Direct Marketing: This method is commonly by Coke when target a specific group of potential customers and an immediate response is needed Sales Promotion: the company gives short-term incentives in form of promotions, travel tickets, and other incentives to encourage sales of the product especially during low seasons Public Relations: this through building good image of the company among the public by dealing with any rumour, unfavorable events, and through corporate social responsibility i.e. "corporate image" Market Positioning Product Range The range of standardized products of Coca-Cola Company includes Coke, Sprite, Fanta, and Diet Coke. Given income inequality among the consumers, the company packs her products in different sizes to make them affordable to every potential consumer. Among the common bottle sizes are; LRB (litter returnable bottle) SSRB (standers size returnable bottle) NRB (no return bottle) PET 1.5 (1.5 litre plastic bottle) CANS (330 ml) Facilitating Production by Infrastructure In order to promote their products, the company has embarked on Infrastructural service provision to her customers to help in keeping the products cool, safe and in good condition to meet the consumer needs (Pendergrast, 1993: 52). Some of these infrastructures are; Vizi cooler  Display racks Freezers Bottle shells and free empty bottles Sales Promotional Activities Coca-Cola Cricket and sponsorship Coca-Cola Concerts through media Coca-Cola Food Mela Coca-Cola Basant Festival Coca-Cola GO-RED Coca-Cola Party in a Park Coca-Cola Shopping Festival Coca-Cola Ramzan Campaign Conclusion Having conducted thorough research, it noted that Coke Company is increasing their popularity and market dominance over other competitors. The marketing department strategies are being successful in demonstrating the ability to grow and even expand. The management of the company should focus on building strong customers loyalty. Recommendations The company should consider increasing their infrastructural facilities to facilitate its marketability The company should focus on expanding its capital base by raising more capital through listing of its shares in the IPO The local demand factors for different countries should be taken care of The marketing group should capture the marginalized customers such as the older generation The company should reduce the cost of its operations through effective and accountable administration Bibliography Ackerman, F. & Eden, C. 1998. Making Strategy: The Journey of Strategic Management. SAGE Publications, UK. Ahlstrand, B., Lampel, J. & Mintzberg, H. 1998. Strategy Safari: The Complete Guide through the Wilds of Strategic Management. Pearson Education; London. 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