Development of Competitive Strategy of Coca Cola Company - Assignment Example

A Report of Coca-Cola Contents Contents 2 Company background 3 Strategic company performance 3 Development of competitive strategy 4 Identification of implementation challenges 5 Bibliography 15 Aursaraf. (n.d). Business Model Exercise #1: geekar. Retrieved on 30th March 2014 from http://myownfortune.wordpress.com/2013/04/30/business-model-exercise-1-geekar/ 15 Company background In just over a century, Coca Cola has skyrocketed to become a global phenomenon and this has presented many challenges in the process. Keeping all the stakeholders happy is never easy and requires a dedicated and well thought out methodology taking into account the various interests of parties involved. It seems that Coca Cola has been a victim of its own success, trying to meet popular demand but having to cut corners in the process to ensure it can supply its consumer base. At the turn of the millennium, Coca Cola was in the spotlight for many reasons but some of them were extremely negative, creating a strong backlash and bad publicity (Bolstorff , 2011). Many people boycotted the brand and started campaigns seeking to highlight the social injustice and inequity that Coca Cola was seemingly responsible. The negligence that occurred in India and other nations are not forgotten, but it seems that Coca Cola has taken the criticism on board and is seeking to avoid mistakes of the past. Strategic company performance Coca cola’s mission is driven by their will to endure which by extension creates a sense of operational motivation amongst them. The establishment of the mission attaches purpose to the company and issues a ground for consideration in decision-making. Coca cola aims at hypothetically ‘refreshing’ the world through the provision of its beverages. Their products are purposed at satisfying the consumers in the most convenient ways possible. It also targets to inspire moments of happiness and optimism in customers as they consume the products. It is evident in the consumption of coca cola products during occasions and celebration events. It also seeks to make a difference and at the same time create value through provision of standard products in terms of quality. The Coca-Cola Company also focuses much attention on testing and quality control. It makes use of different technology in order to control product quality (Bolstorff , 2011). Coca-Cola heavily invests in real-time the D-count or microbiology analyzers. This technology is adapted on the basis of quantitative analysis that have satisfying detection limits, automated analysis with analytical time reduction, robustness of the system and reliability of the results for intensive routing uses. First, sample preparation is done which involves rinsing to transfer samples to buffer solutions. This is followed by an analysis on the D-count and reading the results. By extension, this will push up costs through undermining per formability and efficiency. Apart from this, sufficient organizations are not able to function in the absence of good people. It also increases the organization’s reputation. Even though it takes up to decades to develop thorough organizational, reputations, ethical, responsible organizations are least likely to face scandals and disasters. Additionally, in the event that one occurs, ethical, responsible organizations automatically acknowledge the best ways of dealing with it quickly, openly and honestly. Development of competitive strategy Coca cola has shown enthusiasm in the provision of its products globally through its modes and trends in operations. One of the ways that their dedication is characterized is through the diversification of their products to suit different clients of diverse regions of the world. Coca cola also has a committed mind and heart towards the attainment of its goals both regionally and globally. It has shown thorough integrity in operation, in increasing its market share. Coca cola, on the other hand, has shown esteemed accountability in actions that have led to the overall thriving of the empire (Bolstorff , 2011). Coca cola has achieved this through shifting its focus onto the market. It means that they put the needs of their franchise partners, customers, and consumers into consideration prior to decision-making. Through the listening, learning and observing the market they have been in a position to possess a worldview. Working smart has also come in handy in making the organization successful. Here, working efficiently, remaining open to changes and responding with accuracy has enabled them to acquire a constructively discontent position. ‘Being the Brand’ is an approach that has made it thrive this far. It involves continuously inspiring passion, fun, creativity, and optimism. There are numerous organizational benefits from behaving ethically, compassion, with humanity, and with sufficient consideration of the world past the boardroom as well as the shareholders. The first benefit is a competitive advantage. Here, most its customers are increasingly developing favor for providers and suppliers demonstrating responsibility and ethical practices. In the event that there is failure to embrace this means that there will be lost market share as well as shrinking popularity that eventually reduces revenues, profits and other results that the company seeks to attain. Proper ethical issues handing will better staff retention and attraction. Evidently, the best staffs want to seek employment for employers who are truly responsible and ethical. On the other hand, failure to be good employers will mean that good staffs continually leave which greatly reduces the probability of attracting good new-starters. Identification of implementation challenges Due to the growing aspects of globalization, as well as easier access to competing products in the market today, the relevance of product design in relation to demand generation, is more demanding than ever. In addition, as competition, and therefore supply, among firms for limited market demand rapidly increases and pricing as well as other marketing elements continue to be less distinguishing factors, product design and value chain analysis play a distinct role in the provision of attractive features in generating new demand. In this context, the generation of demand is perceived as a definition of how attractive a value chain is in accordance to the efficient creation if demand (Bolstorff , 2011). In other words, the ability of a value to stimulate demand through satisfying customer expectations is one of the competitive dimensions a company as the Coca-Cola Company has used to increase profitability levels. However, value chain affects not only in the generation of demand but also in the manufacturing quality, processes, cost, and lead-time. The value directly affects the existing supply chain as well as its requirements including manufacturing, quality, production policies, transportation, quantity, material selection, regulations, production schedule, production technologies, and laws. From a general perspective, the efficiency of a supply chain greatly depends on the value and its abilities to uphold the supply chain. The reverse is also true as the outcomes of the product wholly depend on the existing supply chain producing it. In addressing the various social and ethical issues in the workplaces, in the deepest possible sense, the Coca Cola Company considers the effect and cause as part of its social responsibility. It is because life is a huge interconnected system with all that surrounds it. Therefore, in making significant decisions or apparently fleeting across little decisions in potentially significant and sensitive environments the decisions involved will be intensely influential to many people and their respective aspects of life both now and in the future. 5. Concepts and Models Clearly, there are several enablers in the Coca-Cola Company’s strength chain. These aspects include the Customer Development and Training, the suppliers, and the Coca-Cola Retailing Research Councils (the customers). The company’s suppliers range from business partners that provide it with raw materials like packaging, ingredients, and machinery too heavy service providers. Clearly, there are several enablers in the Coca-Cola Company’s strength chain. These aspects include the Customer Development and Training, the Coca-Cola Retailing Research Councils (the customers) and the suppliers. The company’s suppliers range from business partners that provide it with raw materials like packaging, ingredients, and machinery too heavy service providers (Bolstorff , 2011). In addition, the suppliers need to comply with Supplier Guiding Principles developed by the company. The Coca-Cola Company works with these channels to create mutual benefits while incorporating their bottling partners. In order to support them in this initiative, they are assisted by teams that manage the accounts in order to provide services and support which is tailored to the customers’ need. Coca Cola Company also uses the business model canvas in distributing the various products in the firm. This is evident through distribution channels that outline partners and distributors that ensure clients get Coca Cola products on time (Aursaraf, n.d). (Aursaraf, n.d) Based on Coca Cola’s opportunities, the approach for the ethnocentric will be more evident as people from various home companies become charged with the management of the operations across the foreign country. On the other hand, the polycentric approach refers to a situation where local people in a foreign country seek to manage operations. The geocentric staffing approach focuses on having the company choosing the best personnel in a bid to manage the operations. This way, within the geocentric framework, there are possible mixtures of home, host-country, as well as third-party managers. The major aspect and reason for making Coca-Cola so successful is due to the continued implementation of the geocentric approach in staffing. With the largest market share across the globe for beverage products, this has at times become a difficult strategy while initiating progress purposely due to the various cultural differences encountered by managers. Also, Coca Cola Company dominates in the market through their SWOT strategies. STRENGTHS: The strengths of the company are evident through the popularity of the Coca Cola brands such as Fanta that dominate across the globe. Also, the company enjoys dominancy as the largest brand through sales and accessibility across the globe. This is evident through over 400 brands that are supplied across the globe. In addition, Coca Cola takes refuge in the over 1million labor turnover of employees in different countries across the world. WEAKNESSES: Coca Cola faces stiff competition from other products across the globe such as Pepsi. Also, cases of presence of poisonous substances in the products have caused damage to the brand. OPPORTUNITIES: The Company is versatile across the globe through penetrating new markets in untapped countries. The firm has also specialized in acquiring other weak brands that exist in different countries in order to expand their market base. THREATS: The health deterioration in people has affected the consumption of Coca Cola products across the globe. Also, the effects of inflation and economic variations have an impact in the sales of the products in different countries (MBASkool, n.d.). The Coca-Cola Company works with supply channels to create mutual benefits while incorporating their bottling partners. In order to support them in this initiative, they are assisted by teams that manage the accounts in order to provide services and support which is tailored to the customers’ need. Value chain has evolved to be one of the most critical business ideas in the recent past. Value chain refers to a sequence of activities firms as well as companies that converge into one with the aim of putting the goods and services in a strategic market position. Wherein through all these activities in the chain, the product, and services gain value. The assumption is that the series of activities continue to provide a product with the benefit as compared to the sum of added elements of all activities. Porters Five Forces Model is also a relevant strategy used by the company alongside value chain and generic strategies. The model outlines the channels used by Coca Cola Company in reaching out to its clients. The model is summarized below. (Ecommerce, n.d) The company’s commitment in becoming an excellent leader in both customer and distribution services are reflected in the significance of establishing value chain excellence. The main goal of Coke’s value chain can be divided into four distinct areas, which include business, shareholder, operations, and key processes. The Coca-Cola Company aims at delivering superior returns to all its stakeholders and these amounts to its mission of the value chain. The principal elements in achieving this end are complete brand equities and revenue management techniques that are comprised of volume, sales, pricing and costs. Consumers are the focus points in the value chain analysis driven by pervasive market penetration, brand preference, and superior ratio of price to value. On the other hand, operational drivers can be identified as the organizational excellence, process excellence and strategic metrics (Bolstorff , 2011). The crucial processes in the company are further subdivided into five functions. They include manufacturing, customer and consumer service systems, warehousing and logistics, demand and operations planning, and infrastructure planning and development. In the discussion of international marketing, it is important to consider that the difference existing between Coca Cola’s current global marketing performance and the expectations therein in are based on customer focus. Global marketing for Coca-Cola presents a comprehensive opportunity for growth and is characterized by the overall outlooks of the substantiated market in wholesome. The Coca-Cola standardization approach takes the marketing strategy that in turn refers to similarities of the sets of practices implemented at the home market against that of the foreign market. About the level of competition over market share in BRIC from PepsiCo, the main standardization elements will advocate for a strategy, which covers the political-legal, consumer, competitive, cultural, and economic, environments. To take advantage of being the best global brand across the world in regards to value, this same research continues to state that the strategy is likely to be well implemented in the event that similarities are in existence compared to those of the home country. The other concept provides an explanation that firms that have with strong standardization levels enjoy high control levels within organizations (Bolstorff , 2011). The other strategy that will be of great relevance to Coca-Cola is the increased supply chain forward integration. It will help take advantage of the increasing levels of demand for both healthy food and beverages. With the many social programs set to fight issues of obesity, the demand for more healthy food and beverages has drastically increased drastically. Coca-Cola Company is presented with an opportunity of further expanding its product range for the drinks, which have low sugar and calories amounts. In the ever-changing volatile world, it is impossible to avoid many unforeseen difficulties but Coca Cola ought to do whatever is in its power to prevent and remedy them to the largest degree possible. Prior initiating any of its operations in any of its proposed countries, must Coca-Cola to determine the manner in which they will be in a position of planning the staffing formula for their facilities. There are diverse frameworks under which Coca-Cola can staff its international operations. These will include a focus on the geocentric, polycentric, and ethnocentric frameworks. The fact that Coca Cola is overly focusing on aspects of Corporate Social Responsibility CSR programs including energy conservation/climate change and water stewardship. It also includes recycling/packaging, Active, healthy living among many, has boosted the company’s social image, which has in turn resulted in an increment of competitive advantage over competitors. Coca-Cola explains that it deals with such cultural differences on a standardized organization design for the creation of a broad scope of flexible structures as well as partnerships complementing the different markets as well as through staffing. The staffing techniques go further to value the international assignments through giving the best people sufficient exposure towards different cultures including ways of having to conduct business. In empowering Coca Cola’s weaknesses, the stated approach will indeed champion for the continued progression of business including the requirements of the involvement of the professional staff. On a similar note, when the issue of standardization applies, Coca Cola’s global image coupled with its product offering becomes strong factors where the firm will rely on. The fact that Coca-Cola has been working on this for a while now means that there is an understanding that the emphasis laid on the collaborative process are in a way that they makes such decisions better. However, the global culture remains purely focused towards making right choices as compared to than defining the turfs involved in competition and other differentials. This will allow Coca-Cola to make the decisions more quickly and efficiently. Bibliography Aursaraf. (n.d). Business Model Exercise #1: geekar. Retrieved on 30th March 2014 from http://myownfortune.wordpress.com/2013/04/30/business-model-exercise-1-geekar/ Bolstorff P. 2011. Supply Chain Excellence: A Handbook for Dramatic Improvement Using the Scor Model. New York: AMACOM Div American Mgmt Assn. Ecommerce. (n.d). Porters Five Forces Model. Retrieved on 30th March 2014 from http://www.ecommerce-now.com MBASkool. Coca Cola. 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