Disadvantages and Advantages of Coke's Marketing Strategy - Essay Example

The paper “Disadvantages and Advantages of Coke's Marketing Strategy" is a meaningful example of an essay on marketing. One of the key advantages of diversification is the control of inputs which can allow maintaining the hold over achieving a desired level of quality. However, it is also important to note that for a firm like Coke, it is always good to look for new products to add because it can allow developing the overall choice of the customers. Coke can also continue to control the market through sales and distribution if it can diversify itself to include other products and services. This can also allow Coke to cross-sell and therefore achieve better margins. Above all, in the current scenario, diversification can actually allow Coke to spread the risk and reduce the overall chances of failure purely in one segment of the business.

One of the key disadvantages for Coke would be to experience a slowdown in its core business as Coke, over the period of time, has relied heavily on its core brand. It is also important to understand that diversification may not result in the required synergies and hence can cause failure for Coke.

Coke was mainly able to achieve the required growth by spinning off its businesses and using the creative accounting treatments to wash its balance sheet from the potentially toxic debt. The subsequent decline of the Coke was actually the reaching of the threshold of the strategy which provided Coke good results over the period of time. Coke was left with no more assets to sales as well as large bottlers started to fade thus causing Coke to experience the decline after 1997.

One of the key benefits of selling of the bottling company of Coke was the washing of its balance sheet. Also, as discussed in the case, Coke was increasingly facing problems with its bottlers with bottlers refusing to increase the margins as well as not selling other products of Coke. The selling of the bottling, as well as outsourcing of the same, therefore allowed Coke to actually reduce the overall influence of bottlers in setting the terms of the trade.

One of the key reasons as to why Coke still was successful in selling itself despite the failed attempt at advertising was the power of Coke as a brand. It was generally believed that Coke was the best-known brand in the world and Coke was able to carry this image even in times of failure. Apart from this, Coke was also able to change its advertising to suit it to its overall image thus actually allowing itself to re-tailor its message to revive its original image while at the same time pushing expansion through better access and reach to the customers. Coke was thus able to keep its brand strong through its ability to cater to the tastes of its customers by offering them the kind of products that provided its necessary success in the past.

The transformative acquisition was not considered as the option because Coke’s new CEO was of the view that Coke can actually reclaim its brilliance by doing simple things better. This approach was actually focused on utilizing the core competencies of the Coke and reverting Coke to focus on the carbonated drinks which were its main line of business.