Business Strategies
Coca Cola Company Case Analysis
Strategy Recommendation in Business
The Coca Cola Company (Case Analysis)
The Coca cola Corporation is among the most successful and well-known company in the globe. Its reputable existence is analyzed with its performance and efficient management. The company has dominated and controlled the beverage industry for many years, and has often proven its abilities in innovation, creativity and consumer satisfaction. The company has also set extremely high standards in terms of competition. In fact, its trademark is recognized with over 90% of the entire global population. Many factors contribute to the success of the organization, but also there are many hindrances. Opportunities and external threats are also evident in its positional market. After critical analysis, the following report was acquired, for the purpose of planning the company’s future strategies.
Coca Cola’s present strategies
The company has implemented a , to improve its efficiency and also to help in communication with the consumers through their website. The technology has also reduced the costs of the company and the organization feels more secure, in terms of data and information recording. Providing quality and well-designed products and services is priority in the company’s strategy, with their products being consumed internationally and ensuring consumer satisfaction. The company also strategizes towards limiting the costs of designing their products, to cut on the production costs. The company has ensured to sustain a standard rather than customized product (Coke). Coca cola also operates a strong and efficient dealer network, making the product accessible to most of the people, including those in the interior setting. However, the company has not specialized in any direct sales.
Coca cola’s annual report
The report provided the main force of the company, indicating both its strengths and weaknesses, including the opportunities and threats surrounding the company (The report is tabulated in figure 1.1).
Coca cola Company comparison with competitors (Summation)
Figure 1.1
The success factors of the two companies (Coca cola and Pepsi )
Total weight
Coca cola (Weighted score)
Pepsi (Weighted score)
2.71 (Average)
2.63 (Average)
Coca cola’s strengths
The Coca cola Company’s strengths were the following; well equipped with technology, advantage over the competitors due to global dominance, the Company’s advertising and promotion capabilities and the good quality of their products.
Weaknesses
The major weaknesses are; the inefficiency in price competitiveness, rigid organization structure (Bad organization culture), lack of employee motivation and satisfaction and also the unfavorable market share in U.S.
Company’s opportunities and threats
Opportunities
After analysis of the external factors, the total weighted score came to 2.97 with a of 100%. The Company’s opportunities included the following; consumer satisfaction, global development to other countries, using the trademark of the product, increasing the environment awareness by producing health drinks and preventing pollution of the environment and the advantage of weak dollar, (this would reduce product prices in the global market).
Threats
The harshest threats facing the organization included the economic recession, which was a global hindrance to most companies, high costs of the raw materials used in production, lower prices by opposing producers (incumbents especially Pepsi), and the presence of substitutes in the international markets.
The SWOT Matrix
The SWOT analysis is one way of deciding of the organization’s strategies, by combining; 1) the strengths of the company to the opportunities and threats, and 2) the weaknesses to the external opportunities and threats (Bohm, 2009). Illustration is shown in figure 1.2.
Figure 1.2
Weaknesses
Strengths
(WT) Strategies
(ST) Strategies
(WO)
Strategies
(SO)
Strategies
Threats
Opportunities
The illustration suggests that the strategies should be in such a way that, the company uses its strengths to enforce its opportunities, its opportunities to counter the weaknesses, its strengths to overcome the threats, and finally its strengths and opportunities to eliminate the weaknesses and the overcome the strength.
Coca Cola’s SWOT Matrix (Figure 1.3)
(WT)
Measures have to be discussed on the best move to cushion the company from recession. Better communications will also lead to the motivation of employees, and this definitely means better service to the consumers. The end result of this I n most cases is profit increase
Threats;
There is global economic recession, affecting all companies though. The cost of raw materials is much too high, leading to high production costs. Reducing of product prices by the incumbent companies like Pepsi
forcing Coke’s prices down and also the presence of product substitutes in the other countries (International Markets)
(ST)
Implement plans for global expansion, so as to counter the recession experienced in the economy. Use the technology it has to rapidly reduce the costs incurred in the production stages, hence profit maximization. Use the strength of customer satisfaction to maintain the market prices.
Reducing chances for loss.
(WO)
Ensure prices are considerate to both the company and the consumers in the globe. Enhance communication channels to allow employees to address their opinions to the management. Take advantage of the weak dollar in the international market
(SO) Strategies
Due to the organization’s size and popularity, the company should expand to areas, which have been earlier neglected. Coca cola should also use its advertisement tool to reach more people and assist in the people’s sensitization on environmental awareness.
Opportunities;
Consumers are satisfied; hence room for expansion.
The use of their popular trademark in the international market and ensure environmental awareness through the avoidance of pollution, and producing healthy commodity. Weak dollar meaning reduced market prices abroad.
Weaknesses;
The company’s price competitiveness is poor. The organization structure is also insufficient due to poor communication channels. The employees are dissatisfied and feel less motivated. The U.S. market share is also unfavorable for Coca Cola.
Strengths;
The Company has technological inputs including a network operation. It also is in the best position for global expansion, due to its popularity. Its advertisements are effective and well recognized and the quality of the products is consumer satisfying.
The IE Matrix
This is the Internal External Matrix, which is used after analysis of the internal factors affecting the company, and also the external factors, which in most cases are the opportunities and the threats the company undergoes. Figure 1.4 is the diagrammatical expression of the IE of say, Coca cola Company. When applying this matrix, usually the EFE total weighted score is presented on the Y-axis, whereas the is on the X-axis. The matrix contains nine cells representing the position of the organization (Refer to the figure 1.4)
Average
(2.0-2.99)Figure 1.4
Weak
Strong
Coca cola’s
Position
2.97
2.711
Low
Medium
(2.0-2.99)
High
IX
VIII
VII
VI
V
IV
III
II
I
EFE total weight ed score
IFE total weighted score
Alternative Strategies
The Product Development Strategy
The strategy is characterized by a whole process of bringing a new product into the already existing market (also a service). The strategy often begins with the conceptualized idea, followed by the design and finally the creation of the product (Sam & Makor, 2011). Actually, the process ends when the product is in the market. The advantages of this strategy include; the fact that new products usually come with better quality, will ensure more sales for the observant consumers. The development of the new products also provides for better money value hence increase in the firm’s income. Now that firm’s are introducing the product to markets they already understand, it will be easier to select the best segment of the entire market, where more sales will be made. This strategy is evidently used in the Coca cola Company, with new brands such as the Coke Zero. However, the strategy has its own limitations. For instance, the prosperity of the product into the market will depend on the products that are already available in the market. The product is subject to consumer rejection, due to the buyer’s tastes and preferences (Kurtz, MacKenzie & Snow, 2009).
Market penetration strategy
This strategy is in most cases geared towards the sales increase target. The products already exist in the market. The product may be modified, or its quality improved. Some products are even adjusted to enhance functionality. The advantage that attracts this strategy is the ability of the product to gain market share in the already existing markets. However, there is the element of the product positioning, which is the perception of the consumer to the product (including its use and quality). In most cases, the consumers compare the products in the market, and go for the best alternative. The risk of this strategy is mostly countered with the research of the market trends before approaching a new market with a different product (Kurtz, MacKenzie & Snow, 2009).
Recommended strategies for the next three years
Table Format- Figure 1.5
Recommended Strategies
Requirements (Items)
Estimated Costs (Amount in Dollars)
TOTAL
2013
2014
2015
Adjustment of the Organization’s Structure
There has to be outsourcing of a qualified Company Secretary, who will be responsible for designing the structure.
4,320
1,200
5,520
Integrate Technology to reduce the production costs.
The company is supposed to acquire better technological equipment, which will rapidly reduce the production costs.
9,870
2,100 (Maintenance costs)
900 (Maintenance costs
12,870
Financial measures to cushion the company from the economic recession.
Appointment of a financial advisor (Maybe interim)
3,700
3,700
3,700
11,100
TOTAL
29,490
Comparisons and Contrasts
Comparisons
Both the recommendations and the company’s current strategy insist on the benefits that come with Information Technology integration. With the current trend in the business fields, technology is proving to be mandatory for any successful company. The installation of technological equipment, though expensive to install comes with many advantages like reduced costs of production, the safety of information in computers (Information that is fatal and private could be coded), the easier processing of specific projects, the enhancement of communication channels in the organization and many other efficiencies. Though Coca Cola is in its initial integration of the resource, there is more to be done. The other definite comparison is that both of the strategies are aimed at the reduction of costs, which has always been an objective of many major companies.
Contrasts
Though the company strategies have been linked to the betterment of the company, the issue of the organization structure and the motivation of the employees are not considered. The employees perceive fulfillment with different aspects, ranging from security to the remuneration they receive, and even the response of the management to their pleas (Fisher, 2008) All these aspects are to be considered when working with employees so that they feel more appreciated (motivated employees work better compared to dissatisfied ones). The security of the employees is therefore one of the factors that might just be preventing Coca cola from thriving more. The employees also feel more secure when they can address their issues directly from the management, without the conservative and rigid communication where hierarchy was grated exaggerated recognition. There is need for decentralization of power in the company, as long as every individual is conscious of the obligations and duties assigned specifically to them.
Adoption of recommended strategies and the expected results
Tabulated format (Figure 1.6)
Recommended Strategies
Implementation Process (common)
Expected Results
Time Required
Designing of the organization structure
The implementation process is the obligation of the management, who will;
Design and plan for the process with all details that are necessary (Tactic shaping)
There will be need for implementation of contingencies
The aspects of governance are to be analyzed, including the confirmation of deliverables.
The execution process is to be supported, and the coordination of the process begins with actions like revision of the costs.
Evaluation of the process is conducted
Operations and support are granted to safeguard the process of implementation. The processes that are time consuming and irrelevant are terminated as liabilities are evaluated. The implementation is now taking place at this point.
The structure of the organization should be fine enough to be able to integrate change when possible, and the communication channel will be more efficient for both management and employees.
6 months after secretary assumes duty
Integration of technological implementation
There will be enhanced security of information and the different departments of the organization will be linked through a specially designed network program.
1-year (entire installation)
Appointment or (outsourcing) of financial coordinator/advisor
The matters of the organization regarding finance and investment options will be analyzed by the officer, who will prepare a report to the board of the company for verifications
From appointment to the end of contract.
Review and evaluation of success of the strategies
This stage will require that there be information collection regarding the organization, after implementation of the recommended strategies. The information sorted should explain the difference of the organization how the changes have influenced the coordination and income of the company and many other aspects, the bottom line remains that the company that adopts the strategies and implements as instructed/required, is at a better chance of winning success. The aspects will include the reference framework, before making conclusions (International Monetary Fund, 2004).
Conclusion
There is great and equal opportunity for all the organizations to prosper, but it depends with the chosen strategy of the company. Successful organizations are run by enlightened managers, who are ready to adopt change and strategize their plans in the right manner. The organizations, especially those that are business oriented, and are just breaking even have to restructure their present strategies or change the strategy completely, for any fruitful end.
References
Bohm, A. (2009) The SWOT Analysis. Munich: GRIN Verlag Publishers.
Fisher, J.G. (2008) How to Run Successful Employee Incentive Schemes: Creating Effective Programs for Improved Performance. New York: Kogan Page Publishers.
Kurtz, D.L., MacKenzie, H. F & Snow, K. (2009) Contemporary Marketing. New York: Cengage Learning.
Sam, S. & Makor, J. (2011) Strategic Internet Business Management — An Assessment of Internet Business Growth Strategies: Empirical Evidence From Listed SME’s in Denmark. Munich: GRIN Verlag Publishers.
