Strategic Analysis of Coca-Cola Company over 130 Years
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Executive Summary
According to Coca-Cola (2015), Coca-Cola existence dates back over 130 years with over 3500 brands of quality products worldwide. The major company concentration is the soft drink industry set up in over 200 countries around the world with headquarters in Atlanta, Georgia, USA. The company long presence in the market grants it wider penetration and expanded quality brands in both the industry and world markets. The company has establishment both in fast and slow growth markets hence splitting its activities between these two incomparable markets. As much as it owns many brands in the market, coca cola does not have many sub-industries in its market.
The industry has evolved over time, is more competitive, and hence must respond to external factors to outshine its competitors in the segment. Coca-Cola Company commands a greater share of the market and, therefore, must deal with factors that may serve as a boost or impediment to its successful venture in the markets. As a multinational corporation, Coca-Cola stands to face hurdles in the international business environment and rapid change in the global economy. Its competitors engage in negative publicity to ensure that the company loose customers, even as people raise alarm over possible health effects of its products.
Coca-Cola Company must do things differently to meet changing needs of the consumers and outsmart competitors. In times the company is facing competition from the indirectly competing products, differentiation would ensure that it offers alternative products under its brand that would retain its customers. Mergers and acquisition would enable the company eliminate competitors in the segment making it retain dominance. Stronger marketing with proper marketing strategies would make the company continue its dominance by discouraging customer focus on competing products while countering the adverse publicity.
Internal Analysis
Coca-Cola Company has an enduring purpose, which acts as gauge for their action, and decisions, to refresh the world, inspire moments of optimism, happiness, and value creation to make a difference. The company works to shape better future, build collaborations, and ensure integrity and accountability through passion, diversity and quality of their products (Coca-Cola, 2015). Coca-Cola ages over 130 years with over 3500 brands of quality products worldwide. The major company concentration is the soft drink industry with establishment in over 200 countries around the world. Its headquarters is in Atlanta, Georgia, USA.
The company long presence in the market grants it wider penetration and expanded quality brands in both the industry and world markets. Coca-Cola Company has been paying relatively high rates dividend to its shareholders in the past fifteen years and is being more established as it penetrates the market with relatively non-volatile products of beta content at 0.5. Gilhuly (2014) argues the company has an establishment in both fast and slow growth markets hence splitting its activities between these two incomparable markets. As much as it owns many brands in the market, coca cola does not have a vast amount of sub-industries in the market it does not operate.
The major company strengths include the following
- Coca-Cola is the best global brand in value with key market share in the beverage
- It has long beverage distribution channel with concrete marketing and advertising.
- Sustainable customer loyalty and greater corporate social responsibility
Major weaknesses are
- Significant focus on carbonate drinks without further diversification
- Insignificant debt levels from its acquisitions
- Adverse publicity and brand failures
Management
Coca-Cola works on being a local business in every place it ventures into around the globe and prides itself in considering people's customs and desires. According to Gilhuly (2014), the company initially had a centralized system of control, which evolved to satisfy customer demands for a decentralized form of distributed leadership to ensure effective management. Other than the division of groups to manage different operations, the company also has management per various regions with further division into geographical zones. The control by regions allows for the inclusion of local markets in decision-making that would inform success of company operations in the areas.
The company control is through vertical hierarchy, and decision-making role lies with the company top management at different levels. Narayan (2010) argues that like any other company, the company has divisions both at the top organ, and regional levels and decisions on daily operations come from line managers in the regions. The company has slightly higher number of employees compared to its bottling partner involved in operation of all the company six segments. The head offices based in the US headquarters provides the company with strategic directions and support to the regional bureaux. The overall president of the company is the global chief executive officer who heads the executive committee tasked with strategic decision making for the enterprise.
Every activity of a segment or division of the company has to get approval from the United States Office. Vice presidents head the major company divisions as regional offices are led by leaders who are under the business’s top CEO and global president based at the headquarters (Coca-Cola, 2015). The company also has subdivisions led by line managers who handle day-to-day operations of the company and report to the top management.