Introduction
Coca Cola Company is the leading beverage firm in the world. Started in 1886, this firm has managed to become one of the America’s most profitable companies. Its trademark was officially registered in the United States in 1944. Kline (2010) reports that the firm has experienced a consistent growth in its market share in the local market. The firm is currently operational in over 200 countries across the world.
The brand ‘Coca Cola’ has been rated as one of the best brand in the world. In the year 2008, it was rated the most valuable brand in America and the world at large, beating some of the renowned brands like Apple, General Electric and Amazon.com.
The firm has been experiencing consistent growth even in the face of the economic slowdown in the United States and other major world markets. According to Biswas (2011), it has been in a position to withstand some of the external challenges posed by various factors in the environment. In order to bring to focus the environmental factors that have influenced this firm, a SWOT analysis will be used.
SWOT Analysis
The strength of this company lies in various factors. One of the major strengths of this firm is its brand name (Grossman, 2011). As Stated above, the brand Coca Cola is one of the strongest brands in the world. This has made it be able to maintain its market share in the face of an increasingly competitive market.
This firm also has financial strength. It has been in operation for over 100 years, amassing huge wealth in the process. As such, this firm is in a position to implement its projects, including those of research and extension. The firm also operates in various countries outside the home market. As such, it has been able to balance its production when one section of its market is experiencing economic growth while the other has recession.
Despite the above strengths of this firm, Lippman (2004) says that there are some weaknesses that it has, a fact that has seen some of its competitors like Pepsi Cola eat up a section of its market share. One of the weaknesses that many environmentalists have repeatedly talked about is environmental degradation.
The plastic bottles that this firm uses in packing its drinks are causing havoc to the environment. It is apparent that this firm is yet to develop solution to this problem because as Tanke (2000) notes, Coca Cola Company is yet to replace the plastic bottles with better alternatives.
Within the environment that this firm operates are some opportunities that have made it experience massive growth in its market share. According to Panagariya (2008), Coca Cola Company has exploited vacuum that existed in many countries in the world, especially in the developing countries. Weiss (2011) says that there was no competition for this firm in the overseas markets and this Company was able to make the most out of it.
Technological advancements have also enabled the firm to conduct trade much easily due to improved means of communication and transport means. The economic boom that America experienced soon after the Second World War was another opportunity that helped this firm to expand its market.
The threats that this firm has had to deal with include competition. The market has gotten increasingly competitive. Charantimath (2006) notes that many firms like Pepsi Cola have come up with products, which are close substitutes of those that are offered by Coca Cola. They have eaten into the markets of Coca Cola.
Political instability in some countries is another threat that this firm has had to deal with. When there is an internal strife, like the one experienced in Egypt and Libya in the recent past, this firm would lose millions of dollars due to the destruction of its assert in those countries. During such periods, the firm would also lose the profits they get from the country, while yet they will have to pay the employees. This would hurt the firm financially.
Competitor Analysis
Although there many competitors of Coca Cola in this industry, the main competitor that has been able to keep it at close watch is Pepsi Cola. Just like Coca Cola, Pepsi Cola is also an American firm. According to Clinton (2011), it has a considerably huge market share in the American market and other countries overseas.
This firm has been in a position to understand the emerging market trends and respond to them as appropriate, making it develop a niche in the market. As a result of this, it has been in a position to emerge as the main competitor of Coca Cola Company. The firm has diversified its production lines as a way of ensuring that it is not affected by the failure in one of the lines.
The brand of this firm is also strong. Pepsi Cola is known in various countries beyond America. It has managed to outsmart Coca Cola in South Africa, one of the most promising emerging markets in the third world countries (Clement & Henry, 2010). The firm is also doing well locally and in other European nations.
Market Analysis
The market is getting increasingly competitive. The beverage industry is getting new products like fruit juices that never existed before. These products have been propositioned as healthy as they are taken directly from the natural fruits. According to Baily (1996), this has seen a massive shift from consumption of the cola products to the consumption of the natural fruit juices.
This is a competition that Coca Cola least expected. It would have expected its competitor to be a firm like Pepsi Cola producing similar products to its cola products. Given this new trend, this firm must readjust its operations in order to counter this new challenge.
Environmental Analysis
Environmental analysis can take various fronts (Andrzej & Buchaman, 2007). The competitive environment of this firm has been discussed comprehensively in the above discussion. Other environmental factors like technology, environmental conservation concerns, and economic growth are some of the other factors that would affect the operations of this firm
Internal Analysis
Coca Cola is a huge company with huge market share, capital base and very many employees. Other internal analyses of this firm have been looked at in the above SWOT Analysis.
Marketing Objectives
Marketing has experienced a complete shift from what it used to be in the past. After the Second World War, there was a huge market for many of the manufacturers in the world, Coca Cola included. By this time, the concern was to produce in mass and take them to the ready market in various countries in the world.
The market had no options but to accept the products that were availed to them (Barthe, 2010). However, this has completely changed over the past few years. Technology has reduced the world into a global village, breaking the physical barrier that existed before. Information is also changing the world market. Customers have easy access to information. They can easily get the information about specific products they need, where to get them at competitive prices.
As Shachaf (2008) says, customers are currently demanding for more value at a lesser cost. The suppliers are also getting more patronizing, especially those that operate in semi autonomous manner. They ask for more at lesser value they give. A business unit would be trapped in between a more demanding customer and a more patronizing supplier (Hirschey, Kose & Makhija, 2004). This is not the only predicament in which a firm like Coca Cola finds itself.
Other cases of environmental conservation are also demanding for an attention. The firm must therefore develop a marketing plan that would work in the current business world. The firm must develop concise objectives that would enable it navigate through the market that has gotten more challenging. For Coca Cola Company, the following are some of the objectives that it may need to achieve in order to maintain its market position.
- To broaden the scope of the Cola brands. The current brands are broad enough, but given the new competition that is emanating from the fruit juices, the firm must refocus its strategy. The objective of broadening the scope of the Cola brands is aimed at ensuring that this firm would be in a position to introduce new competitive fronts that would counter the effect of new market competition. This would also result in increased profitability.
- Enhance creativity in the process of serving the customers. The research and development team of Coca Cola Company has always ensured that it provides its customers with new products often enough. However, the rate at which market is experiencing changes demands that this firm becomes more creative (Safizadeh, Field & Ritzman, 2003). This creativity can be demonstrated in the way of packaging the products. Customers should be made to feel that there are changes happening within the firm which are geared towards ensuring that the customers are satisfied.
- Transform the bottling companies into active partners who are able to be the drivers of positive change for this firm. For a long time, the bottling companies have basically relied on the Coca Cola Company to issue directives and necessary advice in the production process. They have basically acted as the processing centers which would not give any advice on the management, production or any other concern to the company (Schmitt & Lane, 2009). By transforming them into partners, this company will be empowering them to be in a position to develop creative ways of conducting their production. The partners can also be of great benefit to this firm because they can be the managers of local competition in various countries.
- Embrace technology as the agent of positive change. The society is greatly influenced by the changing technologies around the world. As Warner (2011) says, the current business society has embraced technology. Coca Cola can rely on technology to reduce the cost of production hence lower the prices of the products to competitive levels.
- Develop market proposition that would make it be seen as the preferred firm in this industry. This firm’s main objective is to attract and retain its customers through consistent customer satisfaction (Manaschi, 1998). As such, the firm plans to re-engineer its marketing strategies to reflect its new production methods and products that are responsive to customer needs.
Targeting and Positioning
Target marketing is one of the current marketing strategies that many business units have found to be relevant. Bird (1977) says that it starts with market segmentation. A business unit must be in a position to segment a large market and then identify those segments that are relevant. This is because the entire market cannot be equally attractive. For the Coca Cola Company, the market segment that has been identified to be the most attractive is the youth (Ruddar & Sundharam, 2009).
The youths are attracted to the products of this company, especially because they can easily be carried from one location to another and that they make the best snacks for such forums as party or picnics. Coca Cola Company has this market segment as its target market. it should therefore develop strategies that would help it further attract this market segment.
In order to attract this segment, it has to developed market positioning strategies that would make it appealing to the youths. Coca Cola has position itself as the source of happiness (Kurtz & Boone, 2010). In its Coca Cola Summer television commercial 2010 that was largely broadcasted in various channels of television and on YouTube, Coca Cola leaves no doubt of its intention to attract the youth. In this commercial, the firm is telling the youths that opening a bottle of Coca Cola is like opening happiness (Freeman, 2010).
To the youth therefore, they go for a Coca Cola drink when they are looking for happiness. It has successfully propositioned itself as a firm that has the interest of youths at heart by making them believe that it is the genesis of happiness. Moran (2011) described this as a good move. However, it may need further adjustment to appear more attractive. The firm should attempt to convince the youths that its products are do not have any negative health consequences to its consumers.
Growth Strategies
The ultimate objective of every firm is always to ensure that it experiences growth in the market share and assert base. As Majer (2011) notes, this may not be easy to achieve, given the current market competition. There are many businesses that are coming up, most of which offer similar products. Besides Pepsi Cola as the main competitor of Coca Cola Company, there are the local firms in various countries that are producing the fruit juices.
These products are direct substitutes to the Cola products. Growth strategies must therefore be developed in order to secure this firm from a possible negative growth. One of the strategies that this firm should consider developing is the increment of its product lines (Lacity, Willcocks & Feeny, 2004). This should be one of the main objectives of this firm especially in those countries where most people are shifting from consumption of Cola products to other substitutes that are believed to be more health conscious.
It should consider going local by producing the line of products that are acceptable. This would help it regain the section of the market share that it might have lost to the local firms. it would also help it attract new market segments that were not previously covered by its initial products. This would lead to growth of this firm both in its market share and capital base.
Selection of Competitive Advantage
Sandwick (1987) once said that in the current world where the market is very dynamic, it is very important for a firm to develop competitive advantage as early as possible and make the maximum of it as fast as it can. This is because the in the current market, no competitive advantage is permanent.
What is considered as a competitive advantage today may not be the case tomorrow (Pfiester, 2010). Coca Cola has to be in a position to select competitive advantage early enough and put in place structures that would enable it exploit it maximally. Given the competition from the local firms that are producing fruit juices, this firm has the financial advantage against them. These firms have the potential of driving the Cola products out of the world market and therefore they should not be taken lightly (Lisa & Amy, 2006).
The firm should use their economic strength and develop a different line from its current products that would directly compete with this local firm (Minja, 2009). Although the ultimate goal may not be a total elimination of these local firms, Coca Cola should make an effort to put to check their effects on its products. To other firms like Pepsi Cola, Coca Cola should take advantage of the fact that it has broader market coverage and therefore can make more profits.
Marketing Mix Program
Marketing Mix Program is one of the important factors that a firm should consider when developing business strategies that work, according to Wellington (2001). Coca Cola should start by defining the product aspect of the mix. It should determine which product would be suitable for its current markets.
After determining the product that it can produce in the best way, it should determine people who would make the market for the product (Lall & Narula, 2004). It should then come up with a price that would take care of the cost of production and the profit margin expected while still ensuring that the targeted people are able to pay. The firm can then design promotional procedures that would be convincing to the target group.
Conclusion
Business environment is getting more competitive. Coca Cola Company must therefore be ready to face this competition and develop strategies that would enable it be in a position to manage this competition. As can be seen from the above discussion, this firm has the responsibility of making its products be seen as competitive in the market.
It must exploit its strengths and overcome some of the identified weaknesses within the local and international market. It should also take advantage of the opportunities that avail themselves in the external market to increase its market share. Finally, Coca Cola must identify some of the threats that are in the external environment and develop measures to overcome them. This way, it will be in a position to maintain its current market lead in the beverage industry.
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