Strategy Audit Findings
This paper presents a critical strategic analysis of Coca-Cola Company, which is the leading company in the beverage industry. Coca-Cola has been the world’s number one maker of soft drinks, and it operates in more than two hundred countries globally. The company also operates and licenses more than four hundred brand of nonalcoholic beverages. The company has enjoyed great success in each area or region that it operates.
However, despite the success that the company has been experiencing both locally and globally, it regularly faces challenges in the current marketplace. This is because it operates in a dynamic market which is governed by changing regulatory policies and the changing socio-economic wants and needs. This paper presents the findings of the research that was conducted to understand the localization strategy of this global beverage company. The findings in this paper present an external analysis of Coca-Cola, and this will help in understanding the impact this company has on its environment. An internal analysis of this company will also be performed to have an understanding of the internal capabilities that have been propelling the company.
The paper will also present the processes the company has put in place to maintain the position it is currently enjoying. The uncovered initiatives taken by the top level management and the strategies they have laid out to maintain market leadership will also be analyzed. On the areas that the company is not optimally performing, the paper will provide recommendations to perfect them. The conclusion of the paper will emphasize the need for the company to reduce its dependence on the carbonated beverages and suggest on how it should diversify its product portfolio to remain competitive (Peterson, Udell & Easton, 2011). The paper will show that the best way for Coca-Cola to become a total beverage company is by addressing the key identified issues in the research.
The rapport has also been very helpful in identifying areas where the company has not been doing well and thus employing the necessary variations. The crew also makes sure that the time needed to fulfill various requests from the customers is shortened. Coca-Cola has acknowledged that customers are critical to any business, and thus they should be taken care of. Customer needs should be addressed in the right manner and that new products should be introduced into the market to take care of the ever changing demands.
Internal business process perspective
Internal business process perspective focuses on internal operations of Coca-Cola and how the company has employed means to create value for its clienteles. It also analyzes various ways through which the financial perspectives are applied in increasing the wealth of stakeholders. The key objective that the company has put in place is to ensure that there are improved manufacturing competences, and there is abridged delivery time to customers and also more importantly it meets the specified delivery epochs. The corporation has had a wide range of products and services presented to clients. The top-secret formula held by the company in making the soft drinks is also a key factor that the company has benefited from. The company has developed a series of trucks which are meant to deliver the products to the distributors and also to the final customers. The fact that Coca-Cola is using the latest technology on its manufacturing line is a clear indication that there is less or no manufacturing downtime. The company has also developed a good rapport in terms of the post-sales services it is offering to consumers. Once a new product has been introduced to the market, customers are given priority to test or try it before it is set for the marketplace.
Learning and growth perspective
This perspective accentuates on the capabilities of employees and the systems of information in the company. The corporation has invested in developing a process skill of its employees together with empowering the workforce so as to boost the efficiency. The procedure through which the information is channeled from one department to another is also heightened. This helps various levels of management work together harmoniously and without any turbulence. The enterprise does also train its employees, and this increases the skill level thus working with people of right abilities. This upsurges the turnover rates of employees.
Organizational assessment of Coca-Cola
The present-day mission of Coca-Cola is to create a long-term destination for its trade. The destination is aimed at providing a roadmap for which the company will realize its winning ways. The business has developed strategies that have helped it pursue its main mission impeccably. One of the missions of this company is to refresh the whole world in body, spirit and mind. Through the production and distribution of soft drinks, the company has been able to reach this mission. Another major mission of the company is to create value that brings a difference in everywhere the company is in procedure. Through increased research and employed product revolution, the value creation has been able to be realized.
The business has developed a very strong of culture in areas and regions which it is running. The company has identified and realized that consumers are the main reason as to why it is in operation, and, consequently, good mechanisms should be put in place to care their questions. Communication between the consumers and the company is a key factor in any enterprise. In this regard, therefore, Coca-Cola has developed a customer care team. This team has been tasked to collect information and complaints from the clienteles. This info is then used by the company to increase and improve its production schemes. Grievances received from the customers are taken by this team and then given to the organization. According to Ladda, 2012, the upgrading of the design products is also greatly attributed to customer participations.
Value chain analysis
The establishment has identified that there is a great potential for focusing on the global shop. It is for this reason therefore that many branches have been opened worldwide. This has enabled the company to reach its esteemed customers easily all over the biosphere. The company is also known for its commitments to give coolers and freezers to dealers and distributors of its products. These freezers are helpful in preserving the products before they are bought by the final consumers. It is very rare to find a distributor of coke’s products operating without a freezer. The company has also been providing trucks that offer transport services to the distributors. These elements have been very essential for the establishment of a strong market for this company. The after sales services it offers function well in selling it to the consumers. The company has also developed a very strong relationship with bottling companies (Ahmad ElAmin, 2007).
However, there are some areas in which the company is experiencing competitive disadvantages. In terms of marketing, the company has been relying majorly on the per-head consumption of beverages rather than focusing on the total beverage consumption by people. If the company starts to focus on total beverage consumption, it will indirectly increase the speed at which the products are distributed to the customers. It will also increase the speed at which the products are being consumed.
Summary of the findings
The main strength that this company enjoys is its wide coverage as it operates in more than two hundred countries around the world. The company has also been offering more than four hundred brands all over the world. It has a long history due to its outstanding and established brand acknowledgment. The company has also been producing top quality products, and this has enabled it to gain the confidence of the customers. The company has also been participating in corporate social responsibilities in many aspects. It has been sponsoring various sporting activities all over the world. Some of the sporting activities that the company has sponsored include the FIFA World Cup and the Olympics Games. All these have been very great in marketing the company, and this is a major strength enjoyed by the company.
However, there are some of the weaknesses that the company has had a good share of. The company has a product line that is only restricted to beverages. The company needs to develop other means which will introduce other food products in the market. There has also been a negative publicity on the Coke’s products. People have been saying that there are issues of obesity registered in people using these products. The company should, therefore, invest in educating the society about its products. This will help them be aware of the products and thus get rid of the said mentality.
External environment scan and five force analysis
This company has been recognized worldwide as the provider of the most valuable brand. It has been extremely successful in both local and global market, and this success is largely attributed to product variation and adaptation. The company has extended over two hundred countries and this has created an immense need to bring a diversification on its products so as to create a marketing plan that will meet the socio-cultural needs and interests of all customers around the world. It has a globally recognized trademark which is understood regardless of the language used for the brand (Ahmad ElAmin, 2007). The company, however, needs to continue tailoring its marketing plan and product development process. This will make sure that the unique values, cultures and beliefs of customers are respected. The company has given careful considerations of the social factors in its marketing plan. It has developed products that please the twenty-first century’s health-conscious consumer.
The fate of development of this company is highly determined by the trends registered in the global economy. The global economy has had a good run and has maintained a steady growth and thus presenting the good news to Coca-Cola. However, a recession or decline in the global economy will mean that the company will have adverse effects on its operations. The decline in the economy will mean that there will be higher unemployment and also increase the cost of living. This will mean that the consumers will experience a lower disposable income and thus losing their purchasing power. The company has also contracted with many bottling companies and thus weakened economy will mean that the stability of the company will be threatened.
New legislation or regulation of beverage and food products would mean that the company’s environment could be affected. There have been activists everywhere who have been pushing for the involvement of government in both product advertising and labeling. Many laws have been passed in this regard, and this, therefore, means that the expanded new or expanded laws could threaten the environment of the company. This will create more overhead expenses for the company thus reducing its profit margin.
Technology is a key player in the current marketplace as it helps a business stay profitable. Coca-Cola has invested in technological advancement, and this has helped it find ways which help it maintain efficiency and remain ultimately better than its competitors. External technological factors are what now the company should focus on investing on as they pose a threat to its environment. There should be improved and applied research which will improve the recording and monitoring of the company’s sales. The production process and the delivery are also some of the areas that technology should be applied for easier monitoring.
There is a notable change in consumer behaviors and tastes around the world. There has been a new focus on the health and nutrition matters due to many cases of obesity facing people globally. This has seen many consumers change their behaviors and product choices. The change in consumer behaviors and product choices had seen tea related products and mineral water being favored than the soft drinks. This is therefore acting as an external threat to the company. The changes in preferences mean that there will be an increase in the number of competitors in this industry. However, the company has employed aggressive efforts that brings responsible marketing of the products to maintain its competitive advantage. The company has also invested more in community-based projects and product development, and this is as an effort to maintain its market position.
Assessment of external factors applying five forces
The assessment of external factors applying the five forces is a model that gives the primary lookout of this company by analyzing its performance in the industry. The five forces which are considered here are the bargaining power of the consumers, bargaining power of suppliers, the threat of competition, the threat of substitute products and services and the threats of new entrants. In the bargaining power of consumers, the products from this company have less pressure from consumers in terms of bargaining. This is because the products are of top quality, and they are subsidized in terms of price.
The bargaining power of suppliers also presents medium pressure to the company. This is because the company depends on suppliers to provide raw materials for the production of beverages. In terms of competition, Coca-Cola has devised means through which it deals with fierce competition from such companies as Pepsi. Pepsi, just like Coca-Cola, produces carbonated beverages, and this is a major threat to the market for coke’s products. The threat of substitute products is also something that this company has to deal with. You have seen the change in consumers’ preferences can affect the market for soft drinks. Therefore, Coca-Cola must play its part well in ensuring marketing is done appropriately to maintain the inevitability of the brand. These strategies will also cater for the new entrants to the market. The beverage industry has numerous players who are involved in and thus Coca-Cola must be unique in how it is offering its products (Ladda, 2012).
Market position analysis
One of the key element that has placed Coca-Cola in a better position than its competitors in the market is its strategy to study the market and provide the exact commodities and products that are needed. The company has been able to identify the consumers’ needs and thereby developing means through which these needs are fulfilled. For instance, the company has identified the great potential held in the youthful population and the baby boomer population. The youthful population is seen to have a growing demand for both energetic and sporting drinks. After realizing this, the company has been producing these products and delivering them to the right or targeted customers.
Another common factor that has seen Coca-Cola become a globally successful company is the quality of products it produces. The company has been producing quality products and at the same time selling them at a relatively low price. This has made customers like the products and thus developing loyalty on them. This is a factor that has a highly placed the company at an advantageous position than its competitors. This makes it possible for the company to manipulate the market price easily.
The company has also been employing both the differentiation strategies and the cost leadership strategies in its operation (Senker & Foy, 2012). This has helped it attain market leadership and thus competing well with other players. The main competitor of Coca-Cola has been Pepsi, and though it has tried to fight Coca-Cola fiercely, it still remains low in terms of market share as compared to Coca-Cola.
Coca-Cola has had In conclusion, it has been that the response and the perception that from the customers is a positive one. Consumers are aware of the brands and awareness of this company is quite high in the beverage industry and market (Salmons, 2012). The brand awareness has been seen to place the company in a better position as compared to competitors such as Pepsi. The customers have also developed loyalty in coke’s products and thus becoming easier for the products to be bought.
The beverage industry is a dynamic industry, and it is currently experiencing many players being involved in it. Companies which are involved in this business should continually venture into innovations and research for the introduction of new products in the market. Coca-Cola is not exempted from this and it. As seen from the paper, there has been a cry for the company to revolutionize its products and at least try to introduce new products in the market. However, the company has remained reluctant and opted to continue offering the usual brands it offers. The dynamism in this industry may make the company opt to change its tactics to retain relevance in the market share.
Ahmad ElAmin (2007). “Coca-Cola reports progress in red environment impact” William Reed Business Media. United States.
Bazil, M. (2013). The Motley Fool. Coca-Cola Has a Prosperous 2013 Ahead of It. Available at http://beta.fool.com/muhammadbazil/2013/01/04/coca-cola-has-prosperous-2013
Bingham, C., Eisenhardt, K., & Furr, N. (2011). Which strategy when? MIT Sloan Management Review.
Brian Nordmann (2004) “Organizational Structure”
Fred R. David (2011). Strategic Management: Concepts and Cases. 13th edition. Francis Marion University. Florence, South Carolina. Prentice Hall
Ladda, P. (2012). A Comparative Study of Pepsi Company and Coca Cola Company Woth Reference To Chatla Chowk, Solapur. Journal Of Biological Chemistry.
Peterson, B., Cox, R., Udell, C., & Easton, T. (2011). Agile execution: Driving strategic results in a changing aftermarket.
Salmons, A. (2012). The Role of Marketing Auditing and Planning for Coca-Cola Corporation. Carpe Diem, The Australian Journal Of Business & Informatics.
Senker, C., & Foy, D. (2012). Coca Cola: The story behind the iconic business. London: Wayland.
Click following link to download this document
Presentation Of Strategy Audit Findings .docx