This paper analyzes the Coca-Cola company’s strategy management at the market level. In addition, the forces of the competitive environment and market cycles are being identified. The obtained characteristic of Coca-Cola allows concluding the effectiveness of the company’s most crucial corporate-level strategy. In general, within the framework of this paper, the strategic aspects of Coca-Cola’s business activities will be discussed.
Introduction
Firms have utilized techniques that have allowed them to achieve a competitive advantage. Business-level and corporate-level strategies equip firms with the ability to produce goods. Some corporate-level strategies may incorporate differentiation strategies, while corporate-level strategies may emphasize value production (Nguyen, 1, p. 61). When a company identifies its core capabilities, its adopted strategies are successful. However, every company has its formidable competitor that may or fail to adopt the strategy of their competitors.
Business-Level Strategies
Firms employ a variety of business-level methods to maintain market competitiveness. A company’s business-level strategy is a distinct criterion that enables it to incorporate core competencies into its distinctive production. Coca-Cola, for instance, adopts a differentiation strategy that allows the company to differentiate its products at competitively fair prices, ensuring that customers will enjoy their products (Michael, 2, p. 496). Coca-Cola is aware of the value of its customers and the costs at which they are willing to purchase its products. Consequently, this enables the company to meet the needs of its clients (Rajesh 3, p. 91). The most plausible justification for the firm’s differentiation strategy is that it will gain a competitive advantage by prioritizing manufacturing unique, non-price-driven items. The differentiation strategy has enabled the company to refresh its products with special, consumer-appealing features without increasing prices (Michael, 2, p. 48). As a result, the company has several production lines that allow it to incorporate technical characteristics that suit consumers’ expectations.
The Coca-Cola company’s performance is exceptional due to its ability to sell its products at reasonable prices that exceed its production expenses. Therefore, the company can surpass its competitors and maximize profits by utilizing the differentiation approach. The differentiation philosophy has allowed the company to focus on developing adaptable features to changing market circumstances, allowing it to outperform competitors (Michael, 2, p. 333). The unique characteristics of Coca-Cola beverages, the friendly customer service, the quality of the product, and good technological leadership provide the company with a brand name that gives value to the company (Michael, 2, p. 345). Thus, Coca-Cola’s customers can accept price increases since the firm’s value production satisfies their unique demands, rendering them insensitive to price increases (Rajesh 3, p. 82). This is because Coca-toughest Cola’s competitors do not offer services and goods comparable to its own. Coca-Cola ensures customer satisfaction because they have a thorough understanding of the needs of its target market.
The unique products meet the needs of the firm’s loyal clients, and the differentiation strategy has enabled the company to earn their loyalty. The company differentiates its products by quantity to meet the needs of consumers (Michael, 2, p.127). Since most consumers seek items that meet their demands, Coca-Cola has developed a base of devoted customers who have contributed to the development of its brand (Michael, 2, p. 284). Through the development of a brand name, price sensitivity is diminished. Consequently, this establishes a credible relationship between price sensitivity and brand loyalty, which provides the company with a competitive advantage over its rivals.
In addition, the Coca-Cola Company can integrate with numerous suppliers worldwide due to its differentiation strategy. Therefore, the company requires its suppliers to supply consumers with high-quality services that would attract more customers, thereby increasing revenue. The distinctive value of production created by differentiated products enables the company to pass on additional costs to consumers without encountering resistance from them (Michael, 2, p. 749). Therefore, Coca-employment Cola’s differentiation strategy is a favorable decision, as it has allowed the company to remain on the market for a long time and gain a competitive edge through building brand value.
The Coca-Cola Company’s fundamental capabilities are materials and capacity, which offer the company a competitive advantage. The firm’s natural strengths consist of its brand reputation, its resources, and the quality of its products (Michael, 2, p. 34). The company makes flawless beverages that satisfy consumer demands. Most consumers view quality as a measure of a company’s productivity. Throughout its value chain, Coca-upper Cola’s management, middle management, and suppliers support the production of high-quality products (Michael, 2, p. 381). This helps the company to manufacture goods that meet consumer expectations. By creating high-quality goods, the company can assess the quality of its competitors on the market and produce goods that fulfill consumer desires, giving it a competitive advantage over its rival.
Additionally, the company’s excellent reputation encourages buyers to acquire its items. The brand has given the company a positive reputation and an advantage over its competitors. The firm’s excellent brand reputation allows it to establish an unpredictable competitive edge that keeps its rivals guessing about the next potential move it may make (Michael, 2, p.153). The firm also possesses sufficient tangible and intangible resources, which provide it the capacity to function in a larger market share, the ability to identify its flaws and devise methods for overcoming them, and the strength to defeat its competitors.
The company markets its products in many ways utilizing its core skills (Michael, 2, p.188). The positive brand is readily marketable on various online platforms and television networks. Innovative actions can maintain the company’s brand recognition. The firm’s resources enable it to reach its consumers inside its more significant market share (Michael, 2, p. 751). Thus, these make it easier for the company to produce and distribute high-quality services and products in the market and make them more accessible.
Corporate-Level Strategy: Generation Diversification
Diversifying a company’s product results in a greater return by allowing it to reach a larger market share. To achieve diversification, a company must embrace corporate-level strategies that will enable it to transition from a single entity to several entities in the market (Michael, 2, p. 230). Consequently, corporate-level strategies are criteria that the company uses to acquire a competitive advantage by selecting and managing its operations in various markets. Various corporate-level strategies are employed by businesses, such as Coca-value Cola’s generation diversification strategy (Michael, 2, p. 641). This corporate-level strategy is most important to the long-term success of the Coca-Cola corporation (Nguyen 1, p. 57). The strategy enables the company to expand its capacity and resources, forming a competitive edge over its rivals. By creating value for its customers, Coca-Cola can expand its economic footprint through exploitation (Michael, 2, p. 548). The scale of the economy generated by Coca-Cola enables the company to share its resources, resulting in the development of cost-cutting mechanisms that ensure the company minimizes expenses while maximizing revenues.
The pooling of resources enables the company to share its beliefs and strategies. If a particular method yields a greater return in one area, it is transferred to another market. The company creates economies of scale with suppliers and facilities sharing tangible resources such as equipment and other physical assets such as cars (Michael, 2, p. 522). The corporation can share its activities via operational interdependence and transfer its corporate interdependence. Sharing working relationships enables Coca-Cola to share its inventory delivery services, such as purchasing procedures. In the global setting of Coca-Cola, the sharing of company activities develops corporative relationships between firms that operate in different markets (Michael, 2, p. 512). Sharing facilities within a company encourage good coordination that results in a value that improves the firm’s performance, boosting returns.
The greater the economic scope of the company, the more it attracts shareholders and suppliers, expanding its market share. In addition, Coca-Cola combines its intangible resources in its domestic market. The company shares its technology, management, and market-oriented specialists within its various divisions (Asante, 4, p. 43). Rather than transferring the commodity from one market to another, the business reduces expenses and extra costs by sharing resources (Michael, 2, p. 628). Moreover, Coca-Cola has a value development approach based on resource intangibility that discourages competition. The strategy helps the market entity obtain the resources necessary to reach consumers in vast market segments effectively.
Competitive Environment
Pepsi is a competitor to Coca-Cola in the market for carbonated soft drinks. There is longstanding competition between the two corporations over market share. Other market competitors are Dr. Pepper Snapple Group, Nestle, and Diet Coke. Coca-Cola has a slight advantage in market share over Pepsi. In 2017, Coca-Cola held a market share of 42.7%, while Pepsi held a market share of 31.0% (Business Bliss Consultants, 5, p. 4.3). In recent years, however, as customers have become more health-conscious and purchased more water and tea instead of sugary soft drinks, the market share of both corporations has decreased (Nguyen 1, p. 60). Both Coca-Cola and Pepsi are enormous international businesses with extensive resources. They are both financially capable of making substantial investments in marketing and advertising campaigns. Therefore, the two companies are highly comparable in brand recognition and market share. Coca-Cola and Pepsi are attempting to shift their strategies away from sugary soft drinks and toward healthier alternatives. Both parties invest in bottled water, tea, and other beverages without carbonation (Business Bliss Consultants, 5, p. 2.2). In addition, they are both attempting to attract health-conscious customers by expanding their low-calorie and diet offerings.
Coca-Cola has a long history of being a consumer-centric business. This is evidenced by their capacity to create experiences that emotionally engage individuals. The company’s emphasis on developing trustworthy relationships with customers and consumers produces emotional connections. PepsiCo’s Business Strategy operates in a diversified and intricate market. Pepsi focuses on enabling individuals to be their best selves. PepsiCo aims to achieve long-term, sustainable growth while positively impacting society and the environment (Business Bliss Consultants, 5, p. 2). To achieve this, it has committed to Performance with Purpose. According to PepsiCo’s Performance with Purpose philosophy, the success of its business is intimately related to global sustainability. Therefore, their top aim is to achieve long-term growth through investing in a brighter future for people and the world (Asante and Adu-Damoah, 4, p. 41). The success of Coca-Cola is likely attributable to its business strategy, corporate strategy, and leadership. Coca-Cola has a well-defined mission and strives to become a more efficient and leaner organization (Business Bliss Consultants, 5, p. 2.2). PepsiCo is likewise a great firm, but more than its emphasis on social and environmental responsibility may be needed to overcome the obstacles presented by the competitive landscape.
The strategy of Coca-Cola is to emphasize differentiation. The company attempts to develop different and challenging items for rivals to imitate. This strategy requires Coca-Cola to continue innovating and developing new consumer-appealing products (Business Bliss Consultants, 5, p. 4.2). Additionally, Coca-Cola must continue marketing to build a solid brand identity. Its business strategy of Pepsi aims to maintain a low-cost leadership position (Silvio, 6, p. 16). The company’s objective is to produce goods at a lesser price than rivals. Pepsi must continue investing in efficiency and scale to preserve its cost advantage. In its pursuit of lower costs, the business must maintain quality.
Coca-Cola has a greater variety of goods and a more family-friendly image than its competitor. Pepsi is more focused on carbonated drinks and has a youthful appearance. Based on these criteria, Coca-Cola has a better chance of achieving long-term success. Coca-Cola is more likely to achieve long-term success due to its modest market advantage over Pepsi and greater diversification (Asante and Adu-Damoah, 4, p. 41). In addition to its leading Coca-Cola brand, Coca-Cola owns several other brands, whereas Pepsi’s portfolio consists primarily of Pepsi-branded items (Business Bliss Consultants, 5, p. 2.2). In addition, Coca-Cola positions itself as a drink for the whole family, while Pepsi claims its soda is aimed at a new generation. This makes Coca-Cola’s consumer sample broader. As a result, Coca-Cola is less dependent on the success of any one product and is better able to withstand shifts in consumer tastes.
Market Cycles
Companies that manufacture comparable items constantly compete for consumers, market share, and brand preservation. The dynamics of firm-to-firm rivalry are influenced by competitive characteristics such as slow- and fast cycles. Slow cycles are a circumstance in which markets obtain a competitive advantage when they are not duplicated, allowing the company to be sustainable over a lengthy period (Michael, 2, p. 119). The first-cycle needs enable the company to gain a competitive advantage that is quickly and cheaply reproduced (Michael, 2, p. 691). Coca-Cola is more likely to be successful in the long run than Pepsi due to its modest market share, which provides it with a competitive advantage (Silvio, 6, p. 19). Coca-Cola manufactures a range of items, including water, beverages, and green tea. Therefore, this gives the company an advantage over its formidable opponents.
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