Introduction
The business environment is characterized by a high degree of dynamism. This is because firms have heavily invested in research and development. The objective of research and development is to increase the rate of innovation thus enabling the firm to be well-positioned in the market. To be able to compete effectively, it is paramount that the management of firms incorporates strategic management strategies. According to Michael Porter, strategy is aimed at enabling a firm attain a competitive advantage (David 1). Thus, to develop competitive advantage integration of strategic management is important. According to David, strategic management entails an analysis of all the factors related to customers, competitors and the firm (5). This means that both the internal and external business environment is considered. Through strategic management, the management of the firm is able to align the firms’ corporate policies and its strategic priorities. This means that strategic management involves comprehensive analysis of the firms’ position within the market thus enabling the management to make radical change. Through strategic management, the firm becomes a leader rather than a follower.
Considering the intensity of competition within the soft drink industry, effective integration of strategic management would enable the firms to develop competitive advantage. One of the firms that have been dominating the global soft drink market is the Coca-Cola Company. According to Ahmed, Khan and Waqas, the company was first established in Atlanta, Georgia in 1886 (4). The firm specializes in the production of a variety of drinks. The drinks are it produces are of different categories. These include; energy drinks, juices, water, sports drinks, coffee, tea etcetera. The firm’s mission is to be the global leader in relation to consumer foods and drinks. Apart from financial success, the management is committed to ensuring that firm attains a positive public image. Currently, the company has expanded into various economies through foreign direct investment. According to Ahmed et al, the firm is currently experiencing intense competition from other firms in the soft drink industry especially Pepsi, Cadbury Schweppes companies (13).The discussion of this paper illustrates the various strategic recommendations that the management of Coca-Cola Company should integrate.
Strategic recommendation
Integration of Customer focus
For Coca-Cola Company to succeed, the management should integrate the concept of customer focus. Customer focus refers to the process through which the entire organization considers the customer as the most important asset in the firm’s financial success (Jana 12). Through customer focus, the management of the firm will be able to effectively satisfy the customer needs. This is due to the fact that the management understands the needs more effectively. In integrating the concept of customer focus, the management of Coca-Cola Company should ensure that the entire processes of the firm in relation to planning, innovation of new products, their production and marketing consider the customers. The most important category of customers that the management of Coca-Cola Company should consider is the individual customers. This is due to the fact that its products are mainly consumer products.
To ensure effective integration of customer focus concept within its globally distributed firms the management of Coca-Cola Company should share this vision with all its departmental staff. This is can be through incorporation of information communication technology. Technology can enhance customer focus through incorporation of Customer Relationship Management (CRM) within its operation. According to Angela, CRM refers to a well-organized process through which the management of a firm is able to keep track of its customers (para.1). One of the ways through which Coca-Cola Company can implement this is by integrating the CRM software. This would enable the management to communicate with its customers effectively. By incorporating CRM, the management of the firm will be able identify the customer’s complaints more efficiently thus addressing them in a more efficient and effective way. On the other hand, incorporating CRM within the firm’s intranet system will enable its employees to access information related to the customers. To increase the effectiveness of the CRM system within the organization, the management of Coca-Cola Company should train its employees on how to use the system. By understanding the system, it becomes easy for the firm’s sales department to add more input into the system for next department to effectively understand the customers.
In relation to customer focus, the management of Coca-Cola Company should continuously conduct consumer market research. In conducting the research, one of the variables that should be considered is the consumers’ disposable income. By gaining this knowledge, it would be possible to determine the price of its products more effectively. This is due to the fact that consumers are price sensitive.
Dealing with rivalry
According to Barnat, rivalry is defined as the extent of individual firm’s response to competition of other firms within the same industry (Para. 1).The degree of rivalry in the soft drink industry is very high due to the competitive nature of the industry. Competition results from an increase in the number of investors venturing into the soft drink industry. This has resulted in an increase in the variety of commercial beverages. The management of Coca-Cola Company should integrate the concept of conducting continuous market research. The market research should involve conduction of comprehensive competitor analysis. This would enable effective understanding of the competitor’s moves. This means that the firm will benefit by being proactive in strategizing on the way forward.
To deal with rivalry, the management of Coca-Cola Company should formulate strategies aimed at attaining competitive success. These strategies should include product innovation, new methods of branding, packaging, and sales promotion. The soft drink industry is characterized by high rate of product innovation.
Research and development
To deal with rivalry, the management of Coca-Cola Company should invest in research and development. According to Danneels, to ensure that the research and development are effective, the management should ensure that the firm has the necessary competencies and technology (1102.This would enable it to effectively add value to its products resulting in increased customer satisfaction. On the other hand, effective research and development would enable the firm to develop new soft drink categories. This means that the firm will be able to penetrate the global market more effectively resulting in an increase in the volume of sales and hence the level of profits.
Through research and development, the management of Coca-Cola Company would be able to differentiate its products effectively. Through differentiation, the firm will be able to integrate the concept of product customization (David 7).This means that the firm’s products will be effectively positioned in the market. The effect is that the customers will prefer the firm’s product over the competitors.
Sales promotion
According to Jana, management of firms in industries characterized by intense competition should invest in sales promotion (23). For instance, upon developing a new soft drink, the management should ensure that there is market awareness in relation to the product. This would contribute towards the consumers purchasing the product. One of the sales promotion strategies that the management can use is free samples. This would help in launching the new product into the market. On the other hand, sales promotion should also consider the other products that are already on the market. This would ensure that the consumers are continuously aware of the product’s existence in the market. Through effective sales promotion, the company will be able to attract new customers while at the same time retain the existing ones. For sales promotion to be effective, the management should ensure that it utilizes various sales promotion methods.
Increase its involvement in corporate social responsibility
The management of Coca-Cola Company should integrate the concept of corporate social responsibility. According to Brooks, corporate social responsibility refers to the process through which a firm conducts its operations ethically (404). Brooks asserts that corporate social responsibility enables the firm to improve the livelihood of its employees and the society in general (403).This is due to the fact that the organization has an impact on the society it exists in. Corporate social responsibility means that the firm should not only be accountable to its shareholders but also the society. This is due to the fact that the firm’s profit is derived from the society in which it operates.
One of the ways in which Coca-Cola can implement corporate social responsibility is through works of charity. This can either be through formation of either trusts or foundations. Alternatively, Coca-Cola Company can positively impact the society through its diverse human resource. This is due to the fact that the firm is composed of experienced human resources that can help in transforming the society. Therefore the company should impart some of its leadership skills into the society. This will result in a reduction of the social problems. The effect is the creation of a good business environment within the society where the firm operates. Additionally, corporate social responsibility will enable Coca-Cola Company to conduct foreign direct investment more effectively resulting in an expansion of its market size.
Incorporation of supplier relationship management
The management of Coca-Cola Company should also integrate the concept of Supplier Relationship Management (SRM). According to David, SRM refers to the process through which the management of a firm develops a good rapport between the firm and its suppliers (6). In its operation, Coca-Cola deals with a large number of suppliers. Some of these suppliers are related to raw materials and finances. For the firm to operate smoothly, the management should ensure that it has a good relationship with its suppliers. To ensure, effectiveness of the SRM, the management of the firm should integrate Information Communication Technology (ICT) just like it has done with the CRM. This is done by integrating the SRM software within its operation.Incorporation of ICT would ensure effective communication between the firm and its suppliers. For instance, through the CRM, Coca-Cola Company will be able to improve on the efficiency in relation to management of inventory. This means that, SRM will result in a reduction in the firm’s cost of production. The effect is that the firm will be able to price its products more competitively in relation to its suppliers culminating in a higher competitive advantage.
Conclusion
Strategic management is a key element in the financial success of a firm. This is due to the fact that it enables the firm to attain a higher competitive advantage relative to its competitors. Considering the competitive nature of the soft drink industry, it is paramount that the management of Coca-Cola Company considers incorporates various concepts related to strategic management. By integrating customer focus, the management is able its customer needs more effectively. This enables it to produce its soft drink products in a manner that results in higher customer satisfaction. Through the CRM software, the management will be able to able to communicate with the consumers more effectively. CRM also enables the firm’s employees to effectively integrate customer focus. Considering the intense competition within the industry, the management should ensure that its products are effectively positioned in the market. This is through integrating concepts such as research and development, sales promotion, branding, and product customization. Research and development will enable the firm to innovate new products to meet the market demand. Sales promotion will enable the firm to improve its product awareness within the market. The management should also incorporate corporate social responsibility. Through CSR, the firm will develop a positive public image enabling it to conduct foreign direct investment more effectively. Coca-Cola Company should also develop good relationship with its suppliers by incorporating the concept of SRM. This will enable it to conduct its operations cost-effectively due to efficiency of supply of resources.
Works cited
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