Issue Identifying
The main issue that Coca-Cola faces is competition from other corporates in the industry, such as Pepsi, Starbucks and other companies selling soft drinks and beverages. Considering that Coca-Cola is a multinational corporation operating globally, I would recommend that they follow a global standardization strategy in solving this issue. To accomplish this goal, guidelines need to be drafted that would be provided to all employees of Coca-Cola located in every country. This would ensure that everyone is working to the same standards and that the items produced by the company continuously improve the market quality.
Analysis
Coca-Cola’s global standardization strategy combines central and local marketing functions in solving the stiff competition issue. There is direct competition within the industry from other businesses like Pepsi, even if the company already has a significant market share. Pepsi has been on the tail of the firm for several decades, with Pepsi performing exceptionally well in a number of the cities and goods that Coca-Cola is known for. The corporation contends with indirect competition from businesses such as Starbucks and other companies that sell beverages.
PepsiCo is not the only company that competes with Coca-Cola; the company also faces competition from other beverage manufacturers and distributors, such as Starbucks coffee shops and businesses that provide healthy drinks. The Coca-Cola Company is ranked first among businesses that create non-alcoholic beverages, followed by PepsiCo in second place (5.55 billion dollars behind The Coca-Cola Company) (Panigrahi, 2020). The Coca-Cola Company is ranked number one, followed by Nestle Tea at number three, 6.301 billion dollars behind, and Starbucks at number four (17.76 billion dollars behind Coca-Cola Company) (Panigrahi, 2020). Only PepsiCo and Nestle Tea, two of the top four non-alcoholic beverage manufacturers, pose a threat to Coca-Cola Company since their products are competitive with those manufactured by Coca-Cola Company. These companies’ rivals sell visually comparable items to Coca-Cola Company and promote, package, and distribute them similarly.
Recommendations
The Coca-Cola Company board of directors should employ the global standardization strategy in solving the competition issue. Using this strategy will preserve the company’s solid global brand while simultaneously incorporating local features into its marketing to ensure that the product’s image is in keeping with the local culture. The global standardization approach used by Coca-Cola in the implementation of global standards can assist in developing a robust and recognizable brand identity that surpasses competitors, making it highly recognized to customers in various markets. This is because when a corporation pursues global standardization, it increases the competitive advantage by generating a consistent set of norms and procedures that can be used across all markets. The strategy contributes to developing a robust and consistent brand identity recognized by target audiences, thus increasing the number of consumers. Second, adopting global standards may result in efficiency growth and cost savings for Coca-Cola Company which will provide resources to increase innovation. This is because a firm can save money by mass-producing items and services utilizing the same processes and principles throughout production.
In addition to this benefit, global standardization will help Coca-Cola convey successful strategies from one nation to another, making them more creative and innovative. The exchange of this information can contribute to an increase in the effectiveness of operations and lead to original insights that can be utilized across the entirety of the firm. Global standardization can result in cost savings by lowering the total number of product variants available. This is because there is a reduced requirement to manufacture and store multiple variants of the same product. When all workers adhere to the same protocols, it is much simpler to instruct new employees on their duties. Entering new markets can be a considerable advantage for growing businesses. Standardization on a global scale makes it simpler to manufacture new products because there is a decreased need to tailor such items to specific geographic settings. This can result in a shorter amount of time required to bring new products to market.
Reference
Panigrahi, V. (2020). An Organization Study on The Coca-Cola Company (Doctoral dissertation, CMR Institute of Technology. Bangalore).