The Coca-Cola Company is the world’s leading beverage company. With a brand value of 78.5 billion dollars, Coca-cola is the world’s number one brand according to Interbrand. Based in Atlanta, Georgia, the company distributes carbonated soft drinks, light and diet beverages, waters, juices and juice drinks, teas, coffees, energy and sports drinks in over 200 countries. Even though Coco-Cola’s beverage portfolio caters primarily to Carbonated Soft Drinks, the company has been expanding fast into the non-carbonated soft drinks category in response to a shift in consumer demand and a greater emphasis on healthy options. The Company generated net annual operating revenue of 28.9 billion USD in 2007, representing a 20% growth over the previous year.
Even though Coca-cola is the leading brand with large scale operations across the world, the company has been facing sluggish sales in the carbonated drinks market in North America. The main threats that face Coca-Cola are the rise in the number of substitutes as well as the growing health consciousness of the consumers. With key acquisitions of many non-carbonated drinks and the opportunity presented by the growing bottled water market, Coca-Cola is in a favorable position to meet its threats.
Based on its annual report, Coca-cola has outlined 5 priorities that it will focus on in the year 2008 and that is to grow its leadership in the sparkling beverage industry, rapidly grow its still beverages, leverage a balanced geographic portfolio, accelerate innovation pipeline and strengthen coca-cola’s system capabilities.
These priorities show the increased commitment of the Coca-Cola Company to further grow in the market and continuously establish itself as the world leader in the beverage industry.
Coca-Cola is number 1 in sparking beverages, juices and juice drinks, and in ready to drink coffee and teas. It is number 2 in sports drinks and number 3 in packaged water.
Strategy Canvas of Coca-Cola
The factors of competition for the industry are listed on the horizontal axis and the vertical axis indicates the degree to which Coca-Cola and its key competitor, PepsiCo invests in the competitive factors.
This canvas is based on the Competitive Matrix Profile (see appendix ) which identifies the key success factors in the industry Coca-cola operates in, namely the beverage industry. Accordingly the factors of diversification of product, innovation, distribution channels, Brand, Packaging, Geographic Spread and Advertising have been identified as the competitive factors that determine success in this industry.
Based on the careful analysis it would be well advised that the Coca-cola Company focus on the strategies outlined below. Growth in Emerging Economies
There has been an increased shift from the
rural to the urban areas in emerging economies.
This shift translates into a growing base of
middle income consumers. This growth is accompanied by the increase in demand for carbonated soft drinks which in turn mitigates the effects of the decline in the US Markets in terms of volume of sparkling beverages.
Coca-cola should focus its marketing efforts for sparkling beverages on mainly the BRIC market and other key emerging markets. Together with increasing the number of bottling partners, it should work towards developing stronger relations with its existing partners so as to take advantage of their knowledge of the local markets. This knowledge should in turn be translated into effective local strategies that target and captivate the consumers.
Diversify Product Offerings in the Non-Carbonated Sector
Driven by increasing health concerns, consumers are rapidly shifting their focus from carbonated drinks to non-carbonated drinks. Evidence of this is seen through the decline in the share of carbonated drinks in the US and European markets. Thus, it is vital that Coca-cola increase its product...