Running Head: Strategic Management Plan (Coca-Cola Company)
Strategic Management Plan (Coca-Cola Company)
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Strategic Management Plan (Coca-Cola Company)
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Introduction
The leading manufacturer, distributor and marketer of beverage concentrates and
syrups in the world, Coca-Cola Company owns and licences over 400 brands such as water,
juice, diet and light beverages, teas, coffees, energy and sport drinks. In the beverage
industry, the Coca-Cola Company faces competition from its prime competitor Pepsi.
Therefore, for the Company to achieve its long-term goal, it has in its strategic planning to
take into consideration factors and strategies that will be effective to give the company
advantage over its competitors. The paper will discuss the internal and external environments,
competitive advantages, strategies used to gain advantage and provide the effective
measurement guidelines the company implements.
An organization’s environment is split into two divisions, the internal and the external
environment whereby the internal environment is composed of the elements directly involved
within the company that is, the vision, mission and generally the corporate culture (strength
and weaknesses) whereas the external environments involves evaluation of the market trends,
patterns and events that aid in the company accessing the organization impact to its
environment. The vision of the coca cola company is to: refresh the world in the body, mind
and spirit, inspire moments of optimism through the brands and its actions and also create
value and make a difference everywhere. The mission is creation of consumer product,
service and communications and bottling system strategies, tools and processes that create a
competitive advantage and deliver superior value to all its clients and customers. The
company’s strength such as having a strong and reliable distribution network, having a strong
brand image recognized worldwide and its low costs of operations ensure consistency of
operations of the company and knowledge of its weaknesses such as low export levels and
the limitations in its ability to invest and achieve economies of scale by the small scale sector
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reservations that ensure ‘red- tapism’ by the government restricting the company to invest the
company investing in technological advancements (Wheelen & Hunger, 2011).
On the other hand the external environments deals with the opportunities such as the
large domestic market that is adequately available for the Coca-Cola Company as compared
to other soft drinks manufacturers, the export potential where the company can come up with
new products and a gaining a higher income among people. Its threats include imports where
consumers decide to rely on imported beverages rather than those manufactured within the
country could pose as a threat to the beverage industry, the tax and regulatory sector where
regulations are stipulated everywhere from production to consumption and slowdown in rural
demands.
The Coca-Cola Company in terms of its competitive advantages, which is the reason
as to why customers buy from Coca-Cola and not their competitor, can be ascribed to the
taste it has that makes it better than other cola drinks, the company’s continuity in developing
new products and making the old ones better, possessing a better distribution system that
ensures its accessibility to its worldwide consumers and finally its cost, as its costs is
regulated in that it charges lower than its competitors gaining a competitive edge and that its
production techniques ensures that it costs a fraction to manufacture their product ensuring
high profit margins.
To ensure its success and sustainability in the competitive market, the company’s
market leadership, joint ventures and the flexible form of the organization structure ensure
the Company attains a sustainable competitive advantage this is done through; ensuring the
product is as per the consumers’ health preference and focusing on production of producing
high quality drinks, brand recognition whereby the Coca-Cola logo is a timeless font and
differentiates it from its competitors and become imprinted in the minds of people around the
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world, brilliant product placement where the product is readily available in events such as the
Olympics and national sporting events, the provision of other beverage choices such as water,
juices and energy drinks and the creative advertisement campaigns (Epstein & Buhovac,
2014).
The Coca-Cola Company sets measurement guidelines that direct it towards assured
success in its strategic moves, as the guidelines play a crucial role in directing the employees,
suppliers and associates to ensure achievement of ethical means of business and working per
the set quality and safety standards. These measurement guidelines help in showing and
analysing the strengths and weaknesses which helps the company in adjusting to its strategic
plans to attain its current and future market needs and know their standings in the world
market (David & David, 2012).
The Coca-Cola Company undertakes the process of measuring each segment before
taxes by operating income and corporate overhead as it believes taking count of the operating
income is significantly important than net sales since it provides specification by creating
new advances that will help in maintaining its competitive edge over its competitors (Porter,
2011). To ensure quality management, a program Coca-Cola Operating Requirement
(KORE) was developed to enhance the Coca-Cola system address the ever transiting business
market while providing support to its strategic growth plans through the creation of integrated
quality and management program. Through KORE high standards in product safety and
quality, organizational and environmental safety and health is achieved as the program
outlines the requirements, specifications and state programs that will guide the Coca-Cola
operations. In making sure the safety and quality of the products is essential to the Coca-Cola
Company inspections from reliable, trusted sources are made to ensure that all ingredients
Strategic Management Plan (Coca-Cola Company)
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have been used effectively and sufficiently to either meet or exceed the set standards (Hill,
Jones & Schilling, 2014).
Conclusion
In conclusion, employing and establishing high quality processes and standards
guarantees production of products that are standardised meeting the expectations of
consumers. Coca-Cola has its brand as the world’s most popular brand as it has implemented
strategic management plans that have ensured its success in the worldwide market. To
guarantee its success the Coca-Cola Company, first, it built a brand with reputation that is the
trademark of Coca-Cola, it created an efficient chain of supply and a prudent delivery
network which boosted the sales of the beverage firm, it ensured it had the appropriate human
resource management procedure and it also adapted quickly internationally in foreign
countries and local culture accepted its products which acted as a boost factor. The company
has a self-determination that ensures its orientation is distinct and with all this strategies
implemented, it affirms that the Coca-Cola Company beats down most of its competitors in
the global market.
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References:
David, F. R., & David, F. R. (2012). Strategic management: A competitive advantage
approach, concepts and cases.
Epstein, M. J., & Buhovac, A. R. (2014). Making sustainability work: Best practices in
managing and measuring corporate social, environmental, and economic impacts.
Berrett-Koehler Publishers.
Hill, C. W., Jones, G. R., & Schilling, M. A. (2014). Strategic management: theory: an
integrated approach. Cengage Learning.
Porter, M. E. (2011). Competitive advantage of nations: creating and sustaining superior
performance. Simon and Schuster.
Wheelen, T. L., & Hunger, J. D. (2011). Concepts in strategic management and business
policy. Pearson Education India.
Running head: STRATEGY FORMULATION
Strategy Formulation
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STRATEGY FORMULATION
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Introduction
Coca cola is one the companies which have illustrated that it’s important to have a
strategic plan. The company has been a master in vision and strategy formulation. Coca cola
has developed its strategies in line with today’s globalized, technologically advanced, and
lifestyle changing world. The world is constantly changing, and therefore the company’s
management has positioned the company for success, by adjusting the industry’ rules and
norms. Through its well thought strategies, the company establishes ways of coping with
difficult environmental changes, meeting needs of changing customer needs and preferences,
and responding to their competitors. These strategies have had a positive effect in the
company’s performance, which is reflected in its financial reports.
Strategy Formulation
Coca cola’s strategy is to be globally known by targeting different markets across the
globe with preferred product for each market, so as to gain popularity, and maintain its brand
name. Coca cola aims at being more than just a drink. The company’s strategy is to become
the definitive global brand, and be a constant cherished symbol by cutting across all cultures.
Even though the company’s drinks taste has not changed over the years, the company is
constantly changing packaging and introducing new products, so as to meet needs, which
might arise in future. The company plans on establishing new capabilities, innovations and
models. The company will also change its management model to fit any new competition and
evolving market, but without changing the identity of its drinks (Cola, 2014).
STRATEGY FORMULATION
Strategy Formulation
People
Attract and maintain the best talent
Operate on low cost through economies of
Profit
scale
Focus on flexible delivery methods, to ensure
Partners
availability and accessibility of products
Ensure that customers prefer coca cola
products due to branding, quality and
Competition affordability.
The markets that the company will pursue
The company’s strategy has a clear market demographics to ensure that the needs of
every market segment are met. The company will target a new middle class emerging
market, which is hoped to deliver more that 800 million customers by year 2020. 60% of the
double profit, which the company aims at achieving, is expected to come from new markets,
which the company aims at reaching in the next four years. In addition to targeting the
middle class, the company aims at maximizing its presence in an increasingly sophisticated
teen population, which if properly approached, can enable the company to achieve its goals
(Ulwick, 2012). Geographically, the company plans on reaching to more markets across
Europe by advertising its entire brand range rather that separate brands. The company’s
strategy also entails reaching more markets in Britain by increasing its investment in the
region. By increasing sales in these regions, the company will increase its current sales,
which average at 89 soft drinks per person annually across the globe.
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STRATEGY FORMULATION
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Unique value which will be offered, and the resources required
The company plans on offering its new market, culturally and environment friendly
drinks. Even though the company aims at staying culturally and technologically relevant, the
company’s unique taste and ingredients will remain. However, the company will continue
manufacturing new products, and also make the old ones better. Ina addition, the company’s
strategy entails ensuring that its brands are available and accessible worldwide. In addition,
the pricing for the drinks will be lower compared to that of competitors. In terms of quality,
the company will offer the new markets products which match the consumer’s health
preferences and of high quality. To achieve the set goals and strategies, the company ought to
embrace technology so as to reach out to the diverse markets and ensuring that the company
stays relevant in today’s fast changing market. In addition, entering new markets or
increasing productivity in a market will require additional production and advertising
resources.
Capturing value and sustaining competitive advantage
The company’s strategy entails ensuring that customers prefer its products over those
offered by competitors. This will be ascribed to the unique taste, and the ability of the
company to keep up with fast changing consumer preferences. To ensure that its drinks’
prices are lower than those of its competitors, and that the high profit margins remain, coca
cola will ensure that its operating costs are minimized.
Business Management Strategy
Cost and Differentiation Advantages.
In order to build growth momentum, the company will invest more on marketing, but
at the same time, look for other areas to cut on cost. Therefore, the company will embrace
the strategy of increasing its operation’s efficiency so as to reduce cost (NOTO, 2013). This
STRATEGY FORMULATION
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will be achieved by embracing a zero based budgeting where every item budgeted annually
has to be justified. In addition, the company will cut cost by minimizing in store promotions,
and embracing social media marketing which is currently relevant to over half of the target
market.
Corporate Strategy
Coca cola’s strategy has clear definition of what the company’s corporate culture
ought to focus on. The company aims at increasing knowledge of its employees. In addition,
employees will be motivated and inspired to be ambassadors of coca cola’s brand.
Management will also be keen during recruitment process, and employee development to
ensure that diversity is achieved (cola, 2016). The company will also enhance employee
experience so as to create a fun and fulfilling environment, with work place where people can
grow.
Vertical Integration& Strategic alliances
The company will utilize more vertical integration approaches, so as to move closer to
its customers. The company will therefore incur less cost, but will also be able to reach to
consumers. Currently, the company does not own or control all its bottling companies.
However, the company will continue using more of these platforms to ensure that the supply
chain is controlled. Coca-Cola bottling company partners work closely with small businesses,
and partners with them to ensure that the drinks are distributed at the retail level. Coca cola
partners include grocery stores, street vendors, convenience stores and movie theatres.
Company’s Competitive Advantage.
Coca cola already has established brands, and established presence across the globe.
The company’s strategy entails building on its current competitive advantage. The company
is planning on cutting on production, which will make it possible to sell products at lower
STRATEGY FORMULATION
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prices compared to competitors. In addition, the company will invest more in marketing its
brands by increasing quantity and quality of advertising, especially on modern modes of
advertising, which include social media platforms.
Organizational Chart
CEO
Manufacturing
Corporate staff
Finance
Marketing
Coca-cola
International
North&South
America
Europe
Middle& Far
East
Africa
Conclusion
Coca cola continues adopting new strategies so as to maintain and build on its
competitive advantage. The company’s strategy entails expanding its production and
streamlining its operations. In addition, the company will be more people oriented, and the
company will invest in its employees to ensure that the workplace is fun, and employees are
the company’s brand ambassadors.
STRATEGY FORMULATION
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References
Cola, C. (2014). Road Map for winning together. 2020 Vision, 1.
cola, C. (2016, April 27). Five Strategic Actions. Retrieved from Coca cola Company:
http://www.coca-colacompany.com/stories/five-strategic-actions
NOTO, L. (2013). Analyzing Resources and Capabilities. THE TOOLS OF STRATEGY
ANALYSIS.
Ulwick, A. (2012). Business Strategy Formulation: Theory, Process, and the Intellectual
Revolution. Business Strategy.
Individual Assignment: Strategy Implementation, Evaluation and Control
Purpose of Assignment
Week 3, 4 and 5 Individual Assignments are integrated to generate a Strategic Management Plan. This is part
three of the three part Strategic Management Plan addressing strategy implementation, evaluation and control.
The Purpose of the Week 5 individual assignment is to allow the student to discuss and explain how the
strategies discussed in prior weeks are converted into implementation activities both domestically and
internationally, in alignment with legal, social and ethical considerations. Furthermore, the student has an
opportunity to explain and discuss how the strategic plan and implementation activities will be monitored.
Resources Required
Textbook Chapters 9, 10, 12, 13 and 14
Grading Guide
Content
Met
Partially
Met
Not Met
Total
Available
Total
Earned
6
#/6
Comments:
Student addresses the following regarding
strategy implementation:
a. Discuss International Strategy.
b. Discuss Strategic Implementation.
c. Explain the influence of Governance and
Ethics.
d. Discuss the Company Social Value.
e. Discuss Innovation and Diversification.
f. Discuss Legal limitations.
Student addresses the following regarding
evaluation and control:
a. Explain Strategic Metrics.
b. Discuss Key Financial Ratios.
The paper is 1,050 words in length.
Writing Guidelines
The paper—including tables and graphs,
headings, title page, and reference page—is
consistent with APA formatting guidelines and
meets course-level requirements.
Met
Partially
Met
Not Met
Comments:
Strategy Implementation,
Evaluation and Control Grading
Guide
MGT/498 Version 4
Writing Guidelines
Met
Partially
Met
Not Met
Total
Available
Total
Earned
3
#/3
9
#/9
Intellectual property is recognized with in-text
citations and a reference page.
Paragraph and sentence transitions are
present, logical, and maintain the flow
throughout the paper.
Sentences are complete, clear, and concise.
Rules of grammar and usage are followed
including spelling and punctuation.
Assignment Total
Additional comments:
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Comments:
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