Organizational Competitiveness of Coca-Cola Company

Organizational Competitiveness of Coca-Cola Company

In an attempt to achieve a substantial market power, the Coca-Cola Company has devised technical and innovative mechanisms to counteract its competitors in the beverage industry. Currently, the company faces a competitive threat from Pepsi, which has a wide range of differentiated beverage products. The mechanisms adopted revolve around the cost-benefit advantages that accrue from the widely differentiated Coca-cola products in the beverage industry.

Substantial Product Differentiation

            Over the years, Coca-cola has differentiated its products through the development of new brands and improving on the existing ones to meet the dynamic consumer tastes and preferences. Currently, the company offers over 400 brands in approximately 200 markets worldwide (Harford, 2007). This mechanism explains its substantial control of the beverage market relative to its competitors such as Pepsi. To achieve this, the company analyzed its existing strategies, assessed its value-creating possibility and determined whether its competitors employ the same strategy.

Comprehensive distribution Channel

            One of the market-oriented strategies adopted by the company is to develop a comprehensive network of distribution systems all over the world. The motive behind this is the geographical settings of its global consumers, which calls for a timely and sustained supply chain of the company’s products. Fundamentally, this has helped the Coca-Cola Company to penetrate into remote markets where its competitors have not reached. The company has therefore realized access to millions of its consumers relative to its rivals in the beverage market, with the overall result of greater market control and profitability.

Economies of Scale in Production

            The Coca-Cola Company enjoys the economies of scale in its production techniques as well as the distribution of its brands. The company’s per unit production is a small fraction of its selling price leading to greater profit margins relative to that of its rivals, for example, Pepsi. Despite the high fixed costs of the company, the fixed costs per unit are considerably small as they are spread over millions of brands sold. The Statistics Portal (2014) found out that the net operating global revenues for the Coca-Cola Company was worth US $ 46.85 billion in the year 2013.

Market Multi-Segmentation

            The company has adopted the multi-segmentation strategy in different markets whereby the market is segmented based on the consumer demand and preference. The aim of the strategy is to match the various consumer tastes and preferences with the right portfolio package, brand or price in the market clusters. The clusters are determined based on past consumer habits, socioeconomic conditions, and the competitive levels in the cluster markets. A multi-internal preserve mechanism is maintained to aid in the production of appropriate preference for different markets. For instance, the Coca-cola drink sold in India tastes differently as compared to the one designed for African markets.

Technological Advancement and Innovation

The competitiveness of a company greatly depends on the innovative techniques employed (Harford, 2007). Technological advancement of the company has led to the establishment of vending machines throughout the global markets. Sophisticated techniques have yielded new products including Diet Coke and the Cherry Coke. In addition, these advancements have affected the bottling industry significantly whereby, the Coca-Cola Company established recyclable and non-refillable cans alongside the trendy appearance that appeal to younger consumers.

View on the Company’s Future Competitiveness

Despite the uncertainties in the future economic trends in the beverage market, I believe the Coca-Cola Company will continue to maintain its future competitive advantage. This is supported by the existing strong and integrated management system responsible for the wide range of the company’s portfolio and the analysis of the weaknesses and strengths alongside the opportunities in the market (Harford, 2007). On the same note, the dynamic branding of its products will help the company to manage its marketing strategies in the global markets. Resultantly, the company derives the power to isolate the markets in the future in regards to similar features.

According to The Statistics Portal (2015) and the comprehensive market research conducted by the company worldwide, there is a future oriented competitive strategy. This implies a sustained future competitiveness of the company due to the ability to forecast the market trends. To achieve this, the company identifies the anticipated consumer requirements to meet them in future. Moreover, the research would help the company update its brands based on the future trends in the global market and to bridge the information resource asymmetries in the market.

In concise, the Coca-Cola’s high flexibility in innovation and greater affinity to technological advancement implies a substantial strength to withstand the disruptive technologies in relation to its rivals. This implies a continued future competitive advantage in the market as it improves efficiency in production, thereby lowering the production costs, hence, and higher profitability. Flexibility provides grounds for redesigning the existing products to suit the changing market requirements in the future and establishing new brands based on the prevailing tastes and preferences in the future.

Share this Post