Bases Of Competitive Strategy At Coca Cola Commerce

Essay add: 28-10-2015, 14:15   /   Views: 261

This area has to do with how Coca-Cola has positioned itself in relation to its competitors. The Coca-Cola Company competes in the non-alcoholic beverages segment of the commercial beverages industry. The non-alcoholic beverages segment of the commercial beverages industry is highly competitive, consisting of numerous firms. These include firms that, like Coca-Cola, compete in multiple geographic areas, as well as firms that are primarily regional or local in operation. Competitive products include numerous non-alcoholic sparkling beverages; various water products, including packaged, flavoured and enhanced waters; juices and nectars; fruit drinks and dilutables (including syrups and powdered drinks); coffees and teas; energy and sports and other performance-enhancing drinks; dairy-based drinks; functional beverages; and various other non-alcoholic beverages. These competitive beverages are sold to consumers in both ready-to-drink and other than ready-to-drink form. In many of the countries in which Coca-Cola does business, including the United States, PepsiCo. Inc. is one of its primary competitors. Other significant competitors include, Nestl´e, Dr Pepper Snapple Group, Inc., Groupe Danone, Kraft Foods Inc, and Unilever etc. In certain markets, its competition includes beer companies. Coca-Cola also competes against numerous regional and local firms and, in some markets, against retailers that have developed their own store or private label beverage brands.

The strategy clock: competitive strategy optionsHigh






Focussed differentiation


Perceived Product/ Service


Low price




No frills

Strategies destined for failure



Source: Adapted from Johnson, Scholes and Wittington; exploring corporate strategy. 2008; pp 225

The 'strategy clock' above represents different positions in a market where customers or potential customers have different 'requirement' in terms of value for money. Coca-Cola has therefore taken the strategy option of hybrid, in which case it maintains its price but tries to differentiate itself from competitors. The Company has had a mix of pricing, advertising, sales promotion programs, product innovation, increased efficiency in production techniques, the introduction of new packaging, new vending and dispensing equipment, and brand and trademark development and protection. In this regard Coca-Cola has increased its annual marketing budget substantially, launched many new products, and developed a model to help its retail customers maximize their sales while it continue to plan for the future. The risk of this choice is that one could lose market share due to its low prices but then it can be tackled through economies of scale where the company produces in large quantities to cover cost and tries to penetrate different geographies as is the case of Coca-Cola. This choice has actually proved beneficial to Coca-Cola even though its market share has not grown tremendously as one would think over the last ten years but it definitely has a much higher market share than its competitors, especially Pepsi Co. This has been possible for Coca-Cola due to its recognised brand name and strong presence in so many geographies including Africa, Asia, Europe, Latin America, North America and the Pacific spanning across 200 countries.

Strategy direction

This has to do with the scope of a company in terms of its products. Over the last few years Coca-Cola has introduced a lot of products to its portfolio, including the recent Coca-Cola zero, which sold more than 600 million cases globally. Today Coca-Cola does not only deal in non-alcoholic soft drinks, but it also makes a lot of juices and juice drinks, still and carbonated products. As a matter of fact Coca-Cola has more than 3,300 products in more than 200 countries. In general one can rightly say that Coca-Cola has gone into diversification since it has not only shifted from soft drink to juices and even energy drinks but has also ventured and penetrated larger market over the years. Diversification is simply a strategy that takes the organisation away from both its existing market and its existing products. We have therefore used the Ansoff matrix below to identify the strategy direction which Coca-Cola is taking Box D, which is diversification. The Ansoff matrix provides a simplified way of generating four basic alternative directions for strategic development.

Strategic directions (Ansoff matrix)Products

Existing New


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