Part 2 only 600 to 700 words

Strategic management Plan Of Coca-Cola Company

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Coca cola company strategic management plan

Introduction

Coca Cola Company has been and will continue to dominate the soft drinks industry simply because of the strategic plan that they enforce in their daily activities. It’s unique formula for making their drinks coupled with strategic managers who lead the organization has been most influential in becoming the industrial leader. It is important to analyze the internal and external environment of coca cola in order to know what other factors affect them and how they have dealt with them.

Internal and External Environment of Coca-Cola Company

The organizational environment consists of both external and internal factors. The scanning of the environment should occur to determine the development and the factor's forecasts that would influence the success of an organization. Scanning of the environment refers to the utilization and possession of information concerning the patterns, trends, occasions, and relationships within an organization’s external and internal environment (Aguilar, 2000). It assists the managers in making decisions concerning the future organization path. Scanning should identify the opportunities and threats which exist in the surrounding. Whereas in strategy formulation, an organization must take advantage of the opportunities and minimize the risks. A risk for one group may be an opportunity for another (Campbell & Craig, 2005). However, scanning of the environment occurs basing on the internal environment and also the external environment analysis.

Internal environment

The Company’s internal environment includes activities, capabilities, and resources. The resources at Coca-Cola Company are in plenty, more so the intangible resources like the brand recognition, the trade secrets and also the culture. Even though there exists the fierce competition by Coca-Cola and PepsiCo, Coca-Cola has at all-time been leading in the market of soda because of the strengths they contain in the area. When one conducts a VRINE model; (value, rarity, inimitability, non-substitutability, and exploitability), then one can note that the Coke Company contains an advantage as compared to its competitors who are in diverse areas. The VRINE model is said to contribute more towards the success of Coca-Cola. That is because its products cannot be replicated and are also loved more (Campbell & Craig, 2005).

External Environment

The external environment comprises of the factors which are out of the company’s control. Some of such factors include technological, economic, and sociology (Carpenter M.A., 2009). The economic environment tends to be quite hard right now. However, the Coke Company and also the industry of beverage usually suffer because of the negative impacts imposed by the present economic recession in the US. On the other hand, technological environment tends to be much favorable to the Coke Company due to the new technologies which the company can utilize for its production process’ automation to increase. However, due to that, the company can save costs and also increase its output effectiveness. Finally, the social environment can also fail to be favorable to the company of Coke. However, in a more precise manner, the customers tend to grow more and are also concerned about their healthy lifestyle and health which make several customers not to buy the products of Coke Company. That was because they consider them as unsafe and hence may contribute towards health problems developments such as obesity (Campbell & Craig, 2005). However, from such scenarios, the company ought to alter and also improve its image to the public to attract more customers.

Competitive advantage of Coke Company

The Coke Company is competitively advantageous because of the most consumers who prefer Coke and also because of its bigger domination of the market. Also, it is advantageous because of its sustainable competitive advantage. The Coke Company has been one among other companies which at every time has had growth stock. Few enterprises dominate the market through the similar way that the Coca-Cola is ruling the business of soft-drinks. According to the research by the Beverage Digest, the brands of coke controlled collectively about 41.9% of the whole U.S. market of carbonated soft drink in the year 2010, which was well ahead of PepsiCo which had about 29.9% (Fraser, 2012). Even if the competition emerges between the brands, that is Coke versus Pepsi; Coke would appear to be the winner because it contains 17% of the whole market as compared to 9.9% of Pepsi. The other competitive advantage of Coke is its sustainability of the competitive advantage. Every goal of an investor should always be to try and discover the companies which have competitive advantages that are sustainable like the Coke Company. The Coke’s cola have always tasted the finest hence one cannot be able to clone it despite the endless competitor’s efforts to do the cloning. The exclusive distribution of Coke worldwide is practically impossible for one to replicate. However, when one combination the finest product with a distribution network that is best too, then may run a business that is unbeatable (Fraser, 2012).

Strategies to Create Value and to gain Competitive Advantage

Through the differentiated focus, Coke Company seeks to produce other different products within a constricted section of the market. Such a strategy is the best for the competitors who provide products to target a wider group of consumers with unique preferences and tastes (Shimizu, Carvalho, & Barbin, 2005). Different labeling and beautiful packaging such as in a particular part of the marketplace would allow Coke to sell more than other companies like Pepsi Company in that same section of the market. With the strategy of cost leadership, the major objective is for the Coke Company’s products to be produced at the cheapest cost possible. By Coke trying to do cost minimization of its production, it can vend at a low price to the consumers. Provided that the attained selling price would be close or equal to the price of the market, Coke Company would, therefore, enjoy more income because of the economies of scale. With the cost focus strategy, Coca-cola may feel that it could be wise for the Company to charge a lower price for the same product on some segments of the marketplace. Such a strategy usually relates to the large production scale companies with the products that are accepted by many consumers. The company might also feel that it is fit to label the same products differently and that the low prices to be tagged to benefit the specific customers (Shimizu, Carvalho, & Barbin, 2005). However, that would bring about more sales and hence can outdo the PepsiCo at the same environment of the market.

Measurement Guidelines Used by Coke Company to Verify its Strategic Effectiveness

The measurement guidelines should be created for the previous results to determine if the plan is working as it is supposed to work. Having checkpoints and goals that are clear is crucial in the determination of whether a strategy formulated should be changed to meet the desired results. Both the Coke Company and PepsiCo uses the similar guidelines of measurement to carry out the determination of the effectiveness of their strategies. However, their measurements are metrics from the annual customers, growth percentages, revenue, and the customer satisfaction. Just because the Coke Company is enormous, then it has broken up its evaluations into different regions to localize their results.

Effectiveness of the Measuring Guidelines used by Coke Company

The Coke Company utilizes the various measurements about verification and also the effectiveness of its strategies as benchmarks, analysis, through observation, surveys, and checklists. All the above measurements alongside the specific guidelines such as beliefs and values help the Coke Company in the verification of the effectiveness of its strategies. All the guidelines of measurement above assist the Coke Company and its management to identify if there are any gaps and also to rectify them on time before the waste of reassures occur on the strategic move. The use of benchmarks is very efficient to Coke Company because it helps it serve its customers with drinks including the high customer quality and service. Lack of all the above guidelines created in Coke Company would, therefore, be impossible for its suppliers and employees to attain the world-class market position. The Company fixes the instructions to work with and doing so would also be quite significant and that it is one of the useful guidelines of measurement which would help the company to attain all its objectives and aims.

In conclusion, it is clear that the Company’s internal environment includes activities, capabilities, and resources. The resources at Coca-Cola Company are in plenty, more so the intangible resources like the brand recognition, the trade secrets and also the culture. Also, the external environment comprises of the factors which are out of control of the organization. Some of such factors include technological, economic, and sociology (Carpenter M.A., 2009). The economic environment tends to be quite hard right now. There should be measurement guidelines for the previous results to determine if the plan is working as it is supposed to work. Having checkpoints and goals that are clear is crucial in the determination of whether a strategy formulated should be changed to meet the desired results.

References Aguilar, F. J. (2000). Scanning the business Environment . New York: Macmillan. Campbell, D. J., & Craig, T. (2005). Organisations and the business environment. Amsterdam : Elsevier Butterworth-Heinemann. Carpenter M.A., S. W. (2009). Strategic management: A dynamic perspective concepts and cases. Upper Saddle River: Pearson/Prentice Hall. FRASER, C. (2012). Why Coca-Cola Is an “Unbeatable Business”. investing daily journal, 1-3. Shimizu, T., Carvalho, M. M., & Barbin, F. J. (2005). Developing Strategies For Competitive Advantage. New York: Pearson.