Strategic Management of Coca cola

Contents
1. Introduction
2. The soft drink industry
3. Background of the organization
4. Strategic analysis of the organization and its environment
5. Strategic options for the company
6. Conclusion















Introduction
Business management is the term used to describe the techniques and
expertise of efficient organization, planning, direction, and control of the operations
of a business. In the theory of business management, organization has two principal
aspects. One relates to the establishment of so-called lines of responsibility, drawn
usually in the form of an organization chart that designates the executives of the
business, from the president to the foreperson or department head, and specifies the
functions for which they are responsible. The other principal aspect relates to the
development of a staff of qualified executives ( 2005). Planning in business
management has three principal aspects. One is the establishment of broad basic
policies with respect to production; sales; the purchase of equipment, materials, and
supplies; and accounting. The second aspect relates to the implementation of these
policies by departments. The third relates to the establishment of standards of work
in all departments.

Direction is concerned primarily with supervision and guidance by the
executive in authority; in this connection a distinction is generally made between top
management, which is essentially administrative in nature, and operative
management, which is concerned with the direct execution of policy. Control involves
the use of records and reports to compare performance with the established
standards for work ( 2005). The term strategic management originates from the
Greek language, where the word means the art of a general. The person who makes
strategies is the strategist who is the leader of an army (1991). Management of a
firm needs strategy, to make sure that everything goes well in the company, through
the use of strategic management everything done in the company is well organized
and no detail is being left out. The company needs strategic management to make
sure that the company is doing well internally. The term strategic management
originates from the Greek language, where the word means the art of a general. The
person who makes strategies is the strategist who is the leader of an army (1991).

Strategic management decisions have multi-functional and multi-business
consequences, this kind of decision require broad consideration of the firm's external
and internal environments, and it may affect the firms chance of prosperity. The
strategic management paradigm is built on the notion that strategic decision making
results from intentional actions in the name of individual or collective purpose. The
paradigm accords central importance to the cognitive elements of understanding and
intention as basic drivers of strategic choice. Managerial thought is critical to
processes of strategy formulation, for example, which require managers to envision
and prioritize future states that are appropriate and proper. Similarly, managerial
thought is critical to environmental analysis, which requires managers to forecast
and make predictions. These tasks all depend on individual cognitive capabilities and
on cognitive processes such as attention, perception, reflection, and understanding (
1992).
For some, strategic management is just another commercial technique being
foisted on an unwilling sector which is losing its soul. For others, however, strategic
management has provided a useful set of tools and techniques to draw on and adapt
to enable them to be more focused, to create a stronger sense of unity and direction,
to understand the external environment better and to manage more effectively the
development of the organization (2002). The paper will discuss about the soft drink
industry. The paper will discuss about Coca Cola, its background and its goals. The
paper will also discuss a strategic analysis of the said company. The strategic
analysis will be used to discuss the strategic options available for the company.

The Soft drink Industry
Just three decades ago, the competitive environment of the carbonated soft
drink (CSD) industry was based on a recognition of and implicit acquiescence to the
dominance of The Coca-Cola Company. Beginning in the 1960s, however, Coca-
Cola's dominance has been increasingly challenged, particularly by Pepsi-Cola. The
new competitive environment is well publicized and intense. The Cola Wars were
declared and the battle continues. Pepsi-Cola and Coca-Cola are widely recognized
as being two of the premier marketing companies in the world. A great variety of new
products and package types have been introduced. Celebrity advertising has been
raised to a new level. Coca-Cola even changed the formula for Coke. These and
other developments in the CSD industry came about from major changes in strategy
by Pepsi-Cola and Coca-Cola. To some extent these strategic changes arose from
Pepsi's challenge to Coke's dominance of the industry. In addition, several factors
external and internal to the industry have been important catalysts for these
changes. Rather than simply reacting to a changing competitive environment,
PepsiCo and The Coca-Cola Company have created and implemented strategies
that turned the new environment to their advantage (1993).

Although Pepsi Cola attacked Coca-Cola's dominance and achieved near
parity with Coke in bottled soft drinks, both Coke and Pepsi have benefited from
fighting the Cola Wars because the battle between them has stimulated continuing
growth in an industry regularly pronounced by the experts for many years to be on
the verge of maturity ( 1993). As the industry existed in the early 1970s, the reasons
for predictions of impending maturity were not difficult to see. The apparent limits of
the human stomach argued strongly against further significant growth of per capita
consumption of soft drinks. Certainly, substantial growth in sales of the limited
number of products offered by Pepsi and Coke appeared unlikely ( 1993). The
competitive advantages of the two industry leaders were built on delivering a few
unchanging, high-quality products through a distribution system that, although
complicated, was effective. In the face of the predicted maturation of their domestic
market, the prudent course appeared to be a holding action in the United States, with
attention and resources shifted to offshore markets and diversification a classic cash
cow strategy.
New strategies, such as joining the parade of product modifications and
introductions of other food manufacturers, and bringing what had long been a very
effective independent distribution system in-house, required basic major
modifications of the competitive advantages of Pepsi-Cola and Coca-Cola (
1993). Such strategies appeared to be bet-the-ranch propositions. Nonetheless,
Pepsi-Cola and Coca-Cola took the bets. Each escalated the Cola Wars to new
forms of pricing and promotion, and each launched a great number of new products,
including new versions of their flagship brands. Finally, each company undertook a
fundamental change in its distribution system from networks of independent bottlers
to company-owned bottling systems. The result of these and other new strategies
has been a continued, rapid expansion of Pepsi's and Coke's domestic sales. The
limits of the human stomach have not yet been found, and all other liquids, from
coffee to water, face continued competitive pressure from Pepsi and Coke (1993).
The soft drink industry is focused on the battle for supremacy of the two companies.
The battle of the two companies gives life to the industry. The two companies have
a long history and have been tried and tested. Each company tries to outdo each
other and tries to produce the best product.




The Coca Cola Company
The coca cola company is a beverage company and the world leader in soft
drink sales. Coca-Cola produces and distributes several brands in the United States
and internationally. The company also produces and markets many fruit juices and
other non-soda beverages. The Coca-Cola Company is based in Atlanta, Georgia.
Coca-Colas soft drinks include its flagship product Coca-Cola which is popularly
known as Coke, Diet Coke, Tab, Sprite, Fanta, Fresca, Mello Yello, and Barqs root
beer. The companys non-soda beverages include Minute Maid fruit juices,
PowerAde sports drinks, and Nestea iced tea drinks (1993).

In 1986 The Coca-Cola Company consolidated all of its non-franchised U.S.
bottling operations as Coca-Cola Enterprises, Inc. The new company began
acquiring independent bottling companies, a venture that grew into the worlds
largest bottler of soft drinks by 1988. While Coca-Cola Enterprises distributes over
half of all Coca-Cola products in the United States, small franchise businesses
continue to bottle, can, and distribute the companys drinks worldwide. In 1987 the
Coca-Cola Company was listed in the prestigious Dow Jones Industrial Averages
index of stock market performance. Its stock is traded on the New York Stock
Exchange. Coca-Cola and PepsiCo products occupied nine of the top ten spots in
the U.S. soft drink market. Worldwide, Coca-Cola ranked first in soft drink sales, and
the company earned almost 80 percent of its profits from international sales (1993).
The goal of the company is simple, yet effective. The goal of Coca Cola is to produce
growth for the company. It intends to not only reinvigorate the company but inspire
the people working for them.
Coca Cola and International business
It is typically true that doing business locally is much simpler than performing
international business functions. The local firm only has to worry about its own
country's law, economics, labor problems, financial constraints, and so on, while an
international firm faces all of these complexities at home and in the host country, and
in addition must struggle with complex international problems arising out of the
present nationalistic organization of the world. One would expect that, unless
compelling pressures arose at home, most firms would choose to remain local in
orientation, confining their international business activities to import and export and
possibly to the relatively simple patterns such as licensing of patents and processes.
One major reason for considering international business activities might be that
opportunities at home are getting thin. Profit rates in the sector the firm is in may be
declining, even though the firm is still quite profitable. Incremental investments are
likely to yield lower returns than the company finds acceptable ( 1966).

The company is continuously reaching places it has not reached before. It is
conducting expansions to reach new territories and increase its profitability and
clients. The company is trying to bring the so called coca cola experience to more
people in more countries. The company uses new branches and subsidiaries in
different countries to have more territories and reach more people more. These
branches have been oriented and trained regarding company policies and
procedures.
Strategic Analysis
Strength
Strengths are the strong points of the business. To know the strengths of the
things that should be known includes the sources of the companys revenue, the
market share of the company in various product lines, the availability of strong
brands of a company, the effectiveness of the advertisement of the brand or product,
the availability of pool of skilled workers, the morale of the employees, the
innovativeness of the company and the ability of the company to withstood
international competition. Coca-cola strength is the international popularity it has.
The company is known throughout the world. People from all over the world
purchase and drinks the different products the two companies have.

Another strength of the company is the strong brand name it has. The strong
brand name is what makes the company and its products popular. It brings the
company huge amounts of profit and worldwide notoriety. Furthermore a strength of
the company is the effective advertising it uses. The company uses a different
advertising method. The company uses television and magazine commercials as
well as other methods for people to be informed of its product. Lastly a strength of
Coca Cola is its website that is easy to use, attractive, and informative. The website
is visited by people from different countries and this can help companies promote its
products. The website of the company is attractive, informative and easy to use for
clients this gives the clients interest in purchasing the companys products.


Weakness
Weaknesses are the current problems of the company. To determine the
weakness of the company the things that should be known includes the products that
are least profitable, areas of the company that is not able to recover cost, the weak
brands, the ability of the company to raise money when it needs to, the ability of the
company to stand price pressures against competitors, the ability of the company to
create new ideas, the faith of employees in management and the ability to compete
with other companies in the technology front. The main weakness of the company is
the health issues when their product is partaken. The products they have can cause
health problems when taken so many times. The company cannot restrict the
consumption of their product at all times, thus they might not be able to stop health
problems to be present to clients.

A weakness of the company is its inability to restrict certain age from using
their product. Young children who might acquire health problems from taking their
products are not restricted. Children who can get their products anywhere might
over-consume their products since they are not given proper warning and restriction.
Lastly a weakness of the company is it not being able to separate from other
beverage companies. When Coca Cola is being talked about Pepsi can also be
talked about subsequently. They have a strong brand name but they dont have one
thing that gives them distinction.

Opportunities
Opportunities are those events or situations that may arise in the future. To
determine the opportunities of the company the things that should be known includes
competitive position of the company, new technologies that the company can
innovate for low costs, the capacity and opportunity to extend brands, the capacity to
implement incentive plans to boost employee effectiveness, the ability of the
company to move up the value chain, the ability of employees to be multi-skilled to
reduce levels of redundancy, opportunities to cooperate with companies that are not
competitors for both companies to be beneficial.

Opportunity for the company is to create products that can give not only
satisfaction to clients but health benefits as well. The company can create a product
that is not harmful to ones health at the same time it does not taste bad. An
opportunity for the company is to find out more ways to give a distinctive taste to
their product. By doing this the company will not be co related with Pepsi and other
competitors products. Lastly an opportunity for the company is to reach newer
territories where it can offer its products and services. The company can reach more
territories not yet reached by its competitors. By doing so the company can have
added profits.
Threats
Threats are problems that may arise and should be avoided. To determine the
threats of the company the things that should be known includes the capacity of
employees to be adequately trained, the capacity of the company to withstand
sudden changes in the environment, the ability of the brands to withstand price
competition, the financial being on the verge of liquidity, is the company considered a
good employer, and the ability of the company to cope up with technological
changes. Coca Colas threat includes the laws in the country they are operating in.
Laws are a vital part of a country. These laws are the ones that initiate order and
discipline in the country. There may be laws that can cause some delay in selling the
products. These laws can hamper business transactions to be completed. These
laws are enacted to protect the welfare of local sellers in that specific country. Since
there are different laws in different countries it can also cause problems for the
company.

Laws in Taiwan are different from the laws in Switzerland therefore the laws in
one country may cause problems for the company while in another country it may
not be a problem. Another threat to the company is the tariffs and taxes that the
company has in different countries, each countries has its own rate of taxes and
tariff. Taxes and tariffs are collected by the countries government as additional funds
for their projects in that country. The taxes and tariffs collected by a country depend
on what the law of the country states. The taxes and tariffs collected by a country is
a threat because this causes expenditures to a company.

Since its rate varies the company must be wary of the cost of the taxes and
tariffs and be able to decide if having a business in that particularly country is
reasonable and feasible for the company. Furthermore a threat to the company is if
the country they are operating in has economic, political and other problems. In
every country it cant be denied that there exists problems whether political,
economic or other kinds of problems. This becomes a threat when it affects business
transaction in that country. This problem also becomes a threat when in the country
the company is doing business in; such problem has arisen or may soon be arising.
The economic and political problems in a country whether having large or small
effect is a threat to the company in the present and the future and every company
should be wary if there is indication of such situation. Lastly a threat to the company
is complaints to the health problems that their product may cause. Its products may
have some effect not liked by people.

Strategic Option
Markets and industries are dynamic and change over time. They have life
cycles and attract competitors in different numbers and of different sizes and
strengths according to the stage in the life cycle. Returning for a moment to portfolio
models, it is argued that the products that businesses have in their portfolios make
different contributions to profits and overheads. Moreover, given that an organization
also has a long-term survival motivation, there is the impetus to look for ways of
ironing out large fluctuations in profitability and ensuring long-term survival. In order
to do this the firm has to constantly review its product market posture and look for
ways of achieving its survival objectives ( 2000).

The company to increase profitability and occupancy must first add new
methods to advertise itself to people. The company can make additional use of TV
and newspaper advertisements to showcase its products to people as well as to
show the effect of the use of their product to people. The company can also use
more internet advertisements. They can collaborate with internet companies and
post advertisements and reminders on other companies site. This may cause the
company more finances but it may help the company in increasing its profits. The
company should also increase its knowledge of communicating with international
clients to increase the companys camaraderie with them. The companys
relationship with international clients is important because the international clients
are the one that can make the international expansion successful or it can make it
fail. Lastly it should make use of special promotional techniques especially during
days where they have low turnout of clients. There are certain days wherein the
number of clients purchasing their products is low; what the company can do is to
lower its rates or have special discounts or promos during these days to increase the
number of clients purchasing the products.

Conclusion
The soft drink industry is focused on the battle for supremacy of the two
companies. The battle of the two companies gives life to the industry. The goal of
Coca Cola is to produce growth for the company. It intends to not only reinvigorate
the company but inspire the people working for them. Coca-cola strength is the
international popularity it has. Another strength of the company is the strong brand
name it has. Furthermore a strength of the company is the effective advertising it
uses. Lastly a strength of Coca Cola is its website that is easy to use, attractive, and
informative. The main weakness of the company is the health issues when their
product is partaken. A weakness of the company is its inability to restrict certain age
from using their product. Lastly a weakness of the company is it not being able to
separate from other beverage companies.

Opportunity for the company is to create products that can give not only
satisfaction to clients but health benefits as well. An opportunity for the company is to
find out more ways to give a distinctive taste to their product. Lastly an opportunity
for the company is to reach newer territories where it can offer its products and
services. Coca Colas threat includes the laws in the country they are operating in.
Another threat to the company is the tariffs and taxes that the company has in
different countries, each countries has its own rate of taxes and tariff. Furthermore a
threat to the company is if the country they are operating in has economic, political
and other problems. Lastly a threat to the company is complaints to the health
problems that their product may cause.