Importance of Strategic Management

in an organization
Bhaswati B

4 minutes

When you’re dying of thirst it’s too late to think about

digging a well.

Planning is something that we do consciously or habitually all our lives. From making
big career moves, to the simplest of tasks such as presenting an idea; every measure
requires considerable amount of planning. It is completely possible to go about
anything without planning at all; yes, POSSIBLE; but that involves a lot of risk and
results are most often unsatisfactory and disheartening.

Planning or designing a strategy involves a great deal of risk and resource assessment,
ways to counter the risks, and effective utilization of resources all while trying to
achieve a significant purpose.

An organization is generally established with a goal in mind, and this goal defines the
purpose for its existence. All of the work carried out by the organization revolves
around this particular goal, and it has to align its internal resources and external
environment in a way that the goal is achieved in rational expected time.

Undoubtedly, since an organization is a big entity with probably a huge underlying

investment, strategizing becomes a necessary factor for successful working internally,
as well as to get feasible returns on the expended money.

Strategic Management on a corporate level normally incorporates preparation for

future opportunities, risks and market trends. This makes way for the firms to analyze,
examine and execute administration in a manner that is most likely to achieve the set
aims. As such, strategizing or planning must be covered as the deciding
administration factor.

Strategic Management and the role it plays in the accomplishments of firms has been
a subject of thorough research and study for an extensive period of time now.
Strategic Management in an organization ensures that goals are set, primary issues are
outlined, time and resources are pivoted, functioning is consolidated, internal
environment is set towards achieving the objectives, consequences and results are
concurred upon, and the organization remains flexible towards any external changes.
As more and more organizations have started to realize that strategic planning is the
fundamental aspect in successfully assisting them through any sudden contingencies,
either internally or externally, they have started to absorb strategy management
starting from the most basic administration levels. In actuality, strategy management
is the essence of an absolute administration plan. For large organizations, with a
complex organizational structure and extreme regimentation, strategizing is embedded
at every tier.

Apart from faster and effective decision making, pursuing opportunities and directing
work, strategic management assists with cutting back costs, employee motivation and
gratification, counteracting threats or better, converting these threats into
opportunities, predicting probable market trends, and improving overall performance.

Keeping in mind the long-term benefits to organizations, strategic planning drives

them to focus on the internal environment, through encouraging and setting
challenges for employees, helping them achieve personal as well as organizational
objectives. At the same time, it is also ensured that external challenges are taken care
of, adverse situations are tackled and threats are analyzed to turn them into probable
opportunities.

Five Strategic Actions: The

Coca-Cola Company
By: The Coca-Cola Company | Apr 27, 2016

6-8 minutes

1. WE FOCUSED ON DRIVING REVENUE AND PROFIT

GROWTH
Each of the 200-plus nations we serve plays a critical role in our growth plans.

We used segmented revenue growth strategies across our business in a way that
varied by market type. And we aligned our employee incentives accordingly. In
emerging markets, we focused primarily on increasing volume, keeping our beverages
affordable and strengthening the foundation of our future success. In developing
markets, we struck a balance between volume and pricing. In developed markets, we
relied more on price/mix and improving profitability by offering more small packages
and more premium packages like glass and aluminum bottles.

Creating value for our Company and customers looks different in different countries,
and we did a good job segmenting our markets to drive revenue growth in 2015.
While we still have more to do, we were encouraged by our results. Globally,
price/mix rose 2 percent as did volume, helping increase organic revenue 4 percent.
We also gained worldwide value share in our industry.

2. WE INVESTED IN OUR BRANDS AND BUSINESS

Healthy businesses require continuous investment. We made a choice to invest in
more and better marketing for our brands, increasing both the quantity and quality of
our advertising. We increased spending on media advertising by more than $250
million, and we used these funds to share stronger, more impactful ads.

At the same time, we invested across our expansive beverage portfolio. We improved
our position in the energy category with a strategic new partnership with Monster
Beverage Corporation. We invested in brands like Suja, a line of premium organic,
cold-pressed juices, and agreed to buy China Green Culiangwang, a plant-based
protein beverage brand. We also expanded to nationwide the U.S. distribution of
fairlife ultra-filtered milk.

In 2015, we developed our first global marketing campaign to support the entire
Coca-Cola Trademark of Coke, Diet Coke, Coke Zero and Coca-Cola Life. Launched
in early 2016, “Taste the Feeling” emphasizes the refreshment, taste, uplift and
personal connections that are all part of enjoying an ice-cold Coca-Cola. With this
campaign and our broader “one brand” strategy, we’re letting consumers know they
can enjoy Coca-Cola with calories, fewer calories or no calories and with or without
caffeine. The choice belongs to each individual, every time he or she reaches for a
delicious and refreshing Coca-Cola.
3. WE BECAME MORE EFFICIENT
As we took steps to rebuild our growth momentum, we knew we needed to invest in
more and better marketing while also increasing our financial flexibility. To these
ends, we increased our efficiency and productivity while reducing costs.

Part of the solution was “zero-based work”—a way of looking at our business that
starts from the assumption that organizational budgets start at zero and must be
justified annually, not simply carried over at levels established in the previous year.
We also cut spending on non-media marketing like in-store promotions. And we
found new savings in our supply chain around the world.

Overall, we were able to realize more than $600 million in productivity improvement
in 2015, which we used to invest further in our brands and business and also to return
to our shareowners.

For the future, we’re working to drive productivity and continuous savings across our
Company and system. We see productivity not as an event or series of events but as
an ongoing, day-by-day process of becoming stronger, leaner and ultimately better.
4. WE SIMPLIFIED OUR COMPANY
Few industries have changed more rapidly in recent years than the nonalcoholic
beverage industry. Evolving consumer tastes and preferences, coupled with sweeping
innovations in the retail and supply chain landscapes, have created an environment in
which speed, precision and empowered employees determine who wins in the
marketplace.

To seize this opportunity, we took steps to reshape our business. We looked hard at
our operating structure and identified areas where we could be faster, smarter and
more efficient. We removed a layer of functional management and connected our
regional business units directly to headquarters. We streamlined a number of
important internal processes and removed roadblocks and barriers that inhibited us
from being as effective and responsive as we knew we could be.

Most importantly, we began to look at ways to enhance further the employee

experience across our Company with the goal of creating the world’s most exciting,
productive, fun and fulfilling career environment, with workplaces that nourish
curiosity, learning, innovation and growth. While this journey has just begun, our
associates have responded with the resolve, commitment and passion that have been
hallmarks of Coca-Cola leadership since 1886.
5. WE REFOCUSED ON OUR CORE BUSINESS MODEL
The Coca-Cola Company has always been a creator of refreshing beverage brands.
Today, our expansive portfolio includes more than 500 brands, including sparkling
beverages, juices and juice drinks, coffee, tea, sports drinks, water, value-added dairy,
energy and enhanced hydration drinks. Among these brands are 20 that generate more
than a billion dollars in annual retail sales.

Another core competency has been our ability to lead the world’s most sophisticated
system of independent bottling partners while creating value for our retail and
restaurant customers. Over the years, we’ve acquired and managed a number of
Coca-Cola bottling partners with the aim of improving performance, optimizing
manufacturing and distribution systems, and ultimately refranchising the bottling
territories back to independent status.

In North America, we took aggressive steps in 2015 to accelerate the refranchising of

Company-owned bottling territories with the goal of completely refranchising our
North America bottling system by year-end 2017. We also announced a transaction to
form a unified new bottling partner in Western Europe and took action to improve our
bottling system in Southern and East Africa, Indonesia and China. By year-end 2017,
we expect Company-owned bottlers to produce just 3 percent of our global volume,
down from 18 percent today.

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Coca Cola’s Strategic Management
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In 1886, John Pemberton was able to make replacement product of alcohol by adding
CO2 with sugar and other components such as caffeine and cocaine named the
mixture Coca-Cola. He may have been inspired by the formidable success of Vin
Mariani, a European coca wine. At the beginning, they consider it as a medicine to
relieve headaches and gain energy. They were believed that carbonated water is good
for health so the first sales were at Jacob’s Pharmacy in Atlanta, Georgia. In 1888
Coca Cola drinks were sold by three different companies. But John Pemberton died in
1888 without realizing the success of the beverage he had created. Atlanta
businessman Asa Griggs Candler secured rights to the business for a total of $2,300.
Candler would become the Company’s first president, and the first to bring real vision
to the business and the brand. (Atlanta Beginning, 2006-2011)

Asa G. Candler was a salesman and he was the one who put a good marketing
strategy for introducing the product to the people by distributing apothecaries with
clocks, urns, calendars and apothecary scales bearing the Coca-Cola brand. So the
people were able to see it everywhere and that will attract them to buy Coca-Cola
drinks. In 1895, Candler had built the first Coca-Cola factories in Chicago, Dallas and
Los Angeles. (Atlanta Beginning, 2006-2011)

In 1900, the company started to sell their product outside the country to England then
they sold it in Canada and Mexico. In 1916, the product arrived to France, Jamaica,
Germany and Cuba. In addition to that, the first factory for Coca-Cola Bottling in the
Middle East was in 1944 in Egypt. Furthermore, there were many factories opened in
the mid-20th century such as Iraq and Saudi Arabia to produce Coca Cola drinks.
(Coca-Cola Offical Website, 2012)

Industry, Segment, and Type of Products

Coca-Cola is a global leader in the beverage industry; nowadays Coca-Cola Company
provides more than 500 brands including soft drinks, fruit juices, sport drinks and
other beverages in over 200 countries or regions and serves over 1.7 billion servings
each day. Coca-Cola drink consists of:

 Carbonated water
 Sugar
 Caffeine
 Phosphoric acid
 Caramel color
 Natural flavorings

The original copy of the formula which considers a secret formula for the drink held
in safety box in SunTrust bank in Atlanta. Coca-Cola drink contains material that only
produced in the main Atlanta factories Georgia, United States. Then the company
distributes it to other Coca-Cola factories around the world. (Coca-Cola Offical
Website, 2012)

The target market for the Coca-Cola is all age group especially male and female
teenagers, it is sold all around so that everyone can buy it and drink it. Furthermore,
we could find on their TV advertisement that they target families to choose Coca-Cola
drink as favorite family drink.

Locations of operated company

The Coca-Cola Company headquarters are in Atlanta, Georgia, and the United States.
In addition, Coca-Cola Company has rights to operate across Europe which means
they have rights to operate in 24 European countries. They sell their products in 200
countries all over the world. In other words, Coca-Cola Company is served all over
the world (locations, 2009).

Company Mission
Their Roadmap starts with their mission which is enduring; it declares their purpose
as a company and serves as the standard against which we weigh our actions and
decisions:

 To refresh the world…

 To inspire moments of optimism and happiness…
 To create value and make a difference. (coca cola, 2012)

Macro-environment (PEST) Analysis

PEST Analysis
PEST analysis identifies the changes in the market that occur because of the
economical, political, technological and social factors.

Political analysis: The Non alcoholic beverages such as Coca Cola are under the Food
and Drug Administration. In terms of the regulations, the government controls over
manufacturing procedure of the products. There are some factors that affect the
operations of Coca Cola such as the changes in the laws and regulations (taxation
requirements), accounting standards and environmental laws. Moreover, changes in
the non alcoholic business era like pricing policy and competitive product pressures
and ability to maintain sales in worldwide market compare to its competitors. Political
conditions in international markets like governmental changes, civil conflict and
restrictions on the ability to relocate the capital across borders. Its ability to enter
developing market depends on political and economic conditions and their ability to
form strategic business alliances with local bottlers effectively and to improve their
distribution networks, production amenities, sales technology and equipment. So in
some countries coca cola has problem in business expansion due to government
regulation. (political and technological analysis)

Economic analysis: Economic analysis examines the world, national and local
economy impact. The recession that was in 2001 has impacted the operations of many
companies, however, due to the aggressive actions of the US economy it returned to
grow positively in 2002. The rise in the rate of interest also depressing business and it
causes lower spending levels and redundancies. Because of the global recession, Coca
Cola can borrow the capital and invest in the other products easily due to lowered
interest rate. In addition, it can borrow to advance its research for new technology and
products. Researching of the new products is cost effective and the company can sell
its products at lower price so that its customers would buy more Coca Cola products
at lower price. (Sociological and Economic analysis)

Sociological analysis: It analyzes the ways how the changes in society affect
organization such as changing in attitudes and lifestyles of the market (Sociological
and Economic analysis). Most of US citizen are practicing healthier lifestyles. This
has affected non alcoholic beverages industry mostly. Customers are switched to diet
colas like Coca Cola Zero or light and bottled water instead of beer and alcoholic
beverages. Time management has also increase and it is 43% approximately of all
households. The need of bottled water and other healthy products are important in the
day to day life. Middle aged customers are more concerned with their nutrition. This
will continuously affects non alcoholic beverages industry by increasing overall
demand and in healthier beverages also.

Technological analysis: Many factors influence the actual results of the company to
vary from the expected results such as the efficiency of promotional programs,
marketing and advertising of company. The new technology like internet and
television use incomparable effects for advertising and this makes products more
attractive. In the past, entrance of plastic bottles and cans have increase sale volume
of company because plastic bottles are easier to carry and can dispose them once they
has been used. The technology is advancing continuously by the entrance of new
machineries. Due to this, the production volume of Coca Cola has increase sharply in
last few years. In Britain, Coca Cola enterprises have six factories those who are using
modern equipment to ensure the top product quality (political and technological
analysis).

Industry Five Forces Analysis

Porter’s Model
Michael Porter, belonging to the Harvard Business School, introduced a business plan
for industry analysis in the year 1979 known as Porte’s Five Forces. It essentially
measures the competitiveness of the market with the sole aim to help the enterprises
augment profit and enlarge their markets. The five forces can be used to determine the
nature of the competition in the industry. In industry i.e. Coca Cola and the
conclusion from the same is used to determine the nature of competition in this
particular industry. The Porter’s Five Forces include:

Threat of new entrants and potential competitors: It has been observed that in the
beverage industry the entry barriers are relatively low. One can see the frequent
emergence of new brands in the market which are usually priced at a rate which is
lower in price as compared to Coke products. However, it cannot be denied that now
Coca Cola is not seen as a mere beverage but as a brand. Owing to this very reason it
cannot be ruled out that it has loyal customers who are unlikely to try any other
beverage brand and quit drinking Coke. It is also worth noting that Coca Cola has a
very significant market share for a long time.

Threat of Substitutes: It cannot be denied that there are a number of other sodas and
energy drinks in the market apart from Coke. But the threat against Coke is low.
Firstly, due to the brand loyalty. Secondly, due to the fact that Coca Cola has such a
market reputation where it has been successfully differentiating its products
remarkably.

Bargaining power of buyers: The third which pertains to the bargaining power of the
buyer can be rated as low. It has been seen that the individual has no pressure on Coca
Cola. Fountain sales, sales through vending machines, supermarkets, large scale retail
sales and the convenience stores attached to the gas stations serve as the main
channels of distribution. Pepsi, the main competitor is also priced almost the same as
Coke itself. It has been however observed that the vending machines, convenience
stores and supermarkets given to the fact that they have not many alternatives, have
low bargaining power. It should also be pointed out here that given to the fact that
people now are realizing the adverse impacts of the carbonated drink on health, they
tend to turn towards fruit juices instead of carbonated drinks.

Bargaining power of the Suppliers: The fourth which pertains to the bargaining power
with the suppliers can be again rated as low. Coca Cola is primarily concerned with
the task of supplying either fructose or sucrose and undertakes the bottling work.
However, in countries like US Coca Cola buys high fructose corn syrup as its
ingredient. As a matter of fact any supplier would not be willing to lose a huge
customer like Coca Cola.

Business Rivalry or rivalry among the existing firms: The market is essentially shared
by Pepsi and Coca Cola which are always striving for international presence. It is seen
that both the brands commit heavily to sponsoring outdoor festivals. Given to the fact
that Coca Cola has a longer history, it resorts more to the classical way of advertising
in comparison to its rival Pepsi which basically tries to captivate the attention of the
younger generation by using Pop Stars as brand ambassadors. (Wright, 1999)

Lifecycle Stage
Coca-Cola has been constantly developing despite of their unrevealed formula that
has not changed over the years, which has also been a huge success in maintaining
their brand as a number one position. Industries evolve structurally as well as in terms
of overall size over time. However, profits do vary throughout the lifecycle. The
competitive forces that shape the business keep changing throughout the lifecycle.
Hence several stages in the lifecycle of an industry are as follows:

 Embryonic Stage: In this stage where the industry is in its nascent stage faces minimal
competition as there are few competitors and no threat from the substitutes due to the fact
that the industry is new.
 Growth Stage: In this phase, the number of competitors increases. However, the rivalry
between the firms is kept in check given to the fact that demand outstrips capacity of growth.
This phase is often associated with profitability.
 Shakeout Stage: In this phase, economies of scale are achieved and due to large-scale
consolidation barriers to entry become very high.
 Maturity Stage: In this phase, the focus is not on the growth, however, some competition
from the late entrants become apparent. The power of buyer increases while the power of
suppliers declines because now the capacity either matches or exceeds demand.
 Decline: In this phase, one can see increase in the power of buyer in sharp contrast to that of
the supplier as capacity exceeds the supply. Hence, it can be said that this phase does pose
new challenges. It is in this stage that we can see an eventual decline in the rivalry of the
firms as the weakest of the competitors tend to withdraw from the industry. (Niemann,
Tichkiewitch, & Westkämper, 2009)

Current Lifecycle Stage

Currently Coca-Cola is under the maturity stage due to the solidity and capability of
keeping a large and loyal group of stable customers. This stage is lasting longer than
all other stages when it comes to western countries like the United States and Europe;
considering Asia however, it is still in the growth stage. ( Coca-Cola Case Study)

During the maturity stage, products usually go through a slowdown in sales growth
which can affect cost management, product differentiation and marketing in the
industry. Therefore, management has to pay attention to products in order to keep the
percentage of sales growing, not forgetting the market share is the source of
profitability.

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A way to extend its lifecycle being away from declining is to keep developing the
product and/or the brand to make it more accessible based on consumer needs, by
following some helpful strategies:

Have a constant change in designs of both cans and bottles, for example: colorful cans
and labels for bottles with tags on for festive occasions to make them more attractive.

Produce smaller sizes of bottles and cans with lower calorie and sugar for kids.

When buying packs of coke, they would come with a nice case to carry them easily
everywhere.

Produce Coke drinks with additional flavors (e.g. cherry, strawberry, grape…etc.) to
grow customers’ demand and interest as well as to attract new consumer groups.

Replacing glass bottles to plastic liter bottles will help increasing consumption.

(Noor, 2011)

Internal Analysis

SWOT Matrix
This section attempts to perform a strategic analysis of the brand which is the number
one beverage maker i.e. Coca Cola. This is done by making an internal analysis of the
company in order to understand its internal capabilities. This involves the
development of such strategies which make Coca Cola distinct from its competitors.
To compete in the international market Coca Cola has developed such strategies
which creates values for its customers as well as its consumers like that of optimism,
rejuvenation, accomplishment and difference. It follows the following path trying to
pursue its strategic policies:

 by growing core carbonated soft drink brands at global level

 by growing in other core non carbonated brands like sports and energy drinks
 developing wellness platforms by initially focusing on tea, soy and juice
 by nurturing system health i.e. market by market focus
 Coca Cola should try to take into account the needs of its customers and create a greater
customer value
  by creating adjacent business (Coca-Cola Offical Website, 2012)

SWOT Analysis
Coca Cola is the leading manufacturer, distributor and marketer in the beverage
industry. However, given to the fact that certain regulations have been imposed in
schools have affected the sale of soft drinks which seem to have a consequent adverse
effect on the sale and operating margins of the company in the near future.

Strength
Coca Cola has leading market presence which is built on strong portfolio. Coca Cola,
Diet Coke, Fanta and Sprite are the world’s top four non- alcoholic beverage brands
which are owned by Coca Cola. Minute Maid, Coca Cola Zero, Dasani, Powerade,
Simply, Georgia Coffee, Del Valle and vitaminwater. It is the strong brand value of
Coca Cola that enables it to be recalled by the customer and consolidate its position in
the market.

 The company’s brand success is attributed to the its strong bottling and customer
partnership
 It has a strong global footprints on the emerging nations
 Good financial resources (Coca-Cola Offical Website, 2012)

Weaknesses
 Involvement in product quality issues
 Low health products
 It’s own products are competitor of each other

Opportunities
In today’s scenario an increasing awareness can be seen among the consumers
regarding food and drink choices and it is owing to this reason that once can see the
increasingly growing demands of healthy beverages and drinks. By taking such needs
of the consumer into consideration the company can win the confidence of the
consumers. There is good opportunity in health drink segment. Company can make its
products healthier.

Threats
The potential threat to the company sales is that in the face of regulations placed on
their sale given to the health issues involved. The production costs and capacity can
also be affected by the water scarcity and poor quality. Another threat is from
government regulations of some countries. (Coca-Cola Offical Website, 2012)
Strategy Assessment

Current Strategy
One of Coca-Cola company goals is to maximize growth and profitability to create
value for their shareholders which will also create advocacy for the brand under the
following strategies:

Transforming our commercial models to focus on our customers’ value potential and
using a value-based segmentation approach to capture the industry’s value potential.

Implementing multi-segmentation strategies in our major markets to target distinct

market clusters divided by consumption occasion, competitive intensity and
socioeconomic levels.

Implementing well-planned product, packaging and pricing strategies through

different distribution channels.

Driving product innovation along our different product categories.

Achieving the full operating potential of our commercial models and processes to
drive operational efficiencies throughout our company. (Strategy and Competitive
Advantages, 2011)

Other effective strategies to achieve the business goals are:

Deliver shared value

Engage the market through storytelling and thought provoking ideas

Be a leader in the cultural dialogue

Create a network advantage (Creating Advocacy, 2012)

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Strategic management of Coca Cola Company

Introduction:

It is a well-known fact that Coca Cola Company has emerged to be one of the most
recognized organizations in Tanzania and all over the world. Founded in the year of
1886, the company has witnessed unprecedented success and incredible recognition in
the market of non-alcoholic beverages and syrups. The success of the organization in
terms of both the stock price as well as profitability in the last few years has helped
the company emerge to be one of the most successful companies in the market of
beverage products, operating successfully in more than 200 countries (Karnani 2014).
Although the organization has been operating its business in the international market
with considerable success, it is highly important to analyze the strategic objectives of
the company and evaluate the implications of the same. Since the company is
encountering cut-throat competition from some of the rival giants of the industry, it is
important to analyze and evaluate the strategic objectives of the company.

Brief Background of the Company:

Coca Cola is a leading company in the soft drink industry that operates its business in
more than 200 hundred countries. The strong brand recognition that the organization
has accepted all over the world, has largely helped the company gain wider
acceptance among the masses. While the organization has focused on creating the
vision that intends to spread unalloyed happiness and joys in the life of every person,
it keeps on creating a sense of positivity by engaging in a variety of Corporate Social
Responsibility Acts. While the mission statement of the organization states that the
objective of the company is to achieve huge revenue earning capacities, it also intends
to create enduring value for each stakeholder associated with the company. The
organization has multiple brands, such as Diet Coke, Fanta, DASANI, Minute Maid
and many more (Archer et al. 2013). Although the organization encounters tough
competition from some of the rival brands, such as Pepsi Co, Monster Beverage Corp.
and Suntory Beverage & Food Ltd., the company has been adopting innovative
marketing campaigns, interesting CSR activities, effective promotional programs as
well as cost controlling strategies that have been helping the organization gain
competitive advantage over the rival giants (menon and Yao 2017).

Core Business:

Just like any other organization, even Coca Cola has a primary area or activity in
which it intends to focus its business operations. Coca Cola Company has emerged to
be the most successful company operating in the soft drinks industry of the world.
The core business of the organization focuses primarily on the sale of beverages that
includes protein-packed dairy products, juice products, spirits as well as other forms
of soft drinks (Pfitzer et al. 2014). Although the organization has also been operating
its business in other business areas, such as production and sale of packaged drinking
water, its focus has been on the production of beverage products. The manufacture
and sale of business of beverages form the core business of the organization (Muturi
2015).
Organizational Structure:

The organizational structure of an organization plays an integral role in the success of

any company, as it is the structure of the company that determines exactly the process
in which the tasks get allocated, or supervised within a company. Since Coca Cola is a
multinational company, operating in more than 200 countries, the organizational
structure adopted by the company is Separate International Division Structure. It
should be noted here that the company has strictly divided its continental operations
among five divisions:

 The Eurasia and Africa Group

 Europe Group
 Latin America Group
 North America Group
 Pacific Group (Ferie 2014)

Now, since it is not possible to supervise and monitor the performance of the business
activities across each region of the world, Coca Cola Company hires the staffs for
each of the five stated regions, that work in isolation from the head office of the
organization. The organizational structure of the company can also be explained with
the help of the diagram below:

Figure 1: Organizational Structure of Coca Cola

As it can be understood from the above diagram, Coca Cola follows a structural
design that is very close ad akin to the functional design of an organization. While the
CEO remains at the top of the organization, various subordinates manage the various
business activities of the organization, such as finance, marketing or HR activities
across different regions of the world. The Coca Cola Company ensures strong
authoritative control over the regional managers and working staffs of its each
regional branch. The divisional managers of the company are responsible for
conducting business in the particular regions of the world. Each of the five different
operating groups, mentioned above are again further subdivided into regions, the
works of which are assigned to local heads. By allowing local job decisions to be
taken by the local heads of the regional branches, the higher management authority of
the organization can choose to reflect over and focus attention on long-term planning.

Organizational Culture:

The organizational culture of a company, that is the set of beliefs and ideologies
underlying the business purpose of a company, largely determines the extent to which
the stakeholders are motivated to work for the company. The organization embraces a
Winning Culture at workplace, whereby the company demonstrates a healthy,
employee-friendly workplace culture that encourages moral values such as honesty,
integrity and collaboration at workplace. The employee-friendly culture helps in
ensuring high quality workforce. The inclusiveness is also an integral aspect of the
organizational culture of Coca Cola. The all inclusive culture of the company helps it
to hire diverse people, enriched with a variety of talents and ideas. Since Coca Cola
operates in a truly global world, it has the ability to encourage diversity at
workplace, so as to operate in a fully multicultural nation. Besides, the
organizational culture of the company is also considered to be a futuristic one, that
exhibits a clear understanding of the changing society of the present world. The
company intends to promote as well as inspire happiness as well as optimism (Muturi
2015). Besides, it is also important to mention here that Coca Cola also follows an
employee-friendly culture that helps the employees voice their own opinions and
explain their viewpoints, rather than merely working in conformity with what the
management authority expects them to do. Seen in this context, the organization
enables the employees freely ventilate their ideas, participate in the business-related
activities, as well as express their innovative ideas in the business (Rowlinson and
Hassard 2015).

Leadership Style of the Organization:

Strategic thinking is highly important for any organization that intends to sustain itself
in future, and there is no denying the fact that strategic thinking is always inextricable
related to effective leadership of an organization. As it is a known fact that the vision
is futile if an organization does not have effective leaders to execute the same.
Considering this, it s important to evaluate the leadership style as followed in Coca
Cola. Since positivity, optimism and happiness guide and underline the basic motto
and working culture at Coca Cola Company, the company usually follows a laissez
faire leadership style in Tanzania and each country in the word. As per the laissez
faire style of leadership, the workers in Tanzania are being allocated with a set of
objectives, that they are expected to accomplish within the given period of time as per
the Key Business Indicators Index (Mooji 2013). The managers as well as the
directors of the organization prefer to choose a relaxed form of leadership whereby
they tend to leave the managerial decisions in the hands of the subordinates as long as
they are able to achieve their KPI targets. It is because of the lack of autocratic
leadership style, that the employees feel motivated to contribute to the success of the
company in their own ways.

Strategic Objectives and Challenges:

Internal Analysis (Value Chain Analysis):

Value chain analysis is useful to separate the business operation into a series
of value generating activities by identifying the important activities in which a
business engages. Once the factors are evaluated, the same is used by the company as
a defensible competitive advantage (Caplan et al. 2016). The steps involved in the
production of the cold drink can be stated here:

1. The raw materials are collected and then they are sent for the manufacturing of the cold
drink. In this process, the health and the safety of the particular ingredients are checked and
processed thoroughly (Ghosh and Shah 2015).
2. The operational and the logistic include the sending of the bottled drink to the particular
places from where the drinks can be directly supplied to the consumers (Caplan et al. 2016).
 3. Next comes the packaging and the bottling of the product. It is one of the most important
part of the complete production process and it includes a safety care that the particular
organization does not have to face any kind of issue (Chalikias and Skordoulis 2016).

With the detailed analysis, it can be easily said that the Company has been utilizing its
prime operational activities well. It is the values of the organization that has lead the
organization to reach the position where it is present at the particular time (Parmigiani
and Rivera-Santos 2015).

VRIO framewok:

The internal analysis of the Organization can be made here by the means of VRIO
framework.

1. Value: If the distribution channel of the Organization is considered, it can be said that Coca
Cola focuses more on the distribution of large markets like restaurants rather than the
consumers directly. Thus, it can be said that the retail operation is more important for the
organization. It is by the means of the particular distribution method, the company has been
able to strengthen its distribution network largely (Rothaermel 2015).
2. Rarity: The market size of Coca Cola is considered as rare because the company operates in a
large distribution network. There are number of activities that the organization has to do
before the final product is set for distribution. As it has been evident that the Company is
only responsible for the manufacturing of the drink and that the bottles are manufactured
somewhere else, it becomes important for the Company to build up a good relationship with
these manufacturers as well (Meyer and Peng 2016). An efficient distribution channel has
only helped the organization to maintain a good relationship in the market of its operation.
3. Imitability: If the product of the Company is considered, there are a number of companies
that imitate the products produced by the organization. There are a number of strategies like
the push and pull strategies that are imitated by other organizations (Peng 2016). However,
the size and the scope of the Company cannot be imitable by other organizations of the
same nature.
4. Organization: If the organization is taken into consideration, it has to be said that Coca Cola
has been dominated by the market share. Coca Cola has a good market share overall the
globe. The Company has been using the raw material available in different parts of the
countries where the particular company operates (Meyer and Peng 2016). In fact, it is only
by the means of availing the resources at the particular places of operations, the Company
has been making profit.

With the detailed analysis of the internal environment of the organization, it can be
said that Coca Cola utilizes all kinds of facilities available in the market in order to
carry out its operational activities. In addition to this, the company has an efficient
team of expertise that actually put the organization in the position that it hails today.

External Analysis (Porter’s Five Forces):

According to Porter’s, there are major Five Forces that actually determines the
profitability of a company within an industry. As commented by Crane et al. (2014),
the weaker is the force, greater the opportunity for the Organization to perform better
in the firm. The Five Forces of Porter’s analysis for Coca-Cola can be done here.
 1. Threat of new entrants: It has been found that Coca Cola is at a much higher and stronger
position in the soft drink industry. Thus, the threat for capturing the market of the particular
industry is low because Coca Cola has domination in the market already (Latif and Parker
2014). However, there still remain certain threats related to the size, price and the brand
image distribution of the Company.
2. Threat of Substitution: If the substitution products are considered, bottled water, sports
drink and in fact coffee and tea can also be considered as a substitute to Coca Cola. In fact,
there has been growth of various types of sports drinks and coffees and tea options that can
be consumed by the consumers (Latif and Parker 2014).
3. Threat of Suppliers: Suppliers of Coca Cola include the manufacturers as well as the
secondary packaging suppliers. The Company itself is engaged in the manufacturing of the
soft drink and not in the manufacture of the bottles (Hassan et al. 2014). This is the reason
the Company has a high threat of bargaining power for the suppliers.
4. Bargaining power of buyers: If the large scale buyers are considered, then they are the large
scale grocers, restaurants and discount stores as well. The actual process of selling the soft
drinks takes place from these grocers (Hassan et al. 2014). The bargaining power of the
buyers is high because there are a number of substitutes that the particular drink can easily
replace.
5. Competitive rivalry: There are already huge numbers of rivals in the market that include
Pepsi Co. and other soft drinks like diet coke and Fanta are the main competitors of the
product. Therefore, the Company has great threat in terms of other products in the market
(Latif and Parker 2014).

Evaluation of the Current Strategic Position:

With the detailed analysis that has been gained from the understanding, the SWOT
analysis of Coca Cola can be done here.

The strengths of the Company include the valuation of the Company.

The value of the Company is as high as 79.2 billion dollars. This value
is much higher than the other companies in the market (Masterman
2014).

It has a global presence and a big market share.

Strengths
The promotional means undertaken by the Company such as the
promotion using celebrities add benefits to the image of the Company.

The Company also has a large base of loyal customers that has
enhanced the distribution network of the Company (Grant 2016).
Presence of some strong competitors like Pepsi acts as great
weaknesses for the particular Company.
Weaknesses
There are no health drinks that the Company manufacturers and thus,
there remains the chances that the Company has to deal with a number
of issues related to the value of the product (Grant 2016).
There are a lot of opportunities for the particular business if the
Opportunities
Company goes for product diversification. As it has been found, there
 are opportunities for coming up with a number of health beverages and
packaged drinking water as well (Hassan et al. 2014). The Company
also need to improve its supply chain management to reach the market
more effectively.
The threats of the Company include the improper sources of the raw
materials that are required for the production of the drink. With the
issues like changing temperature and climate, the Organization has
Threats
been found to face certain threats (Hassan et al. 2014). In addition to
this, the competitors in the market also act as the major threats to the
business activities of the Company.

Table: SWOT analysis of Coca Cola

(Source: Created by the Author)

As it is evident from the Porter’s Five Forces Analysis, it is clearly evident that Coca
Cola Company has gained sufficient recognition in the global market, and
consequently the organization is not likely to encounter strong competition from the
new entrants of the market. The kind of brand recognition that the company enjoys is
incomparable and cannot be outrivaled by an emerging organization, given the fact
that Coca Cola is an old, and a well-established organization. It is worthwhile to
mention here that the organization has taken several steps to ensure that the company
is able to maintain its global brand recognition. In order to distinguish itself from the
competitors, such as PepsiCo and others, Coca Cola Company has been spending a
lump sum amount of more than $250 million for the purpose of promoting the brand
of the company (Wang 2015).

As far as the competitive forces are concerned, it is clear that the organization does
encounter cut-throat competition from some of the greatest rival giants of the industry.
First of all, ever since the 19th century, Coca Cola and Pepsi Co have been battling in
the global market, since the product offering of both the organizations is quite similar,
such as orange juice as well as bottled water (Powell and Gard 2015). Besides, the
very famous Dr. Pepper Snapple Group is also a major competitor of the organization
that has also established much recognition in the realm of soft drinks and juice market.
Keeping into consideration, the competition the organization encounters from these
companies, it does require to adopt the objective of sustained competitive advantage.
Keeping into consideration, the fierce competition in the market, Coca Cola keeps on
adopting innovation in its products as well as strategies. The organization for example
has adopted the product diversification policy whereby, unlike any of its competitors,
the company has been able to offer a wide variety of 400 brands in more than 200
countries across the globe (Wilson and Wilson 2017). Besides, Coca Cola has always
been well aware of the fact that it does face fierce competition from equally
recognized companies, such as PepsiCo, and hence the company intends to employ
effective distribution systems that helps it to make it accessible to the distant and
remotely connected areas where the competitors’ products cannot easily reach. For
example, the organization delivers its products even to the remotest localities of the
African Continent. It is also needless to state that the organization also adopts a very
competitive price policy, whereby the products are charged at a very low price. In fact,
it is worthwhile to mention here that during the span of 1886 to 1959 a bottle of coke
was available at the expense of a mere five cents (Shemwell 2016). Hence, the
organization has always been able to gain consumer loyalty by keeping its price at a
minimal level, and it should continue to do the same in future. Besides, the
organization has also engaged itself in a variety of CSR activities that helps the
organization gain competitive edge over the other companies.

As far as the VRIO framework is concerned, it has been observed that product
differentiation is an important resource possessed by Coca Cola. As it is self-evident
from the above discussion that the brand differentiation is a rare resource possessed
by Coca Cola, and as and when a consumer thinks of buying a cola, the very first
name that usually strikes his mind is that of Coca Cola. However, yet the organization
may not be able to enjoy competitive advantage considering the fact that the product
is equally imitable. In fact there are at least hundreds of generic colas available in the
market that can imitate the taste of the beverages. However, the organizational brand
image cannot be stolen, as Coca Cola keeps on reminding people how a Cola drink
can open a bottle of happiness for them. Consequently, the company enjoys much
greater brand recognition, which is not imitable, and hence it should further
strengthen the marketing strategy. As far as Coca Cola is concerned, it becomes
clearly evident that brand differentiation acts as the most effective resource for Coca
Cola that should be exploited to the fullest by the organization. Besides, the
distribution network of Coca Cola is also very huge, and consequently it is rare as
well as less imitable (Ireland and Ashton 2017). The management authority of the
organization has been well-aware of the fact that the push and pull distribution
strategy adopted by the company can be easily imitated by some of its competitors as
well, and this is the reason why the company has ensured that the size of the
distribution channel is too huge to be imitated. Besides, in order to get best advantage
of the available distribution network, the Coca Cola Company has also started
entering foreign markets, that have not been explored so far by the rival brands, such
as the market of Mexico and the African Continent.

The vast global presence, huge market share as well as the brand equity of the comapy
is huge sources of strength of the organization. The huge market area of business
operation has helped the company gain its mammoth brand name. Besides, the
celebrity marketing of the organization as well as a broader target market segment of
the organization has largely facilitated the growth of the company. While the
competitors of Coca Cola such as PepsiCo usually focuses on the youth population,
while promoting its products Coca Cola keeps into consideration the older as well as
younger group of people. However, the organization has been encountering a fall in
sales owing to the production of the carbonated beverages that in turn causes obesity.
Since the organization was losing out to the market share owing to the lack of health
beverages, the company introduced the fruit juice brand named Minute Maid as well.
Besides, the organization despite being a global brand, has faced accusations and
lawsuits for the inefficient supply of water, and the company immediately adopted
CSR activities in the specific regions, so that its organizational reputation does not get
maligned (Kamani 2014).

Recommendations for Future Growth Strategy:

A detailed analysis has been conducted on the internal and the external factors that
influence the strategic business of the Company. It is on the basis of the analysis, a
number of recommendations can be made that would help the Company to improve
their business strategies.

Strengthening of the execution infrastructure: As it has been evident that Coca Cola
operates from different parts in Tanzania and all over the word it has different
sub-segmentations for its operation. The approach made by the Company resulted in
the growth in the core business.

Focusing on the core business: As commented by Gomez (2015), that at times it

happen that the particular Company loses its focus on the core business because of the
presence of a variety of sub products. Similar type of situation is evident in case of the
Coca Cola Company. It has been evident that there are a number of products that the
company deals with. In case, if any kind of issue occurs for any particular product, the
company as a whole focuses on the particular issue (Wilson and Wilson 2017).
Customer focused growth strategy: Another important strategy that can be undertaken
by a soft drink company like Coca Cola is by the means of focusing on the need of the
consumers of Coca Cola. It is for the same reason, recommended that the Company
shall come up with better research and development strategies that shall help the
company to understand the actual need of the consumers (Fung 2014). It is only on
the basis of the information gained from the research certain product differentiation
can be done. This shall help the organization to grow in the market.

Improving organizational capabilities: As pointed out by Fung (2014), it is also

important to understand the capabilities of an organization as well because the
complete organizational growth and strategies actually help in the future growth of the
particular organization. As it has been evident from the analysis of the organizational
leadership capabilities as well as the organizational structure, it can be said that
certain improvements can be made in it. For instance, the structure of the organization
can be made horizontal rather than following a particular hierarchical structure in the
organization. In addition to this, it is also recommended that at certain instances when
it is required, the leadership approach can be changed as well.] A transactional
approach can be undertaken for improving the organizational activities (Wilson and
Wilson 2017). Again, if the organizational culture is also considered, it can be said
that a more collective approach can be made towards the organizational leadership.
Other recommendations: Apart from the above made recommendations, a number of
other recommendations can be made that shall increase the pace of the growth of the
Organization. For example, the Company could come up with better Corporate Social
Activities that would improve the image of the Company in the society (Wilson and
Wilson 2017). Improved CSR activities will also help in a promotional and
advertisement part for the particular organization. Again, another important factor that
the organization should undertake is on the performance management. It is an
important part for the evaluation of the growth strategy and overall organizational
performance.

The recommendations made above have addressed all the issues that the Coca Cola
has been facing in the recent time. It is expected that these strategies will be effective
enough to create a better result in the overall organizational performance and
activities. It is expected that if the recommendations are used by the organization than
there shall be more prosperity that the Company gains in its business.

Conclusion:
To conclude, it must be noted that Coca Cola is a reputed multinational company that
has achieved enormous amount of brand recognition which in turn has been
contributing to the high profitability of the company. However, it is important that the
organization primarily focuses on the core business products that is the beverages,
instead of relying on product sub-groups as well. Besides, the organization should
keep on engaging itself in more innovative marketing campaigns endorsing its
products, promoting its brand by CSR activities and pleasing the consumers with a
wide variety of innovative products, such as Blue Coke ad Diet Coke.
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