Coca-Cola's Competitive Advantage

This assignment examines how Coca-Cola, a global leader in the soft drinks market, achieves competitive advantage. The essay analyzes strategies like lower selling prices due to economies of scale, aggressive advertising campaigns, corporate social responsibility activities, and acquisitions/partnerships with unique brands. It concludes by highlighting the importance of leveraging strengths and resources for sustainable competitive advantage.

Running head: COMPETITIVE ADVANTAGE 1
Competitive advantage.
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COMPETITIVE ADVANTAGE 2
Every company strives to perform better than its competitors. This forces companies to
look for strategies that will enable the firm to be able to minimize the sales or business of the
other organizations. The strategies used give the company competitive advantage. Competitive
advantage refers strategy or leverage that the company possesses over the other companies in the
same sector (Schilke, 2014). Competitive advantage can be created through reduced costs, lower
prices, high quality products, and services, acquisition and partnerships with other firms,
aggressive advertising, and even supply chain management. This essay is written to show how
Coca-cola, which is in the soft drinks manufacturing sector is a global company can achieve
competitive advantage over the over firms in the same industry.
Coca-Cola Company can create competitive advantage through lower selling price. Being
a global company, this firm faces a lot of competition from various companies which produce
competing products. To be able to maintain their market share, coca cola can reduce the prices of
its products to sell more than the competitors (Hinterhuber, & Liozu, 2014). This is possible
because coca cola produces a lot of products and this enables it to enjoy economies of scale. This
helps to reduce the cost of production per product (Meihami, & Meihami, 2014). This can enable
them to sell their products at a reduced price than the competitors and this helps to maintain or
even increase the market share. The other firms will not be able to reduce their prices because
they do not enjoy economies of scale. If they reduce their prices, they will incur losses and close
down the companies.
Coca-cola can also create competitive advantage by conducting aggressive advertising
campaigns. Due to enormous resources that this firm has, it can decide to embark on the
advertising campaign that will make their products known all over the world. The advertisement

COMPETITIVE ADVANTAGE 3
will give the company a chance to highlight the company products’ strengths and quality and
why customers should purchase the products (Smith, 2014). Advertising will make customers
remember the products, and this will increase sales. The advertising campaign can be in the form
of road shows, television and radio adverts and even through sponsorships. The other companies
who cannot afford to do the aggressive campaigns will not be able to compete with Coca-cola,
and this will give coca cola an upper hand.
Coca-cola can also decide to engage in corporate social responsibilities (CSR) activities.
This a way of giving back to the society (Saeidi, et al.2015). Due to enormous resources than its
competitors, coca cola can sponsor a big event or tournament that will enable the company to be
known all over the world. During the event, the company will enjoy free advertising because the
company logos and brands will be displayed all over the place. The company can also decide to
sponsor needy children and even build sporting stadia. By doing so, the community will feel that
the company is helping the society and they will purchase the products to be associated with the
company. The other companies which cannot afford such sponsorships will not enjoy the
publicity, and they can even be eliminated from the business.
Due to high competition in this industry, coca cola can also create a competitive
advantage by acquiring or even forming partnerships with companies producing unique products
in this sector. The acquisition will enable coca cola to buy the other firm because it has the
needed resources to trigger the buyout clauses in various companies. This will reduce the
competition and also be in control of the unique products and this will increase its sales
(Zucchella, & Siano, 2014). Coca-cola also due to being a global company has branches all over
the world. This enables it to have efficient supply chain management. Due to this factor, it can
partner with unique brands and reduce the competition. This will enable it to reduce the

COMPETITIVE ADVANTAGE 4
competition and also be able to enjoy the benefits of the other firm because of the partnership
deal, and this creates a competitive advantage over the other firms which do not enjoy
acquisitions and partnership privileges.
In conclusion, for a company to have a competitive advantage, it must use its strengths
and unique aspects in the industry to have leverage over the other companies in the industry.
Competitive advantage enables a company to increase the market share, reduce the competition,
and increase its sales and revenue. It can be achieved through reduced prices, advertising,
corporate social responsibility activities and acquisitions and partnerships

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References
Hinterhuber, A., & Liozu, S. M. (2014). Is innovation in pricing your next source of competitive
advantage?. Business Horizons, 57(3), 413-423.
Meihami, B., & Meihami, H. (2014). Knowledge Management a way to gain a competitive
advantage in firms (evidence of manufacturing companies). International Letters of
Social and Humanistic Sciences, 3, 80-91.
Saeidi, S. P., Sofian, S., Saeidi, P., Saeidi, S. P., & Saaeidi, S. A. (2015). How does corporate
social responsibility contribute to firm financial performance? The mediating role of
competitive advantage, reputation, and customer satisfaction. Journal of Business
Research, 68(2), 341-350.
Schilke, O. (2014). On the contingent value of dynamic capabilities for competitive advantage:
The nonlinear moderating effect of environmental dynamism. Strategic Management
Journal, 35(2), 179-203.
Smith, N. C. (2014). Morality and the Market (Routledge Revivals): Consumer Pressure for
Corporate Accountability. Routledge.
Zucchella, A., & Siano, A. (2014). Internationalization and innovation as resources for SME
growth in foreign markets: a focus on textile and clothing firms in the Campania Region.
International Studies of Management & Organization, 44(1), 21-41.