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Strategic Analysis - Assignment

   

Added on  2021-06-18

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Running Head: STRATEGIC ANALYSIS 1Current Strategic Situation of Coca-Cola CompanyNameInstitution

STRATEGIC ANALYSIS2Current Strategic Situation of Coca-Cola CompanyCoca-Cola is a multinational company that was established in 1886. Since then, the company has been of the major seller of non-alcoholic beverage drinks, carbonated in particular. The company has long-standing history of using pricing strategies, extensive advertisements, and franchising model to sustain competition and improve its sales revenue (Fioleni, 2015). This critically analyses the current strategic actions that Coca-Cola has been utilizing to gain competitive edge over its rivals. The paper also provides overview on the challenges the company has been facing as well as the alternative strategy to improve performance. Currently, Coca Cola strategic actions sit on a five-legged stool of increasing profit growth, increasing brand marketing, enhancing efficiency, simplifying the company, and refocusing on the core business models (Coca-Cola Company, 2016). With markets in over 200 countries, the company play a significant role in growth plans. In order to drive revenue and profit growth, Coca Cola has adopted a number of tactics. First, the company employs segmented revenue growth strategies based on the market type. The company also aligns employee incentives adequately in order to improve employee satisfaction. In addition, the company has recently been focusing on the emerging markets by increasing volumes, keeping their products affordable, and building strong foundation for future success. In developed countries, the company relies price/mix and manufacturing of “small and more premium packages” like aluminium and glass bottles (Coca-Cola Company, 2016). The Company’s strategy to segment markets is an ideal approach since it has the efficacy to drive revenue growth. Statistics show that the company recorded a 4-percent increment of revenue in 2015 and overall increase in value share due increased price/mix strategy (Coca-Cola Company, 2016).

STRATEGIC ANALYSIS3Additionally, Coca-Cola Company has invested substantial amount in branding and business. According to Rieger et al (2016, p.62), healthy business growth necessitates continuous investment. Coca-Cola has ostensibly maximized media advertisement, in terms of quality and quantity. In 2016, the company spent at “more than $250 million” in media advertisement— in pursuit of developing impactful ads (Coca-Cola Company, 2016). Besides, Coca-Cola has invested substantial amount in expanding beverage portfolio. The company has also forged alliance with Monster Beverage Corporation as a way of improve itsposition in energy drinks category (Coca-Cola Company, 2016). According to Ferrarese (2017, p.21), multinational companies form strategic alliances in order to sustain competition,expand their market share, and penetrate new markets. To improve its brand, Coca-Cola has also increased manufacture of other products like premium organic cold-pressed juices and ultra-filtered milk. The company has also acquired other beverage companies, for instance, “China Green Culiangwang— a plant-based protein beverage brand” (Coca-Cola Company, 2016). Fitzroy et al (2011, p.153) observe that well-established companies can acquire other companies in the same industry to diversify its products, reduce competition from, and impose barrier to new entrants. From 2015, Coca-Cola has intensified global marketing of theCoke Trademark, Coke Zero, and Diet Coke. Since the launching of “Taste the Feeling” in 2016, the company has improved customer experience in refreshments and personal connections (Coca-Cola, 2016). On efficiency, Coca-Cola has been rebuilding growth momentum by increasing investment, marketing, and financial flexibility. The company has launched “zero-based work” criterion as a strategy to reduce cost (Coca-Cola, 2016). Zero-based work involves envisaging the business based on the notion that the organizational budget starts at zero and that it must be justified annually instead of carrying over the levels established in the previous year. The company has also reduced expenditure in non-media advertisements like

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