LSME 501 Strategic Management: Coca-Cola's International Expansion

This case study examines Coca-Cola's international strategy, focusing on its growth strategies, market share, and global expansion. It highlights the company's strengths, such as brand awareness and distribution, alongside weaknesses like water resource management and limited product diversification. The analysis includes opportunities for diversification and threats from health-conscious competitors. The external environment's impact, including political, economic, social, technological, legal, and environmental factors, is assessed. The company's strategic evaluation framework is reviewed for its effectiveness in managing international growth, resource allocation, and objective achievement. The study concludes that while Coca-Cola effectively uses its growth strategy, it faces challenges related to sustainability and changing consumer preferences.

Strategic Management

Table of Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY...................................................................................................................................1
CONCLUSION................................................................................................................................5
REFERENCES................................................................................................................................6

INTRODUCTION
For the following case study Coca-cola has been taken into consideration. The company
was established in year 1892 and headquartered in Atlanta, Georgia. It is the worlds largest
beverage franchise with over 48% market share globally. The company operated in over 200
countries and produces more than 160 different types of beverages for its customers. The
following essay will consist of the international strategy and objectives of the company.
Moreover, it will focus on its internal and external analysis along with review of company's
success in international operations.
MAIN BODY
The coco-cola brand has established itself in international market not only by being the
most recognized beverage brand but also by utilizing effective business strategies (Alva and
Bhat ., 2018). The company is focused on implementing growth strategy in order to increase
their overall market share and acquire assets for their business to improve its products in the long
run. Moreover, this strategy enables them to increase their revenue. The company has used this
strategy to increase their market share in both domestic and internation market. The growth
strategy has assisted Coca-Cola to enter the internarial market in an effective manner as they
already have an established customer base due to their world wide recognition as a top non-
alcoholic beverage producer. This has resulted in gaining a loyal customers in various
international market along with increase in revenues. Moreover, the company and its
management focus on adopting efficient technology when entering international market in order
to reduce production impact on the surrounding regions natural resources as well as build a good
reputation in the international market. Moreover, in order to grow in the internation market the
company pays emphasis on fulfilling its social obligations in the new region to keep the citizens
satisfied and be able the supply their products in the new market without any social hindrances.
When entering a new internation market the company promotes franchises in the region
to boost not only their own product distribution system but encourage employment as well
(Blakeman ., 2018). This helps the company to increase its support in the new market and gain
popularity among the community, resulting in enhanced brand awareness and increase
profitability. The company is able to use the growth strategy to fulfil its objectives of being a
global business which focuses on ensuring they conduct all their social responsibility in an
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ethical manner and move towards sustainable growth. Moreover, they focus on objectives such
as simplicity through out their product line in the internation market to provide their customers
with the same product that is available world wide (Flynn and et. al., 2021). They have launch
various campaigns in over 50 countries to boost their international presence and provide their
customers with the ability to customize products in order to achieve the objective of increasing
personal engagement with customers. Furthermore, the company accomplishes its objective of
being know world wide by utilizing social media platforms in order to be current with its
customers and gain understanding of dynamic social trends.
Over the years since it establishment the company has developed various strengths, but one that
is its most valuable is their brand awareness. The company is one of the most widely recognized
brands in the world. It has a iconic signature logo and world-famous jingles which resonate with
consumers of all ages. The company has maintained a constant position in the top post in the
market as a clear cut winner in beverage industry. Moreover, the beverage producer has acquired
a central following of loyal customer, as many customers that refer themselves as the fans of
coco-cola products tend not to shift towards other brands. The company also possesses an
impeccable distribution system in order to deliver their products to more than 200 countries.
They have the ability to efficiently utilize self-owned as well as controlled distributors,
wholesalers and retailer to ensure their products reach their customers on time and are always
available. Moreover, this intricate system of distribution allows the company to efficiently
manage their cost along with the ability to rapidly introduce new products in the market and
saturate various geographical location which gives them a competitive advantage in the market.
On the contrary the company does have its weaknesses such as its inability to efficiently
manage water resources. Water is a main component for all beverage companies and vital for
the production of agricultural ingredients on which the company relies upon (Hope ., 2018).
Water is a limited resource in many parts of the world, facing unprecedented challenges from
overexploitation, as well as rising demand for food and other consumer and industrial products
that require water for their manufacturing processes. This has posed as weakness for the
company as these events increase the risk of pollution, poor management and effects stemming
from climate change which puts the company in the situation to either fulfil its social
responsibility or focus on earning profits. Moreover, the detrimental factor of water resources
can make the company incur higher cost or face capacity constrains that can adversely affects its
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profitability and net operations in the long run. Furthermore, the company lacks the element of
products diversification when compared to competitors such as Pepsi who have made a smart
move into the snack product segment (Koilada ., 2019). This weakness has resulted in Coca-cola
loosing a massive market share which could have been a good source of revenue for the
company. Although the company can use this weakness as an opportunity to diversify their
portfolio of products by acquiring other brands that can provide them the extra support that is
needed to compete with their competitors. The company can make the move into the energy
drink segment by establishing joint ventures with the top performing brands. This will allow the
company to establish relationship with a younger customer base how are oriented towards energy
and healthier drinks. Moreover, as the customer base increases and the trend shifts towards the
healthier lifestyle it can move towards bottled juice segment as well. This product differentiation
will allow the company to not only increase their overall profits and market share but at the same
time portray their brand in a positive light.
It is crucial for the company to utilize these opportunities as it faces threats form not
being able to establish themselves as a healthy beverage company. This shift in culture has made
their customers opt for beverages such as shakes and non-carbonated drinks for a healthier option
resulting in reduce in revenue for the company (Masciocchi ., 2019). The products offered by the
company contain high amount of sugar and artificial flavouring which have made their customers
concerned about their well-being. Moreover, the company has to encounter various brand who
offer health alternatives such as coffee shops, smoothie bars and juice centres. These brands even
offer their customers the ability to customize their beverage according to their taste which plays
as a disadvantage for the company. Furthermore, these various brands are able to offer their
products at a much cheaper price when compare to coca-cola.
The company external environment impacts its operations in a major manner such as
political environments force the company to follow certain rules and regulation of the the
country their want to supply their product to. For instance the trade ware between US and china
had negatively impacted their operations due to an increase in the cost on steel and aluminium
which are essential component for the company to products their ever popular soda cans. Unlike
political environment factors the economical environment has been much favourable to them as
customers are now being attracted to their low calorie diet coke and zero sugar products. The
change in the trend has enabled the company to ramp up its revenue an expects future revenue to
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be higher as the health concision trend is on the boom. Moreover, the brand is able to exploit its
social environment by launching attractive campaigns such as “shareacoke” which has proven
to be a major success among customers (Sahadeo ., 2018). The company has enabled its
customers to customize their beverage with their name resulting in increase in engagement rates.
This has encourages customers to find products with their name on it and share it on social media
which has connected the company to its customers at a personal level. This campaign has not
only increased their revenue with boosted their brand image as well.
The company has also pays emphasis ion its technological environment as they aim to
always be innovative and stay young and fresh by utilizing social media platforms and
encouraging their customers to visit their website to enjoy interactive games and events. These
events and games also help the company to gain valuable data about their customers and
preferences which can be used to develop future line of products. On the contrary, to all the
positive aspects the company has found itself in deep trouble due to external legal environment
as the company has faced various legal issues due to their low quality caffeine in their products
and being accused on not paying wages to their employees according to the rules and regulation
of the employment act. Moreover, the brand has also been accused of being racially
discriminatory towards its employees and producing products which have been falsely
mislabelled. The company has also been impacted by their external environment factors due to
backlash from various communities around the world that have pointed out that the company is
unethical in its water utilization which have resulted in a decrease in levels of fresh water
reserves in various regions (homas and Smith ., 2021). Moreover, they have also faced issues
regarding their overall carbon footprint. To over come these issue the company has started to
install solar panels to power their production units and focus on efficient water harvesting to
reduce their overall water consumption.
The company uses strategic evaluation framework to identify if their internation growth
strategy is functioning as the management intended. The framework enables them to allocate
adequate resources and utilize them efficiently in order to ensure all operation function at
appropriate cost. Moreover, it assists in anticipating the internal and external environmental
factors along with ensuring if their long-term and short-term objectives are being met (Xu .,
2020). The company is able to obtain crucial data about is production and by using this
framework and take corrective measures in order to keep its operation in the international
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market effective. Furthermore, it helps them to keep a track of their progress and assist in any
misalignment that may occur during the production and supply of their products. This further
enables them to detect any flaws in the strategy and aid in taking corrective measures to resolve
it. The strategic evaluation framework promotes the managers within the company to be
proactive in order to negate issues related to dynamic external environment in the international
market (Zavidna and et. al., 2019). Moreover, it enables the company to be consistent in its
performance and be able to set benchmark that evaluate not only their products but their strategy
of growth for the internal market.
CONCLUSION
From the above essay it is concluded, that the company is able to utilize its growth
strategy in an effective manner to capture the international market and increase its overall market
share. The company is able to use its strengths in an impressive manner to attract new customer
in the internation market and increase its overall revenue. On the contrary they do face various
issues regarding their weakness related to improper management of water resources and not
being able to establish themselves as a heath conscious brand. Moreover they face issues in
relation to their political, legal and environmental external factors and threats from health
oriented competitors which affect their overall operations. Although the company can negate
these threats if they focus on their potential opportunities which will enable them to not only
improve their domestic but international market functioning as well. The company is also able to
maintain optimal performance in the international market by utilizing strategic evaluation
framework. The frame work allows them to monitor their growth strategy and set necessary
benchmarks to keep their quality standards high. Moreover, it assists the company in the long run
to deal with any variance and take corrective actions to resolve them.
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REFERENCES
Books & Journals:
Alva, H. and Bhat, S., 2018. Accenture–Understanding Sustainable Business
Strategies. International Journal of Case Studies in Business, IT and Education
(IJCSBE), 2(1). pp.54-63.
Blakeman, R., 2018. Integrated marketing communication: creative strategy from idea to
implementation. Rowman & Littlefield.
Flynn and et. al., 2021. A strategic approach to improving pharmacy enterprise automation:
Development and initial application of the Autonomous Pharmacy
Framework. American Journal of Health-System Pharmacy, 78(7). pp.636-645.
Hope, A., 2018. Sustainable business model design: a review of tools for developing responsible
business models. Sustainable Business Models, pp.377-394.
Koilada, D. V. S. R. K., 2019. Strategic Spam Call Control and Fraud Management:
Transforming Global Communications. IEEE Engineering Management Review, 47(3).
pp.65-71.
Masciocchi, B., 2019. How to make a business plan. In Studies in Surface Science and
Catalysis (Vol. 179, pp. 465-484). Elsevier.
Sahadeo, C., 2018. Business Planning. In Financial Literacy and Money Script (pp. 231-248).
Palgrave Macmillan, Cham.
Thomas, C. K. and Smith, S. K., 2021. An internal company analysis of avalanche creative:
Toward enhancing business management in the creative design
industry. ITALIENISCH, 11(1). pp.143-154.
Xu, X., 2020. Compose the Business Plan. In Introduction to Entrepreneurship (pp. 139-163).
Springer, Singapore.
Zavidna and et. al., 2019. Strategy of innovative development as an element to activate
innovative activities of companies. Academy of Strategic Management Journal, 18(4).
pp.1-6.
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