LSME 501: Coca-Cola's Strategic Management and Competitive Advantage

This essay provides a comprehensive analysis of Coca-Cola's strategic management, focusing on its long-term planning decisions and how they contribute to its competitive advantage. The essay examines Coca-Cola's international differentiation strategy, branding efforts, and cost leadership to maintain its market position. It explores strategic choices based on Porter's Generic Strategies, including cost leadership and differentiation, and applies the Ansoff Matrix to evaluate market penetration, product development, and diversification strategies. The report discusses how Coca-Cola adapts its marketing strategies to suit different cultures and market segments, ensuring its continued success in both global and international markets. The analysis highlights the importance of branding, cost leadership, and strategic decision-making for sustainable success in a dynamic global business environment, providing insights into how Coca-Cola has successfully navigated various market challenges and opportunities.

Strategic Management

Table of Contents
INTRODUCTION...........................................................................................................................3
Main Body.......................................................................................................................................3
Long term planning decisions of Coca-Cola in relation to its competitive advantage................3
Strategic choice decision in the light of the competitive advantage............................................5
CONCLUSION................................................................................................................................7
REFERENCES................................................................................................................................8

INTRODUCTION
Strategic management refers to ongoing planning, monitoring, analysis and assessment of
all important requirements that organisation requires in order meeting goals and objectives of the
organisation. Strategic management requires organisations to develop strategies on the basis of
analysis and scanning and related market and environment in which business operates. Strategic
management also play important role in successful competitive advantage of the company. This
report will assess long term planning decision of Coco-Cola in relation to competitive advantage
and will also involve strategic decision in light of competitive advantage. Coco-Cola is a
carbonated soft drink manufacturer, company was founded in 1886 in United States. Presently
company operates in more than 200 countries and sells more than 400 brands.
Main Body
Long term planning decisions of Coca-Cola in relation to its competitive advantage
In its long term planning company has adopted and implemented different decisions in
different countries. In order to maintain competitive advantage Coco-Cola has adopted several
strategies and market share and market position of Coco-Cola justify this. Coco-Cola has taken
different strategies in which company adopted policy of Think Global, Act Local. This means
that company has adopted an international differentiation strategy in which offerings of Coco-
Cola differentiate on the basis of country in which it operates and also on the basis (Cheptegei
and Yabs, 2016). This means that different variants of Coco-Cola are available on the basis of
country of operations. In its international differentiation strategy Coco-Cola has maintained
strong focus on branding and cost leadership. Branding plays a significant role in long term
success of the company specifically when company operates in international market. Branding
helps creating an image and linking its value with it and on the basis of this it becomes easier to
attract customers. This also involves confirming credibility of the company and image created of
a product in one country also is helpful for it in gaining success in other countries. Especially in
present times where it has become very easy to communicate and sharing of information
throughout the world. Branding is also effective as a competitive advantage because image of a
brand also help it in attracting customers when company offers new product to attract customers

from different segments of market. This means that existing image of the Coco-Cola helped it in
attracting customers for diet Coke and because of this, diet coke is highest selling diet drink in
world. In its long term planning and differentiation strategy Coco-Cola also involved cost
leadership, it has two types of benefits one company can offer its product at low cost and then
also can earn high margin on its products making significant profits (Štofová and Kopčáková,
2020). In long term planning and competitive advantage cost leadership is very effective. This is
because cost leadership is very effective in attracting more customers and gaining big market
share because products that are of higher price attract and gain limited market share. In its long
term planning decisions through its branding activities Coco-Cola is one of the highest
recognised trade-mark in world and because of this around 94% of world’ populations known
Coco-Cola. This is very important for long term success and competitive advantage of the
company. This means that significant impact that Coco-Cola had on was image, quality and
being affordable. This means that Coco-Cola involved all the key elements that affect buying
decisions of customers. This means that Coco-Cola can be used by those who focus on quality,
by those being influenced by cost and those who gets influenced by image of the product. This
means for lower, for lower middle, for higher middle and for high class customers Coco-Cola is
a suitable product.
In its long planning decisions company also focused on strategies that are joint venture,
merger and acquisition (Grgić, 2020). This means that in order to expand its business in
international market and to ensure its success company has undertaken several joint venture,
merger and acquisition. This allowed Coco-Cola to gain market share and company also
collaborated with brands that are successful in their home markets and then did not change its
identity. This means that company ensured that brands that it acquire are marketed on their brand
name . This allowed company to retain existing customers and brand value of the company
because of which it became successful in its domestic market. However, Coco-Cola has takes
right decisions in its long term planning for both international marketing and also in its global
marketing. Global market involves overall market of the company in which standardised
products are offered by organisation. Standardisation involves offering similar products in
domestic and foreign markets. International marketing is related to different market segments
that are targeted by the company and considering their differences rather than focusing on single
market. Coco-Cola has implemented both these strategies in which in many of the markets Coco-

Cola offered similar products and in some of the markets company made difference in name of
the product (Deshpande and et.al., 2020). Change in name of the product is aimed at making of
more familiar for local customers of the foreign market and attracting customers because of local
element associated with the brand. This is also done because of the culture differences in market
this means that in certain market it is easy to sell products of foreign countries however it is not
same in some other countries. In its long term planning strategy and long term competitive
advantage company focused on maintaining its cost leadership by creating standardised
marketing strategy together with cross-culture marketing strategy. This means that Coco-Cola
did not changed its product and taste but what it changed was name of product and because of
this company planned standardised marketing strategy with cross-culture marketing strategy.
To ensure success of international marketing strategy company also focus o effective
understanding of the local culture of international markets. Along with this, in its promotional
campaign company focuses on connecting Coco-Cola and its products with local culture and
important elements of local culture. This strategy has played a significant role in success of
Coco-Cola and its long term competitive advantage. This means that in its long term planning
decisions Coco-Cola focused on different aspects of its global and international marketing and
success and how it can maintain its competitive advantage (Singaram and et.al., 2019). As above
discussion and analysis of case study in its long term planning decisions Coco-Cola has focused
on and adopted every strategy, this involves cost leadership, differentiation and other strategies
for its sustainable success in international market.
Strategic choice decision in the light of the competitive advantage
Strategic choice directions available on the basis of competitive advantage are on the
basis of Porter’s Generic strategies.

Figure 1 Porter's Generic Strategies
This model outlines four strategies based on market and source of competitive advantage. On the
basis of this strategic directions available to Coco-Cola are as follows-
Cost leadership strategy- This is a strategy in which cost of company remains lowest in
industry and this provides benefit in form of lowers prices. Low prices of products help
companies in attracting more customers and increasing their market share. Another benefit of
this is high profit margin (Islami, Mustafa and Latkovikj, 2020). This means that companies can
have high profit margin for the product that they are selling to customers. Competitive advantage
in this strategy is cost and Coco-Cola has adopted this strategy and this strategy has played an
important role in success of Coco-Cola.
Differentiation strategy- This is another strategy in which company ensures that product that
they are offering to customers is different from their competitors and also provides differentiated
and unique value to customers. This means that offering something that competitors do not
provide and something that they cannot provide. This strategy also offers several benefits. This
means that company can charge premium and higher prices for the product that are developed on
differentiation strategy.
Differentiation focus- This is strategy that is similar to differentiation strategy however key
element that differentiate both these strategies is focus of organisation in terms of customers and

market that they are serving (Omsa, Abdullah and Jamali, 2017). This means that in
Differentiation strategy focus of organisation is limited to one or few segments in which
differentiated products are offered by organisation.
Cost focus- This is a strategy that is similar to cost leadership strategy. In this strategy company
offers advantage of cost leadership from a certain market segment. This means that only certain
segments or one segment of the market is provided product at low prices. For example- specific
foreign country market that Coca-Cola targets will be offered products at low prices compared to
all other market segments and international market.
From the strategies discussed above Coca-Cola can adopt Differentiation leadership
strategy. This is because differentiation becomes basis for premium price of the product (Viltard,
2017). Coca-Cola because speed cost- leadership strategy it can create differentiated products on
the basis of which it can charge premium prices from customers.
Ansoff Matrix
Figure 2 Ansoff Matrix

This is another model providing strategic directions for the company. Strategies in this model are
based on market and products and their existence. Strategies that Coca-Cola can adopt are as
follows-
Market penetration- This is first strategy in this model. This strategy involves existing market
send existing product. This means that company in this strategy merely focus on increasing sale,
customers and target market of the company (Sukma, Lubis and Utami, 2019). This strategy
involved least risk but success if this strategy is also for short time. This requires company to
focus on promotional efforts and company can utilize strategies like price variation and sales
promotion.
Market Development- This is another strategy and this strategy is based on development of
market. This means that when company adopt this strategy, it will require to identify market in
which it can sale its existing products. This requires company to identity market that is similar to
its existing market in order to ensure success of existing product in new market. This strategy is
highly suitable for the organisations that have utilized limited market from the market that is
available to organisation to gain market share in. In relation with suitability of this strategy for
Coca-Cola company has significant existence in market and because of this scope of successful
market share is limited for the company. Competitive advantage in this is market existence of the
brand and feasibility and availability of the company’s product.
Product Development- This is another strategy that Coca-Cola can utilize and this strategy
focus on development of products that can be offered in existing market of the company. Product
development is suitable when offerings of the company are limited. This is also useful when
company is offering limited products from long time (Loredana, 2017). This is also useful when
company has utilized major portion of market and in order to increase market share it required
focusing on fulfilling different requirements of customers. Coca-Cola has several product
offering and this make this strategy unsuitable for Coca-Cola.
Diversification- This is another strategic direction for the company. This involves developing
new market send developing new products to offer in new market. Company requires to make
significant investment in this strategy and this is why risk involved in this is also high compared
to all other strategies.

On the basis of this model Coca-Cola can adopt and implement diversification strategy.
This is because company has several markets and also large number of products are being
offered by Coca-Cola. This is why diversification is a suitable and appropriate strategy for
company.
CONCLUSION
On the basis of above discussion it can be concluded that long term planning of Coca
Cola has been very successful full stop success of this planning is visible through success of
Organisation in domestic as well as global market. Because of long term planning of Coca Cola
company has gained significant market share. On the basis of existing Strategies and long term
planning of Coca Cola strategic directions available to company involve differentiation focus and
diversification. This is because there in its existing market Coca-Cola had gained significant
share and intense competition can make it difficult to increase it.

REFERENCES
Books and Journals
Cheptegei, D.K. and Yabs, J., 2016. Foreign market entry strategies used by multinational
corporations in Kenya: A case of Coca Cola Kenya Ltd. European Journal of
Business and Strategic Management. 1(2). pp.71-85.
Deshpande, A and et.al., 2020. Influence of Strategic Branding in Soft Drink Market in Indian
and Malaysian Context: Study on Coca Cola to remain Top of the Mind Brand
(TOMB). Asia Pacific Journal of Management and Education. 3(1). pp.82-93.
Grgić, J., 2020. Coca-Cola internationalization strategies (Doctoral dissertation, University of
Zagreb. Faculty of Economics and Business. Department of International
Economics.).
Islami, X., Mustafa, N. and Latkovikj, M.T., 2020. Linking Porter’s generic strategies to firm
performance. Future Business Journal. 6(1). p.3.

Loredana, E.M., 2017. The use of Ansoff matrix in the field of business. Annals-Economy
Series. 2. pp.141-149.
Omsa, S., Abdullah, I.H. and Jamali, H., 2017. Five competitive forces model and the
implementation of Porter’s generic strategies to gain firm performances.
Singaram, R and et.al.,2019. Coca Cola: A study on the marketing strategies for millenniums
focusing on India. IJARD. ISSN, pp.2455-4030.
Štofová, L. and Kopčáková, J., 2020. The Competition Strategy between Coca-Cola vs. Pepsi
Company. Calitatea. 21(179). pp.40-46.
Sukma, D., Lubis, P.H. and Utami, S., 2019. Analysis of Marketing Strategy of Minyeuk Pret
Using STP, Ansoff Matrix, and Marketing Mix.
Viltard, L.A., 2017. Strategic mistakes (AVOIDABLE): the topicality of Michel Porter’s generic
strategies. Independent Journal of Management & Production. 8(2). pp.474-497.