Question

What is the extent to which Coca-Cola, Inc. has "reimagined" itself and what exactly the company is doing and plans to do, in order to ameliorate the primary deficiencies of American Capitalism?

Answer 1

Coca Cola

Introduction:

Coca Cola is a leading brand in the soda industry and the arch rival of Pepsico. Today the company is reckoned to have the third most popular brand name, recognized by 94 percent of the world's population, and the company's $35.1 billion in revenue makes it the 84th largest economy in the world, just ahead of Costa Rica. It has 500 brands sold in more than 200 countries. The brand has a global network of bottlers and distributors who have helped it maintain its global presence. Its global network is a key strength that has enabled the company to manage its sales and distribution globally with efficiency.

Coca Cola has also managed a large, global and efficient supply chain. However, to achieve and sustain a leadership position in the highly competitive soda industry, it requires several sources of competitive advantage. In recent years, while the net revenues of the company have steadily declined, its global presence and its position in the soda industry has remained strong. The brand has sustained its focus upon marketing which is also a source of competitive advantage in the soda industry. This is a discussion of the resources and capabilities of Coca cola and how they have helped the brand build strong and sustainable competitive advantage.

Coca Cola – A Symbol of Entrepreneurial Capitalism

Coca-Cola has become a symbol of entrepreneurial capitalism. Originally Colonel Pemberton was looking for a way to wean himself off the morphine addiction he'd picked up after the American Civil War. He developed a medication containing carbonated water, coca leaves (a source of cocaine), and kola nuts (a source of caffeine). It was sold in soda fountains, but it was the business model of providing syrup to franchised bottlers that provided the basis of its success.

Its status as a symbol of capitalism, and indeed of America, is helped by the fact that it has made mistakes along the way and corrected them.

VRIO tool used to analyze the firm internal resource and capabilities to find out that they can be a source of sustained competitive advantage.

V- Value

R- Rarity

I – Imitability

O - Organisation

This tool is developed by BARNEY J.B, according to him, the resource must be valuable, rare, imperfectly imitable and non-sustainable

Valuable:
coca- cola resource considered valuable if they add value by enabling a firm to exploit opportunities or defend against threats. This is done by increasing differentiation and decreasing the price of the product. coca cola manages their brand image in global market and connects with people all over the world due to their different and unique taste. They had better sales and long reputation as the leader of the cola world. Coca-cola biggest formula is the biggest success and differentiates their product from the other beverage companies. They provide a different range of cola in at the different price and fulfil the customer needs.

Rare:
Coca-cola Resources can only be acquired by one or very few companies are considered rare. Rare and valuable resources grant temporary competitive advantage. Coca-cola competitive parity and differentiation strategy make them rare. When thinking about any soda drink coca cola is the first come in customer mind. This rarity company capabilities and resource persist over the long time period. In term of human resource management, Coca-cola is the head of all the other companies in soda industry and their marketing skills and high brand image make them rare which is far higher than that of a competitor and last their secret formula (different flavor) give the company highest success.

Costly to Imitate:
There is hundred generic cola in the market but the specific product of coke is not imitable due to cost asymmetric on its market. The company without resource and capabilities face significant cost disadvantage compared to a company that already possess them. The handful known the formula and has a long history of keeping it make the cola different and it impossible to imitate.

Organisation:
Cola company firm structure include company management and control system, compensation policies make the firm achieve the sustained competitive advantages. It plays role in differentiation because red signifies coke over the Pepsi blue.

Resources and Capabilities of Coca Cola

Global presence:

The business of Coca Cola spans more than 200 countries. The company makes its branded beverage products available to consumers across more than 200 countries and territories through its global network of bottling partners, distributors, wholesalers and retailers. Coca Cola owns the world’s largest beverage distribution network which also includes company owned or controlled bottling and distribution operations. More than 1.9 billion servings of Coca Cola are enjoyed by consumers throughout the world each day. To grow its global presence and brand recognition, Coca Cola continues to invest in marketing. The company has divided its business operations into the following segments :

• Europe, Middle East and Africa • Latin America • North America • Asia Pacific • Bottling Investments

It manages its business mainly on a geographic basis. The headquarters of Coca Cola are in Atlanta, Georgia, United States.

Supply chain:

Coca Cola has also managed a strong and global supply chain which supports its global manufacturing and distribution network. Its global supply chain leverages the size and scale of Coca Cola system to gain a competitive advantage. The company continues to assess the standards across its entire supply chain and update them as required.

The company also sources from a large number of farmers across the globe which are the primary suppliers of the agricultural ingredients for the production of Coca Cola beverages. The ingredients used for producing these beverages include a large number of agricultural products such as sugarcane, corn, sugar beets, citrus, coffee and tea. Water is also a key ingredient required for manufacturing Coca Cola products. To maintain consumer confidence in its products, the brand also invests a lot in quality and product safety. The company has formed a code of business conduct for its suppliers to maintain the quality standards down its supply chain. The role of its suppliers is vital to the continued business success of the brand.

Bottling and Distribution Network:

Coca Cola’s bottling and distribution network has also played a vital role in its success globally. Its large and global bottling and distribution network includes independent bottling partners and distributors, wholesalers, retailers as well as company owned or controlled bottling and distribution operations. Its strong and stable distribution system also helps it capture growth by manufacturing, distributing and selling existing as well as new Coca Cola products around the globe.

Marketing:

Marketing is also a key source of competitive advantage in the soda industry and a major driver of sales and revenue for the soda brands. Coca Cola is known for its great marketing strategy and promotional techniques. Marketing is one of the leading drivers of its growth and global expansion. Apart from investing in advertising and promotions through several channels including digital and traditional, the company also invests in CSR to manage its reputation.

Apart from digital marketing, the company uses social media channels for promotions and customer engagement. In 2018, it invested around $4.1 billion in marketing and promotions. Marketing helps Coca Cola strengthen its sustainable competitive advantage as well as retain sales and customers in a hyper competitive industry and market. The brand also runs seasonal campaigns from time to time to grow its popularity and the excitement surrounding the brand and its products.

Product Range and Quality:

Another important source of Coca Cola’s competitive advantage is its large and varied product range which Coca Cola has designed, keeping in mind the taste of the modern generation. In recent years, it has also released a large number of health friendly and low calorie beverages. A large product range is also a key driver of sales and revenue for Coca Cola. Coca Cola owns, markets and sells a large number of non-alcoholic beverages that include the following:

• Sparkling soft drinks: Coca-Cola, Diet Coke/Coca-Cola Light, Coca-Cola Zero Sugar, Fanta, Schweppes,* Sprite, Thums Up;
• Water, enhanced water and sports drinks: Aquarius, Dasani, glacéau smartwater, glacéau vitaminwater, Ice Dew, I LOHAS, Powerade;
• Juice, dairy and plant-based beverages: AdeS, Del Valle, innocent, Minute Maid, Minute Maid Pulpy, Simply, ZICO; and
• Tea and coffee: Ayataka, Costa, FUZE TEA, Georgia, Gold Peak, Honest Tea.

Human resource management:

Another important source of competitive advantage for the Coca Cola brand is its excellent human resource management. The company has maintained a heavy focus on managing its people strategically. As of 2018, Coca Cola employed 62,600 people of which 11,400 were employed in the United States. The company apart from paying good salaries, has also made attractive benefits including financial and non financial available to its employees throughout the world.

Moreover, it spends a large sum each year on the training and development of its people. Coca Cola has an excellent performance management system in place to manage the performance of its employees worldwide. It is using digital tools for the training and development of its employees and has also implemented several training and exchange programs. Inside the organization, Coca Cola has maintained an environment of continuous learning and a culture that fosters diversity and inclusion.

Distinctive Competency of Coca-Cola:

Distinctive Competency Coca-Cola is the result of a patent medicine formulated in a small southern pharmacy over a hundred years ago. It has grown into a multibillion dollar international company. It also owns one of the most valuable brands in the world. Their Coca-Cola banner has won the world’s top brand 13 times on brand c-consulting firm Interbrand’s annual list. In addition to its main product, Coke, the company owns over 3500 beverages. One of its core competencies is brand building. They have built their brand to have respectability and dependability. Their brand and logo are recognized all around the globe. It has actually become a new known on almost all households worldwide. It has taken much more than simply the brand and product to grow Coca-Cola in the number one leader in the soft drink market.

Over the past 100 plus years, Coca-Cola has built a huge network of distribution and manufacturing networks. These collaborations that are superior to all others and all types of relationships are a distinctive competency for Coca-Cola. The way that they organize and plan their contracts has proven to be extremely successful and continues to keep Coca-Cola at the top of the market. They have been able to build relationships with suppliers, buyers, bottlers, manufactures, retailers and consumers that are strengthened by the degree of loyalty from both sides of these relationships. Their diversity workplace strategy includes programs to attract, retain, and develop diverse talent; provide support systems for groups with diverse backgrounds; and educate all associates so that we master the skills to achieve sustainable growth. Their diversity workplace strategy includes programs to attract, retain, and develop diverse talent; provide support systems for groups with diverse backgrounds; and educate all associates so that we master the skills to achieve sustainable growth.

Future of Coca Cola:

Coca Cola plans include focusing on growing smaller-sized packages and no-calorie sparkling beverages. In the latest quarter, smaller package production grew nearly 10 percent in volume, while no-calorie colas saw accelerated growth in the second half of the year.

Globally, have been driving Coca-Cola Zero Sugar with graphic changes, with formula changes and that’s starting to build global momentum. There’s a future for no calorie.

Conclusion :

Coca-Cola company is now the largest soft drink company in world. The company take pride in being a world most business that is always local. Through analysis of Coca-Cola resource and capabilities, brand value is the most important resource to the sustained competitive advanatage in order to ameliorate the primary deficiencies of American Capitalism.