The case is addressing the commitments the company has in being accountable for 50% of the total sales of products with low calories by 2020 (Koch, 2016). The health condition of the customers is another symptom the case is concerned with. Cases such as those of Prairie Health services Clinic (Richard Ivey School of Business 2011). This is due to the decrease in sales by soft drink companies due to the introduction of new products with low health effects. Government intervention in reducing obesity is also another factor the case is focusing on. This led to the launching of coke life which has been sweetened using stevia leaf extracts which is a substitute for sugar. This has helped in the control of obesity due to the low calorie levels in the drink. Concerns about the company’s revenues, earning estimations, gross profit and total sales are also another symptom for the case.
Definition of the problem
iii) Concerns about consumer preferences and the concern about health effects by the company’s products.
Fighting the weakening consumer trend and keeping brand positioning intact
Coca-cola Company is the top market leader in the beverage world. By launching the product Coke life, the company used this as a measure to satisfy the growing health concern around the world. The product launch was also as a result of changing consumer tastes. This was a measure by the company to have a larger market share control. Coke has a huge influence in our lives and parenthood. People have felt to be part of it hence accepting it in the market which in turn influences the consumer market of Coca-cola products.
Concerns about the company’s revenues, gross profit, estimated earnings and total sales
Due to the weakening consumer trend the company’s earnings have been greatly affected as in the case of Prairie Health Services Clinic. Low sales have led to lesser earnings and a decrease in the gross profit margin.
Concerns about consumer preferences and the concern about health effects of the company’s products
Coca-cola Company (TCCC) launched coke life due to the rising intervention by the government and industry to strategies to reduce obesity. The use of Stevia leaves which is a low calorie product extract has had a big role in this. This has been equipped to meet the direct consumer needs.
Strategies by the Company to control over 50% of the total sales of low calorie beverage
Due to the rise of consumer change in preference, Coca-cola Company (TCCC) launched the product coke life to its product mix. This is a low calorie coke product which was meant to meet increasing consumer wants (Kenneth protect Quality Management 2016). Despite all these efforts the product still faces critics as a healthy product.
Despite of the efforts by the company to launch the product coke life, which is an aerated low calorie product, scientists argue that the product is unhealthy for consumption. Despite of these critics the company’s brand position and market power has helped it fend off these allegations. Despite of the efforts by competitors, coca-cola company still stands out as giant controller in the product market. Products from these companies had a decrease in sales. This shows that Coca-Cola Company is still a giant leader in healthy products.
Brainstorm solutions
iii) The company should focus on producing healthy products for the next several years for healthy generation and market.
Pros and Cons
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Solution 1 |
Solution2 |
Solution3 |
Solution4 |
Solution5 |
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Pros -positive image on the company’s brand. -forcing competitors to adopt their ways of production. -increases the market share of the company. |
Pros -People with health problems will consume the product. -Many promotions will improve the demand of the products. -Non-consumers of coke products will be maintained as customers through these products. |
Pros -Good health to the esteemed customers of the new products. |
Pros -Competitors will be forced to adopt the means the company is using -Acquisition of a larger market share by the company. -Achievement of the 50% market share control. |
Pros -Alteration of the market consumption of CSD products. |
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Cons -Further health critics from scientists. |
Cons -I will be difficult for the new products to maintain the reputation built by the new products |
Cons -Company revenues will be shattered. |
Cons -Further health critics because the negative coke life still contains a lot of sugar despite of the source. |
Cons -This will result in damaging the DCC brand. |
The Company should focus on promoting coke life products as a healthy product
By promoting this product the sales of the company’s products will be increased. An increase in the sales will lead to more revenue and earnings for the company (Richard Ivey School of Business Foundation, 2011). This will result in an increased gross profit margin of the Coca-Cola Company. The CEO should set a meeting with senior stakeholders to come up with major decisions that will affect the courses of action.
Increased efforts on a line of healthy products
The cause of action will not only increase its sales but also create a market control force that will make it control a larger market share. A larger market share means more power in controlling the market share.
Producing healthy products the company will be assure of loyal customers
Having loyal customers mean the company will have some control in fending off its competitors. A healthy generation will prevent the government from imposing unfair laws in the business environment.
The company management has to evaluate the situation using software technology to enable them have adequate data. By improving innovation strategies in the Research and innovation department, more healthy products will be created. This will be done by the research experts in the company to come up with the best alternatives in the production line. This will increase the healthy product line hence increasing sales. The marketing department will come up with new ways to improve promotion of the new product. By conducting more promotions and advertisements by the marketing department, customers will be more informed about the products (Q1 2018 CocaCola European Partners PLC Earnings Call – Final, n.d.). Adequate information about the new products will influence the customer choices. This will directly affect the sales creating more market power for the company.
Some of the long term plans will include lowering the product prices by 0.09%.Reduction in prices will attract customers over time. Within a period of ten years more customers will love the new line of products, due to the reduced prices there will be higher demand and loyalty. After ten years the market share of the company in the healthy products will be around 57%, after attaining this power normal prices will be restored reducing the market share to around 49.97.In the long run control of half of the market share will have been attained.
Conclusion
Research and innovation is one of the major pillars of most powerful company’s in the world. Through innovation new products have been developed leading to intense competition in the product market. Coca-cola Company is among the leading giants in the beverage industry. Adequate planning, research and innovation is one of the key factors that has enabled the company to fend off completion. Companies such as Pepsi have been unable to offer coca-cola company due to the advanced strategies in innovation and research. Market strategies by the company have also had a major impact on the amount of sales due to customer attraction.
An increase in the market share means the company is acquiring more power control both the market environment and economy control. Increased sales means the company will have higher earnings and in turn larger gross profit margins. More profits lead to more investment in innovation and research. Due to this the company will strive at meeting consumer desires such as producing healthy products. Adopting new products in the market will provide much competition to similar companies.
Reduction in prices will increase the company’s sales due to the increase in the demand of the new products. Increase in demand is a huge benefit to the company due to increased profits. Increase in the number of sales means there is an increased number of customers for the product (Suddath & Stanford, 2014). More customers imply that the company has some influence in the control of the market share. More influence leads to more power in the competition environment.
Reference
Invest or Take A venture Capitalists Ethical Dilemma, 9B16M057 (2016).
Mishra, P., & Sharma, P. (2014). Green Marketing: Challenges and Opportunities for Business. BVIMR Management Edge, 7(1), 78–86.
Monica, S. (2016). Coca-Cola Goes Green: The Launch of Coke Life. Ivey Publication
Murninghan, M. (2018). Corporate Civic Responsibility and the Ownership Agenda: Investing in the Public Good (1994). New England Journal of Public Policy, 30(1), 1–30.
Karnani, A., McFerran, B., & Mukhopadhyay, A. (2014). Leanwashing: A HIDDEN FACTOR IN THE OBESITY CRISIS. California Management Review, 56(4), 5–30.
Kenneth H., R. (n.d.). Project Quality Management: Why, What and How. USA: J. Ross Publishing, Inc.
Koch, M. (2016). Coca-Cola Goes Green: The Launch of Coke Life. Ivey Publication.
Q1 2018 CocaCola European Partners PLC Earnings Call – Final. (n.d.). Fair Disclosure Wire (Quarterly Earnings Reports).
Richard Ivey School of Business Foundation (2011): CEO-Decision Making at Prairie Health Services
Suddath, C., & Stanford, D. (2014). Coke Is Ready To Talk About Its Problem. (cover story). Bloomberg Businessweek, (4389), 38–43.
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