Identifying the best strategy is very important but most critical task for every company. The future of a company depends on the quality of the strategy that the management takes at present. This study aims to identify the best strategy for Coca Cola that can enhance the sustainability of the company during 2027. In order to develop the best strategy, the study analyzes the current situation of the industry, current strategies that the company has taken, the internal and external factors and the strategic implementation and control issues. After analyzing the overall situation of the company, the future strategies are developed and recommended.
Coca Cola started its business in United States in the year of 1886 (Coca-colacompany.com 2017). Currently, the business of the company is spread in most of the countries in the world. The company started its business in Singapore in 1936. Presently, Coca Cola is one of the most famous brands in the international soft drinks industry (Coca-colacompany.com 2017).
The mission of the company is to revive the spirit, mind and body of the people and to inspire every moment of life by creating more value to the customers and making a difference (Coca-colacompany.com 2017).
The vision of the company is achieving the mission by setting proper goals that will help the company maximizing its production and revenue, building better relationship with its customers and partners and making the brand as the most preferred brand in the international market (Coca-colacompany.com 2017).
The strategic objectives of the company are as follows:
The mission, vision and strategic objectives of Coca Cola mentioned above are indicating that the primary goal of the company is to improve its financial performance by encouraging the employees to provide better products and services to the customers. The management of the company will follow this aim in the future years also. Therefore, in 2027, the company will also follow this primary goal and to achieve this goal, the company will apply the follow set of strategies:
Coca Cola operates its business in the international soft drinks industry. If the current situation of the international soft drinks industry is analyzed, it can be identified that the soft drinks manufacturing companies are trying to produce the soft drinks with new taste and flavor. The market value of the global soft drinks industry has increased day-by-day. In the year 2004, the total market value of global soft drinks industry was $307.2 billion, which increased to $367.1 billion in 2009 (Csbsju.edu 2017). If the comparison is made among the soft drinks companies, it can be identified that Coca Cola is the highest performing company in the international market. The market share of the company is 50% (Coca-colacompany.com 2017). This means, there is a strong market position of Coca Cola and if the company can maintain its performance standard, then the company will be able to achieve more market share during 2027. The set of strategies mentioned in the above for 2027, will help the company attracting more customers in the future financial years.
In case of Singapore, the performance of the soft drinks industry is also very good. The industry specialists are stating that till the end of 2019, the soft drinks industry will grow further in Singapore (Wilson and Wilson 2017). The industry report says that with 2025, the soft drinks manufacturers will bring more low calories soft drinks in Singapore. As per 2027’s business strategies, Coca Cola is also planning to bring some new products, which will include low calories. The demand for the soft drinks is always at high level in Singapore. There is high competition between Coca Cola and PepsiCo (Csbsju.edu 2017). Both of these two companies are now focusing on the packaged drinking water. The companies are now planning to introduce flavored packaged drinking water. In case of packaged drinking water segment, the total market share of Coca Cola and PepsiCo is 13% (Csbsju.edu 2017). It is also one of the major strategies of Coca Cola for 2027 to focus more on the sales of drinking water. Therefore, it can be expected that the sales of the drinking water of Coca Cola will increase more during 2027. However, in comparison to other soft drinks, the sale of soda water has decreased in the recent scenario. However, the sales of soft drinks segments have increased from the past days. Therefore, in this industry, Coca Cola has better future. However, the management of the company will require maintaining the key success factors. The key success factors of the company are as follows:
Therefore, while preparing the new strategy for the future, the management of the Coca Cola must consider the key success factors and must try to improve the key success factors more, so that the company can improve its performance standard.
Coca Cola has achieved high level of success by taking right strategies at right time. The past performance standards of the company has proved that the strategies taken by the company at corporate and business levels were much effective. Currently, the company is focusing mainly on five corporate and business strategies and these are as follows:
If the current strategies of Coca Cola are compared with the future set of strategies, then it can be identified that the future strategies (strategies in 2027) are influenced from the current strategies of the business. For example, the current strategy of the company is improving the efficiency level of the employees and during 2027, the strategy of the company will be improving the performance level of the company through high-standard training sessions and motivating the employees through better reward schemes. Similarly, current strategy of the company is refocusing on the core business model, which will also be part of strategy during 2027. In 2027, the company will take the strategy to build and maintain the relationship with customers and other stakeholders, which is the main factor of the core business model of Coca Cola. The 2027’s strategy of introducing more low calories products and increasing the sales of packaged drinking water is also influenced by the current strategy of focusing on revenue and profit growth.
The future planning of a company depends on several internal and external factors. Hence, before taking any future decision or planning for future, the management of the company must analyze the internal and external factors that can affect the business of the company. This is also applicable in case of Coca Cola. The internal and external factors of Coca Cola can be analyzed by identifying the core competencies of the company, analyzing the current capability of the company and conducting environmental scanning.
Identifying the core competencies of Coca Cola:
The core competencies of the Coca Cola are in its product variance. The company has wide range of products and in comparison to the other companies in the international soft drinks sector; Coca Cola has highest product range (Coca-colacompany.com 2017). This particular core competency of the company will be stronger in 2027, when the company will implement the strategy of introducing new low calories products. Apart from the product range, the pricing strategy is another core competency of Coca Cola. The price range of the products of Coca Cola is much low, which helped the company expanding its market. Due to this core competency, it will be easier for the company implementing or following the strategy of increasing the sales of packaged drinking water during 2027.
Analyzing the current capabilities:
Current production capacity of Coca Cola is increasing in the markets of Singapore and Indonesia. The company has opened new production lines in Indonesia and Singapore. The company has invested more than $1 billion in the production lines in these two countries (Coca-colacompany.com 2017). The company has also invested much fund in the production units in other countries. The current capabilities of the company will help implementing the strategy of introducing new reward schemes and arranging high-standard training sessions for employees during 2027.
Environment scanning:
Internal environment scanning – The internal environment of the company needs to be scanned for analyzing the internal factors of the company. SWOT analysis is the best tool for the internal environment scanning of the company. The SWOT analysis of Coca Cola is shown below:
|
Strengths · Wide product range · Strong financial health · High brand image · High market share · Efficient employees · Low price range · Strong distribution channel |
Weaknesses · Employee-management conflicts at high level · High waste level · Low quality water management · Less number of healthy beverages |
|
Opportunities · High demand in the existing market · High demand for the packaged drinking water in every country · High supply chain improvement opportunity |
Threats · High level of competition in the market · High price of the raw materials |
Table 1: SWOT analysis
(Source: Coca-colacompany.com 2017)
From the above SWOT analysis, it can be stated that the internal environment of the company is more or less stable. The company has several strengths, though there are some weaknesses also. In future, the company must try to grab the market opportunities, so that it can enhance its strengths more. Stable internal environment will help Coca Cola implementing the new strategies in 2027.
External environment scanning – The external environment of Coca Cola can be scanned with the help of PESTLE analysis. The analysis is shown below:
|
Factors |
Current situations |
|
Political |
Politically, Singapore is a stable place, which is helpful for the business of Coca Cola. The government of the country is much supportive to the business organizations (Bbc.com 2017). |
|
Economic |
Economically, Singapore is a Wealthy area. The GDP growth rate in Singapore is 6.86% (Bbc.com 2017). The economic condition is much stable, which helps Coca Cola expanding its business more in Singapore. |
|
Social |
In Singapore, the society is multi-cultured. The people in the societies in Singapore are advanced and they are fond of healthy soft drinks. |
|
Technological |
Singapore is also technologically advanced. The advanced technological infrastructure helped Coca Cola operating its business successfully and maintains its distribution network (Bbc.com 2017). |
|
Legal |
In order to operate the business successfully in the market of Singapore, Coca Cola needs to maintain certain laws like, Industrial Relations Act 2016; Employment Act 1968 and others (Bbc.com 2017). |
|
Environmental |
The government and the people in Singapore are very conscious about the natural environment of the country. Therefore, Coca Cola must operate its business in such a way that does not affect the natural environment negatively. |
Table 2: PESTLE analysis
(Source: Bbc.com 2017)
The above PESTLE analysis is indicating that currently, the external environment of the company is favorable. The management of the company expects that the external environment of Coca Cola will be more or less same during 2027. However, there are chances that the political and social factors may change a bit, but the technological, economic, legal and environmental factors will be favorable during 2027.
The business of Coca Cola is much successful in different countries along with Singapore. However, during the long business life, the company has faced several issues in strategic implementation. At the same time, the company has faced several issues related to the business control (Halder, Ganguly and Singh 2016). Some of the major strategic implementation issues faced by the company are – conflict between the management and the employees, wide business coverage area and unavailability of resources (Gehani 2016). These are the three main strategic implementation issues that the management of Coca Cola is currently facing.
Due to the issue of conflict between the management and employees, the management faces difficulties not only to implement any particular strategy, but they also face difficulties to control the overall business of the company. However, this issue of the company can be solved in 2027 by implementing the strategy of new reward scheme and training session. The reward scheme will satisfy the employees’ needs and training will enhance their capabilities. The wide area coverage is another issue that the management of the company is facing currently (Austin and Gaither 2016). The business of Coca Cola is spread in most of the areas in Singapore and due to that, when the management implements any particular strategy, it becomes very difficult for them to implement the strategy at all over the area. The 2027’s strategy of building better relationship with the stakeholders will help the company handle this particular issue. On the other side, recently, the company is facing fresh water scarcity, due to which it cannot implement any advanced production strategy that requires more fresh water (Haydar et al. 2016).
If the overall business performance of Coca Cola is evaluated, it can be said that the business of the company is much successful in today’s business context. The external and internal working environments are favorable, which will help the company implementing the future strategies in a better way. However, due to the over expansion of the business, the management is facing control issues. At the same time, there is also conflict issue between the management and the employees. The conflict issue is affecting the business performance. On the other side, due to the fresh water scarcity and low quality of water management, the production of the company is hampered. However, the current issues of Coca Cola will be solved if the company properly implements the strategies in 2027.
In the above analysis, it has been identified that Coca Cola is facing some major issues, which are negatively affecting the performance of the company. However, the study has also identified that if the company implements the strategies of 2027 properly, then the current issues can be solved. In order to implement the strategies properly, the management can consider the following recommendations:
Conclusion
In this study, it has been identified that Coca Cola aims to provide better quality products to the people within the affordable price range. The company has strong brand image and high market growth opportunity, which provides more scope to the business growth of the company. The study has identified the 2027’s strategies of the company, which will include – bringing new products, increasing sales of packaged drinking water, introducing better training sessions and reward system and improving the relationship with stakeholders. However, recently, the company is facing some issues like, high employee-management conflict, resource scarcity and overall control issue. These issues of the company can be solved if the company implement the Total Quality Management system and divides the business into less number of functional areas.
Reference list:
Austin, L.L. and Gaither, B.M., 2016. Examining Public Response to Corporate Social Initiative Types: A Quantitative Content Analysis of Coca-Cola’s Social Media. Social Marketing Quarterly, 22(4), pp.290-306.
Bbc.com. 2017. BBC – Homepage. [online] Available at: https://www.bbc.com [Accessed 17 Feb. 2017].
Coca-cola.com.sg. 2017. Coca-Cola Singapore. [online] Available at: https://www.coca-cola.com.sg [Accessed 17 Feb. 2017].
Coca-colacompany.com. 2017. Coca-Cola Journey Homepage. [online] The Coca-Cola Company. Available at: https://www.coca-colacompany.com/ [Accessed 17 Feb. 2017].
Constantino-Toto, R.M. and Montero, D., 2016. Water Footprint of Bottled Drinks and Food Security. In Water, Food and Welfare (pp. 229-239). Springer International Publishing.
Corea, G., 2016. Global value chain: the Coca-Cola system.
Csbsju.edu. 2017. College of Saint Benedict & Saint John’s University. [online] Available at: https://www.csbsju.edu [Accessed 17 Feb. 2017].
Gaither, B.M. and Austin, L., 2016. Campaign and corporate goals in conflict: Exploring company-issue congruence through a content analysis of Coca-Cola’s twitter feed. Public Relations Review, 42(4), pp.698-709.
Gehani, R.R., 2016. Corporate Brand Value Shifting from Identity to Innovation Capability: from Coca-Cola to Apple. Journal of technology management & innovation, 11(3), pp.11-20.
Halder, S., Ganguly, D. and Singh, V.P., 2016. Design Process and Its Application on the Improvement (Re-Design) of the Coke Bottle. International Journal of Advanced Packaging Technology, 4(1), pp.pp-185.
Hansen, J.T., 2016. Constructing a Product Brand Identity: The Case of Coca-Cola.
Haydar, S., Hussain, G., Nadeem, O., Aziz, J.A., Bari, A.J. and Asif, M., 2016. Water Conservation Initiatives and Performance Evaluation of Wastewater Treatment Facility in a Local Beverage Industry in Lahore. Pakistan Journal of Engineering and Applied Sciences.
Parekh, A., 2016. Journey of Sustainable Development by Private Sector Actors. In Water Security, Climate Change and Sustainable Development (pp. 137-153). Springer Singapore.
Wilson, R.E. and Wilson, R.E., 2017. Coca-Cola Amatil: A Bottler Recharging Growth With Energy Drinks. Kellogg School of Management Cases, pp.1-15.
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