The Global Nature of Coca-Cola - Research Paper Example

Challenges in the Global Business Environment – The Coca-Cola Company Introduction Coca Cola is an American multinationalbeverage corporation The Company’s flagship product is Coca Cola invented in 1886 by pharmacist John Stitch Permberton in Columbus Georgia. The founder of Coca Cola is John Pemberton. In 1980 it featured the memorable slogans coke is it catch the wave and can’t beat the feeling , In 2009 it campaigned as open the happiness. Marketers today look Coca Cola as a model of marketing power; its image has transcended the national borders and cultural barriers to reach everyone in the earth. Today coke is the most powerful brand and serves as an icon for most of the beverage industry. Coca Cola is a carbonated soft drinks sold in the shops, outlets, stores. Restaurants and vending machine sold throughout the world. A global leader in the beverage industry that offers hundreds of brands and focuses on the need of the customers, consumers and franchise partners, it pays attention on execution in the market place every day, Its winning culture defines the attitude, behaviors that will be required by the company to transform their vision into reality by 2020. Answer 1 The global nature of Coca Cola business requires that its system has the highest standards and processes for ensuring consistency in its product safety and quality, it can be found that the coca cola business focuses on each steps from concentrate production to bottling and product delivery. It measures the key product and package quality and attributes to ensure that the beverage products in the marketplace meet the Company requirements and consumer expectations. Consistency and reliability are critical to for product quality and for meeting global regulatory requirements and Company standards (The Coca-Cola Company, 2014). Structure of Business The Products that are being offered by Coca Cola Company are Diet Coke, Coke Zero, Thums-Up, Fanta, Sprite, Limca, Mazza, Pulpy Orange, Nimbu Fresh, and Kinley Water, Georgia Gold. It provides various types of drinks. It offers 3300 beverages. The reason for their success is that it believes in 3 key issues Brand Positioning, market share and packaging. It believes in “Me, We and World” that stands for people, communities and environment. It aspires to help people lead active, healthy lives by producing a wide variety of beverages, providing nutrition information and consumer health education and supporting physical activity programs. Answer 2 Coca Cola is targeting a wide sector and it is positioned in the mind of the people and it is targeting people of all generations while Pepsi is targeting the teenager but Coca-Cola mainly deals with and focuses on real taste while Pepsi focuses on celebrations, enthusiasm. The other competitor is Nestle which mainly focuses on baby foods. It is world leader for coffee (Nescafe), whereas coca cola is more famous for its cold drinks. Packaging Coca Cola is packaged in Red background with iconic coca cola writing, it color signifies classic great tasting soft drinks, refreshing Conversely Pepsi products are packaged in a can with their blue writing which the consumer perceives that the brand as the current and younger brand to consume. Nestle strives to ensure that all packaging including drinks packaging respects the environment. Market Share Coca Cola Company captured 25.9% of the market in beverage industry, Pepsi captured 11.5% of the market in beverage industry worldwide and Nestle captured 4 % of the market in beverage industry worldwide. According to the statistical survey conducted in the year 2012 on beverage industry. Coca Cola maintains a high level of innovation by keeping its brand fresh and relevant, the advertisement techniques are modified according to the needs of the customers. Answer 3 Coca Cola has a strong market share as compared to its competitors, Coca Cola deals with wide range of products with which it is easy for it acquire the wide market and gain customer loyalty. It also has a good distribution channel because of its wide demand for its product in the market. In the year 2011 it has been awarded as the best brand equity award, (Ferrell, 2008, pp.20-35). Potential positive aspects for PEPSI Pepsi has a diversified market it has not only focused on beverage industry but diversified into snacks segment like Kurkure, Lays etc. Pepsi is very successful in marketing and promoting its brands. Two Potential positive aspects for NESTLE are as follows. Nestle has diversified its products, it has an excellent reputation and it is well known in the world. Nestle is one of the health food producer, the products contain a good nutrition. Adverse aspects for COCA COLA Absence of health beverages, carbonated beverages are one of the reason for fat intake and coca cola is one of the largest manufacturer of carbonated beverages. Its product diversification is very low as compared to its competitors. Adverse aspects for PEPSI Much weaker brand awareness and market share in the world beverage market. Low price margin Adverse aspects for NESTLE Nestle focus is too narrow as it focuses on daily products. Nestle products don’t bring too much profit. Answer 4 Coca cola had to face an uncontrollable problem of increase in price during inflation. During recession people have less money to pay which leads to an overall decline in the economic activity. These factors alternately could force coca cola to reduce their profit margin. Political Factor It plays a very important role as it deals with different rules and regulations that the company needs to follow, coca cola promotes their product as a strictly non alcoholic beverages, because they are constantly monitored by the government on what they put in their drinks. Cultural Factor With the increasing competition, to increase their market share coca cola is moving accordingly with the cultural changes of the people, as it believes large population will bring more demand and profit. Technological Factor It is expanding its market with the help of technological factors, it has a partnership with music service that plays music on demand so it will improve this digital on demand service and make it available to more people around the world (Gong, 2013, pp.15-17). Social Factor Coca Cola is practicing healthier life style than they used to be as now a day’s people are more health conscious. They are willing to buy a bottle of water rather than a can of coke. Coca Cola has faced a problem of in the past due to its water management issues. Several groups have raised lawsuits in the name of Coca Cola because of their vast consumption of water even in water scarce regions. At the same time, people have also blamed Coca Cola for mixing pesticides in the water to clear contaminants. Coca Cola’s product in India contained toxins such as Lindane, DDT, Malathion and Chlorpyrifos and pesticides that can contribute to cancer and a breakdown of the immune system. People decided not to buy Coca Cola because it is not green company due to this pesticides allegations there was a drop in sales. Answer 5 Coca Cola maintains a high level of innovation by keeping its brand fresh and relevant, the advertisement techniques are modified according to the needs of the customers, development of social networking to come closer to the potential customers, with the help of technology it has been able to meet the needs of its environment aware market segments, The company also used improvement of technology to design free style dispensers which allows coca cola in development of new products. It uses very effective online shopping advertisement for its customers (Rainey, 2009, pp-90-110). Advertisement effectiveness of Coca Cola with marketing and promotional programs It is well known that the ability of a company to promote their products with the use of adverts will have direct impact upon the sales volume. Coca Cola can take the help of televisions, social media and the internet as the medium. A recent example is that of Share a Coke which allowed users to share a digital can. It is funny or a new way to communicate. On the other hand Coca Cola’s closest competitor PepsiCo tries some different techniques. The company takes initiatives to make its presence felt on face book, twitter and other social networking sites. It helped in product promotion. It is believed that such impacts remain on the minds of the consumers for a longer period of time. Package Design The introduction of cans and pet bottles took the sales volume of Coca Cola to an exponential level mainly due to the easy to carry and easy to dispose fact. The current product is packed in red background with the iconic encryption of the company name. The refreshed color resembles that of the drink. New equipment Use of advanced technologies into business process and implementation of it on other related activities has been the feature of business strategy these days. Coca Cola as well tried to introduce the use of advanced machineries and new packaging techniques to cement its footprints on the market. Answer 6 Coca Cola products that were produced and distributed in Indian Market contained pesticides which caused cancer and weaken the immunity of human body. The government took necessary actions and formed a committee to detect it. Coca Cola produced many lab tests which were not reliable to justify the fact. Due to this the sale has reduced which in terms has affected in the goodwill and brand image of the company. The consumer refuses to consume Coke as they believed it as a matter of cheat. It leads to a setback. Coca cola has faced a problem of in the past due to its water management issues. Several groups have raised lawsuits in the name of Coca cola because of their vast consumption of water even in water scarce regions. People decided not to buy coca cola because it is not green company due to this pesticides allegations there was a drop in sales The people claimed that it did not follow the concept of go-green and spoiled the natural environment. The customer was highly dissatisfied which in return reduced their demand for the product (McIntyre, Ivanaj & Ivanaj, 2009, pp.87-91). The company faced a hurdle to gain back the confidence and trust of its potential customers, because it is very hard to gain back the same trust and goodwill once it is lost, it has to undergo a down phase, various research were conducted and technological changes were adopted then again various new advertisements were published to attract customer and to gain the demand for its product. It approached different social media. It took nearly 6 months to a year to gain back the same position and market share it had earlier. It also took various factors and help of the government. Necessary measures were adopted so that the mistake is not repeated in future. It undertook various environment protection hygienic protection measures. Answer 7 Its local as well as worldwide strategy enables it to listen to all the voices of the world that is asking for spectrum in taste and occasions. What people or consumer wants in a beverage is just the reflection how they play , how they relax, how they recharge, coca cola aims not only to be the leading beverage producer but to lead up to the commitment of the people , the health wellness and diversity of the consumers. Coca cola is consistently shaping the business decision just to provide improve and quality life to its friends around the world, it treats its customers as its friends and tries to reach up to their expectation and never forgets its customers. It appreciates and values its relationships with the individual s, organizations and wider community .Although there are cultural differences in different country but it takes to be successful and sustainable business over long term. Being a profitable, but also responsible corporate citizen is increasingly one of this imperatives .This requires business leaders to be committed to set a clearly stated publicly upheld values , undermine by principles , policies and standards that are applied everywhere the company operates not only in its home market. It requires companies to have risk management system and accountability structure. In place to protect the existing values, by minimizing any negative economic, social or environmental impacts and reputation damage arising from their business activity. Conclusion The company sells beverage products in more than 200 countries. Coca cola is the market leader in beverage industry, producing various types of soft drinks. Its mission is to refresh the world, to inspire the moments of happiness and optimism and to create a value and make a difference. Its objective is to accelerate sustainable growth to operate in tomorrow’s world. References Ferrell, W.P. (2008). Marketing, New York: Cengage Learning. Gong, Y. (2013). Global Operations Strategy: Fundamentals and Practice. France: Springer Science & Business Media. McIntyre, J.R., Ivanaj, S. & Ivanaj, V. (2009). Multinational Enterprises and the Challenge of Sustainable Development, London: Edward Elgar Publishing. Rainey, D.L., (2009). Sustainable Business Development: Inventing the Future Through Strategy, Innovation, and Leadership, USA: Cambridge University Press. . The Coca-Cola Company. (2014). Our Company. Retrieved from: http://www.coca-colacompany.com/our-company/. Read More