Business Ethics of Coca-Cola Company - Case Study Example

MARKETING PLAN Student’s Name Institution Executive Summary The Coca-Cola Company is defined as being the most popular trade mark in the world and this in fact, is a genuine assertion. The company has in its ownership, about 400 different types of brands which are appealing and attractive to different individuals throughout the world. The company is also capable of satisfying the needs of all their clients or consumers and enhance their experiences with the Coca-Cola products. The company’s (Coca-Cola) products are quite appealing to a wide range of consumers from all genders, ages and races. The Coca-Cola Company is well known the world over because of its global popularity since its products are actually sold to over 200 nations while some of its major competitors have only managed to sell their products in numerous select countries. As a result, this gives the Coca-Cola Company a competitive edge or advantage over the others. It is indeed an obvious fact that the Coca-Cola Company is easily recognized by all and sundry (Carey, 2009). The popularity of the company has made to grow as an organization which is very much well recognized. The company’s finances make it easier for it to continue growing and even expand into the future. In addition to that, the finances also make it possible for the company to promote many of its other products. In essence, many aspects of the Coca-Cola Company have proven to be superior to that of its major competitors which include its corporate structure and promotional techniques. Some of these aspects include among others market mix, implementation plan and positioning. It is through such aspects that make the Coca-Cola Company to be placed ahead of its competitors and instigate it to aspire to higher missions and goals. It is the company’s mission to refresh and totally satisfy the entire world and make a bottle of the company’s products to become available to each individual all around the globe. Problem Identification and Analysis Despite the fact that the Coca-Cola Company has been a great successor in the industry of soft drinks for over 100 years, it has all along incurred numerous crises along its successful path. The Coca-Cola Company is faced with numerous challenges in the contemporary market because of the market driven changes, socio-economic changes and regulatory changes. The Coca-Cola Company is faced with numerous significant strategic issues. One of the strategic issues is a decline in sales of the carbonated soft drink sector, the second strategic issue the current wellness and health trend that has swept throughout the beverage industry while the third issue arises from the threat of increased competition from the PepsiCo Company Ltd. Another strategic issue that the Company is faced with is an increase of conflict with other bottlers, lack of food safety and innovation and the statutory regulatory compliance (Lopez, 2013). It should be noted that the introduction of new products, effective innovations and the ability of responding with the agility towards changing consumer and customer demands are quite essential. This must therefore be implemented through the introduction of both new formats and products which are planned successfully and executed as well. However, the Coca-Cola Company has now neglected its product innovation during the past few years. The better adaptation of PepsiCo towards the consumer health recently made it to overtake the Coca-Cola Company in the market value, something that has been done for the first time in a period of 112 years. The Coca-Cola Company failed to realize that innovation actually represented the largest single opportunity for it to drive its profitable growth. Despite the fact that water is the major ingredient in almost all of Coca-Cola’s products and it is a limited resource in various parts of the world, the company has faced unprecedented challenges arising from overexploitation, poor management and increasing pollution. As the demand for this scarce resource (water) continues to soar up around the globe, the quality of the water which is available will also deteriorate thus making the Coca-Cola Company to incur an increase in the production costs and encounter capacity constraints. The changes in the non-alcoholic beverage business due to changes in the preferences of the consumers like obesity concerns, nutrition and health considerations, change in lifestyles, competitive pricing and product pressures and increased consumer information have made the consumers to prefer other products at the expense of those which are manufactured by the Coca-Cola Company. Public health officials, consumers and numerous government officials have increasingly become aware and also concerned regarding the health consequences which are linked with obesity especially among the young population. In addition to that, press reports have further indicated that consumer advocates and lawyers have actually threatened publicly to instigate or start litigations against organizations in the beverage industry among them, the Coca-Cola Company by alleging that there are unfair and deceptive practices which are related to the contracts of selling sparkling and other known beverages in the schools. An increase in such public awareness campaigns and also negative publicity emerging from either threatened or actual legal actions may lead to a reduction in the demand of the carbonated products or beverages like those offered by the Coca-Cola Company(Pendergrast, 2013). Given the fact that non-alcoholic beverages segments in the industry have become highly competitive, this has made the Coca-Cola Company to compete with some of the best established beverage companies which operate in multiple or numerous geographic places as well as locally based companies. For instance, in many of the nations across the world, PepsiCo has actually emerged as the company’s major competitor. Other known significant competitors for the Coca-Cola Company include Nestle, Groupe DANONE and Kraft Foods Ltd and Cadbury Schweppes plc. The inability of the Coca-Cola Company in providing a relevant mix of the incentives towards the bottling partners using a combination of marketing, pricing and advertising support may make the other bottlers to take actions aimed at maximizing their short term profits and as a result, this has had a detrimental impact not only on Coca-Cola as a Company but on its products as well. Another problem facing the Coca-Cola Company is the changes in both laws and regulations associated to the beverage’s containers and packaging as well. For instance, Coca-Cola and other bottlers as well currently offer packaging in not only recyclable but also non-refillable containers in the US and other markets around the globe. As a result, there has been the enactment of some legal requirements both in the United States and in other countries oversees demanding that deposits or some specific eco fees or taxes be charged for the marketing, sale and using of some specific non-refillable beverage containers. The legislation of similar regulations in different countries of the world has made the Coca-Cola Company to become affected thus forcing it to alter its model of distribution. Apart from that, the container deposits laws or regulations which impose other additional problems on the retailers will ultimately result in the shifting away by consumers from the Coca-Cola’s company products to other “retailer-proprietary brands” which could eventually have a negative impact on the demand of the company’s products in the markets which are affected (Luther, 2011). The labelling or the warning requirements sought by numerous jurisdictions around the world insisting having additional warning or labelling about the chemical content coupled with any possible health consequences that may arise due to the consumption of such beverages will highly inhibit the sales of the Coca-Cola Company’s products. Despite the fact that Coca-Cola’s path towards growth strategy is quite promising; the company has not yet fully addressed the bigger issue which asserts that 80% of its entire business operations originate from the carbonated soft drinks. In addition to that, carbonated soft drinks have also become a major target in numerous global debates regarding the relationship of the soft drink consumption and how it is linked with obesity. And as if that is not enough, the carbonated soft drinks like the ones which are manufactured by Coca-Cola have also become a prime target in numerous international debates relating to the consumption of the soft drinks and obesity (Ferrell, 2010). It should be noted that indeed, most of the health conscious consumers located around the world have started to reach for both bottled water and other noncarbonated drinks which offer better nutrition and new tastes. As a result, a major competitor like PepsiCo have therefore started diversifying and even taking risks aimed at diversifying the portfolio of their products while the Coca-Cola Company is still in the process of struggling so as it reinvents itself. Alternative solutions There is need for the Coca-Cola Company to minimize its dependence on the carbonated beverage and also diversify the portfolio of the product into the noncarbonated field in order to remain competitive. In order for the company to become a fully beverage company, it needs to address the major issues that have been identified in this research and only move to a learning organization. In order to effectively compete in the “global beverage market”, the Coca-Cola Company should use a differentiation strategy in order to create value for both its consumers and customers. In order to accomplish the company’s mission of refreshing the world, inspiring the moments of optimism and creating value and making a difference, the Coca-Cola Company should adopt various strategic growth paths; for instance, it should grow the Core Global variety of its carbonated soft drinks brands. This will ultimately make the company to capture its total potential of the trademark thus accelerating the growth of its major brands in each given market using the immediate consumption opportunities so as to enhance consumer recruitment, margin and revenue as well. In addition to that, the Coca-Cola Company should also grow or enhance the other core brands since the noncarbonated market which provides energy drinks, coffee and sports drinks have become profitable lately (Dibb, 2012). Recommendations The Senior Management of the Coca-Cola Company should use value in order to ascertain both the strengths and weaknesses of each particular activity and therefore compare it with the competitors of the Coca-Cola Company. The strategic issues should be seriously evaluated since they can have a negative impact or effect on the Coca-Cola Company’s long term potential profit. From the analysis above, it can be genuinely be ascertained that the sector of carbonated drinks is not simply too large but it also lacks positive health attributes that can be used to succeed in a market place that has become increasingly health conscious. As a result, the Coca-Cola Company should not competitively focus on the “carbonated soft drink sector” so as it can continue being a market leader in the industry of beverage manufacturing (Hays, 2010). In order to establish a name for itself in the booming domestic and global market for the energy drinks, the Coca-Cola Company should compete aggressively in the contemporary beverage sector. Through competing outside the field of the carbonated soft drinks sector, the Coca-Cola Company will have an ability of having a competitive edge in the growth of the industry. The Coca-Cola Company should therefore change with the modern times in order to effectively adapt to the ever changing needs of the dot com generations of both the health conscious customers and young consumers. As for the cold wars that are occurring in the 21st century, competing aggressively will make the Coca-Cola Company to become successful in the noncarbonated sector. This will make the Company (Coca-Cola) to become well positioned in encountering the consumers’ future needs. From the above analysis, it is quite evident that health and wellness has continued to be a major trend which has swept across the international beverage market and most specifically in North America and Europe. The Coca-Cola Company should move forward in order to ensure that with its commitment of providing industry leadership in the wellness and health sector. The Company should further do a better job in ensuring that it stays in touch with both consumers and shoppers not only during the process of innovating the products but also in the process of creating value as well. This is essential because it aids in the value creation of the beverage industry (Ferrell, 2012). Since the Coca-Cola Company faces stiff competition from PepsiCo which poses a serious threat, the company ought to develop strategies which are aimed at winning the cola war during this century. Winning such a war for Coca-Cola is quite critical since it will help it to maintain the leadership position of the industry and make it to become a fully beverage company. The Coca-Cola Company ought to enhance the Bottler relationships since some of them have actually started distributing more “non-Coke Brands” which are aimed at pushing through their aggressive retail prices so as to minimize the amount of syrup that is supplied and boost their own profits (Ma, 2014). The Coca-Cola Company should address this significant issue through leadership discussions and negotiations because the bottlers are a vital link to the consumers. Given the fact that the Bottlers are known to both sell and market the brand products of the Coca-Cola company to institutions and businesses, supermarkets, retail chains, restaurants, schools and colleges, entertainment and sports venues and in the small neighbouring grocers, these clients are in turn responsible for selling the company’s brand products to the final consumer. As a result, it is prudent for the Coca-Cola Company to work with them as one system to enable the company to satisfy or fulfil the concept of presenting one face to the customers. The effective innovation and the introduction of new products coupled with the ability of the Coca-Cola Company to quickly respond towards the changing consumer and customer demands in an agile manner is quite essential for the Coca-Cola Company. This must be implemented through the introduction of new formats and products which should not only be planned successfully but also successfully be executed. Given the fact that the Coca-Cola Company has not yet established a bestselling soda in the North American Market and it has neglected the innovation of new products in the recent past, the success of these strategies will definitely make the company to have higher sales and profitability as well. In order to cope with problems associated or linked to lack of innovation, the Coca-Cola Company, being a market leader in the beverage industry should continue with the innovation of its product and also expansion of the company’s product line. This is because the industry of soft drinks is not only mature but it is also heavily saturated with numerous competitors and therefore Coca-cola should try all means to ensure that it tames such competitors through the use of excellent business strategies. Through the introduction of new products into the market, the Coca-Cola Company will be in a better position of not only increasing its profits but it will also be in a better position of continuing to grow or expand. By having a product line which is adverse, the Coca-Cola Company will become very stable and thus making it to become to both creditors and investors as well. The Company should thus realize that innovation results into the creation of value. References Carey, C. (2009). American Inventors, Entrepreneurs, and Business Visionaries. New York: Infobase Publishing. Smith, A. (2011). Fast Food and Junk Food: An Encyclopaedia of What we Love to Eat. New York: ABC-CLIO. Lopez, D. (2013). Brand Development of Coca-Cola Company (UK). New York: GRIN Verlag. Pendergrast, M. (2013). For God, Country, and Coca-Cola. New York: Basic Books. Luther, W. (2011). The Marketing Plan: How to Prepare and Implement it. New York: AMACOM Div American Mgmt. Assn. Ferrell, O. (2010). Business Ethics: Ethical Decision Making & Cases. New York: Cengage Learning. Dibb, S. (2012). Marketing Briefs: A Revision and Study Guide. New York: Routledge. Hays, C. (2010). Pop: Truth and Power at the Coca-Cola Company. New York: Random House. Ferrell, O. (2012). Marketing Strategy. New York: Cengage Learning. Ma, T. (2014). Professional Marketing ad Advertising Essays and Assignments. New York: Tony Ma. Read More