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Final Coke - Strategic Analysis The Coca-Cola Company...

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Strategic Analysis The Coca-Cola Company consists of over 500 non-alcoholic beverage brands that reach over 200 nations with its largest competitor being PepsiCo. In order to maintain its position in the market, it must set and meet many business objectives including, using innovation to create new brands, expanding its global reach, maximizing long-term return to shareholders, making a positive difference in the world, managing relationships with partners and customers, and adapting to a changing marketplace. In order to reach its goal of providing brands that compete at the highest level of quality in each of its markets, Coca-Cola must implement continuous innovation in its product development as a strategy. On its website, it says, “Innovation is at the heart at everything we do”. It accomplishes this by doing lots of market research to determine customer preferences and needs. The Coca-Cola Company has an innovation center in Brussels, which makes up 40% of its business operations, showing how much of its efforts are dedicated to creating new, quality products for customers. Due to its overwhelming efforts and expertise put towards innovation, Coca-Cola now has over 500 brands and more than 3,500 beverages which make up over half of the world market share for non-alcoholic beverages. Given this information, it appears that the strategy is working very well, with a variety of products being sold all over the world, including energy drinks, juices, soft drinks, sport drinks, teas, coffees, water, and milk. Another objective is to expand its global reach to increase beverage sales around the world. In order to accomplish this, Coca-Cola has a strategy that involves learning a great deal about the needs of global consumers with varied products and marketing strategies. For example, Coca-Cola created bottles that fit inside one another in Russia to imitate typical Russia dolls that do the same. In addition, managers in China have been given control over local advertising. By
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tailoring its products and marketing to its global markets, Coca-Cola has become the world’s most recognizable brand, serving 1.7 billion servings a day. It is obvious that its strategy has been working thus far, and it hopes to expand its global reach by continuing this strategy. Like any other public company, Coca-Cola has an objective to maximize long-term return to shareholders. It focuses on differentiating its products, which allows it to charge a premium on each of its brands. These higher margins lead to increased revenues, which ultimately falls to the bottom line. In addition, the strengthening of the Coca-Cola brand has led to the perception of high quality and increased customer loyalty. This also increases revenues for the company. Coca- Cola has accomplished this strategy with revenues exceeding $30 billion in each of the last 3 years, net income increasing in the last 3 years with nearly $12 billion in 2010, and steady growth in stock performance.
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