In the current era companies venturing in the beverage industry are facing various impediments in the achievement of quality standards in some of their products. This is due to the complexity of the process of formulating effective strategies which go hand in hand with the client’s demands. This implies that companies have to be creative in crafting their quality plans to ensure they accomplish their organization’s sustainability objectives. This is necessary to ensure that cases of food poisoning and other unwanted substances do not occur in the products. The allegations reported in Belgium regarding the Coca Cola products indicate how lack of efficient quality strategies in beverage firms can impact their production performance. These cases compromise on the consumer’s preference on the company’s products which consequently affects the demand of these products. This portrays the significance of having proper quality strategies in place for Coca Cola to make it certain that they will produce quality and safe products for their customers. However, formulation of these approaches has to be done with regard to the changing tastes and preferences of the consumers as it is depicted by the industry trend. Implementation of these strategies by the company would make sure that it does not have to incur costs in compensating consumers for damages resulting from the use of their products. This study seeks to review the quality strategies put in place by Coca Cola and come up with significant recommendations on how the company can improve its product quality.
The company’s mission describes its purpose and is also used to measure upon its performance variables. The core mission of the company is to refresh the world; this is supposed to be accomplished by production of good beverage products which are preferred by the consumers. It is also the mission of the company to motivate instances of optimism and happiness by availing products that make people happier. Finally, the company has a mission to build value and create a difference from the other products in the industry. The company uses its vision as a guide to the activities that it undertakes in accomplishing its organizational goals. The vision of Coca Cola revolves around five concepts which include; the people, portfolio, planet, profit and productivity. The company believes that it must present a better situation of occupation where the people will be highly motivated. In addition, the company upholds that it must provide an assortment of quality products in the beverage industry which gratify the consumer’s needs. The company also seeks to support and help in uniting together different communities in the planet, and aims at earning maximum profits and at the same time ensuring that it performs its core responsibilities. Lastly, Coca Cola vision on productivity is to become extremely efficient and a fast growing beverage company. Having identified the mission and vision of the company it is prudent to keep in mind the concept of proper strategic management. This requires that companies should incorporate their mission and vision as they undertake their business to ensure that they are on the right track as it is expected. A company would be deemed unethical if it does not configure its operations with the set vision and mission (Hill & Jones, 2010). With respect to this it is expected that the company would formulate its quality strategies basing on its mission and statement.
The internal strengths and weaknesses of Coca Cola are developed on the basis that the company holds a significant position in the beverage industry (Hill & Jones, 2010). The strengths of the company are largely influenced by the fact it is the world’s top brand. The company boasts of a leading brand name and product portfolio which ranks it ahead of competitors like Pepsi. This assists consumer in constant remembrance of the brand thus increasing the company’s chances of penetrating interior market. The company also undertakes large scale production by applying the relevant economies of scale which places it in a better position than its significant competitors in the industry. The fact that the company enjoys a well-built revenue escalation also makes it to maneuver efficiently in the market by ensuring that it does not have to take on redundant debt investments. This company also preserves an inspired labour force that helps in steering improved production. This is achieved by the company having to take a massive personnel training. The company is also endowed with a lot of resources at its disposal which it controls. These resources help the company in the process of production and running its operations. Coca Cola also owns a variety of intangible resources ranging from technical expertise, intellectual property rights to goodwill. The company’s goodwill and intellectual property has made it certain that its brand continues to be the favorite amongst its clients.
Finally, the company has distinctive capabilities which support it in carrying its operations efficiently compared to its major competitors. These capabilities include; creativity, architecture and a world class status of the company. These strengths possessed by Coca Cola have ensured that it continues to dominate in the beverage industry by offering it with a better competitive edge and also continued production of new products. However, diverging from the company’s strengths it also faces some weaknesses which make it not to effectively achieve the set organizational objectives. The major weakness of the company is that it continues to report a slow-moving performance in North America where it has laid vast investment backing. This is one limitation that hinders the company from achieving to its full potential in the industry. Another weakness of the company is due to the products recall which dents the brands image. For instance the recalling of over 15 million cans and bottles by Belgium would result to a negative perception of the company’s products by the Belgian consumers. This may further lead to destocking of Coca Cola products by businesses in this country which would mean that willing consumers would not be able the company’s products. Weaknesses may also caused by brand failures whereby the company initiates and introduces new brands to the market but after some time the products disappear from the market as if they were never in existence.
The company’s external analysis is done on the basis of its opportunities and the threats that it faces in the market. The first opportunity that the company has is that there has been increased consumption of bottled water throughout the world. This paves a way for the company’s water brands like Dasani to penetrate into this fast growing market thus increasing its market share in the industry. Coca Cola has also had many acquisitions of its main bottling firms in North America for instance the acquirement Coca Cola Enterprises (CCE) provides an opportunity for the company to achieve greater control of other businesses thus improving its chances of inter regional integration. The emergence of new markets in Africa and Asia also gives the company an opportunity to establish new investments in those countries which will increase its overall market foundation. Presence of complimentary foodstuffs would also improve the chances of consumers having to buy the company’s products to be taken together with these foodstuffs. This is an opportunity for the company to expand its sales in the market.
The company, however, faces some threats in its way of business. The major threat being increased competition from its rivals in the industry, these include; Pepsi, Unilever, Nestle and many others. These competitors have the ability to invest and expand their market share in the worlds rising markets thereby posing as a threat to the existence of Coca Cola as the top beverage company. Changes in consumer preferences and public health issues are also a major threat to the company. This has resulted to evolution of regulations for carbonated drinks which require reduction of some ingredients such as sugar which may affect health of customers. This would make consumers to change their inclination towards the company’s products thus affect its production. Increased production costs is also another threat to the company, increased freshwater demand has raised the price of water and therefore the company has to incur extra costs which add up to the costs of production. An increase in the cost of other raw materials such as sugar is also another threat for the company in terms of its overall production costs. The company will therefore be supposed to formulate significant strategies to counter these threats which could easily compromise on its position in the market.
In analyzing the strategic issues of the Coca Cola company we shall make use of the Porter’s Five Forces Model which is provides a structure for evaluating the industry and how the company would execute strategies to acquire market dominance (Hill & Jones, 2010). This model is composed of; threats of fresh competitors, threats of alternative products, negotiation power of the customer, negotiation power of the supplier and competitor enmity. This framework is employed to evaluate the world beverage industry in the perspective of Coca Cola. To begin with, the intensity of new competitors is determined by various factors which include; advertising capacity, brand allegiance, supplier accessibility and availability of distribution channels. The advertising ability is core for new entrants to gain credit in the market. Consequently, this requires major financing to achieve high levels of recognition like the Coca Cola hence this creates a ground for the company to continue dominating the market. Brand allegiance by the consumers makes it very difficult for fresh entrants to enter the market. The availability of distribution channels is important for new competitors entering the market. It can be difficult to find sellers who will distribute products for these new competitors before they are established hence giving Coca Cola an advantage in the market.
In this industry there exists many alternatives for every type of the product; this guides the sellers on what to be stocked on their stores. These alternative products generate a reasonable threat to the company but through its aggressive advertising the company is able to maintain its status in the industry. Since the switching costs are quite low in this industry, then the sellers can change to products with more popularity. The negotiation power of the buyers in the industry is quite low and this means that the company sells its products with some good margin hence it earns better profits which can support its operations. The negotiating power of the suppliers in the industry is also low due to the fact that the costs of major raw materials is very low and they can be found with easily. Thus, due to the low prices of these raw materials the switching costs are also low and hence the company can change its suppliers depending on its preferences. Competitor enmity in this industry is fairly moderate due to few major companies who control the market. Competitor rivalry is mainly determined by the brand allegiance which is further established by the advertising abilities of the companies. Therefore, new entrants would not be a threat in terms of rivalry since they are not well established.
In ensuring that product recall cases such as those that occurred in Belgium do not happen the company is recommended to incorporate new strategies in its operations. One core strategy that needs to be adopted is embracing collaborative customer relationships. This can be achieved by working closely with the major customers in order to initiate a strong relationship between them. This may involve modifying its product portfolio for these customers with regards to their domestic markets’ socioeconomic and consumption features. This entails partnering with the customers from information management and development of abilities in the market to the point of sale. The company can also practice channel marketing where they classify their markets and come up with objective endeavors for each customer segment. This would involve an in depth analysis of the purchasing trends and preferences of different categories of customers in various locations. On evaluation of this analysis the company creates its products in a way that meets the needs of every channel or consumer segment. For the company to ensure constant consumer loyalty, it must open up to a wider corporate responsibility agenda. This ensures that the company takes consideration of the consumers and the environment in which they exist. In implementing this strategy the company achieves customers’ allegiance for its brands thus ensuring that it continues to top the industry.
Lastly, the company must adopt a strategy that embraces efficient management of water, substance use and other values. This involves making innovative preferences and vital reasoning that is necessary in the achievement of sustainable growth objectives (Hill & Jones, 2010). In its action plan the company needs to give priority to advertising of its product as this is core in ensuring its continued leadership in the beverage industry. This can be inform of aggressive advertising that involves use of popular personalities, use of premium offers and major advertising in schools and other institutions. The media would also play a great role in enhancing the workability of the action plan. Another core thing that must be incorporated in the action plan is embracing the concept of going green where use of chemicals is very minimal in the production process. This would boost the consumer confidence on the products quality thus improving the company’s market share with increased consumers.
In conclusion, Coca Cola is the world’s top beverage company whose mission is to refresh the world, inspire moments of optimism and happiness and to create worth and make a difference. In this case the company is faced by a major product recall in Belgium of over 15 million cans and bottles as a result of allegations that its products had poisoned various consumers in the country. The paper develops a detailed analysis in terms of its operations and the strategies behind the company’s top position in the industry. The company is characterized by various strengths and weaknesses which forms its internal analysis. It also has different opportunities in the beverage industry and at the same time it faces potential threats that could wipe out its investments in this industry. The company management should work diligently to reduce its weaknesses and threats while maximizing its potential on the strengths and opportunities that it possesses. The company employs the Porter’s five force framework in formulation of its strategies which ensure that it upholds its position in the industry. These strategies put in place ensure that even as new entrants in the industry come they do not change the preferences of their consumers towards its product. There are also alternative strategies that the company can employ in ensuring its market share is maintained. These include; the global strategy, transnational strategy, the multi domestic strategy and the home replication strategy. The company adopts an evaluative criterion that is based on the relationship between the brand preferences and the consumer tastes. This criterion further shows that brand preference discrepancies can be explained by the evaluation of consumer tastes on these brands. The study comes up with significant recommendations that the company should adopt to ensure it delivers efficiently to its esteemed clients. This is followed by an action plan that describes what concepts should be put in place to ensure effective implementation of these strategies to support the company’s position in the industry.
Hill, C. W., & Jones, G. R. (2010). Strategic management theory: An integrated approach. Mason, OH: South-Western/Cengage Learning.