Coca-Cola Business Strategy and Competitive Advantage

INTRODUCTION

Every organization needs a strategy to outline the common goals of its organization. A well business strategy is critical to the success and sustainability of any business enterprise. They can use a single general strategy (e.g. low cost or differentiation or focus, etc.) or try to combine two or more strategies.

This essay explains the opinions of Coca-Cola business strategy and competitive advantage simply.

The Coca-Cola Company is established in 1886 by the pharmacist Dr. John Pemberton in Atlanta, in the beginning, it was sold as a medicine. The Company registered its trademark on March 27, 1944. Nowadays it is spread in more than 200 countries with over 500 brands and 3,300 beverage products.

Business Strategy

Strategy is the determination of the basic long-term goals of an enterprise, and the adoption of courses of action and the allocation of resources necessary for carrying out these goals (Alfred Chandler, 1962).

A. Low Cost

Coca-Cola is the world's largest beverage production company. They have a great deal of bargaining power; their brand name recognition is a powerful bargaining tool.

Coca-Cola is a carbonated drink made from sugar and water mixed with some seasoning so that the cost of raw materials is actually very low. For raw materials suppliers, Coca-Cola is a large bulk buying company and there has a contractual cooperation between suppliers and Coca-Cola then they will require suppliers to maintain low cost in raw materials to maintain a reasonable price for maximum profit.

B. Differentiation

Coca-Cola produces franchise products; their products are exclusive. Coca-Cola concentrated stock solution, taken from a variety of natural flavors, secret recipes that outsiders cannot know.

They have a unique formula to attract customers; it is undisclosed and high difficulty in imitation. Coca-Cola is avoiding the outflow of formula, they will supply the stock solution and ship it to processing plants in the different country for packaging procedures and apply for a patent. So they have the largest plant in the world and therefore enjoy significant economies of benefit.

Competitive advantage

Competitive advantage, an advantage over the competitor which is gained by offering the consumer the greater value, by either lower price or by providing more benefit that justifies the higher price (Kotler & Armstrong, 2008).

A. Low prices

Coca-Cola or popularly known as Coke,