Case Study: Coca Cola

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Case Study Coca Cola

Coca Cola is a successful company that operates globally and has large revenues. To reach its current position, the company has implemented some wise strategies and they have been successful. The company uses its external environment to succeed and be respectful. It focuses on its customers, vendors, partners, and communities in each region to form its strategy. Due to its competitive strategies, the company has reached its goals, and to continue success, it should continue using well-designed strategies. Moreover, a growing competition requires further development of competitive strategies. In this essay, the environment and goals of Coca Cola will be studied, and some recommendations on strategy improvement will be made.

Coca Cola Company Summary

The Coca-Cola Company (NYSE: KO) is the biggest beverage company in the world. Globally, it has 500 different brands. Some of them are common for all countries, and some are unique. Moreover, the company owns different brands that refer to the most recognizable brands in the world. Coca Colas portfolio includes 20 billion-dollar brands, and 18 of them are available in reduced-, low-, or no-calorie options. The most expensive global brands are Diet Coke, Fanta, Sprite, Dasani, Powerade, Del Valle, Georgia, and several others. Due to the largest beverage distribution system in the world, Coca Cola is the biggest provider of both sparkling beverages and still beverages. More than 1.9 billion units of beverages are sold every day in more than 200 countries all over the world (Coca-Cola at a glance, n.d.). In terms of consumption, the shares of world regions are as follos: 20% of products are sold in North America, 29% in Latin America, 13% in Europe, 16% in Eurasia and Africa, and 22% in Asia Pacific (Coca-Cola at a glance, n.d.).

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Like any other company, Coca Cola has an external environment. The external environment includes microenvironment, or operating environment, and macroenvironment, or general environment. In its turn, microenvironment includes suppliers, customers, market intermediaries, competitors, and the public. Macroenvironment includes economic, social, political, technological, natural, and demographic factors that influence the company (Jain, Trehan, & Trehan, 2009, p. 6).

Coca Cola has many suppliers because it needs different ingredients to produce its beverages. Depending on the country where drinks are produced, these suppliers may be different. Companys suppliers are selected accurately, and they should follow some principles to supply merchandize to Coca Cola. The company has Supplier Guiding Principles (SGP), and suppliers should follow them completely. Those principles communicate the expectations and values of the company to its suppliers. For instance, all suppliers should follow international laws and regulations as well as the laws of country where they work. They should not use child labor, forced labor and other forms of discrimination and forced labor (Supplier and customer partnership, n.d.).

For Coca Cola, the customers as well as its intermediaries are retail chains, restaurants, and other retailers that buy its beverages directly from producers and sell them to individual customers. The firm tries to set mutually beneficial relationships with its customers. The customers try to work efficiently, for instance, they reduce costs, increase sales and profits, and deliver high quality products to consumers. Coca Cola creates additional value for customers and provides training for them to make businesses more efficient and raise sales; in particular, training is provided in Latin America (Supplier and customer partnership, n.d.).

Coca Cola operates in the food and beverage industry, in particular, beverage-producing sub-industry. The company is among the most powerful players in the industry by its sales. According to the sales volume in the USA and Canada, its main competitors are PepsiCo ($437.9 billion), and Nestle ($27.6 billion). In 2015, the sales of Coca Cola were $21.7 billion (Food processings top 100, 2016).

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The public is also an element of external environment of Coca Cola. It has deep relations with communities both on local and global levels. In particular, Coca Cola provides the sponsorship of different organizations and events such as the Olympic Games, Bet Network, NASCAR, NBA, NCAA, and others (Coca-Cola sponsorships, 2012).

Economic factors that influence Coca Cola are various, and they may differ from one country to another. The company operates in various economies, and they have different conditions that influence its operations and sales. In particular, Coca Cola is influenced by GDP, the general life level, and average income of customers in each country where it operates. For instance, its sales volume may depend on the economic level and level of customers income in the economy.

Political environment influences Coca Cola as well. It may include the policies of the particular country implemented by its government, different regulations imposed on business units, regulations of trade and foreign trade, etc. (Hamilton & Webster, 2012). Therefore, Coca Cola is influenced by particular political environment in each country. For instance, it may be influenced by the local regulations of business activities it provides, the local limitations of foreign companies activity, trade regulations, import and export regulations, etc.

Furthermore, Technological environment is important for the company too. In modern business, all companies try using modern technologies to compete and Coca Cola is not an exception. Natural environment is important in the conditions of limited resources and environmental issues, some of which can be caused by business activities. Thus, Coca Cola provides different programs to support the environment and represent its sustainability. For example, the company provides local and global initiatives to cut water use and preserve water for the production and needs of communities as well as to save other resources (The Coca Cola Company, 2012).

Finally, demographic factors are of great importance for the company. For example, Coca Cola may benefit if the population of particular country grows because it means more potential customers. It will also benefit if the average income of citizens grows, as they will be able to buy more. The growing share of young population is also beneficial because they are likely to become potential customers.

Coca Cola has different strategies and current objectives. Strategies are important for any company, and their vital role has been developed recently because they are important for successful management (Arasa & KObonyo, 2012, p. 201). In 2016, Coca Cola has announced a new strategy that is expected to make the company even more successful. This strategy is called One Brand, meaning that all Coca Cola brands will be united to a single global creative promotion campaign. The Taste the Feeling campaign is expected to remind about the popularity of Coca Cola and persuade the customers to drink it again, and it is expected to raise sales in the nearest years (Moye, 2016). In addition, loyalty to the brand and products will be reached via current goals. In particular, Coca Colas goals refer to its sustainability, as it is the core of the company. The company has several sustainability goals that have already begun their implementation and that should be accomplished by 2020. By this date, the company wants to empower five million women entrepreneurs, do much for water preservation, and help the communities worldwide (Journey Staff, n.d.).

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Present Strategies

If the company continues with the current strategies and objectives, it is expected to become more sustainable, more respected, and more trusted in 5 years. In modern business, sustainability is vital for companies, and customers trust them more and buy more of their products if businesses take care not only of their profits but also of the environment and common people. One Brand strategy is likely to be beneficial and improve Coca Colas sales in 5 years because the focus on all brands as a single one of one company will attract more customers globally.

Recommended Strategies

If I were the CEO of the company, I would recommend some strategies that are likely to make Coca Cola successful and increase its sales. First, it would be wise to continue the strategies that involve environmental care and the care of people, or, in general, improve the companys sustainability. They are likely to continue Coca Colas success, and more customers can be attracted, as they will see the benefits the company brings to their communities and the world. Second, in my opinion, Coca Cola should focus more on healthy and natural products. As many global trends show the increasing popularity of individual health care and closer attention to healthy products, the company should use these trends because its famous products like Coke or Pepsi are not natural completely. Thus, introducing some new natural drink brands would be beneficial, as new customers will be attracted to the company.

Strategies of Competitors

On the global beverage market, PepsiCo is the main competitor of Coca Cola. Its general strategy is based on Porters model, and it involves cost leadership and broad differentiation. Cost leadership is based on low production costs, and it allows PepsiCo making its products cheaper as compared to Coca Cola (Ferguson, 2016). Differentiation includes offering a wide assortment of products, and it is similar to Coca Colas strategy. At the same time, Coca Cola should lower its costs to compete with PepsiCo in terms of lower prices. It may turn to be hard, but the company can benefit from higher sales volume.

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To summarize, Coca Cola is a very successful global player on the beverage market and it is represented in most countries all over the world. It has achieved its success due to various brands and creative promotion campaigns as well as a single strategy of One Brand that has made the company and its products unique. In addition, the wise use of external environment and the cooperation with its members have contributed to the success of Coca Cola. In order to continue its success, the corporation focuses on the One Brand strategy and environmental and social goals for its sustainability. However, it may be hard to compete with PepsiCo due to its low prices. In order to continue its global success, Coca Cola should continue sustainability programs, focus on healthy products, and try to make its products cheaper.

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