strategic business plan for coca cola company

A balanced focus on brands while responding to emerging consumer trends.

Long-Term Growth Potential

There is a significant long-term growth opportunity for both the industry and our company. In terms of markets, commercial beverages represent approximately 70 percent of beverage consumption in the developed world, and we have a 14 percent volume share across cold and hot nonalcoholic beverages with a very small position in flavored alcohol beverages today.

In the developing and emerging world, only about 30 percent of beverage consumption is commercialized and our volume share position within that is about half of what it is in the developed world. The developing and emerging world represents 80 percent of the world’s population, with over 6 billion people.

As another way to think about it…

The world has billions of people living in it, and that population continues to grow, but only a small percentage of those people are consuming our beverages today.  Even if we doubled the number of drinkers of our beverages over the next decade, there would still be plenty of headroom to grow for years to come.

Therefore, we believe there is compelling long-term growth potential across the world through growing the overall industry and continuing to gain share.

Note: Data represents internal estimates of top 37 markets (a) Represents population that does not consume commercial beverages (b) Represents Weekly+ drinkers

Loved Brands

Diversified and Optimized Brand Portfolio

We have the platforms to take advantage of this long-term growth opportunity through our diversified portfolio of beverages and brands. Our streamlined portfolio consists of a broad selection of organic brands, acquired brands, and partnerships, and presents a strong platform for innovation that will drive interest and consumption for both new and existing consumers.

Strong Global Value Share - #1 Overall Position in Total NARTD

We are always in pursuit of becoming an increasingly consumer-centric, total beverage company and we are building on solid foundations from the past. Today, we have a strong global position in all category clusters in nonalcoholic ready-to-drink (NARTD) beverages. However, outside of sparkling, our strong global position is primarily due to a solid presence in only a handful of markets. Therefore, we have a long runway in the majority of markets to gain leadership positions outside of sparkling.

Source for value share positions: Euromonitor 2021

Focused on the Core + Experimenting in Adjacencies

It all starts with a strong core, and we remain laser-focused on strengthening that core through our advanced capabilities in marketing, innovation, revenue growth management and execution. But that does not limit our ability to intelligently experiment through thoughtful innovation, and purposeful shifts into adjacent categories. For example, we have made great progress with the expansion of Costa – now available in 40+ markets and 90+ market combinations – and Topo Chico Hard Seltzer, now available in 20+ markets, and holds the #5 spot in hard seltzer in North America.  We continue to refine our “test and learn” approach as a company, always striving to remain consumer and customer-centric.

Pervasive Distribution

Our franchise business model has enabled us to develop a strong global footprint with a local touch in markets around the world. Today, we have approximately 200 bottling partners across more than 200 countries and territories and sell our brands in more than 20 channels within approximately 30 million customer outlets globally.

~$8+ Billion System Capex

* Data points are for 2019

> 20 Channels

~30M Customer Outlets

~16M Cold-Drink Assets

Our purpose, refresh the world. make a difference..

Our company started in 1886 and grew with a purpose to refresh the world. This became refreshment not just in a physical sense but also in spirit, and not just to refresh people but also communities.

Today, we are a total beverage company. We’re present in almost every beverage category, and we have approximately 200 master brands. Over 700,000 people in our system help deliver those brands to customers and consumers every day. The Coca‑Cola Company’s purpose remains clear: To refresh the world and make a difference.

View The Purpose

Total Beverage Company

Our vision is to craft the brands and choice of drinks that people love, to refresh them in body and spirit. And done in ways that create a more sustainable business and better shared future that makes a difference in people’s lives, communities and our planet.

Growth Strategy

Pursuing excellence globally and winning together locally.

As we continue our journey as a total beverage company, disciplined portfolio growth plays an integral role in that journey. This disciplined portfolio growth is reinforced through a constant focus on innovation, revenue growth management and improved execution – all supported by integrated brand-building. We believe executing and improving upon these initiatives forms the foundation to deliver strong results both today, and in the years ahead.

Sustainability

Leading in sustainability through collective action.

At The Coca-Cola Company, we strive to use our leadership to be part of the solution to achieve positive change in the world and to build a more sustainable future for our planet. We act in ways to create a more sustainable and better shared future. To make a difference in people’s lives, communities and our planet by doing business the right way. Our ESG agenda and initiatives are integrated into every part of our dual flywheel strategy, helping to drive growth while achieving our purpose as a company: to refresh the world and make a difference.

Compounding Quality Value

In order to continue raising the performance bar within our organization, we are focused on investing in our people and our capabilities in order to leverage accelerating topline growth across four key pillars of financial performance: Resource Allocation, Margin Expansion, Asset Optimization, and Cash Flow Generation.

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Coca-Cola's Global Dominance - Decoding the Beverage Giant's Business Strategy

From its humble beginnings in 1886 at a local pharmacy in Atlanta, Coca-Cola has grown into one of the world's most recognizable brands and successful global businesses. The company now operates in over 200 countries and sells nearly 2 billion beverage servings every single day.

However, Coca-Cola did not achieve worldwide dominance by chance. Behind the brand's global expansion is an equally impressive business strategy focused on distribution partnerships, product diversification, mass marketing, and understanding local consumer demands.

This case study takes a deep dive into Coca-Cola business strategy across dimensions like functional and corporate strategy , marketing, innovation, revenue growth management, and more. For any business leader looking to go global, there is much to unpack from Coke's 130+ year journey.

Functional Strategy Powering Global Growth

A key driver of Coca-Cola's worldwide growth is its functional strategy involving strategic global partnerships. Rather than handle bottling and distribution entirely on its own, Coca-Cola adopted a unique franchising model early on. This involved partnering up with local bottling companies while focusing internally on brand building and product concentrate manufacturing.

Such bottling partnerships gave Coca-Cola a highly asset-light and flexible structure, making rapid global expansion more feasible. Moreover, having strong regional bottling partners enabled the adaptation of products to local tastes and the gaining of deeper cultural insights. This win-win arrangement remains central to Coca-Cola's operations around the world even today.

Other functional areas like marketing, innovation, analytics, and HR also now leverage an integrated "Networked Organization" structure. This facilitates collaboration and best practice sharing globally across business units and regions. Aligning all functions towards the overall corporate vision has been key.

Crafting a Global Brand and Marketing Machine

Coca-Cola puts branding and marketing at the heart of its global business dominance. The company utilizes a "one brand, one visual identity" policy internationally to ensure universal recognition. Such standardization at scale brings unmatched mental recall globally, triggering impulse purchases by travelers and locals alike.

Moreover, while maintaining a consistent identity, Coca-Cola's advertising is tailored to resonate culturally across diverse markets. Commercials tap into universal themes like family bonding and festive joy that transcend geographies. Even today, Coke allocates enormous budgets across TV, sports sponsorships, social media, and experiential events to craft captivating campaigns.

Beyond promotion, the product portfolio itself has expanded greatly over the decades to include lower-calorie options like Diet Coke and Coke Zero. Category diversification moves into juices, coffee, energy drinks, and enhanced waters to cater to wider consumer needs. This multi-brand approach, combined with world-class marketing, has been a proven tactic in Coca-Cola's global success.

Strategic Innovation Focus Areas

Innovation in flavors, packaging, processes, and business models also plays a key role in Coca-Cola's growth story. However, the company does not innovate randomly but with clear strategic intent after rigorous testing.

Some focus areas driving innovation include healthier formulas, more sustainable packaging, premium/affordable pack formats for different consumer segments, and digitally-enabled equipment/experiences.

Rather than purely novel ideas, Coke focuses innovation investment on scalable platforms with the highest ROI potential based on needs assessments. The goal is ultimately global replication of big wins, not just local trials.

With such targeted innovation, Coca-Cola manages to consistently keep its product offerings relevant amid dynamically changing consumer preferences. This prevents lost market share to new beverage entrants.

Revenue Growth Management Driving Performance

Apart from great branding and innovation, Coca-Cola also actively manages revenue growth opportunities through advanced analytics. Techniques like predictive modeling, geo-demographic segmentation, pricing elasticity analysis, and promotional optimization leverage data to maximize sales and profits.

By determining the highest potential customer groups, retail channels, and portfolio/pricing mix for any given market, resources can be scientifically allocated for efficiency. Digital dashboards also enable tracking leading performance indicators and competitive benchmarking.

Such Revenue Growth Management (RGM) capabilities allow Coca-Cola to remain agile despite its massive scale. RGM will continue maturing as a key business discipline for global beverage players.

Global Expansion

When entering new international markets, Coca-Cola has a proven expansion playbook involving strategic partnerships, product localization, mergers & acquisitions, and technology transfers. Executed in a calibrated manner, this four-pronged approach has fueled Coke's rapid growth across developed and emerging markets.

• Local Bottling Partnerships Instead of setting up capital-intensive owned plants, Coca-Cola's established global practice has been to partner up with local bottlers and distributors who already possess regional scale, logistics infrastructure, and route-to-market. Such affiliates understand nuances like consumer preferences, languages, business norms, and distribution intricacies better in their geographies. Tapping into these local insights via bottling partnerships instead of going solo proved a highly prudent and successful growth strategy for Coca-Cola in diverse markets like China, India, the Middle East, and Latin America. This asset-light franchise model provides flexibility to expand faster while also benefiting local partners through technology access and a lucrative alliance with an aspirational global brand like Coca-Cola. Both parties thus experience a win-win arrangement.
• Product Portfolio Localization While maintaining brand consistency across core trademarks like Coca-Cola, Sprite, and Fanta, the product formulations and packaging formats are tailored to align with local tastes and sensibilities. For instance, soy-milk-based variants were launched in Asian countries to cater to dietary preferences. Coca-Cola offers fruit juice blends in Europe, dairy-based fusions in Latin America, and lower-sweetness dry drinks in Japan based on regional taste inclinations. Moreover, pricing and pack sizes are strategically adapted to align with income pyramid dynamics in a market, thus improving product penetration and affordability. Such portfolio localization, while keeping core branding intact, has been vital for Coca-Cola's growth in international markets.
• Mergers & Acquisitions Over the past decade, besides organic innovation, Coca-Cola has also accelerated growth by acquiring strong regional beverage brands across categories. Key acquisitions include Costa Coffee, an innocent smoothies brand, mineral water labels like Topo Chico, and the sports drink BodyArmor. Such tactical Mergers & Acquisitions instantly allow Coca-Cola access to new consumer segments, local distribution networks, and innovation capabilities already nurtured by the acquired brand. This faster route to enhancing market share has benefited Coke across Europe, North America, and premium beverage categories.
• Technology Transfers To support hyper-growth in developing markets, Coca-Cola also actively enables technology transfers to impart world-class concentrate production and bottling know-how to regional partners. By providing proprietary food-grade chemical processes, quality protocols, supply chain best practices, and equipment capabilities to affiliates, Coca-Cola empowers consistent local manufacturing capacity across global geographies. This transfer of intellectual property and operational expertise establishes sustainable execution capabilities for both concentrate production and last-mile distribution across the company's worldwide bottling network - catalyzing wider reach.
• Inclusive Distribution Network The Coca-Cola system also focuses on developing inclusive distribution models to ensure availability across retail outlets catering to all income segments in a market. Beginning with niche high-margin stores, distribution gradually expanded across neighborhood grocers, small eateries, and roadside vendors, accessing mass consumer segments. This micro-market distribution strategy centered on establishing an omnipresent network rather than chasing volumes alone has been instrumental to Coke's exponential rise in Asian and Latin American emerging economies. By tailoring engagement across dimensions like partnerships, products, M&A, and knowledge sharing, Coca-Cola has devised a replicable expansion strategy template fueling worldwide growth. Blending global standards with regional adaptations allows for customizing Coca-Cola's solution for local relevance worldwide.

Key Takeaways

Few businesses can claim to have perfected global scale, local relevance, and mass brand appeal as successfully as Coca-Cola. Across 131 years, the company has proven itself highly versatile at navigating international expansion.

While much mystique surrounds Coca-Cola's secrets to market leadership and worldwide recognition, several replicable principles underpin its winning recipe:

• Think global, act local - Consistent identity yet locally tailored
• Function follows form - Align all infrastructure to growth strategy
• Consumer is king - Stay on the pulse of evolving preferences
• Brand and data advantage - Differentiators not easily replicable
• Value of partnerships - Leverage mutually beneficial relationships

There is much for companies to unpack from Coca-Cola's global success playbook. With its strong corporate vision, functional alignment, consumer-centricity, and partnerships at its foundation, Coca-Cola continues expanding its growth runways even today. This case study offers several takeaways to inform smart internationalization strategies across industries.

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How Coca-Cola became one of the most successful brands in history

Table of contents.

Coca-Cola has an impressive track record of innovation which has helped propel the company to become one of the most successful brands in history. Through skillful advertising efforts, Coca-Cola is widely recognized as a symbol of American culture through its influence on politics, pop culture, and music around the globe.  

Key statistics and facts about The Coca-Cola Company: 

• Owns 43.7% of the US carbonated soft drinks market
• Net operating revenue of $38.7B
• Present in more than 200 countries and territories
• Employs over over 700,000 along with its bottling partners
• Ranked #93 in the Fortune 500
• Μarket value of $259.77 billion as of February 2023 

Who owns Coca-Cola?

There is no sole owner of Coca-Cola as it is a publicly listed company. However, the largest shareholder is Warren Buffett. Read on as we dive into the history of Coca-Cola's owners and much more below!

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The history of The Coca-Cola Company

How it all started.

The story of The Coca-Cola Company had humble beginnings in the late 1800s, in Atlanta, Georgia. Dr. John Pemberton, a local pharmacist, had developed a recipe for a sweet syrup that was originally advertised to cure headaches. It was eventually mixed with carbonated water to create a fizzy drink that was served at a soda fountain in Jacobs’ Pharmacy. The first glass of Coca-Cola was served on May 8, 1886. In the first year, Pemberton served approximately nine drinks per day which were sold for 5 cents a glass. 

While the ingredient list today is a highly guarded secret, it is well known that the original version contained extracts from the Coca leaf and Kola nuts for caffeine. The combination of these two ingredients is where the name comes from. Dr. Pemberton’s partner and bookkeeper, Frank M. Robinson, felt that spelling the name with double “C’s” would look better in advertising. So, he scripted out the logo which even today displays Mr. Robinson’s unique handwriting. 

Dr. Pemberton didn’t realize the potential of his new product. He took on several partners and sold portions of his business to various owners. Sadly, Dr. Pemberton died just two years after the creation of Coca-Cola. Prior to his death, he sold his remaining interests to an Atlanta businessman, Asa Griggs Candler. Candler knew there was something special about this new product, but little did he know that his $2,300 investment (roughly $67,000 today) would be the start of one of the most powerful brands on the planet. 

Birth of The Coca-Cola Company

The Coca-Cola Company was officially founded by Asa Candler in 1892. It didn’t take long for the Coca-Cola product to quickly spread outside of Georgia and across the nation. By 1895, Coca-Cola was being sold in every state of the union. In 1919, the company was sold to Ernest Woodruff. Woodruff's sons would continue to run the company for many years, transforming the company into a major international brand. The Coca-Cola Company was officially listed on the New York Stock Exchange in 1919 under the ticker symbol KO. 

International expansion of The Coca-Cola Company

The first export of Coca-Cola was to Cuba in 1899. It wasn’t until the 1920s, that international expansion of the brand began to take off. During World War II, Coca-Cola’s President, Robert Woodruff, wanted to ensure that US service members stationed all over could have the comforts of home and pledged to transport Coca-Cola to the various bases in the European and Pacific theatres on the company’s dime. This introduction of the Coca-Cola product increased international demand. With people all over the world craving a taste of American culture, Coca-Cola began establishing partnerships with bottling companies and distributors all over the world. Today, the brand operates in more than 200 countries and territories. 

Early competition

In the early years, Coca-Cola had a lot of competition. In fact, the late 1800s and early 1900s was the most active period in the development of new soft drinks. Some of these companies went out of business or were bought out by other larger companies. However, many of these brands are still in existence today as more novelty brands and hold a very small percentage of the market. 

The most prominent competitors to Coca-Cola throughout its history have been Pepsi and Dr. Pepper. They were both created around the same time as Coca-Cola (Pepsi in 1898 and Dr. Pepper in 1885). Over time, these three giants bought up many of the smaller beverage companies. For example, Vernor’s Ginger Ale, Hires Root Beer, and Royal Crown Cola still exist but are now owned by Dr. Pepper. 

The Coca-Cola beverage was created in 1886 by Dr. John Pemberton, a pharmacist from Atlanta, Georgia. The recipe was purchased by Asa Griggs Candler and The Coca-Cola Company in 1892. The brand quickly became popular and was sold all over the United States. By the early 20th century, Coca-Cola began a rapid expansion across the globe.

The Coca-Cola system- a global franchise distribution network 

The Coca-Cola Company’s rapid expansion around the world can be attributed to its unique franchise distribution system (known as the Coca-Cola System ) that they have operated since 1889. Coca-Cola produces syrup concentrate which is then sold to various bottlers around the world. This helps the company maintain control over its top-secret recipe without the burden of having to run many of the independent bottling facilities. 

The Coca-Cola System is a network of over 900 bottling plants that produce 2 billion servings of Coca-Cola every day. The bottlers each hold contracts that allow them to exclusively operate in a predetermined territory. This reduces the need for the competition from multiple companies that sell the same product. 

These distributors handle all aspects of the production and distribution process including mixing the syrup with carbonated water and sweeteners, placing the finished product in cans or bottles, and distributing Coca-Cola to supermarkets, vending machines, restaurants, and movie theaters. Although Coca-Cola produces the main syrup, the franchise companies also control the soda fountain business in their territory. 

The exception to this model is the North American market where The Coca-Cola Company directly owns most of the bottling and distribution. Outside of the United States, Coca-Cola has continued to encourage the consolidation of its various bottling companies. Over time, Coca-Cola has acquired a percentage of ownership in many of the companies in the Coca-Cola System. 

Top 5 independent bottling partners, representing 40 percent of the Coca-Cola System distribution network:

• Coca-Cola FEMSA (Latin America)
• Coca-Cola Europacific Partners, plc (Western Europe, Australia, Pacific, and Indonesia)
• Coca-Cola HBC AG (Eastern Europe)
• Arca Continental (Latin America and North America)
• Swire Beverages (Asia and parts of North America)

Here's an example video from Coca-Cola HBC AG explaining their business model:

The Coca-Cola Company leverages a network of independently owned and operated bottlers around the world. This has enabled the company to quickly expand without having to invest billions of dollars into building facilities and navigating international rules and regulations unique to each region.

Evolution of the Coca-Cola product

The formula for Coca-Cola has undergone a few changes since its creation. Some of these changes were driven by necessity. Some were an attempt to reduce costs or gain market share. While the brand does not make changes often, some have been better received than others. 

Removal of cocaine

During the late 19th century, there were many Cocoa-based beverages available on the market. At the time, drugs like cocaine and opium were perfectly legal and used quite frequently for medicinal purposes. Since Coca leaves were used to make Coca-Cola, there were small quantities of cocaine that could be found in the drink. 

The public eventually became aware of the addictive properties of these substances, so Coca-Cola was pressured to remove this drug from its list of ingredients. The Coca-Cola Company made steps to gradually phase out sources of cocaine from its production until it was finally eliminated in 1929.

On April 23, 1985, The Coca-Cola Company took a huge risk that shocked the world. They announced that they would be changing the formula of their world-famous soft drink. Despite its massive success, the company had been losing ground to one of its main competitors, Pepsi. Pepsi’s success wasn’t just in the United States. They were quickly expanding into markets that were once considered untouchable. At the height of the Cold War, Pepsi became the first Western product to be permitted in the Soviet Union . 

Based on surveys and taste tests, consumers seemed to prefer the sweeter taste of Pepsi-Cola. So, Coca-Cola set out to rework the formula to improve its ability to compete. According to Coca-Cola’s website, their goal was to “re-energize the Coca-Cola brand and the cola category in its largest market, the United States”. After receiving positive feedback from nearly 200k customers in taste tests, New Coke was released to the market. 

The public’s response to the new version of their product was outrage. Unfortunately, Coca-Cola miscalculated its customer’s bond with the original brand. Massive protests were staged and the company was flooded with thousands of angry phone calls and letters. The backlash was so fierce that it forced the company to revert back to the old formula after only 79 days on the market, branded as Coca-Cola classic. 

This graph demonstrates PepsiCo’s rapid expansion of market share from 1970 to 1990 and subsequent fall.

Coca-Cola Zero Sugar

While Coca-Cola has vowed not to make any changes to its original product, the company plans to update the recipe and packaging for their popular zero sugar variation, Coca-Cola Zero Sugar . The company has been cautious in its promotion of the new version as to not create a blowback like the 1985 New Coke fiasco. Coca-Cola has reiterated that the new version will not be a major overhaul, rather an “optimization of flavors and existing ingredients”. The rollout is expected to hit the US market by August 2021.

Sweetener changed to high fructose corn syrup

Traditionally, the Coca-Cola recipe called for cane sugar as the primary sweetener. During the 1970s, the United States saw a massive increase in corn production. This forced the prices of corn to drop significantly. In addition, corn was heavily subsidized by the US government. This made sweeteners like high fructose corn syrup more affordable. 

In an attempt to reduce costs, Coca-Cola slowly started substituting cane sugar for high fructose corn syrup during the 1980s. The transition took place over the course of approximately 5 years. 

Today, cane sugar is still used in the production of Coca-Cola in certain regions of the world. The most popular example is Coca-Cola produced in Mexico. This version of Coca-Cola is still made with cane sugar. Some critics argue that “Mexican Coke” has a flavor that is closer to the original formula.

In 1935, Coca-Cola was certified as kosher after the company replaced the source of glycerin used in production . This was originally derived from beef tallow but was replaced with a plant-based version. However, with the change of sweetener in the 1980s to high fructose corn syrup, its kosher status was removed. Today, bottlers in markets with large Jewish populations will temporarily substitute high fructose corn syrup during Passover to obtain Kosher certification.

Recipe and flavor variations

Despite the utter failure of New Coke in 1985, The Coca-Cola Company has introduced new flavors over time in addition to Coca-Cola classic. 

Some consumers avoided Coca-Cola classic because of the high sugar or caffeine content. In 1982, the company released a diet version of their product for consumers who were concerned about consuming too much sugar. A caffeine-free version was also introduced a year later. 

The company has also tried different flavor combinations. The first was Coca-Cola Cherry in 1985 which was a huge success and remains popular today. Other flavors included lemon, lime, vanilla, orange, ginger, cinnamon, and coffee. Many of these were attempts to bring local flavors to international markets. 

Coca-Cola has achieved enormous amounts of growth by tailoring its products to local tastes and demands. They have also been able to reduce production costs by substituting expensive ingredients such as cane sugar for lower-cost alternatives. Not every change has been well received by the public. Coca-Cola infamously changed their original recipe to replace it with “New Coke”. This change faced fierce backlash and forced the company to bring back the original product after only 79 days on the market. 

Coca-Cola Growth Strategy

The company has outlined a list of key objectives that they plan to execute in the coming years to spur additional growth. This strategic plan is intended to guide the company in refocusing efforts and being more intentional with its actions.  

Focus on developing markets

Coca-Cola has identified that there is huge growth potential in the developing world. Seventy percent of all beverages being consumed in the developed world are commercialized compared to only 30 percent for the developing world. Considering the developing world contains 80 percent of the world's population, growth is expected to be exponentially higher. 

One identified area of opportunity is brand diversification. While Coca-Cola has a strong foothold globally, this is only due to its strong presence in major markets. Outside of sparkling water, Coca-Cola is trailing competitors. The focus will be on gaining momentum in other beverage categories through the experimentation of new products. 

Brand portfolio optimization

Bigger isn’t always better. The Coca-Cola Company is realizing that its efforts may be spread across too many individual brands. Their goal is to rebalance their portfolio and consolidate products into fewer master brands. They have already reduced this number from approximately 400 to 200. By having fewer master brands, they can better focus their efforts. 

Networked organization

Operating a large corporation comes with challenges. In many cases, there can be inefficiencies and duplicated efforts. Coca-Cola plans to address this by reorganizing its support and operational teams to provide better support and work more effectively. 

Brand building

The company plans to deliver world-class marketing through targeted resource allocation. The goal is to be more intentional with the way advertising and marketing investments are made. 

Coca-Cola has a goal to increase the frequency that new or existing consumers drink their products. To do this, the company has set targets to significantly increase innovation by bringing more trial products and projects into the pipeline. The goal is to increase this by 40 percent over 2020. 

Digital transformation

Coca-Cola understands that data is a powerful tool. They are in the process of undergoing a digital transformation to help the company operate more effectively and leverage data to drive decision-making. 

Revenue growth management

With this new data and digital tools available, the company can place a renewed focus on which areas have the most potential for growth. They will focus on understanding which markets, consumers, product lines, and competitors should be addressed.

The Coca-Cola Company is dedicated to growing the business through a skillfully designed and executed strategic plan. Their long-term goals are to focus on expanding the commercial beverage industry in developing countries. They also plan to optimize their product line by reducing the number of master brands, creating new innovative products, changing their internal operations teams to streamline processes, and better leverage data.

The power of advertising- Coca-Cola becomes a household name

A big part of Coca-Cola’s success over the years has been its focus on innovative marketing and advertising campaigns. In 2020, Coca-Cola was ranked as the 6th most powerful brand in the world. This accomplishment didn’t come overnight. Over the years, Coca-Cola has had to work diligently to evolve and bring fresh, new ideas to marketing and advertising.

Large contributions to advertising 

Even early on, Asa Griggs Candler spent a considerable amount of money on advertising. His original budget for advertising was $11,000 (over $300,000 in today’s money). By 1900, the budget increased ten-fold to $100,000 and again to $1 million by 1910. 

Large advertising budgets are important when a new brand is getting established. As a company grows and becomes well-known, they typically scale back on their advertising budget since most consumers recognize the brand. Coca-Cola, however, has continued to keep the pressure on its competitors. Today, the company spends about 10 percent of its revenue on advertising and marketing. This equates to approximately $4 billion in commercials, print advertising, sponsorships, and other promotional merchandise. 

Focus on the brand and human connection

Much of Coca-Cola’s advertising success comes from the way they present their brand. Instead of focusing on the actual product, they emphasize the feeling and camaraderie of making the brand part of one’s identity. Their advertisements are intended to make people feel good about themselves and want to be a part of the experience. 

Human connection is an important part of the brand message. One great example of this was the “Hilltop” commercial from 1971 that featured people from different cultures singing “I’d like to buy the world a Coke”. This showed the Coca-Cola brand as one that was intended to unite people around the world.

Celebrity endorsements

Celebrity endorsement is a way to help a brand stand out, especially when targeting specific groups. For example, sports fans will be more likely to purchase a product if their favorite athlete promotes the brand. Over the years, Coca-Cola has been endorsed by numerous high-profile celebrities, athletes, and pop culture icons. 

Hilda Clark, an American model, and actress was the first celebrity to endorse the brand in 1900 and was featured in early advertisements. Since then, Coca-Cola has received endorsements from many big-name celebrities such as Ray Charles, Aretha Franklin, Magic Johnson, and Elvis Presley. 

Coca-Cola in pop culture

The Coca-Cola brand has been a prominent part of American culture for decades. Coca-Cola has skillfully attached itself to key historical events, music, movies, and major holidays. 

Coca-Cola and many of its other brands have been featured in numerous films and television programs. For a short time, Coca-Cola even owned Columbia Pictures (from 1982 to 1989) and inserted Coke products into many of its productions.  A few examples include:

•  The 1933 film King Kong displays a Times Square billboard advertisement in several of the scenes.
• Coca-Cola products being used in the 1982 film E.T. the Extra-Terrestrial.
• The modern TV series Stranger Things which takes place in the 1980s displays and makes reference to New Coke. 

The Coca-Cola Company has also made its way into music across the globe. Elvis Presley promoted Coca-Cola during his last tour in 1977. The UK sensation, The Beatles, made mention of Coca-Cola in a line of their hit song “Come Together”. In addition to lyrical references, the brand has featured musical superstars such as David Bowie, Elton John, and Whitney Houston in Diet Coke commercials. 

The Coca-Cola brand has also cleverly attached itself to popular holidays. Some of its most successful campaigns have been displayed over the Christmas holiday. One of the most iconic campaigns started in 1931 with illustrations of St. Nicholas drinking a Coca-Cola. Many credit Coca-Cola with inspiring the modern-day version of Santa Clause. 

Clever campaigns and promotions

Coca-Cola has been one of the top innovators in the advertising space. On many occasions, they have used never before seen tactics that both surprised and delighted consumers. Creating an additional buzz around their advertising campaigns helps to amplify whom the campaign reaches directly. 

During the 2012 NFL Superbowl, Coca-Cola decided to take a non-traditional approach. The Superbowl is one of the most sought-after advertising opportunities. Each year, approximately 95 million people tune in to watch the championship game. Typically, major brands spend over $5 million for a single 30-second commercial. With the rise of cell phones and other mobile devices, Coca-Cola knew that consumers would be juggling multiple devices during the game. So, they created a family of animated polar bears that would react to the game in real-time on digital media banners and a microsite. The bears would laugh, respond to audience tweets, and make faces. The campaign was a huge success. During the game, over 9 million viewers spent an average of 28 minutes engaging with and watching the polar bears in action. 

In 2011, Coca-Cola decided to take a personalized approach to advertise in Australia with their Share a Coke campaign. They selected 150 of the most popular names and printed them on the side of their bottles along with the message “Share a Coke with…”. The campaign encouraged people to share a bottle of Coke with a friend or tag them in a social media post with the hashtag #shareacoke. The campaign was so successful that it was expanded to over 80 countries and led to Coca-Cola’s first sales growth in over 10 years. 

Collectible memorabilia 

Coca-Cola has created and distributed numerous pieces of branded memorabilia that are highly sought after by collectors including toys, clothing, antique bottles, signs, household items, and old vending machines. The collectible nature of these products has nostalgia of traditional Americana and has further helped to amply the prestige and cultural connection of Coca-Cola to US history. Rare and well-preserved items can fetch tens of thousands of dollars. 

The Coca-Cola Company has created one of the most powerful and well-known brands in the world. Over the years, they have embedded themselves as an icon of American culture through music, television, and films. The company spends a significant portion of its annual revenue on advertising efforts including television commercials, social media, and other advertising. 

Growth through mergers, acquisitions, and partnerships- becoming an unstoppable force in the food and beverage industry

While The Coca-Cola Company is known for its main products such as Coca-Cola and Diet Coke, the company owns, produces, and distributes over 500 individual brands worldwide. Some of these brands are a result of new products that they created. Others were obtained through mergers, acquisitions, and special partnerships with other major companies. 

Key mergers and acquisitions

• 1960 - Coca-Cola acquires Minute Maid, a producer of juices, soft drinks, and other beverages such as the popular Hi-C brand. 
• 1993 - When Coca-Cola was struggling to gain a foothold in the Indian market, they purchased the popular local brand, Thums Up. Their business now makes up over 40 percent of the cola business in India. 
• 1995 - Acquisition of Barq’s which produces a line of root beers and cream sodas. 
• 1999 - Coca-Cola purchased 50 percent of Inca Kola for $200 million and took control of its marketing and bottling operations. 
• 2001 - Odwalla, a brand of fruit juices, smoothies, and bars was acquired. This company was discontinued in 2020.
• 2007 - Coca-Cola acquired Fuze Beverage, a producer of teas and fruit drinks that were infused with vitamins and minerals. 
• 2008 - The company purchased 40 percent of Honest Tea, a popular iced tea producer. The remaining shares were purchased in 2011 giving Coca-Cola full ownership. 
• 2013 - Coca-Cola purchased the coconut water company ZICO. 
• 2014 - 16.7 percent of the energy drink manufacturer, Monster Beverage, was sold to Coca-Cola in exchange for a long-term strategic partnership. 
• 2016 - Coca-Cola purchased a portion of Chi Limited, a major distributor of snacks, food, and beverage products in Nigeria. The remaining shares were acquired in 2019.
• 2017 - Topo Chico, a Mexican sparkling water brand was acquired by Coca-Cola. 
• 2018 - Coca-Cola purchased Costa Coffee making it the owner of the second-largest coffeehouse chain in the world after Starbucks Coffee. 
• 2018 - Organic & Raw Trading Co., the Australian producer of MOJO kombucha was acquired. 

Special partnerships

In addition to owning many brands, The Coca-Cola Company has created many successful strategic partnerships that have allowed Coca-Cola to grow exponentially. 

One of the most famous partnerships is with McDonald’s. When McDonald’s was just getting started in 1955, it needed a beverage distributor. The two companies struck a deal for Mcdonald's to exclusively sell only Coca-Cola products. McDonald’s eventually grew to become the largest restaurant chain (by revenue) and Coca-Cola products are served in nearly 40,000 of their locations around the world. Other notable restaurant chains that carry Coca-Cola products include Burger King, Chili’s, Chipotle, and Domino’s Pizza.

Coca-Cola has also partnered with numerous venues around the world to sell only Coca-Cola products in their stadiums, theatres, and concert halls. The Coca-Cola Company is a major sponsor of the Olympic Games. In 2017, the company signed a deal with Major League Baseball in which they agreed to drop their competitor Pepsi and only promote Coke products.

Most of Coca-Cola’s growth has come from strategic mergers and acquisitions of companies all over the world. They have been able to expand into new markets by buying companies that already dominate the specialty or space. The company has also developed strategic partnerships with other large companies to exclusively sell Coca-Cola products.

Controversy, regulatory issues, and criticism 

Despite the company’s overwhelming success, Coca-Cola has faced a lot of criticism throughout its history. There are many opinions related to the impacts that The Coca-Cola Company has on the environment and consumers alike. 

Health concerns

It’s no secret that Coca-Cola is a sugary drink. According to the Centers for Disease Control (CDC), half of all Americans will drink at least one sugary beverage each day. This massive consumption of sugar is leading to an epidemic of conditions such as type 2 diabetes and obesity. The World Health Organization (WHO) recommends that adults consume no more than 6 tsp of sugar each day. A single 12oz can of Coca-Cola contains nearly twice this amount. 

With Coca-Cola being the leading company in the food and beverage industry, they have received a lot of negative attention directed towards their contribution to this serious problem. 

The company has responded by producing sugar-free or reduced-calorie beverages. They have also expanded their product lines to include healthy alternatives like coconut water. 

Environmental issues

Coca-Cola has been identified as the single producer of plastic waste in the world. Much of this plastic is not discarded properly and ends up in the oceans. This has contributed to the ecological disaster due to single-use plastics. This has captured the attention of environmental protection groups who claim that Coca-Cola isn’t doing enough to work toward a reasonable solution. A report from Greenpeace estimates that the company produces over 100 billion plastic bottles every year with no obvious goal to reduce single-use plastic waste. 

Coca-Cola has made some efforts to reduce its environmental impact. First, they redesigned their bottles to use less plastic (a process called “lightweighting”). While this does reduce the amount of plastic used in production, it does not reduce the number of bottles that end up in landfills or the ocean. They have also introduced their “PlantBottle” which is made from plant-based materials.

While these are steps in the right direction, most environmental groups question whether these efforts are enough. Coca-Cola appears to be spending large amounts of money lobbying politicians around the world to block legislation that would encourage more environmentally friendly manufacturing. They have also been accused of spending a considerable amount of money on “green marketing” without efforts to back up their claims.

Over the years, The Coca-Cola Company has been the center of controversy due to environmental impact and health concerns due to their products. Coca-Cola has responded by providing low-calorie, sugar-free, and healthy alternatives. They have also worked to reduce their plastic use and seek alternatives as they are the single largest contributor to single-use plastic waste.

Coca-Cola's social media strategy

The Coca-Cola Company is a social media powerhouse with millions of followers across the globe. The company is very intentional with its use of social media platforms and leverages them to drive brand awareness and interaction with customers. There are several key components that have made Coca-Cola’s social media strategy so successful. 

Positivity  

In 2018, Coca-Cola made a commitment to become the ‘most optimistic brand on social media'. They launched their #RefreshtheFeed campaign in which they completely deleted all of their social media content and started fresh. Consumers embraced this new positive approach and encouraged even more followers who wanted to enjoy the feel-good vibes of their social media posts. 

Leverage consumers to create content

While Coca-Cola’s marketing team creates a lot of content for their online platforms, they have successfully leveraged their millions of followers to create content on behalf of the brand. They have used creative hashtag-based campaigns to encourage consumers to post Coca-Cola-themed posts for their friends and family to see. One of the most successful was the #shareacoke campaign which reversed a 10-year stagnant sales record. 

Attachment to social issues

The company has a stringent social media policy to ensure that content aligns with the company’s values. In July 2020, Coca-Cola decided to join many other major brands in temporarily halting social media posts and advertisements for a minimum of 30 days. This decision came as a result of concerns about growing hate speech and misinformation on social networks. They’ve regularly supported important civil rights and other social issues over the past few decades which helps consumer groups connect with the brand. 

Coca-Cola website

The Coca-Cola Company’s main company website contains various resources for consumers, vendors, and investors. The information included in the website discusses the company’s history, its brands around the world, career opportunities, media center, and investor relations. 

According to SimilarWeb, the site is ranked 10th in the Food & Beverage category and receives about 1.8 million visitors each month. 

The Coca-Cola Company’s YouTube channel is a platform that is used to post promotional videos and other advertisements from all over the world. The channel was started in 2006, has 3.6 million subscribers, and has nearly 3.5 billion views. About 8 percent of their website traffic comes from YouTube.

Coca-Cola’s LinkedIn account has over 6 million followers. The company uses this platform to post company updates for the business community. It is also used to promote job openings and attract top talent from the LinkedIn community. 

Twitter is one of Coca-Cola’s most powerful social media accounts. Their Twitter account ( @CocaCola ) was started in 2009 and has posted nearly 300,000 tweets to its 3.3 million followers. Most of the tweets are short inspirational or funny messages to enhance daily brand awareness or encourage engagement. Coca-Cola’s Twitter account generates 62 percent of the traffic to their website. 

Coca-Cola’s Instagram account has 2.8 million followers. The account is mostly used to post promotional stories on the platform. 

Coca-Cola’s Pinterest account is used to post drink and food recipes and promote Coca-Cola products like customizable Coke bottles. Their account has about 30,000 followers and receives over 10 million views each month. 

With over 105 million followers, Coca-Cola’s Facebook account is massive. It’s the 5th most-followed account on the social media platform, only behind Facebook itself, Samsung, Cristiano Ronaldo, and Real Madrid CF. The site is used to post videos and promotional content in many different languages for their followers. 

So, Why is Coca-Cola so Successful?

Few companies can boast the tremendous success and growth that The Coca-Cola Company has enjoyed for over 135 years. This accomplishment can be attributed to industry-leading advertising, innovation of their products, and delivering a positive brand message. Let's take a look at what makes Coca-Cola so successful!

Recap: growth by the numbers

Key takeaways.

• Coca-Cola has leveraged a network of independent bottlers around the globe to aid in rapid expansion. These distributors have territorial rights which help prevent competition and price wars.
• The Coca-Cola Company has made changes to its main product over the years but learned a very valuable lesson with the introduction of New Coke in 1985. The launch was a disaster and faced a fierce backlash from consumers who demanded the return of the original product.
• Coca-Cola’s long-term strategic plan includes focusing on the developing world where consumer beverages have a lot of growth potential, optimizing the number of master brands, revamping their operational network, and leveraging technology and data.
• Coca-Cola’s advertising focuses on creating human connections and making people feel good. They have led the advertising world in cutting-edge approaches to marketing that have never been seen before.
• Coca-Cola has inserted its brand and products in films and television to become an easily identifiable American icon.
• Acquisition of other companies has been a major part of Coca-Cola’s expansion efforts giving them the ability to quickly reach into new markets or acquire existing popular products.
• The Coca-Cola company has been the target of criticism due to its potential negative impact on consumer health and the environment. 

Coca Cola Marketing Strategy, Plan & Mix (4Ps)

Last Sunday, I went to my nearby Kirana store to get some bread. As I was waiting for the shopkeeper to fetch me a loaf, the TV in his store caught my attention. Some news channel was showing the horror that is going on some parts of the world.

Noticing this, the shopkeeper told me something, which translated in English, is “Only if humans could forget the differences and enjoy the commonality, the world would be a better place…” I nodded in agreement but kept thinking, people everywhere are so different, be it culture, race, nationality, etc. So how do we find something familiar?… The answer to my question was resting right next to the TV, in its iconic shape, chilled as everyone likes it…A bottle of Coke. 

What is it about Coke that makes it so much more than a refreshment? How has it transcended from being a refreshment drink to a feeling? Let’s deep dive into all of this and much more as we take a look at the marketing mix (4Ps), plan, and strategy of Coca-Cola. 

View this post on Instagram A post shared by Coca-Cola (@cocacola)

The Marketing mix (4Ps), plan, and strategy of Coca-Cola. 

A big buffet of products.

Coca-Cola has five major categories for Beverages; Sparkling Soft Water, Waters and Hydration, Juices, Dairy and Plant-based, Coffees, and Teas. There are roughly 500  beverages that make up these categories—the most popular are Coca-Cola, Sprite, Fanta, Dasani.

Let me share a brief history of Coca-Cola. It was first produced as syrup by Dr. John Stith Pemberton, a local pharmacist in Atlantia, Georgia, on May 8, 1886. He then carried a jug of this syrup to Jacobs’ Pharmacy, which was sampled pronounced “excellent” and placed on sale for five cents a glass as a soda fountain drink. Carbonated water was teamed with the new syrup to produce the drink we know as Coca-Cola.

Fun Fact: Did you know that Dr. Pemberton’s friend, Frank M Robinson, came up with the name Coca‑Cola. He wrote it out by hand in the Spencerian script that is still used as the logo.

So precisely what is the product when it comes to Coca-Cola? Is it the drink that you and I enjoy on a hot summer afternoon?… Or is it the iconic contour design bottle conceptualized in 1916, and to date, remains the same?… Actually, it is none of these. Leave alone bottling; Coca-Cola doesn’t even complete most of their products! 

Coca-Cola manufacturers sell syrups to authorized bottlers. These bottlers then add water and perform carbonation to make and sell finished Coca-Cola products. This is called Concentrate Operations. 

Having many independent bottlers created several macros and macro-economic challenges for the firm, as smaller independent bottlers may face problems in continuing business when faced with economic hurdles. The Company started its Bottling Investments Group, identifying struggling  franchisees , providing them with financial and institutional support. 

Historically, the most considerable risk that the Company ever took came on April 23, 1985. It announced that it was changing the formula of the world’s most popular soft drink! It was called “new Coke.” The Company wanted to revamp the formula and the whole soft drinks segment, and they did just that!

We set out to change the dynamics of sugar colas in the United States, and we did exactly that — albeit not in the way we had planned. Then Chairman Roberto Goizueta

The decision to change Coke’s original formula was based on the fact that Coca-Cola was losing the market share, intensified by the lack of consumer preference and awareness. Over 200,000 consumers tested the change in formula and its taste, but these tests failed to show consumers’ emotional bonding with Coke. 

The below visualization shows the world’s most chosen consumer brands, and Coca-Cola tops the chart!

Coca-Cola’s first stint in the Indian market was in 1950 with the opening of the first bottling plant by Pure Drinks Ltd., in New Delhi. The Company had to exit the country in 1977 due to India’s Foreign Exchange Act. In 1992, Coca-Cola returned to India. It bought Parle and hence acquired Thums Up, Limca, and Gold Spot.  Thums Up- The Phoenix of the Indian Cola industry

Flexible Pricing Strategy

Coca-Cola, in its marketing mix, follows a pricing strategy called price discrimination. Price discrimination is a microeconomic pricing strategy where identical or largely similar goods or services are sold at different prices by the same provider in different markets. In general, an oligopoly is a market characterized by a small number of firms that realize they are interdependent in their pricing and output policies. The beverages market is an oligopoly, with a small number of manufacturers and many purchasers.

Between 1886 and 1959, the price of Coca-Cola was set at five cents or one nickel. This was possible for reasons including bottling contracts the Company signed in 1899, advertising, vending machine technology, and a relatively low inflation rate.

In 1899, when approached by two lawyers, the then Coca-Cola president, Asa Candler, sold the bottling rights to them for a meager amount of one dollar, thinking bottling would never take off, as soda fountains were the predominant way of consuming carbonated beverages in the United States. Bottling did become popular, surpassing fountain sales in 1928.

Since the contract was non-expiring, Coca-Cola had to sell their syrup at a fixed price. This meant that Coca-Cola’s profits could be maximized only by maximizing the amount of product sold, minimizing the price to the consumer. This led to Coca-Cola aggressively associating their product with a five-cent price tag, providing incentive for retailers to sell at that price even though a higher price at a lower volume would have brought them profit otherwise. 

Another aspect to consider was that vending machines were prevalent during that time, and Coca-Cola owned around 85% of the total vending machines in the US in the 1950s. These existing vending machines couldn’t reliably make the change, and hence the Company feared requiring multiple coins from the customer may deter them from buying the product. Reluctant to double the price, the Company preferred to stick to five cents.

When it comes to developing countries like India, where consumers are very price-sensitive and may flip to competitors, especially Pepsi, keeping this in mind, both parties agree to price parity in each segment.

The way Coca-Cola prices its product is exciting. For the sake of this article, we will use one product as an example here, the Classic Coca-Cola. As we know, Coca-Cola’s price in the modern day is not fixed. We can purchase it for as low as 50 cents a can and as high as $5.

To illustrate, if you buy a can for 50 cents, you are buying the product as a slab of 24 cans. So, there is saving, but it’s a quantity-buy. For a little more, $1.49, you will get a chilled can at the supermarket. You’ll have to pay a little more in a petrol station or convenience store since it is more of an impulse buy. In a vending machine, which is generally located at places with no other food source, the price is higher at around $2.50. In a cafe, it would cost approximately $4.50. And the same Coke in a hotel would cost about $5. 

The different price points for Coke are driven by the type of consumption, “the need state”, or “the desire state”. Therefore, the pricing power resides in the usage and the location, and the utility that the customer derives from that.

When it tries to enter a new market, mainly those sensitive to price, Coca-Cola prices its products at lower price points than its competitors in that segment. Once the brand is established, it repositions itself as a premium brand through various promotions.

With such a genius pricing strategy in its marketing mix, Coca-Cola has been able to achieve such a high margin of 27%. The below graph shows Coca-Cola’s global revenues from 2009 to 2020, as we see its revenues peaked in 2012:

Creative Promotional Strategy

If we had to choose one brand that has always been consistent with its promotions in marketing strategy, it is Coca-Cola. Never deviating from the basics, Coke has always been consistent with its projection.

From Santa Clause, as we know him, to the coupon culture we see every day, there are many such things like these that we owe to Coca-Cola. They have had such diverse campaigns, yet their underlying theme has been the same throughout history, Happiness! With slogans like “Enjoy,” “You can’t beat the feeling,” “Happiness,” coke has never been a beverage, but a “feeling.” 

Coca-Cola did not create the legend of Santa Claus. But Coca-Cola advertising did play a big role in shaping the jolly character we know today. The Coca Cola Company

Bill Backer, the creative director on the Coca-Cola account, was once flying to London to meet up with music director Billy Davis to shoot a new ad for Coke. The plane had to be rerouted to Ireland due to heavy fog in London. Most of the passengers were irritated by the situation. The next day Backer saw many of the passengers, some of whom were the most irate the previous day, laughing and sharing stories over a bottle of Coke. This was an eye-opener for Backer; he realized Coke wasn’t just a refresher but a commonality shared by people worldwide.

This set Bill Backer and team to shoot the famous “I’d like to buy the world a Coke.” When released in the US in July 1971, the Coca-Cola company received more than 100,000 letters about the commercial. Billy Davis, the music director on Coke’s account, wanted to produce a record version of the commercial, releasing two versions, by a group of studio singers who called themselves “The Hillside Singers” and later New Seekers. Both versions topped charts and were recorded in a wide range of languages, and sheet music is one of the top-selling to date.  

The “I’d like to buy the world a Coke” ad:

In the context of India, Coca-Cola has had a mix of jingles with celebrity endorsements. One of the most iconic ads was the “Thanda Matlab Coca-Cola,” released in 2003, featuring Amir Khan. This ad highlighted how Indians related to the brand as cool relief. Coca-Cola also understood the importance of festivals and cricket in Indian culture and targeted the same.

Campaigns like “Share a Coke Campaign,” “Fifa World Cup Campaign,” “Happiness Machine Campaign” helped Coca-Cola become an industry leader and become a part of the everyday lives of its consumers.

View this post on Instagram A post shared by Coca-Cola India (@cocacola_india)

The “Share a Coke” campaign:

The “Happiness Machine” campaign:

Coca-Cola at international Places

Coca-Cola is present in more than  200  countries and territories. Being in the business for more than 135 years, Coca-Cola has a vast and extensive distribution network. It has a total of 6 geographic regions of operations, including Europe, Latin America, North America, the Pacific, Eurasia & Africa. As mentioned earlier, Coca-Cola relies on its bottling partners for the packaging and distribution of its products. 

The visualization below shows the Market Share of leading Carbonated Soft Drinks companies in the United States. Coca-Cola has been a clear market leader.

While many view our Company as simply “Coca-Cola,” our system operates through multiple local channels. Our Company manufactures and sells concentrates, beverage bases, and syrups to bottling operations, owns the brands, and is responsible for consumer brand marketing initiatives. Our bottling partners manufacture, package, merchandise and distribute the final branded beverages to our customers and vending partners, who then sell our products to consumers. The Coca Cola Company

Once the bottlers are done with the packaging (predefined by the Company), the bottles are transported to the stockists, distributors, and retailers from where the final consumers buy the product. Coca-Cola has a pervasive distribution channel. In India, Coca-Cola has around  2.6  million outlets to sell its products.

Coca-Cola has a reverse supply chain where they collect the leftover glass bottles from the retailers and convert them into reusable products, thus saving cost and additional resources.

In its latest News Release, the Company reported strong results in the second quarter. The Coca-Cola Company reported strong second-quarter 2021 results and year-to-date performance.

Our results in the second quarter show how our business is rebounding faster than the overall economic recovery, led by our accelerated transformation. As a result, we are encouraged, and, despite the asynchronous nature of the recovery, we are raising our full-year guidance. We are executing against our growth plans, and our system is aligned. We are better equipped than ever to win in this growing, vibrant industry and to accelerate value creation for our stakeholders. James Quincey, Chairman, and CEO of The Coca-Cola Company

This signifies a strong recovery from the setback caused by the pandemic. As we see, all of the above Ps in its marketing strategy and mix have contributed to Coca-Cola’s success, both during pre-pandemic and in its recovery post-pandemic. 

That’s it for this one; I need a Coke now 🙂

-AMAZONPOLLY-ONLYWORDS-START-

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-AMAZONPOLLY-ONLYWORDS-END-

In my current role, I work with a Marketing Insights firm to serve clients across all domains. In my free time, I like to read books, cook, work out and write occasionally. I'm also a huge Chelsea FC fan.

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Our ambitious strategy to drive a circular economy for our packaging focuses on measurable and interconnected goals: Making 100% of our packaging recyclable globally by 2025—and using at least 50% recycled material in our packaging by 2030; collecting and recycling a bottle or can for each one we sell by 2030; and bringing people and organizations together to support a healthy, debris-free environment.

We offer beverage choices for all occasions and lifestyles across a range of categories and in a variety of packages. Our disciplined approach to innovation includes offering beverages with reduced added sugar and more brands with nutrition and wellness benefits, providing clear nutrition information on packaging, and marketing our drinks responsibly.

We are actively working on sustainable solutions across our global value chain to build climate resilience, reduce our carbon footprint and protect biodiversity. Our interconnected approach to sustainability supports our science-based target to reduce our absolute greenhouse gas emissions by 25% by 2030 (compared to 2015 levels), as well as our ambition to achieve net-zero carbon emissions by 2050. 

Our ability to deliver quality products requires a sustainable and secure supply of agricultural ingredients. In 2021, we launched our Principles for Sustainable Agriculture (PSA) to encourage and guide our suppliers to drive continuous improvement in sustainable farming practices. Our goal is to sustainably and ethically source priority ingredients to increase the resilience of our diverse supply chain, conserve nature and economically empower farmers. 

We help create a better shared future for everyone our brands and business touch by providing access to equal opportunity; fostering belonging in our workplaces and communities; respecting human rights across our operations and supply chain; economically empowering underrepresented groups; and giving back through philanthropic initiatives. 

Business & Sustainability Report

View 2022 Report

View 2022 Highlights

View 2022 Reporting Frameworks & SDGs

Publication Details

- Publication date: April 2023

- Language: English

- Number of pages: 88

Below is a list of quick links from the report:

3.  Chairman & CEO Message

5.  Board of Directors

6. Executive Summary

12. Our Company

24. Water Leadership

31. Portfolio: Beverages for All

36. Packaging

43. Climate

47. Sustainable Agriculture

51. People & Communities

63. Operations Highlights

69. About This Report

70. Data Appendix

86. Assurance Statements

87. Reporting Frameworks & Sustainable Development Goals (SDGs)

The Coca-Cola Company’s Strategic Analysis Report (Assessment)

Three external industry changes, strategy of coca cola to create competitive advantage over rivals:, reference list.

This paper will discuss three external factors of industry shifting that seriously affect on the profitability level of Coca-Cola the giant of the beverages industry; it will focus on strategic alignment of this company to generate competitive advantage over rivals, marketing mix, and one of the strength, opportunity, weakness and threat that could influence the future success of Coca Cola. Based on the given case study, the strategic analysis of the Coca-Cola illustrated that the beverage industry has been going through challenging time because economic meltdown, changes of customer’s preference, and shifting suppliers have seriously impacted the profitability of the company; however, this company has endeavoured to encounter the situation through its internal capabilities and product diversification strategy.

Adeoye & Elegunde (2012) sated that modern organizations are eager to engage their business operation within the more dynamic environment where the external factors have rapid and unpredictable influence on the regular operation integrating with the complex changes and shifting economic variables that necessitates for addressing appropriate strategy to sustain sales revenue and profitability.

The most momentous influence on the organizational strategy is the external industry changes and such strategy would deliberately design to attain definite goals and objectives to overcome the negative impact of the situations that carried out by the external factors and carried out internal changes to encounter with the shifting dynamics (Gamble & Thompson, 2012). Today’s beverage industry operates in a greater environment of the global market and its current business environment has experienced with ever hardly complexities, serious turbulence as well as rapid in change where the industry players must have to pay greater attention on the external environments in order to formulating sustainable strategies for future operation (Gamble & Thompson, 2012). The given case has presented three external industry changes mentioned as follows–

Economic Meltdown

The global financial crisis and its consequential recessionary impact has seriously impacted on the beverage industry; however, it was projected that the industry would reach at US$1.58 trillion by 2009 and would attain a sales revenue of US$1.78 trillion by 2014 due to global expansion of market and introduction of new products and product diversification. However, economic meltdown has presented a serious influence on the projected profitability by hampering steady market growth, reducing purchasing power of customers in both developed, and developing countries; although, the price of all varieties of beverages were higher in the developed countries in relation to the developing countries.

For instance, the case has strongly presented the data that in 2008, the market maturity along with bankrupt economic conditions in the USA has thrown the U.S. beverage industry to turn down at least 2.1 %; however, in 2009, the industry had fallen 3.1% of the overall market globally. At the same time, the sales reduction of the carbonated soft drinks have recorded 2.3% at the measures of sales revenue, it has added that within last five years the customers of the US market has consumed less soft drinks than the previous years, simultaneously, the sales of sports drinks, energy drinks, fruit juices, and even drinking water has reduced.

Changes of Consumer’s Taste and Preference

According to the given case, the changes of consumer taste and preference is another vital external industry changes that have affected the profitability of the companies within the beverages industry and the shifting dynamics of the customer taste and preference has drawn the attention of the market analyst and the managers engaged to identify right strategy fit for the situation. During 2010, the consumer’s taste and preference have shifted to the alternative beverages such as energy drinks, sports drinks as well as vitamin-enhanced drinks (Ki, Yin & Wai 2011; McWhorter, Chasteen & Davis 2012; Coca-Cola 2013, and Norden, Koch and Pronk 2008; Adeoye & Elegunde 2012 and Banutu-Gomez 2012).

However, such diversified drinks were priced fifty to four hundred percent higher than the carbonated soft drinks, the customers in the US marker did not bother to consume (Gamble & Thompson, 2012; Ki, Yin & Wai 2011; McWhorter, Chasteen & Davis 2012; Coca-Cola 2013, Adeoye & Elegunde 2012; and Norden, Koch and Pronk 2008; and Banutu-Gomez 2012). The dramatic shifts in the consumer’s taste and preference have evidenced with a surprising attributes due to the market raise of alternative drinks and generated new opportunities for the industry players, but the meltdown economy seriously influenced the market with a direct reduction of 12.5% of the sales revenue.

Shifting Alternative Suppliers

From the existing suppliers, to move the alternative suppliers for raw materials is another fundamental external industry change that would affect the profitability of companies within the industry; however, the most prevailing difficulty for beverage distributors is to refill vending machines as well as to offer alternative drinks for special events that Coca-Cola would competent to control over the channels.

The assortment of suppliers of alternative resources for newly diversified product line, such as, colour, flavour, glucose, sugar, and nutritional supplements have essentially engaged in bilateral cooperation to establish a long-term business relationship with the alternative suppliers for steady and sustainable growth. Moreover, for the packaging of new products, there would be an assortment of new suppliers to address the existing and upcoming demand for bottling; ; however, the necessity to establish a strong base of potential suppliers who are able to provide secondary packaging materials in accordance with the specification of Coca-Cola and to practice from the present time.

From the given case, it has illustrated that the Coca Cola has engaged to follow market driven strategies to create competitive advantage over rivals by engaging its internal resources and innovation where product diversification strategy and new product development strategy have simultaneously engaged to conquer the competition and to ensure sustainable growth. During 2010, the customers of the US market has shifted their preference to the energy drinks and alternative beverages rather than carbonated soft drinks, to address this gap, Coca-Cola developed many new products such as sports and energy drinks and at the same time, the company has diversified its carbonated soft drinks with various colours and flavours.

Such new product development and diversification has evidenced as gigantic success for the company by resolving uncertainty rose from the shifting market dynamics and contributed the company with remarkable competitive advantages; as the new products were essential to overcome the situation, Coca-Cola has engaged to ensure its right use of internal resources without wasting time, and efforts.

The Marketing Mix Elements

Key products of coca cola.

• According to the report of Banutu-Gomez (2012) and Norden, Koch and Pronk (2008, p.15), this company highly concentrated on the beverages segment, for instance, near 40% of its products linked with carbonated soft drinks whereas only 20% of the products connected with juices.
• It has already started product differentiation by taste (Ki, Yin & Wai 2011; McWhorter, Chasteen & Davis 2012; (Coca-Cola 2013, and Banutu-Gomez 2012).
• Coca-Cola offers over 3,000 products though it started with only a soft drink made of syrup and carbonated water (Ki, Yin & Wai 2011; McWhorter, Chasteen & Davis 2012; Coca-Cola 2013, and Banutu-Gomez 2012).
• Valuable non-alcoholic beverage brands includes Sprite, Fanta, Coca-Cola Zero, Diet Coke/ Coca-Cola Light, Coca-Cola Minute Maid, Powerade, Georgia, Glac´eau Vitamin water (Coca-Cola 2013, and Banutu-Gomez 2012).

Price of the products

• The profitability of this company come under threat due to increasing the price of raw materials.
• It introduces effective pricing strategies for different operational zone; however, it asks competitive market price for the soft drinks (Coca-Cola 2013 and Norden, Koch and Pronk 2008).
• To keep the sales rate up, it decreases product prices (Ki, Yin & Wai 2011; McWhorter, Chasteen & Davis 2012; Coca-Cola 2013, and Banutu-Gomez 2012).
• According to the given case, consumer preferences shifted during the 2000s for which this company intended to offer higher price for the alternative beverages, for instance, price of sports drinks and vitamin-enhanced beverages is 50% to 75% higher than its soft drinks.
• Coca-Cola (2013, p.3) stated that finished beverage products are now sold in more than 200 nations; however, it develops the world’s largest beverage distribution system.
• It has already developed strong distribution system to make available its products to its customers (Ki, Yin & Wai 2011; McWhorter, Chasteen & Davis 2012; Coca-Cola 2013, and Banutu-Gomez 2012).

Promotion of Coca Cola

• To conducting own independent advertising and marketing activities, this company provides sufficient funds to bottlers under the terms of agreement on a discretionary basis in most cases (Coca-Cola 2013); According to the annual report 2013 of this company, total budget for promotional and marketing programs was $6.9 billion in 2013 (Coca-Cola 2013).
• In addition, it allocates large investment for sponsoring physical and nutritional education worldwide (Ki, Yin & Wai 2011; McWhorter, Chasteen & Davis 2012; Coca-Cola 2013, and Banutu-Gomez 2012).
• However, it concentrates on the development of physical-activity based clubs, and health camps; moreover, it provides fund to initiate sports activities in many countries.
• This company has enlarged its budgets for the promotional activities for example family events, sports events, trade deals, bonus packs as well as in-store display.
• It creates and implements integrated marketing programs in order to increase sales.

A strength that could help Coca Cola to achieve better performance in the future has discussed below

Supply Chain Management and Distribution Channel

According to this case study, consumers could like to purchase most alternative beverages from convenient stores such as supermarkets, restaurants, hotels, food stores, vending machines, wholesale markets and many other places; however, it is significant to state that consumer used convenient place to buy 75% of the energy drinks sale in 2010. As a market leader of soft drinks industry, it becomes easy for the Coca-Cola Company to introduce alternative beverages and make available these products in the present distribution centres for example, food stores, retail markets, wholesale clubs, and convenience stores (Ki, Yin & Wai 2011; McWhorter, Chasteen & Davis 2012 and Banutu-Gomez 2012).

At the same time, top management and the marketers of this company would successfully able to influence the customers to buy the products of this company by ensuring prompt supply chain management (Ki, Yin & Wai 2011; McWhorter, Chasteen & Davis 2012; Banutu-Gomez 2012 and Norden, Koch and Pronk 2008, p.15). On the other hand, smaller producers typically used third parties to overcome the difficulty for food service distributors and to distribute products in the convenience stores and restaurants (Ki, Yin & Wai 2011; McWhorter, Chasteen & Davis 2012 and Banutu-Gomez 2012).

In addition, Coca-Cola Company was able to dominate such channels and beverage distribution systems to deliver sports drinks, carbonated soft drinks and vitamin-enhanced drinks; therefore, from the fact of this case, it can be said that strong supply chain management system and distribution channel is one of the most significant success factors and strength for this company.

Opportunity

An opportunity that could help this company to attain better performance in the future has discussed below

Product Diversification

The entire beverage industry had faced worse condition in the recessionary period in 2009, for instance, sales volume was down in the US market for sports and vitamin-enhanced drinks; however, alternative beverage industry experienced gradual growth in the worldwide market. According to this case study, product innovation had been among the most imperative competitive features of the alternative beverage industry; therefore, this Company could gain competitive advantages over other market players by diversifying existing product line. From the fact of this case, it can be said that consumer behaviour had already changed, as they are more interested to purchase alternative beverage items; therefore, it would be great opportunity for this company to be market leader in the alternative beverage industry.

A weakness that could help this company achieve better performance in the future has discussed below

Health Concern

Long addiction of soft and energy drinks of this company could adversely affect on the public health, such as, it can raise number of diabetes patient and damage our teeth (Ki, Yin & Wai 2011; McWhorter, Chasteen & Davis 2012 and Banutu-Gomez 2012 and Curd 2010, p.3). According to this case, the US Food and Drug Administration has not controlled caffeine content of energy shots and energy drinks, but health professionals researched on the effect of the high caffeine content of energy drinks and identified that the most important health troubles linked to large caffeine consumption are ‘heart arrhythmia’ and ‘insomnia’. Nowadays, consumers, administration or health officials become more concerned about the public health issues; therefore, Coca-Cola needs to invest more funds to control quality of products, such as, ensure pure water, reduce effects of HFCS and so on.

A threat that could help this company achieve better performance in the future has discussed below

Competitors

PepsiCo is one of the major primary competitors of Coca-Cola; however, other important competitors are Nestl´e, DPSG, Groupe Danone, Kraft, Unilever and many other companies (Coca-Cola 2013; Norden, Koch and Pronk 2008; Ki, Yin & Wai 2011; McWhorter, Chasteen & Davis 2012; Banutu-Gomez 2012 and Curd 2010, p.3). In addition, it has to compete against many regional and local companies or private label beverage brands (Coca-Cola 2013; Ki, Yin & Wai 2011; McWhorter, Chasteen & Davis 2012; Norden, Koch and Pronk 2008; Banutu-Gomez 2012 and Curd 2010, p.3).

Adeoye, O. & Elegunde, A. (2012). Impacts of External Business Environment on Organisational Performance in the Food and Beverage Industry in Nigeria. Web.

Banutu-Gomez, M. B. (2012). COCA-COLA: International Business Strategy for Globalization . Web.

Coca-Cola. (2013). Annual report 2013 of Coca-Cola Company . Web.

Gamble, J. E. & Thompson, A. A. (2012). Essentials of Strategic Management – The Quest of Competitive Advantage . New York, The USA: McGraw-Hill. Web.

Ki, T. H. Yin, C. H. & Wai, F. (2011). The Coca-Cola Company. Web.

McWhorter, C. Chasteen, w. & Davis, C. (2012). Marketing Study of the Coca-Cola Company. Web.

Norden, L. Koch, C. & Pronk, S. (2008). Marketing Management . Web.

• Chicago (A-D)
• Chicago (N-B)

IvyPanda. (2024, May 12). The Coca-Cola Company's Strategic Analysis. https://ivypanda.com/essays/the-coca-cola-companys-strategic-analysis/

"The Coca-Cola Company's Strategic Analysis." IvyPanda , 12 May 2024, ivypanda.com/essays/the-coca-cola-companys-strategic-analysis/.

IvyPanda . (2024) 'The Coca-Cola Company's Strategic Analysis'. 12 May.

IvyPanda . 2024. "The Coca-Cola Company's Strategic Analysis." May 12, 2024. https://ivypanda.com/essays/the-coca-cola-companys-strategic-analysis/.

1. IvyPanda . "The Coca-Cola Company's Strategic Analysis." May 12, 2024. https://ivypanda.com/essays/the-coca-cola-companys-strategic-analysis/.

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Coca-Cola Pricing Strategy

The Coca-Cola pricing strategy involves considering factors like demand, competition, and brand value . Pricing strategies include premium pricing and penetration pricing. Benefits include brand loyalty and market share, while challenges include price sensitivity and regulatory compliance for optimized pricing decisions.

Table of Contents

Definition and Overview

• Coca-Cola Pricing Strategy : Coca-Cola, one of the world’s leading beverage companies, employs a value -based pricing strategy , focusing on delivering value to consumers while maintaining premium pricing for its products.

Key Concepts and Components

• Value-Based Pricing : Coca-Cola’s pricing strategy is centered on delivering value to consumers by offering quality products, strong branding, and enjoyable experiences associated with its beverages.
• Premium Brand Positioning : Coca-Cola positions itself as a premium brand in the beverage industry, allowing it to charge higher prices for its products compared to many competitors.
• Product Differentiation : Coca-Cola differentiates its products by offering a wide range of beverages, each with its unique flavor profile and packaging. This variety allows the company to cater to diverse consumer preferences and price points.
• Psychological Pricing : Coca-Cola often uses psychological pricing techniques, such as setting prices just below round numbers (e.g., $1.99 instead of $2.00), to create the perception of lower prices while maintaining profitability.

The Coca-Cola Pricing Process

• Market Research : Coca-Cola conducts extensive market research to understand consumer preferences, trends, and competitive landscapes. This research informs pricing decisions.
• Competitor Analysis : The company monitors the pricing strategies of its competitors to ensure that its pricing remains competitive and aligned with market dynamics.
• Consumer Insights : Coca-Cola values consumer feedback and adjusts its pricing strategies based on consumer insights, ensuring that its products continue to meet customer expectations.
• Price Optimization : Coca-Cola employs price optimization models that consider factors like demand elasticity, production costs, and market conditions to determine the optimal pricing for each product.

Benefits and Applications

• Brand Loyalty : Coca-Cola’s premium pricing strategy has contributed to strong brand loyalty. Consumers are willing to pay more for Coca-Cola products because of their perceived quality and brand reputation.
• Revenue Maximization : By maintaining premium pricing, Coca-Cola maximizes its revenue and profit margins, allowing for continued investments in marketing , innovation , and sustainability efforts.
• Global Presence : Coca-Cola’s pricing strategy is adaptable to various global markets, allowing the company to operate successfully in diverse regions with different consumer preferences and economic conditions.

Challenges and Considerations

• Price Sensitivity : While Coca-Cola’s premium pricing has been effective, the company must monitor price sensitivity, especially during economic downturns when consumers may seek more affordable alternatives.
• Competition : Intense competition in the beverage industry requires Coca-Cola to continuously innovate and differentiate its products to justify premium pricing.
• Health and Wellness Trends : Growing consumer awareness of health and wellness may lead to increased demand for healthier beverage options. Coca-Cola must balance its product portfolio and pricing accordingly.

Key Highlights

• Coca-Cola Pricing Strategy : Coca-Cola’s pricing strategy is influenced by factors such as demand, competition, and brand value .
• Demand & Supply : Striking a balance between the demand and supply of Coca-Cola products in the market.
• Competition : Analyzing and responding to pricing strategies employed by competitors in the beverage market.
• Brand Value : Leveraging the strong brand value of Coca-Cola to inform pricing decisions.
• Cost Structure : Understanding the various cost components to determine profitable pricing levels.
• Market Segmentation : Dividing customers into segments based on their preferences and willingness to pay.
• Premium Pricing : Setting higher prices based on the premium brand image and perceived quality of Coca-Cola products.
• Penetration Pricing : Entering new markets with lower prices to capture market share quickly.
• Promotional Pricing : Employing temporary discounts and promotions to stimulate sales during specific periods.
• Brand Loyalty : Cultivating customer loyalty and encouraging repeat purchases through strategic pricing.
• Market Share : Establishing and retaining a significant share in the competitive beverage market.
• Profitability : Achieving sustained profitability through well-calibrated pricing decisions.
• Price Sensitivity : Evaluating how sensitive customers are to changes in pricing and adjusting strategies accordingly.
• Global Market Variation : Adapting pricing strategies to accommodate variations in regional and country-specific market dynamics.
• Regulatory Compliance : Ensuring adherence to pricing-related laws and regulations in various markets.

Read Next: Coca-Cola’s Business And Distribution , Coca-Cola Mission Statement and Vision , Coca-Cola Competitors , What Does Coca-Cola Own? , Coca-Cola PESTEL Analysis , Coca-Cola SWOT Analysis , Coca-Cola Vs. Pepsi.

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