Some of the major issue faced by Coca Cola are; Company is facing Strong competition from Tubainas so their Market share is decreasing due to increase in Tubainas, and their regional presence at low cost. Company is facing Decrease in its Profitability By its decision of price cut to compete with Tubainas who are low priced. Company has used many new expensive strategies to improve its operations and undercut competitor’s products, which caused greater reduction in profits. Company is also facing unfair competition from illegal and non tax paying companies.
In Brazil many companies operate who are not registered and illegal and don’t pay taxes, which help them to be low cost, and offer their products at low price There are many Local companies who are stealing market share of Global companies, Brazilian customers are price sensitive and they are not loyal to brands, so the locals who offer low priced products are preferred, and their market share is increasing day by day. For coca cola it’s very difficult to cut its costs while increase its revenues and profits.
Its being very difficult to be at low cost as every other player in the industry is trying to use same strategy to reduce costs, and be cost efficient, for providing low price products. At the end this report contain a solution proposed to coca cola that it must acquire existing regional companies with preferred taste to lower down competitive pressure. With cola drinks Brazilian market also prefer some local drinks, in which company is not yet present, and have started to enter into that market segment, with Guarana Kuat, so company should increase its operations in local preferred drinks.