Coca-Cola Case Study Essay Example

healthier drinks, resulting in a decline in Coca-Cola's revenue. Furthermore, the power of buyers is high because they face low switching costs when choosing an alternative product.

Customers have the convenience of purchasing a variety of beverages that are readily accessible in the market. The suppliers hold significant power in the industry with only a handful of bottlers providing bottles to both Coca-Cola and its competitors. It is at the discretion of the suppliers to withhold their supply of bottles from Coca-Cola.

It is challenging for Coca-Cola to locate new suppliers because there are limited bottling companies available in the industry. The competitive rivalry for Coca-Cola is high, as new competitors could enter the market with ease. Additionally, exiting the market is difficult due to high production costs. The introduction of new products by competitors poses a threat to Coca-Cola. To remain competitive, companies commonly use SWOT analysis, which enables them to understand their internal and external environment. Please refer to diagram 2 (Johnson, Scholes and Whittington, 2008).

Since 1886, Coca-Cola has had strong brand recognition and a significant presence in the market. This popularity attracts consumers, resulting in higher sales. As a global leader in soft drinks, Coca-Cola produces substantial amounts of their products for sale worldwide through mass production. This strategy reduces expenses related to high production quantities while also allowing for wider distribution of their products.

While Coca-Cola primarily targets the market for classic carbonated soft drinks, changes in consumer habits have created a greater demand for healthier options. However, Coca-Cola has not yet created any products to meet this demand. Instead, their focus has been on introducing new flavors such as Cherry Coke,

Diet Coke and Vanilla Coke. Unfortunately, these attempts have resulted in disappointing sales figures and a drop in revenue. Additionally, relying heavily on carbonated soft drinks with slow growth rates within North America has left Coca-Cola underrepresented in other markets.

If Coca-Cola remains confined to its present markets, it could encounter growth obstacles. Nevertheless, there are means for the company to broaden and take advantage of possibilities. One option is to procure bottling corporations and maintain ownership instead of vending them to bigger rivals. This would enable expansion while also overseeing the bottling industry. Additionally, Coca-Cola has yet to make headway in the health sector. To diversify their range, they might consider purchasing companies that concentrate on non-carbonated drinks like teas, juices, and energy beverages.

Intense competition plagues the industry, as PepsiCo has become the main competitor by successfully launching new products and expanding its portfolio. Meanwhile, Coca-Cola struggles with introducing new products or variations of its classic Coke that appeal to consumers. Moreover, the brand failed to enter the bottled water market with its withdrawn Dasani brand. Revenue for Coca-Cola is generated through bottlers who purchase concentrates and syrups.

Coca-Cola lacks ownership of the bottling companies and consequently lacks control over them. The bottling companies possess the option of refraining from engaging in business transactions with Coca-Cola and can produce and market their own merchandise. Coca-Cola encountered challenges due to the sluggish development in the carbonated beverages sector wherein its foremost market, North America, only demonstrated a growth rate of 1%.

The popularity of tea, juices and energy drinks is driving a decrease in carbonated beverage consumption. In response to this trend, Pepsi has been more successful

than Coca-Cola. However, in 2001, Coca-Cola's CEO at the time, Mr. Douglas Daft, was unable to persuade the board to acquire Quaker Oats.

PepsiCo acquired the company primarily to obtain Gatorade, a sports drink. On the other hand, Coca-Cola purchases small bottling firms and subsequently sells them to larger ones for profit. Nevertheless, if Coca-Cola retains ownership of these bottling firms instead of selling them off, it could improve its control over quality and pricing. This would enable charging higher prices for concentrates to remaining bottlers.

Both Coca-Cola and PepsiCo strive to synchronize the priorities of their bottling enterprises with their own objectives. Although Coca-Cola encountered challenges in launching new merchandise, customers still favor the iconic Coke. On the other hand, PepsiCo has achieved positive outcomes through recent product debuts such as Pepsi Twist. To stay competitive, Coca-Cola has redirected its attention towards promoting its traditional Coke while concurrently adopting a strategy for creating fresh innovative products for consumers.

In 1999, Schweppes mixer drink was purchased by Coca-Cola, but their industry products have not gained favor among consumers. Coca-Cola opted not to make additional acquisitions in order to improve earnings growth. Rather, the company decreased its earnings growth target and downsized its workforce to increase agility. Conversely, PepsiCo has triumphantly introduced new product extensions like Diet Pepsi and Pepsi Twist. Additionally, PepsiCo accurately anticipated growth potential in other markets and acquired Quaker Oats in 2001 to represent them in the non-carbonated drinks market.

From my point of view, Coca-Cola's main market suffered a decline due to the shift in consumers' tastes towards healthier drinks. As a consequence, their sales decreased and this was aggravated by their lack of presence

in the non-carbonated segment. The Atlanta Business Chronicle (2003) informs that North America, which represents Coca-Cola's most important market, only experienced a growth rate of 0.5% in 2003. It is worth highlighting that Coca-Cola has been involved in the non-carbonated sector since as far back as 1886.

Despite Coca-Cola's global expansion, classic Coke remains the favored option amongst consumers since its initial strong growth. Despite introducing new variations of their primary brand, classic Coke has maintained its popularity.

Due to intense competition and a dearth of fresh product options, Coca-Cola is suffering from a downturn, necessitating the launch of novel products and marketing tactics to revive its fortunes. At present, the company's leadership style is transactional, whereby leaders seek to enhance existing strategies instead of introducing their own distinct approach. Their primary objective is to ensure seamless operations and tackle extant problems.

Charismatic Leadership is characterized by leaders who possess confidence and likability, as well as the ability to establish organizational objectives that advance their industry. They effectively communicate their vision in a clear and concise way and show attention to detail. Coca-Cola had two CEOs, one of whom was Mr.

From 2000 to present, the Coca-Cola company has had two different leaders with contrasting leadership styles: Douglas Daft from 2000 to 2004 and Neville Isdell from 2004 onwards.

While serving as CEO of Coca-Cola, Mr. Douglas Daft exhibited traits of transactional leadership, but his successor, Mr. Isdell, was recognized for his charismatic leadership approach.

While leading, Daft proposed buying Quaker Oats mainly because of the popularity of their sports drink Gatorade. However, the board of directors declined his suggestion due to doubts about the company's growth potential. In contrast, Mr.

Isdell is a well-liked and personable leader who takes responsibility for most matters and has a team that is eager to collaborate with him.

Mr. Daft assumes both the roles of a team player and a team leader, establishing the direction of goals through clarification of role and task requirements. While applauding staff members for good performance, they are similarly held accountable for any mistakes made.

As per my opinion, Mr. Isdell’s leadership style is more suited for driving Coca-Cola's growth as compared to Mr. Daft who downsized over 5000 employees in 2001. Mr. Isdell is known for clearly expressing himself and taking accountability for his actions, qualities that are admired by the people.

Mr. Isdell has led Coca-Cola to make strides in technology and environmental sustainability. The company's new bottle design uses 5% less PET and is more user-friendly, leading to increased revenue.

Coca-Cola has expanded its brand portfolio to over 400, including non-carbonated beverages, under the guidance of Mr. Isdell. The company's culture has become more eco-conscious, as evidenced by enhancements made to bottle quality and efforts in 2007 to introduce a re-sealable can for classic Coke. The evolving consumer lifestyle is also observable in reported trends.

Modern consumers are increasingly conscious of both their personal health and the environment, disliking any unnecessary waste. Coca-Cola is taking action to address this concern by introducing eco-friendly bottles that allow people to enjoy drinks at their leisure without losing carbonation prematurely.

Mr. Isdell's leadership style has resulted in highly motivated Coca-Cola staff, improved relationships and greater productivity, leading to increased revenue. The company is now seeking opportunities in Brazil and plans to acquire Leao Junior, a Brazilian beverage company,

despite declining sales from 2002-2005. Furthermore, they have developed Peartiser; a new pear-based drink targeting female consumers aged 16-34 in the UK which will be launched in January 2007 (McCrorie, 2007).

Although PepsiCo provides competition, Coca-Cola has stayed relevant in the beverage market since 1981. The launch of their new product in the UK has led to a boost in revenue. In my opinion, Coca-Cola will continue to be a significant player and remain competitive in the industry.