Strategic choices are concerned with decisions about an organisation's future and the way in which it has to respond to the myriad of pressures and influences because of this of its immediate and macro environment. To this end there are three basic alternatives to be produced as shown below.
The choices about how exactly strategies are to be pursued
The choices of products and markets available to an organisation
The choices as to how an company positions itself in relation to competitors
Source: Designed from Johnson, Scholes and Whittington; checking out corporate strategy 2008: pp217.
This area is due to how Coca-Cola has positioned itself with regards to its competitors. The Coca-Cola Company competes in the non-alcoholic beverages section of the commercial beverages industry. The non-alcoholic beverages portion of the commercial beverages industry is highly competitive, comprising numerous firms. These include companies that, like Coca-Cola, compete in multiple geographic areas, as well as firms that are primarily regional or local in operation. Competitive products include numerous non-alcoholic sparkling beverages; various drinking water products, including packaged, flavoured and increased waters; juices and nectars; berry beverages and dilutables (including syrups and powdered beverages); coffees and teas; energy and activities and other performance-enhancing refreshments; dairy-based drinks; functional beverages; and different other non-alcoholic beverages. These competitive beverages can be purchased to consumers in both ready-to-drink and other than ready-to-drink form. In lots of of the countries in which Coca-Cola does business, including the USA, PepsiCo. Inc. is one of its principal competition. Other significant competition include, Nestlґe, Dr Pepper Snapple Group, Inc. , Groupe Danone, Kraft Foods Inc, and Unilever etc. In certain markets, its competition includes beverage companies. Coca-Cola also competes against numerous regional and local firms and, in a few markets, against suppliers that have developed their own store or private label beverage brands.
Strategies destined for failure
Source: Designed from Johnson, Scholes and Wittington; exploring corporate and business strategy. 2008; pp 225
The 'strategy clock' above presents different positions in market where customers or potential customers have different 'necessity' in terms of value for money. Coca-Cola has therefore taken the strategy option of hybrid, in which case it keeps its price but will try to distinguish itself from challengers. The Company has already established a variety of pricing, advertising, sales advertising programs, product invention, increased efficiency in creation techniques, the introduction of new packaging, new vending and dispensing equipment, and brand and brand development and coverage. In this respect Coca-Cola has increased its twelve-monthly marketing budget greatly, launched many new products, and developed a model to help its retail customers increase their sales while it continue to plan for the future. The risk of the choice is that one could lose market talk about due to its low prices but it can be tackled through economies of level where the company produces in large volumes to protect cost and attempts to permeate different geographies as is the truth of Coca-Cola. This choice has actually turned out beneficial to Coca-Cola even though its market talk about has not cultivated tremendously as one would think over the last ten years but it will be has a higher market show than its competitors, especially Pepsi Co. This has been possible for Coca-Cola because of its recognised brand name and strong occurrence in so many geographies including Africa, Asia, Europe, Latin America, North America and the Pacific spanning across 200 countries.
This is due to the scope of the company in terms of its products. During the last few years Coca-Cola has created a great deal of products to its profile, like the recent Coca-Cola zero, which sold more than 600 million conditions globally. Today Coca-Cola will not only package in non-alcoholic soft drinks, but it addittionally makes a whole lot of juices and juice refreshments, still and carbonated products. As a matter of fact Coca-Cola has more than 3, 300 products in more than 200 countries. Generally one can rightly say that Coca-Cola has gone into diversification since it hasn't only shifted from soft drink to juices and even energy beverages but has also ventured and penetrated greater market over time. Diversification is simply a strategy that requires the organisation away from both its existing market and its existing products. We have therefore used the Ansoff matrix below to recognize the strategy route which Coca-Cola is taking Pack D, which is diversification. The Ansoff matrix provides a simplified way of generating four basic substitute directions for strategic development.
Source: Designed from Johnson, Scholes and Wittington; checking out corporate and business strategy. 2008; pp258
Diversification been a good proper option for Coca-Cola as it helped the Company to break new grounds running a business. For instance a new product like the Coca-Cola zero performed so well in terms of sales. This therefore impacted positively on the business's market show. Again moving from carbonated drinks to energy and athletics drinks also offered Coca-Cola a chance of a more substantial market talk about.
However diversification can be capital intense as not absolutely all organisations will be able to manage the finances included since a whole lot of money will be had a need to go into research and development for the new product. For example Pepsi-cola once developed a new product called Meca cola but it wasn'successful and the product was withdrawn later on. Surely you will see a lot of laboratory works and feasibility studies to go with a fresh product and this will similarly require skilled people getting involved and consequently hiring more employees so if the organisation doesn't have enough funds it might not exactly be able to manage. Again the company which makes a decision to diversify will put in place an adequate amount of public awareness in terms of advertisements and trainings. This might involve using news papers, television set, internet etc. Each one of these can be very extensive so diversification requires careful planning.
Most of Coca-Cola products are produced and sold by its bottling partners. THE BUSINESS typically sell concentrates and syrups to its bottling partners, who convert them into finished packaged products which they sell to vendors and other customers. Separate agreements (''Bottler's Agreements'') exist between the Company and each of its bottling associates regarding the manufacture and deal of Company products. At the mercy of specified terms and conditions and certain modifications, the Bottler's Contracts generally authorize the bottlers to get ready specified Company Brand Beverages, to program the same in authorized containers, and also to deliver and sell the same in (but, at the mercy of applicable local rules, generally only in) an discovered place. The bottler is obligated to buy its entire requirementof concentrates or syrups for the specified Company Trademark Beverages from the business or Company-authorized suppliers. Coca-Cola agrees to refrain from selling or distributing, or from authorizing third gatherings to sell or deliver, the specified Company Trademark Beverages throughout the discovered territory in this authorized storage containers.
The Coca-Cola Company has generated and achieved a tactical lock-in such that it has achieved dominance in the industry. For instance many people will think of 'Coke' after they think of using or going for a soda.