The business level strategies of Coke or Pepsi. Essay Example

  • Category:
    Management
  • Document type:
    Assignment
  • Level:
    High School
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Business-Level Strategy of Coke

Business-Level Strategy of Coke

According to Hitt, Ireland, and Hoskisson (2014 p. 105), business-level strategies define plans of action that an individual business uses to gain a competitive advantage over rivals that operate in the same market domain by exploiting its core competencies. The choice of these strategies is a critical factor in determining the long-term performance of a firm. Coca-Cola is a multinational cooperation that has achieved remarkable success since it was founded in 1886. It is worth noting that the business faced excessive levels of competition during its formative years with some of the competitors imitating the design of Coke bottles (World of Coca-Cola 2015).As such, one of the early strategies that provided the basis of Coke’s current status as a globally recognised brand was the decision to create distinctive and standardised bottles for Coca-Cola. An evaluation of generic business-level strategies shows that Coke has taken the differentiation and cost leadership approaches.

According to Griffin (2015, p. 74), the differentiation strategy is a strategy through which a company distinguishes itself from competitors through maintaining high levels of quality in its products and services. Coke has managed to create several products that are considered to be unique and of the highest quality by its customers. Additionally, the firm has also differentiated itself through innovative marketing strategies such as the recent “Share a Coke” campaign. It is also worth acknowledging that the firm has differentiated itself from competitors by developing different flavors to match the diverse needs of its consumers. In summary, the differentiation has allowed the company to attract and retain a diverse customer base from all regions of the world. It is also notable that the firm has developed a sustainable competitive advantage over firms like PepsiCo, Nestle, Monster Beverage, and Dr. Pepper as a result of differentiation. The continued use of the differentiation business-level strategy should allow the firm to remain synonymous with providing refreshment, happiness, and wellness to consumers.

When it comes to cost leadership, Coke has adopted the strategy to improve on its efficiency. According to Tanwar (2013, p. 12), cost leadership entails the production of high volumes of standardised products with the aim of achieving economies of scale and reaching a broad customer base. A critical component of the strategy is the desire to achieve cost reductions in all aspects of the business operations (Tanwar 2013, p. 12). It is acceptable that Coke is a company whose distribution extends to all remote corners of the world. Additionally, the firm concentrates on standardised products with a Coke in a remote part of Australia being the same as the Coke in Alaska. Finally, Coke seeks cost reductions to keep prices at levels that are comparable to other beverage firms that seek to obtain market share by keeping prices at low levels. These factors combine to illustrate Coke’s adoption of the cost leadership strategy.

References

About Us: Coca-Cola Industry. 2016. World of Coca-Cola. Viewed 8 March 2016 <https://www.worldofcoca-cola.com/about-us/coca-cola-history/>

Griffin, R., 2015. Fundamentals of Management. Cengage Learning.

Hitt, M., Ireland, R.D. and Hoskisson, R., 2014. Strategic management cases: competitiveness and globalization. Cengage Learning.

Tanwar, R., 2013. Porter’s generic competitive strategies. IOSR Journal of Business and Management, 15(1), pp.11-17.