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Coca-Cola Business Strategy

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1.0 Introduction

Coca-Cola has sold more than one billion servings every day. More than 10,450 beverages are consumed every second. The company achieved earnings of $4,347,000,000 in 2003. It is present on all seven continents and is recognized by 94% of the world population. How did Coca-Cola grow from its humble roots as a home-brewed Georgia-based patent medicine to be the international soft drink powerhouse that it is today? Coca-Cola used numerous technologies to achieve its rise to the top of the soft drink industry, defining new technologies and establishing paradigms that popped the status quo like a cap from a soda bottle. Through technology, Coca-Cola perfected Coke as a beverage and spread it throughout the world. Even today, the US soft drink industry is organized on this principle. "The Coca-Cola Company" is now the largest soft drink company in the world. Every year 800,000,000 servings of just "Coca-Cola" are sold in the U.S alone.

1.1 Company Background

The Coca-Cola Company is now the largest soft drink company in the world. Coca-Cola became the largest manufacturer, distributor, and marketer of non-alcoholic beverage concentrates and syrups which operate in more than 200 countries. Coca-Cola was invented on May 1886 by Dr. John Stith Pemberton in Jacob's Pharmacy in Atlanta, Georgia. The name Coca-Cola was suggested by Pemberton's book-keeper, Frank Robinson. He penned the name Coca-Cola in the flowing script that is famous today.

2.0 Corporate Vision & Mission

Coca-Cola has been marketed with catching marketing themes such as "Drink Coca-Cola" and "Delicious and Refreshing". After years of globalization and brand building, Coca-Cola proudly pronounces its Mission Statement "The Coca-Cola Company exists to benefit and refresh everyone who is touched by our business". And their goals: The basic proposition of our business is simple, solid and timeless. When we bring refreshment, value, joy and fun to our stakeholders, then we successfully nurture and protect our brands, particularly Coca-Cola. That is the key to fulfilling our ultimate obligation to provide consistently attractive returns to the owners of our business. Indeed, it was!

2.1 Evaluation of Coca-Cola's Overall Strategic Vision & Mission

Coca-cola's mission "our people and our promise" mainly focuses in Coca-Cola world is to celebrate, refresh, strengthen and protect. Coca-Cola feels that they should offer a soft-drink to the entire global community, which is environmentally safe and accepted. The company's mission is directed towards its soft drink business and the strategy management changes that will be forthcoming. Coca-Cola appeals to the long term interests of stakeholders particularly shareowners, employees and customers. This helps to support the local populations by offering job opportunities, and it also helps out the local and global economies in which the employees live.

Woodruff's vision that coca-cola to be placed within "arm's reach of desire" came true from the mid 1940s until 1960, the number of countries with bottling operations nearly doubled. It is so feasible that the company can reasonably expect to achieve in due time. Coca-Cola strives to find new innovations to better its products and to stay a step ahead of its competitors as what is mentioned in the mission "the action we will take". This is a key element in the company's drive to be number one in the industry. Also it is constantly looking for improvements in everything that it does, both in the production and the manner in which the company is run daily.

2.2 Evaluation of the CEO's Overall Strategic Leadership

Coca-Cola persuaded their former executive, E. Neville Isdell to come out of retirement in June 2004 to steer the company out of their doldrums with new strategic mission and vision being crafted and executed. Over the years, Coca-Cola has experienced different strategic paradigm change ranging from financial re-engineering to offload bottling related debts to product diversification and growth through distribution.


"That combination infuses all the elements of the strategy that we are implementing to deliver value to our share owners in the year to come, and well into the future:

a) Accelerate carbonated soft-drink growth, led by Coca-Cola;

b) Selectively broaden our family of beverage brands to drive profitable growth;

c) Grow system profitability and capability together with our bottling partners;

d) Serve customers with creativity and consistency to generate growth across all channels;

e) Direct investments to highest potential areas across markets; and

f) Drive efficiency and cost-effectiveness everywhere."

2.2.1 Responsible Business Model and Good Corporate Governance

In today's ultra-competitive world, organizations strive to sustain long-term growth by having a distinctive competitive advantage. Coca-Cola believes its long-term success would only be sustained through a responsible business model with good corporate governance. Essentially, this has lead to the setting up of their "quadrant framework" to develop and communicate core values (in the community, market place, environment and workplace) and strategy to its bottlers.

2.2.2 Growth and Collaboration with Bottling Partners

As part of Coca-Cola's Chief Financial Officer, M. Douglas Ivester led financial re-engineering in 1986. Coca-Cola revamped its strategy to spin off their bottling operation while retaining minority shareholding but with board control. Local partnership has since become an essential part of Coca-Cola's business equation with great support towards the evolvement of their business structures. Now, wherever Coca-Cola goes, it would tie up with a local bottling partner with interdependent relationship. Whilst Coca-Cola's business scope is indeed global, it's remains, at heart, a truly local business (Siewert, 2003).

2.2.3 Product Diversification

Coca-Cola continues to explore new beverage categories, keeping the tradition of expanding



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