The Coca-Cola Company Namestrategic Management

The Company Namestrategic Managementcoca Cola Companyautho

Introduction Coca-cola company is one of the largest beverage companies in the world that primarily produces refreshing products to its broad category of consumers across the globe. The company trades at the New York Stock Exchange and has been one of the highly recognizable and valuable brands. Established in the 1880s, Coca-Cola has grown into a tremendous company that produces low-calorie soft drinks as a way of ensuring that its customers are served with products that take care of their health after continuous consumption over the years. Through product innovations such as Diet Coke, which became the world's top-selling diet cola, and many more successful flavor extensions, Coca-Cola has extended its brand into a giant company with large sales volumes.

Coca-Cola's success is heavily attributed to its secret formula for producing an outstanding beverage recipe (Pitta & Prevel, 1995). Operating within the beverage industry of fast-moving consumer goods, Coca-Cola has built a vast brand portfolio of more than five hundred brands. Besides offering various flavor extensions, the company also produces energy drinks and bottled water, which puts it in direct competition with many industry players. Its closest rival, Pepsi, has also built a strong brand after merging its original Pepsi brand with the Frito-Lay brand (Venkataraman et al., 2017).

The US remains the primary market for both Coca-Cola and Pepsi, intensifying their fierce rivalry. Other competitors in the soft drinks industry include Dr. Pepper Snapple, Red Bull, and smaller brands competing in segments like energy drinks and bottled water. While some companies such as Dr. Pepper Snapple and Red Bull have successfully captured market shares, others have failed and exited the market. For example, Josta, an energy drink launched during the intense Coke vs. Pepsi rivalry, was unable to make a significant impact and eventually shut down. Similarly, Orbitz, a soft drink containing floating solid foods, failed to satisfy consumer needs and ceased operations after a year.

The potential profitability of the industry remains high for Coca-Cola, Pepsi, and smaller successful brands. The industry's profitability is driven by barriers to new entrants, such as high capital requirements and strong brand loyalty enjoyed by established players. Coca-Cola and Pepsi benefit from decades of brand recognition, extensive distribution networks, and economies of scale, which give them a competitive edge and high margins (Slater, 2002). Additionally, the low bargaining power of buyers—due to the limited number of large suppliers—further enhances profitability for the major companies, as they can set prices without significant pressure from consumers.

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