Thesis on "Coca-Cola Company Description the Coca-Cola Company (NYSE"

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[EXCERPT] . . . .

Coca-Cola

Company Description

The Coca-Cola Company (NYSE: KO) was founded by John Pemberton in 1886 in Atlanta. Pemberton did not live to see the success of his product, however. Asa Candler acquired the rights to the product and logo by 1891, and proceeded to build the company over the subsequent years. The company spread across the nation rapidly, with three new plants set up within just a few years. Candler marketed the product aggressively. By 1894, Coca-Cola was bottled by a franchisee in Mississippi, a development that allowed for the soda fountain beverage to be enjoyed at home. The product's international spread began and Coca-Cola was already under attack from imitators. These attacks led to the development of the iconic bottle shape, six-packs and more aggressive marketing to distinguish the brand from imitators (Coca-Cola.com, 2009).

Today, Coca-Cola is the leading producer of non-alcoholic beverages, owning four of the top five brands in the category (Ibid). The company owns over 3000 products, which are sold in over 200 countries worldwide. The company has 13 brands that are do over $1 billion in annual sales (Coca-Cola Company Fact Sheet, 2009). The company's global reach is evident in the fact that over 70% of its revenues are generated outside of North America. Sales last year were $31.73 billion and profits $5.66 billion (2008 Annual Report) and its market cap is over $110 billion at present (MSN Moneycentral, 2009).

Core Competencies and Competitive Advantage

The Coca-Cola Company's initial success was based on several factors. The company was one of the first aggressively marketed soda fountain beverages, and the first to mass market bottles. These first-mover advantages helped it to gain traction in the marketplace and build up brand equity. Today, the company has several key competencies that allow it to flourish. Branding remains at the heart of the company's success. The Coca-Cola brand is a globally-recognized advertising icon. This allows the company to move into international markets and succeed immediately. The firm also has a wide range of other powerhouse brands.

The second core competency is with respect to product development. The Coca-Cola Company has embarked on a saturation strategy, wherein it seeks to secure a dominant market position by occupying most or all market niches. In doing so, the company seeks to preclude new entrants or the growth of competitors. This strategy is supported by strong new product development. The company has established either a #1 or #2 position in emerging categories such as sport drinks, ready-to-drink coffee products and juice products.

The company's capacity for new product development and brand extension is supported by another core competency in distribution. Coca-Cola has one of the most extensive distribution networks in the world. They are able to acquire shelf space, prime positioning within the store and exclusive retailing rights on the basis of their strong brands, efficient distribution networks and ubiquitous presence. The expansive distribution network allows Coca-Cola economies of scale, both in terms of distribution and in terms of marketing. These economies of scale allow for the company to develop a low-cost structure, while their brand strength allows them to charge a premium price for their product, far above what the margin on such a low-end drink should be.

Situational Analysis

Coca-Cola is subject to a number of external factors that impact its marketing strategies. Sociocultural factors are important for a number of reasons. The first is that they impact the specific products that become the focal point for the company's marketing. Marketing budget decisions hinge on which products have the best opportunity given the current socioeconomic climate. In 2008, for example, the company launched over 150 diet and low-calorie products, as there was an uptick in demand for those products in the marketplace. Coca-Cola has also placed emphasis on growing its ready-to-drink coffee brands in response to the growing demand for those beverages. This also guides their marketing funding. The company is also responsive to the vibrancy of its marketing message with respect to its core brands. While the Coke brand is strong, that strength must be maintained in order for the competitive advantage to be maintained. Thus, the company strives to keep its marketing message fresh with respect to the core brands, by aligning that message with current sociocultural trends.

The competitive environment is also of critical importance.… READ MORE

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