Key success factors of Coca-Cola Company

Posted by mbalectures | Posted in Strategic Management | 19,447 views | Posted on 24-11-2010 | Print This Post

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Key success factors (KSFs) are important to future competitive success of industry players. These factors comprise resources, product attributes, competencies, market achievements and competitive capabilities etc. It is very significant for the strategists to know the background of industry in order to recognize the most significant competitive success factors. Because of alteration in driving forces and competitive circumstances, the key success factors (KSFs) of one industry diverge from other. The key success factors of Coca-Cola are given below:

 

Strong global presence

 

Coca-Cola is a carbonated soft drink sold in the vending machines, stores, restaurants in more than 200 countries. Coke’s marketing tactics and global expansion strategies led it to dominate the world soft-drink industry during the 20th century.

 

Licensed Bottlers

 

Coca-Cola’s bottling structure also permits the firm to take advantage of immeasurable growth opportunities all over the world. This approach provides Coke the opportunity to serve a greater geographic diverse area. The Coke manufactures concentrate which is afterward sold to licensed Coca-Cola bottlers all over the globe. The bottlers, who have territorially limited contracts with the Coke, manufacture finished goods in bottles and cans from concentrate in mixture with sweeteners and filtered water. The bottlers then distribute and sell Coca-Cola to vending machines and retail shops.

 

High utilization of fixed assets 

      

Coca-Cola’s bottling system allows it to operate on a global scale while preserve a local approach. The bottling firms are locally operated and owned by autonomous business persons who are authorized to trade brands of the Coca-Cola Corporation. Because Coca-Cola does not have complete possession of its bottling system, its major basis of revenue is the sale of concentrate to its bottlers.         

 

Advertising and differentiation

 

Coke mainly is competing on advertising and differentiation rather than pricing. This resulted in higher profits and disallowed a massive depression in profits. Soft drink industry needs huge amount of money to spend on advertisement and marketing.  In 2000, Coke and their bottler’s invested approximately $1.3 billion. Coke has different advertisement campaigns according to situation. Its advertising has significantly exaggerated American culture and run different campaigns such as holiday and sport sponsorship etc which attracts and appeal different segment.

 

Well recognized and cherished brand name

 

Brand recognition is the important feature affecting Coke’s competitive spot. Coca-Cola’s brand name is recognized well right through 90 percent of the world today. The main brand of the Coca-Cola Company is sold globally and is recognized as the best-known brand name in the globe. More prominently, its consumers would not do without it, and have confirmed a loyalty. Coca-Cola also has further well-known brands on its lists – Sprite, Evian, Fanta, PowerAde and Minute Maid.

 

Retail and distribution network

 

Coke provides significant margins to retailers up to 15-20%; these margins are reasonably enough for retailers to keep Coke’s products. Coke has strong network of convenience stores, fast food fountain, vending, food stores, and restaurants etc globally.

 

Product innovation capabilities

 

The Coca-Cola Company offers different products lines according to the specific needs, preferences and tastes of the customers such as Coca-Cola Vanilla, Cola-Cola Zero, and Coca-Cola Cherry etc. 

 

Breadth of product line

 

The Coca-Cola organization has occasionally launched other cola drinks beneath the Coke brand name. The most familiar of these is Diet Coke with supplementary including Diet Coke Caffeine-Free, Caffeine-Free Coca-Cola, Coca-Cola Vanilla, Cola-Cola Zero, Coca-Cola Cherry and special versions with lemon, coffee or lime. Coca-Cola franchises in different countries offer different product lines.

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