Question

1. Explain Coca-cola diversification and strategic alliances through Build-Borrow-or-Buy Framework.

Answer 1

Strategic tie up with Chi ltd. In Nigeria was one move which coca cola took which was supposed to boost the total revenue of the organization as ban on the imported juices in the country boosted coca cola to create a brand image in front of the consumers. Chi ltd had nearly 48% of the total volume of the trade, the soft drink market is supposed to grow by 11.9% till 2020 backing by growth in globalization and urbanization in the country which is well taken care by coca cola at this point of time.

As growth in soft drink took a backward shift few years ago due to demand in healthier drinks and less of carbonated drinks, coca cola took care by launching its coca cola zero with no sugar content. Coca cola invested heavily in Africa which was amounted to be $ 17 billion which was thrice the investment they made in last decade. The investment is supposed to facilitate the manufacturing, distribution and machinery.

The success of coca cola in Latin America was significant, Latin America had vibrant and colorful food and beverages choices with a total of $ 90 billion, coca cola had nearly 48% share in the beverage industry, apart from weak macroeconomics condition with high inflation and currency’s depreciation which was forcing the company to force the prices constantly which was leaving a negative impact on the consumers, while the softness in the economy prompted the governments to raise taxes, including for the food and beverage industry, which hampered the purchasing power of consumers.

The potential of Coca cola to expand its operations as well as manufacturing to countries like Nigeria helped to diversify the brand while keeping it authentic in nature, while there is large market share regions like Latin America and some parts of Asia for sports and energy which is still untapped by Coca cola, the current soft drink market in Latin America accounts for 4 Billion where coca cola holds a very big opportunity to make them more bigger.