Question

Coca-Cola is a well-established consumer products company with a strong position in the global market. The sales of its core soda products have remained relatively stable for decades, yet the company has continued to grow and has remained extremely profitable. Discuss coca-Cola's history in light of the statement that " generating a steady stream of new products to market is extremely important to competitiveness." Does Coca Cola's success disprove that statement? Is the company an exception to the rule or an example of its application?

Provide 300 words in response to this discussion posting:

When operating within a significantly competitive global market, the ability for a company to adapt and respond to customer demands can be incredibly challenging in a market such as the food and beverages industry. The Coca Cola Company has been a global leader in the industry through sales of their traditional soda brand, but offer different products including seltzer water, tea and juices. Having been producing their standard Coca-Cola brand of soda since the 1800’s during a time when there were few alternatives, generations of consumers have been familiar with the company and the brand, some of which have grown up with the drinks and consequently developed brand loyalty to the products. The consistency with which Coca-Cola has produced their drinks, with a keen focus on marketing to local country’s specific tastes and habits, has helped maintain a strong and consistent demand for their products.

Contrasting to the comment on sustainability and level of competitiveness are tied in with generating new products, Coca Cola’s success is not inherently a disproval of that notion but shows how success can be attained through strong brand recognition, targeted and strategic marketing, and brand appeal. While competitors, including their largest and most direct competitor PepsiCo, identify new brands and food types to offer consumers, Coca Cola’s sodas and ancillary products are valuable enough to their customers to achieve consistent global success. Their core products are strong enough on their own to continue marketing without the need to constantly innovate for the sake of innovation. One innovation of the company’s that is typically noted as a disaster in marketing was the introduction of New Coke in the 1980’s, which was a re-branding of the product with a new flavor of soda to resemble their PepsiCo competitor’s flavors. The new drink misunderstood what customers enjoyed about their standard Coca-Cola soda: they either preferred the taste of normal Coke compared to Pepsi, or already had Pepsi and did not need another identical-tasting flavor. Coca-Cola’s competitive advantage was simply offering a high-quality and consistent soda.

Through their consistency, Coca-Cola can maximize their productivity. By creating a similar set of products for over a century, the firm can generate novel cost-savings methods that produce goods quicker and at a cheaper cost, save costs in transportation spend, and reach consumers for consistent brand awareness through novel marketing tactics. Coca Cola’s access to consistent revenue flows allows them to develop new methods to maintain a high-efficiency operation, minimizing workload to produce the maximum amount of product as possible. When considering the need to supply products globally, partnering with distributors and transportation firms that can maximize that efficiency can also help to reduce costs of transporting freight to and from warehouses. The sheer volume of production that the Coca Cola Company can produce helps them to leverage competitive packages from vendors, which will help generate additional savings by partnering with strategic business partners to optimize their transportation network. Smaller firms that are do not have the luxury of such significant brand recognition would struggle to compete against a company with the optimization Coca Cola has achieved in producing their drinks.

I believe, in typical market conditions, that a company should have to react and identify new opportunities to address the demands of a rapidly changing and growing marketplace. To remain relevant in any industry, few firms can sustain consistent growth without a flagship product that has seemingly transcended consumer “wants” to a “need” like Coca Cola enjoys. With strong brand identity and loyalty, it would be very difficult and take years of regression for Coca-Cola Company to experience a significant loss of market share to an up-and-coming competitor and would most likely have the capital to acquire that firm prior to losing too much market share to them. The ability to offer a very specific but very valuable core group of products allows the Coca Cola Company to focus their efforts on maximizing efficiencies and reducing overall costs on the products they create, rather than spending resources to develop or identify new offerings that may jeopardize their productivity or alienate their core consumer.

Answer 1

From the passage, it can be clearly seen that through the years, Coca-Cola's strength has been its consistency in delivering the quality porduct that it has familirised its customers with. It is important to note that this refers specifically to the same product delivered through the years ever since it has come to the market. This premise is supported by the fact that when the company tried to introduce a new product in response to popular competition in the 1980s was not very well received by the customers. This is because the csutomers have through the years, developed a very deep familiarity with the existing porducts that are offered by the compnay, and their loyalty to the brand has reached the stage where they are not ready for any change even if it is by the same brand to the same product. This brings out a strong sence of brand loyalty among customers. It can be easily traced that most of these customers are poeple who have over the years spent many a precious moments recognising this soda as complimentary to the events of their lives, which now has them to believe that this soda is not just their want but their need. What the company has done brilliantly is managed to weave its way into all the special occasions of the customers by targetted advertising, connecting its products to their very intimate personal festivities of life. This has been conveyed to the consumers in such a way that they now recognise these festivities by the presence of the products of this company. Another very significan factor that has added to the advantage of the company is their volume of operatoin and the loyalty of its suppliers and distributors. The reasons for this is that the company has been working for so long with almost consistent profits, it has over the years developed some very close trusted relations with its distributors, something which new entrants and other smaller firms cannot do. This is important because this gives the company a lot of leverage when it comes to the low cost distribution and also production of the products of this company. The most important factor in the growth of the compnay has been brand loyalty by its customers which it has brilliantly captured over the years. It has now come to occupy such a huge share in the market that other firms can hardly compete.