Samples Brand Coca Cola: Case Study

Coca Cola: Case Study

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Investigate and Analyze the Company’s History & Growth
Coca Cola was formed in 1892, after pharmacist mixed different compounds and discovered a new beverage (Coca Cola, 2011). Throughout the years, Coca Cola has used a variety of strategies in order to ensure the popularity of the beverage. During Word War II, soldiers were able to purchase the beverage at cost. After World War II, Coca Cola went global with the product. The global reception of the product was successful. Twenty years after the company debuted globally, Coca Cola invented diet coke; an alternative to coke that had fewer calories. The company’s successes continued in the 1990’s when Coke had strong affiliations with multiple sports figures, which helped to increase the popularity of the brand. However, no notable changes have been evident since the 1990’s in terms of branding and marketing.

Coca Cola experienced massive growth between 1993-1997, when the price per share went from $5 to $45 (see chart 1.1.). Since this period, Coca Cola has experienced difficulties in sustaining growth. In 1997, the company hit an all time high in stock prices, which has yet to be replicated.

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Coca Cola hit a decade low price per share in 2009, when stock in the company tumbled to less than $20 per share. Shares again began to rise at the conclusion of 2010, when prices stabilized at $30 per share. Since this period, Coca Cola has been able to achieve growth. However, this growth has not been stabilized, as growth within this company is met with decline (see Chart 1.2.).

Chart 1.2. Demonstrates the price fluctuations in Coca Cola’s stock over the past two years. As previously discussed, growth within the company tends to be met with decline shortly after (Yahoo Finance, 2013, pp. 2).

Identify Strengths and Weaknesses Within the Company
Coca Cola as a company has many strengths. The strong brand recognition, global popularity, previous successes and an array of products have all helped to strengthen the company (Coca Cola, 2011). The valuation of the company, which is estimated, to be around $166 billon is another prominent strength. In addition, the company continues to pay high dividends to stockholders, despite the fluctuating share prices (Yahoo Finance, 2013).

Despite the strengths of the company, there are many weaknesses. Coca Cola primarily operates in North American and Europe. The company’s presence outside of these markets has not been established. Another weakness is the growth in health conscious individuals in these markets. Coca Cola brands generally are not healthy. Consumers that are focused on their health are well aware of this, and tend not avoid the company’s products.

Gather Information on the External Environment
The external market in the beverage industry has been relatively volatile. In the last quarter of the 2012 fiscal year, Coca Cole reported missing analyst’s expectations. Like many other beverage companies, Coca-Cola was “hurt by declines in Europe and Asia where it sold more lower-priced drinks amid economic uncertainty, which the company expects to continue into 2013” (Reuters, 2013, pp. 2). Although other major companies like Pepsi and Nestle reported decreases in sales during this period, it should be noted that both Pepsi and Nestle have a large line of other products. Pepsi products range to include: soda, Gatorade and Doritos (PepsiCo, 2013). In contrast Nestle owns a large array of products (Nestle, 2013). The ability for these two companies to expand into other markets has helped both companies to sustain growth during periods of economic uncertainty. Furthermore, Coca Cola’s competitors Pepsi and Nestle have a strong international presence that Coca Cola lacks.

Analyze Your Findings
Although Coca Cola has a strong brand reputation in the United States there are multiple factors that continue to hurt the company financially. The economic downturn in the United States as well as Europe, two of Coca Cola’s biggest markets, continue to plague the company. In addition, the emphasis towards leading a healthy lifestyle has severely harmed Coca Cola. Other companies such as Pepsi have been able to escape the stigma of being unhealthy by developing drinks such as Gatorade, which is primarily marketed to athletes. The lack of diversity associated with Coca Cola continues to plague the company and prevent it from attaining the profits of commonly known competitors Pepsi or Nestle.

Identify Corporate Level Strategy
As a whole, the corporate strategy should focus on diversification. This is one key element that Coca Cola lacks. On a corporate level, Coca Cola should expand the company internationally. The lack of presence in certain regions of the world is one specific factor that differentiations Coca Cola from other brands. Although North America and Europe are large consumers of Coca Cola products, the economic instabilities present in both these regions have hurt the company financially. In addition, Coca Cola should explore the option of creating products that are health conscious. In the future, Coca Cola may want to consider diversifying the types of products offered by the company. Even though non-alcoholic beverages is a huge industry, it simply is not enough to keep up with the diversification of other large corporations.
Make Recommendations

Based on the external environment, and weaknesses within the internal environment the following recommendations are being made for Coca Cola:
1. Focus on international growth
2. Focus on product diversification

Although there has been a global downturn over the past few years, Coca Cola should focus on expanding into Asia. Specifically, China and Japan. These two countries were chosen, as they currently are the world’s second and third largest economies (Winkler, Reynolds & Hirokawa, 2012). Furthermore, this would increase new consumer’s interested in consuming Coca Cola products.

The next recommendation focuses on growing trends towards health. Coca Cola should develop a new line of product that appeals to health conscious consumers. If this option is not feasible, the company should consider acquiring other brands that are not in the beverage industry. This would help to promote growth in an unstable world economy.

  • Brands. Nestle Global, 2013. Web. 15, March 2013.
  • Brands. PepsiCo, 2013. Web. 15, March 2013.
  • Coca-Cola History. Coca Cola, 2011. Web 15, March 2013.
  • Coca-Cola’s revenue misses Wall Street expectations. Reuters, 2013. Web. 15, March, 2013.
  • KO-Coca Cola. Yahoo Finance, 2013. Web. 15, March, 2013.
  • Winkler M., Reynolds I., Hirokawa T. “Dispute with China Hits Japan’s Economy Hard,” 2012. Web 15, March 2013.