Grand Strategy Selection
The Coca-Cola Company: Strengths, Weaknesses, Opportunities, and Threats
The Coca-Cola Company is one of the most profitable and competitive firms in the world today (Menon & Yao, 2014). It boasts of several strengths that support its business model. The major strengths include its strong brand name, use of powerful marketing approaches, quality vision and mission statements, and effective logistical operations (Menon & Yao, 2014). The major weaknesses affecting the firm include the lack of diversification, heavy reliance or focus on carbonated drinks, and negative publicity arising from its unhealthy drinks.
The company stands a chance of benefiting from various opportunities in the external environment. To begin with, the number of individuals consuming carbonated beverages continues to increase across the world. The costs associated with production in the carbonated drinks industry has declined. The emergence of modern technologies will make it easier for the firm to produce and market its products much faster (Banutu-Gomez, 2012). The firm is also expected to face several challenges in the industry. Some of these threats include the emergence of powerful products in the market, increasing the level of rivalry, and the bargaining power of the global consumer.
SWOT Analysis Diagram
After a keen analysis of the SWOT Analysis Diagram, it becomes quite clear that the Coca-Cola Company belongs to cell 1. This cell indicates that the firm supports an aggressive strategy in an attempt to emerge successfully. The use of this strategy is promoted by several internal and external forces associated with the company. For instance, the above description shows clearly that the Coca-Cola Company has various internal strengths such as the presence of a strong brand name and availability of competitive products (Menon & Yao, 2014). The firm has a powerful mission statement that is informed by the existing organizational structure. The departments are empowered and guided to promote the targeted business model.
The industry has continued to present a wide range of opportunities for the firm. The Coca-Cola Company has been able to focus on the changing needs of the customers in different parts of the world. The reducing costs of production are supporting the performance and competitiveness of the company (Menon & Yao, 2014). The increasing number of individuals who are consuming different beverages and products continue to support the firm’s aggressive strategy. Additionally, the emerging competition from different firms in the coffee shop sector forces the firm to implement aggressive strategies in an attempt to remain profitable in the industry (Bunutu-Gomez, 2012). The use of this approach will continue to support the company’s business goals.
Appropriate Grand Strategy for the Coca-Cola Company
The Grand Strategy Selection Matrix outlines four unique grand strategies that can be pursued by a company based on its unique strengths, existing opportunities, resources, and threats. The presented matrix can be used by the Coca-Cola Company to achieve its business potential. After analyzing the presented grand strategies, it is quite clear that the company should choose “maximize strengths”.
This move is necessary because the company has numerous strengths that can be maximized or used to boost business performance. The presence of qualified workers, a powerful organizational culture, strong mission, and vision statements, and adequate logistical operations can support the company’s grand strategy (“Workplace culture,” 2017). The firm should go further to implement the best measures that can redirect its internal resources to support its business strategy. The selected grand strategy is: “maximize strengths” and “internally-directed”.
The company’s internal resources have the potential to support its business model. This assumption has been made because the Coca-Cola Company has numerous resources such as a powerful organizational structure, coordinated bottling processes, and use of modern technologies (Butler & Tischler, 2015). Such resources can be matched with the current strengths to drive performance. This grand strategy can make the firm successful.
Model of Grand Strategy Clusters
The Model of Grand Strategy Clusters is widely used by companies to determine their positions in their respective industries. The Coca-Cola Company is in a high-growth market (Bunutu-Gomez, 2012). This is the case because the firm is currently competing in an established industry. Additionally, the company has numerous strengths compared with the existing weaknesses. This is a clear indication that the company falls into Quadrant 1. This means that the company is in a strategic position that can make it easier for it to achieve the targeted business objectives (Banutu-Gomez, 2012). That being the case, the firm might go ahead to choose a market penetration or market development grand strategy to achieve the targeted goals.
The above decision or assumption has been made because the Coca-Cola Company has a strong competitive position in comparison with the other players in the sector (Menon & Yao, 2014). The company is also experiencing rapid market growth due to the nature of the industry. The industry is characterized by more consumers, reduced costs of production, and increased efficiencies. The rapid growth and strong competitive positions will make it easier for the company to realize its goals and remain profitable in the industry.
The BCG Matrix
The BCG Matrix can be used to analyze the position of the Coca-Cola Company as a major competitor in the industry. A detailed analysis of the company shows conclusively that it has a huge share in the market. However, the firm is growing slowly because it has exhausted the existing opportunities in an attempt to create a competitive edge (Menon & Yao, 2014). The company has been using its resources and strengths to remain a leading player in the industry. The matrix, therefore, shows conclusively that the Coca-Cola Company is a Cash Cow.
From this analysis, it is agreeable that the company’s earnings are stable. It has also been getting enough financial resources from its sales. This company focuses on specific changes that can be made to continue supporting its current business strategy. The matrix can be used to explain why it has been impossible for many players in the sector to compete successfully with the Coca-Cola Company. The firm has a low growth rate while at the same time maintaining its market share. This makes it a good example of a Cash Cow. The company has therefore been recording numerous profits without necessarily having to expand its operations (Ketchen & Short, 2013).
Comparing Results
The results from the Grand Strategy Selection Matrix, the Grand Strategy Clusters, and the BCG Matrix show several similarities. For instance, the Coca-Cola Company has several internal strengths such as the presence of a strong brand name and availability of competitive products. These products have been marketed extensively across the world without necessarily having to consider new regions or promoting market growth (Ketchen & Short, 2013). The company uses its internal resources such as product development and diversification to focus on the emerging needs of the targeted customers.
These results indicate clearly that the firm is in a strategic position that can deliver the targeted business objectives. The firm can go ahead to select a powerful market development grand strategy to achieve the targeted business goals. Since the company is a Cash Cow, it has the potential to achieve its goals by marketing the existing products without expanding or growing its portfolio (Banutu-Gomez, 2012). That being the case, the company’s marketing strategy in over 200 nations has remained the same although it is operating in a mature industry.
Concluding Remarks
The Coca-Cola Company is one of the most successful firms in the world today. It continues to record positive profits without necessarily expanding its business. This analysis indicates that the firm is characterized by a wide range of opportunities and strengths that can support performance. It is also a Cash Cow since it dominates a huge market share while at the same maintaining a low growth rate. That being the case, the firm will benefit from the use of aggressive strategies (Bunutu-Gomez, 2012). The strategies are appropriate because the firm is operating in a favorable environment or position.
The internal strengths can be merged with opportunities to promote product development and innovation strategies (Ketchen & Short, 2013). By so doing, the firm will produce superior and healthy products that resonate with the changing needs of the consumers. Innovative technologies will present quality beverages and market them using appropriate models. Such recommendations will ensure the firm remains competitive in the industry.
Strategy Implementation and Monitoring
The Coca-Cola Company: Organizational Structure
The Coca-Cola Company has a divisional organizational structure because of its global presence. The organizational structure makes it easier for the company to operate its global offices in different continents. Each region or continent has a president whose role is to control the firm’s performance. These continental divisions are critical because of the support of the firm’s performance. The structure has made it easier for the firm to realize its goals despite being a large organization. The Coca-Cola Company is an ethnocentric multinational firm (“Board committees & charters,” 2017). The firm’s international operations are usually similar to the ones undertaken in the United States. It also markets the same products and brands across the world.
To achieve its business potentials, the company has several committees and a Board of Directors. The Board of Directors is headed by the company’s chief executive officer and president. The current president is named Herbert Allen. The Executive Chairman is called Ana Botin (“Board committees & charters,” 2017). The Board has a total of sixteen members. The Board makes appropriate decisions and strategic plans that can promote business performance.
The firm has several committees that discharge several duties that support the firm’s operations. The Audit Committee guides the Board of Directors to achieve its oversight responsibility and monitor the firm’s financial performance. The committee oversees the firm’s enterprise risk management (ERM). The Compensation Committee evaluates remuneration policies and programs. It also implements appropriate decisions that impact the employees at the company positively.
The Committee on Directors and Corporate Governance considers and makes appropriate recommendations regarding the functions of the Board members. The Finance Committee supports the Board to control the firm’s financial affairs (“Board committees & charters,” 2017). The Management Development Committee has been guiding the Board to achieve its goals such as talent development for succession and senior positions (Ketchen & Short, 2013). The role of the Public Issues and Diversity Review Committee is to empower and support the Board to achieve its corporate social responsibility (CSR), diversity, and sustainability goals (Rangan, Chase, & Karim, 2012).
Organizational Culture: Values Statement
The Coca-Cola Company is one of the multinational firms founded on a strong organizational culture. To emerge successfully, the firm has an inclusive culture defined by seven core values (“Workplace culture,” 2017). These values include accountability, quality, collaboration, diversity, integrity, passion, and leadership. Such values are embraced by the employees and stakeholders to achieve the firm’s mission and vision (“Workplace culture,” 2017).
The firm has been leveraging a dynamic team that can meet the changing needs of diverse customers across the globe. The organization uses a powerful strategy that focuses on the idea of diversity. The company implements adequate programs to retain, attract, and develop the best talent. The employees are hired from diverse backgrounds to meet the changing needs of every customer (“Workplace culture,” 2017). The workers are empowered and equipped with the right resources to promote organizational performance.
It should therefore be acknowledged that the firm’s culture is what informs the values statement. For instance, the seven values defining the organizational culture dictate the behaviors, approaches, and practices embraced by the stakeholders. In each division, collaboration is taken seriously to ensure the workers focus on the targeted goals. Employees are required to associate with one another, focus on the seven values, and empower the final consumer (Rangan et al., 2012).
Malpractices such as discrimination, abuse, and mistreatment are discouraged at the firm. The activities undertaken at the firm are guided by the concept of quality. Such practices have made it easier for the company to design and implement a powerful organizational culture that promotes profitability. The strategy has made it possible for Coca-Cola to deliver quality products to its customers while at the same time supporting its business model.
The Coca-Cola Company’s Control Strategies
Many companies use different control systems to monitor their operations, mitigate risks, and ensure the implemented strategies are available. At the Coca-Cola Company, various control systems are considered to ensure the targeted objectives are realized promptly (Ketchen & Short, 2013). One of the unique systems used at the firm is a budget. The firm uses budgeting to identify and determine its expenditures within a given period (usually annually).
The budget is also used to predict the possible expenses and expenditures within the same period (“Workplace culture,” 2017). With such budgeting approaches, the organization can determine the right strategies and approaches that can result in positive performance. Inventory control is used by the company as a powerful process for managing resources and ensuring that different materials are available to support every production process. Issues such as logistical operations and supply chains are considered in an attempt to streamline the firm’s functions. When this is done, the company can meet the needs of the customers by delivering quality products promptly.
The concept of annual objectives is a powerful control system that continues to support the performance of the Coca-Cola Company. The outlined objectives are matched with the targeted strategies to establish if they are viable. Appropriate changes are made depending on the anticipated goals. By so doing, the firm finds it easier to identify potential challenges promptly. Such hurdles are addressed before they can affect business performance.
Functional strategies are used to support the firm’s goals and strategic objectives. Using key functions such as research and development (R&D), marketing, and human resources, various business activities are identified and implemented in an attempt to improve performance. Emerging issues and challenges are addressed by the relevant functional area or department (Banutu-Gomez, 2012). Policies and procedures have been implemented at the company for many years (Butler & Tischler, 2015). The procedures guide different stakeholders to understand specific objectives and goals that must be realized within a stipulated period. Policies act as guidelines that must be followed by the workers and stakeholders.
Consequently, such control systems guide different stakeholders to ensure every activity is aligned with the firm’s overall strategy. The use of personnel evaluation systems at the Coca-Cola Company is a powerful initiative that supports every implemented strategy (Butler & Tischler, 2015). The process measures the performance of different employees to develop them into the effectiveness and high-performing stakeholders. The gaps in productivity are identified and supported using the right resources and competencies (Ketchen & Short, 2013). The workers are then empowered to support existing organizational strategies. These control systems have therefore made it possible for the company to achieve its goals and remain a major competitor in the industry.
Organizational Structure, Culture, and Control Systems: Aggressive Strategies
Aggressive strategies have been recommended for the Coca-Cola Company to remain the most profitable player in the carbonated beverages industry. It is agreeable that the company’s structure, culture, and control systems should align well with the proposed strategies. The organizational structure is divisional because the firm has an international presence. It is therefore agreed that the structure can successfully support the proposed strategies. For instance, the concept of the market development will result in better approaches that can meet the needs of the customers. The functional areas will support the entire process and eventually make the company successful (Butler & Tischler, 2015).
The organizational culture is dictated by the firm’s core values. With such values in place, the employees and stakeholders can work hard to come up with innovative products that can meet the needs of the customers (Banutu-Gomez, 2012). The competent teams at the firm can embrace several practices such as teamwork to promote product development. By so doing, the employees will collaborate and come up with quality products that can transform the experiences of the consumers.
The control systems associated with the company can support every aggressive strategy. For example, innovative practices can be guided by different control systems such as budgeting, goals, and objectives, and functions at the company. The right resources, procedures, and policies will be used to support the company’s performance (Rangan et al., 2012). The firm’s organizational structure, control systems, and culture therefore align will each of the aggressive strategies that can be embraced by the company. These approaches have also made it easier for the company to implement and sustain the best strategies.
References
Board committees & charters. (2017). Web.
Bunutu-Gomez, M. (2012). Coca-Cola: International business strategy for globalization. The Business & Management Review, 3(1), 155-169. Web.
Butler, D., & Tischler, L. (2015). Design to grow: How coca-cola learned to combine scale and agility (and how you can too). New York, NY: Simon & Schuster.
Ketchen, D., & Short, J. (2013). Mastering strategic management. New York, NY: Flat World Knowledge.
Menon, A., & Yao, D. (2014). Elevating repositioning costs: Strategy dynamics and competitive interactions in grand strategy. Harvard Business School, 1(1), 1-18. Web.
Rangan, K., Chase, L., & Karim, S. (2012). Why every company needs a CSR strategy and how to build it. Harvard Business School, 1(1), 1-30. Web.
Workplace culture. (2017). Web.