University of Sunderland in London

PGDM 156
Strategic Management In An International
Context

Student Number: 239434706

Student ID: bi59ml

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 TABLE OF CONTENT
1. INTRODUCTION
2. BACKGROUND
3. OPEN INNOVATION AND INTERNATIONALIZATION
4. SWOT ANALYSIS OF COCA-COLA
5. INTERNATIONALIZATION, LOCALIZATION AND COMPETITIVNESS
6. PORTERS 5 FORCE
7. ORGANIZATIONAL PURPOSE, PROFITABILITY AND SOCIAL
RESPONSIBILITY
8. CSR
9. PERSONAL OPENION
10. CONCLUSION
11. REFERENCING

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Introduction

Through research is in four areas open innovation and internationalization; localization and
competitiveness; organizational purpose; profitability and social responsibility. This assignment
will analyze and evaluate the global soft drink brewing strategies of multinational corporation
(MNC) Coca-Cola. In addition, this research will provide own insights on each subject we
explore. These topics will be investigated with the use of theoretical ideas such as marketing
strategies and SWOT analysis.

Background

The Coca-Cola Company produces the carbonated soft drink known as Coca-Cola, or Coke.
More than 200 countries sold Coke products in 2013, and each day, consumers drank more than
1.8 billion servings of the company's beverages. According to total sales, Coca-Cola came in at
number 87 on the 2018 Fortune 500 ranking of the biggest American companies. Coca-Cola
ranked as the sixth most valuable brand in the world in 2020 according to Interbrand's "best
global brand" survey.

Coca-Cola Company was founded in 1886 in Atlanta, Georgia, by physician and pharmacist
John Pemberton. When the name was first created, his bookkeeper Frank Robinson suggested it.
The soda, which was created using cola nut extract and cocaine extract, was originally served
and sold at the Pharmacy in Atlanta. Because Coca-Cola originally included tiny quantities of
cocaine and caffeine and was intended to prevent various illnesses, it was once regarded as a
medicinal beverage. Asa Candler purchased the Coca-Cola recipe in 1887 following Pemberton's
passing. After then, Candler's aggressive marketing strategies helped it become the most popular
drink in America.1. Financijski Aspekti organizacije sportskih Događanja

Regarding its vision and objectives, The Coca-Cola Company is quite clear. Their main goals are
to uplift individuals, provide moments of hope and joy, add value, and change the world. The
Coca-Cola vision encompasses people, portfolio, partners, planet, and productivity, and it

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describes what a corporation has to do in order to keep growing. It may be summed up in the
following key ideas:
 People: Create an amazing work environment that motivates employees to reach their full
potential.
 Portfolio: Provide the public with a selection of high-quality beverage brands that
anticipate and meet consumers' needs and wants.
 Planet: Develop and promote sustainable communities as a conscientious citizen who
makes an impact.
 Profit: Optimize shareholders' long-term returns while considering our overall
 Productivity: Be a highly effective, lean, and fast-moving organization

Question one: open innovation and internationalization

The first section of the assignment will be critically evaluating the open innovation model using
Henry Chesbrough open innovation concept and
Open innovation is a relatively recent concept. Dr. Henry Chesbrough originally used the word,
and he characterized it as follows: Henry Chesbrough's open innovation concept.
Through the bold external ideas offered by partners and consumers, open innovation seeks to
improve the organization's capacity to generate or develop new ideas for solutions and products
to succeed in the marketplace. Since the ideas originate directly from external contributors, the
teams may save expenses, risk, dedication, and time by utilizing the ideas that are gathered and
evaluated throughout the research stage. (Parker, 2022).
There are numerous platforms which are available to assist corporations, organizations,
engineers, and others worldwide in fostering innovation and monitoring innovation initiatives.
Coca-Cola is turning away from a closed, protected approach to innovation in favour of open
techniques such as crowdsourcing and co-creation for its new product development projects.
(Marketing Mag, Coca-Cola to adopt more open innovation style 2012)

The following are some further open innovation platforms that are utilized by different
businesses worldwide:
 Brilliant Thought

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  Imaginatik
 Trendy Innovation
 Nosco
 Hyve
 idClic
 Spigit
 100 accessible
 The Chaordix

Figure 1: Image Source : New & Improved LLC

There are fountain dispensers where which people may have seen where they can buy an

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oversized Coke with their preferred meal at different fast-food businesses and cafés. However,
people were not aware of the design and system of dispenser machines. Raymond Loewy created
this Coca-Cola fountain dispenser in 1960, making Coca-Cola one of the first businesses to
innovate.
Coca-Cola is currently using open innovation approaches on two fronts: on the one hand,
between the corporation and its clients, and on the other, between the team and other business
people.
In eight different locations throughout the world—Buenos Aires, Singapore, Sydney, San
Francisco, Bangalore, Berlin, Rio de Janeiro, and Istanbul—the Accelerator Program aims to
support start-ups.
The firm also offers an open innovation strategy with its Freestyle dispenser, which lets users
blend their own flavors and suggest new ones.

Figure 2: TMBLover at English Wikipedia / CC BY-SA | wikimedia commons | Coca-Cola

Freestyle dispenser machine

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The new product uses a mobile application to record the taste so that customers may access it
from any other Freestyle machine. Customers are at the center of the production process with this
open innovation concept, as Coca-Cola incorporates suggestions for tastes into outside ideas that
can be evaluated and managed as a new product line. (Mellahi et al., 2010)

SWOT Analysis of Coca Cola

A SWOT analysis is a methodology for assessing a company's competitive standing in the

market that is used in strategic planning. Four primary attributes are analyzed, which are
commonly used to measure a business's potential level of competition in its industry. A well-
conducted SWOT analysis might inspire your imagination for new goods or directions, or it can
provide you with a fact-based analysis from which to make decisions. (White, 2022)

The purpose of a SWOT analysis is to help with a practical, fact-based, data-driven examination
of the advantages and disadvantages of a company, projects, or the industry. To maintain the
analysis's accuracy, the organization must steer clear of gray regions and preconceived notions in
favor of real-world scenarios. It should serve as a suggestion for businesses rather than a strict
requirement. (Kenton)

The Coca-Cola SWOT analysis can identify the tactics that can assist the business improve its
standing and increase sales. It highlights shortcomings according to organizational structure and
culture, as well as the consequences of competition. By taking opportunities into consideration,
the organization may revamp its plans and initiatives. The corporation may consider expanding
its operations to generate revenue and maintain a stable position in the market. Moreover, it is
adaptable to modern technology. (EdrawMax).

Below we are going to discuss SWOT analysis of the company in detail.

Strength:

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The initial step for Coca-Cola is to increase their market share by entering high-buying areas. For
most businesses, market penetration is crucial. Then, in this business, innovation alone may
advance more quickly:

• Coca-Cola is the most popular beverage brand, available in 200 countries, and it won the 2011
highest brand equity award. • The corporation is valued at $79.2 billion. Limca, Sprite, Fanta,
Thumps Up, Maaza, Kinley Water, and Minute Maid are some of its subsidiaries.

• The business distributes a product to the most remote locations and has the strongest supply
chain. Its extensive worldwide reach has helped to establish its brand image.

• It collaborates with well-known brand ambassadors for marketing and promotion. It continues
to use a successful marketing plan. Coca-Cola delights in its consumer

Weakness:

A corporation must be aware of its weaknesses in addition to its strengths. They can take the
required actions to lessen their influence once they've determined what factors are impeding their
growth:

• The company's soft drinks have a high sugar content and other ingredients that are linked to
health issues; • PepsiCo's aerated drinks are providing it strong competition for market share

• The corporation has not yet started a food business, in contrast to PepsiCo. The main emphasis
is on drinks. Furthermore, it has not demonstrated any interest in producing healthful beverages
thus far.

• Despite having a large portfolio of brands, the corporation mostly relies on the Sprite and Coca-
Cola names.

• The business has come under fire for problems with water management and for using
groundwater even in areas with a shortage of it.

Opportunities:

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The performance evaluation of the organization demonstrates how they can take advantage of the
chances at hand. The ones that fit with the company's strengths might be the focus. Due to their
strong brand reputation, Coca-Cola can take advantage of various chances and maintain its
development.

• Broaden its market penetration in unexplored nations to enhance the Coca-Cola brand and
enhance the supply chain; • Promote lesser-known items. It must make use of the opportunity to
strengthen the business by acquiring other enterprises.

• It may expand its range of products by entering the snack market to take on PepsiCo. It can also
launch a fully developed health drink company.

• The growth of Kendall is not comparable to that of Bisleri. It can expand its bottled drinking
water industry.

Threats:

Given the rapid growth of significant new vegan and other organic beverage brands, Coca-Cola
appears to be prioritizing maintaining its top spot in the global beverage sector.

• Aerated drinks are being shunned by consumers who want to make healthy decisions. • It has
trouble adhering to various regulatory rules and laws in other nations; • Raw material sourcing is
a major challenge

• Its market share has been impacted by the current economic recession, inflation, and instability

• It's up against some fierce competition, including PepsiCo, Nestle, Gatorade, Lipton, Danone,
and Schweppes.

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Source:EdrawMax Online

Question 2. Internationalization, Localization & competitiveness

Under this section we will be discussing about how coca cola internationalize its products and
how it is working in local markets and applying porters five rule to know competitive advantage.

A visible market approach that considers consumer behavior, purchasing patterns, and societal
differences that are present in every nation where a corporation conducts business is known as a
localization strategy. Respecting cultural norms, such as serving Coca-Cola consumers
appropriately, is crucial. Globalized demand, in the eyes of Coca-Cola, is a shift in the relative
demand for various kinds of labor. implies that although some businesses get a rise in demand
because of globalization, others see a drop in demand when their employment is relocated

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elsewhere. Even during the epidemic, Coca-Cola was impacted by the political ramifications of
the growing globalization trend.

Cost management, differentiation, cost focus, and focus differentiation are the tactics. In terms of
cost management tactics, a company seeks to position itself as a low-cost manufacturer. The
Coca-Cola Company maintained its position by utilizing several crucial elements that provide a
stable competitive advantage. Three key tactics are identified by Michael Porter as being able to
provide businesses a competitive edge. These three tactics are focus, distinction, and cost cutting
(2022).

Coca-Cola dominates its sector by increasing competitiveness, brand recognition, consumer

loyalty, and value through competitive differentiation methods. To achieve a dominating position
in the industry, Coca-Cola employs a range of competitive tactics aimed at enhancing its core
competitiveness, brand recognition, customer loyalty, and value awareness. Thanks to its
diversification approach, Coca-Cola has become the most well-known brand worldwide for a
wide range of products, including fruit juices, coffee, tea, sports drinks, water, and soft drinks
(Bose and Dey, 2019, p. 9). Businesses employ a variety of tactics to persuade clients to pay
more for their goods and services by highlighting the unique, fulfilling characteristics of their
offerings. Companies use distinguishing tactics based on their unique selling propositions when
market competition is intense, industry differentiation is lacking, and consumer wants are
diverse.

Porter’s Five Forces of Coca-Cola

Threat of New Entrants: Medium Pressure

There aren't many obstacles to entering the beverage business: neither capital nor customer
replacement costs exist. Brands for brands that are new to the market are priced similarly to
COLA goods. Coca-Cola is a brand as well as a beverage. For a considerable amount of time,
this market share is crucial, and devoted consumers are unable to try the new brand.

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Threat of substitute products: from medium to high pressure

Energy drinks come in a variety of flavors, including carbonated and juice. The flavor of Coca-
Cola is not very distinctive. In a blind tasting test, participants can distinguish between Pepsi and
Coca-Cola

Buyer bargaining power: low pressure.

While internet customers are waning, individual consumers are not exerting as much pressure on
Coca-Cola wholesalers like Walmart.

Suppliers’ bargaining power: Low pressure.

Caffeine, sugars, phosphoric acid, and soft drinks are the key constituents. Providers lack
distinction and emphasis. Most likely one of these providers or the biggest buyer is Coca-Cola.

The rivalry between existing companies: high pressure

Large beverage goods are presently offered under the Pepsi rivals' brand. Two popular
carbonated drinks that are utilized and sponsored for outdoor activities and events are Coca-Cola
and Pepsi. There are several well-known soda brands available.

In conclusion, the development of goods like soft drinks and services is the goal of Coca-Cola's
differentiation strategy. Features create value, which enables businesses to provide exclusive
prices. While purchasing bottled water is less expensive, purchasing vitamin water is somewhat
more costly.

Question three: organizational purpose, profitability, social responsibility

This section explains Coca-Cola's goals, financial performance, and approach to corporate social
responsibility.

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The following are the Coca-Cola Company's primary goals:

 Change the world and leave your mark.

 Create popular drink brands and selections to revitalize people's bodies and spirits.
 Build a more sustainable business and a more equitable future that improves the lives of
individuals, groups, and the environment.
 Become well-known around the world as an ethical and responsible business.
 To survive in the world of the future, accelerate sustainable growth.

Source: cocacolacompany.com

Corporate social responsibility

Coca-Cola is dedicated to changing the world for the better by using its size and power. The
corporation has five main areas of emphasis for its Corporate Social Responsibility (CSR)
strategy:

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  World Without Waste: By 2030, Coca-Cola wants to have collected and recycled one
bottle or can for each one sold.
 Eco-Friendly Packaging: By 2025, Coca-Cola aims to have all of its packaging
recyclable.
 Water Stewardship: Restocking the water used in its processes is a priority for Coca-
Cola.
 Women's Empowerment: In its supply chain and local communities, Coca-Cola is
dedicated to empowering women.
 Sustainable Communities: Coca-Cola is dedicated to fostering a more sustainable future
for all by aiding local communities.

The business has come a long way toward achieving its CSR objectives. Coca-Cola, for instance,
collected and recycled 69% of the bottles and cans it sold worldwide in 2021. With 48% of its
PET bottles manufactured from recycled content in 2021, the firm has also made headway
toward its aim of having 100% of its packaging recyclable by 2025. Furthermore, via a variety of
initiatives, Coca-Cola has empowered over 5 million women in its supply chain and
communities, replenishing 113% of the water it utilized in its operations in 2021. (LinkedIn
login, sign in)

Financial performance
To $43.0 billion, net revenues increased 11%, while organic revenue increased 16%. An 11%
increase in price/mix and a 5% increase in concentrate sales were the main drivers of this
accomplishment.
The previous year's operating margin was 26.7%; this year it was 25.4%. Strong topline growth
helped the operating margin, but the BODYARMOR acquisition, greater operational expenses,
more marketing spending, and currency headwinds had a negative effect. (Admin, 2023)

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Source: Coca Cola Inc, 2019
Question four: Personal opinion

In my opinion, the primary goal of the Coca-Cola business is to dominate the market, whether
via advertising or other means. This has allowed them to become the world's largest beverage
maker. As previously stated, the Coca-Cola Company's primary goals are to eradicate waste,
promote sustainable packaging, protect the environment, and empower women. Prominent
institutions, such as CDP and the Dow Jones Sustainability Index, have honored Coca-Cola's
CSR initiatives. The business is dedicated to carrying on having a good influence on
communities, the environment, and women globally. The business has come a long way toward
achieving its CSR objectives. Coca-Cola, for instance, collected and recycled 69% of the bottles
and cans it sold worldwide in 2021. With 48% of its PET bottles manufactured from recycled
content in 2021, the firm has also made headway toward its aim of having 100% of its packaging
recyclable by 2025. In addition, Coca-Cola has replaced 113% of the water it used in its
operations in 2021 and has empowered over 5 million women in its supply chain and
communities via various programs.

Conclusion

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In summary, the company's most significant assets are the flavor of its beverages, the Coca-Cola
System, and its potent marketing arsenal. The firm is exerting efforts in Page%|%44"%order to
supply nutritious beverages, and safeguard the environment for the future generations. The
business aspires to digitize every aspect of its operations. To meet the need of those who are
health concerned, we advise Coca-Cola to enter the market for healthy products. To draw
customers from new areas, Coca-Cola could also think about launching snacks and broadening
the range of products they provide.
Coca-Cola has demonstrated efficacy in employing diverse corporate and business strategies to
synchronize the aims and ambitions of every company division and operate as a unified unit to
endure and excel in a fiercely competitive industry. By doing this, the company is able to
combine and utilize its resources more efficiently.
It is no accident that Coca-Cola has become the most well-known beverage manufacturer and
producer in the world. It is evident that the management of the company has positioned the
company strategically within the beverage industry. Only thorough market research on the
company's customers, internal processes, and supply chain will be able to do this.

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