Executive Summary

Coca Cola has come along way since its beginnings, from selling nine bottles a day to currently over 800 million. As well as becoming one of the most recognised brands. It was introduced into Australia in the 1930’s and is currently produced by a subsidiary company, Coca Cola Amatil who have had the rights to sell and produce Coca Cola’s products in Australia since 1990.

 

        Two levels of strategies are identified by Robbin and Barnwell(2003), corporate strategies and business strategies. In reference to Coca-Cola, their strategies are known as the corporate strategies. These guide the expectations of the business. On the other hand, Coca-Cola Amatil’s strategies are the business level strategies, in this case they are mainly the operationalised versions of the corporate strategies.        

 

        When investigating Miles and Snow’s four strategies, defenders, prospectors, analysers and reactors, it was evident that Coca-Cola fits best to the prospector type. This is due to Coca-Cola’s emphasis on market research and product development. But it was considered that previously Coca-Cola had a more defensive strategy, since historically it was only focused on carbonated drinks. Coca-Cola Amatil also fits into both these strategies. They have a strong emphasis on protecting market share, reducing costs and efficiency. But are also involved in market research and product development.

        Porter suggests four strategy types, cost leadership, differentiation, focus and stuck in the middle. Coca-Cola appeared to best fit the differentiation strategy, as they have an emphasis on being unique and brand images. Whereas, Coca-Cola Amatil has a focus strategy. The company is focused on reducing costs and increasing efficiency including specialising for their market.

        Coca-Cola does not own its bottling companies. This helps keep a competitive edge. Secondly, this make exiting a market easier and allows access to the localised knowledge of these companies. While still owning large portions of the companies, Coca-Cola keep some control. If this was not the case, Coca-Cola’s structure would also include a supply chain.

However, the two companies have different structures due to their different functions and geographical locations. They also differ due to the products they supply.  Coca-Cola Amatil offers there market products that may not be available in other locations.

Background of Coca Cola

Coca cola was invented in May 1986 by Dr John Pemberton, a pharmacist from Atlanta Georgia who was investigating a formula to cue headaches. He mixed a caramel liquid with carbonated water and began selling it as Coca-Cola at Jacobs Pharmacy.  During its first year sales of Coca-Cola averaged nine drinks per day.  Today Coca-Cola is the world’s most valuable brand with Coca-Cola products being consumed at a rate of more than 834 million drinks per day. This means a minute of any day half a million people are drinking a Coca-Cola product.  

Coca-Cola was introduced in Australia in 1937 and by 1938 the first manufacturing plant began operating in Sydney. Coca-Cola Amatil entered the Australian beverage industry in 1984 and by 1990 it had acquired all the Australian Coca-Cola bottling license territories in Australia except for the Northern Territory.  

Coca-Cola Amatil has the principal of Coca-Cola in Australia and independently manufactures and owns soft drinks and mineral waters.  Concentrate for Coca-Cola is made in a number of centralized production facilities and is exported to all countries in the world that sell Coca-Cola.  Only a few people in the world know the secret formula for Coca-Cola.

The Coca-Cola trademark is recognized by 94% of the worlds population and is the most widely recognized word after the word “ok”. Early advertising tried to stop people calling the product Coke and encouraging people to call it Coca-Cola but people have continued to call it Coke.

                                

Strategies

Robbins and Barnwell(2003, p. 142) describe two levels of strategy which are used to help clarify goals of the organisation. “Corporate level strategy attempts to define the nature of the business in which the firm seeks to operate.” The Coca-Cola Company’s two major corporate strategies are to “think locally, act locally”(Robbins & Barnwell, 2003, p. 167) and “to meet the changing needs of consumers everywhere”(The Coca-Cola Company Financial Report 2002, ). This has meant a needed to outsource their bottling facilities globally, as these businesses have the local knowledge needed.

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“Business level strategy refers to those strategies adapted by business units of the organisation.” (Robbins & Barnwell 2003, p. 142) The business units of The Coca-Cola Company, are its number of local bottling companies, these companies then develop business level strategies that are relevant to their particular market, in accordance with The Coca-Cola Company’s six global imperatives. Coca Cola uses the imperatives because the end product for both companies is relatively the same.

Since the appointment of CEO Terry Davis in 2001 at Coca-Cola Amatil, there has been a major focus on extending the product range to ...

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