• Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month

Coca cola How has managed to become the most successful beverage company in the world?

Extracts from this document...


How has managed to become the most successful beverage company in the world? Has it established a monopoly? The Coca-Cola Company has become the largest manufacturer, distributor and marketer of non-alcoholic beverage concentrates and syrups in the world with over 400 brands distributed in 200 countries. The beverage company has approached success for numerous reasons. Their basis of competitive advantage lies on following: reputation, innovation, relationship, lower costs and differentiation. Then, the reallocation of resources is determined adequately as they expand into new markets, products are aimed at a mass market, there has been a recent application of lean production, they have achieved external growth by forming alliances with other companies, their purpose goes far beyond simply making profit, and its "advertising has had a significant impact on American culture." Reputation has been achieved to such an extent (primarily through promotion and branding) that any customer generally asks for a Coke or Coca-Cola by name instead for referring to it as 'cola', which means that the brand is recognised and at the same time value is added. This comes as an advantage to the company because their other wide range of products can also be recognised and associated with it, since it belongs to The Coca-Cola Company. Competitive advantage is also achieved through innovation on their products, which are then protected by laws (in this case protection of patents) ...read more.


They benefit primarily from financial, purchasing, technical and marketing economies. With financial economies it is to assume that banks will lend a larger amount of capital to the business and with a lower rate of interest compared to small or medium firms because they might feel that it's much safer, the chances a recouping finance (redemption payments) is much higher than with a small establishments. Purchasing economies implies that they are able to manufacture drinks more cheaply (by purchasing in bulk) than rivals, thus it enables them to have cost-leadership as well as technical economies, meaning that the firm becomes more capital-intensive. They utilise advanced machinery to manufacture goods rapidly and hence a greater output. "Marketing economies can be achieved if the firm is large enough to employ mass marketing strategies." Coca-Cola is frequently credited for the modern image of Father Christmas. In the past, Santa's disguise use to be green, but ever since he appeared in Coke's television advertisements, he is identified as being red. Furthermore, their success also lies on various marketing mix techniques like pricing, packaging and promotion plus numerous slogans such as: "I'd like to buy the world a Coke", "Coke ... goes with the good times" and "Life tastes good." It is considered that "as a brand and drink, it is a powerful symbol of the US life and culture." A mission statement "clearly expresses a purpose of a business, although it is widely expected that a business must look beyond 'the bottom line' (profitability)." ...read more.


In addition, Pepsi has pressed antitrust charges against Coke, claiming that they control "90% of the market for "fountain-dispensed soft drinks distributed through independent foodservice distributors." This suggests that Coke possesses the power to control prices in the market and also has the power to exclude competition. I believe that Pepsi stands correct because Coca-Cola has made agreements with major foodservice distributors such as McDonalds and Burger King, restricting any sales of Pepsi's soft-drinks, and threatening to cut supplies if done so. There may be a duopoly between both brands, Pepsi and Coke, between them both lies perfect competition because Pepsi is also a very well known beverage due to the fact that they have launched various successful TV advertisements involving popular celebrities, although if we speak about The Coca-Cola Company and PepsiCo as a whole, I think that there is definitely no perfect competition since The Coca-Cola Company owns a much larger market share than PepsiCo and have used unethical business practices through unfair barriers of competition for rivals. The bottom line is that The Coca-Cola Company can be classed as a monopoly thanks to its marketing tactics which has led them to its soft drink market dominance, since it is considered to own 90% of the market share and also due to several barriers of entry and competition it has created through: economies of scale, product differentiation, legal protection and strategic alliances. Finally, their actions suggest that this has been an unfair accomplishment, given that they have made agreements with potential foodservice distributors, movie theatres and other businesses, forbidding any commerce of Pepsi thirst-quenchers. ...read more.

The above preview is unformatted text

This student written piece of work is one of many that can be found in our AS and A Level Advertisements section.

Found what you're looking for?

  • Start learning 29% faster today
  • 150,000+ documents available
  • Just £6.99 a month

Not the one? Search for your essay title...
  • Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month

See related essaysSee related essays

Related AS and A Level Advertisements essays

  1. Produce a marketing strategy for a product or service with a clear understanding of ...

    Goods sold must be fit for the purpose intended. Therefore the coke can, must not be damaged or broken which could harm the customers e.g. can broken, customer cuts themselves against the coke can. The Trades Description Act attempts to ensure that the description given of the goods forms part of the contract of the buyer makes with the seller.

  2. The purpose and activities of each functional area and internal and external communications at ...

    They can advertise their product and help them find out what people really want from their money. HR can help find experienced people for the different work, which will help them achieve improving working relationship. Finance helps them to see how much money they have and how much they need to buy things.

  1. Coca cola - swot analysis

    those people who have televisions because it will always be in their sight. "posters appear in a variety of locations and tend to carry short messages. this is because motorists and pedestrians usually only have a few seconds to consider them.

  2. Viral Marketing

    3G Network in India Launch of 3G network in India by Bharati group is set to trigger a new era of viral marketing in India. 3G networks enable access to broadband Internet and data services like video calling, movie clips and gaming on cell phones at speeds of 384 Kbps.

  1. Create ing your own business - create a full plan on a business of ...

    24th march Information on being sole trader or partnership Wednesday 29th march and at home A copy of a example of flyer, factors effecting location At home in own time Location and competition with map At home own time Legislation Thursday 30th march Planning permission At home in own time

  2. Quantitative Methods Management Report SURREY & HAMPSHIRE RESTAURANT SECTOR

    These means could be over the phone, where gaining the personal attention of the relevant manager to explain more about the business. Another means to collect the data would be direct marketing, so as well as the questionnaire; internet advertisements and post marketing (through the letterbox leaflets)

  1. Coca Cola & its Evolution

    They put forth 4 million dollars of research to come up with the new formula. The decision to change their formula and pull the old Coke off the market came about because taste tests showed a distinct preference for the new formula.

  2. Football is the 'world game' and Coca-Cola is the brand name of the world's ...

    on the interests of local consumers - such as football - Coca-Cola strives to build closer relationships with consumers. Coca-Cola has a long-standing commitment to encourage young people to participate in team sports and live a healthy and active lifestyle.

  • Over 160,000 pieces
    of student written work
  • Annotated by
    experienced teachers
  • Ideas and feedback to
    improve your own work