Coca-Cola Company: Business-Level and Corporate-Level Strategies

BUSINESS-LEVEL AND CORPORATE-LEVEL STRATEGIES
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BUS499 Business Administration Capstone
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BUSINESS-LEVEL AND CORPORATE-LEVEL STRATEGIES
Coca-Cola Company is an American multinational company founded in 1886 by Dr. John Pemberton in Atalanta, Georgia (The Coca-Cola Company, n.d.). The firm has evolved to be one of the most oversized drinks and beverage companies globally, appearing more often than never as one of the largest and best multinational corporations in world rankings. Due to the coronavirus pandemic, the company has its revenue depicting an alarming loss over the past year, registering a 5 percent decline in net revenues and a 6 percent decline in cash flows in 2020 (The Coca-Cola Company, 2021). Nevertheless, the company remains relatively successful in the non-alcoholic industry sectors, thanks to its exceptional strategic management, both at the business and corporate levels. This paper analyzes both the business level and corporate level strategies that the Coca-Cola Company deploys to realize the competitive advantages in such a competitive industry. The report also explores more about core competitor's plans that are likely to be a source of threat to the Coca-Cola Company soon, considering the competitors' behavior in the different market cycles.
Business-Level Strategies
More often than never, businesses are faced with a myriad of choices that need to be made to match the external market forces that influence a company's success in an industry. Also, businesses often have similar products competing for the scarce markets, necessitating a company to capitalize on the specific product qualities to differentiate itself from the competitors. For a company to choose the best course of action out of a series of options, there is a need to select a strategy that would be crucial to the business's success and competitiveness. Business-level strategies, therefore, signify the specific actions undertaken by a company to realize the competitive advantages over the competitors in a scarce product market and potentially influence long-term success (Hitt et al., 2020). Competing for the global environment becomes even more complex, requiring multinational companies to devise top-notch business-level strategies to offset the complexities that come along with the aspects of globalization. The main focus of a business-level strategy is the customers as it determines the customers to be served, their needs, and how the different customer needs can be best suited and uniquely differentiate the company from the competitors (Hitt et al., 2020). According to Hitt et al. (2020), there are five distinct business-level strategies that corporations ought to choose from to realize their competitiveness: cost leadership, differentiation, focused cost leadership, focused differentiation, and integrated cost leadership.
Coca-Cola Company, a key player in the non-alcoholic beverage industry, never falls short of competitors, and the customers never lack the options to choose from. Coca-Cola Company has been recognized as a significant brand in the global market, having registered its presence in more than 200 countries and an experience of over 130 years (The Coca-Cola Company, n.d.). Coca-cola company has humongous revenue capabilities, with net operating revenues of $33.01 billion and a net income of over $ 8 billion in the year 2020 (Conway, 2021). Consequently, low-cost business strategies for Coca-Cola company become inapplicable due to the high revenue strengths of the company. Although the company offers a wide range of products, the products cut across all demographic groups and geographical regions. In this sense, a business strategy that uses buyer groups, geographic markets, and product lines as the baseline for differentiation also does not suffice for Coca-Cola company (Hitt et al., 2020). Differentiation business strategy thus remains the most appropriate business strategy for Coca-Cola Company. The differentiation strategy within Coca-Cola company serves to offer unique attributes to the company's products and services.
According to Hitt et al. (2020), a differentiation business strategy seeks to produce unique products and services at a relatively bearable cost to the consumer compared with those of the competitors. The differentiation can be achieved in many different ways: exceptional customer service, innovativeness, right brand name, unique taste, and feel, among other aspects of differentiation. Coca-Cola's differentiation strategy mainly focuses on the uniqueness of the products and the delivery of the product to the consumers (Townes, 2019). Product positioning through advertisement within Coca-Cola company is exceptional, with 20 percent of its advertisement budget channeled to the differentiation of the products (Townes, 2019). Innovativeness and outstanding communication strategy double up the product positioning as the other differentiation for Coca-Cola Company. The differentiation business strategy has worked quite well for the Coca-Cola company for close to a century, with the firm’s overwhelming success overshadowing significant competitors.
Corporate-Level Strategies
Unlike the business-level strategy, which is an industrywise strategy to place a company in a strategic position to compete with other corporations in a scarce market, the corporate-level strategy mainly focuses on the diverse businesses a corporation might be involved in. Corporate-level strategies denote the different accomplishments that a company undertakes to match the various business operation with the product market and garner competitive advantages (Hitt et al., 2020). Consequently, diversification becomes a very critical aspect of corporate-level strategy to allow companies to determine the most viable business segment to compete in, realize value addition in the different businesses they ought to undertake, and most importantly, determine how diversification of business operations or even venturing into a new industry could be of significance to its success (Bhatia & Thakur, 2018). Diversification is a corporate-level strategy that can be deployed for two primary purposes: value addition to the company through increased revenues and to neutralize the competitors' market strengths (Hitt et al., 2020). Since diversification is the primary form of corporate-level strategy, several corporate-level strategies can be deduced based on the level of diversification that a corporation depicts, with a broad classification as low, moderate, and high-level diversification (Hitt et al., 2020).
The core business operations for the Coca-Cola Company are mainly manufacturing and sell of syrup to partners in the beverage industry group as well as the manufacture and managing of own finished products from the syrup (The Coca-Cola Company, n.d.). In addition, other minor business segments play a role in the revenue generation for the company, with recent ventures in the production and sale of water, non-sugar carbonated drinks, fruit juice, among other products (The Coca-Cola Company, n.d.). Consequently, Coca-Cola company depicts a moderate level of diversification. Since its core products, production technologies, and distribution method have some linkage. The company employs a related constrained diversification strategy (Hitt et al., 2020). The company has its bottling and beverage manufacturing plants distributed across the globe and its subsidiary products distributed alongside the core non-alcoholic beverage products with a standard supply chain. With s...