Week 8 Business-Level and Corporate-Level Strategies

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Strayer University

BUS499 Business Administration Capstone

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The Coca-Cola company is one of the global brands that stand out in the market with diverse products and desirable products. This essay explores the business-level and corporate-level strategies that have been utilized by the entity for its long-term success. The paper identifies PepsiCo as the most significant competitor to Coca-Cola, evaluating its strategies against those utilized by Coca-Cola for its long-term success. It also compares evidence-based best strategies that Coca-Cola can adopt to guarantee success in the long run and contrasts Coca-Cola and its competitor as regards how they play out in slow-cycle and fast-cycle markets. By utilizing evidence-based resources and sources of information, the paper will undertake a diverse analysis of the business environment of the entity with a focus on its market competitiveness.

Business-Level Strategies

The beverage industry in which Coca-Cola operates has stiff competition and consistently changing consumer preferences. It is important to recognize that the Coca-Cola company serves a global market with customers of diverse demographics, among many other differences. The best-suited strategy for the entity to maneuver this business environment is differentiation. Differentiation works by setting apart the company’s products to be much more desirable and unique from those of other rival entities. Differentiation entails cultivating brand loyalty in which it will seek to connect emotionally with the customers.

Over the years, the Coca-Cola company has emotionally appealed to consumers. It exploits its exceptional core competency in its branding and marketing abilities to work towards product differentiation.Statista(2022) has indicated that Coca-Cola has an 85% preference in the soft drinks industry by many consumers. It is this market that the entity should focus on exploiting. Coca-Cola also has several distinct features, from the logo to the shape of its bottle, among other slogans, that set it apart in the market and communicate the message of quality, enjoyable products to its consumers. The strategy has allowed the entity to not only differentiate itself based on the taste but also on the emotions that the customers identify with. In addition, the concept of happiness and sharing has been common in most of the marketing campaigns of Coca-Cola. This strategy aligns well with the social dynamics and meetups that reflect sharing, engagement, and interaction. The said initiatives align well with the emotional connection goals of the firm, which foster brand loyalty to the entity. Diversification of its products has been evidenced in Coca-Cola’s wide beverage portfolios, each with a unique flavor. Such is key in that it enables the entity to serve the differing preferences of the customers and adapt to the trends in the market. A good example is Coca-Cola Zero, which has allowed the company to serve the health interests of those who need sugar-free drinks. In addition, the entity has continuously been innovating by having time-limited flavors and seasonal products like Vanilla and other festive seasoned products that also show differentiation in action.

Corporate-Level Strategies

The strategy employed by the Coca-Cola company at the corporate level is known as related diversification. Under this strategy, the entity has been using new product portfolios in which it makes products that are non-alcoholic yet beyond its scope of carbonated soft drinks. It takes on this strategy for its long-term success thanks to its established chain network of distribution that is almost active globally. This implies it can reach a wide diversity of existing markets for new products. In addition, the increased health consciousness over the globe recently has seen Coca-Cola acquire brands like Honest Tea and Smart Water, which help meet the changing consumer preferences. This diversification enables it to meet the needs of its broad customer base, and hence, it reduces the risk of dependence on one product line. Team (2016) argues that the entity has also used this diversification strategy to expand its market footprint in new areas like Africa. This means that the strategy is helping Coca-Cola expand its market by introducing new product portfolios in its product mix.

Competitive Environment Analysis

The major giants in the non-alcoholic beverage industry are Coca-Cola and PepsiCo, which compete for market share and consumer loyalty. The two entities use distinct business and corporate strategies that have shaped their competitive positions in the market. PepsiCo has its beverage division as a direct major competitor for Coca-Cola. At the business level, both entities employ differentiation strategies that allow them to create unique, desirable products in the market. While Coca-Cola focuses on consumer product emotional appeal and product diversity, the latter adopts a diverse product portfolio with celebrity endorsements and increased marketing campaigns and promotions. Coca-Cola’s emotional appeal and marketing have been its backbone, allowing it to stamp dominance globally.

In contrast, the broad portfolio of PepsiCo has allowed it to cater to a diverse consumer base. Ferguson (2015) has also pointed at PepsiCo using the penetration strategy in which it seeks to enter new markets that it has not been before. At the corporate level strategies, while Coca-Cola has used related diversification to offer non-beverage products, PepsiCo has had a wide diversity of products, including beverages and snacks. While Coca-Cola is geared towards increasing its product range within the beverage industry, PepsiCo seeks to extend beyond beverages to snacks, tapping into multiple markets.

Competitive Environment Conclusion

An analysis of the competitive landscape between the two entities of Coca-Cola and PepsiCo, both at the business and corporate levels, shows that Coca-Cola is ahead of time in achieving long-term success. This is so for a number of reasons. To start with, Coca-Cola has an emotional appeal advantage with its consumers. By evoking happiness, sharing, and nostalgia among its consumers and potential consumers, Coca-Cola fosters long-lasting relationships. This emotional connection is key to loyalty and brand identity. Further to this, Coca-Cola has an adaptive differentiation strategy in which it matches the market trends and the ever-changing consumer needs to manufacture products that serve such needs. An example is the Coca-Cola Zero product, which caters to diabetic consumers. Lastly, a focused diversification of its corporate-level strategy allows Coca-Cola to leverage the stable distribution channels, increase its brand recognition, and easily enter new markets, which, simply put, is like capitalizing on its strengths as a competitive move.

Market Cycles

According to Michael(2019), a slow cycle market is characterized by a company maintaining a monopoly in the market; hence, competitive pressures cannot make it through the market, while in fast cycle markets, there are rapid technological changes, short product cycles as well as rapidly changing consumer demands hence higher competitive pressures penetration in the market. Coca-Cola is better suited for slow-cycle markets, given its brand loyalty, stable strategies, and calculated approach to innovation. Coca-Cola depicts a stronger emotional connection with the customer, in which environments are most associated with stability and familiarity. However, PepsiCo has a diverse portfolio that focuses on innovation and agility in response to market trends, which situation is better suited for fast-cycle markets. The fast-cycle markets are ones that are ready to adapt and align with change, as seen with PepsiCo. That said, the two entities each have strengths that align with their market preferences. On the one hand, Coca-Cola is best suited in slow cycle markets, while PepsiCo has higher adaptability and portfolio diversification, which goes hand in hand with fat cycle markets.

1. Michael A. Hitt. 2020. Strategic Management: Concepts and Cases: Competitiveness and Globalization. 13th ed. Cengage Learning.

2. Statista(2022) Coca-Cola brand profile U.S.
https://www.statista.com/forecasts/1352607/coca-cola-soft-drinks-brand-profile-in-the-united-states

3. Team, T. (2016). How Coca Cola Is Continuing Its Portfolio Diversification Strategy. Forbes. Retrieved August 26, 2023, from
https://www.forbes.com/sites/greatspeculations/2016/02/25/how-coca-cola-is-continuing-its-portfolio-diversification-strategy/?sh=2503a962adfd

4. Ferguson, E. (2015, December 1). PepsiCo’s Generic and Intensive Growth Strategies. Panmore Institute.
https://panmore.com/pepsico-generic-strategy-intensive-growth-strategies

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