Coke Strategy Essay -- Strategic Management Business

Coca Cola is the leading manufacturer, marketer and distributor of soft drinks in the world. With domestic market nearing saturation, the potential for growth lies in international markets. In recent years, economic, political and social changes have made the global environment more uncertain, forcing Coke to reevaluate its strategy, structure and culture to maintain a competitive advantage. The following is a dynamic analysis that tracks the evolution of Coke’s strategy from global standardization to a multi-domestic strategy that emphasizes national responsiveness. During Goizueta’s management term, Coke is already a large, mature company in the formalization stage of its life cycle and in the international stage of global development. The organization’s official goal is to dominate the global beverage market and maintain its market leadership position over Pepsi and other competitors. Its primary operative goals are productivity, efficiency and profit. Coke is a highly formalized, centralized organization with a clear hierarchy of authority and a mechanistic management process. Employees believe in the supremacy of the product, and the company’s rigid, heavy-handed culture helps maintain control and drive aggressive marketing and expansion plans. Given the steady consumer demand and low uncertainty created by the simple/stable environmental dimensions, the vertical structure is appropriate because it provides management with high degree of efficiency and control. Coke’s effectiveness is a result of the synergistic fit between its structural and contextual dimensions. Coke realizes economies of scale/scope and low-cost production from a globalization strategy that enables product design, manufacturing and marketing to be ... ...our product categories. With greater distances between regional units, Coke needs to establish more global coordination mechanisms such as transnational teams and functional managers to link resources, disseminate knowledge and bring products to market faster. To ensure that regional units don’t act too autonomously, headquarters needs to develop unified plans and procedures to ensure control and coordination. With more differentiation, Coke’s challenge is to stay competitive in new product categories without weakening the flagship product or diluting its brand image. Looking to the future, Coke should consider moving to a transnational model, which would transform the organization into a network of interdependent global operations that work together to achieve multi-dimensional goals by simultaneously achieving efficiency, national responsiveness and shared learning.