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Sources of competitive Advantage for Coca Cola

Coca Cola VRIO Analysis

In the 21st century with the level of competition very high, it is imperative for every brand to have more than one sources of competitive advantage. A long lasting and sustainable competitive advantage is not possible without having some critical strengths. Every brand in today’s environment is fighting to gain a leadership status and to earn it building a competitive advantage is more essential than anything else. Coca Cola is a industry leading brand of soda products. However, the brand’s popularity rests on some critical strengths which have helped it create sustainable competitive advantage. Here are some of these sources of competitive advantage that have made Coca Cola an unbeatable brand in the global industry. Some of the most important things to know about Coca Cola is its celebrity status in the soda market, its financial strength, a large array of flavors and its worldwide popularity.

COCA COLA SOURCES OF COMPETITIVE ADVANTAGE

  • Global presence and brand image: 

One of the chief strengths of Coca Cola is its global presence. The brand is present in more than 200 countries. Both its name and logo are easily recognized among the huge crowd of brands. Brand image is also a key strength . Coca Cola’s brand image is connected with the young generation and represents energy and youthfulness. This is a key strength which shows that it is a brand loved by youth around the world. Most of its customers are in the age range of 13 to 35. Global expansion also means higher sales and better revenues.

  • Large supply and distribution network:

Coca Cola has one of the largest supply and distribution networks in this world. It also has one of the most sophisticated and advanced distribution networks. Coca Cola manufactures and sells concentrates, beverage bases and syrups to bottling operations. It is the bottling partners of Coca Cola that manufacture, package, merchandise and distribute the final branded beverages to its customers and vending partners. These vending partners work closely with its customers. It has created a Bottling Investments Group that strategically invests in select bottling operations which it takes temporarily into Coca Cola’s ownership. Apart from that Coca cola has focussed upon having better and long term relationships with its suppliers. It has created plans and started strategic initiatives to help its suppliers including farmers in several nations and empower them.

  • Marketing capabilities:

  • Coca Cola is also known for its great marketing capabilities. For generations, it has served great marketing campaigns that have helped it engage with its customers better. Apart from investing in digital technology for connecting better with its customers, the brand is known for creating great video advertisements. Marketing is a key strength that has helped Coca Cola build its empire through years.
  • Financial strength:

  • Financial clout is one of the very important strengths for any brand and helps them beat difficult conditions. Its current market capital stands at 182.9 Billion dollars. It was among the top five (fifth) most valuable brands in Forbes’ list. Financial strength also helps with faster expansion since you can invest more in marketing as well as research and development.
  • Investment in HR and IT:

  •  HR has become a key strength in the 21st century since without investing in skilled Human Resources one cannot win in the market. Coca Cola invests a lot in career management and development of its employees. Apart from innovative HR techniques, it uses technology to help its employees find better growth in their career. It has established a Coca Cola University for the training and education of its employees. The brand provides financial aid to the employees who want to pursue higher education.
  • Flavors and packaging: 

  • Coca Cola’s large product portfolio is also one of its key strengths. It has a large array of brands and products. 20 of its brands are billion dollar brands generating more than a billion in annual revenue. 18 of these are available in low calorie or no calorie options. The demand for health friendly products has grown in the 21st century and so Coca Cola has grown its range of health friendly beverages.
  • Patents, copyrights and trademarks:

  • Coca Cola owns several patents, copyrights and trade secrets apart from know how and technology. The know how and technology are related to Coca Cola’s products and processes as well as design and packaging and other equipment used in its business. It has licensed some of these technologies to its suppliers. The secret formulae of its soda beverages are also an important source of competitive advantage for the brand.

These are the most important factors that have helped Coca Cola become a market leading soda brand. Behind every great brand there are some major sources of competitive advantage which help it remain at the lead in the market. Competition is intense in the soda industry and unless for these great strengths, Coca Cola would have been lagging behind Pepsi, its nearest competitor. Its large product portfolio and the diverse array of flavors are its key strengths. However, excellent marketing capabilities and great human resources are also strengths worth noting based upon which the soda giant has continued to find growth in the global market. Several of these strengths like its marketing capabilities, differentiated flavors and large customer base are major strengths that  either give rise to a competitive parity or sustainable competitive advantage because of their value and uniqueness. Particularly, it is the secret recipes of its soda beverages that  provide it with a sustainable competitive advantage.

Sources:

https://www.coca-colacompany.com/our-company/the-coca-cola-system

https://www.forbes.com/companies/coca-cola/

https://notesmatic.com/2017/02/hr-management-at-coca-cola-performance-management-and-innovation/

https://ycharts.com/companies/KO/market_cap

https://notesmatic.com/2016/08/coca-cola-swot-2016-strengths-and-weaknesses/

Coca Cola Annual Report 2017

Abhijeet Pratap

Abhijeet has been blogging on educational topics and business research since 2016. He graduated with a Hons. in English literature from BRABU and an MBA from the Asia-Pacific Institute of Management, New Delhi. He likes to blog and share his knowledge and research in business management, marketing, literature and other areas with his readers.