Table of Contents
- 1.0 Introduction
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- 2.0 Background
- 2.1 Coca Cola
- 2.2 Industry Analysis
- 3.0 Product Life Cycle Analysis
- 3.1 Relevance Of Product Life Cycle To Coca Cola
- 3.2 Streaming Competitive Edge Via Product Life Cycle Tool
- 4.0 Conclusion & Key Recommendations
- 4.1 Key Recommendations
- 4.2 Conclusion
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In management, when it comes to competition, the aim is to understand the market dynamics in order to pinpoint the variables and, thereby, create a relevant policy or strategy that will bring forth competitive advantage to the organization at hand (Armstrong & Kotler 2013). It is important to consider that in many markets monopoly advantages are absent and, therefore, the only way to enhance one’s company competitive edge is through market analysis. As a manager, your goal should be about conducting gap analysis, the company’s unexploited potential, method of enhancing efficiency, and ways of expanding the company’s market reach (Grant 2010). Undertaking a comprehensive study of the market and identifying how to tap its potential presence well in order to boost a company’s competitive advantage over its rivals is vital (Dess 2012). However, it is wise to consider that the competitive edge of a company is best placed under the company’s strengths (Daniel 2012). This analytical report aims at providing insights on operations of Coca-Cola Company and exploring the ways it can use the tool of the product life cycle in enhancing its competitive edge within the beverage industry.
2.1 Coca Cola
Founded in Atlanta in 1886, Coca-Cola is the largest non-alcoholic beverage company in the world as well as the most recognized brand. It offers products in approximately 200 countries around the world. The company operates across the globe through more than 300 of its bottling subsidiaries (Coca Cola 2011). Its best-known product is the Coca-Cola soda, and this is also the brand which the company is recognized for around the world the most. The greatest asset of Coca-Cola is its wide geographical outreach including the most remote regions on the planet.
2.2 Industry Analysis
Nowadays, non-alcoholic beverage market is declining increasing competition within the beverage industry (Trefis-Team 2016). There many suppliers within this business sector; therefore, the market bids become too low at times. At the same time, the fact that there plenty of other companies producing non-alcoholic drinks, for example, PepsiCo, Jones Soda Co, Alkaline Water Co (The New York Times 2016) cannot guarantee sales for not all of them won as much consumer loyalty as Coca Cola did. Moreover, the industry does not have rigid barriers to new entrant. This is a phenomenon that can be seen with an increasing number of new companies within the sector. All these factors mean that the corporation within the industry have little influence when it comes to price setting; thereby, they need the management to discover other strategies for enhancing the competitive edge of their businesses.
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3.0 Product Life Cycle Analysis
Product life cycle is the path through which a product goes through as it establishes itself in a particular market. The stages of the process include market development, market growth, market maturation, and, lastly, the market decline stage (Frey & International Society of Automation 2011). In ensuring that a company has a competitive advantage over its rivals, there is the need to identify the stage at which the product is currently at within the market to guarantee that a company can present its product in a manner that best fits the market dynamics (Kotler & Armstrong 2012).
3.1 Relevance Of Product Life Cycle To Coca Cola
As discussed, there are no restrictions for new players to enter the market; therefore, whether it is America or any other region, Coca-Cola needs to acknowledge that there exist the products similar to its offerings. To do so, the company needs to identify the stage at which the intended product is at in that particular market. Additionally, it is important to determine whether the company is a pioneering enterprise where it is the first company to launch a particular product in the market. On the other hand, such market research process also allows a company to see the players of the market and, thereby, to consider a counter step that will help it sensitize people on the existence of another option being availed by the company (Lee 2013). Overall, the product life cycle tool is helpful in planning the best ways to launch a new product or service at emerging market (Gecevska et al. 2010). Once a company is aware of the product stage, it becomes easier to apply the necessary tools, expertise, and resources to best fit the market at hand (Stark 2015). At the same time, utilizing product lifecycle concept in their operations, Coca-Cola will be able to realign their operations both in terms of distribution and product types in a manner that enables the company to offer the product the market is in need of.
3.2 Streaming Competitive Edge Via Product Life Cycle Tool
Being a multi-national company, Coca-Cola faces challenges regarding varied market specific problems. Exploiting product lifecycle analysis presents the best method through which Coca-Cola can remain competitive in different geographies. One of the key insights provided by product life cycle tool is the stage at which similar products are at in the market. This is a vital concept because it does not only help a company to plan how to enter a particular market but also aids it in identifying the rate of saturation that exists in the market. This information is helpful during the planning stage before venturing into the market. If the product is at the development stage, this means that there has not been any similar product on the market yet, and the company is a trend-setting pioneer. This demands that the company employs more efforts and resources in order to sensitize people on the existence of the product at hand requiring intensive marketing and distribution strategies. In the context of Coca-Cola, while exploiting emerging markets, the product life cycle will bring forth this information to the company; thereby, it will help it search the appropriate way of planning the marketing campaign, establishing the relevant distribution networks, and human and non-human capital that will help make the venture more stable. On the other hand, if the product is at its growth stage, then the chances that the market is full of other competitors are high; therefore, the corporation needs to use tailor-made marketing strategies of the company at hand to gain and maintain its market share. Therefore, if Coca-Cola needs to exploit such a market, thorough marketing strategies are needed to attract and retain more customers.
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Furthermore, Coca-Cola can also find itself in a market where soft drinks are in maturity stage. This means that sales growth equals the growth of population with many companies present in the market engaging more in price competition (Sääksvuori & Immonen 2010). Identifying that another similar product at this stage will help Coca-Cola realign its operations in the market in a manner that upholds products differentiation. Rather than engaging in price competition that in most times leads to heavy losses, differentiation presents the best solution that yields similar results (GečEvska et al. 2010). Lastly, similar products might be in the decline stage where the products are experiencing consumer resistance due to boredom. This is usually a risky time to introduce a product in the market since there is surplus of goods in the market (Fukuda et al. 2014). Therefore, there is the need to use appropriate ways of availing the product, for example, through mergers and acquisitions. Here companies within the market try to root the others out the market (Kotler & Keller 2012) and, therefore, utilize the insights from market lifecycle ensuring that when Coca-Cola is venturing in this type of a market, due diligence will be observed enhancing the competitive edge of the company.
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4.0 Conclusion & Key Recommendations
4.1 Key Recommendations
Product life cycle analysis brings forth vital information that enhances the company’s competitive capability within a market by encouraging a more informed decision making the exploitation of the intended market easier (Calantone et al, 2010). It is, therefore, important that Coca-Cola employs this tool before entering a market or launching a new product in the market that it already operates. To ensure a continued profit-making venture around the world that emanates from a competitive advantage, Coca-Cola needs to use product life cycle analysis in all the intended markets. Therefore, before venturing into a new market or launching a new product Coca-Cola needs to:
- Identify the prevailing level of competition within the market
- Determine the stage at which the new product that is being launched is at in the targeted market
- Measure the level of saturation existing in the market
- Identify the appropriate way of entering the market
- Determine the necessary resources, marketing strategies, and distribution channels that are appropriate to use in respect to the prevailing market dynamics
Furthermore, if the above-mentioned recommendations are utilized, Coca-Cola will generate more profit that will be a result of exploiting strategies that enhance its competitive edge. Moreover, all the answers to the key recommendations can be identified via utilization of a product life cycle analysis (Doyle 2011).
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To sum up, it is evident that by utilizing the product life cycle analysis a company can identify what needs to be done before the actual investments regarding the market that is being targeted. This not only secures the company’s money but also enhances its competitive edge within the market. Additionally, it is evident that different products are at different stages within the market – a phenomenon that makes them face different logistic challenges. Moreover, it is clear that product lifecycle analysis is a vital tool if a company is to conduct primary market research influencing the way a company is going to engage in the market. Therefore, product life cycle analysis presents a concept that organizations can employ to get a competitive advantage while exploring opportunities in different markets.
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