Competitive Advantage Of Companies Essay

Question:

Discuss about the Competitive Advantage of Companies.

Answer:

Introduction

This report aims at discussing the competitive advantage of the companies. The case studies of the company’s such as Coca cola and Starbucks has been explained. A brief discussion is given for the reasons of achieving marketing strategies. Strategies are also explained of both the companies. The successful marketing practice is being explained of the companies. Ansoff Matrix model of Coca cola and Porter’s generic Strategies of Star bucks has been explained.

For this report, two companies such as Coca Cola and Starbucks has been selected. To know more about these companies the brief introduction is given below:

Case Study of Coca Cola

It is a successful soft drink company all over the world. It is a beverage company, which is located in US Atlanta. The company was launched by Dr. John Pemberton, in 1886 who was a pharmacist in Atlanta. Firstly, it started selling at soda fountains and hence, there were no bubbles in the drink at that time (Coca Cola, 2016). “Delicious and refreshing” was given as a first slogan for the company Coca Cola. It is successful over last century. Its revenue in 2015 is US$44.294 billion and its operating income was US$8.728 billion (2015). Currently, the number of employees working in this company is 123,300. The products of the companies are sold in more than 200 countries.

Case Study of Starbucks

Starbucks is an American coffee company established in Seattle, Washington in the year 1971. It has number of locations 23,678 worldwide. It operates products such as Coffee beverages, Smoothies, tea, baked goods and Sandwiches. Its specialty is to serve best coffee for their customers. It has started expanding its brand by spreading over Starbucks coffee all over the world. It started from 55 stores in 1989 and now it has 15000 stores all over the world. It is produced in 70 countries. The market structure of Star bucks is monopolistic (Star bucks, 2016).

Mission

  • Its mission is to satisfy the customers and create stores in order to make customers feel comfortable.
  • The other mission is to inspire the human spirit of person.
  • It also provides connectivity with the employees.

Evidence of Successful Competitive Advantage

Competitive Advantage of Coca Cola Company

There are many advantages through which company gets competitive advantage:

Competition through Marketing Mix is helpful for the company’s competitive advantage as the marketing helps in the promotion of the product. The products should be frequently developed to meet the requirements of the customers. Secondly, products is the competitive advantage for Coca Cola Company as it produces all types of drinks such as light, classic, and other soft drink and beverages. Thirdly, promotion of the company is also a competitive advantage as it is helpful to set the mind of the customers. Advertising is the main promoting step. Fourthly, pricing is also the other competitive advantage of the company as it offers discounts to the customers during the events. The product is sold at cheap rate, which is an advantage for the company (Coca Cola, 2016). Fifthly, placement/distribution is the other competitive advantage for the company. Furthermore, there are various reasons for the competitive advantage of the company as it allows adopting different things in the business such as innovative products. For Coca Cola Company it is easy to practice beverages in the business. These advantages are helpful in customer satisfaction and these are mandatory for the company.

Competitive Advantage of Starbucks

There are various competitive advantages which star bucks takes into consideration such as new innovative ideas, it provides new products, and the new experiences for the guests, it also provides sustained competitive advantage by maintaining long term relationship with the customers. It also provides Starbucks reward card, which is the competitive advantage. It allows the customers to share the thoughts of experience at star bucks (Star bucks, 2016). There are various reasons of adopting this competitive advantage as it helps the company to expand its retail operations, adopting opportunities, unique products so that other competitor may not compete, new distribution channels.

Strategies of the Company to achieve success

There are different strategies which are followed by Star bucks that are product differentiation such as product mix, locations, coffee beverages and customer service. These are helpful for achieving successful competition in the market. It does not follow the model that is franchising and joint ventures in the international market (Lamb, 2012). It also offers technology protection in the coordination of global strategy.

For the succession of the company it is necessary to be competition oriented. The company competition strategy focuses on the weakness but the strength should be avoided. It would be helpful in gaining competitive advantage against other companies. The company mainly focuses on strategies such as differentiation focus, focus on the cost, and leadership focus.

These strategies are adopted in order to be successful in achieving the competitive advantage. The company provides unique products in order to achieve marketing strategy. Differentiated focus on producing different products and target the group of customers. Cost leadership involves producing products at low cost (Coca Cola, 2016). The company is cost focus that is low price of the product according to the benefit of the customers.

Successful Marketing Practices

Starbucks follows this practice in order to be successful in the market by meeting needs of customers. It identifies the market segments and customer feedback in order to identify their choice. Secondly, it provides affordable price for the customers so that all may enjoy its coffee. It also provides innovative products in order to attract the customers for its product. It also produces different product in comparison with its customers. It promotes the product by advertisement (Mudie, and Pirrie, 2012). Changes are mandatory for the business to grow successful. It also adopts new technologies such as social media, star bucks digital network to promote its products. Online offerings are also helpful for Star bucks to be successful in the market.
There are different marketing practices of Coca Cola, which helps the company to be successful such as socialization that is helpful in reaching the customers on worldwide level through single platform. Secondly, Personalization is also helpful for achieving the success for the company as face to face communication. It helps to understand the customer’s needs more easily (Coca Cola, 2016). Simplicity is the main successful marketing practice of Coca cola. It endures simple message to the people such as “Enjoy” and “Happiness”. Innovative ideas, unique products are helpful for successful marketing practices.

Ansoff Matrix of Coca Cola

This model was invented by H. Igor Ansoff came into practice for helping management teams in order to focus on the business growth of the company. It focuses on four marketing strategies such as Market penetration, Product development, Market development and Diversification. It has been applied to coca cola and this company is well known for trade name in the world.

Market Penetration: In this marketing strategy, it covers existence products that are already existed in the existing market. Promotion method is used in the company order to carry out these marketing strategies (Lamb, Hair, and McDaniel, 2011). It also adopts new initiatives which encourage the usage of the product. Due to the strength of Coca Cola’s brand, market penetration is utilized by the market creating association between coca cola and Christmas. It increased the sale during the period of festival.

Product Development: In these marketing strategies, newly products are introduced in the existing market. The difference can be measured by introducing new product in the existing market. It helps in increasing the performance of the product or quality of the product.

Market Development: In this marketing strategy, the existing products are sold by the business in the new developed market. It has been successful for applying these strategies (Coca Cola, 2016).

Diversification: This strategy helps in selling new products to new markets at the same time. It is considered as the risk taking strategy among the three marketing strategies. In this strategy the target is on the new market.

Porter’s Generic Strategy of Star Bucks

The above picture describes the Starbucks Porter’s Generic Competitive Strategy. This company focuses on the differentiation strategy so as to compete from its competitors. The company provides unique features by focusing on the customers’ needs. It helps in determining the unique product for the customers (Star bucks, 2016). Star bucks provide coffee of high quality and it attracts the customers with unique experience. It also provides new instant coffee line. The coffee of the star buck is unique from other competitors in the market. It focuses on the customer’s satisfaction.

Conclusion

It is to be concluded from the above report that for the successful growth of the company’s customer satisfaction is mandatory. The company star buck and coca cola created innovative technologies so as to compete in the market against other competitors. It also provides unique products for the customers and provides unique items.

References

Coca Cola (2016) Coke life [Online]. Available at: (Accessed: 6 December, 2016).

Coca Cola (2016) Taste the feeling. [Online]. Available at: (Accessed: 6 December, 2016).

Lamb, C.W. (2012) Marketing. USA: Cengage Learning.

Lamb, C.W., Hair, J.F. and McDaniel, C. (2011) Essentials of marketing. USA: Cengage Learning.

Mudie, P. and Pirrie, A. (2012) Services marketing management. UK: Routledge.

Star bucks (2016) Star bucks. [Online]. Available at: (Accessed: 6 December, 2016).

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