Corporate Strategies In Coca- Cola Company: Growth Essay

Question:

Discuss about the Corporate Strategies in Coca- Cola Company for Growth.

Answer:

A horizontal integration strategy is a corporate strategy used by businesses to expand their horizontal growth. This strategy involves a business expanding its business operations geographically, and it increases the range of services or products offered in the market. When a particular company acquires competitors, it is also part of the horizontal integration strategy (Dringoli 2011). Coca-Cola Company started as a small beverage brand in Atlanta. However, the growth of this company has widely expanded over time. Its growth can be attributed to adopting the corporate strategy of horizontal integration. This company has dominated the beverage industry, and this can be attributed from its growth of its brands horizontally through the application of the horizontal integration. Coca-Cola Company was the first beverage company to take part in the mass distribution of products, mass manufacturing of its beverages and global communication to its consumers and manufacturers, as well as building awareness for its products. Through this strategy, the company acquired new brands such as Minute Maid and invented others (Coca-Cola Company 2007). The horizontal strategy has seen the major growth of Coca-Cola Company from a single entity into a global economy. Coca-Cola Company pursued this strategy to grow horizontally, both in its products and to reach a wider market.

The Coca-Cola Company has used the vertical integration company in owning the distribution facilities. However, Coca-Cola Company has not had 100% vertical integration in its operations. It is yet to reach that stage. For instance, when Coca-Cola Company acquired the independent bottling plant in Sacramento, it engaged in a forward vertical integration. The Coca-Cola Company maintains ownership of its manufacturing and its brand only and is responsible for making the marketing strategies in the business. It is characterized by independent distributors and bottling partners. The company has not been able to achieve total vertical integration, but it is hoping with time, it will be able to acquire all its bottling partners (World Book Inc. 2014).This will enable more flexibility in pricing of its products. The Coca-Cola Company is in its fourth stage of the value chain. It stills holds the position of being the sole manufacturer of its products.

Coca-Cola is the best-known company that has well used the diversification strategy. Diversification in Coca-Cola has been the significant aspect of its success. Its first step in diversification was acquiring another product, which is Minute Maid to grow the company into a beverage giant by incorporating other products into the company. The company has gone beyond its geographical areas, for instance, it has expanded its operations in Africa by acquiring the Chi Ltd Company in Nigeria. It has also engaged in unrelated diversification where it has engaged in rebranding it company to lower the sugary products and those with calories in the company. Coca-Cola Company has always used the diversification strategy since in the 1960s to realize more growth. One significant unrelated diversification it engaged in is buying the Columbia Pictures but later sold them off, since they were not business-related. Through diversification, the business has been able to remain the top brand in the beverage sector due to its ability in going for any trend emerging (Coca-Cola Company 2014).

References

Coca-Cola Company, 2007, Annual review.

Coca-Cola Company, 2014, Annual review.

Dringoli, A 2011, Corporate strategy and firm growth creating value for shareholders. Cheltenham, Edward Elgar

T.V Choice Productions, 2014, Cola Conquest 1. Available at

World Book Inc, 2014, Coca-Cola Company. Oxford publishers.

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