Corporate Strategies Of Coca Cola Amatil Essay

Question:

Discuss about the Corporate Strategies Of Coca Cola Amatil.

Answer:

Introduction

In the present business scenario, contemporary business organizations have to consider various aspects in order to survive in current market situation. Thus, they have to initiate different strategies in order to effectively drive their internal management as well as overcoming the external challenges (Litov, Moreton and Zenger 2012). The more effective will be the corporate strategies of the organizations, the more will be the competitive advantages for them in the market.

Coca cola Amatil is the largest bottlers for the Coca cola in the world. Currently they are operating in Asia Pacific regions and have their market presence in Australia, New Zealand, Indonesia, Papua New Guinea, Fiji and Samoa. With the brand value of Coca cola and corporate strategies of Amatil, Coca cola Amatil is going strong and enjoying the status of market leader in the market.

This report will discuss about the corporate strategies being initiated by Coca cola amatil in the market along with comparison with their past strategies. Criticisms generated by their past strategies will also be discussed here in this report. External operating environment for them will be evaluated along with their organizational culture and leadership roles.

Current corporate strategies of Coca cola Amatil

Coca cola Amatil is driven by innovation. Thus, they are able to cope up with the change in taste and preference pattern of the customers by introducing different products in the market. They concentrates more on the product innovation and with the help of that, they are periodically introducing products based on the current market trend (Eesley, Hsu and Roberts 2014). For instance, with the growing negativity around the artificially sweetened beverages, Coca cola Amatil introduced Coca cola life with having natural sweeteners. This new product has become a leading volume selling item for them. Thus, initiation of innovation strategy is helping them in driving their market share.

Growth strategy is also be implemented by Coca cola Amatil in order to increase their market share. To determine the growth strategy of them, ansoff matrix will be used.

According to the ansoff matrix, there are four market strategies which should be implemented in order to gain the market share. The first strategy is market development which is being implemented to target and enter new market with the existing product. In the case of Coca cola Amatil, they have first started their journey from Australia and gradually they entered the other countries in the Asia Pacific regions and currently they have their presence in six countries. In all the countries, Coca cola Amatil is selling similar products. Thus, with their portfolio of exiusting products line, they have successfully developed new markets. The next strategy in this matrix is the market penetration (Shaw 2012). Coca cola Amatil has initiated policies such as introduction of products in various sizes and in various flavours which in turn increasing the customer conveniyence. Moreover, various offers and events is promoting their market penetration activities. It is helping the organization in further penetrate in the existing market with the existing product portfolio.

The next strategy in ansoff matrix is product diversification (Kumar, Gaur and Pattnaik 2012). Coca cola Amatil first strated as the non alchoholic beverages bottlers and gradually they are now catering to the new customer segments with having fruit juices and alchoholic beverages. Thus, it is helping them in diversifying in the market and catering to more number of customers. The last aspect in this matrix is the product development (Barczak and Kahn 2012). Coca cola Amatil have introduced various variants of their existing products to cater to different taste and preferance pattern of the customers. Moreover, they are introducing more variants which is further enhancing their product line in the existing market. Thus, evaluation of the growth strategies of Coca cola Amatil with the help of ansoff matrix helped to identify the strategie and initiative sbeing implemented by them in order to enhnace their market growth rate.

Strategic partnership strategy is also being implemted by Coca cola Amatil in order to enhance the effectiveness of their business activities (Wheelen and Hunger 2017). The most prominent being the partnership between the Amatil Pty. Ltd and Coca cola. This partnership is proved to be a successful venture for the both the organizations in the Asia pacific regions. In the recent years, Coca cola Amatil went in partnership with SABMiller to market premium beers in New Zealand and Australia. It is helping them in catering to the market of premium spirits. Coca cola Amatil also went in partnership with Beam Suntory in distribution in New Zealand. With the help of this partnership, Coca cola Amatil will be responsible to market and manufacture the products of Beam Suntory in the market of New zealand. This partnership helped Coca cola Amatil in being the largest beverage distributor in New zealand.

Thus, accortding to the vision statement of Coca cola Amatil, they aim to provide diversified product portfolio to their customer’s arm’s reach. Accordingly, they are introducing more products in the market and opting for strategic partnership with other organizations in order to increase the market presence. In addition, they also aims to provide enhanced and unmatched value to their customers. Accordingly, they are effectively identifying the trend and requirement of the customers and introducing products in the market.

Criticism with the past strategies

One of the key strategies that had been failed for Coca cola Amatil in the recent past is inability to identify the market trend. Due to this reason, Coca cola Amatil continued to offers sweetened beverages in the market where the customers are slowly shifted for the naturally sweetened products and fruit juices (Greeenwood et al. 2014). Thus, they lost their partial market share to the competitors due to inability in determining the market trend. Various campaigners and customers are of the opinion that with the continuation of offering the sweetened beverages in the market, Coca cola Amatil is actually pushing the customers in having these unhealthy beverages. Thus, these criticisms results in reducing the effectiveness of their marketing activities in the Australian regions along with reduction in the sales chart of them (Heffernan 2017).

These issues prompted Coca cola Amatil in further identifying the market trend along with determining the requirement of the customers. Accordingly, they have introduced products from the global portfolio of Coca cola such as Diet Coke and Coke Zero. These products are being marketed as healthier option to the regular ones along with low sugar content and low kilojoules (Rath 2012). Coca cola Amatil also introduced Coca cola life based on the market research being done on the Australian customers. Thus, these criticisms enabled them in effectively determining the market requirement and offering healthier options to the customers.

Another criticism faced by Coca cola Amatil in their business activities is their tie up with the Landcare Australia. Coca cola Amatil came in a partnership with Landcare Australia in offsetting the carbon footprint of the former by planting trees (ABC News 2017). However, issues are being generated from the very beginning due to the fact Coca cola Amatil being a bottling organization is responsible for depleting the water level (Amienyo et al. 2013). Thus, employees from Landcare Australia objected to this partnership, which ruined the entire objective of this partnership. The main objective of Coca cola Amatil behind this project is to create and initiate the social responsibilities, which are being affected due to this criticism.

This issue prompted Coca cola Amatil in initiating of more environment friendly schemes in order to regain the lost goodwill and reputation. They have designed their operational facilities in more effective manner in order to make them the most water efficient beverage bottling plant in the world (Green Jr et al. 2012). Thus, in the other way, this criticism helped them in transforming in to more environment friendly organization.

External environment analysis of Coca cola Amatil

PESTLE analysis
  • Political: The political environment in the Asia pacific regions is stable and business friendly. Moreover, the effective geopolitical relationship and trade agreements among the countries in Asia pacific regions is further enhancing the performance of Coca cola Amatil in these regions (Petri and Plummer 2012). However, with the increase in their market area, the prime challenges to be faced by them are to adhere with different political scenarios in different countries.
  • Economical: The economy of the countries in the South Asian regions is developed or developing. Thus, the market potential for Coca cola Amatil is favorable; however, the recent global economic crisis dented the economic potential of them (Castells, Caraca and Cardoso 2012). Due to the fact that, the market of Coca cola Amatil is much diversified and more of low cost products, thus the economic slowdown have less impact on their business activities.
  • Social: The social sector was the opportunity for them a few years ago but in the recent years, social aspect is posing more challenges for Coca cola Amatil. This is due to the fact that, Coca cola was being attached with the lifestyle of the people in this region, which was one of the key competitive advantages for Coca-cola Amatil. However, in the recent years, more customers are opting for healthier options and are avoiding carbonated and artificially sweetened beverages and thus, the market share of Coca cola Amatil is gradually decreasing (Kleiman and Popkin 2012). Thus, the increasing social negativity towards the carbonated soft drinks is adversely affecting the market potential of Coca cola Amatil. However, with the introduction of the new healthier products by them, it is being expected that they can regain the lost market share.
  • Technological: The technology being used in the business scenario is fast changing and effective adapting the technological change will help the organization in effective marketing management. Coca cola Amatil is the frontrunner in initiating new technologies in their business activities (Ashurst 2016). However, with the initiation of more sophisticated technologies by the competitors can pose challenges for Coca cola Amatil if not being effectively countered. Coca cola Amatil have initiated technologies in reducing their cost and time involved in the process of production. In the recent time, initiation of green technologies has promoted them in promoting technologies to reduce the environmental implications.
  • Legal: Rules and legislations are going to be more stringent in future for the soft drink industry. With the increasing awareness about the ill benefit of the carbonated drinks and several symptoms of the ill effect, stricter laws are being introduced in Australia and other regions (Mytton, Clarke and Rayner 2012). Thus, it will have negative impact on the sales of Coca cola Amatil. Legislations reading the quality should also be adhered by them. One of the key challenges being faced by them is to comply with varied legislations in different countries.
  • Environmental: Environment is given the most preference by the contemporary business organizations. More and more legislations are being introduced by the government of different countries for the corporate regarding the environment. Thus, it will be a difficult task for Coca cola Amatil to look after all the environmental implications from their operational facilities. Looking after the environment is a determining factor to enhance the goodwill and reputation of the organization. Accordingly, Coca cola Amatil have initiated various activities related to the environment.

SWOT analysis

  • Strengths: The key strength for Coca cola Amatil is the brand value of Coca cola. The brand equity of Coca cola is huge and enormous, which will be very beneficial for attracting more customers (Stahl et al. 2012). Moreover, the experience that they have gathered in operating in the Asia Pacific region is strength for them because it will help them to counter any challenges in the market effectively. The high level of market penetration of them will help to push their new products in the market.
  • Weaknesses: Negativity in the market around the carbonated soft drinks may have adverse effect on the sales potential of Coca cola Amatil. Less penetration in the fruit juice market will restrict their potential in the region. Environmental issues generating from their business activities will further dent their goodwill and reputation in the market. However, they have diversified in different products but all the products of them are in the same product line. On the other hand, Pepsi is having market presence in other sector such as snacks also. Thus, Coca cola Amatil depends on single product line.
  • Opportunities: The brand value of Coca cola will also act as opportunity because it will help them in targeting and penetrating in new markets. Increasing the global presence is also an opportunity for Coca cola Amatil. This is due to the reason that, Amatil have gained experience and competitiveness in bottling industry and it can help them in entering in new markets. Coca cola Amatil is gradually foraying in the market of fruit juice and drinking water and this market have huge opportunities in future.
  • Threats: Introduction of stringent legislations will pose threats for their business activities. Emergence of more competitors in the market along with various private level brands is eating up the market share of Coca cola Amatil. Water is one of the key raw materials for Coca cola Amatil and environmental issues are creating threat in sourcing of water. This is due to the reason that the water level is gradually diminishing.

Organizational culture and leadership roles in Coca cola Amatil

The organizational culture in Coca cola Amatil is being maintained effectively in order to provide healthy and productive working environment for the employees (Alvesson 2012). Diversity of the workforce is being maintained in the organization. According to the concept of them, diversified workforce will help to cater to different customers segments and the mutual understanding will be increased. The employees are being motivated in generating innovative ideas in their organization (Lazaroiu 2015). Moreover, employee engagement is being given maximum preferences. This is due to the fact that, according to Coca cola Amatil, if the employees can be kept motivated and engaged then it will help in driving the internal management more effectively. Thus, the effective maintenance of the organizational culture is helping them in gaining competitive advantages in the market.

Alison Watkins, the CEO of Coca cola Amatil follows transformational style of leadership, which can be noticed by their organizational activities. The leadership roles in the organization are more concentrated in maintaining the gender equality and employee motivation. Employees are being given opportunities in enhancing their own leadership skills (Coca cola journey 2017). One of the key characteristics of the leadership roles in the organization is providing freedom to every employee, which in turn help them to motivate the employees in engaging in the organization. According to CEO of Coca cola Amatil, employees should be inspired rather than criticizing them. Moreover, the employees are being encouraged to enjoy their workplace and perform something beyond their profession.

Conclusion

Having analyzed the corporate strategies being initiated by Coca cola Amatil, it can be concluded that they have implemented effective corporate strategies in order to expand their market share in the existing as well as in the new markets. Coca Cola Amatil have taken a holistic approach in implementing their corporate strategies, which is helping them in targeting the market more effectively. External and internal environment analysis is being done in order to identify the key opportunities and challenges for them. Organizational culture and leadership roles are effective and employee oriented. Thus, overcoming the identified challenges will help them in targeting and penetrating the existing market more effectively.

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