Type: Management
Pages: 11 | Words: 3132
Reading Time: 14 Minutes

Although running a corporation might seem an easy task, it is important to note that it can be quite a difficult task and sometimes almost impossible. This follows the notion that with the hypercompetitive new economic era, virtually all organizations are striving to surpass their competitors.  This being the case, organizations that aspire to succeed are obliged to devise special strategies that will enable them to flourish and outdo their potential competitors. There are a number of strategies that an organization might embrace to ensure that its endeavors are more successful than those of its competitors. At this particular point, value creation and sustainable competitive advantage come in handy. To start with, sustainable competitive advantage refers to a long-standing competitive advantage that cannot be easily surpassed or duplicated by competitors. Competitive advantage comes about when a particular company can offer similar value as its rivals but at a reduced price. The same can be achieved by charging a higher amount on the same product through differentiation. As such, competition can be said as one that pairs opportunities to core competencies. On the other hand, value creation refers to the practice of making the customers, as well as the other stakeholders, feel important. It should be the aim of any organization that wishes to prosper. In spite of the popular culture by many organizations in the past to create value for only the stakeholders, currently, this condition has changed and companies are giving special consideration to the customers. This document discusses both sustainable competitive advantage and value creation with a focus on Coca-Cola.

The Coca-Cola Company is a multinational beverage company in America that manufactures, retails, and markets non-alcoholic syrups and beverage concentrates (Coca-Cola 2012). The company has been renowned globally due to its flagship product Coca-cola which was invented in 1886 by a pharmacist known as John Pemberton in Georgia. The formula was later bought by Asa Candler in 1889 and incorporated the formula to form the company. Other than its namesake, the company distributes more than 500 brands in more than 200 nations and serves more than 1.8 billion servings daily. Being headquartered in Atlanta, Georgia, the company runs a franchised distribution system that dates back from 1889 where the organization only produces a syrup concentrate that is later sold to a range of bottlers around the globe who hold an exclusive territory (Coca-Cola 2012).

With a determined commitment to building sustainable communities, the company aims at initiatives that minimize its environmental footprints, sustain vigorous healthy living, come up with a secure and inclusive working atmosphere for its associates and facilitate an economic boom to the communities that it operates in. the company together with its bottlers have been ranked among the 10 leading private employers with not less than 700, 000 employees. One of the major reasons as to why Coca-cola has been able to flourish is due to offering its customers quality products as well as creating value to all its associates including the customers and all the stakeholders.

Importance of Creating and Adding Value for the Stakeholder. Coca-Cola is one example of companies that have embraced value creation to propel the organization and boost sales for more than a decade. There are many benefits that the company has reaped from embracing the idea. In 1980, the company was deemed as a good organization though somewhat struggling. This was under the leadership of Roberto Goizueta as the company’s CEO when the company was fast approaching its full maturation stage. Despite the fact that it had attained a 14 percent annual revenue increment, as compared to the previous ten years, its productivity had wore down and its shares had been performing very poorly. As such, Goizueta decided to reconsider the entire organization and introduce value creation as the first priority. This took place at a global management symposium in April 1981. The decision has shown a lot of improvement to the company since the early 80s as its market share virtually doubled to fifty percent in 1990 and almost tripled to nearly 60 percent in 1997 (Favaro 2003).

Afterward, the benefit growth of Coca-Cola has been infinite and Doug Ivester, Goizueta’s successor, was constantly giving value creation the very first priority. After discovering the need to integrate value creation into the business mix as well as within the whole beverage system, the then company leaders realized that they had been missing a significant growth chance in their endeavors. This prompted them to considerably amplify and reconsider the organization’s marketing investment; to hastily extend in the emerging national markets; to get, combine and turn off bottling corporations in order to come up with new, extra powerful agents within their supply chain; and minimize their indulgence in non-beverage trade. As a result, the leaders came up with a very distinctive business model that in the present they have an unquestionable advantage in offering the highest profit growth (Sandino & Merchant 2009).

Coca-Cola alongside a handful of other organizations has a very big advantage in deciding how and where to flourish due to the fact that they focus more keenly on perceiving the sources and propellers of value creation in the businesses and the markets in which they compete as opposed to direct competition with their rivals (Favaro 2003). From the above analysis of Coca-Cola, it can be generally inferred that value creation can give companies two major benefits: capital and talent. Thriving value creators do not suffer from a capital deficiency. They can either generate adequate funds internally to fulfill their venture obligations or draw the cash they require from the markets, which do not cease searching for money-making investment chances. The urge to outshine competitors means having innovative employees who can come up with ideas that will help the business prevail. This somewhat helps in coming up with a group of better managers and employees who hold fast to the ultimate levels of business performance and personal success.

From its success, it can be deemed that Coca-Cola understands the value of creating value to all its stakeholders. The stakeholders include the employees, the customers, customers, and the investors, or rather the suppliers. Since all these parties contribute to the success of the business, the company does give excessive attention to a single group of individuals but to all the stakeholders. This all starts with first focusing on creating value for the customers (O’Malley 2011). This cannot however be achieved unless the right employees are chosen, developed, and pleased, and except investors consistently receive handsome returns.

For the customers, value creation involves coming up with products and services that the clients will find always useful (Kotelnikov 2012). Today’s economy demands that such products be based on process and product innovation as well as having a conception of the ever-changing customers’ needs associated with skyrocketing precision and speed. Putting this into consideration, Coca-Cola has been able to flourish due to its ability to tap the energy, commitment as well as creativity of its employees. This follows the perception that the company’s employees are in constant contact with the customers while serving them. They are additionally involved in developing products that are to be later sold to the customers. They are as such required to have the right skills to prepare products that will meet, and if possible exceed the customers’ expectations.

Whereas creating and adding value to customers assist in selling goods and services by Coca-Cola, adding value to the shareholders ensures that there is the availability of future funds to expand the company. Unlike traditionally when value creation was aimed at minimizing production cost and maximizing income, today value creation is considered as a management tool that will enhance financial prudence which consequently produces temporary outcomes prior to investments enhancing long-lasting competitiveness. Since the initial stage in achieving a company-wide focal point on value creation is understanding the causes and forces of value creation in a company, Coca-Cola investigates all the potential areas that can add value to all the stakeholders.

Having understood what adds value helps managers aim at the most profitable opportunities within the market for growth. Some of the areas that are considered by the concerned managers include delivery of beverages on time, offering high-quality products, and aggressive marketing of the products. This prompts the company to devise systems, skills, and processes that offer quality products and services which in turn translate to the booming of the company (Hillstrom 2012). Due to the changing nature of the customers’ tastes and wants, the best way to win and maintain their loyalty is keenly watch the behavior of the clients as well as their attitudes. The observation is carried out in a series of procedures after which new strategies are devised to cater for the requirements of the customers. Having embraced this idea, coca-cola has been able to win the highest number of consumers around the globe in the beverage industry. (Rahul 2012)

Coca-Cola’s Current Strategy to Value Creation. For quite a long time, Coca-Cola has been best characterized as a local manufacturing and a global marketing organization. Nonetheless, the international marketing approach has been modified to local marketing following the rising variations in consumer demands as well as experiences. In order to execute their philosophy, “think home, act home”, there are some areas that the company considers. The very first sector to put into consideration is the consumers. Coca-Cola has a strong conviction that by using creative and customized marketing programs, designed to meet the local customer insights, the company will amplify its main brands and also leverage its delivery system to capture any other potential growth chances in the category of non-alcoholic beverages.

Communities are considered second in this philosophy. Local offices globally ascertain that the Organization is a respective business citizen and it plays some roles in the development of any community in which it is located. This means that the company has to participate in the growth and development of the economy as well as be cautious not to harm the environment. In other words, the company can be said to be one that is guided by the principle of sustainable development. Customers are also considered in the philosophy of this company. Coca-Cola gives value to the customers through all their purchase, by offering better customer service and also by giving enormous value creation programs. This does not only lure customers in to buying the company’s products, but it also catches and sustains their loyalty.

There is finally the Coca-Cola system which involves delivering value to the company itself and to its bottling partners. Through their partnership, The Coca-Cola System aims at boosting the ultimate benefits from the beverage category and afterward provide improved results to all the parties involved. This somehow ensures that all the contributors of the company’s success are well compensated and hence motivated to continue supporting the company.

For the company to achieve its mission which is “to maximize share-owner value over time”, it has created value for all the constituents it serves including customers, bottlers, consumers, and all its communities (Bradford 2012). In order to succeed in this, the company has implemented a sophisticated business strategy that is guided by six main beliefs. The first belief is that customers’ demands control all that is done by the company. For any business to succeed, customers play the greatest role as they provide a market to the company’s products. Bearing this in mind, it is important for the managers to ascertain that there is an immediate response to their outcries, demands or requests. This enables a company to trace any potential causes of complaints, if any, and consequently adjustment appropriately.

The second key belief is that the Coca-Cola Brand is the main base of the company. This belief sensitizes all the stakeholders that all glory and success of the company should be owed to the company and not for one’s personal good. The belief hence aspires to motivate all the stakeholders to contribute energetically to all their needs bearing in mind that their efforts will never be used by another person to glorify him or herself. The third belief is that the company will ever serve its consumers with a wide range of non-alcoholic beverages as they demand all day long. This is more of a principle than a belief meant to meet, and actually exceed the customers’ expectations. It is the main driving force of the company’s actions as mentioned earlier on. It gives the company its pleasure knowing that it has achieved its obligation of serving the community satisfactorily.

The fourth belief is that the company will eventually emerge as the best marketer globally. As a result to the company’s devotion and unwavering efforts, it has been reckoned as one of the most successful corporations in the world. Apart from it being ranked first in the non-alcoholic beverage company, Coca-Cola takes pride of being recognized as one among the best companies with the best marketing and management strategies around the world. The fifth belief by the company is that it is devoted to think and act locally. As already observed earlier on, this is the main philosophy of the company that keeps it on the move. It is the sole reason that the company is able to come up with improved systems of serving its customers.

The final belief is that the company will ever be a model business citizen. This has the implication that all the activities that the company will be devoted to is ensuring that there are constant development to not only the company but also to the other regions that its retail depots are located. This strategy is aimed at value creation which consequently will lead to the ultimate goals of the company. These goals include increasing volume, maximizing a long-term flow of cash, expanding their share of the global non-alcoholic beverage sales, and also coming up with a value-added economy by boosting economic profit (Matt & Kuke et al. 2001).

Coca-Cola’s Competitive Advantage. Unlike other companies, Coca-Cola has innumerable competitive advantages. Among the many advantages, the two indisputable capabilities is their market leadership and management expertise. The Coca-Cola Company offers its employees with managerial skills through numerous management guidance programs to enable them to develop executive qualifications, acquaintance and knowledge. Its market management is something that occurs rarely in their industry.

In spite of the fact that Coca-Cola’s competitors might have impressive names, many people know of “Coke”. This brand is recognized universally which is a key advantage in the selling of the company’s products. The Coca-Cola trademark is very hard, if not completely impossible to imitate and also extremely costly. Coca-Cola continuously customizes its marketing strategies in order to be able to serve clients better. Ranging from big supermarkets to vast wholesale and small retail stores, Coca-Cola provides old throwback bottles renowned by everyone and which people love though they can also deliver their manufactured goods in other new exciting ways.  As a matter of fact, Coca-Cola has an incredible sustainable competitive advantage since its brand itself is next to impossible be surpassed (Jeremiason 2011). 

Recommendations to Attain a Sustainable Competitive Advantage. After close observation of the Coca-Cola Company, it is obvious that anyone would aspire to be as successful as it is. Taking into consideration that success does not come along without any efforts, it would be prudent to embrace some strategies that would propel any business to success. Bearing this in mind, in the next section I will discuss some value creation strategies I will recommend to the management team for the future sustainable competitive advantage of my organization. Firstly, the management team ought to understand the fact that first entry into the market does not guarantee an organization absolute success as there are other bigger organizations still determined to engage in a similar endeavor. It can therefore become a misfortune if the other organization will get into the market later and outshine those had been there previously (Godin 2012). In order to ensure that the organization thrives there are some key points that ought to be put into consideration as guidelines towards success of the business.

The very first step is establishing brand loyalty. Consumers tend to remain attached to a brand that they are loyal towards irrespective of whether the company offers its products cheaply or not (Invester Pinch Clinic 2012). This calls for the managers to develop even stronger relationships with the customers and offer a professional customer familiarity and service. This ensures that the target customers are aware of the organization’s products in the market and that they have even the very fine details concerning those products. The second step is to patent the company’s products. Though this is not enough for the safety of the products, it is an important weapon in establishing competitive advantage armory (Laulajainen 2012).

The management should also strive to innovation bearing in mind that customers become active when products are upgraded and updated. As such, the products should ever be fresh and well-matched with the market demands (Coggins 2009). Another step is hiring connected working group members. Since the organization’s market is composed of big corporations and government departments, links to key personnel in these companies can considerably hasten my company’s capacity to get and secure contracts. The fifth step is using long Term Incentives and Contracts.  The managers have to implement this step cautiously because it might backfire and harm the company (Invester Pinch Clinic 2012).

If a company can be able to set up a long-term contract with the customers, then obviously they are not likely to turn to a competitor (FairRidge Group 2012). Another point of view is that if a company is only offering long terms contracts, while the opponents are offering short terms contracts, then the company is likely to lose business. Superlatively the aim of motivations is to incentivize customers to coax them into a long term contract with my company, perhaps by providing a minor cutback in price or a bonus. Likewise, customers are likely to be eager to respond positively if they have recently entered into a victorious short term contract with the company.


As earlier observed, a sustainable competitive advantage depends on the company’s management team’s efforts to devise special strategies that will enable it to overcome the numerous challenges in its environment as well as outshine its competitors. Unlike some years ago when the management team gave special attention to the affluent shareholders of the company, today the greatest attention is owed to the entire group of stakeholders including customers, employees, and supplies. In modern terms, this is known as Value Creation as earlier discussed in this document. Coca-Cola Company is one of the most successful companies that has successfully integrated value creation in its marketing and has reaped innumerable benefits from it. Generally, it can be inferred that value creation is the key to economic boom and a start point for establishing a sustainable competitive advantage.

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