Coca-Cola’s differentiation strategy extends to more than just its products, but to itself as a brand. The business has evolved with ever-changing consumer tastes and expectations. Coca-Cola has looked toward creating a “total beverage advantage” that allows the company to quickly adapt to changing consumer tastes no matter the location, especially in the context of a market where sugary drinks are declining in popularity due to health concerns and the better-for-you trend of eating, drinking and living. Coca-Cola differentiates itself by positioning its drinks—especially its flagship drink—as a drink that brings more intangible benefits than tangible ones. Its marketing and advertising place its products at the core of the human experience. A person’s greatest memories, large or small, are enhanced by a Coke, or any of its drinks. Its beverages are pleasing, sustainable and can be shared amongst all, giving it an edge that makes it stand out from the crowd. It differentiates in small ways as well, such as having a wide product portfolio that extends beyond soda, changing the shape of the bottle, its Freestyle machines that allow consumers to make the drinks they want, etc.
A deeper form of strategy that it takes is a “value over volume” (The Coca-Cola Company) approach, which includes making smaller packages, such as mini cans, to address not only changing consumer tastes and preferences when it comes to soda but increasing and maintain its presence in its retail partners. The cost leadership strategy of Coca-Cola is achieved through research and development, its promotion strategy and through economies of scale, along with efficient manufacturing and distribution systems. Through targeting middle class consumers, who make up a large part of its consumer base, Coca-Cola keeps the product prices low with discounts and promotional campaigns, as well as bearing more of the overhead costs of production, manufacturing and distribution. Coca-Cola’s products are part of a wide portfolio and are made en-masse and widely available worldwide. Its product design is simple and remains largely unchanged and the company uses cheaper raw materials to make them, absorbing that cost and not passing it off to customers.
The Coca-Cola Company is diversified in terms of its product portfolio and the people that make up the organization. A dedication to diversity permeates the company from its personnel to the products it makes, especially in the latter. The market competes in the consumer goods industry, specifically in the nonalcoholic beverage category, as its product portfolio includes soda, water, juice, mineral water, energy drinks, bitters, coffee, etc. The company’s operational reach extends across 200 countries and in five specific regions: Asia, Europe, Middle East and Africa, Latin America and North America. The product portfolio is more than just simplistic beverages, but are also adaptive to specific consumer tastes in different countries, such as Bjäre, a julmust available only in Sweden and Costa Coffee, a British coffee chain that it acquired in 2018, along with Moxie, a regional soda company based in New England (Stern, 2018). Coca-Cola has a long history of purchasing other companies, including Minute Maid, Columbia Pictures, Odwalla, Fuze Beverage, Honest Tea, and a large stake in Monster Beverage. Furthermore, its compensation strategy as explained by its Board of Directors is driven by a high-performance culture; little information is available about the numbers of compensation for the people within its company.
In terms of strategy, compared to its competitors Coca-Cola is on top and has remained there given its status as one of the world’s most valuable company. The company has done well in adjusting its strategy, especially when it comes to the gradual decline of drinking sugary sodas and beverages and evidenced by its recent acquisitions.