Strategic Management Term Paper


The Coca Cola Company has risen to become one of the most ambitious brands in America today. The growth of the Coca Cola Company is particularly due to the relentless efforts of Roberto Goizueta makes the company what it is today. This methodical Cuban born chemist proved beyond any reasonable doubt his prowess and ability when he outranked fellow veterans executives in the coca cola company to become the CEO of the company. Roberto Goizueta is responsible for initiating market growth and dominance in the soft drinks industry a situation that was most evident as a result of the ruthless market expansion by the company during his tenure. During his tenure, the coca cola brand become the most popular trademark in the world bearing slogan such as “Coke is it!”, “You Can’t Beat the Feeling” and “Always Coca-Cola”(Allen,1995)

Risk taking in business

One of the lessons that we learn from Roberto Goizueta during his tenure as the CEO of coca cola is the importance of risk taking in business. Perhaps the most evident features with respect to risk taking are the endless success stories by top CEOs and leaders attributing risk taking to their success. The term risk always has a negative notion in it but the outcome of a risk is dependent on the approach taken with respect to the same. According to Nancy, having the capability to take risks effectively could be the key to success for many leaders (1995). From the book, Roberto Goizueta was not afraid of taking risk which led to the explosive market control of the Coca Cola Company eventually beating soft drinks rivals Pepsi.

Roberto Goizueta is responsible for the launching of the diet coke as well as the ill fate new coke. Goizueta’s purchase of the Columbian Pictures also signaled Coca Cola’s intentions to venture out of its comfort zone that is the soft drinks industry. One of the most famous quotes by Roberto Goizueta with regards to risk taking was “If you take risks, you may fail. But if you do not take risks, you will surely fail. The greatest risk of all is to do nothing”(Greising, 1989). On the other hand, Ivester also portrays risk taking in business which contributed to the success of the company where despite having fears of a negative outcome on the company’s ventures, he still went ahead and implemented his plans concerning the company’s growth.“Ivester knew that his plan would be unpopular and that he would run some risks in pushing it through….. (Constance, pp 304)

Competitive advantage in business

Another important that we learn from the book is the importance of developing competitive advantage over business rivals in business. This is one of the key reasons why the Coca Cola Company has succeeded in becoming the global marketer of soft drinks today and a force to reckon with in the industry. Competitive advantage can be described as the strategic management plan that leads to the development of unique features of a product or a certain area of specialization by a company that affects the consumers’ purchasing decision and preference. Competitive advantage is one of the key management tools that are required to ensure the continued growth of any business as well as allow the survival of businesses in highly competitive industries. “By developing competitive advantage over global competitors such as Pepsi, the Coca Cola Company succeeded in becoming the leading global brand in the soft drinks industry under the leadership of Roberto Goizueta” (Constance, pp 189).

Management techniques and organizational performance

The last but not least important lesson that we learn from the book is that just how effective management techniques and corporate culture reflect on the overall performance of any organization. Many of us who are already familiar with the history of the Coca Cola Company already know the problems the company has struggled with in recent years. The company has also experienced mixed results under the leadership of the different CEOs that are Robert C. Goizueta’s and M. Douglas Ivester displaying the strengths and weakness of the various leaders. Some of the major problems that the company faced were such that the company had little or no control over them. The Coca Cola Company was also a victim of anti-Americanism which greatly affected the cultural differentiation of the company. However, the company was able to ensure its growth and dominance in the market as well as perfect its internal organizational and management structures. This is reflected entirely in the global performance of the company and modern corporate organization should aim at ensuring the cohesiveness of both the internal and the external environments of the business which is the key ingredient of business success. According to Constance, The company also used professional advice regarding its management practices a practical example of this is the book being the time when Peter Drucker a management expert once told a senior group of Coke’s executive that they had a great product but lacked distribution (pp.34).

Microsoft Corporation

“Microsoft Corporation is one of the largest multinationals in the world involved in the production of a wide range of products and services predominantly related to computing” (Agence France-Presse, 2008). However, critics tend to contend that Microsoft operates as a monopoly as well as using anti-competitive strategies with regards to the use of its software. The company has also been found to be in violation of the antitrust laws by both the Justice Department in the U.S. and the European Commission. All these problems come admits the background claims that the company engages in unethical monopoly tactics in the market. The application of the lessons from the book The Real Thing: Truth and Power at the Coca-Cola Company is that the company should employ risk taking initiatives and not only concentrate on the operating systems industry. This is with respect to the emerging trends in the business world where even the greatest companies fail as a result of the effect from the forces of demand and supply.

It was not until in later years that the Microsoft Corporation tried new designs of the company’s logos. Microsoft Corporation has also been accused of engaging in unethical business practices that ensure the market dominance and sustained growth of the company. “One of Microsoft’s business tactics, described by an executive as “embrace, extend and extinguish,” initially embraces a competing standard or product, then extends it to produce their own version which is then incompatible with the standard, which in time extinguishes competition that does not or cannot use Microsoft’s new version”( Agence France-Presse,2008). From the book The Real Thing by Hays, Microsoft Corporation should establish competitive advantage not by using monopoly tactics such as the one named above but through the development of unique product features that ensure the company’s product preference by the consumers.

Part 2

‘The Real Thing’ is a portrait of just how a mere soft drink was transformed to become a global symbol of freedom as well as explores the men responsible for this. This story revolves around the global dominance of coca cola both in the domestic and the global market in the soft drinks industry form the time of its creation that was during the Civil War up to date. Some of the most occurring unique traits are such as opportunity, teamwork, salesmanship, determination, ambition and greed which are the virtues responsible for the success story behind the Coca Cola Company. In the early 1920s the success of the coca cola company was entirely dependent on the partnership deal with a group of independent bottlers. This partnership is responsible for making coca cola not just a soft drink but an element of culture in modern day global society. The company however aimed at controlling everything about coca cola aiming at shutting out the partners in its quest for power

Constance L. Hays examines the success story behind the Coca Cola Company and the men responsible for the success f the company. Hays examine just how far the men behind the success of Coca Cola were willing to go to ensure that the company established itself as a global brand and a symbol of success in world. “The Real Thing’ examines the overall operations of the coca cola company at all levels as this story is also a catalog of carbonation, soda fountains, dynastic bottling businesses, global expansion, and outsize promotional campaigns” (The Chronicle of Coca-Cola). This in a general context can be described as a story of America and about a great American product that has risen to become one of the most significant global brands in modern world. Under the leadership of Roberto Goizueta and Doug Ivester, the company has succeeded in restoring investors’ confidence as well as containing unique and attractive salaries and incentives that have resulted to even the wooing of Wall Street.

Part 3

Diversification (Marketing strategy)

According to Gavin, the term diversification can be used to refer to a corporate strategy that aims at increasing profitability through greater sales volume obtained from new products and new markets (pp.116). This can occur both at unit and corporate levels of nay organization where at the business unit level, the business is most likely to expand to into a new segment in the industry of operation while at the corporate level, the business is most likely to enter into a promising venture outside the scope of the existing business unit. The most used techniques used by most businesses in diversification are such as internal developments of new products and markets, acquisition of a new firm, alliance with another existing business in the industry, the introduction of new technologies in production, of the diversification of a product line to incorporate products produced by another firm. Despite this diversification techniques, diversification normally occurs in form of concentric diversification which basically means that there is the existence of technological similarity between the industries implying that a firm is capable of leveraging its technical knowhow so as to gain competitive advantage. The other kind of diversification is horizontal diversification where the company adds new products or services that are characterized by the technological or commercial difference with the current products in the market.

Differentiation strategy

According to Gavin, this is a marketing technique that is used by manufacturers to help establish a strong identity in the specific market (pp 43). Differentiation strategy is also known as the segmentation strategy. Through the use of this strategy, a manufacturer introduces a variety of goods and services of the same kind and using a similar name into a specific product category. A practical example of this from the book by Constance is when the Coca Cola Company decided to offer a variety of sodas after its initial regular soda. This is such as the introduction of diet coke, decaffeinated soda and diet-decaffeinated soda all under the same brand name is using a differentiation strategy (pp,74) As we observe from this, each type of soda is directed towards a specific soda market hence increasing the range of similar products in the soft drinks industry. However, this technique is quite costly in the perspective of advertising in the sense that each product has to be marketed independently due to the difference in the marketing segmentation.

Cost Leadership

Cost leadership is a management technique used by businesses in an attempt to establish competitive advantage over their rivals. The term itself is a straightforward concept that means reducing the operational cost of any businesses. “In a wider context, cost leadership is often driven by company efficiency, size, scale, scope and cumulative experience (learning curve)” (Michael & David, pp 122).The main objective of the cost leadership strategy is to exploit the economies of scale through the production of highly standardized products. However, some business organizations use the cost leadership concept to achieve market leadership. Nevertheless, the concept of cost leadership should never be confused with price leadership. This is because; a company could have the least cost in production but not offer the lowest prices in terms of its goods and services.