The company can win in such markets, however, if it uses its globally powerful brand to gain a stronger presence in underserved markets, thereby pre-empting rival firms from entering these markets. With Coca-Cola establishing market share, it will be all the more difficult for other companies to match the distribution clout and brand loyalty that Coca-Cola can build up. In every market, competition remains a serious threat. Economies of scale can help the company in two ways. The first is that it improves margins, leaving more money left over for marketing efforts. The second is that there is often price competition in competitive markets. With better economies of scale, Coca-Cola can withstand price wars long enough to outlast competitors. Being such a strong company, Coca-Cola can also gain preferential access to distribution and retail channels, enabling it to outlast the competition. Competition can be pre-empted by using the company's power to block competitors out of key channels. There are sometimes laws against this, but often there are not. Even when there are, the company can gain preferential relationships that limit market access...
In addition, Coca-Cola can find the open space in markets where there is less competition, and in those markets the profit opportunities will be greater for Coca-Cola.
Low Cost Differentiation Preemptive Strength Brand identity Differentiate from other low cost providers to increase volume Brand identity commands a premium price, increasing margin Brand identity becomes identifiable with a specific niche Build brand identity quickly to reduce the threat of new entrants Weakness Lack of diversification Diversify into many products to promote volume sales Brand extensions Diversification is not part of this strategy. Diversification is key to opening new market opportunities. Opportunity Geographic expansion Increase volume Increase volume Increase volume Increase opportunities Threat High substitutability Inherent in the strategy -- low cost
KO Advantages Coca-Cola pursues a differentiation strategy, and has built its company around the pursuit of this strategy. The strengths that the company has -- R&D, marketing, and heavy advertising -- all directly support the differentiation strategy. Coca-Cola uses its strategy to foster sources of sustainable competitive advantage, although the strongest of these is the company's brand. All told, Coke has an excellent strategy that does not result in many missed
Strategic Choices - SWOT "Competitive advantage" is approached with the seriousness of a science involving carefully chosen strategies for cost advantage and/or differentiation advantage. Achieving one or both of those advantages through the use of one or more of four strategic business methods ideally gives a company a significant competitive edge over its competitors. The Coca-Cola Company apparently uses three of these strategies to achieve a premiere position in the global
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