Coca-Cola: Company Strategic Alliance Objectives with Suppliers

Suppliers
When it comes to finding suppliers, the Coca-Cola looks for companies who can provide a stable, consistent delivery of goods used in Coke’s various manufacturing processes. The company’s Form 10-K reveals its principle providers of sweeteners. An analysis of these companies reveals they are massive publicly traded companies spread around the world. Coca-Cola’s supply chain has many steps in it, therefore the company’s primary concern with suppliers is that they be punctual with product delivery and now increasingly, environmentally friendly as well.
Other posts on Coca-Cola's brand and strategy:

Coca-Cola: Company Strategic Alliance Objectives with Suppliers
Coca-Cola: Company Strategic Alliance Objectives with Bottlers
Coca-Cola: Company Strategic Alliance Objectives with Brands
Coca-Cola: Life-Cycle Model of Evolving Strategic Alliance Strategy Early Days
Coca-Cola: Current Strategic Alliances – Major Strengths
Coca-Cola: Life-Cycle Model of Evolving Strategic Alliance Strategy
Coca-Cola: Current Strategic Alliances – Major Weaknesses
Coca Cola: Future Strategic Alliance Objectives and Strategy Overview Recommendations
Works Cited Page for Coca-Cola Analysis of Alliances Portfolio

Coca-Cola: Company Strategic Alliance Objectives with Brands

Brands
Coca-Cola seeks to establish as diverse a drink portfolio as possible. The company does not sell alcoholic beverages, and instead has built out a huge portfolio of soda, tea, coffee, and fitness drink products around the world. In its early years, Coca-Cola focused on expanding its lines of soda beverages, since that was the company’s core and was where it began. As time has progressed, however, the company has tried to make the entire non-alcoholic beverage industry its core operation. Recent acquisitions of tea-maker Honest Tea and healthy drink seller Energy Brands (Vitamin Water) clearly demonstrate the company’s strategy for expansion. As organic growth in maturing markets levels out, Coca-Cola looks for room to expand its beverage business, and generally does so by acquiring other brands. Whereas the alliance strategy with bottlers and distributors was to partner, Coca-Cola generally acquires the rights to an entire brand, or at the very least buys a majority equity stake, as it did with Inca Kola (50%) in 1999. With growing product diversity, Coca-Cola seeks to obtain a competitive advantage and tap new market space.

Other posts on Coca-Cola's brand and strategy:

Coca-Cola: Company Strategic Alliance Objectives with Suppliers
Coca-Cola: Company Strategic Alliance Objectives with Bottlers
Coca-Cola: Company Strategic Alliance Objectives with Brands
Coca-Cola: Life-Cycle Model of Evolving Strategic Alliance Strategy Early Days
Coca-Cola: Current Strategic Alliances – Major Strengths
Coca-Cola: Life-Cycle Model of Evolving Strategic Alliance Strategy
Coca-Cola: Current Strategic Alliances – Major Weaknesses
Coca Cola: Future Strategic Alliance Objectives and Strategy Overview Recommendations
Works Cited Page for Coca-Cola Analysis of Alliances Portfolio

Coca-Cola: Company Strategic Alliance Objectives with Bottlers

A look at the attached Alliance Constellation Map reveals Coca-Cola’s general structure of partnerships. The company engages in partnerships of a wide variety, therefore it’s important to first understand how the company chooses those partners.

Bottlers

Coca-Cola looks for existing bottling companies that have the infrastructure needed to bottle their product and distribute it to a defined market. Presently, Coca-Cola owns minority equity stakes in a number of its bottlers and outright owns a few more, though generally the company’s equity investments in its bottlers fluctuates according to internal policy. Most Coca-Cola bottling partners are still independent from the firm. As Coca-Cola has become a major international brand, the company’s products are available in most markets around the world. As such, the company generally doesn’t look for new bottling partners except in instances when previously-closed emerging markets open up. Allying with bottlers, rather than setting up bottling plants of its own, was how Coca-Cola achieved rapid internationalization throughout the 20th century. In 1990, when apartheid ended in South Africa and the country’s economy was no longer hampered by social perceptions, Coca-Cola’s rapid ramp-up in the country was due partnerships and capital investments in a handfull of South African bottling and canning companies. This is one example of how combining an existing efficient supply chain with local bottling and distribution expertise creates a synergy that results in profit for all parties.

Other posts on Coca-Cola's brand and strategy:

Coca-Cola: Company Strategic Alliance Objectives with Suppliers
Coca-Cola: Company Strategic Alliance Objectives with Bottlers
Coca-Cola: Company Strategic Alliance Objectives with Brands
Coca-Cola: Life-Cycle Model of Evolving Strategic Alliance Strategy Early Days
Coca-Cola: Current Strategic Alliances – Major Strengths
Coca-Cola: Life-Cycle Model of Evolving Strategic Alliance Strategy
Coca-Cola: Current Strategic Alliances – Major Weaknesses
Coca Cola: Future Strategic Alliance Objectives and Strategy Overview Recommendations
Works Cited Page for Coca-Cola Analysis of Alliances Portfolio

Woodward, Douglas P., and Sandra J. Teel. "Doing Business in South Africa." The Ziels. Woodward, B&E Review, Vol. 45, No. 4. Web. 28 Mar. 2011. http://www.theziels.org/BandE/bande45/45n4/safrica.htm.

Coca Cola: Future Strategic Alliance Objectives and Strategy Overview Recommendations

Coca-Cola’s dyad of alliances needs to become more tight-knit. The company has begun taking strides in recent years to acquire equity interests in its bottlers. The Alliance Constellation Map shows some of these equity interests. As previously discussed, the company prefers to ally with bottlers rather than acquire them outright. As Coca-Cola’s access to foreign markets begins to fill out and growth in those markets slows in the coming years, the company will be looking for new sources of revenue. One option is for the company to acquire its bottling partners. This strategy will actually decrease the number of partnerships Coca-Cola has, but it will enhance bottom-line profitability at the firm. The company has more than 300 bottling partners worldwide. By cutting out the middle-man, so to speak, Coke can boost its margins and have more control over the distribution of its product. Potential drawbacks of this recommendation relate mainly to the attitude of other bottling partners regarding Coca-Cola. If bottlers begin to perceive Coke as a money-hungry company that seeks to acquire all, Coke’s ever-increasing might could lead them to feel intimidated. Developing expansive bottling and distribution operations of its own would allow Coke to be more assertive in franchise contract negotiations with existing bottling partners. The potential for deteriorating relationships aside, acquiring its bottling partners generally makes sense for Coca-Cola, and is one very possible avenue for future growth.
Another option for Coca-Cola to continue growing revenue and maintain a healthy portfolio of alliances is to acquire more drink brands. With end consumers became increasingly more wary of sugary sodas, Coke should try to buy out well-known healthy drink brands. In recent years the company has already begun to do this, as was evident by its acquisitions of Honest Tea and Energy Brands. Fair-trade certified tea and Vitamin Water are both the types of products that health-conscious consumers today are demanding. As social pressure builds on Coke’s core soda brands, the company needs to be ready to step in with another line of beverages that address the health issue. By developing product offerings involving tea, coffee, vitamins, and vegetables, Coca-Cola can really diversify its brand portfolio to the max. Giving consumers more choice will reduce public backlash and generate more sales revenue.

Coca-Cola’s current portfolio of alliances is very strategically oriented. It has been designed for efficiency and profitability with minimal capital investment. Looking at the Alliance Constellation Map, it is clear that Coke could institute horizontal integration by buying up its bottling partners, or pursue vertical integration by controlling its suppliers and diversifying its brand portfolio. So far, Coca-Cola’s portfolio has been designed to limit the costs of expanding internationally in rapid fashion. As the world’s beverage markets mature, the company will ultimately invest in changing its alliance portfolio to maintain high profitability. Doing so will undoubtedly help Coca-Cola remain the world’s largest beverage provider, and one of the most recognized brands in the world.

Other posts on Coca-Cola's brand and strategy:

Coca-Cola: Company Strategic Alliance Objectives with Suppliers
Coca-Cola: Company Strategic Alliance Objectives with Bottlers
Coca-Cola: Company Strategic Alliance Objectives with Brands
Coca-Cola: Life-Cycle Model of Evolving Strategic Alliance Strategy Early Days
Coca-Cola: Current Strategic Alliances – Major Strengths
Coca-Cola: Life-Cycle Model of Evolving Strategic Alliance Strategy
Coca-Cola: Current Strategic Alliances – Major Weaknesses
Coca Cola: Future Strategic Alliance Objectives and Strategy Overview Recommendations
Works Cited Page for Coca-Cola Analysis of Alliances Portfolio