Coca Cola Red Ocean Strategy

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Coca Cola Red Ocean Strategy. A red ocean strategy is where companies compete in sectors that are already flooded or bloody. While such markets are often characterized by cut-throat competition, big rivals in this industry jostle to control market share through a pricing strategy. This strategy is adopted mainly is the surest bate to expand the demand for products and outwit the competition. The soft drink industry is one of the domains where the red ocean strategy is applicable. While the soft drink industry has been around for quite long, there have also been a plethora of barriers to entry. Coca Cola and Pepsi are some of the market leaders in the soft drink industry. However, there are many small companies that compete for the market share. Though there is limited shelf space and vending spots, deep-rooted brand recognition of popular, current brands, plenty of factors may impact the competition. Some of the red ocean strategy include

Compete in the same market

Concentrate on beating competitors

Taps into the existing demand

Creates cost-value trade offs

Select between differentiation and cost

Coca Cola has two segments that include reduced spending through improved productivity, cash flow and manufacturing quality. The company monitors the production of mature items to lower credit rating anomalies. Furthermore, the company has opportunities that guarantee traditionally low profit margins, traditionally high inventory costs and targets high end customers. Moreover, the company has put in place mechanisms to ensure production of different products (Coca-Cola Company, 2020c). Another segment is the support of sporting events and physical activities. Coca cola is synonymous with sports and activity. It is also engaged in sponsoring international soccer and other sporting events. Funding sporting events and partnering with NGOs to nurture talents has made Coca cola a household name globally. This approach has also made Coca cola become a dominant player in beverage production and consumption across the world.

Coca Cola Red Ocean Strategy

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