Current Debates in Digital Business: Coca-Cola Case Study

Technology has undoubtedly been an important determiner of many business models of in the contemporary marketplace. This compelling change is referred to as digital disruption. Digital disruptions are by their nature supposed to bring new “digital options.” It is up to the management to seek ways to exploit the changes to their strategic benefit. Despite the varied definitions, the bottom-line is that digital disruption drives a substantial change across the economy. The significance of digital disruption is placed into better perspective when one realizes that it shoulders the blame for the closure of over half of Fortune 500 companies since 2000 (Kelly 2016). A current wave of disruptive technologies which are mostly digital is facilitated by the rise in technologies such as sensors, cloud computing, and the internet. The consequences have affected firms, households, and the entire economy. Some of these consequences include reduced costs for information exchange, increase in data value, and a significant rise in the automation of tasks (Australian Government, 2016). A company like Coca-Cola has adapted to change effectively by leveraging the increase in smartphones globally and also using social media like YouTube and Facebook to promote its advertisements. 

Brief History of Coca-Cola

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Few companies have grown to the equivalence of Coca-Cola which is a global giant in the beverage industry. The drink was invented in 1886 by a pharmacist, John Stith Pemberton, who upheld good health and stamina in high regards. The company is associated with over 400 brands including those in subsidiaries and operates in about 200 countries (Banutu-Gomez 2012, p. 155). Pemberton sold the first glass at five cents, and today the company’s share as at 27th February 2019 is at $44.75 (Marketwatch 2019). Coca-Cola has grown to its present size through deploying various strategic methods to promote its products in different countries. The company is relevant with the digital tools of this age and has utilized them optimally. The significance of these tools to the company places Coca-Cola not only as a manufacturing firm but also a marketing company. The company anticipates customers’ needs whereby they make concerted efforts to understand the audience and seek to satisfy them adequately. The rise in the smartphone usage and social media have been primary contributors to the firm’s growing portfolio. Other commendable tools such as cloud computing and sensors have had less profound impact

Presentation and Analysis

Social media is undoubtedly the most common advertising platform in the modern marketplace. Coca-Cola has also integrated this system to boost its sales. The company has sponsored the coke studio platform which is presently an international affair. These videos are shared on YouTube and the firm’s website. Inviting international musicians in the scene is a corporate strategy because it attracts a massive audience. In addition, with the firm being the official partner of the World Cup, it uses this position to promote the brand. During the World Cup periods, the online presence and products of the firm in the site are usually branded with world cup content. Coca-Cola also produced bottles with a variety of designs which was fundamental in enhancing the company’s sales during the world cup. Its Asian market is also expanding gradually. For instance, Coca-Cola translated the advertisement dubbed “Taste the Feeling” from English to Chinese and was significantly received by the Chinese market (Coca-Cola, 2016). More so, both the Western and the Far East cultures bonded in some way and could easily comprehend the message of the advert even when it was not in the mother language. 

Secondly, smartphones are phenomenal devices considering their portability and the functions they can accomplish. Smartphones facilitate the spread of information as quick as possible. People can easily access relevant advertisements of the firm without relying on the traditional media outlets. Smartphones are compatible with several applications. Through these applications, people can make orders for the company’s products with a few clicks. Coca-Cola creates a partnership with various telecommunications companies for a mutual and beneficial relationship. 

Another digital tool that has been prevalent in this industry is the use of cloud computing. The Coca-Cola Freestyle unit is an example of cloud computing at its best. The small dispenser can be easily disregarded, but the machine can deliver approximately 200 drink options. Surprisingly, 50,000 of these units can effectively and efficiently pour 14 million drinks daily (Moye, 2018). Coca-Cola has invented in other types of vending machines, for instance, happiness strikes, small world machines, and hugs=happiness which gained popularity worldwide. All these developments use cloud computing to execute various commands. 

The Advantages of Social Media, Smartphones, and Other Digital Tools

Social Media

There are many advertising platforms, but none outperforms social media because it’s a fun, cost-efficient, and eco-friendly method. Firms can quickly build their network of loyal customers who are essential to the growth of the firm. These are the people that will spread the name of the business or brand to other people. And since human existence, the word-of-mouth has been the most effective for human conversations. Platforms such as Twitter, Facebook, and Twitter aid businesses in creating their following. However, to create this substantial number of followers, the firm has to engage regularly with customers. It is a process that demands patience and can take years to accomplish. There is a growing tendency for individuals using these channels often. The role of the traditional media outlets has hence decreased. 

Smartphones

Smartphones offer convenience in regards to how well one can access information. At the click of a button, one can receive data regardless of the place and there is the availability of internet. Customers can also use their phones to make orders for Coca-Cola products as e-commerce has revolutionized business operations. People can watch short videos of consumers’ experiences which promote loyalty among the fan base. Coca-Cola is fond of having interesting advertisements that go viral. A phone gives one the chance to access these services. 

Cloud Computing

Cloud computing is another trend that is gradually gaining significant attention. Cloud computing has been vital because it employs the efficiency of information technology (IT) coupled with its business agility (Marson et al. 2011, p. 176). Cloud computing lowers the operation costs of firms. It allows for the easier scaling of a business and is an effective method of reducing the IT barriers to innovation even for huge firms like Coca-Cola. 

Recommendations

Despite the numerous benefits of the digital tools it uses, the company should be worry about the digital disruption that is adversely affecting the firm’s sales. The thing with digital disruption is that customers can skip local trips to the local mall as customers prefer delivery services by Amazon. It has been noted that in these moments, the customer is unlikely to order a coke beverage. It implies that the physical presence of a person in a mall or shop is likely to result in impulse buying than when they order for the delivery of specific items. It is an occurrence that is hitting Coca-Cola in an unexpected as the Chief Executive Officer (CEO), James Quincey, notes that by consumers purchasing through mobile apps, they are getting more of groceries delivered to their residences (Kaplan 2017). The early outcomes of digital integration shows that in the future, digital disruption will continue to be a significant contributor to the closure of several companies. 

The situation as it is shows that although Coca-Cola’s revenues are at the expected level, but are likely to decrease as the online e-commerce gathers pace. E-commerce system is the future and explains the reason Amazon has exponentially grown over the last two decades. Besides, the management has to be ready to take these commercial hits. However, Coca-Cola has the financial muscle to deploy a strategy that can promote sales. There are several methods of doing one of them being giving coupons and promotions. However, there is no surety at all these methods will sustain the emerging trend. 

Conclusion

The world and precisely, the technology sector is developing at a rapid rate. Businesses are progressively anticipating consumers’ needs. This process is characterized by high levels of innovation which is evident in the different designs and models that Coca-Cola dispensers come in. It is the technological integration in these dispensers that allow for the automatic delivery of a product once a customer pays for it. It has contributed immensely to the firm’s revenues as there is no need for the physical presence of a person to sell. Coca-Cola has also utilized smartphones to the best manner possible. The short videos they produce can be accessed and watched over the phone. Finally, social media is the last digital tool and the most used where YouTube, Facebook, and Twitter rank as the leaders in this sector. Coca-Cola has used these platforms to promote their product immensely. YouTube videos are enticing and inviting, justifying the appeal it reckons. Otherwise, the role of technology in business is merely gaining roots and it is about to become a more influential factor for Coca-Cola.

Reference List

Australian Government. (2016). [online] Pc.gov.au. Available at: https://www.pc.gov.au/research/completed/digital-disruption/digital-disruption-research-paper.pdf [Accessed 27 Feb. 2019].

Banutu-Gomez, M.B., (2012). Coca-Cola: International business strategy for globalization. The Business & Management Review3(1), p.155.

Coca-Cola (2016). Coca-Cola chinese new year 2017 TVC. [online] YouTube. Available at: www.youtube.com/watch?v=M5Jd_IcUd-k [Accessed 27 Feb. 2019].

Kaplan, J. (2017). Bloomberg – Coke is hurting from the switch to online shopping, Too. [online] Bloomberg.com. Available at: www.bloomberg.com/news/articles/2017-05-09/coca-cola-s-new-ceo-fights-digital-threat-to-soda-buying-habits [Accessed 27 Feb. 2019].

Kelly, K. (2016). [online] Kenan-flagler.unc.edu. Available at: www.kenan-flagler.unc.edu/~/media/Files/documents/executive-development/unc-white-paper-preparing-business-leaders-for-digital-disruption.pdf [Accessed 27 Feb. 2019).

Marketwatch (2019). Coca-Cola Co. [online] MarketWatch. Available at: www.marketwatch.com/investing/stock/ko [Accessed 27 Feb. 2019].

Marston, S., Li, Z., Bandyopadhyay, S., Zhang, J. and Ghalsasi, A., 2011. Cloud Computing—The Business Perspective. Decision Support Systems51(1), pp.176-189.Moye, J. (2018). Coca-Cola freestyle innovation experience | Coca-Cola Journey. [online] The Coca-Cola Company. Available at: www.coca-colacompany.com/stories/coca-cola-freestyle-unveils-next-gen-fountain-dispenser–new-ope [Accessed 27 Feb. 2019].

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