Shifting away from the wisdom of the classic sources of competitive advantage, companies need to have the capability of being responsive and acting swiftly in order to sustain competitive advantage, in the current dynamic business environment (Kanter, 1989). Kanter (1989) discussed the four new sources that lead firms to sustain competitive advantage - core competencies, time compression, continuous improvement and relationships.
Production, Distribution and Marketing, have been identified as CCL's core competencies, which remain the focus of the company. One of The Coca-Cola Company's greatest strength lies in the ability to conduct business on a global scale while maintaining a local approach. Over the years, these competencies have helped to ensure CCL's strong market leader position. CCL has gradually used these core strengths to establish its reputation and market position, while strengthening its brand image (Pearson, et.al., 1994).
To date, CCL's strong brand has enabled it to gain a superior edge by increasing the barriers to entry, using its economies of scale to thwart competition, and ensuring its market position remains sound. In comparison to its competition, CCL enjoys strong brand loyalty, a larger market share and greater profitability(<www.instituteforbrandleadership.org>(Date Accessed<08/05/03).
CCL'S competencies also facilitate effective management of logistics. Within Australia, the division seeks to improve its quality, thereby helping to increase operational savings through improved operating efficiency, via the introduction of 'IFountain' and coordinating buying systems globally (wirelessweek.com,<Date accessed <8/5/03>).
The introduction of 'Vanilla Coke', new product package-size options as well as the new range of Fanta flavours are illustrations of innovative products introduced by Coca Cola to gain advantage over its nearest competitor, Pepsi. The introduction of Vanilla Coke took an unprecedented 100 days from 'inspiration to execution', due to Coca Cola's utilisation of latest technology, and is currently one of the top 10 soft drink beverages within Australia and the U.S. Currently, following consumer demand, CCL is in the process of introducing 'Diet Vanilla Coke' (www2.coca-cola.com (Date Accessed<08/05/03>).
Through CCL's in depth knowledge and extensive research of its customer base (www.cocacola.com), Coca Cola ensured customer satisfaction, while reaping benefits through sustaining its leadership position by attracting a larger customer base and reinforcing its brand image (Chang, et.al.,1997).
CCL's dedication to sustaining superior advantage in the long-term is evident through their continuous innovations and product improvements. In order to satisfy consumer need for 'excitement', Coca Cola has reinvented its bulk product offering, primarily the 'fridge pack', to satisfy customer demand (Cottam, et.al., 2001). However, this innovation was not born through market research alone. Coca Cola had realised one of the ways to gain competitive advantage is through Relationship Marketing, as it helps firms to attract, retain and foster customer relationships (Gronoos, 9-27). In fact, this product offering came as a result through close collaboration with their bottling and packaging suppliers, as well as the retailers who in fact had to reconfigure their shelving in order to accommodate the new product (Turnbull, et. al.,1996).
Coca Cola is constantly striving to improve its performance and quality of products and services, investing resources and skills in order to maintain customer preference and loyalty, ensuring customer perception of the CCL product offering as unique, and distinguishable that cannot be compared with their competitors (Bengstsson, M., et.al., 1999). Areas which Coca Cola has enhanced through the years are further illustrated in Figure 1.0 .
Figure 1.0 Improvements offered by Coca Cola
* Introduction of Vanilla Coke - Vanilla Coke helped boost sales of Coca-Cola branded beverages while inviting new consumers to rediscover
the cola category through a completely original flavour experience.
* Introduction of Diet Vanilla Coke - In response to consumer demand, diet Vanilla Coke was introduced to the U.S. marketplace in October, just three-and-a-half months after it was given the green light.
* FridgePack - This refrigerator friendly pack is increasing consumer awareness and preference, accelerating consumption and case volume in
markets where it has been introduced. Following the introduction of the FridgePack, sales rose by 25% in the first 3 months.
* IFountain - the most advanced soft-drink dispensing system in the industry. iFountain gives customers a technologically advanced fountain system that enhances available brand options, improves operating efficiency and automatically calibrates each drink served to assure consumers of a quality drink every time.
* Extension of the Fanta range - customizing Fanta flavours to suit local tastes.
* Coca-Cola Bottlers' Sales & Services Company - To support its bottling partners, coca cola has established this network to coordinate buying for the entire system. This strategic procurement function is streamlining supplier development, risk management and logistics.
One of Coca Cola's key success drivers is their formation of strategic alliances. Over the years, Coca has formed many alliances primarily with its bottling partners, suppliers of materials and ingredients, McDonald's, as well as affiliations with sporting associations such as Fifa and Olympic games. These alliances not only enable Coca Cola to provide a wider rage of products, but also assists to increase profitability, promotion and an increase in network. Coca Cola can also enjoy economies of scale, as cost savings are achieved through joint purchasing of materials and knowledge sharing in areas such as production and logistics. Equipping itself with vast resources and capital, CCL ensures its customers will benefit by using the resources to invest in areas that may require improvement. Coca Cola has used these strategic alliances to build its brand image by promoting consumer benefits, thus gaining a competitive advantage in the soft drink industry(coke.net, <Date accessed, 7/5/03>).
Using Kanter's New Wisdom Theory, Coca Cola has relied on competitive advantage issues like Brand-Building, Relationship Marketing, Strategic Alliances, Innovation, Technology and Operation Efficiency, to enable the company to gain a superior edge in the soft drink industry.
Applying Day and Wensley's theory to Coca Cola's current situation in the soft drink industry, Coca Cola appear to have maintained a sound balance on its approach in competitor and customer perspectives (Day & Wensley, 1988)
Over the years Coca Cola has been customer focused by continuously catering to the changing needs and wants of its customers. It does this by investing resources to produce new value-added and innovative products. Concurrently, Coca Cola are also consistently improving its operations to improve efficiencies and deliver their product offering to customers in the most effective way(cio-asia.com, <Date Accessed 09/05>).
Although Coca Cola is primarily customer centred, the company also pays attention to its competitors in the industry, especially its worldwide chief rival Pepsi. Due to previous blunders, such as the introduction of 'New Coke' which was a response to Pepsi's market growth, Coca Cola needs to defend and sustain its leadership position, thus closely monitoring Pepsi's actions. Since the re-introduction of the 'Classic Coke', however, all products introduced into the market have proved a great success for Coca Cola. Pepsi, on the other hand have been not been as successful with the product launches of Dr. Pepper and PepsiMax (www.business2000.com <Date accessed 8/5/03>).
The following Day & Wensley's framework highlights how Coca Cola achieves its leadership position in the industry through its critical success factors and identification of advantages, which result in Coca Cola attaining a performance outcome superior to Pepsi, while maintaining customer satisfaction