Coca cola core competency

When discussion is on competencies, it is important to note that different

authors may talk about different issues when they argue. Thus, it may be a good

idea to attempt to map the different possible meanings of the core competence. A

fairly easily comprehensible distinction is between core competencies that are firm

specific and core competencies that are public domain (Belcher, Hassard & Procter

1996). Applying the distinctions discussion yields the so-called core competence

grid, which consists of all the different possible meanings of core competencies that

authors may or may not imply when they talk of core competencies. It may be rather

important to know where one is located in the grid to comprehend the full meaning of

what an author writes about core competencies. The core competence grid in is

designed to capture all the possible meanings of the term core competencies as it

has been used in the literature. Core competency involves product, process, and

administrative competencies. In discussing product-based core competencies is

entirely different from discussing product-market strategy, mainly because product-

market strategy is concerned with the product-market portfolio and adequate

generation of cash to sustain business. In contrast, product-based core

competencies are about competencies in making and/or marketing the products

(Drejer 2002).  In the case of Coca Cola, its product based core competency can be

found on its brand name.

The company’s brand name and popularity and identity all over the world are

what make it saleable to all types of individuals. A product based core competency of

the company is its ability to create products that taste good and is liked by many
people. Firm-specific core competencies are the major source of competitive

advantage. The reason for this is that firm-specific competencies cannot be imitated

and, thus, they are likely to last longer. According to this view, firm-specific core

competencies evolve only when the company and/or the customers desire it (Duarte

& Snyder 2003). On the technological side, firm-specific process core competencies

may be patented process technology. The Danish medical firm Coloplast provides an

excellent example, as the company has a specialized department for developing its

own process technologies, which, in turn, are patented. Consequently, the

technology may be viewed as firm specific. Regarding human-based competencies,

evidently the knowledge of members of Coloplast’s technology department regarding

their self-designed process technologies is an example of such competencies. This

also applies to the blue-collar workers of Coloplast, as they learn to operate the

highly specialized equipment with great expertise, an expertise and knowledge that

may be of little value outside Coloplast. Technological, firm-specific core

competencies might include an internally designed management information system

(MIS) using the latest information technology which may be difficult to transfer to

another firm. Such an MIS may involve company-specific productivity measures,

communication links, customized user interface, and so on, which would be useless

in another company (Foss 1997).

The opposite example, technological competence in the public domain, could

simply be the latest information technology, the latest production planning tool, and

so on. Such technologies may be advantageous for the company, even though the

competitors could easily buy them and, thus, catch up with the company using the
latest technology. In the case of Coca Cola, its firm specific core competency can be

found in the secret formula of its products. The company makes use of a formula for

their product that is top secret and it helps them achieve uniqueness in its industry.

The next core competency is the administrative competency. If one moves to the

human category of administrative competencies, public domain competencies may

be well-defined procedures for administrative activities, for instance organizational

structure (Deal & Kennedy 2000). Organizational structure is almost always

identifiable in the public domain, at least to some extent, which makes it public

domain. Public domain core competencies have a less encouraging development

pattern. There seems to be a slide from a competitive factor toward a qualifying

factor as time progresses and more and more competitors transfer the public domain

competence to their activities. This is probably why many authors within this field

insist that sustainable competitive advantage is best achieved by building firm-

specific core competencies. This does not mean, however, that it is any easier to

build public domain competencies. Consequently, the builder of core competencies,

which are public, should be even more discouraged. Firms may concentrate their

scarce resources on only a few core competencies. Thus, unless there are special

circumstances, it would be natural to focus on firm-specific core competencies and

define other competencies as support competencies (Bate & Johnston Jr 2003).The

administrative competency of Coca Cola can be found on its organizational structure.

The company has a well organized organizational structure that was created to

ensure that the firm would run well and perform according to its goals. The

organizational structure of the firm made sure that the firm would succeed and

provide the best products to the clients.

 
References

Bate, J & Johnston Jr, RE 2003, The power of strategy

innovation: A new way of linking creativity and strategic

planning to discover great business opportunities, AMACOM, New

York.

Belcher, A, Hassard, J & Procter, SJ 1996, R&D decisions:

Strategy, policy, and disclosure, Routledge, New York.

Deal, TE & Kennedy, AA 2000, The new corporate cultures:

Revitalizing the workplace after downsizing, mergers, and

reengineering, Perseus Publishing, Cambridge, MA.

Duarte, DL & Snyder, N 2003, Strategic innovation: Embedding

innovation as a core competency in your organization, Jossey-

Bass, San Francisco,

 
Foss, NJ (eds.) 1997, Resources, firms, and strategies: A reader

in the resource-based perspective, Oxford University Press, Oxford.

Drejer, A 2002, Strategic management and core competencies:

Theory and application, Quorum Books, Westport, CT.

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