Coca-Cola Co. plans to double its business in the next ten years by catering to the billion people expected to enter the middle class by 2020. The company forecasts revenues reaching $200 billion by that time by reducing costs and selling to emerging markets. In BusinessWeek, Coca-Cola CEO Muhtar Kent cites growth in China and India as reasons for the company’s success in the last 10 years, but he adds the company has to look at the changing world and react accordingly.
In the next decade, the company believes the best way to present the brand is to show they have “values.” Marketing office Joe Tripodi explains consumers now are defined by their values and beliefs, and they expect companies to define themselves similarly. For instance, Coca-Cola has jumped on the popular “green” movement and plans to show its environmental awareness through a new bottle partly made of plants. Because Coca-Cola operates in so many countries, it says it can also keep costs down.
The environment is a hot topic right now, and consumers have started to buy goods from companies who address their concerns (e.g. hybrid cards, organic foods, environmentally friendly tech goods). By studying the values of your demographic, you can build a stronger brand.
On HarvardBusiness.org, Andrew Winston explains “environmental initiatives don’t raise costs,” but they actually lower them. Something surprisingly simple as using energy-saving bulbs can save your operation money. Of course, companies must find capital to make these initial “green” changes. The obvious solution is forethought: set aside a percentage of your current capital expenditure to these priorities.
However, in tough financial times, “green” initiatives may not be an urgent concern, even if the writing on the wall says you’ll save money in the long run. While your operation might not have similar economies of scale like Coca-Cola, their example has two advantages: 1) building a brand that will appeal to growing markets by adopting their values, and in turn, 2) adopting strategies that save money in the long run.
Read the BusinessWeek article here.
Read the HarvardBusiness.org article here.
