Coca-Cola company focuses its resources on its biggest most profitable lines in the wake of the most complex and toughest period in history as the factor of which the Coca-Cola company will cut down a number of its “zombie brands”. They need to do a better job of growing smaller and more enduring propositions and existing zombie brands and nurturing, not just zombie SKUs said CEO James Quincey.
Coca-Cola also accounts for just 2 percent of the company’s total revenue with rest accounting for 98 percent and currently has around 400 master brands but admits that more than half are country brands of little to no scale. Coca-Cola believes despite its small size, they still require resources, as the reason which time and money is pulled away from its bigger, more profitable business.
Quincey added even though they are going slower the company average they still require enough resources. In order to redirect resources to those with more chances to expand Quincey promised they will weed out smaller brands that have not worked.
Coca-Cola wants to see a steady pipeline increase of creating ever stronger brands, they will launch a series of explorers to get there knowing most of them won’t make it. But at weeding out the explorer that has not worked so that they can redirect the resources onto challengers and explorers that have the most opportunity, they have not been directive and assertive enough.
Since 2019 Coca-Cola has adopted a three-tier system for its brands. This system includes the leaders- its biggest brands; challengers – those that have the ability to grow to become leaders and explorers – with which it looks to disrupt markets.
The question is are they succeeding or not? The explorer’s success criteria are very fast-growing and starting to achieve a core of very loyal and engaged consumers, though small waves are made in this category. The challenges are being able to gain enough market share over time, in the belief that they get to leadership – where margins are more scalable and favorable, Quincey said.
Coca-Cola was hit harder than the rivals by the closure of restaurants, bars, and other venues which though generates have of its annual revenues. The moves of Coca-Cola seem like they are going to emerge strongly from the pandemic amid a difficult quarter for the company.
CFO John Murphy said their key priority is to emerge stronger and faster, with a key objective in the second half of the year is to position well for 2021, mainly in areas that are important for them and where competitive pressures are strongest.
