Firms need to be flexible in their marketing strategies and adapt to changes in the macroenvironment. Coca-Cola accounts for 40% of all soft drink production worldwide. The company is forced to expand its product range due to increasing consumer health consciousness. By investing in a market with a high market share, the firm is able to keep and increase its market share via its acquisition strategy (Kotler & Keller, 2016). Coffee is viewed as healthier than carbonated soft drinks by many Americans. Coca-Cola could revitalize its brand and increase brand equity by leveraging the Costa market segment. Costa might consider franchising or direct entry to increase its brand equity.
Costa coffee was purchased by Coca-Cola due to its larger market share than soft drinks. Coffee consumption has risen worldwide in comparison to fizzy drinks. Coca-Cola predicts that coffee will see an increase in sales when it enters this market, as opposed to soft drinks which have seen a dramatic drop in their use. Americans consume over 450 millions cups of coffee each day. Coca-Cola now has an opportunity to grow its bottom line (Maamoun2020). Coca-Cola bought coffee second because of the growing number of people who are more health-conscious. Individuals are making better choices due to the rise in chronic illnesses such as diabetes and obesity. The strong link between sugary drinks, chronic disease and obesity is well-established. More people are looking for alternatives to soda, such as coffee or water. Coca-Cola bought Costa Coffee to protect its market share and increase its sustainability.
Costa Coffee is a great company that understands the European market. It is crucial for institutions to understand and adapt to the needs of their market (Lamb, et. al. 2016). Costa is a more well-known firm in Europe and has expanded operations beyond the United Kingdom to include over 30 countries. These numbers show that consumers have confidence in the company’s brand. Coca-Cola plans to use its brand equity so that Americans will embrace their brands. Its ability to respond to changing market conditions by providing customers the products they desire is what has made Coca-Cola a success. There are many coffee items on offer. Health-conscious customers have more choices. The success of Costa Coffee is due to the diversification strategy that has led to the opening of over 4000 locations across Europe. There are many retailers that offer their services, which is a sign of how easy it is for customers to get them.
Costa Coffee’s main problem is that there are other companies offering similar services. Coca-purchase Cola’s will force Costa Coffee to compete with other coffee shops like Starbucks or Subway and to use a stronger marketing strategy to attract more customers. It is possible that the tough work might affect company viability, causing significant consumer changes. Many well-known coffee brands are fierce competitors in this industry.
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