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1 Name Professor Course Date The Product Life Cycle of Coca-Cola To better strategize and plan for future sales, the Product Life Cycle is a tool that can be implemented to help achieve company objectives. Project managers can greatly benefit from understanding the Product Life Cycle, as it helps them to identify different opportunities for increasing the profit margin of that product during different phases of its “life.” The life cycle is composed of four stages, including introduction, growth, maturity, and decline. Coca-Cola is a great example of this cycle in progress while also showing its social and economic impacts in the United States. The introduction stage of the life cycle is the point at which the product begins its “life.” Coca-Cola, the brand, for instance, was founded in 1886, beginning its product lifecycle. At this point, however, many products die. The idea either encounters various challenges that cannot be overcome or face high costs when it comes to production. Various adjustments to the product may occur in this stage as well to make it profitable. Coca-Cola, however, was largely successful from the start. Ten years after its introduction, Coca-Cola was being consumed in all fifty states. This was the beginning of a Cola mania that would last for a decade and is characteristic of the growth stage in Coca-Cola’s life cycle, meaning the product survived the initial tests of the introduction process and then sees a healthy increase in sales. Here, the brand should already be established and the product manager’s mentality should be more focused on pushing aggressive marketing campaigns (Gitman, Lawrence, et al). During this period, Coca-Cola started to optimize the manufacturing process, partnering

2 with other businesses and creating the Coca-Cola Company to gain greater control over the bottling of its soft drink. Furthermore, Coca-Cola started to have significant social implications. Dreyer, et al. altered the tool for measuring the life cycle, known as the Life Cycle Assessment (LCA) so as to include social aspects, stating, “The social LCA is developed to facilitate companies to conduct business in a socially responsible manner”(89). With this in mind, Coca-Cola had significant positive impacts on the economy and society, as the increasing demand for the drink caused the company to make further investments that turned into jobs. Also due to the actions performed during the growth stages was the drop in prices. This allowed for international distribution, and in 2015, the brand controlled almost 50% of the global market for carbonated beverages (Statista Research Department). This also meant the availability of more jobs worldwide. For example, according to an article from Further Africa, “In Mozambique, Coca-Cola has helped more than 20,000 women entrepreneurs launch their businesses with start-up iceboxes and beverages.” With that, the company began to entire the maturity phase. It is difficult to say exactly when this occurred, but it is characterized by a slowing rise in sales. This stage allows for experimentation and expansion, with Coca-Cola developing variation of its original drink along with entirely new products such as vitamin water. Doing so helps the company find new markets and continue growing their profits. Unfortunately, the life cycle is not eternal, and even brands like Coca-Cola lose their control over the market. Coca-Cola entered the decline stage in 2012, which marks the point when the company started to see a drop in profits. Seeing this, product managers will focus on maintaining the relevance of their product by reducing total expenses and keeping prices stable (Gitman, Lawrence, et al). This may cause the

3 company to reduce its staff and hiring capacity. According to a BBC article, the company was looking to let go of 1,200 employees due to a drop in revenue (“Coca Cola to cut 1,200 jobs”). Their decline may be due to a greater emphasis on healthy food products, which will only incentivize the company to switch to marketing other products that fit the consumer demands. Fortunately for Coca-Cola, it is still the number one carbonated beverage distributor, and many people still consume it daily. The Product Life Cycle is an important aspect of any product that can help determine what a company should or should not due to keep itself profitable. Project managers use the information gained from the life cycle to make predictions and search for new methods that satisfy the consumer. In the end, the process allows for a kind of transparency that allows the company to share its history and communicate the reasons behind their future objectives to their staff and customers. With that, the Product Life Cycle is a tool to be taken seriously and managed to sustain a profitable business. Works Cited “Coca Cola to Cut 1,200 Jobs.” BBC News , BBC, 25 Apr. 2017, www.bbc.com/news/business-39711023 .

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4 Dreyer, Louise, et al. “A Framework for Social Life Cycle Impact Assessment.” The International Journal of Life Cycle Assessment , vol. 11, no. 2, 2005, pp. 88– 97., doi:10.1065/lca2005.08.223. FurtherAfrica. “In Southern Africa, Coca Cola Is Creating Jobs for Youth, Women.” FurtherAfrica , 24 June 2016, furtherafrica.com/2016/06/24/in- southern-africa-coca-cola-is-creating-jobs-for-youth-women/. Gitman, Lawrence J., et al. “The Product Life Cycle.” Introduction to Business , OpenStax Introduction to Business, 18 Sept. 2018, opentextbc.ca/businessopenstax/chapter/the-product-life-cycle/. Statista Research Department. “Soft Drink Market Share of Leading Companies.” Statista , 23 Jan. 2020, www.statista.com/statistics/387318/market- share-of-leading-carbonated-beverage-companies-worldwide/.

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