ROKCin’ Coke Down to Its Key Component

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Nope, you don’t have it right.

The “key component” is the trademark: Coca Cola. Its value is a result of the competitive advantage it provides the customer: Americana, Patriotism, Happiness, Freedom,… In other words, people who drink coke feel that that their risk of not being American, patriotic,… is reduced by drinking Coke.

Although originally, the process by which the company achieved this was the production and distribution (as you describe below) of the Coke products it has since shifted in emphasis to brand management. As a brand they extended their product portfolio to include other products that can convey and support the same values Americana, patriotism,…

Each shift in key component requires a shift in processes even though that doesn’t mean completely abandoning the processes that existed before. As you suggest, a company might have managed their own physical distribution but then – under a new key component paradigm – realized it could be more efficiently done by a third party without harming the company elsewhere. Ideally, the company is maximizing its profits on the physical goods side and reinvesting those profits in the brand identity side since that is where its new key component can be found.

Better?

Best,
Alessandro


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