People generally bring up kleenex and xerox as the examples of trademarks lost to generic use (and someone upthread mentioned band-aid), but I think a more interesting example is coke. There are large regions of the US where "coke" is the general term for soda, so that the following invented example wouldn't raise eyebrows:

    A: Want a coke?
    B: Yes, a 7-up please.

(Or at least, it wouldn't raise eyebrows for the implication that a 7-up is a kind of coke.)

How is Coca-Cola dealing with this? Do they have a policy or a strategy?

It's the same. The issue is actual usage, not whatever meaning is correct.