Which of the four generic (Porter) strategies does the Coca-Cola Company follow, and how do you know? Give references.
Integrate the strategy you've identified above with the strengths, weaknesses, opportunities, and threats in the attached document (this exercise should provide you with some specific actions the company should be taking relative to its strengths, weaknesses, opportunities, and threats. These actions are referred to as "strategic choices"). Do the Coca-Cola Company's strategic choices align with the firm's generic strategy? If not, what are the specific points of disconnect?
How can the Coca-Cola Company leverage its strengths and shore up its weaknesses by altering its strategic choices? How can the company take advantage of environmental opportunities and minimize environmental threats by altering its strategic choices? Be specific.
How has the view of the Coca-Cola Company's vision and mission changed or been reconfirmed by this process of strategic analysis? Would you make any suggestions to revise the company's vision, mission, or values statements, or to any of its goals/objectives? Please cite all references.
Executive Summary: The External Environment, Internal Profile and SWOT of Coca-Cola
The purpose of this document is to provide a formal company SWOT analysis of Coca-Cola using the Five Forces of Porter's model and a PEST analysis. It discusses each of the impacts, ranks and compares them, along with assessing internal strengths and weaknesses thereby drawing conclusions based on those results. Finally it offers recommendations based on those findings.
Results - Coca-Cola is a dominant force in its own industry and continues to maintain the majority of the market share. However, it is in jeopardy of losing that market share to rival companies, most notably Pepsi. Currently, Coca-Cola has the majority of its revenue dependent upon its soda product line, about 70%. This hamstrings the company when the market takes a negative turn. Additionally, the company has gained a reputation in some markets as using substandard water in their products or taking away drinkable water sources from developing communities in order to make their product.
Recommendations - The company needs to invest more in their other product lines and build that revenue. Placing the majority of their eggs in one basket could potentially hurt the company given unfavorable market conditions. Another recommendation is that the company engage in more socially sustainable business practices so that they do not lose consumer loyalty.
Conclusion - With more focus on non-soda product lines the company stands a better chance at maintaining their profit margin during unfavorable market conditions. Furthermore, with more socially acceptable ways of acquiring the necessary amounts of water for their product, they will be gaining and maintaining the loyalty of their existing consumers as well as attracting new ones.
The External Environment, Internal Profile and SWOT of Coca-Cola
This document provides a formal company SWOT analysis of Coca-Cola. The research and analysis is based on using each of the Five Forces in Porter's model and is supported with current financial, operational, and marketing data.Porter's five forces include three forces from horizontal competition: the threat of substitute products or services, the threat of established rivals, and the threat of new entrants; and two forces from vertical competition: the bargaining power of suppliers and the bargaining power of customers (QuickMBA, 2010).Furthermore, this document provides a complete PEST analysis using each of the four elements for the external analysis (Political, Economic, Social, and Technological). It will then discuss each of the impacts of the Five Forces in Porter's model, rank them, and use them to draw conclusions about the overall opportunities and threats facing the Coca-Cola Company. Moreover, this document provides a thorough internal analysis of the company, assessing many of the company's key internal strengths and weaknesses and drawing conclusions based on those results. Finally, it will combine the findings of the internal and external analyses and formulate a complete SWOT analysis giving very specific and informed recommendations as to what the company should do.
Analysis using Five Forces in Porter's Model
Threat of New Entrants - In regards to Coca-Cola, there are low barriers for competitors entering their market, but because of their significant share of the market, which ranges between 40-50% of market share, they are not challenged by any other beverage company aside from Pepsi. Because of brand loyalty, the company faces only medium pressure from potential competitors such as Pepsi. Currently, the company has revenues totaling $46,854 million, markets over 3500 products, and is responsible for 1.9 billion servings. The company has a global marketing campaign wherein it is marketed in commercials, college campuses, and other marketing venues across the globe such as FIFA soccer and the Olympics. It is a brand that is worldwide.
Threat of Substitutes - The threat of a substitute is an issue for Coca-Cola as it does not have a distinguishing flavor to separate it from Pepsi according to blind taste studies that revealed most people are unable to discern between Pepsi and Coca-Cola. Therefore, the large amount of rival sport, juice, and energy drinks in the marketplace can compromise profits as consumers have a large array of choices to choose from (Valuation Academy, 2016).
Bargaining Power of Buyers - Although buyers that buy in bulk have bargaining power as a result of the large orders purchased by supermarkets, fast-food restaurants, and other bulk buyers, the individual buyer has no purchasing power to place pressure on Coca-Cola, which results in low pressure for the company in regard to bargaining power.
Bargaining Power of Suppliers - The bargaining power of suppliers is limited as Coca-Cola is relatively simple to make in regard to only containing a few main ingredients. Therefore, suppliers lack the ability to place pressure on their most-likely largest client in regard to raising the price for ingredients, which is why there is low pressure from suppliers (Valuation Academy, 2016).
Industry Rivalry - In reference to threats from competitors, this is the primary area where the company faces high pressure as Pepsi has 30-35% of the market share within the beverage industry. Therefore, they are Coca-Cola's primary competitor, and they spend equal amounts on advertising, marketing and other business essentials as Coca-Cola.
Analysis using the Four Elements of PEST
Political Element - Political factors that result in the company's logo or brand being blamed for transgressions committed by the U.S. are ...
Coca Cola has been established trademark in the United States since 1886. Since then the company has been able to differentiate itself by being known as world's largest manufacturer, distributor and marketer of non-alcoholic beverages and syrups.