Executive Summary
In this paper, beverage giant, the Coca-Cola Company, has been analyzed. An internal as well as external analysis of the company has been undertaken using the following analytical tools: PESTEL, SWOT and Porter’s Five Forces. The 5-factor analysis has revealed: medium threat of new entrants, medium to high threat of substitute products, low supplier and buyer bargaining power, and high level of rivalry with its chief competitor, PepsiCo.
SWOT analysis results were as follows: Strengths: Brand Equity; Company valuation; Extensive international presence; Greatest market share; Brilliant marketing plans; Customer Loyalty and Distribution system. Weaknesses: Competition with Pepsi; Low Product Diversification; Lack of a health beverage offering and Water management. Opportunities: Diversification; Focusing on developing countries; Packaged drinking water; Supply chain improvement and Market lesser selling offerings. Threats: Sourcing of Raw Materials and Indirect competition.
Lastly, PESTEL analysis results were as follows: Political and Legal Factors potentially impacting the company: trade restrictions, tax policy, labor laws, environment policy, FDA certification, etc.; Economic factors: gross domestic product, interest rates, forex rates, disposable income, retail price index, demand and supply conditions, and unemployment rates; Social factors: trends, practices, traditions, wants, population, educational qualifications, aspirations, income distribution, corruption, customer awareness and education, standard of living, religious values, and family structure; and technological factors.
Introduction
Key Facts
Name: The Coca-Cola Company
Industries served: Beverage (more than 600 brands)
Geographic areas served: Worldwide (more than 200 countries)
Headquarters: Atlanta, Georgia, United States
Current CEO: James Quincey
Revenue (US$): 41.863 billion (2016) 5.5% decrease over 44.294 billion (2015)
Profit (US$): 6.527 billion (2016) 11.2% decrease over 7.351 billion (2015)
Employees: 100,300 (2017)
Main Competitors: PepsiCo Inc., Dr. Pepper Snapple Group, Inc., Unilever Group, Mond?lez International, Inc., Groupe Danone, Kraft Foods Inc., Nestlé S.A. and several other beverage manufacturers.
The Coca-Cola Company’s business overview from the company’s financial report (Coca Cola Company, 2011):
The biggest global beverage manufacturer, Coca-Cola, owns, licenses and markets over six hundred brands of non-alcoholic beverages (chiefly sparkling beverages), besides numerous still ones including waters, juice drinks, enhanced waters, coffees, teas, juices and sports and energy drinks (Coca Cola Company, 2011).
The company owns and markets four out of the most popular 5 global brands of non-alcoholic sparkling beverages, namely: Coca-Cola, Fanta, Sprite and Diet Coke. Trademarked company beverages, marketed in America since the year 1886, can now be seen in over two hundred nations’ markets (Coca Cola Company, 2011).
The company’s branded beverages are accessible to customers worldwide via Coca Cola’s extensive network of self –owned or –supervised distribution and bottling facilities, besides independent bottling firms, distributors, retailers and wholesalers, making the biggest global beverage distribution network (Coca Cola Company, 2011).
Coca Cola-trademarked products make up 1.9 billion (roughly) of 59 billion (roughly) of every kind of beverage serving consumed daily across the globe (Coca Cola Company, 2011).
Coca Cola claims its success hinges on its capability of connecting with customers through offering them a broad array of product choices for suiting their lifestyles, wants and requirements and on its workforce’s capability of efficiently executing daily tasks (Coca Cola Company, 2011).
The company aims at utilizing its assets (i.e., its fiscal strength, brands, unparalleled distribution network, worldwide reach, and its managers’ and partners’ firm dedication and skill) for increasing its competitiveness and accelerating progress for ensuring value creation for its shareowners (Coca Cola Company, 2011).
Porter’s Five Forces in Action: Analysis of Coca-Cola
Ever since the concept was proposed in the year 1979, Porter’s 5 Forces theory has remained the de-facto industrial analysis basis, with market competitiveness gauged by deducing market attractiveness. Conclusions from this assessment help ascertain extant and imminent industry risks for a given firm....
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simulation, a very powerful computer-based technique has rapidly gained acceptance as a decision-making tool in business as well as industry (Wynn et al.,2007). The main uses of simulation in business processes are the improvement of operating as well as operational efficiency (Watkins & Hill,2009). The basic idea of the concept of simulation is to accurately model a given physical process on the computer screen by incorporating the various uncertainties
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