Verified Document

External Analysis Coca-Cola SWOT

Coca Cola -- External Analysis An external analysis of Coca-Cola (NAICS # 312111 -- Soft Drink Manufacturing) requires scrutiny of the specific industry environment with Porter's 5-Forces model and examination of the larger business environment through a PEST analysis. In his interview on YouTube, Porter speaks of the five factors of Competitive Rivalry, Threat of New Entrants, Threat of Substitute Products, Bargaining Power of Suppliers, and Bargaining Power of Buyers. He also discusses the underlying forces for each factor, examining the Airline Industry, in which all five factors are strong, and the Soft Drink Manufacturing Industry, in which all five factors are "benign," essentially making the Soft Drink Industry "a license to print money" (Harvard Business Publishing, 2008). Porter stresses the importance and flexibility of his five forces, which keeps an organization focused on "underlying fundamentals" so the organization's leadership is not tricked or trapped by the latest trend or sensation (Harvard Business Publishing, 2008). Explaining that his five forces are dynamic rather than static, Porter emphasizes constantly reexamining how the company, and ideally everyone working for the company, are broadly pursuing a "common proposition of gaining competitive advantage" (Harvard Business Publishing, 2008) and assures his audience that competition does not have to be a "zero sum" competition; rather, there can be many "pieces of the pie" and each company within an industry can offer a unique way of serving various consumer needs so all the companies within an industry can thrive (Harvard Business Publishing, 2008).

Using Porter's Five Forces

Sources providing information to assess Coca-Cola according to Porter's Five Forces are numerous and many of them are set forth in Carl Gwin's A guide for industry study and the analysis of firms and competitive strategy. Gwin first explains that several of Porter's Five Forces combines "analysis of market structure" and "vertical boundaries," which are two Microeconomics tools (Gwin, 2001). Corresponding several of Porter's Five Forces to similar business concepts, Gwin sets forth valuable data sources for analysis. Porter's "Industry Competitors" corresponds with Gwin's "Number of Sellers" and sources of information can be found: at www.census.gov (United States Census Bureau, 2012), where the researcher...

Porter's Threat of New Entrants corresponds with Gwin's "Barriers to Entry" and Gwin mentions sources of information such as annual reports quarterly earnings reports and dividend announcements by the company; consequently, for purposes of examining Coca-Cola, the researcher can use Coca-Cola's published reports (Coca-Cola Company, 2011). Additional information about Threat of New Entrants/Barriers to Entry can also be found from investment analyst reports, such as the report(s) offered by "Stock Analysis on Net" (EBIT Financial Analysis Center, 2012). Information regarding Porter's factor of Bargaining Power of Suppliers corresponds with Gwin's "Market of Inputs" and data for analysis can be found through determining the suppliers of "raw materials, components, labor and services" (Gwin, 2001), for example at Wikinvest (Wikinvest.com, 2010). Porter's factor of Bargaining Power of Customers can be analyzed by collecting data from sources such as an RFM Analysis (Chapter 21, 2011) and by studying the buyer concentration compared to the company's concentration ratio, for example through the U.S. Census site (United States Census Bureau, 2012). Porter's Threat of Substitutes, which corresponds with Gwin's "Product Characteristics" can be examined through data gained from company websites (Coca-Cola Company, 2011) and from periodical articles such as Bhasin's examination of Coca-Cola's market positioning based on its product characteristics (Bhasin, 2011). Through these and numerous other industry-related sources, the researcher can gather significant data for examining Coca-Cola through Porter's Five Factors.
Using PEST Analysis

A PEST Analysis, which considers factors within the greater business environment, looks at four "sub-environments" of: "Political (including regulatory); Economic; Sociocultural; and Technical" (President, Khon Kaen University, n.d.). Political information, concerned with "the extent to which government and its bureaucracy supports and contributes resources to the institution" (President, Khon…

Sources used in this document:
Works Cited

Chapter 21. (2011, August 25). Retrieved February 4, 2012 from Scribd.com Web site: www.scribd.com/doc/63145097/Chapter-21

American Bar Association. (2012). ABA Journal - Law news now. Retrieved February 4, 2012 from ABAjournal.com Web site: http://www.abajournal.com/

American Demographics. (2012). American demographics - News - Advertising age. Retrieved February 4, 2012 from Adage.com Web site: http://adage.com/section/american-demographics/195

Bhasin, H. (2011, February 21). Positioning by product characteristics. Retrieved February 4, 2012 from Marketing91.com Web site: http://www.marketing91.com/positioning-product-characteristics/
Coca-Cola Company. (2011). Coca-Cola - Investors - Financial information - Annual and other reports. Retrieved February 4, 2012 from Thecoca-colacompany.com Web site: http://www.thecoca-colacompany.com/investors/annual_other_reports.html
EBIT Financial Analysis Center. (2012). Coca-Cola Co. (KO)| Financial analysis and stock valuation. Retrieved February 4, 2012 from Stock-analysis-on.net Web site: http://www.stock-analysis-on.net/NYSE/Company/Coca-Cola-Co
Futures Company. (2012). U.S. Monitor. Retrieved February 4, 2012 from Futurescompany.com Web site: http://www.thefuturescompany.com/page/US_MONITOR/
Gale Cengage Learning. (2010). Gale - Home. Retrieved February 4, 2012 from Gale.Cengage.com Web site: http://www.gale.cengage.com/
Gwin, C.R. (2001). A guide for industry study and the analysis of firms and competitive strategy. Retrieved February 4, 2012 from Faculty.Babson.edu Web site: http://faculty.babson.edu/gwin/indstudy/index.htm
Harvard Business Publishing. (2008, June 30). The five competitive forces that shape strategy. Retrieved February 4, 2012 from Youtube Web site: http://www.youtube.com/watch?v=mYF2_FBCvXw
Los Angeles Times. (2012). Technology - social media, internet, electronics, apps. Retrieved February 4, 2012 from Los Angeles Times Web site: http://www.latimes.com/business/technology/
NASDAQ. (2012). NASDAQ Stock Market - Stock quotes - Stock exchange news. Retrieved February 4, 2012 from NASDAQ.com Web site: http://www.nasdaq.com/
President, Khon Kaen University. (n.d.). Key forces in the external environment. Retrieved February 4, 2012 from President.kku.ac.th Web site: http://www.president.kku.ac.th/petmas/External%20Scan.pdf
Science Magazine. (2012). Science. Retrieved February 4, 2012 from Sciencemag.org Web site: http://www.sciencemag.org/
United States Census Bureau. (2012). Census Bureau Homepage. Retrieved February 4, 2012 from Census.gov Web site: http://www.census.gov/
Wall Street Journal. (2012). Business news & financial news. Retrieved February 4, 2012 from WSJ.com Web site: http://online.wsj.com/home-page
Wikinvest.com. (2010). Stock: Coca-cola bottling co. consolidated. Retrieved February 4, 2012 from Wikinvest.com Web site: http://www.wikinvest.com/stock/Coca-Cola_Bottling_Co._Consolidated_(COKE)
Cite this Document:
Copy Bibliography Citation

Related Documents

Coca-Cola Vs. Pepsico Company Company Financial Comparative
Words: 1468 Length: 5 Document Type: Essay

COCA-COLA vs. PEPSICO COMPANY Company Financial Comparative Study Coca-Cola Company and Pepsi Incorporation are beverage-producing companies worldwide. Over the years, people have had different opinions and ideas about the two companies, although their products are meant to serve the same purpose. Both plants have sub-plants, although Coca-Cola Company has its sub-plants worldwide. Pepsi Company has managed to set plants in specified regions, which serve as strong hold of the company. Pension plans

Coca-Cola Company Description the Coca-Cola
Words: 1434 Length: 5 Document Type: Thesis

With a small number of companies competing for a market that in many cases (North America, for example) is subject to slow growth, the competition can be characterized as intense. Thus, Coca-Cola's marketing message must also take into account the moves that its competitors are making. Coca-Cola not only must respond to shifts in the competitive environment but as industry leader must protect its position by making proactive moves

Coca-Cola Is Everything SCM CRM ERP Social Media
Words: 2168 Length: 7 Document Type: Case Study

Coca Cola Is Everything Coca-Cola Is Everything: SCM, CRM, ERP, Social Media Importance of standardization in supply chain management Software services of Coke My Coke Rewards an example of a switching cost Pepsi's Facebook page and comparison with Coca-Cola's Facebook Supply Chain management is regarded as anintegratedapproach for managing business resources. The companies including largescaleenterprises utilize its capabilities to enhance their business performance. The capability of the supply chain management can be increased through using a

Coca-Cola External Coca-Cola's Industry Conditions, According to
Words: 1229 Length: 4 Document Type: Essay

Coca-Cola External Coca-Cola's industry conditions, according to the Five Forces analysis, are generally favorable. The environmental conditions, according to the PEST analysis, are also generally favorable. This means that with few obstacles, Coca-Cola should be able to achieve its business objectives. NCAIS Code The industry code for Coca-Cola is 312111: Soft Drink and Ice Manufacturing (U.S. Census Bureau, 2007). Porter's Five Forces Porter's Five Forces explain the ability of firms to earn profits in their

Coca Cola Before 1970, Coca
Words: 1460 Length: 4 Document Type: Research Paper

Instead, the Cola Wars helped the industry grow. In 2000, for example, 41% of total non-alcoholic beverages sold were CSDs. In the late 1990s and into the 21st century, the drinks with high growth (and media hype) were non-carbonated juices, sports drinks, tea drinks, dairy drinks, and bottled water. Pepsi dominated this market with Gatorade, Lipton and Aquafina. The bottlers were also required to reinvest in more complex equipment

Coca-Cola Low Cost Differentiation Preemptive
Words: 796 Length: 3 Document Type: Research Paper

This provides tremendous opportunity to build market share without significant increases in infrastructure. The downside of these markets is that they tend to be less efficient, because fixed costs are higher in relation to revenues. The company can win in such markets, however, if it uses its globally powerful brand to gain a stronger presence in underserved markets, thereby pre-empting rival firms from entering these markets. With Coca-Cola establishing

Sign Up for Unlimited Study Help

Our semester plans gives you unlimited, unrestricted access to our entire library of resources —writing tools, guides, example essays, tutorials, class notes, and more.

Get Started Now