Running Head: PORTERS
Porters
Introduction
Coca Cola’s Mission and Vision
The Coca Cola Company is among the leading beverage companies in the world. The beverages are sold to bottling companies and distributed to its several branches all over the world. It’s also a leading brand. The company is passionate about their mission and vision which are based on; to offer a refreshing feeling to the body, mind and spirit as well as to inspire moments by its name and process. In addition to creating value and create change in where it is. On the other hand, its vision is based on optimizing its revenue and returns to the stakeholders (Hymes & Isom, 2011). The workers at Coca cola are experienced and inspired to acquire the best as well as enjoy what they do. The needs of the clients are the leading desire to achieve as well as to formulate a better relation with the partners and suppliers. The company has been able to fulfill its vision and mission through making a difference in the communities as well as improve the environment. Its tasks and choices are directed by their values which include leadership, passion, integrity, collaboration, innovation and accountability among others.
External Analysis of Coca Cola using the Porter’s model
The porter’s model is a structure for the analysis of Coca cola and its advancement as a business strategy. The model composes;
The threat of the entry of new competitors
In customer loyalty, Coke has invested massively in advertising and marketing, this has led to improved brand equity and loyalty from the consumers everywhere. It is hence hard for a new competitor to counter this industry (mbalectures, November, 2012). Advertising and marketing has been invested upon, approximately $ 2.58 billion this has made it hard for new entrants to cope with the prevailing market. Its retail distribution is quite massive, for instance, retailers are able to acquire 20% and others 30%. This makes it possible for the retailers make it complicated for competitors to convince retailers to take up their products. In terms of retaliation from the competitors, Coca cola has enable to establish itself leading to hard entrance into the market by competitors.
The intensity of competitive rivalry
With the beverage industry being dominated by Coke and Pepsi, their market share is quite high while others have limited shares. Their competition is based on advertising and differentiation as opposed to pricing. The composition of the competitors is not balanced as it is being led by Coke and Pepsi while the others are down below. The scope of competition is holistic in over 200 states. Their market growth rate is not bound to go higher as it has seen s drop by 1.1%. The level of differentiation is quite big; there level of competition is based on advertising and differentiation.
Threat of substitute products
The industry is composed of varied types of substitute goods like water, juice and coffee among others. This however requires advertising, loyalty and accessibility. The aggressiveness of the soft drink industry is high as it contributes large sums of money to promote it based on the loyalty of the consumers. There is also limited switching cost of the substitute goods hence the clients can move towards the substitute goods. The perceived price is quite low as the products are relatively similar and only vary in the differentiation through advertising.
The bargaining power of the consumers
The bargaining power is quite good as it is bought in huge sizes. There are vending machines which offer easy access to the products. However, the convenience stores have limited bargaining strength as it offers high prices.
The bargaining power of suppliers
The suppliers have limited bargaining power on the cost as they are not strong. The products used are flavor, color, sugar among others. The products used are quite available hence making it cheap to every supplier. The switching cost is quite low as the suppliers are able to switch to other products. The threat posed by external intervention is quite low as the suppliers are not afforded the luxury to such good networks.
Coca Cola intensive strategy
The company is able to penetrate the market as well as develop it through promotion strategy. Its aim is to satisfy the intended market through informative means, education, persuasion, and constant reminder of the advantages they are able to acquire from the product. Their promotional technique keeps into consideration the external environment where the product is located (Dost, Oct 25, 2006). In product development, Coca cola, the product is intended to satisfy the consumer. For its development, there is the need for its distribution so as to sell better quantities. The company pays retail centers so as to resell their goods. The product line extensions have been elevated in addition to producing new products like Vanilla, coke, and Cherry Vanilla coke among others.
Coca Cola SWOT analysis
Strengths
Coke leads in brand identity with a great operational network with gradually growing revenue in all sections. The big brand name makes it possible for coke to introduce other products in the market. It operations has made it sell in varied countries it is hence able to upkeep coming markets.
Weakness
The company is exposed to negative publicity as it is accused of retailing its products with certain presence of pesticides which are harmful. The company has also experienced a drop in money due to operations. This has led to a drop in money allocated it is hence supposed to finance its operations through debt. There has been a drop in performance in Northern America; it has experienced a drop this might lead to future decline in competition.
Opportunities
Coca cola is able to acquire other sectors as a means to reach new customers; acquisition of Kerry Beverages and Appollinaris in Germany. This has made it possible for Coca cola to acquire a strong grip on the world market as well as ability to grow. The health level market has attracted Coca cola just as in the bottle water market.
Threats
The industry Coca cola is involved in is quite competitive among them being Pepsi, Cadbury, Nestle and Groupe Danone among others. The company is also quite reliant on partners and suppliers; this makes them become much susceptible. The income acquire by the company is acquired from selling things is has not place of making any decision or management.
Conclusion
The review of the internal and external environment of the company as offered us the complete view of the company’s position and operation. The external factors as well as the negative impacts faced by the company present a massive consideration and resources from the management. With the good business technique, the company should not relax. On the other hand it should tighten its grip on the actions and transformation in the industry and make the business strategy to fit better. The company should integrate its organizational and external strategy as well as the modes of the company so as to acquire a better strategy.
Recommendation
In the past periods Coca cola, based on global economies, the company has not been keen in the stand it has in the market. With a decentralized management system, the model can be a benefit as well as a disadvantage. The company has not set any goals for the whole organization; it has varied goals for each and every region. In more advanced states this will work but in developing states this will require a transformation of the management framework so as to sort out this matter. This might need a common goal as well as more resources.
Bibliography
Dost, C. (Oct 25, 2006). International Marketing Strategies, Example: Coca Cola. GRIN Verlag.
Hymes, K., & Isom, A. (2011). Coca Cola Marketing Strategy. Docstoc.
Mbalectures. (November, 2012). Porter’s Five Model Forces of Coca Cola. Principles of Marketing.
