Porters
Introduction
Coca Cola’s Mission and Vision
The Coca Cola Company is among the leading beverage companies in the world and is based in America. The beverages are sold to bottling companies and distributed to its several branches all over the world. It’s also a leading brand with a portfolio hitting 15 billion dollars brands among them Diet Coke, Fanta, Sprite and others. The company is passionate about their mission and vision which are based on offering 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.
Its vision is based on optimizing its revenue and returns to the stakeholders (Hymes & Isom, 2011). Over 55% of the company’s net operating revenues and approximately 80% of the unit case volume is registered outside North America. The successful revenue it has is attributed to a strong and committed staff. The workers at Coca cola are experienced and inspired to acquire the best as well as enjoy what they do. The company is committed to meet the needs of the clients 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. This has made it hard for a new competitor to counter this industry (mbalectures, November, 2012). Advertising and marketing has been invested upon at approximately $ 2.58 billion, this has made it hard for new entrants to cope with the prevailing market. On the other hand its retail distribution is quite massive, for instance, retailers are able to acquire 20% while others get up to 30% this makes it complicated for competitors to convince retailers to take up their products.
In terms of retaliation from the competitors, Coca cola has been able to establish itself as a leading brand making it hard for new 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. These companies have their competition being based on advertising and differentiation as opposed to pricing. The companies have hence been able to establish themselves in these areas. The competitors on the other hand are not balanced as it is being led by Coke and Pepsi while the others are down below this makes the level of intensity of rivalry to be a two horse race hence not that intense. The scope of the competition is holistic in over 200 states. However, Coca cola and Pepsi’s market growth rate is not bound to go higher as it has seen some drop by 1.1%.
Threat of substitute products
The industry is composed of varied types of substitute goods; water, juice and coffee among others. For the growth of these goods they require advertising, loyalty and accessibility. The aggressiveness attributed to this soft drink industry is high as it contributes large sums of money to promote it to higher grounds based on the loyalty of the consumers.
The substitute goods are also attributed to limited switching cost hence the clients can move towards these goods with much ease. The ease of these goods is also pegged on the perceived price which 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 of the consumers of the drink is quite good as it is bought in great amounts leading to high revenue. The company on its part has made it easy to access the drink through the use of vending machines. However, the convenience stores have limited bargaining strength as it offers high prices making it sell relatively limited amounts.
The bargaining power of suppliers
On the part of the suppliers, they have limited bargaining power on the cost as they are not strong. The suppliers use products composed of flavor, color, sugar among others; these products are quite available hence making it cheap to every supplier to access. In terms of switching cost, the suppliers are able to switch to other products with ease considering the limited affordability. The market these suppliers are involved in has limited threat posed by external intervention hence they are not afforded the luxury to 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 in North America. This has led to a drop in money allocated it is hence supposed to finance its operations through debt 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. Similarly, 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 to failure in case they fall out of partnership.
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.
References
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.
