Assignment On Coca Cola

Executive Summary
This report will analyze the business environment and operations of the Coca Cola Company. It dominates the soft-drink market since the early 1900s till now and is considered the best brand in the world. This report will illustrate the companys business model and business strategy. To perform a critical analysis on the people, organization and the technology factors Porters competitive forces model will be briefly used. This study will also carry out the SWOT analysis of the company. In which I will try to identify some of the strengths and weaknesses of the company because of its internal environment and will highlight opportunities and threats because of external forces. value chain analysis to understand the companys primary and support activities. After going through this report it can be understood how Coca Cola has achieved one of the most superior brand image. It can also be seen how the company manages to keep up with its growing demand and what else it needs to adopt in specific areas such as logistics .

Introduction
Background
Back in 1886 a pharmacist from Atlanta called John Pemberton came out with a new drink out
of his curiosity, that new drink was named Coca Cola by his book keeper. To this day, Coca-Cola is written the same way. In the first year, Pemberton sold just 9 glasses of Coca-Cola a day which is a staggering 1.7 billion servings per day across more than 200 countries, making it the most successful soft drink company in the world. Additionally, it has taken the top rank as the best brand for 11 years in a row. Over the years Coca Cola has introduced 500 more new brands such as Coke Zero, Sprite, and Minute maid, Fanta, Diet Coke and many more. It is the largest manufacturer, distributer and marketer of non-alcoholic drinks and syrups in the world (Coca Cola, 2012).

Mission Statement
Strive to refresh the world, inspire moments of optimism and happiness, create value and
make a difference. (Coca-Cola, 2012).

Vision

People: Be a great place to work where people are inspired to be the best they can be. Portfolio: Bring to the world a portfolio of quality beverage brands that anticipate and satisfy people's desires and needs.

Partners: Nurture a winning network of customers and suppliers, together we create mutual, enduring value.

Planet: Be a responsible citizen that makes a difference by helping build and support sustainable communities.

Profit: Maximize long-term return to shareowners while being mindful of our overall responsibilities.

Productivity: Be a highly effective, lean and fast-moving organization.(Coca Cola 2012)

Plan
The primary mission of Coca Cola in simple words may be derived as quenching thirst of more than billion people across the world including remote places. This leads to the global business strategy of this company. The report will begin with the business model and business strategy of Coca Cola. Porters competitive forces and value chain analysis will also be carried out to understand the activities and environment of the company. Later on, the technology factors will be discussed. Finally, the report will be summarized by a conclusion and a few recommendations.

Business Model
PEST analysis may be used to evaluate the business model of the company. It is a tool that helps the organizations for making strategies and to know the external environment in which the organization is working and is going to work in the future (Robbins, Bergman, Stagg, Coulter, 2006) Political- This means the degree of government intervention in business. Government may intervene in areas like tax, trade and environment. Coca Cola had a negative impact on countries like India and USA when they were subjected with health issues. In 2001, the government of Venezuela banned Coke Zero for health dangers. On the other hand the governments of many countries like Turkey, Cambodia, and Paraguay welcomed the company in their market during the 1960s which gave the company more opportunities. Economic-almost every country of the world felt the jolts of recession of 2008, the world economy took a downturn and went into a recession. The recession may have hampered the demand of coke which gathers almost 75% of their revenues from outside north America. In spite of the difficult times, the global positioning of the company prevented it from major setbacks. On March 5, 2010, Coke's CEO said that emerging markets are bouncing back quicker than more developed markets. Changes in economy have to be tackled by the company accordingly with changes in strategy. Social- This includes all the cultural aspects such as health consciousness and social trends. It affects the value of the community. The strategy which the company uses in Japan may be taken as an example; an antioxidant called catechism is included in the drink. Consuming this new ingredient is good for health and the health conscious Japanese people were happier with the product.

Technology- This factor includes research and development, automation and rate of technological change. The company has high priorities in research and development and invests a lot in it. This gives them a competitive edge. As mentioned earlier Coca Cola at present have 500 beverages. This is due to the advanced technology they are using. They also use technology to make drinking easier such as the innovation of can.

Business Strategy
Coca cola operates in almost all of the countries of the world, which demands its strategy to be global; consequently the company follows a global business strategy. One of the major components of production is raw materials and it has to compete with the competitors to acquire resources for production. In some cases in order to expand their business, the company acquires other brands as Glaceau a major vitamin water drink (New York Times, 2007). The purchase of such brands gives Coca Cola more market share in noncarbonated beverages market. To raise funds for this type of acquisitions the company can use its high credit rating at a lower cost. One of the most useful techniques to manage relationships with its stakeholders is strategic alliances. A former CEO claimed that all of its revenue comes from strategic alliance. The company uses exclusive contracts with its bottling partners and other customers such as Burger King. Coca Cola had a ten year deal with Burger king to be their only supplier of beverages. Coca Cola had a similar deal with Wendys as well even though, Coca Colas huge rival Pepsi had a better deal. This shows the importance and power of the brand name. In fact, this is one of the main core competences of the company. Coca Cola makes the most of its name in terms high bargaining power. This differentiation strategy has been from the beginning and results to achieve the highest number of soft drink customers (Coca Cola, 2012). Distribution strategy of Coca Cola is another competitive advantage. The Coca Cola agrees not to sell to other parties in the local market and the bottler also agrees to buy only from Coca Cola dealers. They have over 300 bottling partners globally. Nonetheless, it continues to invest on bottling partners (Coca Cola, 2012).

Porters Competitive Forces Model

New Market Entrants

Similar beverages Foreign Global Competition. Example: Brands such as Double Cola entering the market for Coca Cola.

Substitute Products or Services Energy drinks Gatorade, red bull, coffee drinks, new type of drink (e.g. carbonated soft drink)

Traditional Competition
Old brands like Pepsi Prices of other beverages For Example: Sprite, Diet Coke, Coke Vanilla and other brands

Suppliers
Integrated Supply Chain Punctual Delivery Price and availability of raw materials Quality Safe

Customers
Perception Quality Brand Image Purchasing power

SWOT Analysis:
STRENGTHS
Distribution network: Coca cola has a strong distribution network which is consisted of a number of sales persons, millions of retails outlets around the globe and thousands of distributors in various countries. Coca cola has developed a reliable and efficient distribution network. The distribution network is customized according to the countries based on their consumptions and the infrastructure available.. It has a distribution network consisting of a number of efficient salesmen, 400,000 retail outlets and 2000 distributors. Strong Brand: Its been more than 100 years that coca cola has been in business, with time it has created a strong brand image. This makes it easy for the company to produce and market new products under its name. people around the world identifies all the brands of coca cola and rely on them as a sign of quality because of the confidence built by it. Low Cost of Operations: The concepts of forward planning and maintenance of reliable operations has helped the company to develop efficient system for production, marketing and distribution. The improved system reduces the waste of resources and time which results in lowering cost.

WEAKNESSES
Low Export Levels: The brands produced by the company are the same brands produced worldwide thereby making the export levels low. In India, there exists a major controversy concerning pesticides and other harmful chemicals in bottled products including Coca-Cola and some other beverages also.

Difficult to achieve Economies of Scale: Coca cola has developed its operations on small scale building bottling plants in different cities of the world due to the government regulations and red-tapes. This result in difficulty to achieve economies of scale which would ultimately result in the lowering of cost producing more profits. Another major problem faced by the company is the culture of corruption and bribery in different countries.

OPPORTUNITIES Large Domestic Markets:

Coca cola has developed huge customer bases in developed countries for example in United Kingdom it claims to have 52% share of the soft drink market. The same trend can be seen in other countries as well.

Higher Income among People:

The developing countries like Brazil and India are most attractive for the foreign companies to operate. The reason behind is the increase in the per capita income, which results in increased purchasing power and a good life style. The beverage industry can exploit this opportunity and can increase its customer base.

THREATS: Local brands: In the developing and the third world countries local manufacturers of soft drinks are posing problems to the company. They have tried to copy the taste of the coke and are selling their products for less than half the price of Coke. Same in the case of the home brands of large retail stores like Aldi etc, they produce their own cheap cola.
Tax and Government Regulations: Government regulations and tax systems are a huge headache for the companies. This can be witnessed in the case of India, although it is one of the largest markets, but to get into India was a big problem. The country would not allow any foreign company to operate alone. One has to collaborate with some local company. In addition they posed huge taxes on the company at each stage of the production. A licence

used to be issued for a particular capacity of production and every time it has to be renewed. It would cost the company and is also time consuming. In addition, recently American government regulated the size of the bottle, it means they cant sell their product in big bottles as they do it before. This resulted in making the product expensive for the consumer.

Conclusion
After this report it could be seen that Coca Cola has a very strong global business strategy. After drawing out the competitive forces model it can be understood that Coca Cola does not seem to have any real potential threat from competitors. The company manages very strong terms with the suppliers; however there are very limited suppliers. Other activities of business run very smoothly. Coca Cola might have to reinforce their logistics to keep up with the growing competition. The marketing and sales had always been the key to success for Coca Cola and it is still holding on to its dominance by introducing new products and acquiring other beverages.

References
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