GENERAL WINGET POLY TECHNIC COLLEGE

Department of business programmer marketing and sales management

Practical assessement : profit market

Title: COCA COLA COMPANY

Submitted to:- M.r Hussen

Prepared by:-

1. Eliyas getu

2. Bereket Brihanu
 Table of Contents
Company Overview : Coca Cola.............................................................................................................................2
Vision Statement:....................................................................................................................................................2
Mission:...................................................................................................................................................................3
Part I : External Analysis........................................................................................................................................3
Competitors.............................................................................................................................................................3
Five Forces Analysis...............................................................................................................................................4
Threats of Substitute Products................................................................................................................................4
Bargaining Power of Buyers...................................................................................................................................5
Bargaining Power of Suppliers...............................................................................................................................6
Competitor Rivalry..................................................................................................................................................6
 Company Overview :
Coca Cola
Coca-Cola Company (KO) (obtained from yahoo) Coke is it -- it being the #1
nonalcoholic beverage company in the world. The Coca-Cola Company is home to 15 billion
dollar brands, including four of the top five soft drinks: Coca-Cola, Diet Coke, Fanta, and
Sprite. Other top brands include Minute Maid, Powerade, and vitaminwater. All told, it owns
or licenses and markets more than 500 beverage brands, mainly sparkling drinks but also
waters, juice drinks, energy and sports drinks, and ready-to-drink teas and coffees. With the
world's largest beverage distribution system, The Coca-Cola Company reaches consumers in
more than 200 countries. About 40% of its revenue is generated in the US.

Coca-Cola has sold trademarked products in the United States since 1886 and is now
selling trademarked products in over 200 countries. The company has the most valuable
brand in the world and owns four of the world’s top 5 non-alcoholic “sparkling” brands.
Their mission is to refresh the world, to inspire moments of optimism and happiness, and to
create value and make a difference.1 They believe that their success depends on their ability
to provide consumers with a wide variety of options to meet desires, needs, and lifestyle
choices. Coca-Cola has four strategic priorities to create long-term growth: to drive beverage
leadership, to accelerate innovation, to leverage their balanced geographic portfolio, and to
lead the Coca-Cola system for growth.

Vision Statement:

Coca Cola’s vision serves as the framework for our Roadmap and guides every aspect
of our business by describing what we need to accomplish in order to continue achieving
sustainable, quality growth.

 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.

Mission:

Coca Cola’s Roadmap starts with our mission, which is enduring. It declares our
purpose as a company and serves as the standard against which we weigh our actions and
decisions.

 To refresh the world...

 To inspire moments of optimism and happiness...
 To create value and make a difference.

Part I : External
Analysis
Global Beverages Industry
The global beverages industry consists of four different categories according to Datamonitor:
Beer (along with Cider & FABs), Soft Drinks, Wine, and Spirits. Beer, Cider & FABs
account for 33.5% of the industry’s total value, and it is closely followed by Soft Drinks at
32.0%. Coca-Cola products fall under the Soft Drinks category, and despite this category
being only 32.0% of the industry, The Coca-Cola Company is the market leader in the global
beverages industry with a market share of 16.3%.
Datamonitor predicts that the global beverages industry will experience revenue and volumes
growth decline during 2010-2015. However, European and Asia-Pacific industries will grow
with CAGRs of 0.2% and 4.3%.

Competitors
The non-alcoholic beverages segment of the commercial beverages industry is highly
competitive. Commercial beverages companies compete with each other in multiple
geographicareas. Competitive products include numerous non-alcoholic sparkling beverages,
various water products, juices and nectars, fruit drinks, coffees and teas, energy and
performance-enhancing drinks, dairy-based drinks, functional beverages and other ready-to-
drink form. PepsiCo, Inc. is the primary competitors of The Coca-Cola Company in many
countries, including the United States. Other significant competitors include Nestle, Dr.
Pepper Snapple Group, Inc., Group Danone, Kraft Foods Inc. and Unilever
Five Forces Analysis

Threats of New Entrants

The level of new entrants is measured by multiple factors including: brand loyalty,
advertising ability, access of distribution channels, and supplier availability. These factors
create a low to moderate threat of new entrants.

 Customer and brand loyalty make it very problematic for new competitors to enter
into the beverage industry. Coca-Cola is the most known beverage brand throughout
the world, which has been made possible through advertising and marketing.

 Advertising and marketing are a key component for a new company to gain
recognition from consumers. However, both these components require large amounts
of funding to produce broad scale marketing campaigns that will gain the recognition
needed to compete with industry leaders, such as Coca-Cola.

 Access to distributing channels is an important factor when entering into a new

market. It can be tiresome for new entrants to find retailers that will carry their
product before they are established. Shelf space will rarely be made for products that
cannot prove they have consumers to regularly buy their product.

 Coca-Cola and other industry leaders have strict bottling contracts in all of their sales
areas. These contracts block the bottling company from doing business with
companies producing a similar product. One of the only alternatives for the new
company is to do the bottling themselves, which requires high amounts of capital.

Threats of Substitute Products

In the beverage industry there are many substitutes for each category of beverage. This
allows the consumer to help shape what the retailers put on the shelves. Examples of these
substitute products compared to Coca-Cola are: Pepsi products, beer, wine, tea, coffee,
energy drinks, etc. The substitute products create a moderate threat in the industry.
  Marketing and advertising, again, have a major impact on the substitute products. If
the consumers do not know about a particular product, then retailers do not want to
stock that product.

 The switching cost for retailers is fairly low, so retailers can easily switch to more
popular products. This can create an advantage for the retailer from a cost standpoint
and for the producers of the substitute product.

 Throughout the beverage industry, product lines are very similar in price between
competing companies. Differentiation techniques are taken so consumers will choose
their product. This can give substitute products the opportunity to use promotional
influences to gain consumers’ favor.

Bargaining Power of Buyers

Buyers make up an important aspect of the beverage industry. Some of these buyers
include: fast food fountain, vending, convenience stores, and super markets. The bargaining
power of the buyer is low to moderate.

 Fast food chains have the highest bargaining power out of the other buyers, simply
because they buy in bulk. This method of purchasing provides the least profit for
Coca-Cola due to small margins. It is more for the customer to sample the product
and grow a loyalty toward the brand name.

 Vending machines provide a straight line approach from getting the product directly
into the hands of the consumer. There is literally no bargaining power for the buyer.

 Convenience stores, like vending machines, have no bargaining power. The reason
for this low bargaining power is because convenience stores pay inflated prices for
the products since they are buying smaller quantities.
 Super markets have low bargaining power. The power they possess is best shelf
space, but consumers usually make the final decision of the most popular products.
Bargaining Power of Suppliers

The bargaining power of the suppliers, in the beverage industry, is very low because the
ingredients used to create these beverages are readily available.

 The basic materials used to make Coca-Cola products are easily found with many
suppliers. This ease of access gives a huge advantage to Coca-Cola because the
company can set their own prices with the suppliers.

 Switching costs are also very low, so the ability for manufacturers to change suppliers
is easily done.

 There is great emphasis put on the buyer industry to suppliers. The industry utilizes
large quantities of raw materials the suppliers must remain in good standing with the
buyers.

Competitor Rivalry

The intensity of rivalry among competitors differs by the industry. In the beverage industry
the level of rivalry is relatively moderate. The main reason for this is the number of major
players controlling the market share. These players are Coca-Cola and PepsiCo.

 Brand loyalty is a determinant of the rivalry between competitors. In the end the
consumers chooses the product, so the rivalry comes in the form of advertising and
marketing strategies to gain market value.

 Products in the industry are easily differentiated. This differentiation lowers the level
of rivalry because each company is trying to create the next product that will have
high consumer reviews.

 The ability for consumers to control the market greatly boosts competitor rivalry.
Because stores stock their shelves with the most popular products, competitors are
always fighting for their product to be the most popular and easiest to recognize.

 Expansion opportunities are one of the major factors affecting rivalry. The best way
to gain market share is to enter into a market that is not already occupied by strong
competitors.