External and Internal Environments
Coca-Cola Company (Beverage Industry)
Organizations operate under the influence of internal business environment and external business environment. Internal business environment identifies with factors which influence internal operations of the organization, and in most cases an organization has control over the factors. External environment identifies with factors outside the organization and the organization has no control over the factors. Success of an organization depends on the managing the strengths, spotting opportunities, dealing with threats and addressing the weak points. Earlier research focused on Citigroup Inc. which is under the Banking and Financial Services industry, this report focus at the Coca-Cola Company which is under the Beverage industry.
The Coca-Cola Company
The Coca-Cola Company is a public company listed at the New York Security Exchange (NYSE) trading as S&P 500 Component, Dow Jones Industrial and Average Component. It s a multinational organization headquartered at Atlanta, Georgia. Coca-Cola was invented in 1886 by John Stith Pemberton who was a pharmacist; in 1889, Coca-Cola brand and formula was purchased by Assa Griggs Candler who went ahead in incorporating the Coca-Cola Company back in 1892 (Pendergrast, 2013). The company offers more than five hundred brands in the target market of more than two hundred nations in the world. Coca-Cola Company is a public company. Key person in Coca-Cola Company identifies with Muhtar Kent as the Chief Executive Officer and Chairman. Coca-Cola Company specializes as a marketer, manufacturer and retailer of beverage syrups and concentrates that are nonalcoholic (Allen, 2005).
Internal and external environments
Internal and external environments affect the operations of Coca-Cola Company in one way or another. It has been noted that the internal environment at Coca-Cola Company is characterized with extensive layout and design of the bottling centers and warehouses. Effective management of internal environments has enhanced efficiency of the organization. Layout technology has influenced the overall workflow design. Coca-Cola brand is recognized by target market, a model that has encouraged brand loyalty (Pendergrast, 2013).
Research and design within the organization has enabled the organization in meeting the exact needs of the customers, and providing excellent services to the customers and suppliers. Beverages are part of luxury products, an indication that if it goes tough, then the luxuries are the first products to be withdrawn from the budgets of the customers. Coca-Cola Company has been sensitive in making sure that they meet the standards and needs of the customers. Coca-Cola Company has been in the forefront in the provision of freshwater in nations of operations, as it is one of the key ingredients. Internal environment in Coca-Cola Company is managed by internal administration identifying with information Technology, Human Resources and Accounting Departments among others.
External environment has been one of the challenges in Coca-Cola Company, since the organization has no control over the external environment. External environment influencing the operations of Coca-Cola Company identifies with Political factors, economic factors, technological factors and social factors among others. Porter’s five force analysis will be engaged in understanding the external factors in the environment that shape the operations of Coca-Cola Company (Isdell & Beasley, 2011). Adapting to the external environment has been influential in creating a competitive edge. External environment ranks high than internal environment in meeting the needs of the target market, in the sense that internal environment is controlled by the existing organizational culture.
Porter’s five forces of competition
Porter’s five forces of competition are critical in Coca-Cola Company. It has been noted that in the industry analysis, the five threats are: new entrant’s threat, bargaining power of buyer’s threat, bargaining power of supplier’s threat, substitute products and services threat and the threat of the competitive rivalry in the existing business organizations. The two most influential sources of competition identify with threats of substitute products and rivalry among the existing business organizations.
It has been noted that in the nations of operations, there has cropped up small business organizations offering substitute products that are competing with the Coca-Cola products in distinct jurisdictions (Blanding, 2010). The threat is rated as medium to high pressure, since the diverse sodas, energy drinks and juice products in the target market are eating away the market share of the Coca-Cola Company. Pepsi has been the major competing and substitute product in the beverage industry; Pepsi almost have the same taste with Coca-Cola. Coca-Cola Company has heavily invested in research and design in making sure that the products are meeting the changing preferences and needs of the target market.
Rivalry among the existing businesses organizations in the beverage industry is rated as a high pressure. Surveys have indicated that Pepsi is the major competitor in the United States and beyond the borders. Pepsi has diversified beverage products with the recognized brand. Pepsi and Coca-Cola compete in diverse platforms in outdoor activities and events. The market has also embarked a number of soda brands identifying with Dr. Pepper, Unilever, Nestle S. A., Kraft Foods Inc. and Groupe Danone among others in the target market in the United States and beyond the borders (Pendergrast, 2013).
The Coca-Cola Company has managed to be the well known beverage brand in the globe; this is an indication that The Coca-Cola Company has been sensitive in meeting the needs of the target market. Threats of substitute products and threat of rivalry among existing firms has been overcome through research and design and globalization in more than two hundred nations. Globalization has enabled The Coca-Cola Company to tap into new markets that are developing. The extensive numbers of suppliers to more than eighty four thousand, hence a building a distribution network that has encouraged efficiency within The Coca-Cola Company.
The Coca-Cola Company has remained true to the target market, in making sure that it delivers refreshing, quality and products that are satisfying, in so doing the organization has build a competitive edge hence overcoming the threats associated with substitute products and rivalry of the exiting firms (Blanding, 2010). Each product made by the Coca-Cola Company has the same taste; beverage recipe has been kept as a big secret and controlled tightly at the facilities used in manufacturing the recipe. The sight of a Coca-Cola brand indicates the best company offering beverages in the globe.
Coca-Cola Company has been sensitive and has invested heavily in marketing the brand, marketing has been critical in managing a number of threats in the external environment. Global marketing strategies of Coca-Cola Company have enabled the organization to brand its products effectively. Coca-Cola Company has developed catchy jingles and slogans that go deep into the minds and hearts of the people in the target market. naming a number of influential advertising slogans includes ‘enjoy’, ‘drink Coca-Cola’, ‘life tastes good’, ‘things go better with Coke’, ‘always Coca-Cola’, ‘it’s the real thing’ and ‘good ‘til the last drop’ among others (Isdell & Beasley, 2011).
The marketing slogans have been influential in making the consumers remember the Coca-Cola product at all times. An example of one of the most influential marketing slogan is the ‘I want to buy the world a coke’ developed by Billy Davis in 1971. The commercial advertisement indicated a world full of love and hope as multicultural teenagers were ascending a hill. The commercial advertisement was very strong at that time, that it won a number of awards. Coca-Cola Company has supported Olympic Games among other activities in sports identifying with National Hockey League (NHL), International Federation of Association Football (FIFA), Major League Baseball (MLB), Cricket World Cup, NASCAR and National Basketball Association (NBA) among others. Giving back to the community has enabled Coca-Cola Company to build product differentiation in the areas of operations (Allen, 2005).
SWOT Analysis
SWOT analysis in Coca-Cola Company reflects at the areas of strengths, areas of weaknesses, areas of opportunities and areas of threats. The strengths in Coca-Cola Company identifies with the fact that Coca-Cola brand is the best in the globe with an estimated value of more than seventy seven thousand Unites States billions. Coca-Cola brand has the widest market share in the globe in the beverage industry, Coca-Cola brand has gained loyalty among the consumers, Coca-Cola Company has heavily invested in CRS (Corporate Social Responsibility), Coca-Cola Company has control over the bargaining powers emanating from the suppliers, Coca-Cola Company has developed a complex and an efficient distribution channels in the globe and that Coca-Cola Company has a strong advertising and marketing (Blanding, 2010).
Weakness of Coca-Cola Company identify with over-reliant in carbonated drinks, the product portfolio of Coca-Cola Company is undiversified, the organizations has elevated debt levels which has been accelerated by acquisitions, Coca-Cola in the recent past has received negative publicity basing on health concerns and that a number of brands within Coca-Cola Company has failed to capture the target market (Pendergrast, 2013).
Opportunities within Coca-Cola Company identifies with new emerging markets in bottled water, the globe has an increased demand for beverages and healthy foods, Coca-Cola Company has high growth opportunities through acquisitions and that consumption market for the beverages has been on the rise with global warning and emerging markets in developing and in least developed nations.
Threats facing Coca-Cola Company are constant changes in the needs and preferences of the consumers, the world is facing scarcity of fresh water, the United States dollar has been strong over the years, push by the legal environment in disclosing the side effects of the Coca-Cola products, high levels of competition especially from Pepsi, decreasing margins in net profit and gross profit and saturated market with drinks that are carbonated (Isdell & Beasley, 2011).
The most serious threat facing Coca-Cola Company is saturated market with drinks that are carbonated and the greatest opportunity is emerging markets in the developing and in least developed nations. In diversifying the greatest opportunity and in overcoming the serious threat, Coca-Cola Company has concentrated on globalization plans and extensive advertising and marketing as the organizations introduces new brands like Dasani water (Blanding, 2010).
Surveys have indicated that most of the sales in Coca-Cola Company originate from markets outside United States; this is an indication that the markets within United States are highly exploited. Coca-Cola Company is penetrating to the developing and in least developed nations as a way of building brand loyalty and competitive edge in the markets that are least exploited.
Coca-Cola Company has been sensitive in product differentiation, which has facilitated globalization of the organization. The vision of product differentiation is to enhance customization of Coca-Cola products in meeting the wants and needs of the individual markets. Coca-Cola has tailored its products in meeting the demands in particular market. Young consumers prefer flavored coke products and powerade products examples being Vanilla Coke and Cherry Coke among others. Health conscious consumers and the older generations prefer Vitamin Water, Diet Coke and Odwalla products among others.
Coca-Cola Company has heavily invested in understanding and researching on different markets in regards to age, lifestyle, income bracket, culture and other factors in making sure that the Coca-Cola develop accurate products depending on the demand (Pendergrast, 2013). It has taken time and money in comprehending the target market and in responding appropriately to the demand. Coca-Cola Company has engaged packaging differentiating depending on the target market, as the Coca-Cola products are adjusted in different market segments.
Functional packaging has made sure that the Coca-Cola products are available to the consumers in different forms and sizes; including fountain drink dispensers, glass bottles, aluminum cans and plastic bottles. Coca-Cola Company has been sensitive on diverse sizes and shapes of cans and bottles in making sure that the product is easily stacked and also encouraging vending machine dispensing among others (Allen, 2005). Coca-Cola Company has been committed in sustaining environment, by developing recyclable packaging materials.
The greatest strengths of Coca-Cola Company are associated with the strength of Coca-Cola brand and the most significant weakness is on overreliance in drinks that are carbonated. It is fascinating noting that Coca-Cola Company has managed convincing customers to buy its products for more one hundred years. This has been possible by addressing the week points and at the same time building a competitive edge that is aligned to the tastes and preferences of the target customers. Coca-Cola Company is among the Fortune 100, having existed for more than a century, and it brand has earned a global reputation in the beverage industry (Isdell & Beasley, 2011).
In the recent past, Coca-Cola Company is embracing technology as one of the strongest marketing tool. It has been noted that the Coca-Cola Company fan page has more than fifty five million likes, an indication that the company gets noticed even before working on the marketing plan, but the company does not take it for granted, it allocates time and resources in building a competitive edge and remaining on top of the competitors. Internet marketing in Coca-Cola Company is engaged in extending the brand awareness among the young people in the target market (Blanding, 2010). Coca-Cola Company has developed products for all age groups, an indication that the target customers have a variety of choice, which has enabled the brand image to remain very strong in consecutive decades. The significant weakness has been greatly reduced by the extensive and aggressive marketing; this is through the traditional advertising campaigns and through the modern advertising campaigns. Coca-Cola Company has managed to develop slogans that identify with the target market, which makes customers feel that Coca-Cola is part of them, and that the customers have the responsibility of supporting the brand.
Campaign resources, Capabilities and Core competencies
Coca-Cola Company campaigns have been characterized with open happiness, which is characterized with positive emotions felt by individuals when they are contented or feel joyous. According to Coca-Cola Company, open happiness is simply anything that is experienced by the human beings, and at the end of the day contributes to the joy of the individuals (Isdell & Beasley, 2011). Coca-Cola Company is in business to spread open happiness and smiles in the globe. True happiness in this context is associated with the Coca-Cola brand, such that whenever someone is happy, he/she feels like taking Coca-Cola products as a way of driving away the quest. Open happiness is facilitated by choice and decision, in which Coca-Cola products facilitates. Through the happiness campaigns, Coca-Cola Company has proved its capabilities in tuning the target customers towards supporting the brand, which has made the brand the number one in the world.
The core competencies of Coca-Cola Company is the strong brand name and the extensive distribution channel of the distributors and bottlers, the brand name has enabled Coca-Cola Company to have a deal of bargaining leverage and power (Pendergrast, 2013). Another core competence is related to the symbiotic interdependencies between the bottlers, Coca-Cola Company and the distributors; Coca-Cola Company has remained in full control of the processes.
Value Chain
Coca-Cola Company has managed to develop an effective value, since it has been in control of all the stakeholders in the world. The organization has managed to build product differentiation which is part of the business level strategies that has been influential. Coca-Cola Company has been innovative for decades, and it remains to be innovative, the target customers knows that the organization is always on the move of improving the products, a move that has protected the brand name and the domains from competitor attacks (Isdell & Beasley, 2011). Coca-Cola Company has improved the value chain by opening local offices in nations of operations; this has enabled the organization to offer extensive market research in developing new models of addressing the needs and preferences of the target customers.
References
Allen, F. (2005). Secret Formula: How Brilliant Marketing and Relentless Salesmanship Made Coca-Cola the Best-Known Product in the World. New York: Harper Paperbacks.
Blanding, M. (2010). The Coke Machine: The Dirty Truth behind the World’s Favorite Soft Drink. London: Avery Press.
Isdell, N. & Beasley, D. (2011). Inside Coca-Cola: A CEO’s Life Story of Building the World’s Most Popular Brand. London: Pan Macmillan-St. Martin’s Press.
Pendergrast, M. (2013). For God, Country, and Coca-Cola: The Definitive History of the Great American Soft Drink and the Company That Makes It. New York: Basic Books.
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