Coca Cola Company The Value Chain

Analysis
Posted by Taylor Byrne on Sep 23 2018

1.1 Advantages of conducting Value Chain Analysis of Coca

Cola Company The
Value Chain Analysis of Coca Cola Company The can offer various advantages:
1.1.1 Identify competitive advantage sources
By conducting the Value Chain Analysis of Coca Cola Company The during the planning
process, possible sources of competitive advantage can be identified. The firm/company is
a collection of different activities that share relatedness to some extent. Coca Cola
Company The cannot trade all activities in the external market. The Value Chain approach
suggests that a company can consider these activities as economic rent sources. These
activities can also act as barriers to new entrants or cause cost disadvantages to
competitors.
1.1.2 Identify complex inter-relationships and interdependencies
Coca Cola Company The can identify various internal and external linkages among
activities through the value chain lens. The internal linkages are- interrelationships between
activities within same organisational units and external linkages are between business units
of same or different firms. Studying these interrelationships can help a company take
benefit from coordination and joint optimisation.
1.1.3 Improved flow of materials, information and finances
The use of Value Chain Analysis can optimise the finances, products and information flow.

 The improved information flow can help the company identify and exploit new
opportunities and reduce external threats. The continuous Value Chain evaluation
can result in timely filling important gaps that may affect a firm's productivity.
 The effective implementation of the Value Chain Analysis of Coca Cola Company
The can improve the material and product flow due to improved demand and sales
forecasting. The inventory management also improves as Coca Cola Company The
can minimise the delays by tracking activities throughout the supply chain.
 Modern customers place high importance to the quick response and convenient
access to the important product related information. The unexpected interruption in
the information flow can affect the customer-supplier relationship. Coca Cola
Company The Value Chain Analysis and its implementation can highlight and
remove the bottlenecks to the information flow.

Yes, We Can Help!

 We promise to deliver high quality papers on time which will improve your grades. Get help now!

SAMPLES PLACE ORDER OUR SERVICES

Plagiarism Free Work
Best Price Guarantee
100% Money Back Guarantee
Top Quality Work
1.1.4 Formulate effective firm-specific strategies
Coca Cola Company The Value Chain Analysis can be used in the competitive strategic
decision-making process. However, choosing the right competitive strategy (cost
leadership, differentiation or focus) requires knowledge of own and rivals’ cost structure.

1.2 Challenges associated with Value Chain Analysis of Coca

Cola Company The
 The company may lose its vision and overall strategy by dividing operations into
different activities.
 Dividing the operations into primary and support activities may not be separable due
to increased complexity.
 The division process can be time consuming and finding the required information
can also be difficult.
 Effective value chain implementation does not only require familiarity but detailed
expertise.
 Coca Cola Company The may find it difficult to get required information if its
Business Information System is not structured accordingly.

2. Porter’s Value Chain Analysis of Coca Cola

Company The
Porter's value chain model is highly popular in the business world. However, Coca Cola
Company The must not take it as a rigid, standalone framework by assigning the equal
importance to all activities. The effective Value Chain Analysis requires Coca Cola
Company The to realise that all activities or functions do not require same scrutiny level.
Hence, the first step of adapting the Porter Value Chain framework is to identify the
importance of activities according to their role in product/service delivery process.
Here is the list of primary value chain activities as proposed by Porter:

2.1 Primary Activities

The primary value chain activities of Coca Cola Company The are directly involved in
producing and selling the product to targeted customers. Analysis of primary value chain
activities can improve the performance of Coca Cola Company The as explained below.
2.1.1 Inbound Logistics
It is important to develop strong relationships with suppliers as their support is necessary to
receive, store and distribute the product. Without analysing the in-bound logistics, Coca
Cola Company The can face various challenges in product development phases. Analysis
of in-bound logistics requires a company to focus on every aspect of transformation from
raw material to finished product. Some examples of inbound logistics are retrieving raw
material, storing the inputs and internally distributing the raw material and components to
start production.
2.1.2 Operations
The importance of analysing operational activities raises when raw material arrives, and
Coca Cola Company The is ready to process the raw material into the end product and
launch it in the market. Some examples of operational activities are machining, packing,
assembling and testing. Equipment repair and maintenance also falls into this category.
It includes both- manufacturing and service operations. Analysis of operational activities is
important for improving productivity, maximising the efficiency and ensuring the competitive
success of Coca Cola Company The. The increased productivity can help Coca Cola
Company The to achieve consistent economic growth, increase profitability and set a
powerful basis for competitive advantage.
2.1.3 Outbound Logistics
Outbound logistics include the activities that deliver the product to the customer by passing
through different intermediaries. Some outbound logistics activities are material handling,
warehousing, scheduling, order processing, transporting and delivering to the destination.
Coca Cola Company The can analyse and optimise the outbound logistics to explore
competitive advantage sources and achieve its business growth objectives.
Because, when outbound activities are timely managed with optimal costs and product
delivery processes put a minimum negative effect on the quality, it maximises the customer
satisfaction and increases growth opportunities for the firm. Coca Cola Company The
should pay specific importance to its outbound value chain activities when its offered
products are perishable and require quick delivery to the end customer.
2.1.4 Marketing and Sales
At this stage, Coca Cola Company The will highlight the benefits and differentiation points of
offered products to persuade the customers that its offering is better than competitors. Only
producing a high quality product at affordable costs and distinctive features cannot create
value until Coca Cola Company The invests on the marketing and sales activities. The sales
agents and marketers play an important role here.
Some examples of Coca Cola Company The's marketing and sales activities are- sales
force, advertising, promotional activities, pricing, channel selection, quoting and building
relations with channel members. The company can use the marketing funnel approach to
structure its marketing and sales activities. The marketing strategies can either be push or
pull in nature, depending on the Coca Cola Company The’s business objectives, brand
image, competitive dynamics and current standing in the market.
Effective and wisely integrated marketing activities can develop the brand equity of Coca
Cola Company The and help it stand out from the competition. However, Coca Cola
Company The must avoid making false commitments about product features that cannot be
fulfilled by the production department. It indicates the need to ensure coordination between
different value chain activities.
2.1.5 Services
The pre-sale and post-sale services offered by the Coca Cola Company The will play an
important role in developing customer loyalty. The modern customers consider post-sale
services as important as marketing and promotional activities. The power of negative e-
WOM due to poor support service cannot be undermined in the current technologically
advanced era. The company must analyse its support activities to avoid damaging brand
reputation, and instead use it as a tool to spread positive word of mouth due to quick, timely
and efficient support services.

2.2 Secondary Activities

The support activities play an important role in coordinating and facilitating the primary
value chain activities. Coca Cola Company The can also benefit from analysis of its support
activities as explained below.
2.2.1 Firm infrastructure
The firm infrastructure denotes a range of activities, such as- quality management, legal
matters handling, accounting, financing, planning and strategic management. Effective
infrastructure management can allow Coca Cola Company The to optimise the value of the
whole value chain. Coca Cola Company The can control the infrastructure activities (or
commonly called overhead costs) to strengthen the competitive positioning in the market.
2.2.2 Human resource management
Coca Cola Company The can analyse human resource management by evaluating different
HR aspects, including- recruiting, selecting, training, rewarding, performance management
and other personnel management activities. The effective HR management can allow Coca
Cola Company The to reduce competitive pressure based on motivation, commitment and
skills of its workforce. The company can also achieve its cost minimisation objectives by
analysing hiring and training costs with their relative return. The heavy dependence of Coca
Cola Company The on employees' talent will increase the importance of this value chain
support activity.
2.2.3 Technology development
In a modern, technological advanced era, almost all value chain activities depend on
technological support. The technological integration in production, distribution, marketing
and human resource activities requires Coca Cola Company The to realise the importance
of technology development. It can be divided into product and process technological
development activities. Some examples are- automation software, technology-supported
customer service, product design research and data analytics. The research and
development department of Coca Cola Company The is classified in this category.
2.2.4 Procurement
The procurement in value chain denotes the processes involved in purchasing the inputs
that may range from equipment, machinery, raw material, supplies, raw material and other
items necessary for producing the finished product. Due to its linkage with multiple value
chain activities, Coca Cola Company The should carefully consider its procurement
activities to optimise the inbound, operational and outbound value chain.
As mentioned above, the application of Porter Value Chain model depends on
understanding the importance of all activities. After understanding the relative importance of
identified value chain activities, Coca Cola Company The should highlight areas where
value can be added, cost efficiency can be achieved, differentiation basis can be set, or
processes can be optimised.
Here is a pictorial presentation of Porter Value Chain model:

3. Competitive Advantages through Value Chain

Analysis of Coca Cola Company The
It is important for Coca Cola Company The to base its competitive advantage on activities in
which it has access to the rare or scare resources. It may include- intellectual capital,
assets, skills or distribution network. The Value Chain Analysis can help Coca Cola
Company The identify those activities and develop those areas to get a strong competitive
edge over rivals. There are many examples (like Toshiba and Sharp) that consider Value
Chain Analysis as a tool to get a competitive advantage and invest heavily in research and
development activities within their value chain network. Porter’s generic strategies for
achieving the competitive advantage and value chain model can be used together to set
strong competitive advantage basis.
Following diagram shows Porter's competitive advantage model:

The analysis of the value chain activities can be done to understand the competitive
advantage sources. Coca Cola Company The can either use the operations, marketing and
other relevant value chain activities to avail the cost advantages or it can use the human
resource, technology, infrastructure, service or other relevant activities to set the strong
differentiation basis. Broadly, the competitive advantage sources can be grouped into two
types- cost and differentiation. Coca Cola Company The can obtain a competitive
advantage from one or both sources, depending on the depth and breadth of its Value
Chain Analysis. Next parts of the article present in detail how Coca Cola Company The can
configure primary and/or secondary value chain activities to achieve the desired cost and
differentiation objectives.

4. Cost Advantage of Coca Cola Company The

4.1 Cost advantage through Value Chain Analysis of Coca Cola
Company The
Coca Cola Company The can avail the cost advantages by reducing the costs associated
with the value chain activities. However, it requires the company to firstly map the activities
and then associate costs to make necessary adjustments. The connection between the
value chain and cost leadership strategy reflects a parallel focus on the low cost operational
activities. If Coca Cola Company The aims to obtain cost advantage, it needs to identify
each element within the value chain can be optimised to get the whole effect

 A Value Chain Analysis Example for Coca Cola Company The is that it can use the
analysis as a tool to negotiate the best prices and maximise the in-bound and out-
bound transportation processes.
 Another Value Chain Analysis Example is using the value chain information to make
modest advertising budget that can reduce marketing costs and offer the product at
an affordable cost.
If Coca Cola Company The aims for the low-cost, the Value Chain Analysis can optimise
the profitability. If product differentiation is the aim of Coca Cola Company The, Value Chain
Analysis will help the company in maximising the efficiency and enhancing the product
quality by improving processes.

4.2 Cost drivers of Coca Cola Company The Value Chain

Analysis
Coca Cola Company The can control following drivers to add value, set differentiation basis
and enhance efficiency.

 Organisational policies
 Integration
 Timing
 Economies of scale
 Linkages
 Interrelationships
 Capacity utilisation
 Learning and Spillover

However, it is important to note that costs can be reduced only to some extent. Coca Cola
Company The Value Chain Analysis must also consider the customers’ perceived value that
may justify the higher price charged by the company compared to competitors.

Looking For Help With Term Paper On

Coca Cola Company The?
Start your order

5. Company Differentiation Advantage

Coca Cola Company The can obtain the differentiation advantage by analysing different
value chain activities. For instance, a company can procure the unique and valuable inputs
that are not easily available to competitors. Coca Cola Company The can either reconfigure
the whole value chain or change individual entities to set the differentiation basis. The cost
drivers (such as timing, interrelationships, linkages, scaling and integration) can also be
altered to develop uniqueness.
Some examples of differentiation through analysis of value chain are:

 Forward integration or backward integration to exercise better control over inputs

 Utilisation of new channels of distribution
 Implementation of innovative process technologies.

5.1 Differentiation through primary value chain activities

Coca Cola Company The can individually analyse the primary activities from all aspects and
create differentiation basis by identifying the following sources:

 Inbound logistics: possible differentiation basis for Coca Cola Company The are:
o Procure high quality inputs to offer high quality finished product
o Effective incoming input handling to reduce damage
 Operations: possible differentiation basis for Coca Cola Company The are:
o Flexible manufacturing system
o Wide product range
o Improved product appearance
o Prevention of product pre-mature failure
o Quick response to unique specifications
o Improved customer satisfaction through lower defect rate
o Improved product performance due to conformance to technical specifications
 Outbound logistics: possible differentiation basis for Coca Cola Company The are:
o Effective handling and better shipping to reduce product damage
o Timely product delivery
o Flexible delivery capabilities
o Effective order processing procedure
 Marketing and sales: possible differentiation basis for Coca Cola Company The are:
o Improved relationships with suppliers and customers
o Enhanced communication with customers by offering high quality information.
o Brand awareness, reputation and image development due to extensive and
effective advertising.
o Effective coordination among product, research and marketing departments.
o Wider sales force coverage.
 Services: possible differentiation basis for Coca Cola Company The are:
o Superior service quality
o High quality technical assistance
o Reliable and quick repair/maintenance service

5.2 Differentiation through secondary value chain activities

Coca Cola Company The can also analyse the secondary value chain activities to set
differentiation basis:

 Firm Infrastructure: Coca Cola Company The can set differentiation basis through:
o Extensive database development for effective marketing
o Advanced information system to get deeper customer insights.
 Human Resource Management- Coca Cola Company The can set differentiation
basis through:
o Attractive rewards to encourage creativity and maximise productivity
o Personnel training for effective interaction and superior customer service
 Technological development- Coca Cola Company The can set differentiation basis
through:
o Quick new product development
o Innovation integration in product designing
o Innovative product features with patented technology
  Procurement- Coca Cola Company The can set differentiation basis through:
o Reliable transportation to ensure quick delivery
o Procure high quality raw material and replacement parts.

6. Value Chain Analysis Example

Value Chain Analysis of the Coca Cola Company The can be better understood with the
help of some examples.

 By using Value Chain Analysis, Coca Cola Company The can select and source
premium quality raw material and develop customer loyalty on the basis of it. It can
also use Value Chain Analysis to develop brand identity.
o Starbucks provides a good Value Chain Analysis Example. The organisation
created a strong brand identity and set a strong competitive advantage basis
through aggressive marketing and strengthening coordination between
marketing and product development department.
 Coca Cola Company The can also achieve competitive differentiation by speeding
up the delivery of offered products to the final customers.
o Pizza Hut provides another successful Value Chain Analysis Example where
organisation outpaced competitors by re-configuring value chain activities to
ensure quick delivery.
 The Value Chain Analysis can also be used by Coca Cola Company The to improve
its human resource practices.
o FedEx is a good Value Chain Analysis Example to understand how Coca
Cola Company The can achieve competitive advantage through analysis of
its human resource activities.
o FedEx emphasised over its value chain support activities, invested heavily on
employee development, took excellent human resource initiatives and made
visible infrastructure improvements, resulting into visible increase in brand
loyalty and market share.
 Coca Cola Company The can analyse value chain activities to reduce the costs, find
better deals with suppliers and offer high quality products at affordable prices.
o A relevant Value Chain Analysis Example is provided by Walmart that
continuously analyses its value chain activities to remain innovative, minimise
operational costs and offer low-cost yet reliable services.
 Coca Cola Company The can analyse the support value chain activities to offer
superior customer support. It can also analyse the operational activities to expand
the presence in geographically dispersed areas.
o It can be understood with the help of another Value Chain Analysis Example.
Starbucks places high importance to analysing value chain activities and has
successfully opened direct stores in more than 50 countries.
 Coca Cola Company The can also use the Value Chain Analysis as a tool to do
backward integration. It can be done by merging or purchasing the suppliers to
ensure timely raw material availability.
o Apple provides a relevant Value Chain Analysis Example in this regard. The
company is known for its efficient value chain and successfully controls the
product and parts.
  The Value Chain Analysis can also be done by Coca Cola Company The to
maximise the operational efficiency, reduce waste and integrate sustainability in
business operations.
o Intel is a good Value Chain Analysis Example that has reduced the waste and
negative impact on the environment by analysing its value chain operational
activities. The company has received appreciation for its waste reduction
efforts.
 Coca Cola Company The can learn from value chain practices of Dow
AgroSciences. Dow has used Value Chain Analysis to explore the unique marketing
opportunities and extracted value from generic commodity market. The company has
also used Value Chain to manage the risks at different product lifecycle phases.

The above-stated examples show how Coca Cola Company The can benefit from
conducting a detailed Value Chain Analysis. However, it is also important to note that the
Porter Value Chain model application depends on the unique contextual variables that must
be considered when assigning the weightage to primary and secondary value chain
activities.

References
Baldwin, R. E., & Evenett, S. J. (2015). Value creation and trade in 21st century
manufacturing. Journal of Regional Science, 55(1), 31-50.
Bustinza, O. F., Bigdeli, A. Z., Baines, T., & Elliot, C. (2015). Servitization and competitive
advantage: the importance of organisational structure and value chain position. Research-
Technology Management, 58(5), 53-60.
Chang, W., Ellinger, A. E., Kim, K. K., & Franke, G. R. (2016). Supply chain integration and
firm financial performance: A meta-analysis of positional advantage mediation and
moderating factors. European Management Journal, 34(3), 282-295.
Chatterjee, S. (2017). Two efficiency-driven networks on a collision course: ALDI’s
innovative grocery business model vs Walmart. Strategy & Leadership, 45(5), 18-25.
Dekker, H. C. (2003). Value Chain Analysis in interfirm relationships: a field study.
Management accounting research, 14(1), 1-23.
Fearne, A., Garcia Martinez, M., & Dent, B. (2012). Dimensions of sustainable value chains:
implications for Value Chain Analysis. Supply Chain Management: An International Journal,
17(6), 575-581.
Kirchoff, J. F., Tate, W. L., & Mollenkopf, D. A. (2016). The impact of strategic
organizational orientations on green supply chain management and firm performance.
International Journal of Physical Distribution & Logistics Management, 46(3), 269-292.
Ramaswamy, V., & Ozcan, K. (2016). Brand value co-creation in a digitalized world: An
integrative framework and research implications. International Journal of Research in
Marketing, 33(1), 93-106.
Riasi, A. (2015). Competitive advantages of the shadow banking industry: An analysis using
Porter diamond model. Business Management and Strategy, 6(2), 15-27.
Rieple, A., & Singh, R. (2010). A Value Chain Analysis of the organic cotton industry: The
case of UK retailers and Indian suppliers. Ecological Economics, 69(11), 2292-2302.
Wiengarten, F., Humphreys, P., Gimenez, C., & McIvor, R. (2016). Risk, risk management
practices, and the success of supply chain integration. International Journal of Production
Economics, 171, 361-370.
Yoo, S. H., & Seo, Y. W. (2017). Effect of supply chain structure and power dynamics on
R&D and market performances. Journal of Business Economics and Management, 18(3),
487-504.