National Institute of Fashion Technology, Bengaluru

Master of Fashion Management Batch- 2022-2024

Design Thinking and Strategic management

Exercise - 8

Submitted by:

Akshita Aravind Kumar (MFM/22/163)

Arpita Kujur (MFM/22/5889)
Mansi Singhal (MFM/22/53)
Nishita Singhal (MFM/22/36)
Sneha Dey (MFM/22/559)
Sucheta S (MFM/22/15)
1. Threat of New Entrants:

Coca-Cola's Strategic Position:

Coca-Cola, as a global beverage giant, holds a strong strategic position in the market that acts
as a significant barrier to new entrants. The threat of new entrants is relatively low due to the
following factors:

● Brand Power: Coca-Cola is one of the most recognized and valuable brands in the
world. Its iconic status and long history make it challenging for new entrants to
compete on brand recognition.

● Distribution Network: Coca-Cola has an extensive and well-established distribution

network worldwide. New entrants would face significant challenges in replicating
such a vast distribution infrastructure.

● Economies of Scale: Coca-Cola benefits from economies of scale in production,

marketing, and distribution. Newcomers would struggle to match Coca-Cola's
cost-efficiency.

● Advertising and Marketing: Coca-Cola's substantial advertising and marketing

budgets create strong consumer loyalty and preference. It would be costly and
challenging for new entrants to compete at this level.

2. Power of Buyers:

Coca-Cola's Strategic Position:

Coca-Cola's diverse product portfolio and brand loyalty give it a strong position with buyers.
While buyers have choices, the power of buyers is relatively moderate because:

● Brand Loyalty: Consumers often have strong brand loyalty to Coca-Cola products,
reducing their willingness to switch to alternatives.

● Product Differentiation: Coca-Cola offers a wide range of beverages, each with its
unique taste and appeal. This product differentiation limits buyer power by providing
a variety of options to satisfy different preferences.

● Distribution: Coca-Cola's extensive distribution network ensures its products are

readily available to consumers, making it convenient for buyers.

3. Power of Suppliers:

Coca-Cola's Strategic Position:

Coca-Cola's size and market influence grant it significant power over its suppliers. It can
negotiate favorable terms and ensure a stable supply chain. Key factors include:
 ● Economies of Scale: Coca-Cola's large-scale production allows for favorable pricing
arrangements with suppliers.

● Brand Reputation: Suppliers often seek partnerships with Coca-Cola due to the
prestige of being associated with a global brand.

● Supplier Diversity: Coca-Cola's diversified sourcing strategy reduces its dependence

on any single supplier.

4. Threat of Substitutes:

Coca-Cola's Strategic Position:

The threat of substitutes for Coca-Cola is relatively low due to several reasons:

● Product Differentiation: Coca-Cola's unique and iconic beverages have limited

direct substitutes in terms of flavour and experience.

● Brand Recognition: The strength of Coca-Cola's brand makes it challenging for

substitutes to gain consumer trust and loyalty.

● Diverse Product Portfolio: Coca-Cola offers a wide range of beverages, including

carbonated soft drinks, juices, water, and energy drinks, reducing the appeal of
substitutes.

5. Competitive Rivalry:

Coca-Cola's Strategic Position:

Coca-Cola faces competitive rivalry primarily from other major beverage companies like
PepsiCo. However, Coca-Cola's strategic position is strong, influencing competitive
dynamics in the industry:

● Brand Dominance: Coca-Cola's brand dominance and market share position it as a

leader in the industry.

● Global Presence: Coca-Cola's global reach gives it a competitive advantage, allowing

it to adapt to regional preferences and emerging markets.

● Innovation: Coca-Cola continually innovates and diversifies its product portfolio to

stay competitive and respond to changing consumer trends.
Coca-Cola's strong brand, global presence, and market dominance position it strategically to
reduce the five forces outlined by Porter. This strategic position allows Coca-Cola to maintain
its competitive edge in the beverage industry and continue its long history of success.