Cola wars

Strategic Analysis

Porters five force model

Porters five force model

Threat of new entrants
Large companies has
Strong brand image, Supirior distribution channel,

Very small possibility of new growth, Barrier to entry:

High fixed costs, Economies of scale,

So new entrants are not a strong competitive force

Porters five force model

Threat of Substitutes
Substitutes are,
Bottled water, sports drinks, juice etc.

Increasingly popular to Appealing to different consumers tastes. Low switching costs for consumers.

Key factors are quality and innovation, And the threat of substitute products very strong.

Porters five force model

Threat of Suppliers
Suppliers, bottling equipment manufacturers.
Coca cola enterprises is an independent bottlers, Conflict with the bottlers. Rising sugar price and cost of packaging

The Threat of Suppliers is strong.

Porters five force model

Bargaining power of Buyers
Buyers are,
Super markets, Discount stores, Restaurants.

Buy large volumes, at lower prices, Decreasing the end consumers demand, Soft drink consumers are moving to bottled water, sport drinks, juice and tea.

So Bargaining power of buyers is a strong competitive force

Porters five force model

Competitive Rivalry
Owns four of top five brands, Over all sales is high, But low sale in US market, Also lost its position

The competitive pressure is the greatest competition and the strongest competitive force

Value Chain Analysis

Firm Level Value Chain

Finance & accounting: GAAP, Business Intelligence solution, SEM-BCS for financial statement, Stock option program, Financial modeling, Credit extentions, Legal services: Drafting, reviewing and interpreting sales and licensing agreements.
Corporate, Acquisition & securities group; Customer, procurement & general legal matters group; Labor & employment group; Litigation group; Records & information management; Regulatory compliance group.

Quality: The Coca-Cola Quality System (managing quality, environment, health & safety; Hazard Analysis Critical Control Point system (Evolution 3); ingredient evaluation laboratories.

Firm Level Value Chain

IT services: Installing applications; Desigbibg computer networks; Information Database management; SAPERP (Financial management, Manufacturing and Supply chain management, Human resource management & Materials management.)

Management: A Coke in arms reach.

Human Resource Management: Coca- Cola Universityone stop shop for all learning and capability building activities.

Firm Level Value Chain

Technology Development: Strategic Innovation Group, Product development, Process development (six-sigma project), DMAIC improvement method, DMADV design method.

Procurement: A billing system, Dealing with suppliers, IS about raw materials, SAP-EBP (procurement database, key business processes, supplier base & competitive pricing).

Primary Activities
Inbound Logistics: Handling raw materials (warehousing, storage & control of raw materials), require significant capital investment. Operations: Transform raw materials into finished goods, produces syrups & concentrates, bottlers combine syrup with carbonated water, packaged in cans or bottles.
Efficient plant operations to minimize costs, quality production control systems, efficient plant layout & work flow design, an appropriate level of automation.

Primary Activities
Outbound logistics: Transfer of concentrate to different bottling plants. Managing the flow & distribution of concentrate.
Inventory control, warehousing & transportation of finished goods. Quick delivery, minimize damages, efficient warehousing process, shipping in large lot, quality material handling equipments.

Primary Activities
Marketing & Sales: Advertising, Promotion product mix, Pricing, Distribution channels, work with whole sales force issues.
Consumer marketing: Enhance consumer awareness, increase consumer preference for brands, long term growth. Customer & commercial Leadership: Understanding each customers business needs, ensure the customers have the right product and package offerings.

Service: Central value adding activity. Quick response to customer needs & emergencies, ability to furnish replacement products, quality of service personnel.

The SWOT Framework

Strengths 1. Strong brand image, 2. Large market share Weaknesses 1. Lack of innovation, 2. Lack of product differentiation

Opportunities 1. Expanding noncarbonated category, 2. Expanding bottled water market, 3. Growth in emerging market,

Threats 1. Rising raw material prices, 2. Threat to carbonated beverage category, 3. Food safety issues