Coca-Cola Analysis

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Contents a. | Introduction | 2 | b. | SWOT Analysis | 2 | c. | Porter’s five-force model | 3 | d. | Porter’s Value Chain Analysis | 5 | e. | Conclusion | 7 | f. | Reference | 7 | | | |

The Coca-Cola Company is the largest manufacturer and marketer of nonalcoholic beverage in the world. The company produces finished product in cans and bottles. The bottlers then sell, distribute and merchandise the resulting Coca-Cola product to retail stores, vending machines, restaurants and food service distributors. Coca-Cola is the most popular and biggest-selling soft drink in history as well as the best-known product in the world. The Coca-Cola Company offers nearly 400 brands in over 200 countries. Throughout this
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Porter’s five-force model identified five forces which would impact on an organization’s behavior in a competitive market and access the external threats and identifies the opportunities to achieve competitive advantage. The five forces include: * The threat of new entrants * The bargaining power of buyers * The bargaining power of suppliers * The threat of substitute products * The competitive rivalry between existing firms
Cocal-Cola Company applies the five-force model to increase the profitability of their products and consolidate the market shares.
The threat of new entrants:
The market share of soft drink industry actually has to maintain by spending and investing huge amount of money on advertisement and marketing. The advertising cost of Coca-Cola was $3.3 billion in 2012. Such a high cost makes it very hard for a new competitor to survive in the market and expand visibility. Moreover, due to the highly recognized brand name of Coca-Cola, the strong loyal customers’ base would not easy to switch to a new product. Therefore, it is nearly impossible for a new comer to compete in the soft drink industry.
The bargaining power of buyers:
Mostly, the buyers for soft drink are usually from fast food restaurant, vending machines, convenience stores and food stores, etc. The profitability in each place demonstrates the bargaining power of the buyers. The lower the bargaining power of buyers, the higher is the profitability of
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