External Environment Analysis of Coca-Cola

The soft drink industry in the United States is a highly profitably, but competitive market. In 2000, carbonated soft drink retail sales were estimated $60.3 billion, however, soft drink consumption growth has slowed in recent years. There are three major companies that hold the majority of sales in the carbonated soft drink industry in the U.S. They are the Coca Cola Company with 44.1% market share, The Pepsi-Cola Company with 31.4% market share, and Dr. Pepper/ Seven Up, Inc. with 14.7% market share. These three companies market the top ten brands account for 73% of soft drink sales in the U.S. Dr. Pepper/ Seven Up, Inc. owns two of the top ten brands: Dr.

Historically, the soft carbonated soft drink (CSD) industry has been valued at $74 billion in the United States. In order to understand the reasons why the industry has been hugely profitable despite the ‘Cola Wars’, an examination of the CSD industry with Porter’s five forces analysis will be conducted. As market leaders, the analysis will be centred on both Coke and Pepsi (hereafter “C&P”).

The market for carbonated soft drinks is saturated with many brands. The top five are, Coca-Cola, Diet Coke, Pepsi-Cola, Mountain Dew, and Dr. Pepper (Hartlaub, n.d.). Over 90% of the market is dominated by three companies, Coca-Cola, Pepsi, and Dr. Pepper/Snapple (Statista, 2015) Because the soft drink industry manufactures its products in mass amounts, they can produce economies of scale and create a competitive advantage over smaller or new companies trying to

It seems that over the last 10 years, there has been campaigns that promote different studies showing soft beverages or carbonated beverages are unhealthy and cause a lot of problems to individuals. Cities, in order to tackle public health, especially childhood obesity, have made efforts of to ban or tax carbonated beverages. Although some may not have been successful, such as New York City or Philadelphia, it shows the public that soda is not a healthy product. In a recent article by Sanger-Katz, she explains that over the last 20 years, the sales

“Between 1970 and 1997, the united states Department of Agriculture (UDSA) surveys indicated an increase of 118 % of per capita consumption of carbonated drinks, and a decline of 23% for beverage milk. Soft drink intake has been associated with the epidemic of obesity and type II diabetes among children. While it is possible that drinking soda instead of milk would result in higher intake of total energy” (Dehghan 3).

I used Google Finance to find the Cola-Cola financial information. The revenue that Coca-Cola Company generated in the end of 2017 was $35.41 billion. Their gross profit is $22.15 billion. However, Pepsi revenue was $63.52 billion and the gross profit was $34.740 billion. These financial information shows that the customer prefer Pepsi over Coca-Cola. These also show that the demand of Coca-Cola products has been declining. The causes for this decline would be from a change in the customer preference and more competitors in the

Sales in the United States are declining due to the public concern over sugar. Sales in Europe and Japan are flat, while markets in China and India offer up strong completion for Coca-Cola. Africa’s middle class population is growing at a steady rate, so the disposable income is increasing. This creates an opportunity for Coca-Cola to tap into growth opportunities (Natalia Cheverri 2012).

Coca Cola is an international organization which is operating in more than 400 countries. It deals in the beverage industry and is leading the industry for years. Coca Cola is a competing brand, which has made its place in the market competing against several brands. Coca Cola is considered as the leading brand and is ranked as number 1 international brand, according to the ranking of 2011. Coca Cola deal in the beverage industry and provides people with several products. It is a well-known name and people all around the world knows about it. Headquarters of Coca Cola is in Atlanta, and the company has been operating for more than 126 years (Wise and Baumgartner, 1999). In 1886, the company was formed and since then it has been serving millions of people around the globe. Coca Cola is the lead brand of Coca Cola Company, which is the greatest reason of its recognition. Despite many competitors like Pepsi Co, the company has been able to maintain its position in the

“For a 125 years, we have been refreshing the world.”(Coca-Cola) These words explain the long relationship that the Coca-Cola Company has had with the consumers. The Coca-Cola Company was founded in downtown Atlanta, Georgia in 1886. (Coca-Cola) Today Coca-Cola is one of the most recognizable fountain drinks in the world. Expansion of advertising techniques, and modern technology have allowed this company to rise above the rest. One ad that is particularly oriented towards the global community is an ad that reaches out to not only Americans but also to the world. This ad attempts to sell to a wide variety of people engaged in every aspect of life. Coca-Cola has expanded to come one of the leading soda companies in the world, they make

Starbucks is a major reason why things have changed for Coca-Cola and Pepsi Co, they have emerged in the market with balancing their menu with gourmet, coffee beverages that offer sweet and sugary options for their customers. In 2016, the soft drink industry is in the middle of the growing policy debate in the United States regarding taxation of sugar-sweetened beverages. Therefore, it hasn’t been a great year for Coca-Cola, Pepsi Co, and Dr. Pepper Snapple due to the public’s concern on the health issues of sugary sodas. The health problems with the sugar content in soft drinks have increased political pressures, as well as slowed the growth of these giant beverage companies.

Porter 's Five Forces model (PFF) is a powerful instrument that can be utilized by companies to investigate its situation and identify its industry 's competitors. Analyzing industry will help any business in determining the competitive strength and weaknesses. By using PFF model, investors can gain valuable information regarding what the actual factors that affect the organization 's profitability (Evans & Neu 2008). This paper will analyze the Cola Wars case study based on the PFF model, and the primary components of soft drink industry. At the end of this paper, some recommendations will be given to Coca-Cola company to enhance its position in the market.

Pepsi is a non alcoholic beverage and has to follow regulated by FDA with stability

General trend goes away from high-calorie beverages and towards healthier and low-calorie beverages Increased demand of bottled water, ready to drink tea and energy drinks Sales of bottled water increased from 4.6bn to 8.8bn in 8 years SoBe Energy drinks only with negligible share in energy drink market Lipton RTD tea increase by 15% between 2006 and

Coca-Cola is one of the non-alcoholic beverage companies that is publicly listed on the New York Stock Exchange. In the 1920’s the company started branching out internationally in the Caribbean and Canadian markets. They also started venturing to Asia, Europe, South America and the Soviet Union. Coca-Cola products are mostly everywhere in the world. During its expansion, Coca-Cola ran into some problems in India. The Indian NGO Centre for Science and Environment reported in 2003 the sample of beverages contains high levels of pesticides which exceeds European Standards. The government was notified regarding this matter and was rectified.

In this Coca Cola case study analysis I will answer five major questions which are to identify the most important facts surrounding the case, key issues, specify alternatives courses of action, evaluate each course, and recommend the best course of action.