09-02-2013, 09:27 AM
Coca-Cola
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INTRODUCTION
Coca-Cola, the product that has given the world its best-known taste was born in Atlanta, Georgia, on May 8, 1886. Coca-Cola Company is the world’s leading manufacturer, marketer and distributor of non-alcoholic beverage concentrates and syrups, used to produce nearly 400 beverage brands. It sells beverage concentrates and syrups to bottling and canning operators, distributors, fountain retailers and fountain wholesalers. Coca-Cola was first introduced by John Syth Pemberton, a pharmacist, in the year 1886 in Atlanta, Georgia when he concocted caramel-colored syrup in a three legged brass kettle in his backyard. He first “distributed” the product by carrying it in a jug down the street to Jacob’s Pharmacy and customers bought the drink for five cents at the soda fountain. Carbonated water was teamed with the new syrup, whether by accident or otherwise, producing a drink that was proclaimed “delicious and refreshing”, a theme that continues to echo today wherever Coca-Cola is enjoyed. Coca-Cola originated as a soda fountain beverage in 1886 selling for five cents a glass. Early growth was impressive, but it was only when a strong bottling system developed that Coca-Cola became the world-famous brand it is today. Coca- Cola was the leading soft drink brand in India until 1977, when it left rather than reveal its formula to the Government and reduces its equity stake as required under the Foreign Regulation Act (FERA) which governed the operations of foreign companies in India. In the new liberalized and deregulated environment in 1993, Coca-Cola made its re-entry into India through its 100% owned subsidiary, HCCBPL, the Indian bottling arm of the Coca-Cola Company.
Internal and External Environment of Coca-Cola
Internal Business Environment
the internal business environment and its influence is that which is to some extent within the business’s control. The main attributes in the internal environment include efficiency in the production process, through management skills and effective communication channels. To effectively control and monitor the internal business environment, Coke must conduct continual appraisals of the business’s operations and readily act upon any factors, which cause inefficiencies in any phase of the production and consumer process. The internal environment of a corporation includes resources, capabilities and activities. Resources at Coca-Cola are abundant, especially intangible resources such as brand recognition, trade secrets (the recipe of Coca-Cola Classic is known by only a few people) and culture. Though there is fierce competition between Pepsi-Co and Coca-Cola, Coca-Cola has always been the leader in the soda market due to their strengths in these areas. In conducting a VRINE model (value, rarity, inimitability, non substitutability, and exploitability), one can see that Coca-Cola has an advantage over their competitors in many areas. Inimitability is a major contributor to Coca-Cola’s success, due to the fact that their product is well-loved and cannot be imitated exactly.
External Business Environment
The External business environment and its influences are usually powerful forces that can affect a whole industry and, in fact, a whole economy. Changes in the external environment will create opportunities or threats in the market place Coca cola must be aware off. Fluctuations in the economy, changing customer attitudes and values, and demographic patterns heavily influence the success of Coca Cola’s products on the market and the reception they receive from the consumers
the competition between Pepsi-Co and Coca-Cola as an illustration for exploring the external environment. The battle between these companies is long-standing, and though they are neck to neck in profits, it is more about “winning the hearts and minds” of the consumers. The textbook defines an industry as a “firm or groups that produce or sell the same or similar products to the same market.” This is certainly the case for Coca-Cola and Pepsi, who are competing in the soft drink market. These two companies could even be defined as a duopoly, where only two or a few large firms dominate the industry. In broader terms, Coca-Cola is competing with any company who serves beverages, including Starbucks, Lipton, all of the major beer companies, bottled water companies, when considering the five forces of industry structure, Coca-Cola has an enviably powerful position. The threat of new entrants to the soda industry is very low, since Coca-Cola and Pepsi-Co are so large and profitable that it would be nearly impossible to compete with either of them. Coca-Cola does not suffer from the power of the supplier-rather, it imposes a high level of power to the bottling companies that must sign contracts with them to bottle their products.