Coca Cola Porter S Five Forces Analysis and Diverse Value Chain Activities in Different Areas PDF
Coca Cola Porter S Five Forces Analysis and Diverse Value Chain Activities in Different Areas PDF
Coca Cola Porter S Five Forces Analysis and Diverse Value Chain Activities in Different Areas PDF
Spring 2011
Introduction
Coca-Cola Company is the world's largest nonalcoholic beverage
company.
Coca-Cola has more than 400 brands are nearly 2,400 beverage
products. Four of the world's top-five soft-drink brands are : Coca-
Cola, Diet Coke, Sprite and Fanta. Thums Up and Limca, which
are formulated to appeal to local cultures and lifestyles.
With operations in more than 200 countries, we have a diverse
workforce of approximately 55,000 Company employees.
Coca Cola family of beverages accounts for approximately 1.3 billion
servings worldwide of the 50 billion beverage servings consumed
every day-a figure that indicates both strength and growth opportunity
of the company.
SOME BRANDS OF COCA COLA
PRODUCTS DESCRIPTION
The Rejuvenation division offers a range of drinks designed to
improve how people feel physically and mentally. Products include
ready-to-drink coffees, teas and herbal beverages.
WEAKNESSES
Carbonates Market is in Decline
Over-complexity of relationship with bottlers in North America
The existing distribution system is not so efficient for non carbonates
OPPURTUNITIES
Expansion Reaching all segments
Catering to Health Consciousness of People
Soft drinks volumes in the Asia- Pacific region forecast to increase by
over 45%
Use distribution strengths in Eastern Europe and Latin America
Increased Consumer Concerns with Regard to Drinking Water
THREATS
Health Drinks Fruit Juice Companies
Competition-Pepsi
Boycott in the Middle East
Porters 5 forces model
Suppliers
New entrants
Substitutes
Buyers
Infrastructure
Support Activities
Financial
Human Resources
Management
Primary Activities
Sales
Inbound Outbound
Process & Aftercare
logistics Logistics
Marketing
Source: Porter,1985
Coca-Cola Value Chain
The purpose of Coca-Cola 's value chain is divided into four areas
namely shareholder, consumer, business operation and key processes.
10. Service/Dealer Support: Within each region are different dealers that
orders through three primary categories: bulk, side load and full service.
Coca-Cola system ensures that dealerships are assisted upon. So the
company opened their distribution system and embraced the DSD system
or the direct-to-store concept. The movement is from wholesalers
channels into Direct-store-delivery DSD channels.
Coca-Cola Retailing Research Councils Impact on
Innovation and Products
Research Councils conduct different studies on issues that could possible assist
retailers to respond to the ever-changing marketplace. According to the company,
the unique value of these activities is vested on the fact that retailers define the
objective, the scope of each project and own the process after it was released and
disseminated to the broader retail community .
There are five council members: Asia, Europe, Latin and North America and
National Association of Convenience Stores (NACS). Such councils are cashing
in on research to innovations of product portfolio by means of introducing new
concepts and ideas about merchandising and store formats as well as idea
generation for connecting store performance and the actions of store management
teams as examples of retail innovations.
1. Inventory levels are down: Each of the facilities and components such as the concentrate
manufacturing facilities and canning plant that received Class A rates obtained significant
progress in inventory turnover, with specific facilities that accomplished the number of
weeks of inventory on hand declined between 50 to 75%.
2. Improved productivity Level of quality targets within these facilities, whether for
products, bottles or cans, coupled with high responsiveness to production experienced
productivity gain of 85% to 100%.
5. Improved business processes: For different processes like purchasing and customer
order processing, there had been a large reduction in cycle times.
6. High data integrity Inside different Coke facilities, inventory record accuracy and bill of
material accuracy is reported to be 99-100% and 100%, respectively.
7. Decline in cost of goods: The reductions, as high as 20%, in each facility annually is
viewed to be a significant improvement.
8. High team spirit: Communications within and between marketing, finance, quality
assurance and manufacturing are improved with respect to the global teams.
The focus of the company is on holistic improvement instead of systems replacement that
centers on the development of the business operation in different levels but most
significantly on the retailing. Implementations are the key towards proactive
functionality within manageable and actionable initiatives. Coca-Cola 's plan is one
facility at a time with decision-making that is based on anticipated benefits.
Coca-Cola Creation of the Absolute Effective Position
1. Coca-Cola continued to deliver unit case volume growth. Been ranking 4 of the
top 5 nonalcoholic sparkling beverage brands are owned by the Coca-Cola.
2. Brand-wise, the original Coca-Cola is still the best known brand globally Evidently,
the beverage leadership position is delivered by how consumers can more around
the Coke portfolio depending on their needs at different stages of their lives.
3. Financially, the Coca-Cola Company reported in February 2007 that profit jumped
of about 18% with net income nearly $6B - $5.98 billion on $28.9 billion in
revenue. Further, Coca-Cola and its bottling partners delivered unit case volume
growth of 6% for the year 2007 and four consecutive quarters of double-digit
earnings per share growth. Worldwide, the sparkling beverage volume increased by
4% and the still beverages by 12%.
4. In terms of systemic integration, adding value with its bottling partners, there had
been the existence of collaboration, support and shared values and goals and
through its customers, Coke brands were made possible for the consumption in local
communities. Driven by the Coca-Cola system, the company is now no. 1 in sales of
sparkling beverages, juices and juice drinks, no. 2 in sales of sports drinks and no. 3
in sales of bottled water.
Conclusion
At Coke, the creation of the absolute effective position is central on investing
on Coca-Cola Retailing Research Councils. Along with its four key processes,
Coke creates value through proactively engaging their retailers at technically
every levels of the value chain from raw materials down to end-products.
Conforming to holistic improvements, Coke strategically put value to store
management, providing consumers with the right to choose while also
enjoying the health benefits of its brands.
More than complying to standards and acquiring first rates, Coke aimed at
enhancing the shopping experience and enjoyment of refreshments which are
reflected in the figures they accumulate coupled with ethical operation.