Case Study Coca Cola

1. Review the critical external and internal environmental factors that have strategic implications in the future for Coca Cola

Externa and internal factors play a crucial role in the future of any company. In our case, the Coca-Cola’s profitability and its overall performance is at stake. There are several external and internal factors, which cause implications and affect company’s position in the market.

Over the last few years industry experienced declining demand for carbonated sugary drinks. One of the causes is the current age structure, especially in the US, as the population over age of 65 started to increase rapidly, while fertility rates began to slow down by a lot. This is extremely important, taking into consideration that company’s

Global concerns, such as global warming, water shortage and overall sustainability bring alongside a new set of regulations, restrictions and additional budget requirements. Our current state of the economy dictates consumers purchasing power, most of whom opt out for cheaper, generic products, therefore pushing prices down and boosting rivalry.

Expansion of the technology trends hit the industry with another blow, consumers became “innovation-hungry”, constantly searching for new, cutting-edge products, which means a lot of investments in R&D for the industry players.

Our next step is to analyze industry environment by applying Porter’s five forces model. In my opinion, bargaining power of the suppliers is fairly weak. The Coca-Cola Co has a pretty good system in place, where it manufactures its own signature concentrate and then sells it to the bottling franchises, which are contracted for 10 year periods. Bargaining power of the buyers is somewhat escalated, since we are still in recession and its natural for consumers to go after the better deal. Potential Entrants create additional production capacity and may eventually generate overcapacity, which results in a forceful price lowering. The variety of the substitute products is one of the strongest forces, it affects brand loyalty and makes it a lot more difficult for the Coke to compete. Last but not least, is the rivalry among existing firms. The main peril for the Coca-Cola

Coke as a founder of the industry still holds the largest market share and sizable tangible and intangible resources. Lately Coca-Cola has been noted for its instability in the human capital, especially on the executive level. Even though the company has been fairly consistent, frequent changes in the decision-making workforce may plant unnecessary concerns across various levels of stakeholders. The company should bear in mind the consequences hefty employee cuts could bring along, main being damaged morale in the workplace and wracked brand loyalty, even if those cuts are supported by improvements in the efficiency and value chain. The Coca-Cola initiated “green policies” and made a lot of effort to transform the company into sustainable one. By minimizing environmental footprint, implementing water neutrality concept, reducing calorie count in the beverages and providing scholars programs, Coca-Cola began to slowly shift away its association with unhealthy type of business and therefore expanding its outreach. Hence, the Coca-Cola’s capabilities are the power of its brand name, strong financial position and high brand