Words: 3365
In 1887, another Atlanta pharmacist and businessman, As Candler purchase Coca Cola formula from John Pembroke for $2,300. N 1890 the efforts of Candler’s made Coca Cola the most popular fountain drinks in America. Joseph Beheading was the first person, who installed bottling machinery and put Coca-Cola in bottles. Later on Benjamin Thomas, Joseph Whitehead and John Lepton developed worldwide bottling system. From 1 886 the company currently sells in more than 200 countries. The coca cola company first started with Coupons to promote Coca-Cola.
In 1890 Hilled Clark becomes the first celebrity to appear in multiple advertising. The first advertising for Coca-Cola appears in national magazine. The annual advertising budget for The Coca-Cola Company surpasses $1 million for the first time in 1911. Advertisement is must for every brand and company. Coca Cola is best for advertising from its beginning to till now. Company is using ups of marketing mix (price, product, place and promotion), so that a good quality can be provided to the consumers at a reasonable price to attract the consumers towards their brands.
In 1921 the first slogan of Coca Cola Company was “Thirst Knows No Season”. With the passes of time slogan are also changed. Latest slogan of coca cola is open happiness. Coca-Cola entered in Australia, Austria, Norway and South Africa in 1938. Now Coca-Cola Company is the world’s largest drinks company, controlling more than 200 countries. Coca Cola Company has owns the world’s five best-selling soft drinks. Its principal brand is of course Coca-Cola itself, the world’s best-known and most valuable brand.
But the company also sells almost 500 other beverage brands ranging from variants like Diet Coke, Fan and Sprite to a huge range of carbonated and non-carbonated juice-based drinks, bottled waters, iced teas and coffees. Competition authorities now watch the company’s every move, effectively ruling out the acquisition of anything other than marginal products; and market saturation and economic downturns in both emerging and mature markets caused sales growth to stall for more than a decade.
Since 2006, though, the company’s performance has begun to fizz once again, mainly through aggressive development of non-cola products, including bottled water. Coca Company always comes forward for charity. They started coca cola foundation in 1984. It start as a local foundation within few years its spread around the globe. Water, women and well being are priority areas of coca cola foundation. The first servings of Coca-Cola were sold for 5 cents per glass. During the first year, sales averaged a modest nine servings per day in Atlanta.
Today, daily servings of Coca-Cola beverages are estimated at 1. 9 billion globally. Environmental Analysis Business Environment is the combination of all factors, which effects the operation of the business. These factors can be classified in two parts Internal and external. The factors, which are present in the business and usually controllable to the management, are known as internal factors and which are exist outside the company and beyond its control are external factors. External factors can also be subdivided into two parts: Micro and macro.
Macro factors are those, which are common for the industry. It affects the industry as a whole not only to a single company and micro factor’s effect is limited to a single company and varies company to company. Internal Factors The internal factors are Leadership, objectives of business, production Capacity and method of production, Human Resources, organization structure etc. All above factors influence the business at a greater extent but because they are under the control of management, these are overlooked while considering the cuisines environment. External Factors (m. Sissies. Org) Macro Factors Micro factors Legal Consumer Environmental Suppliers Political Competitors Social Intermediaries Economic Technology Legal Factor: Every country has a set of laws for all industries, which are must be abide by the company to run its operation in the territory of that country. These laws may include vat, corporation taxes, consumer law, antitrust law, employment law and health and safety law. It put great impact on the cost, production and demand of the product of the company. As coca cola is operating relied, so it is top most concern for the company.
Coca Cola Company had a bad experience of this factor, company was sued for racial discrimination allegations in April 1999. The case was that company was paying less to the black workers then white ones. Black workers not complaint due to fear of lose their jobs. This news spread like a fire on the Internet and shocked the people. Its sales were adversely affected and some countries eves banned its product. Company lost its image due to this discrimination. Environmental: Environment issues are very important for a business in short and in long term as well. With he increase of operation level the new issues also comes into light.
The most important from it is use of pesticides. In India the Coca Cola’s product contained toxins such as EDT, linden, immolation and chloroforms- pesticides which may be responsible to cancer and weaken down the immune system. This issue affects the sale at the greater extent. People decide not to buy the product of the company. Company experienced serious decline in sales in the 2003. Coca Cola making a Seven-point list of goals with the World Wide fund for nature to be achieved by 2020. In this plan company trying to make the bottles, cans ND cardboard more recyclable.
It put a positive impact on the environment and on the company image too. Political: It includes the political system of any country and political relation with other countries. Business can grow more in a politically stable country, which has good political relations with other countries too. This factor affects the sale during the war against Iraq by I-SIS. The company is known as American company so sale of its product decreased in Middle East and Muslim countries. To show the respect and support to Iraq people stop to buy the product of the company.
Social: It includes the education level, life style and standard of living of the people of a country. The more aware people are more demanding and conscious about their health. The social factor, which influences the sale of the company, is awareness in the consumer. Now a day’s more and more people are choosing healthier life styles due to that they prefer non-alcoholic drinking products. Therefore they prefer a water bottle instead of can of coke. It decreases the demand for the products of the company. Economic: It is the economic condition of the country like boom, recession, and growing inflation problem.
Taking this into view companies plan its affair for future and operates in present. Economic recession is a major determinate of sale of any product. Consumer behavior changed during recession period. They cut back their spending due to less money. At present Europe is facing economic recession, so the sale of the products is reduced in the Europe but as the company is dealing worldwide this reduction in sale is compensate from the other countries of the world. So this factor does not have much impact on the sale of the Coca Cola Company. Technological Factors: It is how a company does work.
With the invention of new machinery, computer etc. The working of company will also changed accordingly. Company must be identified which technology is best and in what way. The new technology development like use of electronic media, internet for advertisement is very useful. With the use of the technology company make its product more attractive which helps in increasing the sales. It proves very effective for the company. Another use is to recycle the cans and plastic bottles, which enhance the green company image of the company and contribute in the increase of sale.
Micro Factors Customer Customer is at most important foe any business. According to peter F Trucker,” there is only one valid definition of business purpose that is to create Main motive of every business is to earn the profit by serving the demand of customer. Now a days every company wants to reach the customer at a mass level this is the reason that customer becomes a most important factor in micromanagement. The more satisfaction level of a customer more demand for products and services. Companies always try to target the various groups and legion for more demand.
Coca cola is managing its customer very well. Company set up a customer care department to hear from customers, who provide the solution to the customer problems and records their valuable suggestions for the future planning of the company Supplier Supplier is also an another main determinate for the product and services of a company. According to Michael Porter, “the relationship between suppliers and the firm epitomizes a power equation between them. This equation is based on the industry conditions and the extent to which each of them is dependent on the other. Suppliers can be individuals or business houses. Choose of good applier is very important who can provide the best mix of quality, delivery, credit, warranties and obviously all these at the low cost. Lower the supply cost better the product quality at low cost. Suppliers are very vital for Coca Cola, they help the company to refresh the world more than 1. 7 billion times every day. Company buys ingredients, packaging and machinery, as well as good and services. Company has a Supplier Diversity Program. Through this company provide coaching, guidance and training to do their in a better way.
Only one supplier increased the business with the company by 212% within a year of implementing the mentoring program. (Coca-collocation. Com) Competitors The time of monopoly is gone. Today’s world is very competitive. If a company wants to survive in current scenario it must be competitive with its rivals. There is a cutthroat completion is the market. Whole world is become a global village with the use of Internet. Philips Kettle is of the opinion that the best way for a company to grasp the full range of its completion is to take the viewpoint of the buyer.
What does a buyer think about that which is eventually leads to purchasing something? So it is very important to know what consumer actually ants. Coca cola captured the major portion of the market of non-alcoholic beverage. Company is always trying to increase it with new promotional schemes and vast range of products. Company always conducts the surveys to collect the knowledge of the customer needs and what the competitors are doing. It is not easy for a company to reach each and every customer directly. To overcome this companies take the help of market intermediaries. Intermediaries are a key factor for the sale of product and services.
These may be individual or business houses for example wholesaler, retailers and agents. The company has o consider the review of the performance of the intermediaries, take their help to overcome the discrepancies, to find most effective method of intermediaries to reach the ultimate customer. Coca Cola have a lot of intermediaries. To keep track of all these intermediaries and provide solution to their problems is not a easy task. To solve this company provide a web site to help them. On this web there is everything for intermediaries like solution of problems, training tips for staff, new products and ideas and many more.
By this company manage this important factor very well. SOOT ANALYSIS Strength . One of the most valuable company in the world, valued around 79. 2 billion dollars. 2. Operating in 200 countries in the world. 3. Company has a largest market share. 4. Very big distribution network. 5. Brand loyalty. 6. Good marketing techniques. Weakness 1 . Dependent mostly on Non- Alcoholic beverage only. 2. Produce carbonated beverage, responsible for fat 3 Pepsi comes as a good competitor. 4. Debt level is very high due to acquisition. Opportunity 1. More growth with acquisition. 2.
More scope for bottled water. 3. More demand for beverage products. Threat 1. Increased price of dollar. 2. Legal binding to disclose even the negative aspects of the products. 3. Consumer awareness. 4. Falling down gross and net profit margin. M. Porter’s Diamond Theory M. Porter’s Diamond is the best practice to determine the competitive structure of an industry and its important component of identifying factors that are threats for the profit of a company. Porter (1980, 1985) has highlighted five such factors: 1. Rivalry between existing competitors 2. Threat of entry by new competitors 3.
Price pressure from substitute or complementary products 4. Bargaining power of buyers 5. Bargaining power of supplies All of these factors affect the performance of a company, a schematic diagram below represent the relation among all these factors: 1 . Rivalry between existing competitors (High Pressure): Currently, the main competitor is Pepsi, which also has a wide range of beverage products under its brand. Both Coca-Cola and Pepsi are the predominant carbonated beverages and committed heavily to sponsoring outdoor events and activities. There are other soda brands in the market that become popular, like Dry.
Pepper, because of their unique flavors. These other brands have failed to reach the success that Pepsi or Coke has enjoyed. . Threat of entry by new competitors (Medium Pressure): Entry barriers are relatively low for the beverage industry: there is no consumer switching cost and zero capital requirements. There is an increasing amount of new brands appearing in the market with similar prices than Coke products. Coca-Cola is seen not only as a beverage but also as a brand. It has held a very significant market share for a long time and loyal customers are not very likely to try a new brand. . Price pressure from substitute or complementary products: There are many kinds of energy drink s/soda/juice products in the market. Coca-Cola doesn’t really have an entirely unique flavor. In a blind taste test, people can’t tell the difference between Coca-Cola and Pepsi. 4. Bargaining power of buyers (Low Pressure): The individual buyer no pressure on Coca-Cola. Large retailers, like Wall-Mart, have bargaining power because of the large order quantity, but the bargaining power is lessened because of the end consumer brand loyalty. 5.
Bargaining power of supplies (Low Pressure): The main ingredients for soft drink include carbonated water, phosphoric acid, sweetener, and caffeine. The suppliers are not concentrated or differentiated. Coca-Cola is likely a large, or the largest customer of any of these suppliers. Anions model Market Penetration: Selling more of an existing product to an existing market. It is going deeper into a market, such as, coke and diet coke. Coca Cola in UK is doing market penetration through the selling its products to the business buyers and retailers who are huge multinational organizations like Tests, Sad, McDonald’s, Subway, KEF and many more.
Market Development: Selling an existing product in a new market, for example, taking out various bottle sizes to attract different buyers. It is called market development. Many flavors of Coca Cola are not being sold in every shop, retailer market and other business buyers. Coca Cola can develop a new market if they introduce those flavors in their market. Product Development: Selling a new product to an existing market. It is called product development, such as, creating changes to a product, for example, a new flavor like Coca Cola Vanilla.
Coca Cola Company can do product development by introducing the new flavors in UK which are not sold anywhere in the World by the Coca Cola company. Diversification: Selling a new product to a new market. This is called diversification. Coca Cola recognized the deed for a new sports drink and introduced Powered. Coca Cola can produce new products, which are not manufactured by it before. Coca Cola is only dealing in beverages but it can also produce its own snacks item as the Pepsi is manufacturing “Lays” which are eaten with the beverages.
Product Life Cycle Product life-cycle like human beings, products also have an age. From birth to death, human beings pass through various stages e. G. Birth, growth, maturity, decline and death. A similar life-cycle is seen in the case of products. The product life cycle goes through multiple phases, involves many professional disciplines, ND requires many skills, tools and processes. Product life cycle is defined is 4 stages mainly the introduction stage, growth stage, maturity stage and the decline stage. These stages are devised in such a way that it defines where the product stands and where it would go.
Coca Cola identified as in the stage of growth because of its large group of loyal customers. Product life cycle (PAL) has to do with the life of a product in the market with respect to business/ commercial costs and sales measures. To say that a product has a life cycle is to assert three things that a product have a limited life, product sales pass through extinct stages, each posing different challenges, opportunities, and problems to the seller and a product require different marketing, financing, manufacturing, purchasing, and human resource strategies in each life cycle stage.
Product life cycle of Coca-Cola Coca-Cola is currently in the maturity stage, which is evidenced primarily by the fact that they have a large, loyal group of stable customers. Cost management, product differentiation and marketing have become more important as growth slows and market share becomes the key determinant of profitability. In foreign markets the PAL is in more of a growth trend, Coca-Cola’s advantage in hose areas is mainly due to its establishment strong branding and it is now able to use this area of stable profitability to subsidize the domestic campaigns.
First is the INTRODUCTION stage, in this stage costs are very high, slow sales volumes to start and very little or no competition so the demand has to be created. Customer’s started to try the product launched by Coca-Cola. And company makes no money at this stage. In The Growth stage of the Coca-Cola products costs are reduced to economical scale so that the sales volume can increase significantly and maximum profit can be gained in this stage. Also public wariness increases with the competition with a other soft drink companies like Pepsi etc.
Third is the MATURITY stage, in this cost is lowered as a result of production volumes increasing and experience curve effects and sales volume peaks and market saturation is reached. The main point of maturity stage of Coca-Cola products is that brand differentiation and feature diversification is emphasized to maintain or increase market share also prices tend to drop due to the proliferation of competing products by another companies. And last stage is the DECLINE stage, which signifies the costs, becomes counter-optimal and clines sales volume.
Also profit becomes more a challenge of production/ distribution efficiency than increased sales Summary Coca Cola is a big brand, which occupies large space in this competitive world. It has to be consistence to remain ahead of cutthroat competitors like Pepsico. Coca-Cola is a large company; they have different kinds of drinks, for example, Coca-Cola, Coca-Cola Zero, and Wilkins etc. , which are provided to meet the customer’s needs. In this assignment, it has evaluated the current competitive position of Coca-Cola, the products or the services and also the company’s product lifestyle.
As the company had already been in the market for a long time, they need to change their current operation so that it may be good for their new market opportunity. In order to have a new market opportunity, Coca-Cola needs to evaluate the market in order to know more about the current market. On the other hand, they also need to evaluate their competitors, to know more about their operation, their market place and their market environment. Coca-Cola needs to develop the new market opportunity, which can match with its current goals and business activities, fit within its current business practices and is in line tit its core business.