Marketing Management

This report discusses the current market effectiveness of Coca Cola in their global business operations. It analyzes external and internal factors, identifies issues, and recommends strategic options based on SAF model.

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Marketing management
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Executive summary
The aim of this report is to discuss about the current market effectiveness of Coca Cola in their
global business operations. In doing so, different external and internal factors relevant in their
business are being discussed. In addition, a few issues are also being discussed. Based on these
issues, a few recommended steps are also being discussed. These recommended steps are further
evaluated on the basis of SAF model and a few winning strategies are identified. It is expected
that implementation of these winning strategies will help Coca Cola in having favorable business
viability in the long term.

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Table of Contents
1.0 Introduction................................................................................................................................3
1.1 Company background............................................................................................................3
1.2 Industry background..............................................................................................................4
2.0 Strategic analysis.......................................................................................................................4
2.1 VRIO analysis........................................................................................................................4
2.2 External analysis....................................................................................................................5
2.2.1 PESTEL analysis............................................................................................................5
2.2.2 Five forces analysis.........................................................................................................8
2.3 SWOT-TOWS matrix..............................................................................................................10
2.3.1 Current strategic position..................................................................................................12
3.0 Strategic options......................................................................................................................12
4.0 Conclusion and selection of winning strategies.......................................................................14
Reference.......................................................................................................................................15

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1.0 Introduction
The current business scenario is much more competitive for the contemporary business
organizations due to the presence of good number of competitors. Thus, it is also important for
the business organizations to have effective mechanism for determination of the external and
internal factors along with having effective marketing strategies. Effectiveness of these activities
will help the business organizations in staying ahead in the competition and gaining competitive
advantages (Schmidt, Spann and Zeithammer 2014). However, on the other hand, it should also
be noted that the strategic intent of the organizations should be in line to the changing business
factors due to the fact that effective alignment between the two will ensure that the business
organizations are having maximum effectiveness from their approaches (Tedlow 2014).
This report will discuss about the major internal and external factors for Coca Cola in
their global business operations. In addition, the major issues being faced by them in this
business will also be identified in this report. Based on the issues identified, a few strategic
options will be recommended for Coca Cola on the basis of SAF model.
1.1 Company background
These factors are more relevant in the sectors, which are highly competitive in nature
such as global beverage market. This sector is having the presence of number of global and local
brands operating in most price sensitive market. Coca Cola is the leading brand in terms of
global coverage and revenue in the beverage sector and is well established against the
competition. However, competitors such as PepsiCo and other brands are increasingly affecting
their sales potentiality, which are further creating the urgency of having effective strategic intent
in place (Barkay 2013). It should be noted that Coca Cola is the oldest player in this sector and

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thus having the maximum experience about the key market trends and patterns. Moreover,
extensive global presence of Coca Cola is also causing larger barriers in aligning with diverse
environmental factors.
1.2 Industry background
Global soft drink industry is having positive outlook in the near future and it is projected
that this industry will grow at the rate of 5.70 percent till 2023. Thus, Coca Cola is having
positive business potentiality in the long term. Moreover, with the rapid increase in population
across the world, customer base for them is also increasing (Amienyo et al. 2013). However, on
the other hand, there are number of issues also being faced by Coca Cola in this business such as
the change in taste and preference pattern of the customers. With the increase in the customer
consciousness regarding the ill impacts of the carbonated soft drinks, preference for the
customers is getting reduced. Thus, Coca Cola is facing the challenge in retaining their existing
customer base. Furthermore, this industry is also facing the challenges of emergence of better
substitutes in the same price points in the market such as fruit and dairy based drinks.
2.0 Strategic analysis
2.1 VRIO analysis
Valuable Some of the valuable resources for Coca Cola are financial
resources, brand value, access to strategic resources and supply
chain management. Coca Cola being one of the largest
multinationals in the world is having access to huge financial
resources (Haroon, Waseem and Mahmood 2013). This is further
helping in investment. Brand identity of Coca Cola is proving

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valuable in pushing the sales of their new products. Strategic
resources such as the ingredients are helping them to maintain their
unique taste in their products. Supply chain process of Coca Cola is
effective and extensive in gaining deep penetration in the global
market.
Rarity Strategic resources of Coca Cola are rare and are not being accessed
by their competitors. However, other resources such as brand value
and financial resources are not rare for Coca Cola.
Inimitability Branding and brand elements of Coca Cola are inimitable due to the
reason that Coca Cola is known for their brand elements including
colors, logo and font styles (Knott 2015). The strategic resources of
them cannot also be imitated by their competitors.
Organizational capability Extensive distribution strategy of Coca Cola is the proof of
organizational capability. In addition, they are having different
manufacturing and bottling plants (Pepsic, Milic and Stankovic
2013). Thus, Coca Cola is capable enough in terms of their
organizational capability.
2.2 External analysis
2.2.1 PESTEL analysis
Political factors  Coca Cola is operating in different countries across the world
and thus they are facing diverse political scenarios.

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 Diplomatic relationships between the countries are also affecting
the international business of Coca Cola in terms of their
investments (Ho 2014).
 Differences in the political ideologies in different countries are
also affecting their business due to the reason that some of the
political approaches are not business friendly.
Economical factors  Growth in the average global economy is posing positive
impacts for Coca Cola in their business. This is due to the reason
that the more will be the economical growth, the more will be
the business potentiality.
 On the other hand, increase in the competition is causing
challenges for Coca Cola due to the fact that profitability is
getting affected (Kolios and Read 2013).
 Emergence of economic downturn and recession like in 2008
will further reduce the business of Coca Cola. Emergence of
these situations will reduce the purchasing power of the
customers.
Social factors  Rapid changes in the taste and preference pattern of the
customers are one of the major social challenges for Coca Cola.
 Negative word of mouth due to selling carbonated drinks is also
affecting the potentiality of Coca Cola.
 However diverse product portfolio of Coca Cola is helping in
meeting the different taste pattern of the customers across the

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world. In the recent time, Coca Cola has introduced different
products and flavors including drinking water brands and fruit
juice. Hence, the social area coverage for them is more and
expanded.
Technological factors  Coca Cola being the leading name in the global beverage
industry is also leading in terms of technological development.
They have already introduced automated bottling process.
 This is helping them in gaining economies of scale over their
competitors and increased efficiency in production.
 However, it should also be noted that rapid development in the
technological field is posing challenges for Coca Cola. This is
due to the reason that added cost will be incurred for further
developing newer technologies.
Environmental factors  Coca Cola was accused in past for depletion of ground water
level in different locations and thus environmental factors are
relevant for them.
 It is important for them to align with different environmental and
sustainable factors to have the long term lower impact of
business.
 It is also important for them to meet the different legal
obligations in maintaining their business sustainability.
Legal factors  There are number of legal factors to be faced by Coca Cola. This
is due to the reason that different countries are having different

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sets of legal obligations for the business.
 It is important for Coca Cola to adhere to the investment related
legislations in different countries to have their expanded
presence.
 Different countries have already implemented taxes for the fast
and soft drinks. Thus, the product quality for Coca Cola should
be improved to adhere to these standards.
2.2.2 Five forces analysis
Bargaining power of the
buyers
 Coca Cola is having higher degree of bargaining power
of buyers. This is due to the reason that customers are
having different options available for them to choose
from (Dobbs 2014).
 Price level is same and thus customers can bargain the
end product price by marketing forces.
 Switching cost is also low for the customers.
Bargaining power of
suppliers
 Bargaining power of suppliers is low for Coca Cola due
to the less dependence on external partners.
 Coca Cola is having effective backward as well as
forward integration and thus external partners are having
limited approach (Porter and heppelmann 2014).
 Brand value for Coca Cola is much higher than that of
the suppliers and thus the suppliers are more dependent

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on Coca Cola.
Threat of substitutes  Threat of substitute is more due to the presence of
number of competitors.
 All the competing products are having same value
proposition and operating in the same price level.
 Thus, the customer loyalty for Coca Cola is lower and
fluctuating.
Threat of new entrants  Threat of new entrants is moderate. This is due to the
reason that number of local brands are operating in
national level.
 These local brands cannot match the level of Coca Cola
in terms of brand value and market coverage.
 However, Coca Cola is facing competition from them in
different local regions across the world.
Competitive rivalry  Competitive rivalry is high in this sector with the
presence of number of brands trying to have the market
leadership in the saturated market.
 Price war is common to attract the majority of the
customer bases.
 Aggressive marketing activities are also being initiated
by the competing firms to stay ahead in the industry.
2.3 SWOT-TOWS matrix
Strengths  Brand value for Coca Cola is one of their biggest strengths and helps

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them in covering larger market area.
 Diversified product portfolio is helping Coca Cola in catering to different
customer bases and thus the revenue generation is more (Srivastava,
Franklin and Martinette 2013).
 Huge global market coverage is helping Coca Cola in generating revenue
from maximum area possible. This along with the higher penetration
level is also enabling them in having extended target bases.
Weaknesses  Negative publicity for Coca Cola is creating hurdles for catering to new
customers.
 They are having lower market presence in alternative segments other than
the carbonated soft drinks (Shelley, Ogedegbe and Elbel 2014).
 A number of lawsuits being faced by Coca Cola in terms of unethical
business practices. This is causing issues in operating in different
locations.
Opportunitie
s
 Entering in alternative segments such as fruits juice and dairy based
products will help Coca Cola to have larger target segments along with
new customers.
 Offering premium products under different sub brands will also be
beneficial in targeting different target segments (Burgos-Campero and
Vargas-Hernandez 2013).
 Investing more in the developing markets will be viable due to the fact
that developing countries are growing at faster pace compared to the
developed economies. Thus, the market opportunities will be more for

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Coca Cola.
Threats  Emergence of economic recession will pose issues for Coca Cola in
generating revenues from their existing sets of customers.
 Coca Cola is also facing the challenge from the side of legal authorities.
This is due to the reason that number of stringent regulations is being
introduced by different authorities.
 Introduction of cheaper and healthier alternatives in the market will pose
threat in the existing business of Coca Cola.
Strength –
weaknesses
 Positive and highly penetrated brand value of Coca Cola should
be used in mitigating the negative word of mouth. This is due to
the fact that brand value for Coca Cola should be used in having
more ethical and sustainable products that will create positive
image in the market. In addition, the existing market presence of
Coca Cola can be used in pushing alternative products in the
markets much like PepsiCo.
Opportunity – threat  Coca Cola should offer alternative and premium products under
the different sub-brands to mitigate the challenge of healthier
alternatives. This will help Coca Cola to have more market share
in different segments. Investing more in the developing nations
will help in mitigating the holistic impact of the economic
recession. This is due to the reason that favorable economic
position in the developing market can help to absorb a major

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challenge of recession to an extent.
2.3.1 Current strategic position
Thus, it can be concluded that Coca Cola is having favorable strategic position in the
market. This is due to the reason that Coca Cola is having extensive market coverage and
branding in the global scenario. This is helping them in catering to maximum number of
customers across the world. On the other hand, it is also helping them in positioning their
products as a truly global product. This is helping in gaining competitive advantages over their
local competitors. Moreover, products of Coca Cola are also being positioned as mass market to
have the larger market penetration.
3.0 Strategic options
Suitable Acceptability Feasibility Accept/reject
Coca Cola should
initiate diversification
strategy in order to
have larger market
share and target
segments. This will be
suitable due to the
reason that Coca Cola
is having the need for
maintaining their
They should invest
capital in having
separate entities for
newer business
segments. This will
only help in
preventing dilution of
the new business with
that of the existing
business of Coca
Will incur huge
capital for Coca Cola
and chances of
success is also
uncertain. Moreover,
recruitment process
should also be done in
separate manner for
the new entities along
with different
Accept

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global brand position. Cola. marketing activities.
Coca Cola should also
initiate market focus
strategy due to the
reason that this will
help in effectively
determining the
requirement and
expectations of the
target customers. This
will be suitable for
Coca Cola because
their products can be
more market oriented.
The recommended
products should be
premium over their
existing mass market
products of Coca
Cola. This will not be
effective for the
market focus strategy.
Premium products
will be targeted for
niche segment.
Cost in new product
development process
according to the
market trend will
involve added
investment. However,
the chances of
acceptances will be
more provided that
the products will be in
accordance to market
trends.
Accept
Product development
can also be initiated
by Coca Cola to have
larger variants of their
existing products in
terms of flavors, types
and price. This will
help in having further
market penetration
This should be done
in accordance to the
changing market
trends. In addition,
brand extension
should be focused
more to have larger
variants.
Investment is
important in
developing the
existing products in
accordance to the
changing market
trends.
Accept

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and increased level of
acceptances for their
existing products in
the global market.
4.0 Conclusion and selection of winning strategies
Thus it can be concluded that Coca Cola is having a number of potential strategies that
can be beneficial in enhancing their business viability. In this report, external and internal
analysis is being done to have the fair understanding about the major issues being faced by Coca
Cola. In accordance to these issues, a few strategies are being discussed in this report. It is
recommended that diversification will be one of the major wining strategies for Coca Cola. This
is due to the reason that catering to diverse customer segments is important for survival in the
current business scenario. Coca Cola with the help of diversification strategy will be able to have
larger target segments. On the other hand, it is also recommended that product development can
also be beneficial for Coca Cola in the long term by having more product variants.

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Reference
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