Role and Significance of Competitive Environment of Coca Cola

This report discusses the role and significance of the competitive environment of Coca Cola using Porter's five force model. It explores the inbound logistics, operations, and outbound logistics of the organization. Additionally, it identifies key value adding activities and discusses the importance of marketing in adding value to Coca Cola's products.

Assignment
1

Table of Contents
INTRODUCTION ..........................................................................................................................4
MAIN BODY...................................................................................................................................4
INTRODUCTION OF COCA COLA.............................................................................................4
Competitive environment of business with help of Porter's five force. .....................................5
Inbound logistics, operations and outbound logistics.................................................................7
Two support activities in Porter's value chain. ...........................................................................8
Identify key value adding activities with justification. ..............................................................9
Understanding of Porter's five force analysis and Porter' value chain. ....................................10
Summarise and reflect the way business deploy information technology. ..............................10
CONCLUSION .............................................................................................................................11
REFERENCES..............................................................................................................................12
2

INTRODUCTION
Information technology refers to the development, maintenance and use of computer
software, systems and networks (Benckendorff, Xiang and Sheldon, 2019). For an organisation,
technological advancement play very much important role to survive successfully in the
competitive business environment. Respective report is based on Coca cola which is a
carbonated soft drink manufacturer under coca cola company. Respective report is based on role
and significance of competitive environment of organisation by using Porter's five force model.
It includes the inbound logistics, operations and outbound logistics of organisation. Further it
adds two supporting activities in Porter's value chain of Coca cola. Finally, it demonstrate the
understanding of Porter's five force analysis and Value chain analysis by reflecting the way
business can deploy information technology.
MAIN BODY
INTRODUCTION OF COCA COLA
Coca Cola is Carbonated soft drink producer who marketed in whole world as a
temperance drink and patent medicine (MAANI HESSARI, N.A.S.O.N. and et.al., 2019). It
produces the concentrate then it sold to licensed coca cola bottlers in whole world. It was
invented in 19th century by John Stith Pemberton by using marketing tactics to dominate market
throughout 20th century. In 1960 firstly they acquired Minute Maid that was primary step to pace
towards the totally a beverage organisation.
Background information about organisation:
Coca cola is very much passionate about delivering their drinks in 200+ countries by using 500+
brands to reach at large no. of consumers positively. They hire employees from the very diverse
communities as 7,00,000+ personnel across company and bottling partners. For them
environment matters a lot, by acting in such a way to create a most sustainable and better shared
future. Respective organisation contribute towards making sustainable and better future for
people communities and planet. Coca Cola deals in more than 500 brands in 4100+ varieties by
focusing on reduction of sugar drinks and providing products in small packages that is very
convenient for customers in consumption. To save the environment they focus on sustainable
packaging to reduce wastage as it proved harmful for environment. Respective organisation
aimed to make the global packaging 100% eco-friendly recycled till 2030 (The Coca Cola
3

Company, 2020). Coca Cola work for returning 100% water which used in making drinks as they
passionate about water balanced to improve safe drinking water in communities where it needed
most. Respective organisation are working with government on climate resilience programs to
assist the environment by reducing plastic consumption. With their action Coca cola determined
to reduce carbon footprints of “drink in your hand” by 25% by 2020. Their products are available
in very high quality and with cutting edge ingredients that are sourced as sustainable and ethical
in nature. Respective organisation on regular basis work on their business strategy to become the
most successful beverage company by giving more and more products. In Coca Cola's product
menu consist of low caloric and sugar free products in wide variety of packaging available
conveniently. In product portfolio of Coca cola includes consumer centric products as they shift
their focus from wants of consumers from what consumers actually wants. Coca Cola majorly
involved in more ethical production of products by stressing on become natural. With the help of
multifaceted approach to remain competitive in dynamic business world Coca Cola focusing on
reducing sugar and calories in their drink across their brands.
Goods and services:
The products and services of Coca Cola consist of beverages and syrups, finished
beverages which includes sparkling soft drinks, water and sports drinks, juices, dairy and plant
based drinks and tea with coffee (Bryant, 2019). The major brands work under it is sprite, Fanta,
Schweppes and Applestiser. In series of their products consist of organic tea, coconut water, grab
and go coffee as they provide large no. of choices in front of consumers. Respective organisation
invest most of their marketing dollars in creating awareness in regards of their products and
services in marketplace.
Competitive environment of business with help of Porter's five force.
Porter' five force model is very much important for an organisation to determine
competitive forces that affect an industry (Boeckl and et.al., 2019). In context of Coca Cola, to
acknowledge the competitive environment it is significant to evaluate five forces that are threat
of entry, bargaining power of suppliers, bargaining power of buyers, industry rivalry and threat
of substitute in order to build strategies and tactics.
Bargaining power of suppliers:
Respective force of competition is weak in context of Coca cola due to there are large no.
of suppliers are available in the marketplace and switching cost is low. Coca cola easily can
4

switch from one supplier to another but supplier can not easily switch to respective organisation.
Specifically, sugar is ingredient that widely used in production of soft drinks and prices varies
over time (Chen, Das and Ivanov, 2019). The poor harvesting of one season adversely impact
on Coca cola's raw material cost. Gratification to the contracts that have with organisation assist
in minimising adverse impacts unless poor harvesting.
Bargaining power of buyers/ customers:
The bargaining power of consumers/buyers in context of Coca cola is low, as consumers
buy their products in less quantity and not concentrated in specific market. There is low
differentiation in between the Pepsi and products of Coca cola as they offer same flavours. In
that regards switching cost is not high for consumers but both brands on their place enjoy brand
loyalty. They directly not deal with end user but supply by using distribution companies that are
direct fast food chains, vending machines, campus of collage and supermarkets. Hence demand
leads towards purchasing of products but they also conscious for end price. Ultimately they sell
their products through distribution channels at low price then they sell to end user at competitive
range.
Threat of new entrants:
Respective force determines about how easy for industry to enter in market. If industry is
enough profitable and less barriers to enter than rivalry soon intensifies (Domeij and et.al.,
2019). In context of beverage marketplace, there are so many factors which discourage the other
brands to enter into market so building brand identity overnight is impossible. To become
competitive local brands require huge investment and marketing and Human resource requires
the greatest investment. The loyalty of consumers in respective industry is moderate and local
dealers requires adequate time in building image in heart of consumers. So, when new entrants
come across into the market to compete with Coca Cola and Pepsi at small scale to build brand
image is such a big task for them that required both capital and skilled human resource.
Threat of substitute:
Respective force is very much threatening while buyers can easily find out substitute
products with most attractive price range or in better quality. Respective condition also apply
when buyers can switch one product or service from another seller relatively at cheap cost. In
context of Coca cola there are no. of substitutes available in the marketplace, main substitutes are
beverages made by the Pepsi, healthy drinks, fruit juices and hot and cold beverages. The
5

substitution effect of coco cola is high as no. of juices available and other drinks available in
marketplace. Switching cost also low for consumers with quality of substitute products also
generally good. As more and more consumers become health conscious that is threat for Coca
cola as a real possibility.
Competitive rivalry between existing players:
Respective force is one of major determinant how much competitive and profitable the
industry is. In that regards competitive industries have to compete fiercely for market share
resulting lower profitability (Goldkind and McNutt, 2019). In beverage industry, majorly two
players capture the whole market that is Coca cola and Pepsi. There are intense competition in
both the firms, however few smaller players also available in the marketplace. These two main
players in market are nearly in same size and provides similar kinds of products and services to
consumers with similar kind of strategies. It can be said that difference in between two brands is
very low so price competition is very much intense but one notable difference in both brands that
Pepsi deals Doritos, Lay's, Cheetos nad Fritos and coca cola stuck with beverages such as Minute
maid, Powerade, gold Peak Tea, Dasani and Vitaminwater. So the major factor is that as
consumer taste and preferences shift, coca Cola should be left vulnerable, therefore, risk in
respective area is moderate.
From the above discussion it has been evaluated that accessing competitive factors plays
very much important role to analyse competitors effect on business works and activities. In
context of Coca cola there are some factors which impact on their business but with help of their
strong brand image and strategies they can be able to gain sustainability in marketplace.
Inbound logistics, operations and outbound logistics.
Value chain Streamline various activities that are performed by organisation to create
value for their consumers (Harlie, Rajiani and Abbas, 2019). Value creation adds potential in
organisational products and services that delivered to end user in order to gain competitive
advantage and higher profitability. The major value of respective model is its approach. Here are
the value chain activities that are primary and support activities. Primary activities have an
immediate impact on production, maintenance, sales and assistance of products and services
supplied ultimately. Coca cola is one of most well known brand name in the market as it present
at global level. They have several million dollars in their portfolio, in their value chain consist of
6

activities starting from the attainment of raw material from various sources to final sale up to end
user.
 Inbound logistics: In inbound logistics consist of all processes that involved in attaining,
storing and internally distribution of raw material occurs in manufacturing of products
and services. It is very important for organisation to create valuable relationship with
suppliers to deliver one of best products and services to end user (Pasqualetti, 2019).
Coca cola by managed a very large supply chain that consisted thousands of farmers and
suppliers. They treat their suppliers as their business partners as they provide raw
material which includes various ingredients, packaging and machinery to produce ready
goods. For that they set minimum guidelines that suppliers have to follow that is required
to comply with laws and regulations. They focus on responsible environmental activities
and workplace practices by maintaining strong relationship with their suppliers.
 Outbound logistics: In outbound logistics consist of activities related with delivering
goods to the end user which includes instance, storage, distribution and transportation
(Paul, 2019). The part of Coca cola's value chain consist of their bottling partners and
distributors. Their bottling partners contribute in the production, packaging, merchandise
activities and distribution to end user and vending partners. The major consumers of Coca
cola includes grocery stores, restaurants, vendors, convenience stores and movie theatres
and amusement parks. By collaborating with their partners to execute the localized
strategies developed in partnership with Coca Cola.
 Operations: Operations of coca cola consist of concentrate development and
administrative activities which enables in gaining desirable outcomes. They operate
through many local channels but not own their all bottling partners. They just produce
and sell on beverage bases and syrups for their bottling operations. So organisation owns
their brand identity and accountable for brand marketing initiatives at wider scale.
Two support activities in Porter's value chain.
For an organisation to gain desirable outcomes, it is very much potential to have support
activities such as human resource management as it has great importance within primary activity
and in operations. In context of Coca cola two support activities are as follows:
 Technology development: Coca Cola heavily invest in maintaining technology and
R&D. From production to distribution and sales on every sphere they focus on up
7

gradation in technology. They rely on technological innovation by R&D as they possess
six centres around the whole world connected with external technology and various
assessment hubs with their partners, tech start ups and university researchers (Pearlson,
Saunders and Galletta, 2019). Respective organisation by collaborating with other
partners in industries to fuel innovation in their products, standardize services and
gaining best equipments.
 Human resource management: HRM is one of most important area of Coca Cola's
value chain as they focus on hiring and developing most talented personnel in business
environment. They provide smart pay and complements to maintain their level of
motivation and engagement with organisational goals. Apart from it, by using
performance management the accumulate information regarding employee's performance
to provide career growth to them. So they consider human resource one of most valuable
assets that contribute in organisational development and enhancement potentially.
Identify key value adding activities with justification.
For an organisation it is very much potential to put one of their best efforts in adding
value in organisational products and services in order to serve consumers very positively. In
context of Coca Cola the most value adding activity is marketing the goods in order to enhance
sales of organisation (Saberi and et.al., 2019). Value adding activities are activities that adds
major benefits in organisational products and services. It is very potential for organisation to
conduct research to acknowledge which activity adds value in organisational products.
 In context of Coca Cola they are very much conscious about innovation in their products
and services. They presently operate no. of products, however recently add caloric and
sugar free products in the product menu potentially. They are very determined to save the
environment by reducing plastic and water wastage while producing their products.
Continuously investing time and cost in respective activities proved very much beneficial
in enhancing consumers loyalty and sustainability in marketplace. So it can be said that
innovation is one of most important attribute that add value in organisational products
and services.
 The another important attribute which can add value in their products is marketing and
promotional activities that helps in attracting the large no. of consumers towards. With
the help of promotional tools organisation can be able to reach at local, national and
8

international level after acknowledging consumers taste and preferences. With the help of
innovative advertisement and sales promotion organisation can be able to deliver one of
best products to ultimate consumers potentially. So marketing and innovation in their
products and services potentially contributes in adding value in organisational products.
Hence, it has been analyse that addition in value plays very important role in organisational
development and in enhancing loyalty of consumers by fulfilling consumers needs and demand
potentially.
Understanding of Porter's five force analysis and Porter' value chain.
For an organisation analysis of competitors and attributes which adds value in their
products plays very much important role. With the help of Porter's five force model Coca Cola
can be able to evaluate competitors that directly affect on their profitability and sustainability in
marketplace (Shahar, Satar and Bakar, 2019). Such as buyers threat is high in context of Coca
cola as switching cost is low, so by analysing respective factor they can change in their existing
strategies and tactics in most potential manner and can lessen down adverse impact of it. The
another important tool which is Porter's value chain that suggest the attributes in which
organisation can pay attention in order to enhance value in products and services. In context of
Coca cola they by paying attention on innovation in their existing products and services can
easily sustain in marketplace. Another factor which adds value in organisational products which
is promotional tools so that they can reach at large no. of consumer base by describing valuable
attributes in their products.
Summarise and reflect the way business deploy information technology.
Information technology plays very much important role in enhancing the living standard
of people as it enhance the capabilities of production and distribution of products and services. In
context of coca Cola they adopt technological advancement in order to remain competitive in
marketplace. They come up with the unique and innovative technique known as PlantBottle
packaging technology that enables to reduce wastage and saves environment. Respective
organisation also aimed to reduce dependence on fossil fuel which based on materials in
comparison to PET bottles (Sutrisna and Goulding, 2019). The plant bottles made of plastics,
that are made from plants which includes sugar cane and by products of processing sugar cane
rather than petroleum products that have larger footprints of environment. Plantbottle used in
most of North America for packaging and it eventually enhance sales. It not only increase trust
9

of people towards their product but also give a remarkable statement in protecting environment
positively. In context of Coca Cola they by conducting through research and development that
helps to access insights related to environment, people and other industries to acknowledge
important information to bring information technology in marketplace (Ul-Hameed and et.al.,
2019). Coca cola realised that save the natural resources is very much potential to reduce the
amount of petroleum used around whole world positively. By increasing usage of renewable
materials helps to reduce organisational dependence on renewable resources in order to remain
competitive in marketplace.
CONCLUSION
From the above report it has been concluded that business environment plays very much
important role for organisation. To understand it and operate business activities, organisation
need to build strategies and tactics to remain competitive in marketplace. Competitors for a
business plays very important role as it pushes organisation to remain always relevant. To
understand the competitors strength Porter's five force model is one of important tool to analyse
different kinds of threats an organisation encounters. With the help of Porter's value chain which
has five primary activities visually represents with equal weight age and real needs of
organisation in order to build strategies and tactics accordingly. It has been evaluated that
information technology plays very much important role within the organisation to give best
living standard of people and enhancing their experience positively.
10

REFERENCES
Books and journals:
Benckendorff, P.J., Xiang, Z. and Sheldon, P.J., 2019. Tourism information technology. Cabi.
Boeckl, K. and et.al., 2019. Considerations for managing Internet of Things (IoT) cybersecurity
and privacy risks. US Department of Commerce, National Institute of Standards and
Technology.
Bryant, C., 2019. Managing development in the Third World. Routledge.
Chen, H.Y., Das, A. and Ivanov, D., 2019. Building resilience and managing post-disruption
supply chain recovery: Lessons from the information and communication technology
industry. International Journal of Information Management. 49. pp.330-342.
Domeij, R. and et.al., 2019. Enhancing information accessibility and digital literacy for
minorities using language technology—the example of Sami and other national minority
languages in Sweden. In Perspectives on Indigenous writing and literacies (pp. 113-
137). Brill.
Goldkind, L. and McNutt, J.G., 2019. We Could Be Unicorns: Human Services Leaders Moving
from Managing Programs to Managing Information Ecosystems. Human Service
Organizations: Management, Leadership & Governance. 43(4). pp.269-277.
Harlie, M., Rajiani, I. and Abbas, E.W., 2019. Managing information systems by integrating
information systems success model and the unified theory of acceptance and usage of
technology. Polish Journal of Management Studies. 20.
MAANI HESSARI, N.A.S.O.N. And et.al., 2019. Public meets private: conversations between
Coca‐Cola and the CDC. The Milbank Quarterly. 97(1). pp.74-90.
Pasqualetti, M.J., 2019. Nuclear power: Assessing and managing hazardous technology.
Routledge.
Paul, S., 2019. Managing development programs: the lessons of success. Routledge.
Pearlson, K.E., Saunders, C.S. and Galletta, D.F., 2019. Managing and using information
systems: A strategic approach. John Wiley & Sons.
Saberi, S. and et.al., 2019. Blockchain technology and its relationships to sustainable supply
chain management. International Journal of Production Research. 57(7). pp.2117-
2135.
Shahar, S.M., Satar, N.S.M. and Bakar, K.A.A., 2019. The challenges in managing information
technology shared services operations. International Journal of Recent Technology and
Engineering. 8(1C2). pp.322-328.
Sutrisna, M. and Goulding, J., 2019. Managing information flow and design processes to reduce
design risks in offsite construction projects. Engineering, construction and architectural
management.
Ul-Hameed, W. and et.al., 2019. Remedies of low performance among Pakistani e-logistic
companies: The role of firm’s IT capability and information communication technology
(ICT). Uncertain Supply Chain Management. 7(2). pp.369-380.
Yamin, M., 2019. Managing crowds with technology: cases of Hajj and Kumbh
Mela. International Journal of Information Technology. 11(2). pp.229-237.
Online:
The Coca Cola Company, 2020. [Online]. Available through. <https://www.coca-
colacompany.com/sustainable-business/in-our-products>.
11

12