Value Chain Analysis of Coca-Cola: Business Level Strategies

This report provides a detailed value chain analysis of the Coca-Cola Company. It begins with an overview of the company's value chain, analyzed through the VRIO framework, which assesses the value, rarity, imitability, and organization of its resources. The report identifies key resources such as the global distribution network, marketing strategies, human resources, and the secret formula. Furthermore, the paper proposes several business-level strategies including differentiation, low-cost leadership, and focus strategies, and evaluates their strategic options considering environment, capability, and market penetration. The study also discusses the feasibility of these strategies, concluding that the organization is well-equipped to implement them successfully. References to various sources are also included.

Running head: Value chain analysis of Coca-Cola
Value chain analysis of Coca-Cola
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1Value chain analysis of Coca-Cola
Table of Contents
Introduction................................................................................................................................3
Discussion..................................................................................................................................3
Conclusion..................................................................................................................................8
References..................................................................................................................................9

2Value chain analysis of Coca-Cola
Introduction
The study intends to give a value chain analysis of the well-known beverage
company Coca-Cola. The paper begins with by analysing the Coca-Cola Company’s
value chain through the VRIO framework (Expert Consulting 2018). Additionally, the
paper has proposed business level strategy that the company can implement in order
to improve the value chain system of the company. Different strategies like
differentiation strategy, focus strategy and the low cost strategy has been suggested in
the study. Finally, the feasibility of the strategies has also been discussed in the
paper.
Discussion
1. Value chain evaluation can be termed as the analytical framework helped in
determining the business activities. It identifies the business activities that can
originate value as well as competitive advantage towards the business (Expert
Consulting 2018). The Coca-Cola Company’s Vale chain analysis is thus discussed
below.
The leading beverage brand Coca-Cola is well known among the beverage
industry for its vast product range (Businessservices24.com 2018). In order to analyse
the strength of the company are suitable and well arranged to provide a competitive
advantage to its business. Thus, the VRIO framework has been used in order to
analyse the resources competitive potential. VRIO stands for Valuable, Rare,
Inimitability and Organised.
Valuable Rare Inimitable Organised
Distribution
network across
Yes - - -

3Value chain analysis of Coca-Cola
the Globe
Human resource - Yes - -
Secret formula - - Yes -
Marketing
strategies
- - - Yes
(Table: VRIO model)
(Source: created by author)
2. According to the VRIO analysis, it has been found that the most crucial resources of
the beverage company are: The worldwide distribution network, marketing strategy,
human resource and the secret formula (Businessservices24.com 2018). Apart from
these resources, some of the other important resources are brand image, research and
development and large product range (Staff, M 2018). Among the resources, valuable
resource of the company is its worldwide distribution network whereas the rare
resource of the company is its human resource strategy. The VRIO analysis states that
the secret formula of the beverage that the company produces is the company’s
inimitable resource. Finally, the marketing strategy is the organised resource of the
company as per the VRIO analysis.
3. The value chain system and the business level strategies are correlated. Different
strategies can be used by the company in business level for both the international as
well as local operations.
Differentiation strategy
The beverage company Coca-Cola, always focuses on making its product different
from the other brands in the industry. The beverage brands under the Coca-Cola, such

4Value chain analysis of Coca-Cola
as Sprite, Coke, Fanta and many more are produced with the secret formula. Quality
is strictly maintained by the company while manufacturing the products. Not only in
the manufacturing of products, differentiation strategyis maintained in the every
aspect of the company (Staff, M 2018). With its differentiation strategy, the Coca-
Cola Company has been able to position itself as one of the leading brands of the
beverage.
Low cost strategy of leadership
Along with focusing on the quality maintenance of the products, Coca-Cola
has also been focusing on the low cost strategy in leadership. As the company is
expanding day by day, it focuses on the cost control measure in order to gain the
competitive advantage (Inc.com 2018). As part of the low cost strategy, the company
also applies cost-cutting measures in every aspects of its business. Thus it can be said
that the low cost strategy leadership is one of the most important strategies that the
company has been practicing without affecting the efficiency of the productivity.
Focus strategy
The beverage company gives serious attention to the both the differentiation strategy
and low cost strategy so that it can target more on the product diversification. Along
with the low cost strategy and diversification strategy, the Coca-Cola Company also
focuses on the quality maintenance so that the company sustain in the continuous
completion within the industry (Inc.com 2018). The company continuously focuses on
the continuous research and development of its product range in order to maintain its
leading position in the market. Apart from all these, the main focus of the company is
the target market. Under the focus strategy, the company has been adopting different
other strategies in order to have good hold of customer base.

5Value chain analysis of Coca-Cola
4.1Strategy evaluation
Strategic option Environment Capability
Market penetration Product distribution network
across the world
Uses specialized distribution
strategy
New product Large range of product Focuses on the customer need
Market development Entering new markets Expansion of product range
Product diversification Competitive industry Uses strategies to increase
product diversification
(Inc.com 2018)
4.2 The business level strategy has a large scope of the meeting the expectation of the
stakeholders. Differentiation strategy and the focus strategy have been developed
keeping the customers in mind which is the main section of its business (Food
Business News 2018). The company is continuously working on the product range
and thus customer satisfaction is main aspect that the Coca-Cola strongly works on.
The risk factor of this strategy is low as it mainly focused on the interest of the
customers. The business level strategy including the differentiation strategy and the
focus strategy has been developed mainly to pool more return from the market
(Talkdailynews.com 2018).

6Value chain analysis of Coca-Cola
4.3 Feasibility
The organization is capable to deliver the proposed strategy successfully. It has been
observed that the company has been able to implement such strategies in the past. The
business level strategies of the company is to unique and thus its competency level is
high. The resources like worldwide delivery network and effective human resource
strategies are presently effectively running by the company (Talkdailynews.com
2018).
5. Strategic evaluation matrix
Suitable Acceptable Feasibility
Strategic option 1 Yes Yes Yes
Strategic option 2 High Medium Medium

7Value chain analysis of Coca-Cola
Conclusion
To conclude, it can be said that the study has clearly discussed the value chain of the
Coca-Cola Company. The paper started by analysing the Coca-Cola Company’s value
chain through the VRIO framework. Additionally, the paper has proposed business
level strategy that the company can implement in order to improve the value chain
system of the company. Different strategies like differentiation strategy, focus
strategy and the low cost strategy has been suggested in the study.