Coca Cola 5 Forces

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CHU HAI COLLEGE OF HIGHER EDUCATION 2010-2011 SEMESTER 2

BBA 353 STRATEGIC MANAGEMENT

Group Case Study Project

The Coca-Cola Company

Tsang Hoi Ki Chan Ho Yin Fung Tsun Wai Chan Ka Po Yuen Sze Wing Chan Tai Hoi Yan Yue Kan

(200826001H, (200826002H, (200826004H, (200826019H, (200826020H, (200826027H, (200926024E,

FNE) FNE) FNE) FNE) FNE) FNE) FNE)

Abstract

This paper is a strategic analysis of The Coca-Cola Company (Coca-Cola), a leader in the beverage industry. Coca-Cola, the world’s leading soft drink maker, operates in more than 200 countries and owns or licenses more than 500 brands of nonalcoholic beverages.

The company faces challenges in today’s market because of market changes, socio-economic changes and globalization. An external analysis of the soft drink industry is performed to understand the impact of environment. An internal analysis of Coca-Cola is performed to understand the internal capabilities.

The conclusion of this case study emphasizes that the company needs to reduce its dependence on carbonated beverage and diversify its product portfolio into the noncarbonated sector to remain competitive.

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Table of Contents

Abstract .............................................................................................................................. 2

Section 1: Introduction ................................................................................................... 5 1.1 1.2 1.3 Mission and Objectives ........................................................................................ 6 Past and Present .................................................................................................... 7 Products and Competency .................................................................................. 11

Section 2: Internal Analysis ......................................................................................... 12 2.1 2.2 2.3 2.4 2.5 2.6 World Leader in Soft Drink Industry ................................................................. 12 Wide Geographic Coverage ............................................................................... 13 Good Financial Performance .............................................................................. 13 Negative Publicity .............................................................................................. 14 Sluggish Performance in North America ........................................................... 15 Lack of Diversification....................................................................................... 15

Section 3: General Environment Analysis .................................................................. 16 3.1 3.2 Globalization ...................................................................................................... 16 Increasing Concerns on Health Issue ................................................................. 16

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Section 4: External Analysis of Coca-Cola ................................................................. 17 4.1 4.2 4.3 4.4 4.5 Low Threat of New Entrants .............................................................................. 17 Strong Threat of Substitutes ............................................................................... 19 Low Threat of Suppliers..................................................................................... 19 Moderate Bargaining Power of Buyers .............................................................. 20 Strong Competitive Rivalry ............................................................................... 21

Section 5: Key Future Challenges and Strategic Recommendations ....................... 22 5.1 5.2 5.3 5.4 5.5 5.6 Declining Sales Volume in Soft Drink Sector ................................................... 22 Recommendations for Declining Sales Volume in Soft Drink Sector ............... 23 Health and Wellness Trend...
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