Coca Cola External Analysis

Topics: North American Industry Classification System, Coca-Cola, Soft drink Pages: 5 (1379 words) Published: February 21, 2012
Executive Summary

The North American Industry Classification System (NAICS) code for the Coca-Cola Company is 3121 (U.S. Census Bureau, 2012). This NAICS code is used to identify Soft Drink Manufacturing. However, the icon Coca-Cola is not in this industry alone. The data of 2002 identifies 2,908 competitors in this category (U.S. Census Bureau, 2002). This NAICS code encompasses establishments primarily engaged in manufacturing soft drinks and artificially carbonated waters. Although Coca-Cola has made its global footprint as a leading competitor in this market and they continue strategizing for long-term sustainable growth, Coca-Cola is innovative in their methodology and application to maintain one-step ahead of their competitors and is aware of the market’s increasing demand of product substitution.

The Coca-Cola Company, now over 125 years in existence, continues to maintain its competitive stance in the global market of beverage consumption. The goliath company’s continued growth may be demonstrated by its ability to 1) identify global awareness of market trends and consumer demand, 2) identify and comply with environmental and regulatory requirements/enhancements, 3) analyze the impact of innovative projects and identify how these external influences directly impact the strategies implemented thus reducing competitive rivalry and competitors ability to take the lead in product substitution.

Threats of Competitive Rivalry

Socio-Economic Concerns

Two major detriments to Coca-Cola’s strategy of expansion into non-carbonated beverages may be the impact of society’s recent economic uncertainty and increased health awareness. Such beverages may be considered luxuries. Although pricing might be competitive, in today’s economic uncertainty individuals may prefer a variety of beverages that offer better nutritional value vice purchasing Coca-Cola’s soda beverages. It is my opinion; Coca-Cola has strategically identified this possible impact by expanding their product line to include over 3,500 beverages in their portfolio to include coffees, energy drinks, juices, sports drinks, teas and waters (The Coca-Cola Company, 2010). Michael Porter believes the competitive edge one company has over another is its ability to think about the company on a broader level (HarvardBusiness, 2008). This ability allows companies to communicate their strategies with employees, stakeholders and even competitors. The expectations, rules of engagement, and deliverables are made clear. One may ask why competitors should know the competitor’s strategy. The answer to that may be if they know exactly what it is you have to offer and how you are going to deliver the product they may defer their quest to compete and seek competition elsewhere. It is my feeling transparency is also complimentary to supporting industries, citizens and agencies. Such sub-groups as transportation, where housing, bottling distributers, environmental agencies, and skilled personnel can complement the organization if such subgroups can promote services that support the organization. Transparency in a successful organization is also reflective of its quality selection of such sub-groups. This could also lead competitors to believe the best of the best have already defined their loyalty by providing services and collaboration with its competitor of choice. Defending its reputation of being a globally responsible leader in the beverage market, Coca-Cola has taken large strides in addressing obesity. Coca-Cola prides themselves on their efforts to support these health concerns providing positive involvement by defining six commitments. These six commitments include, using evidence-based science, innovated development, educating consumers, provide transparent nutritional content, market responsibility to include parent/caregiver information of products, and promote healthy living by collaborating with...
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