ROYAL UNIVERSITY OF BHUTAN

GEDU COLLEGE OF BUSINESS STUDIES

GEDU, CHUKHA: BHUTAN

INDUSTRY ANALYSIS OF BEVERAGES MARKET

(COCO-COLA COMPANY, PEPSI, RC COLA AND BEVERAGES COMPANY)

(INDIVIDUAL ASSIGNMENT)

Submitted by: MBA 1

Bishnu Maya Sanyasi (031903)

DECLARATION FORM

Module Title: Business strategy Module Code: MGT 502

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 Mentor: DR. Dhiraj Sharma Type of Course Work: Group Work

Date of Submission: 17th May, 2019

I hereby declare that this academic work is our own and those derived from other sources have been
appropriately acknowledged. I understand that if found otherwise, our academic work will be cancelled
and no mark will be awarded besides the legal consequences.

031903

Marking Criteria Marks Assigned Marks Secured

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Total Marks

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Signature of Mentor

Contents
EXECUTIVE SUMMARY........................................................................................................4

1.0 INDUSTRY INFORMATION.............................................................................................5

2.0 CRITICAL SUCCESS FACTOR (CFS).............................................................................6

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 Vision.....................................................................................................................................6

Mission Statement..................................................................................................................6

3.0 MODELS OF MARKETING STRATEGIES.....................................................................7

3.1 PESTLE ANALYSIS OF COCA COLA COMPANY....................................................7

3.2 SWOT Analysis of Coca-Cola Company.........................................................................8

1. INTERNAL ANALYSIS................................................................................................9

2. EXTERNAL ANALYSIS...............................................................................................9

3.3 Porter’s five forces analysis............................................................................................10

4.0 PRODUCT LINE OF COCA-COLA COMPANY............................................................11

5.0 BCG Matrix........................................................................................................................12

6.0 COCA-COLA: ANSOFF MATRIX..................................................................................13

7.0 COROORATE SOCIAL RESPONSIBILITY (CSR)........................................................14

Recommendation......................................................................................................................16

Bibliography.............................................................................................................................17

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EXECUTIVE SUMMARY
I am a student perusing MBA studies in Gedu collage of Business studies, and the purpose
of doing this particular assignment is to critically examining theoretical concepts and models
in business strategy, PESTLE Analysis, SWOT Analysis, BCG Matrix, and Cooperate social
Responsibility of Coca Cola Industry.

I will be doing the industry analysis of Coca-Cola Industry by using different type of strategic
management frameworks that can help us to draw the conclusion and make the better
decision. It has been carefully analyzed the internal and external business environments and
critically examined the industry in general, considering all external threats and opportunities.

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1.0 INDUSTRY INFORMATION

The Coca-Cola Company, Pepsi, RC cola and Beverages Company are some of the
Multinational Corporation, and manufacturer, retailer, and marketer of nonalcoholic beverage
concentrates and syrups. Out of many other different non alcoholic beverages I would like to
focus on Coca Cola Company that is there in the industry competing to each other in order to
sustain in the market.

Coca Cola was initially invented in 1886 by a man named John S. Pemberton[ CITATION Our19
\l 1033 ]. Then later it was founded in 1892 by Asa Griggs Candler in Atlanta, Georgia,
United States. This is one of the companies, which deals with non alcoholic soft drink
producer from the beverages industry in the market. The products of the Coca-Cola Company
and other beverages soft drinks are distributed more than two hundred countries and its
brands are more than four hundreds which consist of soft drinks, energy drinks, bottled water,
juice products and many others. It is the product called coke a soft drink that made the
company well known to the world today especially when it comes with the coca cola
company[ CITATION Ric18 \l 1033 ]. This has made the company most recognized brand name
in the world and it has created global value as well in non alcohol beverage industry.

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2.0 CRITICAL SUCCESS FACTOR (CFS)
The company’s vision statement and mission statements are as following

Vision
People: Be a great place to work where people are inspired to be the best they can be.
Portfolio: Bring to the world a portfolio of quality beverage brands that anticipate and satisfy
people's desires and needs.
Partners: Nurture a winning network of customers and suppliers, together we create mutual,
enduring value.
Planet: Be a responsible citizen that makes a difference by helping build and support
sustainable communities.
Profit: Maximize long-term return to shareowners while being mindful of our overall
responsibilities.
Productivity: Be a highly effective, lean and fast-moving organization.

Mission Statement
“To refresh the world... To inspire moments of optimism and happiness...To create value and
make a difference."

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3.0 MODELS OF MARKETING STRATEGIES
3.1 PESTLE ANALYSIS OF COCA COLA COMPANY
Coca-Cola’s mission and vision has to be consistent with trends in the external environments
in order to be successful in the market. It is important to examine the external environment
and find the appropriate strategies to survive in the market so PESTLE Analysis is conducted
to analyze the external factors.

1. Political factor
As per the political situation of India, it can be stated that the political condition of the
economy is stable. Due to which the sale of product of Beverage Companies are having better
sales therefore the profit of the economy is also increasing. Sale of such products are allowed
in schools, universities, hotels, restaurants and other places as the government allows in such
places. The policies and regulation are monitored by the government and the company adopts
it in an effective way. So far the Coca cola Company has no political issues in such matters
and so does the other non alcoholic beverages as well.

2. Economic factor
The sale of the coco-cola products or other non alcoholic soft drinks beverages are not
impacted by the economic factors, still those companies are able to contribute huge amount
of income to its country. The companies is not harming the economy instead it is helping the
country to generate the profit by means of exporting its products to the other countries and
helping the country to maintain the trade efficiencies. The beverages industry is also creating
lots of jobs to the societies.

3. Social factor

Due to era of modernized world today lots of people are educated and these people are so
much health conscious. People opt for healthier life style and want to stay in shape and fit so
with these sort of choice of people the industry have to come up with alternatives which deals
with producing goods with use of healthier ingredients with more of fruits and
vegetables[ CITATION Str16 \l 1033 ]. The company needs to produce goods in such a way
thereby it benefits socially so coca cola company that is there in the industry is trying its
best to give society with better products.
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 4. Technological factors

Technology is one of the major factors that need to be considered by any of the industry so
that the business will be sustained in the market, if the updated technology is not maintained
by the industry there is a probability of getting eliminated from the market. Coca-cola have
been keeping track with the technology factors so that it can improve the performance and
profitability can also rise. With the technological advancement the Coca Cola Company has
been able to communicate with the consumers and respond to their needs in order to sustain
in the market and the other competitors namely Pepsi Company has been also trying it best to
do well in the industry in its technology usages.

5. Legal Factor

The coca-cola company and other competitors of coca-cola company has been following the
specific laws such as employment laws, consumer’s protection laws, copy right laws, patent
laws and health and safety laws in the organization. They have been following the laws and
practicing in an ethical manner. It has also its own rules and regulation but they are aware of
the legislation changes in the industry.

6. Environment Factors

Environmental factors are one of the important factors that need to be considered by an
organization. The coca- cola company has always tried to use the resources in an efficient
ways so that the scare raw materials were used in such so as to maximize the output. They are
not harming the environment instead they have helped the environment by doing corporate
social responsibility towards the environment.

3.2 SWOT Analysis of Coca-Cola Company

SWOT analysis is used in order to analyze the internal and external environment of the Coco-
cola company. This is one of the important strategic management frameworks that help the
company to take better decision by knowing its Strength, Weakness which is the internal
factor and Opportunities and Threat which is an external factor for the company.

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 1. INTERNAL ANALYSIS
Strengths
Strongest brand value in the international market is one of the key strength of the coca-cola
company in the industry. The coca-cola brand is known all over the world. The people
consume the drinks popularly known as coke not just for the taste but for the feelings of
being cool.
The company also has many portfolios as it has varieties of range of products. The risk is also
diversified which has become a strength to the company.

Weakness
The Coca Cola also has its weakness as the company does not have its bottle manufacturing
setup of its own and it have to depend on other manufacturing industries. More over one of
the biggest weakness of the industry is that, the people perception on consumption of drinks
is unhealthy which can lead to certain diseases such as diabetes if consumed in high
quantities.

2. EXTERNAL ANALYSIS
Opportunities
As the standard of living people is altering hastily, it can be seen that People are eating
regularly in restaurants and other places where leisure time is being spent. Coca-Cola has the
opportunity to create strategic alliance with hotels and restaurants where the demand of
beverages is high. It can also further diversify its products portfolio as per the taste and
preferences of the consumers. It can take advantage of various advertising platforms such as
social media marketing to boost its sales.

Threats
In spite of being one of the most dominant beverage markets it does still have some of the
threat. The threats of coca cola company in the industry is facing with its competitor
namely Pepsi. Pepsi is one of the direct competitors of the Coca-Cola Company. Since the
people are health conscious there is a threat of its consumers shifting to another healthy
beverage manufacturer industries.

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3.3 Porter’s five forces analysis

Existing Rivalry (competition)

In the industry, Coca cola is one of the leaders right through the world in terms of Beverage
or the soft drink market industries. For now its competitor are Pepsi Company, RC cola and
beverage and there are other indirect competitors are Fanta, Sprit, Redbull lipton, mountain
dew, Tropicana and various others. They are the one who competes to each other in the
industry; never the less Coca-Cola Company has been too larger than Pepsi and RC cola and
other beverage so the company is doing well in the industry.

Threat of New Entrants

The entrance of the new competitors in the market is low as the two companies mainly Coca-
cola and Pepsi have a good brand name, and it is difficult for the other new competitors to get
into the market to compete with these two giant companies. In order to enter into the market a
new company should have lots of funds and brand so that they will be able to provide rivalry
in the market which is impossible to the new companies. So the threat of new entrants is low
for Coca-Cola Company.

Threat of Substitute Products

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The threat of substitute products for soft drinks industry is very high as there are lots of
substitute’s drinks such as energy drinks, mineral water, coffee, juices. More substitute
products will be threat to the beverage industry so Coca-Cola Company is also focusing on
those sectors, such as healthier than soft drinks so that their customers will not switch over
substitutes[ CITATION Ric18 \l 1033 ].
The bargaining power of Suppliers
The bargaining power of supplier is low, as the suppliers for the ingredient for soft drink are
not concentrated or differentiated. The supplier for the bottling component for coca-cola
company is not specific stakeholder. The industry can change the supplier without any
problem because there is lots of supplier for ingredient that is needed to produce the soft
drinks.
The Bargaining Power of Buyer
The bargaining power of buyers is high because already there are lots of substitute’s products
in the market. There are varieties of beverage and the buyer might switch the consumption
habit if they are not provided offers or the discounts by the soft drinks industry.

4.0 PRODUCT LINE OF COCA-COLA COMPANY

The portfolio of coca-cola company that exists in the soft drink beverage industry is as
following:

1. Coca-cola
2. Thumps Up
3. Limca
4. Fanta
5. Maaza
6. Spite
7. Minute Maid : Pulpy Orange
8. Kinley
9. Kinley club Soda
10. Diet coke

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5.0 BCG Matrix

BCG Matrix is known as the growth-share matrix which can be used by organizations to
classify their business units or products into 4 different categories namely Dogs, Stars, Cash
Cows and Question Mark [ CITATION BCG18 \l 1033 ].

Sour
ce: https://www.google.com/search?
q=bcg+matrix+of+coca+cola&tbm=isch&tbs=rimg:CT9pzO

The BCG Matrix is helpful for a company to accomplish balance among the four categories
of products a company produces. The overall goal of this ranking is to help corporate analysts
to decide which of their business units to fund, and how much, and which units to sell
[ CITATION JHA19 \l 1033 ] . Managers are supposed to gain perspective from this analysis that
allowed them to plan with confidence to use money generated by the cash cows to fund the
stars and, possibly, the question marks.

 Dog Strategy

In this strategy it tells invest to earn market share or consider disinvesting as the market share
is low as well as the market growth. The products such as diet coke, pulpy orange and kinlely
soda it will be better for the company to stop manufacturing. The company needs to produce
new products or innovative beverage then to produce those products as these products are in
Dog. Dog strategy: Invest to earn market share or consider withdraw in the investment.

Star Strategy

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Here the market share is high as well as the market growth. So it is good to Invest and earn
profits. Thums up and Mazza will be a lot profitable for Coco-Cola

Star strategy: invest the profit in future growth to earn more market share and profit

Question Mark Strategy

The company needs to invest heavily in order to push the products to star status, or divest in
order to avoid it becoming a Dog. The question marks of the company are Fanta, Sprite. Here
the companies invest huge in these two products. Question mark strategy : invest more on
products to push them to star status and should try to avoid becoming a dog

Cash Cow Strategy

Use profits to finance new products and growth elsewhere. The cash cow of the company is
coca-cola and Limca and these two products are the foundation of the company. Cash cow
strategy: use the profit to finance new growth and products elsewhere.

6.0 COCA-COLA: ANSOFF MATRIX

Coca Cola Company can also identify its expansion through the ANSOFF approach. Ansoff
Matrix, it has been applied to Coca- Cola, the most well-known trade name in the world and a
company today operating in over 200 countries and a brand that has undertaken countless
growth strategies in its 100+ year history [ CITATION Gro19 \l 1033 ].

Source:https://www.
google.com/search?q=bcg+matrix+of+coca+cola&tbm=isch&tbs=rimg:CT9pzO1

Market Penetration: Due to the incredible strength of CocaCola’s brand, the company has
been able to utilize market penetration

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 Product Development: There was launch of Cherry Coke – Coca-Cola’s first extension
beyond its original recipe

Market Development: The launch of Coke Zero was a classic example of this – its concept
being identical to Diet Coke; the great taste of Coca-Cola but with zero sugar and low
calories

Related Diversification: In order to penetrate a new but related market. In 2007, Coca-Cola
spent $4.1 billion to acquire Glaceau, including its health drink brand Vitamin water

Unrelated Diversification: company has also gone with the unrelated product
diversification by producing shirts with coca-cola logo [ CITATION Und19 \l 1033 ].

7.0 COROORATE SOCIAL RESPONSIBILITY (CSR)

Corporate social responsibility (CSR) is increasingly acknowledged as an important part of
business. Business should give back to the society after earning profit they should not just
think about themselves instead industry must ensure to give some portion of profit back as
different strategy.

Coca cola being one of the beverage companies in the industry followed different types of
CSR strategies. It has practiced Economic responsibility by earning good amount of profit,
legal responsibilities by following the laws and all the regulation that was mended by
government, ethical responsibilities by doing the business in right way and Philanthropic
responsibilities by doing good to the society as a whole. CSR for the company was not
mandatory but it was discretionary. The company did following CSR

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 1. The shareholders Strategy

The coca cola company after earning huge amounts of profit later it has maximized the
dividend to its shareholders.

2. The reciprocal strategy

The company did a survey of groundwater resources before the selection of a site, training
personnel on wastewater treatment, and several energy conservation programs was given
whereby both the society and the company could achieve win win situation.

3. Altruistic Strategy

It also focused on providing education and healthcare in what it described as an attempt to

build stronger communities. The company set up education projects for children residing in
villages and urban slums without expecting returns in back.

4. The Citizenship strategy

Coca Cola Company was viewed as a citizen in the society because it have recognized all the
interest and expects of all the other stakeholders, be it the government, public, employees and
various others.

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Recommendation
As corporate social responsibility (CSR) is one of the important part of business. Non
alcoholic beverages companies such as coca- cola companies in the market are earning huge
amount of profit and they are giving numerous types of CSR to different stakeholders but
they haven’t thought of the health of the society as their products contains lot amount of
saturated fats, transfatty acids, free sugars, or salt. So it would be better if the companies
could focus on health of the people by providing better quality of products.

The Coca Cola company does not have its bottle manufacturing setup of its own and it have
to depend on other manufacturing industries so company could do well in the industry if they
adopt concentration strategy and becoming a niche market by setting up their own bottle
manufacturing department instead of depending on others and ending up paying huge amount
as a cost of raw materials.

Pepsi Company has been one of the direct competitors of the Coca-Cola Company but on
other hand there is lot of other companies in the industry who produces other healthy
beverage products. Since the people are health conscious there is a threat of its consumers
shifting to another healthy beverage manufacturer industries. So the recommendation to Coca
Cola Company is that it should follow vertical integration by using backward integration and
the company should retreat the source of raw materials [ CITATION 19Ma1 \l 1033 ]. The
company needs to raise entry barriers for other potential competitors.

The bargaining powers in the industry of the buyers are high as there is lots of Beverage
Companies in the industry. So if the company does not come up with new innovative
products the new company might come up in the industry with new products and this can be
threat to the existing company such as coca cola and Pepsi companies. So the company needs
to stop the new entrance of the new company by going for expansion strategy such as
diversification in terms of conglomerate.

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Bibliography
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April 25, 2019, from BCG Matrix of Coca Cola | STP Analysis of Coca Cola:
http://heartofcodes.com/bcg-matrix-coca-cola/

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Environment & Strategy: https://www.howandwhat.net/understanding-ansoff-matrix/

Growth Strategies . (2019, April 25). Retrieved from

https://www.casrilanka.com/casl/images/stories/PDBF/growth%20strategies
%20ansoff%20matix.pdf

Jha, A. (2016). STRATEGIC MANAGEMENTON“BCG MATRIX OF COCO-COLA”.

Retrieved April 25, 2019, from https://www.scribd.com/doc/31410727/bcg-matrix-of-
coc-cola-india

Our story 1886-1892: the beginning. (n.d.). Retrieved April 22, 2019, from Our story 1886-
1892: the beginning: https://www.coca-cola.ie/stories/history-of-coca-cola-1886-1892

Stockton, R. (2018, May 30). Morphine, Santa Claus, And Nazis: The Secret History Of
Coca-Cola. Retrieved April 23, 2019, from Morphine, Santa Claus, And Nazis: The
Secret History Of Coca-Cola: https://allthatsinteresting.com/coca-cola-history-
america

Strategic Marketing Plan for Coca-Cola - 2016. (2016, April). Retrieved April 20, 2019,
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Coca-Cola_-_2016

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