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Coca - Cola Company: Porter Five Forces Model

Autor:   •  February 28, 2011  •  Case Study  •  761 Words (4 Pages)  •  2,657 Views

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This paper will cover a situational analysis of the Coca - Cola Company with assessment of industry structure using the Porter Five Forces Model.

Industry Structure

Hill and Jones give the following definition of industry: "An industry can be defined as a group of companies offering products or services that are close substitutes for each other" (Hill & Jones, 2009, p. 53). Leader of the industry will have a competitors, who serve the same essential customers' needs.

We could point that bottled water and carbonated drinks, along with fruit punches can be considered as substitutes to each other as they serve the same customer wish for refreshing and have cold non-alcoholic drink. As a result we can point that Coca-Cola, PepsiCo and Dr Pepper Snapple Group Inc. (before Cadbury Schweppes Americas Beverages) belongs to the soft drink industry and are the major players.

Organization Business Summary

Coca-Cola is the leader of soft drink industry, and is one of the top 100 US companies in terms of revenues. Company is producing a big assortment of drinks around the world, with taking into consideration specifics of local tastes and active in more than 200 countries. Beside Coca-Cola sells syrups and concentrates to different bottlers for finishing and after selling the product. On top, company is selling fountain syrups directly to restaurants, bottled, and canned products directly to retailers (Gaudet, 2009).

Business description is bring us to view company Mission, Vision and Value that help to understand company long-term goals.

One of the Coca - Cola Mission expression:"To refresh the world..."is put in company marketing strategy. From company Vision we can see that it is people who are the company's greatest assets and it is guide to achieve growth : " Bring to the world a portfolio of quality beverage brands that anticipate and satisfy people' desire and needs" and Maximize long-term return to shareowners while being mindful of our overall responsibilities" Coca-Cola Value statement is expressing company core beliefs and identify priorities: Focusing on the Market, Work Smart, Act Like Owners and Be the Brand (The Coca-Cola Company , 2006-2010).

Porter Five Forces Model

Coca-Cola is trying to be presented through its numerous brands, which consumer favor, and are willing to pay. To achieve this Coca-Cola is spending almost 10% of its revenue for advertising.

Customer Bargaining Power

The highest amount of bargaining power belongs to large restaurant chain, following with considerable bargaining power of grocery chains as they care multiple brands of the same product type. In addition authorized bottlers have significant

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