CS2464

BACHELOR OF INFORMATION TECHNOLOGY (HONS.) BUSINESS COMPUTING

ISP583
SEMESTER 4
IT INVESTMENT

CASE STUDY OF COCA COLA

PREPARED FOR:

WAN ATHIRAH BINTI WAN ENDUT

PREPARED BY:

NAME : NURUL NABILA BINTI ZULKEFLEE

STUDENT ID : 2019591235

PROGRAM CODE : CS264 4B2

 Table of Content

1. Introduction 2

2. Organization Background 3

3. Analysis of Case Study – THREE LENSES 4-12

4. a. Five Porter’s Analysis 4-5

5. b. Value Chain Analysis 6-8

6. c. SWOT Analysis 9-10

7. d. Failure Analysis 11

8. Summary 12

9. References 13

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 Introduction

The main purpose of this report is to investigate and make research about IT investment about Coca Cola
that refers to the real world case study. From the real world case study, analysis will be performed to
analyze Coca Cola Company on how they can become the largest and globally brand that well known
around the world. The analysis that will be conduct is about how Coca Cola use Five Force Porter’s that
helps to analyze the critical forces in affecting the level of competition in an industry, Value Chain help
managers to picture how manage their company and adding value to their product so they can obtain a
better result. that and SWOT which is known as Strength, Weaknesses, Opportunities and Threat that help
them to build on what they do well, to address their lacking, minimize risks and take the good advantages
and chances for success in their company so they can keep maintaining their position as a leader to
beverage industry that have the most best-selling other than Pepsi. This report will also containing Coca
Cola failure in becoming the largest brand in the world where they learnt to be better from their mistake.

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 Organization Background

The Coca Cola Company was founded in 1892 by the American corporation and today this company has
engaged primarily in the manufacture and sale of syrup. Coca Cola company is also concentrated in
sweetened carbonated beverage that is a cultural institution in the United States and a global symbol of
American tastes. This company also produces and sells other soft drinks and citrus beverage with more
than 2800 products available in more than 200 countries and become the largest beverage manufacturer
and distributor in the world. Coca Cola also known as the largest corporation in United States that
headquarter are in Atlanta, Georgia. As the third most valuable brand, Coca Cola also have a unique
marketing strategy that design to give huge boost in increasing their brand and marketing strategy that has
been use is “4Ps” which is Product, Price, Promotion and Place.

Mission :
• To refresh the world
• To inspire moments of optimism and happiness
• To create value and make a difference

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

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1. Analysis of Case Study – THREE LENSES

a. Five Porter’s Analysis

Five Porter’s Force model named is after its own developer which is Michael E Porter
that helps to analyze the critical forces in affecting the level of competition in an industry.
This is the analysis of Five Force in Coca Cola Company.

1. Bargaining power of suppliers :

Coca Cola in bargaining power of suppliers is weak because the number of

suppliers that supply their raw materials is high and the switching costs for Coca
Cola is low. This means that while Coca Cola easily switch their supplier to
another supplier, it is not possible for any supplier to switch any time with from
Coca Cola easily. This switch situation will lead to losses for any supplier even
though the size of suppliers is moderately large or small. Furthermore, even if
there is no supplier that have raw materials like sugar, there will always be other
suppliers and the number are still high. So, the main factors of bargaining power
of suppliers are :

• Large number of suppliers

• Small to moderately large size of individual suppliers
• Forward integration difficult for the suppliers
• Switching costs for Coca Cola is not so high

2. Bargaining power of buyers :

The bargaining power of customer is low in Coca Cola case because generally
customer only buy in small volumes and they are not concentrated in specific
markets too. Coca Cola and Pepsi also have low differentiation between them
because mostly they are selling the similar flavors. This situation will cause
customer switching costs which is not high but still the two brands enjoy high
brand loyalty. However, if a retailer has a power of bargaining just like customer
it would be high because they buy it in a large volume.

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3. Threat of new entrants :

The threat for new entrants to entering in this industry is quite high because
growing a brand in overnight is impossible especially when compete with the
largest and globally company like Coca Cola. There must be investment has to be
made especially from operations to marketing which every part requires a large
investment. This is because some local brands may start it at smaller scall still
marketing and hiring a qualified staff which requires generous investment. The
level of customer loyalty in the industry is moderate and to get their loyalty in
any brand will take some time. So, for new entrants who want to compete Coca
Cola at a smaller or local level will requires both capital and skilled human
resources.

4. Threat of substitutes :

The threat of substitutes for Coca Cola is strong because their products are the
beverages that also made by Pepsi, fruit juices and other hot ad cold beverages.
Furthermore, the number of substitutes of Coca Cola product is high and several
juices and other kinds of hot and cold beverage are available in the market. This
leads to low switching costs by customer and the quality of substitute products is
also generally good.

5. Competitive rivalry between the existing players :

The competitive rivalry for Coca Cola is strong force because Coca Cola and
Pepsi is the major player which in the same soda industry. There are also a few
smaller players too, but they do not affect a major competitive threat. But both
two Coca Cola and Pepsi are nearly the same size and have a similar product and
strategies. There is almost no differentiation between Coca Cola and Pepsi so
therefore the price is the competition between two.

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b. Value Chain Analysis

Value chain analysis concept was introduced by Professor Michael E Porter of Harvard
Business School which include all the activities starting from obtaining the raw materials
from various sources to final sales and other sales service. This analysis will help
managers to picture how manage their company and adding value to their product so they
can obtain a better result.

1. Primary Activities

The primary activities of Coca Cola Company is they directly involved in

producing and selling the product to targeted customers.

• Inbound Logistics :

Since Coca Cola Company produce beverage product, their main ingredient
would be water and Coca Cola also uses high fructose corn syrup (HFCS)
which they purchased it from United States with their based supplier and
delivering it by trucks. Coca Cola also uses ingredient from internationally
such as juice orange from Florida and Southern Hemisphere, Brazil. The
international sources will be sent via trucks and ships.

• Operations
Coca Cola operating segments are divided into 7 groups :
i. Eurasia and Africa
ii. Europe
iii. Latin America
iv. North America
v. Asia Pacific
vi. Botting Investments
vii. Corporate

Coca Cola operates many local channels since this company is global brand, it
covers all local scale in every community. But they do not own or control all
their bottling partners because they just manufacture and sell the syrups to the
bottling partners only. So, company that own the brand is responsible to initiative
the brand in the market.
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• Outbound Logistics :
Coca Cola bottling partners do the manufacture, package, merchandise and
distribute to the final product and market it to customer and vending partners.
The vending partners will sell the product to customer and they include from
the grocery stores, restaurants, street vendor, convenience stores, movie
theaters and amusement parks. The bottling partner will work as intermediary
partnership of Coca Cola between customer to execute localized strategies.

Independent
Areas Covered
Bottling Partner

Coca Cola FEMSA, Northeast parts of Mexico, Brazil, Guatemala,

S.A.B.de C.V (“Coca Colombia, Costa Rica, Nicaragua, Panama,
Cola FEMSA) Venezuela, western Argentina and Philippines

Armenia, Austria, Belarus, Bosnia-Herzegovina,

Bulgaria, Croatia, Cyprus, the Czech Republic,
Estonia, the Former Yugoslav Republic of
Coca Cola HBC
Macedonia, Greece, Hungary, Italy, Latvia,
AG (“Coca Cola
Lithuania, Moldova, Montenegro, Nigeria,
Hellenic)
Northern Ireland, Poland, Republic of Ireland,
Romania, Russia, Serbia, Slovakia, Slovenia,
Switzerland and Ukraine

Arca Continental Western Mexico, Ecuador and northern Argentina

S.A.B de C.V

Belgium, continental France, Great Britain,

NEW CCE Luxembourg, Monaco, the Netherlands, Norway
and Sweden

Hong Kong, Taiwan, seven provinces in mainland

Swire Beverages
China and territories in 11 states in the western
(“Swire”)
United States

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 • Marketing and Sales :
Coca Cola have used digital channel, social media, print media and outdoor
marketing to promote its brand and products since this company is well
known and famous with a recognizable logo. Coca Cola also run many
campaigns from time to time.
• Service :
Coca Cola maintaining customer service through online chat by using a
virtual agent in official websites of the company. Coca Cola also provide
FAQ in their official websites that will help them to covers the most aspects
of the products in detailed manner.

2. Secondary Activities :
• Technology :
Coca Cola always maintaining their company to become a global brand. So,
Coca Cola will always focus on inventing and innovating their technologies
especially in R&D. They have six R&D centers around the world that are
connected to external technology and assessment hubs. From R&D with their
partners they will make innovation in products, packaging, equipment and
other.
• Human Resource Management :
Coca Cola focus on hiring and developing talent and creating an environment
of learning and growth. Coca Cola will pay them a good salary and
complement them with payment and reward. Coca Cola also focus on
motivating their employee’s performance to growth.
• Procurement :
Coca Cola maintaining a good relationship with the suppliers and farmers
since it is a large company. They also use technology to ease the process
work efficiently and provide guidelines for supplier to follow.
• Film Infrastructure :

Coca Cola managing a large infrastructure including management, human

resources, financial and technologies focusing on innovating R&D.

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c. SWOT Analysis :
1. Strength :
i. Strong brand identity – Coca Cola is a highly popular brand with the most
unique identity and the most selling soft drinks in the history.
ii. Highest brand equity – Coca Cola was awarded as the highest brand equity in
2011 because of the most renowned brands with highest brand equity.
iii. Extended global reach – More than 200 countries with 9 billion servings per
day sold company products and 500 more for new products globally like
Coca Cola Vanilla and Cherry Coca Cola.
iv. Greatest brand association and customer loyalty – Coca Cola considered as
one of the United States emotional and connected brand because it has a
strong loyalty customer that valuable with happiness .
v. Largest brand valuation – Coca Cola estimated brand value of $7996 billion
and retained the top position as the 3rd Best Global Brand on Interbrand’s
annual ranking.
vi. Dominate market share – Coca Cola and Pepsi are the largest manufactures
of soft drinks in beverage industry but Coca Cola has the largest market share
such as Coke, Sprite, Diet Coke, Fanta, Limca and Maaza.
vii. Unparalleled distribution system – With 250 bottling partnership in globally,
Coca Cola must have the most efficient and extensive distribution network in
the world.
viii. Acquisitions – In 2016, Coca Cola has acquired Ades which is known as the
largest soy-based beverage brand in Latin America.

2. Weaknesses :

i. Aggressive competition with Pepsi – Pepsi and Coca Cola produced the
similar soft drinks in the same industry and it also well known just like Coca
Cola. So, that is why Pepsi is the biggest rival for Coca Cola and if its not
Coca Cola would conquer the market and become the leader in the beverage
industry.
ii. Product diversification – Pepsi not only have beverage like soft drink as their
product, they also launching snacks as their product like Lays and Kurkure
while Coca Cola still lagging and Pepsi leverage over Coca Cola

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 iii. Health concerns – Coca Cola manufactured soft drinks which also known as
carbonated drinks that becoming the major source of sugar intake. This cause
an health issues like obesity and diabetes and still Coca Cola do not have any
solution to solve the problem.

3. Opportunities

i. Introduce new products and diversity its segments – Coca Cola can improve
their products by producing a new segment just like Pepsi such as food and
more healthy products which can help them to contribute revenue and branch
out from the carbonated drinks.
ii. Increase presence in developing nations – Coca Cola can increase their
presence in hot climate region like Middle Eastern and African countries
iii. Bring advance supply chain system – Since Coca Cola is globally brand, they
market their products all around the world which cost transportation and fuel
prices. So, this can solve by improving their system for distribution and make
it more advance.
iv. Package drinking water – Coca Cola only have several packaged drinking
water like Kinley. So, it is great if Coca Cola can expand and bring more
healthy drinks in the market so that can avoid people’s criticism.

4. Threat :

i. Water usage controversy – Many social and environment group have critics
Coca Cola about managing water and claim that this company has a vast
consumption of water in water scarce regions. Furthermore, people also
claim that Coca Cola is polluting the water mixing pesticides to clear the
water.
ii. Packaging controversy – In 2017, Greenpeace has censured Coca Cola for
using plastics bottles that cannot be recycle and renewable
iii. Direct and indirect competition – Other than Pepsi as Coca Cola direct
competition, there are also indirect competing happen with Coca Cola like
Starbucks, Costa Coffee, Tropicana, Lipton juices and Nescafe.

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d. Failure Analysis

Coca Cola is well known brand and most popular brand in the world, but this company
also have massive failure on their way to becoming the largest and globally brand.
1. New Coke
New Coke was introduced by Coca Cola to the world on April 23, 1985. New
Coke was a new formula that has made by Coca Cola Company but did not get
response and encouragement from customers because old Coke is better than the
New Coke. People also give negative response that Coca Cola try to something
that they were not meant to be.
2. Dasani
Dasani was introduced and launched in United Kingdom and it did not get a
positive response from people because the strapline from Coca Cola “WAYER
WITH SPUNK”. The “Spunk” word that is very unpleasant meaning because
United Kingdom and United States has a different slang.
3. Tab Clear
Initially the Tab Clear was introduced just to compete with Pepsi in 1992. This is
because Pepsi has release Crystal Pepsi to the world but did not get response
from customer. So, Coca Cola take the opportunities to release the similar
product and then the Tab Clear appear from Coca Cola. But, within a year both
Crystal Pepsi and Tab Clear were kicked to the curb.

4. Coca Cola Balk

Coca Cola Balk is a coffee flavored that has released by Coca Cola Company in
United States in 2006 but did not get huge response from customer. But in 2019,
Coca Cola bring the Coca Cola Balk into market with a different packaging and
higher quantity of caffeine.
5. Vault
Early 2000s and 2010s, energy drink has become popular and at that time Pepsi
take a chances to released Mountain Dew that has positioning itself as a
champion of extreme sport such as snowboarding and skateboarding. But, Coca
Cola did not give up there, they released new product which is Vault in 2005 by
adding green color for the packaging to draw consumer interest. However, the
vault presence did not last long.

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 Summary

In conclusion, Coca Cola Company faced many obstacles to achieve their goals and becoming the largest
brand that well known around the world. In other word, although Coca Cola faces various obstacles but
that does not end there and they will keep trying to become more than expectation, keep inventing,
innovating and producing product to attract more customers’ interest. Coca Cola keep on using many
strategy to gain and maintaining their position until now so they could to compete with Pepsi because
Pepsi was they biggest rival among other competitors that produce the similar product which it is quite
hard for Coca Cola. Furthermore, from the failure analysis, Coca Cola clearly did many mistakes in
competing with Pepsi because they keep coming with new product that make Coca Cola fall behind for a
while. However, Coca Cola sees those failure as an advantage for them to improve their product and
services for their loyalty customers because customers is Coca Cola priority.

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References

1. Nguyen Duc Phat, Le Quoc Tuan, Hoang Ngoc Tram Anh, Le Thuy Thao Vy & Truong Dinh
Phu. (2018/2019). Coca Cola Report : Marketing Plan Original Coke Group 1.

2. Laura Williams Bustos, Msed (May 2020). Mashed. Coca Cola products that were massive fails.
https://www.mashed.com/210897/coca-cola-products-that-were-massive-fails/

3. MindTools. (2020) SWOT Analysis : How to Develop a Strategy For Success.

https://www.mindtools.com/pages/article/newTMC_05.htm

4. Dave Trott (2000) The Marketing Society. Water Bomb.

https://www.marketingsociety.com/thelibrary/waterbomb#:~:text=It%20was%20found%20that%
20one,of%20Dasani%20was%20a%20failure.

5. Brianna Parker (2020). Business Strategy Hub. SWOT Analysis of Coca Cola.
https://bstrategyhub.com/swot-analysis-of-coca-cola-2019-coca-cola-swot-analysis/

6. Adamkasi (2017). Porter Analysis. Porter’s Five Forces of Coca Cola

https://www.porteranalysis.com/porters-five-forces-of-coca-cola/

7. Abhijeet Pratap (2017). notesmatic. Coca Cola Five Forces Analysis.

https://notesmatic.com/2017/02/coca-cola-five-forces-analysis/

8. Rajani Baburajan (March 2019). Infotechlead. Coca Cola to focus on digital strategy to enhance
business efficiency https://infotechlead.com/cio/coca-cola-to-unleash-digital-strategy-after-10-
drop-in-revenue-58044

9. John Dudovsky (2015). Business Research Methodology. Coca Cola Value Chain Analysis.
https://research-methodology.net/coca-cola-value-chain-analysis/

10. Taylor Byrne (September 2018). Essay48. Value Chain Analysis of Coca Cola Company.
https://www.essay48.com/value-chain-analysis/15049-Coca-Cola-Company-The-Value-Chain-
Analysis
11. Adam Zeidan (2020). Britannica. The Coca Cola Company.
https://www.britannica.com/topic/The-Coca-Cola-Company

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