Competitive Strategy of Coca Cola-Free-Samples-Myassignmenthelp.com

Question: Write an essay of explaining the main strategy development tools and how they are used. Answer: Introduction For a business organisation to survive it needs to ensure that it develops relevant strategies that can help it to secure a competitive advantage in the market. According to Theaker (2017), a competitive strategy can help the organisations to gain an advantage in the market by analysing the environment. This can provide an analysis of the competition as well as the market so that relevant strategies for the satisfaction of customers and growth of sales can be developed. The essay identifies the importance of using strategic tools such as Porters five force analysis, PESTEL analysis and input/output theory that are relevant in the analysis of the business market. Each of the theories has their own significance that plays a crucial role in analysing the business competition in the market. Background of the company Coca Cola is a soft drink manufacturing company, which was introduced in 1886. John Pemberton initially developed the company a patent medicine company. Coca Cola attained global fame due to the marketing skills of Asa Giggs Candler. Coca Cola is one of the most famous companies that exist in the beverage industry. Coca Cola is the third most valuable brand after Apple and Google (Coca-colacompany.com 2018). Concept of PESTEL framework PESTEL framework is necessary for analysing the external environment factors that cause hindrance in the business market. According to Lamas Leite et al. (2017), these common external market factors can help in analysing the market and ensure that the common threats are mitigated. The PESTEL framework is an acronym for six of the most important and modern market elements that exist in a business environment. These elements include political, economical, social, technological, environmental and legal. Analysis of PESTEL framework Political: The political factor consists of the interference of the Government. The Government of a country need to ensure that a company does not provide any products that can harm the safety of the people. In the case of Coca-Cola, the colours and flavours of the products pose threat in the political factor of the product. Economical: The economical factor is the most unpredictable factor for any business organisation. This is mainly because of the fact that the economies of a nation fluctuates constantly. Thereby, it is important to conduct an analysis of this factor for the effectiveness of business. Social: The use of excess sugar for the manufacturing of the product may cause health problems people in the society and make people suffer from diseases. Thus, this is considered as an important health factor to be considered by Coca-Cola. Technological: The technological advantage that the company can receive is centred in the manufacturing of the products. The technological advantage received by Coca-Cola is that the research and development of the company is updated and it helps in identifying any flaws that may exist in the manufacturing process. Environmental: According to Rothaermel (2015), conducting a sustainable business is considered as a major issue in both political as well as environmental form. The environment of a country need to be protected so that the company and the industry can prosper under the society. Legal: A company like Coca-Cola, it needs to ensure that it maintains the rules of the law and the political government by adhering to the rules set by FDA. The use of plastic bottles is not always acceptable in many countries because it causes problems in the drainage of water (Porter and Heppelmann 2014). Concept of Porters five-force framework According to Dobbs (2014), the external analysis is important for organisations so that it can analyse the immediate threats that exist in the market. The threats in the markets are basically the common market and environmental factors that provide resistance to the service of the organisation. In this regard, one such framework can be used to identify the threats and competition that exist in a business. Michael Porter identified five forces that may cause hindrance to the existence of a successful business. The five forces identified by Porter helps to determine the competitive intensity and the attractiveness that can be gained in terms of profitability and productivity in an organisation. Analysis of Porters five-force framework Threat of new entrants: According to Anton (2015), the threat of new entrants is low for Coca-Cola and of the beverage industry. The reputation of Coca-Cola has made the company maintain its number one stature in the business world and consequently have ensured that the company does not allow any other threat in the business market. Bargaining power of buyers: The bargaining power of buyers is medium as the customers may change its preferences. Coca-Cola need to ensure that the marketing mix elements such as product, price and place of selling the products are maintained for effectively conducting the business. Bargaining power of suppliers: The bargaining power of suppliers also poses medium threat as the company can get many suppliers to provide them with the required ingredients. Thus, Coca-Cola does not have to be worried about the factors that may affect the suppliers of the company. Threat of substitutes: One of the biggest rival companies of Coca-Cola includes Pepsi Cola. Pepsi Cola has been in the industry for a long time and it poses threat to Coca-Cola in every aspect. Thus, it can be said that the threat of substitutes in high in the case of Coca-Cola. Industry rivalry: The industry rivalry, like Coca-Cola and Pepsi Cola pose high threat to one another. The manners in which these two companies continue to be innovative and implement strategies denote the intense rivalry that exists. Competition to be the best in the industry is always a factor that intensifies rivalry in the companies. Analysis of input/output model According to Johnson (2016), the input/output method can be used to analyse the interdependency technique in various economic branches. This includes the analysis of the economic technique in national as well as the regional economy. This analysis is derived from the application of the supply and demand curves that help an organisation to understand the economic strength and with it make strategies that can mitigate the economic challenges faced by the industry. One of the most approachable ways to conduct the business is by tying the regions together that exist at the national level (Kuratko, Hornsby and Covin 2014). This can help in analysing the intra-region, inter-industry transactions and the inter-region, intra-industry transactions. An example can be provided that can help in understanding the model in a more comprehensive manner. In the case of Coca-Cola, the company need to analyse the suppliers and the type of ingredients that is provided to the company. The suppliers of Coca-Cola normally come from various parts of the world in which the company is the number one drink. According to Zhao (2016), the demand and supply of the company is depended on the suppliers and the manner in which the suppliers can implement itself in the changing environment of the markets of Coca-Cola. This can help Coca-Cola to continue its production in the competitive business market. Conclusion Hence, it can be concluded that in order to gain a competitive advantage in the market, organisations need to ensure that it selects the best strategic method to gain the advantage. The application of the PESTEL analysis, Porters five-force model and input/output model can be used to understand the external threats and competitions in the market. However, certain limitations also exist in the application of the model as it sometimes cannot be used for all-purpose and dependence on other models can be required to solve the problems. Therefore, it is necessary that organisations use the approaches depending on the situation and likewise take actions necessary for conducting business in the market. References Anton, R., 2015. An Integrated Strategy Framework (ISF) for Combining Porter's 5-Forces, Diamond, PESTEL, and SWOT Analysis. Coca-colacompany.com 2018.Coca-Cola Journey Homepage. [online] The Coca-Cola Company. 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