Essay Sample on Internal Analysis of Coca-Cola

Among world-leading drinks corporations is Coca-Cola Company created in 1886 and established its headquarters in Atlanta. Coca-Cola engages in sales, marketing and manufacture of nonalcoholic beverages globally dominating 48% of the global markets. The main Coca-Cola competitors are Nestle, PepsiCo, and Dr. Pepper Snapple (DPS). PepsiCo is the biggest competitor working within the soft drinks sector generating 196% of the revenue of Coca-Cola (Owler, 2019). Nestle works within the food processing industry and it makes 59.3 billion dollars of revenue compared to Coca-Cola (Owler, 2019). DPS is a private company competing in the nonalcoholic beverages sector having 41, 600 fewer employees compared to Coca-Cola (Owler, 2019). In terms of market share, the company has been gaining continuous value share in the total beverages that are nonalcoholic ready-to-drink (NARTD) (The Coca-Cola Company, 2019a).

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Coca-Cola's quarterly and annual revenue history from 2015 to 2019 has varied in increase and decrease. The revenue from the quarter ending on 30 September 2019 was 9.507 billion dollars, a rise of 8.34% YoY ("year over year"). The revenue for the 12 months ending on 30th September 2019 was 33.558 billion dollars marking an increase of 0.67% year over year (Macrotrends, 2019). The yearly 2018 revenue of Coca-Cola was 31.856 billion dollars representing a decline from 2017 of 10.04% (Macrotrends, 2019). The 2017 Coca-Cola yearly income was $35.41 billion marking a drop of 15.41% from 2016 (Macrotrends, 2019). The annual revenue for 2016 amounted to 41.836 billion dollars, a decline of 5.49% from 2015 (Macrotrends, 2019).

The gross profits for the quarter ending on 30th September 2019 were 5.740 billion dollars representing a 5.73% increase YoY (Macrotrends, 2019). The annual gross profits ending September 30, 2019, amounted to 20.737 billion dollars marking a 1.34% decline YoY (Macrotrends, 2019). The 2018 gross yearly profit for Coca-Cola amounted to 20.086 billion dollars, a drop of 9.34% from 2017 (Macrotrends, 2019). The annual gross profit for Coca-Cola in 2017 totaled 22.155 billion dollars indicating a decline of 12.77% from 2016 (Macrotrends, 2019). The 2016 gross yearly profit for Coca-Cola amounted to 25.398 billion dollars, a drop of 5.27% from 2015 (Macrotrends, 2019).

The analysis of the revenue and income from 2014 to 2018 focused on the investments the company made. In 2018, the operating profit of Coca-Cola totaled to about $8.7 billion marking a 14.49% increase from 2017 (Macrotrends, 2019). the annual report of 2018 addressed approximately 36.7% of the global revenue (Conway, 2019). The company's yearly operating revenue in 2017 totaled to $7.501 billion, a decline of 12.22% from 2016. The 2016 annual operating income for Coca-Cola totaled 8.626 billion dollars representing a 0.81% decline from 2015 (Macrotrends, 2019).

Resources entail the inputs required to develop products which can be intangible or tangible. Tangible resources are physical inputs. The intangible resources include knowledge, location, trademarks and patents. The global distribution network for the company enables Coca-Cola to serve as the worldwide marketplace and uphold its worldwide presence. The company functions via several resident networks. The corporation has an extensive product range which found in more than 200 countries offering more than 500 brands. Coca-Cola products are a variety from soft drinks, sports drinks, liquids, organic tea, grab-and-go coffee, and milk, to coconut water. Of the company's top 20 brands, 18 contain no or low sugar options and about 40% of the sparkling brands get packaged in small bottles.

The brand image of Coca-Cola is owned by the company and is responsible for initiatives of brand marketing to consumers. Marketing expenses and skills of Coca-Cola, focusing on programs of marketing and advertising programs encouraging sales growth of sales for the company. Coca-Cola considers changing the A & M method by making them more digital and focused emphasizing minimum spending and healthy products in the bottling business. It is to lower the gap of the 2018 reported revenue of PEP of 64.7 billion dollars against Coca-Cola's 31.9 billion dollars (Trefis Team & Great Speculations, 2019). The Coca-Cola secret formula is challenging to obtain in whole for anyone. The first part comprises of fluid extract of coca, and caramel: Vanilla, lime juice, water, sugar, caffeine, and citric acid. The second part of the recipe has code 7X and entailed cinnamon, neroli, coriander, nutmeg oil, lemon oil, orange oil, and alcohol (Braiker, 2011).

Coca-Cola contains several core competencies that are set of experiences or skills that are responsible for its success in the market. They include human assets, the distribution system and the company brand. The employees of the company contribute highly to developing a diverse labor force and creating a culture of the business that promotes value creation, innovation, and learning daily. The distribution system of Coca-Cola involves bottlers who are certified, vendors, and retail chains. Coca-Cola produces and vends syrups, concentrates, and beverage bases to bottlers. The bottling associates process, set, produce and dispense the product to selling associates and clients. The bottlers work in collaboration with customers in amusement parks, movie theaters, convenience stores, street vendors, restaurants and grocery stores among others. They execute a localized approach created in agreement with Coca-Cola.

The customers are responsible for selling the merchandise to clients at a serving frequency of 1.9 billion daily (The Coca-Cola Company, 2019b). Coca-Cola is one of the most popular brands and got acknowledged as the fifth greatest-valued brand by Interbrand 2019 report. The business brand got valued at 63.365 million dollars marking a decline in value by -4%. PepsiCo is recognized at number 25 globally. The company owns and licenses more than 500 brands such as sparkling soft beverages, teas, coffees, water and hydration products, plant-based, juices and dairy products.

There are several factors used to determine Coca-Cola's performance. They include operating income before taxation, operating revenues, gross profit, and net income per share of Coca-Cola. The operating margin is obtained by dividing the reported operating profit by the sales of the year ending in 2017. For each 100-dollar benefit made, 17 dollars contribute to Pepsi`s operating profit and 21 dollars towards Coca-Cola. The results indicate that Coca-Cola is a better manager of cots generating profit with a better pricing strategy and direct costs of materials which requires Pepsi to review theirs.

Global distribution network Yes, it provides the company with enough support to maintain its presence globally. Yes, only a few competitors in the beverage industry possess it enabling Coca-Cola to achieve global success. Yes, PepsiCo contains a worldwide distributor network Yes, Coca-Cola has defined procedures to distribute the products.

Extensive product range Yes, the company possesses more than 500 brands globally providing consumers with numerous tastes No, DPS, and Pepsi deal in a vast product range. Yes, temporary advantage as the competitors also possess an extensive product range yes

Brand Image Yes, it directs the value and is crucial in promoting an impressive presence in the market. Yes, it is challenging to develop a sharp brand image like Coca-Cola No, but a strong brand image of a competitor is a threat like PepsiCo yes

Marketing Yes, the marketing of the product helps the company to handle a variable image of the brand and a better connection with the consumers. Yes, matching high amounts of expenses is difficult for any company. No, competitive parity, is difficult to imitate due to high expenses yes

Secret Formula Yes, it can get accessed with specific individuals in the company. Yes, the differentiated flavor of Coca-Cola provides a competitive edge to the competitors. No, difficult to imitate yes

The Likeliness of The Resources to Yield A Competitive Advantage for Coke.

The resources have varied contributions to Coca-Cola's competitive advantage. The global distribution network provides Coca-Cola with a temporary lead since competitors like Pepsi can copy it. The extensive range of a product can be easily imitated by competitors as they also deal with vast product varieties hence posing a temporary advantage. The brand image is likely to yield a competitive advantage since it is the leading beverage brand globally. In terms of marketing, it poses competitive parity since it utilizes enormous expenditures. On the downside, a competitor with strong financial backing can imitate it. The secret formula cannot be copied creating a high likelihood to yield a sustainable competitive advantage.

References

Braiker, B. (2011, February 14). Is This the Secret Coke Recipe? Retrieved from https://abcnews.go.com/Business/coca-colas-secret-formula-revealed/story?id=12914877

The Coca-Cola Company. (2019, April 23). Strong Results Continued in Second Quarter 2018 | Press Release. Retrieved from https://www.coca-colacompany.com/press-releases/the-coca-cola-company-reports-operating-results-q2-2018

The Coca-Cola Company. (2019). Coca-Cola System - Our Company. Retrieved from https://www.coca-colacompany.com/company/coca-cola-system

Conway, J. (2019, March 27). Coca-Cola revenue and income 2009-2018. Retrieved from https://www.statista.com/statistics/264423/revenue-and-financial-results-of-coca-cola/

Macrotrends. (2019). Coca-Cola Revenue 2006-2019 | KO. Retrieved from https://www.macrotrends.net/stocks/charts/KO/coca-cola/revenue

Owler. (2019). Coca-Cola's Competitors, Revenue, Number of Employees, Funding, and Acquisitions. Retrieved from https://www.owler.com/company/coca-colacompany

Trefis Team, T., & Great Speculations. (2019, March 13). Can Coca-Cola Increase Its Revenue And Profitability By Slashing Its Advertising The Next Two Years? Retrieved from https://www.forbes.com/sites/greatspeculations/2019/03/13/can-coca-cola-increase-its-revenue-and-profitability-by-slashing-its-advertising-the-next-two-years/#2dfedd994419