Coke internal analysis and strategy formulation

An assessment is made on the company’s profit, market share position and performance vis-à-vis the company’s competitors. Also, the company’s resources, core competencies, distinctive competencies, and the VRIO framework will be used to establish the sustainability of the company’s competitive advantage. PART A Coca-cola is a multinational company and a market leader in the beverage industry. The soft drink; Coca-cola; was invented by Dr John S Pemberton in 1886 in Atlanta, Georgia. The company received its patent in 1887 and registered as a trademark in 1983 (coca-colahellenic. Just like Coca-cola, PepsiCo sells in more than 200 countries across the globe (Pratap, 2018). Red Bull is also a competitor. Founded by Dietrich Mateschitz in the 1980’s, the company competes with Coca-cola in the production of energy drinks (energydrink.

redbull. com, n. This was a decrease of 2% from the year 2013. With these sales, the company made a gross profit of $28. 109 billion (macrotrends. net, n. d). However, its market share rose to 48. 6% because of the company’s increased marketing (statista. com, n. d). In 2016, the company made sales worth $41. 41 billion. It was a high decrease of 15. 41% from the year 2015. Its profit also decreased by 12. 77% to $22. 856 billion from the year 2017. The gross profit also declined by 9. 34% to $20. 086 (macrotrends. net, n. In reference to other competitors, PepsiCo has a gross profit of $12. 515 billion, Red Bull had a gross profit of 6. 3 billion pounds while the Dr Pepper Snapple had a gross profit of $3. 88 billion (macrotrends. net). The company’s only challenge is on how to use technology to enhance business growth (ar-vr.

cioreview. com, n. d). Nestle also develops breakthrough technologies used in product development. PepsiCo has 267,000 employees (statista. com), Red Bull has about 12000 employees, DR Pepper Snapple has about 21000 employees in the world (statista. com, 2017) while Nestle has 323000 employees. Therefore, in terms of the human resources, Coca-cola leads. The tangible and intangible assets are also important in the company. First, its brand is the major core competence. The product is liked by many people across the world, it leads to brand loyalty; hence, it is the most valuable brand in the world. The company has licensed more than 400 brands. Second, Coke’s distinct taste which gives a unique flavor serves as the company’s core competence. Third, the company has administrative competence.

B, the VRIO framework is used to measure a company’s sustainable competitive advantage (Andersen, & Schrøder, 2010). This is done through the assessment of the company’s internal resources and capabilities. Also, it helps companies to identify and preserve their resources and capabilities so as to attain a competitive advantage. The framework ascertains that the company’s resources and capabilities must be valuable, rare, imperfectly imitable and non-sustainable (Andersen, & Schrøder, 2010). Coke’s VRIO framework Factor Value (Make use of the opportunities) Rarity (owned by the firm exclusively or by few companies in the market) Imitability (Very expensive to imitate) Organization (Arranging tasks and actions) Technology Yes. No. Just as Coke, other company’s has their own physical assets and intangible assets such as goodwill.

Yes. Coke’s sophisticated bottling plants, machines and other assets are costly to acquire. Yes. Human resources Yes. The way the company manages its human resources is way ahead of other companies. It helps the company manage its resources. Yes. The company’s human resource management strategies are rare to find in the industry. The company’s secret formula cannot be imitated. Yes. The company’s secret formula is well structured. Distribution Yes- Coca-cola enhances its distribution strategy through global markets Yes. Given its global presence, Coca-cola has many buyers. Yes. The specific products of Coke cannot be imitated. Yes. The company shows its organization by differentiating the color of the brand PART D The analysis of Coke’s resources and capabilities helps to determine if the company has a competitive advantage.

The company’s existing technologies assist in sustainable competitive advantage on a small margin because other companies have such technologies. The company’s organizational structure, management, policies, processes and control mechanisms optimizes its competitive advantage. References Andersen, T. J. , & Schrøder, P. W. net/stocks/charts/KO/coca-cola/gross-profit Constantly Improving Technology Essential To Survive. Retrieved from https://ar-vr. cioreview. com/cioviewpoint/constantly-improving-technology-essential-to-survive-nid-177-cid-135. html Dr Pepper Snapple's employees worldwide, 2017 | Statistic. Retrieved from https://www. stock-analysis-on. net/NASDAQ/Company/PepsiCo-Inc/Analysis/Property-Plant-and-Equipment#Disclosure Pepsico Net Income 2006-2018 | PEP. Retrieved from https://www. macrotrends. Retrieved from https://craft. co/red-bull Red Bull the company - Who makes Red Bull? Red Bull Origin: Energy Drink :: Red Bull. Retrieved from https://energydrink. redbull. com/company.