This marketing report provides an analysis of the soft drinks industry with a comparison of Coca-Cola and Vimto. It begins with an introduction and methodology. Then, it performs a PEST analysis of the macroeconomic factors impacting the industry. It also analyzes microeconomic trends and industry profitability factors. Next, it examines the internal strengths and weaknesses of Coca-Cola and Vimto using a SWOT analysis framework. The report concludes with strategic recommendations for both companies based on the external and internal analyses.

1. A Marketing Report
For The Soft Drinks
Industry With A
Comparison Between
Coca-Cola And Vimto.
Word Count (not
including references,
tables and figures):
3028
By Alex Kaitiff
Newcastle University, StudentNumber: 120021824
Module Code: MKT2000, ModuleLeader: Paul Naughton

2. Alex Kaitiff
StudentNumber:120021824
Contents
Introduction and Methodology
PEST Analysis
Microeconomic Environment
Analysis of Macro and Micro Factors
Internal Analysis of Coca-Cola and Vimto
Opportunities and Threats in the External
Environment
Strategic Recommendations for Coca-Cola
and Vimto
Evidence Analysis
Figures, Notes and References

3. Alex Kaitiff
StudentNumber:120021824

4. Alex Kaitiff
StudentNumber:120021824
Introduction
Global Marketinginvolves conceptualizingandconveyinga productor service worldwide by
targetingan international audience.
Thisreportwill examinethe macroeconomicandmicroeconomicfactorsimpactinguponthe Soft
Drinksindustryandhowthese factorsleadmarketerstodevise suitable global strategiestoachieve
corporate goals. SoftDrinks is an oligopolisticmarket,withCoca-ColaandPepsi having large market
share,whilstotherbrands holdsmallerproportionsof the market,orare part of large firms’
conglomerates.Companiesmustprovide value tocustomerstogainregularsales.
Methodology
Thisreportis dividedinto 4sections,withinwhichseveral marketingframeworkswill be used.
Firstly, thisreportwill identify importantfactorswithinthe macroeconomicandmicroeconomic
environmentwhichinfluence industryperformance. The macroeconomicandmicroeconomicfactors
are intrinsicallylinked,with the macroeconomicfactorsoutlinedimpacting the microeconomic
environment.
Then,there will be ananalysisof howthese factors, togetherwith the state of the competitive
environment,incorporatingimpactsof customers,competitors,suppliersandintermediaries,will
influencecompanies’strategies.
Next,acomparative analysisof mytwochosencompanies,Coca-ColaandVimto, utilisingthe
SWOT framework,will be compiled.Thus,strategiesformychosencompanieswill be identified.
The final sectionof the reportwill consistof recommendationsforeachcompanytoprogress in
the global marketplace.The assembledresearchandinformation,inadditiontothe resulting
analysiswill formthe basisof the recommendations.

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PEST Analysis
The PEST analysisis usedtoanalyse the external macroeconomicfactors affectinganindustryand
companieswithinit(Baines etal,2011). It establishes the potential factors whichcouldhinderoraid
softdrinks companies.The extenttowhichcompanieswithin anindustryare affected differs,
dependentonthe size of businessesandtheirinfrastructure,and alsothe marketsubsectionthey
target.
Recently,the mostprominentmacroeconomicfactorimpacting the softdrinksindustryis healthy
living.Businessesnowtrytoappeal to health-consciouscustomers profitably,causingcompaniesto
change tactics and abide bynewlaws promotinghealthierlifestyles.Conversely,technologywill
contribute verysparsely tothe welfare andattractivenessof the industry.
PEST
Political-Legal  20% taxation proposedon sugared
soft drinks.
Increasedtax leadstolowerdemand
for sugarydrinks. Customersmay
searchfor alternatives.
 Import Laws.
Some countrieshave strictimportlaws,
whichmay limitthe quantityof
productsimportedormay increase
transparencyof sensitivecompany
information.
 Sugar contentscrutiny from FDA and
FTC.
Increasedverificationof sugarcontent
claimsthat portraya companyas
health-conscious.
 Caffeine limitonSoft Drinks.
Highlycaffeinatedsoftdrinksmay
sufferareduction indemand.More
applicable tothe energydrinksmarket.
Economic  Consumerincomesrising.
More purchasingpowerforbranded
softdrinks.
 Risingstandards of living.
More interestinluxury,brandedsoft
drinks.
 Continuedurbanisation.
Easieraccess to softdrinksdistributors:
supermarketsand convenience stores.
 DevelopingeconomiesinmostBRIC
nations (Brazil,Russia,India,China),
seeingstronggrowthpatterns,except
Russia.
 Africaneconomiesgrowingdue to
wealthof natural resources.
 Asianeconomiescontinue strong
growth(especiallySingapore).

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 Latin Americanhouseholdwealth
increase.
 IMF lowersMiddle Eastgrowth
forecastsas oil pricesremainweak(1).
 MediacensorshipinMiddle East (2).
 Poorgrowth of Australianeconomy (3).
 PoorRussianeconomy (4).
Socio-Cultural  Increasedconcern over healthy
lifestyle.
Leadsto a reductionindemandfor
sugarydrinks,butan increase in
demandforhealthieralternatives.
 Australian obesitycrisis.
Measuresputin place to reduce soft
drinksconsumption.
 Social mediausedfor promotion.
Easieraccess forcustomersto interact
withproducts,to give feedbackandto
expressopinionswhichmayinfluence
consumerbehaviour.
 Environmental focus on packaging.
Increaseduse of recyclable packaging,
such as PET.
Technological  Research and Developmentinto
environmentally-friendly
technologies.
Companies heavilyinvestinginnew
technologiestoappeal to
environmentally-consciousconsumers.
Table 1.1: A table toshowa PEST analysisof the external environment.

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MicroeconomicEnvironment
The microeconomicfactorsimpacting the SoftDrinksIndustrycanbe separatedintoTrendsand
IndustryProfitabilityfactors.Analysingthesefactors enablesmarketerstodecipherhow easyand
profitable it’ll be toenterthe market. They understandthe competition’sstrength,wherethe power
liesinthe supplychain,andthe trendswithinthe market,resultingfromthe macroeconomicfactors
present.
Customer/Markettrends Industry Profitability
 Increaseddemandforhealthiersoft
drinks.
 Increasedpurchasingpowerin
developingnations.
 Newfounduse of alternative
sweeteners.
 Range of package sizesnowavailable.
 Increaseduse of PET bottles.
 Supermarketsandconvenience stores
are maindistributionnetworks.
 Promotionnowprovidingpersonal
value.
 Extensive competitionleadingtomulti-
mediapromotion,includingsocial
media.
 Mobile consumption.
 Celebrityculture.
 Power ofBuyers.
Bargainingpowerof retailersdepends
on size of the brand.
Retailers’ abilitytobackwardsintegrate
isimportant.
Customershave loyaltytoestablished
brands.
 Threat of Substitutes.
No switchingcosts.
Healthylivingtrendleadscustomersto
re-assesssoftdrinksconsumption.
Table 1.2: Micro analysisof the performance environment.

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Porters-5-ForcesFramework
Porter’s-5-ForcesFramework broadensthe conceptof the competitive environment,enabling
managersto findpotential competition, avoidingmarketingmyopia(Bainesetal,2011).
Competitioncomprises productsandservices whichwouldmeetthe same customerneedasa said
product(See Figure 1.1).
Summary of Porters-5-ForcesMain points.
Power ofBuyers (intermediaries).
Large retailers’ orderquantities give thembargainingpower,butit’slessenedforbigbrands,
because of customers’ brandloyalty.Regarding Coca-Cola,buyerpowerislow because the customer
pullsCoca-Colathroughthe supplychain. Theydemand Coca-Cola,andtherefore,retailersmust
adhere toCoca-Cola’sprice,more sothan Vimto.RegardingVimto,retailershave lotsof buyer
power,due tothe smallerbrand andavailabilityof similarsubstitutes.Conversely, Coca-Cola’ssecret
recipe meansthere’snodirectsubstitute.Manyretailers,likeTesco,canbackwardsintegrate to
create theirown-brandversions,enablingthema higherprofitmargin.However,the largerbrands’
brand powermean thatcustomerswon’tsettle forown-brandgoodsandwantbrandswithwhich
they’ve developedarelationship.
Threat of Substitutes.
There’smanyotherbeverage typesto quenchyourthirst,the needsatisfiedby drinking, suchas
water.The threat of substitutesis heightenedbythe non-existence of switchingcostsbetween
drinks. One can quite simplymove to differentproductswithlittle hassle,rendering maintaining
brand loyaltyandstrongcustomerrelationshipsapriorityinthe industry.
There’snowa real impetusonhealthyeating,andcustomers demandhealthieralternativesto
theirfavourite beverages.Therefore, Coca-ColaandVimtomustproduce productstosatisfy
customers’newfounddesire forhealthiersoftdrinks.Coca-Colahave alreadyattemptedtoappeal to
health-consciouscustomers,bycreatingCoca-ColaLife andpurchasingInnocentSmoothie.Vimto
have adaptedto the healthtrendbyproducingthe “StrawberryStill Drink”,andcouldbe moving
towardshealthieroptionsin future.
Industry Rivalry.
The Soft Drinksindustryisoligopolistic. Firmsare heavilycommittedtopromotionand
communication. Theyuse these tools toprotecttheirpositionwithinthe marketandtocontinually
interactwithcustomers.Theyaimtoconvince customers thattheirofferingprovidesmore value
than theircompetitors’.Customersstruggle todistinguish Coca-ColafromPepsi,therefore
promotionandcommunication are essential incustomers’purchasingdecision.The largest
competitorswithinthe marketutilise similarpromotionstrategies,suchas heavyadvertisingand
acquisitionsof smallerbrandstocementtheirstrongposition.Thishasledto intense rivalry.
Extensive promotion mustbe continued,asitcouldleadtoa largerdisparitybetween the brandsif
promotionwasreducedbyone firm.

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Analysisof macro and micro factors.
Havingidentifiedthe macroeconomicfactorsand competitive andmarkettrendsresultingfrom
them,the reportshall analyse these elements.
The proposed20% tax on softdrinks hinderscustomers’purchasingpower.Theymaytherefore re-
considertopurchase cheaper,healthieroptions.Thistransitioniseasyasthere’snoswitchingcost.
The tax will affectcompanieswithweakerbrandvalue.Theymustraise prices, thereforedecreasing
demandor acceptlowerprofitmargins. Therefore,it’s difficultforsmall firmstoenterthe market. In
developingmarkets,customersnowpreferbrandedgoods,due totheirincreasedincome.
Therefore,taxesmaynothinderdemand.The tax will make sugary drinkslessattractive toretailers,
the maindistributionnetwork, whosemarginswill be reduced.Therefore,theymayconcentrate on
own-brandgoods,if theycan efficientlybackwardsintegrate,forthe bestprofitmargin. Strong
distributioncapabilitiesare aKSF(a) inthismarket. However, brandpowerisimportantand
customersmaypull certainbrandsthroughthe supplychain.Tax will increase alternative
sweeteners’popularity,likeStevia,alreadyusedinAsia. Its0% sugar rendersit exemptfromthe tax.
Therefore,it’sattractive forsoftdrinksmanufacturersand couldbe usedtotarget health-conscious
customers.
The FDA and FTC,organisationswhichprotectcustomers andpreventanti-competitivepractices,
are now hinderingsoftdrinksfirms,whodeceitfullyuse false healthclaimstoentice sales,by
ratifyingall claims before theirapproval tobe putinthe publicdomain,hinderingsalesfor
companieswhodishonestlytrytogain sales.
Furthermore,acaffeine limitisbeing introducedon softdrinks.Whilstthisislikelyto have a
greaterimpacton energydrinks,companiesmustavoidmarketingmyopiaandappreciate thatthis
may leadtoreductionindemandforenergydrinks, thusanincrease insoftdrinks’demand.
Intermsof the world’seconomies, Brazil,IndiaandChinacontinue tosee strongeconomic
growth,and therefore couldbe anattractive propositionfor anysoftdrinkscompany.However,
Russiaisthreatenedbyrecessionandprovidesaless attractive optionforinvestment.ManyAfrican
nations,particularlyNigeriaandSouthAfrica provide huge growthopportunitiesforthe softdrinks
market,withNigeriaforecasttoexperience $40 billiongrowth within12years(5). InAsia,Singapore
and Indonesiaprovide the strongestmarketoutsideChina.GermanyandBelgiumare the largest
Europeansoftdrinksmarkets withaverage figuresof 299 litrespercapita,comparedwith3rd place
Switzerland’s266 litrespercapita(6). LatinAmericafaresthe best,with softdrinkssalesmore than
double the worldaverage. Australia’s obesitycrisisencourages anincrease insoftdrinks’pricesto
deterdemand. Therefore,LatinAmericaandAfricawill provide the bestgrowthopportunities,as
well asBrazil,IndiaandChina.
In termsof socio-cultural factors,the largestisthe impetusonhealth andwellbeing.Adapting
productsto thiswill be a KSF in the industry. There’sbeenmany modificationstoingredientsand
package sizestosatisfy health-conscious,active customers.Ingredientsnow include exotic
superfruits withhealth benefits.Forexample,Vimto hasrecently releasedtayberryandelderflower-
flavouredproductsinBrazil.It’sclear,especiallyin developingcountries,thatfreshnessand
nutritional value is desired (7).Tosatisfy on-the-gocustomers,there’s more convenience stores
where one can purchase a range of package sizestosuittheirneeds,suchassingle small bottles.
However,largermultipacksare afeature inlarge citiesaroundthe globe due tothe rise of
supermarketsandthereforethe trend of weeklyshopping.Toprovide additionalvalue,softdrinks
manufacturersinChinahave startedtoadd extravolume totheirbottlesforthe same price,moving
from500ml to 600ml bottles (8).There’salsoahuge focuson the environment,especiallyin
developingnations.Customersnowadaystake actiontoreduce theircarbonfootprint. Thishasled
to an increase indemandforrecyclable packaging,andsustainabilityinitiatives. It’sclearthatmore
customersare willingtospendhighersumsof moneyonenvironmentally-friendlyproducts.
Therefore,companies have beguntoutilise completelyrecyclable PETbottles (9), amaterial whichis
growinginpopularity, toattract environmentally-consciouscustomers,.

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Healthygoods’demand isenhancedbyincessant advertising.Recently,thisadvertising has
extendedtothe exponentially growingmarketof social media(10).
In thismedium, customersandrespectedfigures influence consumerpatternsdue tothe ease of
contact withthe target market.Customers are influenced bycelebritiesandthus,these valuedviews
encourage healthierlifestyles,leadingtoreductionsinsugary drinkconsumption.Due tothe
increase insocial media,marketinghasbecome increasinglypersonal,andproductsare now often
designedtoappeal to specificindividuals.Forexample,Coca-Colahave utilisednamesand
characteristicsontheirbottlesintheir “Share a Coke”campaign. Theiraimisto make theirglobal
brand personal tothe customerto create memoriesandhappiness (11).Thisenablesthemto
improve theirrelationshipandaidbrandloyaltyascustomersfeel asense of cohesionwithinthe
brand as a result.
Fig2.4: A diagramto showthe rise in
popularityof PET.

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Internal Analysis.
The report will nowfocusonan internal analysisof the companies.Here,therewillbe abrief
outline of the workingsof eachcompany, inorderto identifythe strengthsandweaknessesof Coca-
Colaand Vimto,thusleadingtoa SWOTanalysis,amethodologyusedtounderstandafirm’s
strategicposition (Bainesetal.,2011).
Coca-Cola.
Coca-Colaisthe worldwide leaderwithinthe softdrinksindustry.Theirheadquartersare situated
inGeorgia,US andtheirrevenue isover£30 billion (12).
Coca-Cola’semployeesexceed130,000, and are spreadin all cornersof the globe.Theyowna vast
array of brands,spanningbottledwaterstocolacarbonates.Theirmainrival isPepsiCo. Coca-Cola
was originallyusedformedicinal purposeswhenitwasfirstintroducedbyDr.JohnPembertonin
1886 and wentonto become the mostpowerful softdrinksbrandworldwide,atitle whichthey
retaintoday.
Figure 1.2: A diagram to
show Coke’srevenue
streams by continent.
Assetsand Competenciesorlack of.
Unique Brand:Founded1886.
Brand associations:associationsof sugary,sweetdrinkwithfew healthbenefits.
Veryhighbrandvalue.
SCA(a):LargestSoftDrinksManufacturer,25.9% marketshare (13).
USP: Unique brandwithtop secretrecipe.
NPD:renownedforreleasingnew,innovative,in-demandproducts.
Market leaderingrowingmarkets.
SCA:Huge Distributionnetworkthroughmost retailers.
Table 2.1: A table toshowCoca-Cola’sassetsandcompetencies.

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Coca-ColaStrengths and Weaknesses.
Strengths Weaknesses
 Unprecedentedbrandrecognition in
manycountries.
 Huge financial strength givesscope for
strategicfit.
 Huge marketingcampaignsand
capabilities.
 Heavyreliance oncarbonates.
 Bad brand image fromhighsugar
carbonates,beingthe face of the Coca-
Colabrand.
Table 2.2: A table toshow Coca-Cola’sinternal strengthsandweaknesses.
Vimto
Vimtois a smallerbrand,ownedbyNicholsPLC, originally usedformedicinal purposes. It’safruity
softdrinkavailable incordial andfizzyvarieties. Theyhave presence inmostEuropeancountries,but
theirmostnotable revenue streamisinthe Middle East,duringRamadan. Their2011 revenue was
upwardsof £23 million (14),witharound27 employees(15). It’savailableincansor bottles,both
large and small.Theypredominantlytargetthe youngergenerationandhave now proliferatedtheir
productrange to include newflavours,suchasVimtoCherry,appealingtocustomershungryfornew
products.
UK salesof the Vimto brandincreasedby4.5% on last year. Meanwhile,Vimtocordial salestoits
keyMiddle Eastmarketsincreasedby12% on the back of strong in-countrydemandforthe brand
(16).
Assetsand competenciesoflack of.
Unique Brand:Rich heritage,introducedin1908.
The company:OwnedbyNicholsPLC.
Brand associations:fruityflavouredjuice drinkaimedmainlyatchildren.
Strongalliance withCoca-Colabottlers.
Huge presence inthe ‘younger’segmentof the market.
NPD:Tappingintohealthtrends.
Distributedthroughmostretailers.
Relativelysmall insoftdrinksindustry.
SCA:Massive influenceinthe Middle Eastdue to sugarytaste for
Ramadan.
Table 2.3: A table toshowVimto’sassetsandcompetencies.

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Vimto Strengthsand Weaknesses.
Strengths Weaknesses
 Large productproliferation (17).
 AujanCoca-Colawill alsobe the licensed
manufacturerof Vimtoin the Middle
East (18).
 Large presence inMiddle-East(19).
 Highlysugareddrinkandreputation
may be affectedbyhealthtrend.
 Heavyreliance onRamadanfor Gulf
sales.
 Relativelysmall brandinhugely
competitivemarketrequiringhuge
marketingcampaigns –lowerscope
for strategicfit.
Table 2.4: A table toshowVimto’sstrengthsand weaknesses.

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Opportunitiesand threats withinthe Industry.
Companieswithinthe softdrinksindustryare susceptible tomanyexternal factorswhichimpact
upontheirfuture strategies.Some of thesetrendswill have apositive potential impact,whereas
otherswill have anegative impact.It’sforthisreasonthatcompaniesmustavoidmarketingmyopia
at all costs and shouldinvestinin-depthresearchtoascertainthe opportunitiesandthreatsthatare
applicable totheirownorganisation,sotheycandevise strategiestotake advantage of the
opportunitiesorcreate contingencyplanstodeal withpotential threats.
Opportunities Threats
 Growingeconomies (LatinAmericaand
Africaholdshuge potential).
 Localise the flavours.
 Recyclinginitiative.
 Vendingmachinesforon-the-go
consumption.
 Exoticsuperfruit-flavouredbeverages
forecastto performwell.
 Partnershipswithcompaniesheavily
involvedincertainsegmentsof the
market.
 Use Stevia.
 Focuson non-carbonates.
 Use of functional ingredients.
 Social mediaexposure/partnershipto
attract youth.
 Purchase of healthybrands.
 Legislation (taxesandgovernment
controls).
 Healthtrend.
 Substitute products (Rise of energy
drinks).
 Economicfrailtyand lack of disposable
income.
 New,healthyalternatives.
 Mediaagainstsugary drinks.
(Ownbrandsupermarketdecidingto
stock brandedgoods,leadingtoprice
war, badimage for Coca-Colaand
reducedprofits).
Table 3.1: A table toshowthe opportunitiesandthreatswithinthe softdrinksindustry.

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Strategic Recommendationsfor Coca-Colaand Vimto.
Both companies mustfollowstrategieswhichare feasibleforthe size of theirbusinessalongside
theirstrengthsandweaknesses.Theymusttake intoaccount the competitiveenvironmentwhich
surroundsthemandthe external factorswhichare present. Theymustbe aware of the
heterogeneityacrossglobal markets,andthe threatsandopportunitiesthatare synonymouswith
them. Bothfirms mustbe equallywillingtoadapttheirproductsto specificmarketsasto
standardizingtheirofferingsthroughoutthe globe. Thiswillthenenable acompanytoutilise a
strategicfit, the degree towhichan organizationismatching it’sresourcesandcapabilitieswiththe
opportunitiesinthe externalenvironment,togainanSCA. To gain thisadvantage,theyshouldfind
keyareasof theirbusinessthattheycanperformbetterthantheircompetitorsandcommunicate
thisto theirtargetmarket. Withinthe SoftDrinksIndustry,there are manyKeySuccessFactorsthat
mustbe considered, whichhave beenidentifiedthroughout thisreport.Appealingtothe health-
consciousconsumerwill surmounttoa huge boostto businesses.Use of environmentally-friendly
packagingand distributionmethodsisanother keytosuccess.
Coca-Cola Vimto
 Acquisitionof foreignbottlingplants.
 Purchase of healthydrinkingbrands.
 Increaseduse of vendingmachinesin
largercitiesforon-the-gocustomers.
 Continueduse of exoticfruits.
 Use Steviainall drinks.
 FocusmarketingonAfricaand Latin
America.
 Reduce marketinginAustralia/USto
retaincapital.
 Focuson health.
 Focuson superfruits (image of fruity
beverage alreadysecured).
 Vimtoshouldfurtherenhance their
grasp on the Middle-Easternmarket.
 JointVenture withAujanBottling
company.
Table 3.2: Table showingpotential strategiestoundertakeforCoke andVimto.
Businessesmustbe cautiousof marketingmyopiaasthiscouldleadtoseriousdisadvantages.They
mustselectstrategiesthatare applicable totheirbusinessandalsotothe external environment.
Vimto
From the informationassembledwithinthe report,the mostprofitable projectforVimtowouldbe
to expandfurtherintothe Middle-Eastbytakingona jointventure withAujanIndustries,alarge
bottlingplantwithwhomtheyalreadylicensetoproduce theirproductsinthe Middle East.By
changingto a JointVenture,Vimtowill be able tobenefitfromAujan’sexpertise andknowledge
withinthe Middle Easternmarket,whichwill helpthemtopenetrate intothismarketthroughout
the year,rather thanmainlyduringRamadan. Theycan reduce transportationcostsas a large
proportionof theirrevenue comesfromthe Middle-East.Thus,theycanuse thisbottlingcompany
to facilitate salesintheirmostprofitablemarket. Theyalreadyhave anSCA due tobrand loyalty
duringRamadan.Therefore,itwouldbe wise totryto attaina similarlevel of demandthroughout
the year to increase theirprofits. Itwill be cheaperthanmarketingtoanew segment,asit’seasier
to retainthanattain customers. The softdrinksindustryisalsosovastand dominatedbyhuge
playersthata niche strategyseemsmore applicable. Theyshouldmaintain astandardisationpolicy,
as the sweettaste appealstothe target market,butdue to the increase inhealthconscious
consumers,achange to a low-caloriesweetenerisappropriate.Theyshouldalsouse superfruitsto
satisfythose lookingforproductswithfunctional benefits.Therefore,the use of exoticfruitswillbe
applicable. Usage of PETpackagingwill enhance Vimto’senvironmentally-friendlyimage. It’s
importantto note the pooreconomicsituationinthe Middle Eastcurrently,due toreducingoil

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prices.However, oil isascarce commodity,thus will increase invaluesoon. Theyshoulduse a
marketskimmingpricingtechnique,asquality isvaluedoverprice.Due tothe widespread
censorshipof media,andawarenessof Vimtointhe Middle East, short-termnon-price promotions
wouldbe suitable. Thisniche strategywithfocusonanalreadyloyal targetmarketisa strong
strategicfitfor Vimto. A strategicmisfitforVimtowouldbe toconcentrate salesonAustralia,due to
theirpooreconomicgrowthand huge obesitycrisis.
Coca-Cola
For Coca-Cola,arecommendedstrategywouldbe anacquisitionof the patenttoutilise Stevia
withinsoftdrinks,asthe healthtrendwasthe biggestfactordiscussed. ThiswouldgivethemanSCA
withinthe market,asit wouldappeal to customers’ desireforhealthysoftdrinks.Theyhave huge
financial reservesand itwouldtherefore give astrategicfit,giventhe potentiallong-termbenefits. It
shouldbe standardisedonall theirbeveragesdue tothe worldwide healthtrend andthe non-
existence of legalitiesandcultural boundariesthatitwouldperpetrate.The use of Steviawouldhelp
Coca-Colato avoidthe 20% tax on sugaredbeverages,increasingtheirprofits.
However,due totheirworldwideappeal,Coca-Colawill have tolocalisetheiradvertisingineach
countryto appeal to customersassome countrieshave differentresponse ratesforeachtype of
promotion. Steviawouldallow them amarketskimmingstrategyastheirproductisunique. By
owningthe patentforStevia,itwill help Coca-Colasheditsreputationaspurelyasugarydrink.This
will helpappeal tohealth-consciouscustomers.However,Coca-Cola’sbrandimage hasbeenbuiltup
for years,andit may be hard to remove byjustchangingan ingredient.Therefore,itwill require
huge investmentinpromotionandsome time toconvince customersof anew-lookbrand.
Furthermore,due tothe use of a completelynew sweetener,there will be anelementof strategic
uncertaintyanddue to the immediacyandpotentialimpactof the utilisationof Steviaworldwide,
thisisa huge change for Coca-Colainternally,thusthe strategymustbe monitoredandanalysed
continuallytocheckit’ssuccess.A strategicmisfitforCoca-Colawouldbe tolicense theirproductin
China.Thiswouldreduce theirlevel of control andjeopardisetheirsecretrecipe whichtheirbrandis
builton.Furthermore,the Chinese couldmanipulate the recipe andpotentiallydamage Coca-Cola’s
brand image.
Evidence analysis.
The researchundertakenhasanalysedtrendsinall cornersof the globe,enablingastrong
indicationof the mainfactorsimpactinguponthe industryworldwide.Mostof the research
however,hasbeenderivedfrom“Euromonitor”.Whilstasingle source of informationisnever
completelyaccurate,it’simportanttounderstandthat“Euromonitor”isan exceedinglyreliable
source of information,trustedbysome of the mostrenownedorganisationstoprovide accurate
information.However,somearticlesusedasthe basisof thisresearchprojecthave indeedbeen
professionalopinionsfromEuromonitor,ratherthanfactual reports.Therefore, it’spossiblethat
some of the factsportrayed withinthe reportare somewhatskewed. Moreover,the datacollected
fromcompanywebsitesmay be ratherbiasedandnewsarticlesare mostlyopinion-based.
Nevertheless, thisreportis asfactuallyaccurate as possible inprovidinginformationandrelevant
recommendationsto bothCoca-ColaandVimto,giventhe resourcesavailable.

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Figure 1.1: A figure to show the Porter’s-5-Forces framework toanalyse the competitive environment
Industry Rivalry
Some largecompetitors in the
industry.Uselots of promotionand
communication.
Market segmentation often used to
provide many products to different
sections ofthe market. Intense
rivalry between the biggestplayers
in the market, and also thosewith
almostidentical product offerings.
Similar marketing mixes lead to
more intense competition
Threat of New Entrants
Large impetus onhealthy living
small competition may beableto
penetratethemarket witha product
offering that benefits consumers’ health.
Relatively lowentry barriers
No legislation in placepreventing new
firms entering themarket
No switching costnor capital requirement
Increasing product competitionwith very
similar products.
Coca-Cola maintain strong market position.
Potentialentrants leads to lower prices
and profitability.
Do the new entrants haveaccess tobetter
raw mats, largepool oflow costlabour,
govt subsidies etc
Power ofBuyers(intermediaries)
Depends on sizeof brand incomparison tobuyer.
As Coca-Cola is a largebrand,thebuyer has little
power. Conversely,Vimto is a much smallerbrand
and thus, buyer power is higher
Larger retailers canbackwards integrate, but only
for smaller brands
Threat of Substitutes
Several substitutes
Other beverages satisfy the same
need
Low switching cost
Impetus on healthy living leads to
more potential competition
providing healthy alternatives
Power ofsuppliers
Suppliers have little power.
Theyall use same ingredients or methods,
Judgedmainlyon price.
Large companies drive down price and
therefore the profit ofthe supplier. No
switchingcost andmanysubstitutes.
Suppliers must provide the lowest price
possible

19. Alex Kaitiff
StudentNumber:120021824
Notes
(a)
SCA = Strategic Competitive Advantage
KSF = Key Success Factor
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