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Flipkart Industry analysis
The document provides information about Coca-Cola and the beverage industry. It includes facts about Coca-Cola, its history, competitors, Porter's Five Forces analysis of the industry, and recommendations. The key points are: Coca-Cola is a large beverage company founded in 1886 that sells products like Coca-Cola, Sprite, and Fanta in over 200 countries. It has over 123,000 employees and annual revenue of $43.86 billion. The beverage industry includes non-alcoholic and alcoholic drinks companies like PepsiCo and Nestle and has steady performance. Porter's Five Forces analysis found the threat of new entrants and substitutes are low while industry rivalry and buyers'
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Flipkart Industry analysis
- 1. STRATEGIC MANAGEMENT ASSIGNMENT SUBMITED BY, GROUP1 Shamik-1527624 Tony Augustine -1527729 Sai Swetha-1528146 Ajay-1527601 Mehul Pujari-1527618 Shivam Sodhi-1527528
- 2. FACTS ABOUT THECOMPANY Company : Coca Cola Sector : Consumer goods Industry : Beverages Country of origin : USA,1886 Founder : John Pemberton Areas Served : More than 200 countries Product Portfolio : Coca cola, Coca cola zero, Sprite, Minute maid, Fanta, Coca cola light Full time employees : 123,200
- 3. History of CocaCola • 1886 – Coca cola officially goes on sale : Cocaine was an ingredient • 1903 – Cocaine removed from coke • 1916 – Iconic glass bottle design was introduced • 1923 – Invents the six pack • 1982 – Diet coke introduced • 1985 – New coke was launched • 1992 - Coke 2 was launched • 2002 – Coke 2 was discontinued • 2005 – Coke zero was introduced • 2014 - Coke life introduced
- 4. Direct Competitors Comparison Cocacola Dr. Pepper Nestle Pepsico Industry Market Cap: 196.54B 18.09B N/A 153.72B 891.45M Employees: 123,200 19,000 339,0001 263,000 982.00 Qtrly Rev Growth (yoy): -0.04 0.03 N/A -0.03 0.14 Revenue (ttm): 43.86B 6.32B 92.83B1 62.70B 258.60M Gross Margin (ttm): 0.60 0.59 N/A 0.55 0.42 EBITDA (ttm): 12.11B 1.56B N/A 12.05B 21.89M Operating Margin (ttm): 0.23 0.21 N/A 0.16 0.07 Net Income (ttm): 7.28B 789.00M 14.61B1 5.16B N/A EPS (ttm): 1.66 4.12 N/A 3.50 0.57 P/E (ttm): 27.35 23.60 N/A 30.39 23.28 PEG (5 yr expected): 5.17 2.39 N/A 3.52 2.34 P/S (ttm): 4.45 2.81 N/A 2.43 1.68 (source:http://finance.yahoo.com/q/co?s=ko+Competitors)
- 5. Beverage Industry • Includescompanies that produces ready to drink beverages • Includes companies that market nonalcoholic and alcoholic items • To be competitive companies diversify product offerings • Companies has a steady performance throughout the business cycle • Largest players – Coca Cola, Pepsi, Sab Miller, Nestle
- 6. PORTER’S 5 FORCEANALYSIS • Threat of New Entrants • Threat of Substitutes • Threat of Substitutes • Bargaining Power of Suppliers • Industry Rivalry
- 7. Threat of NewEntrants • Threat of new entrants is low in the beverage industry. • To get a good distribution channel very time- consuming and expensive. • The market is a mature one which diminishes the scope of growth.
- 8. Bargaining power ofbuyers • Bargaining power of buyers is high in the beverage industry: • The retail price of the bottlers has been maintained for a long time. • Very low switching cost.
- 9. Threat of Substitutes •Threat of Substitutes is low in the beverage industry • The new bottlers cannot easily get good distribution channels. • Market share of the bottlers is quite high
- 10. Bargaining Power ofSuppliers • Bargaining power of suppliers is medium in the beverage industry • The relationship with the suppliers is good and long-time. • The producers have obtained small bottlers. • The sales depend on the competitiveness of the bottlers.
- 11. Industry Rivalry • Therivalry among competitors is intense • Cut-throat due to their almost similar pricing.
- 12. KEY SUCCESS FACTORS •Constant product innovation • Size of organization • Established brand loyalty • Price • Taste • Global Expansions
- 13. Attractiveness of theindustry • The Threat of new entrants is low as the market has reached a mature stage but if the entrant has the ability for high capital investments the threat can be moderate in nature. • Getting a good distribution channel is very time consuming but it can cause a major impact in increasing the reach of the organization. • Bargaining power of the suppliers are high can cause a major impact in this industry as the products can be easily substituted by the other brands. To add up, many healthier options are available now causing more substitution of the products.
- 14. • The Internalcompetitive rivalry among the existing firms along with the new firms create a very little scope to enter in this industry. • According to the EFE matrix, the average weighted score of the industry 2.28 which indicates that the industry has slightly less than average ability to respond to external factors.
- 15. EFC MATRIX EFC matrixWeight Rating Weighted Score Opportunities: Nutritional offerings to health conscious people 0.07 2 0.14 Develop customer relation 0.03 1 0.03 Acquisitions of smaller players 0.05 2 0.1 Growth opportunities in un- established markets 0.04 3 0.12 Growing demand 0.07 4 0.28 Brand diversification 0.06 3 0.18 Supply chain improvements 0.03 3 0.09 Contract with companies and firms to install vending machines 0.04 2 0.08 Penetration marketing 0.06 2 0.12 Tie ups with restaurants , food chains and organized retail stores 0.05 3 0.15
- 16. EFC matrix WeightRating Weighted Score Threats: Increase in trend towards healthy foods and drinks 0.07 3 0.21 Key competitors 0.06 4 0.24 Substitute products 0.05 3 0.15 Demand variability 0.06 3 0.18 Raw material sourcing – Lack of water 0.07 2 0.14 Effect due to dollar price 0.05 2 0.1 Warning against coke ingredients 0.04 1 0.04 Maturity of beverage industry 0.03 2 0.06 Image perception in different parts of the world 0.04 2 0.08 Campaign against plastic containers 0.03 1 0.03 Total : 1.00 2.34
- 17. RECOMMENDATIONS • Make wisedecisions about mergers and acquisitions • Invest more on the un-established markets • Install more vending machines • Water replenishment should be done in the Coca-Cola factories • Diversify businesses to minimize market risk exposure • Further penetrate developing markets to grow revenue – concentrate more on organized retailers • Improve product healthfulness to attract more consumers • Increase production and distribution • Enhance recycling efforts to address environmentalism
- 18.
Editor's Notes
- #13 1.Product Innovation: Companies are able to understand the needs and wants of the customers and are able to make changes accordingly 2.Size of the organization : In terms of market share and distribution the size of the organization is very large. 3.Established brand loyalty : Most of the customers are very loyal and addicted, that they don’t even try any of other competitive products 4.Taste : The taste of the products are good and is available in different varieties 5.Price : Price of the products are very important because the customers who are not brand loyal have the tendency to look for the competitive products or substitutes 6.Global Expansion : Company is able to expand to any part of the world
- #16 1.One of the major opportunities of Coca-Cola as a company is to provide nutritional offerings to health conscious people because there is a shift of trend towards the healthy products and foods. The company has only introduced coke zero without sugar contents for such customers. That was the only strategy taken by company for the health conscious people. 2.The demand for the beverages has been growing mainly within the teenagers and the company is working a lot to meet this demand and to attract the customers. They spend a lot for advertising of their products to create awareness. 3.The company has a very good brand image in front of the customers. This brand image can be used for introducing new products to markets and the company has tried a lot to make a lot of changes in there strategies to develop new products. Thus it has increased the product portfolio.
- #17 1.The major threat of the company is the shift of the people towards healthy foods and drinks. The company has acquired the minute maid to produce fruit juices and thus attract the customers belonging o this category. 2.The next major threat is the lack of water which is the major raw material required for the production of coke products. The company is working a lot to replace it with a new product. 3.Key competitors can be also a big threat for the company. Pepsi and other major players are giving attractive offers to be competitive. Coca cola has developed superior strategies like better advertisements and product offers to gain major market share.