Executive Summary Coca-cola Company is leading producer, supplier, and online marketer of non alcohols in the United States of America and all over the world. It is an international Giant business that has market existence in practically all nations of the world. The business has also diversified from its preliminary soft drinks to make fruit juices and other non-soda drinks. Its goal has actually been to keep its worldwide management in supply of beverages and other non-soda drinks through preserving high quality production techniques that ensure the name and items stay a home brand.
Intro Resource based view method has actually been a method most managements have utilized to create their business’ techniques (Barney, 1991).
This is due to the fact that Resource Based View concerns a business’s internal environment rather than the external environment. The benefit of utilizing internal environment as a source of method formula is that the company is able to consider elements which are within its controls; which constitute its strengths and weak points (Connely, 2010).
This paper provides an internal analysis of Coca soda pop Business with particular regard to the Economic worth of the company, its resources and capabilities that make it distinct from other business offering it competitors through provision of comparable sodas. Economic value Included In 2010, The Coca Soda Business posted an increase in revenues as compared to the previous year. The earnings came to $6.48 billion. The expense of capital for Coca soda pop Business is estimated to be 8.7% and the capital amounted to $72.929 billion. Taking place is the EVA computation for the business. Net Operating Revenue After Tax (NOPAT)– (capital * cost of capital) = 4.08– (72.929 *.087) billion. This comes to $0.2 billion. The company’s EVA pertains to $0.2 billion.
Coca cola Company Resources Being a global leader in production of beverages and soft drinks, Coca Cola Company has various resources that play a major role in every production stage to ensure that the production and delivery of its various product and subsequent client services are of high standards. The company has both tangible and intangible resources that help it in the various production stages and subsequent delivery of the products to the targeted consumers. Tangible resources The tangible resources include physical, human and Financial Resources. Coca Cola Company has many physical resources it possesses and manages. These physical resources include buildings and equipment. Coca cola has managed to construct buildings in almost all regions. The presence of self owned production plant means that the cost of production is maintained low. This enables the company to offer high quality products at low prices. The presence of self owned equipment ensures that the company does not lease or rent any equipment and thus managing to cost of production low.
The company’s strong financial position ensures that it has stable financial resources to carry out the production process without major problems in terms of cash shortages. The positive cash flows usually ensure that a company has cash available for any activity that needs cash (Lawton, 2006). This position enables it to avoid unnecessary debt financing. The company also maintains a motivated work force. This has been a major force in driving its products into shelves and subsequently into the shopping lists of consumers. The company has highly invested in employee training and development as this is an important factor in ensuring that the workers involved in the production deliver a high quality work, and those that are concerned with marketing ensure that the products are bought by consumers.
This has come through realization that the coca cola products do not fall under the necessity class but rather fall under impulse products. Intangible Resources The Company’s intangible resources include the technical resources, intellectual and goodwill. Coca cola company has for a long time enjoyed technical resources that have helped the company has technical expertise in production of some products that have been of great use fostering the company’s goals. The company has been able to come up with numerous flavors in their soft drinks such as such as , Orange flavor, Pineapple, black currant, lemon, Ginger and so on. These productions are a clear indication that the company has great expertise knowledge that it uses as an advantage of other companies offering similar products, the company also enjoys intellectual property of the brands that they provide. This is because once a company does research and development and comes up with a product, it has the option of patenting that particular product thus maintaining the exclusive rights to supply that particular product (Edvinsson & Malone, 1997).
The company has also enjoyed a goodwill and customer loyalty over a long period of time this has been an internal strength that it has used to its advantage since the coca Cola brand and its products have enjoyed an undying loyalty from consumers. The brand visibility of the company has also ensured that many people access the products really in time. Distinctive capabilities Coca Cola Company enjoys distinctive capabilities that enable it to carry out productions in a manner that is superior to other competitors. Distinctive capabilities that Coca Cola Company has are Innovation, reputation, and architecture. The company has been able to introduce new products into the market.
This has been a major competitive edge over the competitors since they lack the innovation capability to come up varied new products. Its production methods and the ingredients mixture have remained a strong contributor to the unique and high quality products that have enabled the products enjoy a superior status over the competitors’. The company has also managed to command strong reputation in relation to its competitors. This reputation has earned it goodwill and ensured that it remains a favorite brand among the consumers. The company’s architecture plans ensure that the company daily running is congruent with the objectives. The company has instituted a structure system where it outsources product distribution from individual distributors and this has enabled it to manage its operations without dealing with many market dynamics.
Conclusion
An analysis of the Coca Cola Company’s internal analysis through considering the Resource based View provides insightful knowledge on the company’s management practices with regard to strategy formulation using the internal environment approach. The company should therefore keenly look into the areas of internal environment as this is where much strategy formulation ought to originate. The company will continue to be a global leader in supply of non-alcoholic beverages because it has successfully employed the use of its internal analysis to formulate successful strategy. It will however have to improve on its sluggish performance in northern America which is its major market. The internal resources and capabilities of Coca-cola Company will continue to provide a secure foundation for formulation of long term strategy and ensure it maintains a strong reputation.
Rerences
Barney, J. B. (1991). Firm Resources and Sustained Competitive Advantage. Journal of Management , 99-120. Comeford, R., & Callaghan, d. (2011). Environmental, industry, and internal analysis. London: Prentice Hall. Connely, D. (2010). Strategy for Internal Environment. Power point presentation. Edvinsson, L., & Malone, S. (1997). Intellectual Capital:Realizing Your Company’s True Value by Finding its Hidden Brainpower. New York: Harper Business. Henry, A. (2007). The Internal Environment of an Organization. London: Oxford University Press. Lawton, K. (2006). Swot analysis: A management Strategic Success Tool. New York: Cambridge. Szulanski, G. (1996). Exploring Internal Stickiness:Impediments to the Transfer of Best Practices within the Firm. Strategic Management Journal , 27-44. Zahorsky, D. (2009). A business owner’s Secret Weapon: Swot analysis. New Jersey: Mc Graw Hill.
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