The VRIO analysis tool breaks the assessment of a company’s current status into four general elements. The analysis of each component, value, rarity, imitability, and organization, were measured by Coca-Cola’s and its competitor’s performance in global network, product range, human resources, marketing expenses, secret formula, brand image, and research and development strategies. If the brand of Coca-Cola is viewed under the VRIO analysis tool, noteworthy assessments can be observed. Coca-Colas currently has a wide global network, a large product range, a large pool of skilled workers, a secret product formula, a decisive and recognizable brand image, and a highly active research and development sector (Bonsu, 2019). Despite these advantageous factors, there are a few aspects that Coca-Cola’s brand has competitors for (Aboiron, 2019, p.98). For instance, the network of their type of product is shared with some other companies which create similar commodities, such as Pepsi or Dr. Pepper. Additionally, Coca-Cola spends much more on advertising than its competitors (Rockwell, 2018). Coca-Cola scores positively in the entire organization section of VRIO, as they are known to optimize their extensive tools, workforce, and resources when it comes to policy.
The PESTLE method assesses Coca-Cola on five factors, their involvement in political, economic, social, technological, legal, and environmental sectors. As Coca-Cola is dependant not only on FDA regulations but general policies as well, any changes to the law can affect their strategies severely. Additionally, Coca-Cola has an international client base which requires them to meet a number of international regulations (Abdurahman, 2018). They increase their economic value by increasing the variety of their products to reach more customers. Coca-Cola’s marketing and product development are socially driven, as they frequently listen to customers, whether it is creating varied products due to health concerns or cultural norms (Tumaku and Ren, 2020, p.193). As the leader in their respective market, Coca-Cola is in no shortage of advanced machinery and manufacturing tools. Coca-Cola has a strict patent on its entire product line, including products that do not yet exist. However, environmental factors have a significant impact on the sustainability of the company as a whole in recent years due to water accessibility (Chua et al. 2020, p. 45). The potential shortage can harm the production, and the violation of environmental laws will result in severe fines and lawsuits.
Porter’s five forces include an assessment of Coca-Cola’s status when it comes to the bargaining power of suppliers, bargaining power of customers, the threat of new entrants and substitutes, and competition between existing rival companies (Khurram, Hassan, and Khurram, 2020, p.8). Suppliers are unlikely to deviate from providing raw resources to Coca-Cola, as buyers are scarce. The customer’s bargaining power is low as they usually purchase few products at a time. It is incredibly difficult for emerging brands to enter the market as companies like Coca-Cola and Pepsi dominate the sales (Ling, 2017, p.21). Though other soda brands, juice, and a variety of other drinks can compete with Coca-Cola products, it does deter Coca-Cola from leading the market in terms of sales and reach (Wood et al., 2021). The strongest force is likely to be between the competition of Coca-Cola and Pepsi with the rare inclusion of smaller soda brands.
The Covid-19 pandemic had detrimental effects on many brands, with Coca-Cola suffering a significant fall in sales during the increased lockdowns. However, the company made a number of policy and guideline changes that have had a positive impact on the overall quality of the brand and its employees. Coca-Cola has taken steps into increasing the safety of its workspaces, such as maintaining high hygiene standards, additional cleaning, encouraged remote working, improved support to retailers businesses, and better community support and relief spendings (The Coca-Cola Company, 2020). These changes are substantial and would be vital to keep even with the easing of lockdown regulations and the pandemic.
Reference List
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Aboiron, J. (2019). ‘From Strategic Capability To Competitive Advantage: A Framework Of Competitive Intelligence Actions’, International Journal of Research in Business, Economics, and Management, 3(1), pp.87-104. Web.
Bonsu, S. (2019). ‘Strategic Management: The Concept of Competing With Self’, Journal of Marketing and Management, 10(2), pp.20-44. Web.
Chua, J., Hung Kee, D., M., Alhamlan, H., A., Lim, P.. Y., Lim, Q., Y., Lim, X., Y., and Singh, N. (2020). ‘Challenges and Solutions: A Case Study of Coca-Cola Company’, Journal of Community Development in Asia, 3(2), pp.43-54, Web.
Khurram, A., Hassan, S., and Khurram, S. (2020). ‘Revisiting Porter Five Forces Model: Influence of Non-Governmental Organizations on Competitive Rivalry in Various Economic Sectors’, Pakistan Social Sciences Review, 4(1), pp.1-15. Web.
Ling, X. (2017). Managing Customer Relationships: A Case Study of Coca-Cola Company. Master’s Thesis. Centria University of Applied Sciences.
Rockwell, S. (2018). ‘Leveraging Organizational Identity for Competitive Advantage’, Graziadio Business Review, 21(2), Web.
The Coca-Cola Company. How the Coca-Cola Company is Responding to the Coronavirus Outbreak (2020) Web.
Tumaku, J. and Ren, J. (2020). ‘Ghanaian Perspective of Franchise Contract in Africa, a Pestle Analysis’, International Journal of Research in Business, Economics, and Management, 8(3), pp.192-199.
Wood, B., Williams, O., Nagarajan, V., and Sacks, G. (2021). ‘Market strategies used by processed food manufacturers to increase and consolidate their power: a systematic review and document analysis’, Globalization and Health, 17(17).