Internal Environment Report COCA COLA

Coca-Cola is one of the major and popular global beverage companies with a vast of brands available in its stores with more than 200 markets all over the world. The company offers a range of products vacillating from water, juices among other brands. The success of any business depends on the internal as well as the external environment of the firm. Internal environment refers to the composition of every element within the organization. These elements include current employees, management, particularly the corporate culture, defining the behavior of the staff. However, some elements do affect only the management while others affect the overall organization. Factors such as the mission statement, leadership style adopted are also part of the organization internal environment. The report, therefore, gives an analysis of the internal environment affecting Coca-Cola Company a global enterprise comprising the SWOT analysis, and RBV, company’s chain value and a brief discussion of its financial position. The importance of this analysis helps a company to work on its weakness while improving on its strengths as well as understanding its inherent abilities.

SWOT Analysis

The term SWOT stands for four major words used to define an analysis of the internal environment affecting the business. The term stands for Strength, Weakness, Opportunities and Threats. The study helps to guide the company in recognizing its organizational strengths as well as the weakness (S-W) and the wider opportunities and threats (O-T) experienced by the firm during its operations (Coca-Cola, 2013). However, in most studies performed, classify the class O-T as part of the external environment affecting the company.

Below are tables of the SWOT analysis:

Table 1.0 Shows the S-W of the Company

Strength	Weakness
Coca-Cola has the leading market presence	Image of brand affected by recalls of product
Has the world’s leading brand portfolio	Restocking as a result of premium pricing
Large-scaled operations in the global market	Loss of consumer confidence in safety of brands
Has huge finance	Destructive public opinions affect its reputation
Has low sensitivity to economic variations
Strong production and manufacturing infrastructure

 

Table 1.1 Represents the O-T of the company

Opportunities	Threats
Further growth in future	Scarcity and low quality water in most nations
Growing of intake of non-alcoholic beverages	Foreign exchange rates fluctuation
Generating brands for health-concerned clients	Introduction of substitute brands

RBV analysis

The resource-based view (RBV) is a model used by various companies to analyze their resource as a key to superior firm performance. The analysis helps the business to attain and sustain a competitive edge over other enterprises. According to RBV analysis, it is more feasible to exploit the external opportunities by applying the existing resources in an innovative way rather than trying to implement new skills for every different opportunity. RBV helps firms to establish the value of their resources to achieve greater heights of organizational performances.

When dealing with RBV analysis, there are two major types of resources, tangible and intangible that analyst focus attention on. Coca-Cola sells more than 3500 products (2010 year in Review, 2011) managing to enter the various segments of the market such as regular beverages, diet beverages, energy drinks among others (Coca-Cola, 2014). Other sections of resources that shape the strength and competitive advantage of Coca-Cola are its financial assets. Therefore, Coca-Cola is financially feasible with increasing revenues over the last two years and growing more in 2012. The company has raised the number of its shareholder value besides one of the company’s financial characteristics is the great low beta (0.49) an indication that Coca-Cola vulnerability to economic variations is very minimal.

Company’s value chain

The value chain is classically applied by firms to disaggregate it into the various relevant value-generating events so as to assess each activity’s contribution to the company’s performance. Through this model analysis, Coca-Cola can provide an insight as to how a firm creates their competitive advantage and shareholder value. Coca-Cola Company’s value chain is classified into two categories.

Inbound Logistics (Suppliers)

These include suppliers such as Spherion, Jones Lang LaSalle, IBM, Ogilvy and Mather, IMI Cornelius and Prudential. These companies provide Coca-Cola with the necessary raw materials, such as ingredients, packaging, and machinery. Coca-Cola has put in place certain legal standards to ensure that these suppliers deliver resources with the required quality in satisfactory condition.

Outbound Logistics (Buyers/ Customers)

Coca-Cola has the world largest distribution system, owning, leasing as well as operating in over 800 plants around the globe. The over 2400 beverage brands which they market reach the consumers in more than 200 different geographic locations. Grocery stores such as Sobeys, fast food restaurants such as McDonalds (fountain sodas), and retailing machines are some of the distribution segments used to reach the customers by the company.    

Brief Analysis of its financials

Categories	Segments	Year(2011)	Year(2010)	Year(2009)	Year(2008)	Year(2007)
Summary of Operations (in millions)	Net operating revenues	$ 46,542	$ 35,119	$ 30,990	$ 31,944	$ 28,857
	Net income attributable to shareowners of the Coca-Cola Company	$ 8,572	$ 11,809	$ 6, 824	$ 5,807	$ 5,981
Per Share Data	Basic net income	$ 3.75	$ 5.12	$ 2.95	$ 2.51	$ 2.59
	Diluted  net income	$ 3.69	$ 5.06	$ 2.93	$ 2.49	$ 2.57
	Cash dividends	$ 1.88	$ 1.76	$ 1.64	$ 1.52	$ 1.36
Balance Sheet Data (in millions)	Total assets	$ 79, 974	$ 72, 921	$ 48,671	$ 40,519	$ 43, 269
	Long-term debts	$ 13,656	$ 14,041	$ 5,059	$ 2,781	$ 3,277

References

Coca-Cola Central Japan Co Ltd.: Consumer packaged goods - company profile, SWOT & financial report. (2013). Basingstoke: Progressive Digital Media.

Coca-Cola HBC Serbia: Consumer packaged goods - company profile & SWOT report. (2014). Basingstoke: Progressive Digital Media.