Coca Cola Value Chain analysis

Value-chain analysis is an analytical framework that assists in identifying

business activities that can create value and competitive advantage to the
business. The figure below illustrates the essence of value chain analysis.

Inbound logistics. Water is the main ingredient for all products manufactured
by Coca Cola Company and the company occasionally faces significant challenges
in accessing this particular raw material. Coca Cola uses high fructose corn syrup
(HFCS) extensively and this raw material is purchased from US-based suppliers
and delivered via trucks. There are also some ingredients that have to be sourced
internationally. For example, orange juice and orange juice concentrate is
sourced from Florida and Southern Hemisphere, particularly Brazil. For
international purchases inbound logistics are facilitated via ships and trucks.
Coca Cola values diversity among its suppliers. In 2013, $952 million were spent
on diverse suppliers, an increase of 14.8% compared to the previous year.( August
12, 2015 by John Dudovskiy

Operations. Coca-Cola operating segments are divided into the following 7

groups:
1.

Eurasia and Africa

2.

Europe

3.

Latin America

4.

North America

5.

Asia Pacific

6.

Bottling Investments

7.

Corporate
The Coca Cola system is not a single entity from legal and managerial points of
view. Coca Cola manufactures and sells concentrates, beverage bases and syrups
to its bottling partners, maintains ownership of the brand and develops and
applies marketing strategy. Bottling partners, entities that do not belong to Coca
Cola, do manufacturing, packaging, merchandising and they distribute the final
product to customers and vending partners (August 12, 2015 by John Dudovskiy)

Outbound logistics. Coca Cola Company sells its products in more than 200
countries and understandably claims to operate the worlds largest beverage
distribution system[1]. Distribution channels utilized by Coca-Cola consists of
distribution operations operated or controlled by the company, independent
bottling partners, distributors, wholesalers and retailers. The five major bottling
partners listed in Table 3 accounted for 33% of the total unit case volume sales in
2014. Moreover, outbound logistics are organized via manual distribution across
Africa with more than 2500 independent manual distribution businesses
employing more than 11,000 people (August 12, 2015 by John Dudovskiy)

Independent bottling partner

Areas covered

Coca-Cola FEMSA, S.A.B. de

C.V. (Coca-Cola FEMSA)

Northeast parts of Mexico, Brazil, Guatemala, Colombia, Costa Rica,

Nicaragua, Panama, Venezuela, western Argentina and Philippines

Coca-Cola HBC AG (Coca-Cola

Hellenic)

Armenia, Austria, Belarus,

Bosnia-Herzegovina, Bulgaria, Croatia, Cyprus, the Czech Republic,
Estonia, the Former Yugoslav Republic of Macedonia,

Greece, Hungary, Italy, Latvia, Lithuania, Moldova, Montenegro,

Nigeria, Northern Ireland, Poland, Republic of Ireland,
Romania, Russia, Serbia, Slovakia, Slovenia, Switzerland and Ukraine
Arca Continental, S.A.B. de C.V

Western Mexico, Ecuador and northern Argentina

Belgium, continental France, Great Britain, Luxembourg, Monaco,

New CCE

the Netherlands, Norway and Sweden

Hong Kong, Taiwan, seven provinces in mainland

Swire Beverages (Swire)

China and territories in 11 states in the western United States

Table 3 Major bottling partners and areas they serve[3]

Marketing and sales. Sales of beverages belonging to Coca-Cola portfolio
amounted to 28.6 billion, 28.2 billion and 27.7 billion unit cases in 2014, 2013
and 2012, respectively. The volume of sales in the home country US accounted for
19% to the total volume of sales in 2014[4]. 31% of total sales outside of the US
occurred in Mexico, China, Brazil and Japan.
Coca Cola applies integrated marketing strategy using advertising, sales
promotions, events and experiences and public relations elements of the
marketing mix in a combined manner. The brand marketing message is
associated with being happy, enjoying life and leading an active lifestyle. Coca
Colas the latest marketing efforts have been directed at combining four popular
drinks Coca Cola, Diet Coke, Coca Cola Zero and Coca Cola Life into the
concept of One Brand, thus providing wider choice to the target customer
segment. (August 12, 2015 by John Dudovskiy)
Service. Coca Cola maintains its customer service practices via online chat with
a virtual agent in official website of the company dedicated customer service
phone. Coca Cola website has a comprehensive FAQ that covers the most aspects
of their products in a detailed manner and the website also addresses a wide
range of rumors related to the brand direct and indirect ways.

Coca Cola Company Report contains more detailed discussion of Coca Cola
value-chain analysis covering analysis of support activities. The report also
comprises application of SWOT, PESTEL and Porters Five Forces Analyses on
Coca Cola Company, along with analysis of Coca Colas marketing strategy and
companys approach towards Corporate Social Responsibility (CSR).

[1] Annual Report (2014) Coca-Cola Company

[2] Clinton, B. (2009) Harvard Business Review, Available at:
https://hbr.org/2009/09/creating-value-in-an-economic-crisis
[3] Annual Report (2014) Coca-Cola Company
[4] Annual Report (2014) Coca Cola Company