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Company analysis - Coca Cola Amatil (CCL).

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PART A: INDUSTRY ANALYSIS 2 1.0 COMPANY ANALYSIS COCA COLA AMATIL (CCL) 4 PART B: ISSUES ANALYSIS 5 2.0 KANTER'S 'NEW WISDOM' THEORY 5 2.1 CORE COMPETENCE 5 2.2 TIME COMPRESSION 6 2.3 CONTINUOUS IMPROVEMENT 6 2.4 RELATIONSHIPS 8 3.0 DAY & WENSLEY'S THEORY 8 3.1 COCA COLA KEY SUCCESS FACTORS 9 4.0 COCA COLA'S FUTURE SOURCES OF COMPETITIVE ADVANTAGE 16 4.1 BRAND BUILDING 16 4.1.1 Brand Building & Porter's Five Forces 17 4.1.2 Brand Building & Day & Wensley's Theory 19 4.2 RELATIONSHIP MARKETING 19 4.2.1 Relationship Marketing & Kanter's New Wisdom Theory 20 4.2.2 Relationship Marketing & Porter's Five Forces 20 4.3 INNOVATION 22 4.3.1 Innovation & Kotler's Theory 24 4.3.2 Innovation & Hamel & Prahalad 24 4.4 TECHNOLOGY 24 4.4.1 Technology & Kotler's Theory 25 4.4.2 Technology & Kanter's Theory 25 5.0 REFERENCE LIST 26 Part A: INDUSTRY ANALYSIS Coca Cola operates in the Australian Non-Alcoholic Beverages Industry, which consists of carbonated, non-carbonates beverages and juices. 1. Industry Characteristics & Performance 1.1 Market Size - Total turnover was $3.054 million 1.2 Growth - Slowing, since 2000 has decreased by 3%. 1.3 Industry Life Cycle - Mature, due to saturation by soft drink brands 1.4 Geographic Spread - 80% of establishments are located in capital cities. 1.5 Industry Concentration - High. In 2002, the four largest establishments accounted for 86.7% of industry turnover (as measured by market share). (IBISWorld, 2002) 2. Product Segments - * Coca Beverages * Lemonades * Sport Drinks * Bottled Water * Juices and; * other specialty products . 3. Domestic Market Channel Segments - * Supermarkets * fast foods outlets and; * other retail points-of-sale. 4. Industry Attractiveness - Somewhat unattractive. 5. Competitive Environment * Oligopolistic competition Major Players: Market Share % Coca-Cola Amatil Limited 45.30% Cadbury Schweppes Australia Limited (Pepsi) 21.00% Berri Limited 15.10% Golden Circle Limited 6.60% Frucor Beverages Group Limited 1.40% 45.30% (2002) ...read more.


Although Pepsi has released several 'me-too' products to rival CCL's product range ( Pepsi Twist, Wild Cherry Pepsi and Diet Mountain Dew), it was not able to utilise these products to overthrow Coca Cola as the market leader (www.fms.com, Date Accessed <07/05/03>). As Coca Cola's product range is viewed by consumers to be 'different', that is differentiated from its competitors, Coca Cola is able to charge premium prices , which are acceptable to consumers as they are able to justify the price for the benefits Coca Cola's products deliver. Thus, Coca Cola occupies a differentiated position in the marketplace, which allows the company to gain a superior position to Pepsi (coke.net, Date Accessed <7/05/03>). Coca Cola's differentiation advantage has rewarded the company with a higher market share of 46% in Australia, compared to Pepsi's 21%. Coca Cola's 2002 annual report has stated sales increased by 20.1% with net profit of $209.5 million (http://www.cocacola.com.au/). Coca Cola's superior payoff was a result of the premium pricing of the product range, as well as increased operation efficiencies. Based on Day & Wensley's theory, Coca Cola has relied on competitive advantage issues such as Operation Efficiencies, Brand Building, Relationship Marketing, Strategic Alliances. Innovation and Technology, to gain a superior positional advantage, providing superior customer value to Pepsi in the Australian non-alcoholic beverage industry. Figure 2 Day & Wensley Framework for Coca Cola 4.0 Coca Cola's Future Sources of Competitive Advantage Despite the fact that Coca Cola currently occupies the market leadership position, it does not guarantee the company will sustain its position in the future. Hence, it is recommended that Coca Cola enhances the following four factors - Brand Building, Relationship Marketing, Innovation & Technology, to maintain its 'market leader' position and resist the erosion of Coca Cola's present advantages. 4.1 Brand Building Although presently Coca Cola users are responding to the company's advertising campaigns and are prepared to pay premium prices, today's dynamic markets are constantly changing with evolving customer tastes, thus making all companies in the business environment vulnerable to failure. ...read more.


138-146. Gilgeous,V., Parveen, K., (2001), Core competency requirements for manufacturing effectiveness, Integrated Manufacturing Systems Volume 12 Number 3 pp. 217-227. Gronoos, C., "From Marketing Mix to Relationship Marketing: Towards a Paradigm Shift in Marketing", Australian Marketing Journal, 2(1), pp. 9-24. Hamel, G., & Prahalad, C.K., (1994), Competing for the Future, Harvard Business Review, pp. 122-128. IBISWorld, 2003. Johne, A., (1999), Successful market innovation, European Journal of Innovation Management, Volume 2 Number 1, pp. 6-11 Kanter, R., (1989), How to Compete, Harvard Business Review. Kaye, M., Anderson, R., (1999), Continuous improvement: the ten essential criteria, International Journal of Quality & Reliability Management, Volume 16 Number 5 pp. 485-509. Lindsay, P.R., Stuart, R., (1997), Reconstruing competence, Journal of European Industrial Training, Volume 21 Number 9 pp. 326-332. Mackay, D. and Rosier, M. (1996), Measuring Organizational Benefits Of EDI Diffusion A Case Of The Australian Automotive Industry, International Journal of Physical Distribution & Logistics Management; Bradford, vol. 26, issue 10, pp. 60-78 Pearson, G., Proctor, T., (1994), The Modern Framework for Marketing Planning, Marketing Intelligence & Planning Volume, 12 Number 4 1994 pp. 22-26 Pereira, R.E., (2002), An adopter-centered approach to understanding adoption of innovations, European Journal of Innovation Management ,Volume 5 Number 1, pp. 40-49. Porter, M., (1996), What is strategy?, Harvard Business Review, pp. 61-78. Turnbull, P., Ford, D., Cunningham, M., (1996) Interaction, relationships and networks in business markets: an evolving perspective, Journal of Business & Industrial Marketing, Volume 11 Number 3/4 pp. 44-62. Vishwanath, V & Mark, J, (1997), Your Brand's Best Strategy, Harvard Business Review, pp. 123-129. Walter, A., Gem´┐Żnden, H.G., (2000) Bridging the gap between suppliers and customers through relationship promoters: theoretical considerations and empirical results, The Journal of Business & Industrial Marketing, Volume 15 Number 2/3, pp. 86-105 http://www.adage.com/news.cms?newsId=36912 <Date Accessed <8/5/03>) http://www.business2000.ie/cases/cases/case6.htm- (Date Accessed <8/5/03>) http://www.biz-community.com/Article/196/82/1457.html (Date Accessed <8/5/03>) http://www.cio-asia.com/pcio.nsf/unidlookup/E1F7132935A0DBB548256BCD001FE98B?OpenDocument (Date Accessed <7/5/03>) http://www2.coca-cola.com/presscenter/nr_20020508_vanilla_coke_launches.html (Date Accessed <8/5/03>) http://coke.net/home/pub/customer/customer_topbrands.htm (Date Accessed <7/5/03>) http://www.fms.edu/studentresearch.htm (Date Accessed <7/5/03>) http://www.instituteforbrandleadership.org/newfuture.html (Date Accessed <7/5/03>). http://www.microsoft.com/resources/casestudies/CaseStudy.asp?CaseStudyID=10697 (Date Accessed <8/5/03>) http://www.strategicmanagementscience.com/SNews11.htm#Coca-Cola (Date Accessed 7/5/03>) http://www.wirelessweek.com/index.asp?layout=article&articleid=CA232105 (Date Accessed <8/5/03>). MAR 32 Anna Belsky Issues in Competitive Advantage Student ID: 12279064 26 2 ...read more.

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