Coca Cola was one of the Leading brand during 1970’s, made to exit due to foreign policies. After re-entering a hiatus of 16 years, Coco Cola has reached to each and every corner of India. Being one of the largest beverage companies in India, Coca Cola is now available through length and breadth of India.
An Introduction to Coca Cola India:-
Coca cola is a well-known American beverage giant, which sells concentrated soft drink worldwide. The journey for Coca cola begins when Pharma Scientist John Pemberton first formulated Coco Cola recipe in 1886 in Columbus, Georgia. Later in 1889, Coca Cola formula and brand was sold to Asa Candler who then incorporated the company Coca Cola in ...view middle of the document...
Coco Cola reentered into Indian market through its solely owned subsidiary company named Coca-Cola India Private Limited
After India has opened the gate to foreign investments in 1991.Since then Coca Cola Company has rapid grown in Indian market with over 7000 Indian distributors and more than 1.7 million retailers. Coco Cola India had posted positive growth for 26 consecutive quarters and for the 6th consecutive years, it has delivered double digit volume growth in India by gaining strong volume and value share in non-alcoholic beverages. They arrive at this success by adopting suitable system that supports its strategy.
Porter Five Forces Analyses:
Michael Porter five forces framework helps to understand the industry rivalry and the development of business strategy. It does help to identity the rivalry from external sources in the market. Applying porter’s five forces framework analysis to Coco Cola Company in Indian context will aid us to understand micro and Macro Environment. Thus it can enable to draw a map for business strategy.
The Thread of New entrants:
When Coca cola had started its operations in 1993m Thums up was leading brand and Indian market was dominated by small players like Campa Cola, Double Seven and Double Cola in addition to the market Leader Thums Up. Meanwhile Pepsi had entered into scene as well. But Coca Cola had the upper hand among its competitors. It bought Thums up from Parle and made the path easier to beat Pepsi along the way. They had to spend whole lot of money to reach a position where they are today. Huge sum of money that Coca Cola had invested on advertisement and Market helped their cause to tire out competitors. Factors such as advertising, Marketing, Customer loyalty, brand Image, retail distribution, fear of retaliation, bottling network did hinder any new entrants into the industry. Economies of scale are well utilized by Coca Cola. It is not easy for any other new players to enter into soft drinks arena thus the thread of new entrant is very low.
Competitive rivalry within the industry:
Currently in the Indian market scenario, Coca Cola and Pepsi share 95% market share and other small players like Pure Drinks complete rest of the market share. Thus other players have no hand to encourage any price wars. With Pepsi, Coca cola primarily competed on advertising and Product differentiation. Soft drinks industry needs huge sum of money to be invested to have manufacturing plants and bottling Companies. Huge capital meant intensity of competition in the soft drinks is unequal on local markets.
The Thread of substitutes:
This is one segment what Coca Cola had lot of rivalry to face in Indian market. Indian market is enriched with several substitutes such as water, tea, beer, natural Juice, Coffee, etc. but they are very small in size and much localized in nature. They did not have supply and distribution chain across whole country. Thousands of small players offer wide variety...