External Environment Analysis-Coca Cola of Institute NAICS The industry, to which Coca-Cola is ified according to NAICS, is the ‘bottled and canned soft-drink industry’, with the code 2083. In order to conduct an external analysis for Coca-Cola, it is essential to examine the factors affecting the business with reference to Porter’s 5-Forces as well as PEST analysis. Porter’s 5-Factor Model: Porter’s 5-Forces model consists of the following dimensions: 1. Supplier power: Porter’s five factor market analysis: Available at http: //www. oup. com/uk/orc/bin/9780199296378/01student/additional/page_11.htm This source provides information as to how the external environment can be analysed and what factors contribute in altering it with regard to the five forces.
This is exceptionally useful because it actually lists the exact factors which can cause a modification in the forces, as mentioned by Porter. 6 big business rivalries: Available at http: //news. thomasnet. com/IMT/archives/2009/02/6-big-business-rivalries-healthy-competition. html This gives a clear picture as to how Coca-Cola competes with its biggest competitor Pepsi. It might be somewhat biased. However, most of the facts and figures given seem accurate. 2. Threat of new entrants Cola Wars Case: http: //docs. google. com/viewer? a=v&q=cache: 9w_ov0koDxcJ: faculty. haas. berkeley. edu/meghan/299/Case_analysis_Coke_Pepsi2.pdf+new+entrants+in+cola+industry&hl=en&gl=pk&pid=bl&srcid=ADGEESjJd0ViW4fUpEDyf_vA2f6ZIp_MjiAcWAsTa2yDl0Wb6KKWJrCn-1M5uQyuudf9RwWWW4ozeEW7wDXLPmLEPI0u82p7m85LNMPYNMnWIxgKbaRL63Iqwamz7W-uSy9aOm4Y8z0G&sig=AHIEtbSEBFH90__XPNKjIeTh0VI52KOWPQ This describes how difficult it is for new entrants to enter the Cola industry. It gives a balanced point of view about the various new entrants that can potentially enter. Industry Analysis: http: //docs. google. com/viewer? a=v&q=cache: FV3uG1TLf_MJ: www. csbsju. edu/Documents/libraries/zeigler_paper. pdf+new+entrants+in+cola+industry&hl=en&gl=pk&pid=bl&srcid=ADGEEShgeuqecj36QpuSDJkYlKLzw5rHBv4fKYVtVGry4triIZoW1AsqgPkt4ZpnIUHwPBL1povtBerPutF9Tnuex-Nbv615F3Mgf-zWYn_EXeTR1llh-JG0EuW89gJv4IGt--UTfYYp&sig=AHIEtbRAzvoYSNk601sGwjksEt2O8OFQHQ This describes how to analyse the soft-drink industry in regard to new entrants with a special mention of Coca-Cola.
However, the competitors by name are not mentioned anywhere. This is a somewhat useful source. 3. Threat of substitutes Coca-Cola: http: //docs. google. com/viewer? a=v&q=cache: AhSZPslbuRsJ: web. me. com/briangaudet/ThePatientInvestor/Company_Analysis_Examples_files/KO. pdf+substitues+in+cola+industry&hl=en&gl=pk&pid=bl&srcid=ADGEESj_fhN0C4ms2HUrDAZ5LmYUqdGItKTa0IHcTk9SDuqf_yxRmGDAkKhp8Akk1AgXtK1cer8jeSA2f80T1a5vTRjuXaY0Fx6Rzb0fFGYsINdEfuyHHg0y1el6mIC8Mr9pLyMxLS1u&sig=AHIEtbTuX_KXYZMWYNRtY0rTOv0iuY4ZoA This analyses the various substitutes available in the soft-drink industry. Moreover, it helps relate it with Porter’s 5-factor model, meaning how these substitutes can influence the competitiveness of the firm. Coca-Cola: Solid Company at a Reasonable Price: http: //seekingalpha. com/article/147851-coca-cola-solid-company-at-a-reasonable-price This also describes how the various substitutes in the soft-drink industry can be analysed.
However, in relation to the previous source it focuses on the various substitutes available in the soft-drink industry. 4. Buyer power The measurement of purchasing power: http: //www. jstor. org/pss/2279574 This gives a basic idea as to how the purchasing/buying power is measured with regard to various industries. It also gives the facts and figures as to how this purchasing power can vary and how it will influence the economy as well as individual business. Purchasing power parities: http: //docs. google. com/viewer? a=v&q=cache: o2oZy3MMDgQJ: www. oecd. org/dataoecd/32/34/2078177.pdf+measuring+the+buying+power&hl=en&gl=pk&pid=bl&srcid=ADGEESjIf4gFERcPc9SrbYqiUtDPbRAUpsLpHUaYq4vD7IZ8Vrk6na5m2Z2mDvDwOGBit2jR_kco473S9CNmvpHsoCCzMwPuLDET8THZHZ8bfR7S3VRjfFzv4gLdDQsi6WFFxyj5UxpD&sig=AHIEtbRtAXEHn8itFgl_RJVxOKxGHPCXxQ This relates the buying power of customers to the various industries, such as the soft-drink industry.
However, as compared to the previous link, it gives a lot of detail with regard to the customers. 5. Rivalry: 6 big business rivalries: Available at http: //news. thomasnet. com/IMT/archives/2009/02/6-big-business-rivalries-healthy-competition. html This gives a clear picture as to how Coca-Cola competes with its biggest competitor Pepsi. It might be somewhat biased. However, most of the information provided seems accurate. PEST Analysis: PEST Analysis consists of: 1. Political: Business and its environment: http: //www. lavoisier. fr/livre/notice. asp? id=OR2WOKALOXKOWZ This describes how a business environment can be analysed as well as its implications for any industry. The details given can make it a valuable source for the analysis of the political situation of any country. External Environment in the Asia Pacific: http: //docs. google. com/viewer? a=v&q=cache: LZ00MJOZxF4J: www. apmf. org. sg/Lt3--AnalysExternalEnv. ppt+analyzing+the+political+environment&hl=en&gl=pk&pid=bl&srcid=ADGEEShQzyRtEggNOzD6JAUgW3Eoe0l1B144sW0jeFXf30fsTRnRHx4RlfKzXs1CrZ7QYaFvXUYx_pV1XhTE0nTO4XsBGhKCV6YnDPPq3kHKEq22R-i5jlcE3r-Jjp0AXnnPFRZQ61Hj&sig=AHIEtbQeh2bi-GcX_bzm3PRn4MFoUKPcMg This provides an interesting analysis of how the environment in the Asia-Pacific influences the various industries and can be related to the soft-drink industry.
It can also be applied to any given country of area. 2. Economic: PESTEL analysis of the macro-environment: http: //www. oup. com/uk/orc/bin/9780199296378/01student/additional/page_12.htm This helps in understanding the factors which make up the economic environment of a country and how they can influence a business or industry. The Economic Environment: http: //www. fao. org/docrep/W5973E/w5973e03.htm This helps in understanding how the economic environment can be analysed with reference to an industry and its implications. 3.
Social: Social Economics: http: //books. google. com. pk/books? hl=en&lr=&id=cUMgPIPp0-IC&oi=fnd&pg=PP3&dq=analyzing+the+social+environment&ots=jegN6hep37&sig=VY03X4WioDTbr_L7LgsOH_1T4w4 Helps in applying the knowledge of how the social factors make up the external environment, and help to shape the way a business will undertake its operations. The content tends to give a very realistic picture and also includes the facts and figures relating to the demographics, age, sex etc. of various countries which can help relate it to the behaviour of the society. Socio-economic impact analysis: http: //www. lic. wisc. edu/shapingdane/facilitation/all_resources/impacts/analysis_socio. htm Describes how the social factors will shape up the strategy of a business 4. Technological: The effects of technological environment: http: //www. jstor. org/pss/1928813 This identifies the various technological factors which will shape up the business environment as well as delves into the details of their effects. PESTEL analysis of the macro-environment: http: //www. oup. com/uk/orc/bin/9780199296378/01student/additional/page_12.htm This defines the technological environment with relation to various industries, and can help analyse the soft-drink industry with the various factors.
References: Porter, M.E. (1979) How Competitive Forces Shape Strategy, Harvard Business Review, March/April 1979.