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Coca Cola Value Chain

In: Business and Management

Submitted By ausaf
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Introduction

Coca Cola markets nearly 2,400 beverages products in over 200 geographic locations. As a result development of a superior value system is imperative to their operations. Throughout this paper we will analyze their value system by using Michael Porter’s value chain analysis model. In an attempt to paint a current picture of the non-alcoholic beverage industry we will assess the market activity by using mergers, acquisitions and IPO’S as our benchmarks to determine if the market is growing or contracting.

Value Chain Analysis

A value chain is a model used to disaggregate a firm into its strategically relevant value generating activities, in order to evaluate each activity's contribution to the firm's performance (Terms V 2006). Through the analysis of this model we can gain insight as to how a firm creates their competitive advantage and shareholder value.

The value chain of the nonalcoholic beverage industry contains five main activities. These include inbound logistics (suppliers), operations, outbound logistics (buyers/ customers), marketing and sales, and service.

Inbound Logistics (Suppliers)

Some of Coca Cola’s most notable suppliers include Spherion, Jones Lang LaSalle, IBM, Ogilvy and Mather, IMI Cornelius, and Prudential. These companies provide Coca Cola with materials such as ingredients, packaging and machinery. In order to ensure that these materials are in satisfactory condition, Coca-cola has put certain standards in place which these suppliers must adhere to (The Supplier Guiding Principles). These include: compliance with laws and standards, laws and regulations, freedom of association and collective bargaining, forced and child labor, abuse of labor, discrimination, wages and benefits, work hours and overtime, health and safety, environment, and demonstration of compliance (Coca Cola 2006).
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