Introduction
The Coca-Cola Company is a beverage corporation that deals with manufacturing, marketing, and selling soft and sports drinks, water, plant-based drinks, juice, dairy, and coffee. The company is characterized by a wide global presence, a diversified product portfolio, a strong brand, and a skilled workforce that boosts its competitive advantage. Using a VRIO analysis framework on the company’s strengths helps determine if its resources possess value, rarity, inimitability, and organization to help guide its competitive advantage in the soda industry.
VRIO Analysis
Value
The company has a huge distribution network following its global presence, which is a valuable resource to the corporation as it has helped it increase its customer base and income revenue over multiple regions. A global presence gives the company high financial strength and cultural experience, which helps boost sales. Moreover, the diversified product range is valuable to the Coca-Cola Company as it enables it to serve a global audience with different preferences and needs (The Coca-Cola Company, 2021). Additionally, having a strong brand image is a valuable long-term resource that helps Coca-Cola Inc. boost sales and improve company value. Furthermore, the corporation utilizes its talented and skilled workforce, which helps improve the company’s competitive advantage.
Rare
A wide global presence is a rare resource for the company, especially in its industry, where not every company can successfully operate internationally following the huge financial and marketing support required. Since PepsiCo has a diversified product range, this resource is not rare to the Coca-Cola company. Having skilled human resources is a rare competency, as not every company can acquire a diversified and talented workforce to help manage operations and improve value (The Coca-Cola Company, 2021). Moreover, as much as PepsiCo has a strong brand image, the brand value of the Coca-Cola company is a rare resource that is not easy to build.
Inimitability
A global distribution network is an imitable resource considering even Coca-Cola’s main competitor PepsiCo has a wide network presence in the industry. On the other hand, diversification provides a temporary advantage as it can be easily imitated by other industry substitutes, which can help diminish the company’s competitive advantage. For instance, the PepsiCo company acquired Tropicana, which allowed the company to introduce health-friendly beverages to the market, imitating Coca-Cola’s products (About Tropicana, 2023). Developing skilled human resources is accompanied by high expenditures associated with training, hiring, and paying talented professionals, which is a value that no company can attain. A brand image like the Coca-Cola company is hard to imitate, providing a vital advantage but can receive stiff competition from another competitor with a reckoned brand such as PepsiCo.
Organization
The Coca-Cola company has made significant efforts to enhance operations worldwide, including partnerships, which help maintain a global distribution network. Moreover, the company has taken steps to help increase its product portfolio, such as introducing low-sugar and health-friendly product options in the market to help meet diverse customer preferences. On the other hand, the company believes in a diversified and inclusive workforce incorporating a wide talent scope to help serve its customer base. Moreover, the company uses education, empowerment, and training to help improve the skill set of employees and enable them to remain focused and motivated. Additionally, the company is highly involved in corporate social responsibility activities (CSR) by giving back to the community, which has helped build its brand image in the soda industry (The Coca-Cola Company, 2021).
Conclusion
A global distribution network does not provide a sustained competitive edge for the Coca-Cola company since PepsiCo can easily imitate it. Moreover, diversification provides a short-term advantage when going against a strong competitor such as PepsiCo, but can be hard for other players in the industry to imitate. Developing a talented workforce gives the company competitive parity following the heavy expenditure needed to create such a resource, but it cannot be difficult for PepsiCo to match. Lastly, a strong image can equip the company with long-term advantages but can be easily rivaled by PepsiCo, which also has a solid brand value.
Reference List
About Tropicana (2023) Contact.pepsico.com. Web.
The Coca-Cola Company (2021) 2021 Business & ESG Report. rep. Web.