Online Tutoring on Coca-Cola Amatil

Executive Summary

Organization’s sustainability in today’s competitive environment depends on its ability to respond to changes in the market. The analysis of the various macro and micro environmental factors along with analysis of the market and the organization’s competencies enable it to apply effective strategies and have competitive advantage in the respective marketplace. Coca-Cola Amatil was the market leader in non-alcoholic beverage market but the increasing competition has led to various challenges. The organization due to his brand strength and capability to introduce innovative drinks would be able to regain its market share by positioning itself using differentiation strategy and targeting the age-group of 16-30 would be able to increase its market share, which will help the organization to increase its profits and returns on investment and allow it have a competitive advantage in the market.

Introduction

Sustainability and profitability is today’s competitive market depends on the organization’s ability to respond to the changes in the market environment. There are various external and internal factors, which have to be constantly analyzed and necessary changes should be brought in the strategies of the organization to sustain in the market. This report analysis the external and internal environment and the opportunities Coca-Cola Amatil has in the Australian market.

Company Background

Coca-Cola Amatil (CCA) is one of the largest bottlers of non-alcoholic beverages in the Asia-Pacific region (Coca-Cola Amatil, 2015). CCA operates in six countries, which includes Australia and has a diverse product portfolio, which includes spring water, energy drinks, carbonated soft drinks, flavored milk etc. (Mitchell, 2014). CCA started selling soft drinks in Australia in the year 1964 when the tobacco company British Tobacco purchased Coca-Cola Bottlers being operate din Perth (Coca-Cola Amatil, 2015). CCA produces number one bottled water and energy drink in Australia and was the market leader in on-sugar colas in Australia in 2012 (Coca-Cola Amatil, 2015). The company has capitalization of over AUD 7.6 billion and is listed in Australia’s top 50 companies (Coca-Cola Amatil, 2015). CCA serves more than 270 million consumers and has 14,900 employees working across the group (Coca-Cola Amatil, 2015).

Situational Analysis

Market Analysis

Coca-Cola Amatil’s position as the core Australian beverage has seen significant loss of market share due to increasing competition from its competitors mainly Schweppes, which produces products such as Pepsi, Monster Energy and Mountain Dew (AFR, 2015). Schweppes has gaining the market share since it has increased its visibility by selling its products in all important supermarket space, which has impacted the demand of Coca-Cola products (Schweppes, 2015) Coca-Cola Amatil’s profit has also been impacted due to the increasing cost of the required resources.

Macro Environment Analysis

Political

Australia is the sixth oldest country following democracy and has a two-party system involving coalition between Liberal and National party (Yigitcanlar et al., 2012)
Competitive business costs and opportunities
Favorable tax systems

Economic

Australia is largest mixed market economies in the world
The market is dominated by service sector (Heritage, 2015)
Economy of the country depends on the mining industry (Yigitcanlar et al., 2012)

Economic freedom of Australia scores 81.4 making it 4^th freest in the world (Heritage, 2015)

Social

Australia has people from diverse backgrounds (Yigitcanlar et al., 2012)
Local people value honesty, Authenticity and relationship (Yigitcanlar et al., 2012)
Increased disposable income and low unemployment rate

Technology

Australia values technological advancements in every area
The country invests effectively in latest technologies, which includes bio-medical
CSIRO is the country’s government research agency contributing towards research and development in bioinformatics and Information Technology (Yigitcanlar et al., 2012)

Legal

Australia has a legal system, which is based on rule of law, justice and independence of judiciary (Yigitcanlar et al., 2012)
Australia has effective anti-corruption laws, property rights and enforcement of contract laws (Newman, 2015)
Regulatory efficiency is institutionalized and well-established and has open-market policies allowing increased trade and investment (Heritage, 2015)

Micro Environment Analysis

Company Analysis

Advantages

Coca-Cola brand acts as the key competitive advantage for Coca-Cola Amatil
Use of advanced technology in various business areas, which has helped reduce manufacturing cost and allowing it get good returns on investment (Mitchell, 2014)
Coca-Cola Amatil’s diverse product portfolio is another advantage the company has.

Disadvantages

Increasing competition
Lack of Innovation
Lack of effective marketing strategies

Coca-Cola Amatil continued to have strong market position in Australia due to its diverse product portfolio and the brand name. But with increasing price competition due to entry of several small and big companies in the market the organization is facing stiff competition and also its lack of innovation and marketing strategy against the competitors has led to declining market share.

Competitor Analysis

Competitor	Target Market	Positioning	Product	Price	Promotional Strategy	Distribution	Strength/Weaknesses
Schweppes	People in the age group 18 and above	Innovation and value for money	Variety in the products	Less compared to Coca-Cola Amatil products	Market campaigns	Available in important supermarkets	Variety of products Lower cost
Nestle Water	All the target segments	Healthiest Packaged beverage	Use of effective mechanism for Bottled water	Lesser than the bottled water from Coca-Cola Amatil product	Corporate Social Responsibility activities	Available in supermarkets and other outlets	Lower cost Use of effective techniques to ensure all the nutrients in water are present even after packaging
Dr. Pepper Snapple Group	People in the age group 25 and above	Differentiated products	Real and black tea leave used for iced tea	Premium prices	Providing sampling experience to consumers in the supermarkets	Available only in supermarkets	Unique flavored tea Currently having only iced tea in the market.

Coca-Cola faces direct competition from three major companies, which include Schweppes, Nestle Waters and Dr. Pepper Snapple Group, Inc. (Hoover, 2015). The point of similarities between these competitors include selling of bottled water and non-alcoholic beverages (Hoover, 2015). Schweppes sells various non-alcoholic beverages and has gained significant market share since it has increased visibility in major supermarkets (Mitchell, 2014). The point of differences include Nestle Waters does not sell non-alcoholic Beverages and Schweppes does not have iced tea and coffee (Nestle-Waters, 2015). Dr. Pepper Snapple Groups is a new entrant in the beverages market and has currently introduced only iced tea in the Australian market and aims to bring in the variety of products, which are already popular in the US market (Aus Food, 2014).

Consumer Analysis

Soft drink, energy drink and bottled water was consumed maximum by the consumers aged between 14-18, coffee and tea consumption is more in the age group 19-30 and 51-70 (Australian Bureau of Statistics, 2014). The age group of above 18 years consumed more of fruit juices and all the beverages (Australian Bureau of Statistics, 2014).
The purchases is highest in the major supermarket
The purchase of the non-alcoholic beverages is done to gain energy, flavor, quality and since they cannot be made at home (Australian Bureau of Statistics, 2014).
The energy drinks and soft drink are purchased in bulk from supermarkets since they give the consumers the best price (Australian Bureau of Statistics, 2014).

The soft drinks and energy drinks are popular in the younger generation and the tea and coffee are preferred by older generation. The bottled water is purchased mainly by the office goers on their way and from the vending machines in their offices or from nearby outlets (Newman, 2015).

SWOT Analysis

Strengths

· Well-established brand and hence strong management team (Newman, 2015)

· Market leaders in many of the beverages

· Adoption of latest technology hence has unique delivery management system and inventory system (Mitchell, 2014)

Weaknesses

· Changing market conditions (Newman, 2015)

· Increasing price competition (Newman, 2015)

· Changing preferences of the consumers who are becoming more health conscious (Mitchell, 2014)

· Economic fluctuations globally

Opportunities

· Further product diversification and focusing more on health drinks

· Introducing new flavors in the existing products

· Growth opportunities in the neighboring countries

Threats

· Changing prices of resources such as aluminum, PET and PVC plastics (Newman, 2015)

· Increasing market share of other competitors

Objectives

To increase its market share by 25% from its current market share
To develop new products and launch one of the products in next 6 months
To increase its profits by gaining increased returns on the investments made

Coca-Cola Amatil by implementing effective marketing strategies will improve its sales as compared to Schweppes and increase its market share. By introducing new products it would attract new and existing segments and continue to gain their loyalty and by reducing the overheads the company would be able to have a better cash flow and invest effectively in marketing and product development.

Target Market & Positioning

Selection of Target Market

Coca-Cola Amatil would use demographic and psychographic segmentation approach to select the target market. The demographic segmentation involves identifying target segment bases on indicators such as age, gender etc. and psychographic segmentation separates a market segment based on lifestyle, values and beliefs (McDonald, 2012). Coca-Cola Amatil would target population from 16-30 and introduce a refreshment drink, which would be targeted to office goers who have a busy schedule and always look for a good relaxing drink, which does not have a negative impact on their health. The drink would be made available in different outlets and office vending machines, which will increase its visibility. The organization would attract this segment through various marketing campaigns and through internet advertisement.

Positioning Strategy

Market positioning of the product is an important decision. Porter identified three generic strategies for positioning the product in the marketplace, which includes low-cost, differentiation and focus (Chernev, 2011). Coca-Cola Amatil would adopt the differentiation strategy since the target segment is willing to spend for a good relaxing drink and are not price conscious. Considering the posit of similarities and differences this strategy is most appropriate since its product will stand out from the rest of the brands and attract the target segment due to the strength of the brand name and its successful products.

Positioning Attributes

Coca-Cola Amatil will use the attributes of strong brand power and its potential to attract the desired target segment through the strong product portfolio. People continue to value the brand and it has established a powerful brand image in the consumer’s mind. The products introduced by the company highlights the potential of the organization to introduce a great new product, which would meet the needs of the target segment.

Conclusion and Recommendations

Coca-Cola Amatil currently is losing the market share due to increased competition. The lack of innovation, marketing strategies and changing customer preferences require change in the approach. By introducing new product it would be able to attract the desired segment and attract the existing customers. It is recommended that the organization should implement effective marketing strategies and interact with the target segment effectively to be able to respond to their needs in an effective manner and gain their loyalty for life-time.