FIN1FSA Financial Statement Analysis - Assignment Help on Risk and Profit Potential of Coca-Cola Amatil

Introduction

The company that has been chosen for the assignment is Coca-Cola Amatil limited. The company headquartered in Sydney is involved in the business of beverages manufacturing and has manufacturing or distribution in every state. The company with its Coca-Cola International standards and association with Amatil Group in Australia is a giant in the beverages industry.

Industry Analysis

The non-alcoholic ready to drink beverage industry in Australia is at a mature stage, increasingly fragmented and evolving rapidly, marked by consumers embracing new trends ("Coca-Cola Amatil Limited Porter Five (5) Forces & Industry Analysis", 2019). Current themes shaping the industry include as following:

Rivalry Among Firms 

The increase in rivalry among the existing firms is always detrimental for the businesses, it is however, in the benefit of the consumers. The food and beverages industry through out the world is highly competitive; strong competition exists between Coca-Cola and its international as well as local rivals. In order to deal with this problem, the Coca-Cola Amatil can maintain offering sustainable differentiation (Coca-Cola, 2018). Keeping a track of its performance and trying to beat its own records is another way to end this rivalry. And at times it is better to collaborate with the competition and be on the same page to save each other’s. 

Threats of New Entrants

The threat of new entrants is a constant for beverages industry, however, Coca-Cola Amatil Limited, has been able to maintain its upper hand in the industry. The company has been able to do it by keeping a low-price strategy; keeps on implementing innovative ways to keep the costs at the lower side; and above all, by providing consumers with value propositions. Another way the company has been keeping a check on the threat from new entrants is by adding new offerings to its product line (Coca-Cola, 2018). This strategy does not only help in increasing the customer base by adding new customers to the list but also keeping the existing customers as loyal.

Threat of Substitutes

Any company playing in the world of Food and beverages, faces the threat of substitute product at high levels. Since there are many products in the market that can be a complete replacement for the offerings of Coca-Cola Amatil, hence to maintain this feature and overcome this threat the company has to take major action (Coca-Cola, 2018). Coke can deal with this threat by focusing more on the service delivery than the product only; by focusing on the needs of the consumers rather than just their demand. Above all when the company is able to raise the switching cost of product for consumers it will be able to deal with the threat of substitute products.