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Question:
Discuss about the Situation Analysis for Launch of a New Product.
 
 
Answer:
Introduction

Situation analysis is conducted by the company manager to analyse an organisation’s environment which includes both internal and external to understand the capabilities of the organisation, business environment and customers. Here, a situation analysis of a new product launched by the well-known company Coca-Cola is done to understand the above-given situation of the company. The Coca-Cola company has launched ‘Coffeelaa’ a beverage that has a flavour of the Coca-Cola and coffee. Further, in the report marketing analysis, SWOT analysis, Industrial analysis, etc. are taken up to get the exact picture of the product (Ran, 2010).

Situation Analysis

Situation Analysis is taken up by the company manager to know about the situation of the company at the present moment. This situation analysis is generally taken when there is some major decision is needed to be taken in the company. For example, in this case the Coca-Cola Company is going to launch a new product ‘Coffeelaa’. Thus, before actually launching the product the company managers has to decide the marketing criteria for the launch of the product to make it a success and this marketing criteria is determined with the help of situation analysis taken up by the company manager. The situation analysis includes various analysis and they are explained below.

External Analysis

The Coca-Cola company’s present situation is determined here with the help of various external analyses, and they are as follows:-

Industry Analysis

The Coca-Cola Company stands as very reputed and well-known beverage company holding a big share in the beverage market throughout the world. It has come up with new products on various occasions to lure various targeted customers. Here, an analysis of the company present situation and an assumed future market share has been represented with the help of image given below. This analysis will help the managers of the company to ascertain the market for the new product ‘Coffeelaa.’ (Iwamuro et al., 2014)

The current market share and the assumed market share of the products of Coca-Cola company

Fig 1: - The current market share and the assumed market share of the products of Coca-Cola company.

Source: - (www.suredividend.com)

Market Analysis

A company is running in profit or loss is determined by the market share and demand for the company’s products amongst the customer. Here, the competitor analysis and customer analysis are done to reflect the current market situation of the company (Noorinasab and Hemati, 2012).

Competitor’s Analysis

There are many competitors of Coca-Cola Company throughout the world where PepsiCo Company is taken to be the biggest competition for the company. Here an analysis of various products and their market share is being reflected through an image given below (Wang, 2015).

The market share of various products of Coca-Cola Company against its competitor

Fig 2: - The market share of various products of Coca-Cola Company against its competitor

Source: - (www.blogspot.com)

Strategic group mapping is used by the company for the purpose of showing the standing of the company against the rival firms in the market. It helps in the analysing competitive structure of the industry. A strategic group map helps the company manager to find the current standing of the company in the market including its competitors. When the company launches a new product like in this case ‘Coffeelaa’ then managers will be able to ascertain the amount of focus required by the company on introducing its product. Also, if the competitors of the company also have the same kind of product then how ‘Coffeelaa’ can become a success by using the company’s position in the market (Berkers, 2008).

It helps in identifying the main competitors and the attractive and unattractive position of the firms. As the company is introducing a new product, then it help in analysing the level and type of entry barriers a company will face (Elmore, 2013).

The next image shows the strategic position of the company.

Strategic position of the Coco-Cola Company

Fig 3: - Strategic position of the Coco-Cola Company

Source: - (https://image.slidesharecdn.com)

Customer Analysis

Customers are the main target of any company because they are the people who are going to purchase the product and provide profit to the company. It is very significant for the company to determine what a customer need and then manufacture its product as to fulfill their demands. If the product is as per the customer’s demand, it will have more chances of success. If the demand has to be created amongst the customer, then the product need to be perceived in such a way that they feel that the product it an ultimate need for them. What’s an average customer demand is being presented with the help of an image given below (Cermak, 2015).

The consumption details of various drinks

Fig 4: - The consumption details of various drinks

Source: - (https://research-methodology.net)

Microenvironment

PESTLE analysis helps the managers to have a bird’s eye view of the positioning of the company in and around the industry. PESTLE analysis includes the political, environmental, social, technological, legal, and economic factors that help in determining the current scenario of the company (Fletcher, Frisvold and Tefft, 2011).

Political- Coca-Cola is regulated under FDA as it is as it deals in non-alcoholic beverages. It is necessary for the company to follow and maintain firm standard laws set up by FDA. Coca-Cola deals throughout the world thus, it becomes very important for the company to make sure that are aware of the present political situation of the country they are selling their brand.

Economic- recently the world is facing an economic downturn which has affected the economy of all the countries. This has led the company’s profit towards diminishing. Therefore, it becomes necessary to determine before launching a new product that people have purchasing power or not (Foster, 2014).

Social- cultures of different countries affect the choice of drink they prefer to have. Like in India people prefer non-alcoholic beverages where as in Canada alcoholic beverages are more common. Any kind of marketing done for the product is planned by keeping mind the social culture of that country.

Technological- in this advance age of technology, companies are also changing their working. For example, they have included social media to advertise their new product, as this is the most interactive technology that youth of today is using.

Legal- on beverage companies there are many legal implications. With such a vast business setup it becomes very important for the company to follow all the legal points that a particular country demands (Godwin and Okafor, 2012).

Environmental- Environmental factors generally do not affect the Coca-Cola Company. As it is not an agro-based company.

Internal Analysis

The Coca-Cola company’s current situation is determined here with the help of various internal analyses, and they are as follows:-

Operations

Operations of the company help in identifying the strength and weaknesses of the company. Operations are to be regulated in such a way that it uses all its exclusive and effective skills and bring customers for the company. The 4P framework helps the company to determine the skilled operations of the company. The 4P framework of the Coca-Cola Company is given below: -

Product- The Cocoa-Cola Company has a wide range of product as per the targeted customers. It will be not wrong if said that Coca-Cola has something for everyone. Now with the new product ‘Coffeelaa’ Coca-Cola will target the coffee loving customers who cannot get their favourite coffee whenever they want it (Gupta, 2011).

Pricing- the price of different products of the Coca-Cola Company is different, and it depends on the demand and geographic condition of the area. Pricing is also done by keeping in mind the pricing strategy of their competitors.

Place- Coca-Cola has its plant all over the world and sells its product throughout the world. The Coca-Cola Company follows the pattern of FMCG distribution as their own distribution system (Hattersley et al., 2009).

Promotion- with the increasing competitors it becomes very necessary for the company to plan their promotion strategy better than the competitors. Coca-Cola, in general uses festivals or big sports events as the base of their promotion strategy. Use of celebrities also helps in promoting the brand as they help in connecting the product with the customers.

Financial Analysis

Financial analysis of the company is taken out to know the current financial status of the company. This analysis shows the soundness of the company. It is true that a new product launched is not necessary becomes a hit from day one. It may incur losses in the starting. It is necessary that the company should be sound enough to bear those losses. As here also the company is launching its new product ‘Coffeelaa’, so the financial situation of the company is necessary to be analysed. The financial ratio of the Coca-Cola Company of the year 2014 is given below to clear the analysis (Ihueze and Okafor, 2010).

Financial Analysis Ratio of the Coca-Cola Company

Fig 5: - Financial Analysis Ratio of the Coca-Cola Company

Source: - (https://image.slidesharecdn.com)

The external and internal analysis of the Coca-Cola Company is going to help the managers is deciding the marketing criteria for the new product ‘Coffeelaa’ that the company is launching (Kumar, Boesso and Michelon, 2014).

SWOT/TOWS
SWOT Analysis

An analysis performed on the company’s current situation to find out the strengths, weaknesses, opportunities, and threats of the company. This analysis will help the company managers to decide the most effective skills that can be used and reduce the threats to the company. It will also provide the strengths of the company to know what can be used in the favour of the company (Osueke and Ehirim, 2008).

Strength

Brand Equity- Coca-Cola has a vast global presence and brand identity.

Company Valuation- Coca-Cola is world’s one of the most valuable company. It is valued at 80 billion dollars. This includes assets, plants, and profit of the company across the world.

Fantastic Marketing Strategies- Coca-Cola has fantastic promotion techniques which not only target youth but all the age groups. They use celebrities to promote their brand (Pollitt, 2014).

 
Weaknesses

Competition with Pepsi- Pepsi is a big competitor for Coca-Cola. If Pepsi would not be their then the whole beverage market would be of Coca-Cola Company.

Diversification of products is low- Coca-Cola has restrained itself to the beverages segment only, where as its main competitor has entered in the snacks segment also. This segment is a revenue generator which helps the company to increase profit.

The absence in health drinks- in the present day’s people are getting aware of their health. Thus, many people now prefer to have health drinks in place of carbonated beverages. This proves to be a big setback for the company (Ramanathan and Muyldermans, 2010).

Opportunities

Diversification- there is a number of other industry in which the company can step in to increase its revenue for example health and food.

Developing Nation- Coca-Cola has a vast presence in the developed countries, but people of these countries are now slowly drifting towards health drinks. Thus, the company can now focus more on developing countries where people still prefer carbonated drinks over health drinks (Sundar, 2012).

Threats

Raw material sourcing- the scarcity of water is becoming a huge problem everywhere. Water is the main component of the products prepared by the Coca-Cola Company. Thus, in future getting clean and usable water will be very difficult and that will prove to be a big threat for the company.

Indirect Competitors- coffee chains, health drinks, and juices are proving to be sharing the market share of the company. They are proving to be a threat for the company (Wardlaw, 2009).

TOWS

 

 

 

 

Threats

1.      Exchange Rates in different countries

2.      Large competition

3.      Growing global warming problems

Opportunities

1.      Growing population

2.      Technological advancement

3.      Growing demand for healthier products

Weaknesses

1.      Seen as an unhealthy product

2.      Low popularity in the Middle East

3.      Use of fossil fuels to make bottles

1.      Coca-Cola can make a healthier product which is more appealing and also help them with the threat of competition

2.      The company can buy local products that may help in breaking into the Middle East market.

3.      Coca-Cola can build a more sustainable bottle that doesn’t use fossil fuels and is more recyclable to help with global warming.

1.      Coca-Cola needs to make their product healthier so they can get a better image and also target the rising demand for healthier products.

2.      A need of rise in technological advances is required so more sustainable bottle can be built.

3.      In the Middle East different market could be targeted. The increasing population has provided a number of markets everywhere.

Strengths

1.      Large market share

2.      Strong advertisement campaigns

3.      Customer loyalty to the brand

1.      Coca-Cola has strong customer loyalty so they can afford to increase cost of their product to tackle the different exchange rates.

2.      Coca-Cola leads in advertisement campaigns. If better and smarter ways are used to advertise then competing with other brands becomes easy.

3.      Coca-Cola has a large market share, because of this they are more popular than other brands and the company can make partnerships with other organisations to battle global warming.

1.      The increasing population has helped in opening more markets which the company can target to increase the market share.

2.      Advantage of technological advances can be taken to create better advertisements.

3.      They can make a healthier product to meet the demand for healthier products which in turn will also increase their customer loyalty.

Marketing Objectives
SMART Objectives

The smart objectives for the newly launched product ‘Coffeelaa’ are; -

  • To make ‘Coffeelaa’ a known product through proper advertisement
  • Achieve the target of selling two million unit in the first month of launch across the world
  • Introduce it as a unique product of the known brand.
  • Targeted customers need to be told about the product through personalised campaigning(Zhou and Wan, 2013).
 
References
Cermak, P. (2015). Customer Profitability Analysis and Customer Life Time Value Models: Portfolio Analysis. Procedia Economics and Finance, 25, pp.14-25.

Iwamuro, M., Kawai, Y., Shiraha, H., Takaki, A., Okada, H. and Yamamoto, K. (2014). In Vitro Analysis of Gastric Phytobezoar Dissolubility by Coca-Cola, Coca-Cola Zero, Cellulase, and Papain. Journal of Clinical Gastroenterology, 48(2), pp.190-191.

Noorinasab, S. and Hemati, M. (2012). A comparative Kano analysis on customer satisfaction based on customer and employment perspectives. Management Science Letters, 2(5), pp.1555-1562.

Ran, S. (2010). Chinese Translation of Coca-Cola: Analysis and Enlightenment. ACH, 2(2).

Wang, M. (2015). Brief Analysis of Sports Marketing Strategy Adopted by Coca-Cola Company. Asian Social Science, 11(23).

Berkers, E. (2008). Tastes differ: Comparing company strategies, innovation trajectories and knowledge sources in Dutch soft drink production in the 1930s. Business History, 50(3), pp.351-367.

Elmore, B. (2013). Citizen Coke: An Environmental and Political History of the Coca-Cola Company.Enterprise and Society, 14(4), pp.717-731.

Fletcher, J., Frisvold, D. and Tefft, N. (2011). Are soft drink taxes an effective mechanism for reducing obesity?. J. Pol. Anal. Manage., 30(3), pp.655-662.

Foster, R. (2014). Corporations as Partners: “Connected Capitalism” and The Coca-Cola Company.PoLAR, 37(2), pp.246-258.

Godwin, H. and Okafor, C. (2012). Modified Trend and Seasonal Time Series Analysis for Operations: A Case Study of Soft Drink Production. JERA, 7, pp.63-72.

Gupta, S. (2011). MIR talks to Stan Sthanunathan, Vice President of Marketing Strategy and Insights, Coca-Cola Company. GfK Marketing Intelligence Review, 3(1).

Hattersley, L., Irwin, M., King, L. and Allman-Farinelli, M. (2009). Determinants and patterns of soft drink consumption in young adults: a qualitative analysis. Public Health Nutr., 12(10), p.1816.

Ihueze, C. and Okafor, E. (2010). Multivariate Time Series Analysis for Optimum Production Forecast: A Case Study of 7up Soft Drink Company in Nigeria. African Research Review, 4(3).

Kumar, K., Boesso, G. and Michelon, G. (2014). How Do Strengths and Weaknesses in Corporate Social Performance Across Different Stakeholder Domains Affect Company Performance?.Business Strategy and the Environment, 25(4), pp.277-292.

Osueke, J. and Ehirim, F. (2008). Chemical, nutritional and sensory analysis of Zobo drink (Var sabdariffa) and selected soft drinks. Journal of Agriculture and Food Sciences, 2(1).

Pollitt, D. (2014). Deepwater Horizon exposes BP’s PR strengths and weaknesses. Human Resource Management International Digest, 22(7), pp.23-25.

Ramanathan, U. and Muyldermans, L. (2010). Identifying demand factors for promotional planning and forecasting: A case of a soft drink company in the UK. International Journal of Production Economics, 128(2), pp.538-545.

Sundar, D. (2012). Unleashing the Entrepreneurial Potential of Women:initiative of Coca Cola Company. GJRA, 3(8), pp.1-3.

Wardlaw, B. (2009). Got Gas? Mark Thomas Belches Out the Coca-Cola Company. Monthly Review, 61(7), p.57.

Zhou, Y. and Wan, X. (2013). The Bottleneck: Product Variety and Coordination Failures at A Major Soft Drink Bottling Company. Academy of Management Proceedings, 2013(1), pp.10302-10302.

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