Coca-cola should adopt internal assessment as part of its strategic plan to explore the
company’s competency, competitive viability in the market and cost position. Using the internal
factor evaluation matrix, financial ratios analysis and the overall analysis of internal capabilities,
the data generated from an internal assessment is essential since Coca-cola can use it to create
strategic planning objectives to grow and sustain the business.
The Internal Factor Evaluation (IFE) matrix focuses on the evaluation of interest rates,
linked with risk-free ventures, and it also predicts currency movements. As a strategy
formulation tool, the IFE weighs significant weaknesses and strengths in the business’
functionalities (Islam, 2018). The IFE matrix has major strategic implications. For instance, with
regards to the strengths, Coca-cola should consider what it does better or what it has that is more
valuable than what the competitors have. Similarly, with regards to weaknesses, Coca-cola
should consider the aspects that it can improve and at least catch up with its competitors.
Financial ratios analysis concludes the company’s liquidity, financial performance, asset
usage and leverage. Financial ratios have implications for strategic choice since Coca-cola can
use the results to compare its performance with industrial averages or compare with benchmark
companies to weigh the company’s performance (Faello, 2015). Moreover, tracking different
financial ratios over time is a suitable means to identify trends in their early stages, influencing
the strategic choice to boost business growth and performance.
Overall, analysis of internal capabilities is crucial to assess Coca cola’s competitive
advantages, resources and competencies. An analysis of internal capabilities reveals the
company’s strengths and weaknesses. The analysis influences strategic decisions since the
company will exploit its opportunities and strengths while mitigating any threats and
compensating for the weaknesses.
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Hence, conducting an internal assessment involves measures that offer vital information
regarding the company’s weaknesses, strengths, threats and opportunities. Coca-cola can use the
information in strategic decision making to boost business growth and performance.
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References
Faello, J. (2015). Understanding the limitations of financial ratios. Academy of Accounting and
Financial Studies Journal, 19(3), 75.
Islam, M. (2018). Strategic analysis of Shehnaz herbals