MNG3702
Assignment 1 Semester 2 2026
Unique number:
Due date: August 2026
QUESTION 1: ABSORPTIVE CAPACITY
Absorptive capacity is an organisation's ability to recognise useful knowledge from
outside, understand it and use it to solve business problems. It has four connected
dimensions: acquisition, assimilation, transformation and application (Botha and
Venter, 2022, p. 265).
Acquisition. Coca-Cola gathers information through its global business units, local
bottlers, retailers, suppliers and market partners. This gives the business direct
knowledge about consumer preferences, affordability, public health pressure and
operating conditions in South Africa. Its large local network, which includes
manufacturing plants and more than 197 500 retail outlets, improves the speed and
range of information collected. This indicates strong acquisition, although the value
of the information still depends on accurate reporting across the system (University
, QUESTION 1: ABSORPTIVE CAPACITY
Absorptive capacity is an organisation's ability to recognise useful knowledge from
outside, understand it and use it to solve business problems. It has four connected
dimensions: acquisition, assimilation, transformation and application (Botha and
Venter, 2022, p. 265).
Acquisition. Coca-Cola gathers information through its global business units, local
bottlers, retailers, suppliers and market partners. This gives the business direct
knowledge about consumer preferences, affordability, public health pressure and
operating conditions in South Africa. Its large local network, which includes
manufacturing plants and more than 197 500 retail outlets, improves the speed and
range of information collected. This indicates strong acquisition, although the value
of the information still depends on accurate reporting across the system (University
of South Africa, 2026, p. 3).
Assimilation. The parent company manages brands, product development, portfolio
choices and marketing, while bottlers provide local manufacturing, distribution and
customer knowledge. Knowledge, capability and innovation move across this
system. These links help Coca-Cola analyse local information and share it with the
people who make strategic and operating decisions. The wide partner network can
slow this process if information systems and priorities are not properly aligned
(University of South Africa, 2026, p. 2).
Transformation. Coca-Cola has shown that it can combine new information with its
existing brand, production and distribution knowledge. The Health Promotion Levy
led to changes in product formulation, pricing and the portfolio. Environmental
pressure has also been turned into packaging, recycling, water and emission targets.
These actions show that external knowledge is not only collected but is used to
rethink how the business creates value (University of South Africa, 2026, pp. 4–5).
Application. The company applies knowledge through product changes, local route
decisions, recycling partnerships, water projects and planned investment in
production, distribution and innovation. The R17.6 billion investment planned to 2030
gives practical support to these changes. Coca-Cola therefore shows a high level of
absorptive capacity. Its main weakness is that application depends on many bottlers,
Assignment 1 Semester 2 2026
Unique number:
Due date: August 2026
QUESTION 1: ABSORPTIVE CAPACITY
Absorptive capacity is an organisation's ability to recognise useful knowledge from
outside, understand it and use it to solve business problems. It has four connected
dimensions: acquisition, assimilation, transformation and application (Botha and
Venter, 2022, p. 265).
Acquisition. Coca-Cola gathers information through its global business units, local
bottlers, retailers, suppliers and market partners. This gives the business direct
knowledge about consumer preferences, affordability, public health pressure and
operating conditions in South Africa. Its large local network, which includes
manufacturing plants and more than 197 500 retail outlets, improves the speed and
range of information collected. This indicates strong acquisition, although the value
of the information still depends on accurate reporting across the system (University
, QUESTION 1: ABSORPTIVE CAPACITY
Absorptive capacity is an organisation's ability to recognise useful knowledge from
outside, understand it and use it to solve business problems. It has four connected
dimensions: acquisition, assimilation, transformation and application (Botha and
Venter, 2022, p. 265).
Acquisition. Coca-Cola gathers information through its global business units, local
bottlers, retailers, suppliers and market partners. This gives the business direct
knowledge about consumer preferences, affordability, public health pressure and
operating conditions in South Africa. Its large local network, which includes
manufacturing plants and more than 197 500 retail outlets, improves the speed and
range of information collected. This indicates strong acquisition, although the value
of the information still depends on accurate reporting across the system (University
of South Africa, 2026, p. 3).
Assimilation. The parent company manages brands, product development, portfolio
choices and marketing, while bottlers provide local manufacturing, distribution and
customer knowledge. Knowledge, capability and innovation move across this
system. These links help Coca-Cola analyse local information and share it with the
people who make strategic and operating decisions. The wide partner network can
slow this process if information systems and priorities are not properly aligned
(University of South Africa, 2026, p. 2).
Transformation. Coca-Cola has shown that it can combine new information with its
existing brand, production and distribution knowledge. The Health Promotion Levy
led to changes in product formulation, pricing and the portfolio. Environmental
pressure has also been turned into packaging, recycling, water and emission targets.
These actions show that external knowledge is not only collected but is used to
rethink how the business creates value (University of South Africa, 2026, pp. 4–5).
Application. The company applies knowledge through product changes, local route
decisions, recycling partnerships, water projects and planned investment in
production, distribution and innovation. The R17.6 billion investment planned to 2030
gives practical support to these changes. Coca-Cola therefore shows a high level of
absorptive capacity. Its main weakness is that application depends on many bottlers,
