, MNG3702
ASSIGNMENT 1 SEMESTER 2
2026
DUE AUGUST 2026
Question 1: Absorptive Capacity of The Coca-Cola Company
Absorptive capacity is defined as the ability of an organisation to recognise the value of new,
external information, to assimilate it, and to use it effectively to address business problems and
create competitive advantage (Venter, in Venter 2026:101). It is a strategic capability that enables a
firm to learn and adapt more quickly than its competitors. When making a judgement regarding the
absorptive capacity of The Coca-Cola Company, it is essential to evaluate it against the four core
dimensions that determine this capability.
The first dimension is the acquisition of external information, which refers to the organisation's
ability to gather relevant information from its external environment (Venter, in Venter 2026:102).
The Coca-Cola Company demonstrates a high degree of competence in this area. The case study
reveals that the company continuously monitors a wide array of external factors, from changes in
consumer preferences and health regulations like the Sugar Tax in South Africa, to environmental
pressures and supply chain disruptions (The Coca-Cola Company Case Study 2026). Its global
structure, with five major operating segments, suggests a systematic approach to scanning diverse
markets for crucial intelligence. This constant vigilance is a hallmark of a high absorptive capacity,
allowing the company to stay abreast of critical trends that could affect its performance.
The second dimension is the assimilation of acquired information, which concerns the
organisation's ability to analyse, interpret, and make sense of the information it has gathered
(Venter, in Venter 2026:102). Here, Coca-Cola again shows significant strength. The company
processes vast amounts of complex data, such as the economic impact of its R51.2 billion South
African operation or the implications of the 33% decline in sugar consumption from taxable
beverages following the introduction of the Sugar Tax (The Coca-Cola Company Case Study 2026).
Its sophisticated business model, which combines global coordination with local execution,
suggests a powerful central capability to interpret information and translate it into strategic
meaning. The company’s ability to understand that the Sugar Tax required reformulation, pricing,
and portfolio adjustments indicates a strong capacity to assimilate information and derive
actionable strategic insights.
, The third dimension is the transformation of knowledge, which is the ability to combine new,
external knowledge with existing knowledge to develop new insights (Venter, in Venter 2026:102).
Coca-Cola's operations show how it excels at this. The case study highlights how the company
integrates knowledge from environmental scanning with its existing capabilities to create new
initiatives like the 'World Without Waste' programme, which aims for 35-40% recycled material in
primary packaging by 2035 (The Coca-Cola Company Case Study 2026). Furthermore, the
company's ability to apply lessons learned from regulatory challenges in South Africa and adapt its
portfolio strategies across different global segments demonstrates a strong capacity to transform
knowledge and innovate its business model.
The fourth and final dimension is the application of new knowledge, which refers to using the
transformed knowledge and new insights to improve business operations and develop innovations
(Venter, in Venter 2026:102). Coca-Cola provides clear evidence of this capability. The company’s
planned R17.6 billion investment in South Africa until 2030 to expand production, enhance
distribution, and accelerate innovation across the value chain is a direct application of its
knowledge about the local market's potential and challenges (The Coca-Cola Company Case Study
2026). Moreover, its commitment to returning 100% of the total water used in high-risk locations
by 2035 showcases how it applies knowledge about environmental pressures to secure its
long-term operations and legitimacy (The Coca-Cola Company Case Study 2026). In conclusion,
based on a strong performance across all four dimensions, a judgement can be made that The
Coca-Cola Company possesses a very high absorptive capacity. It is exceptionally skilled at acquiring,
assimilating, transforming, and applying external information to sustain its global leadership and
adapt to rapidly changing market conditions.
Question 2: Resource Allocation in The Coca-Cola Company
According to the textbook, resource allocation in the context of strategy deployment can be seen
as consisting of three key elements that function as an integrated whole (Jacobs, in Venter
2026:245). These elements are the communication of the strategy, the ability of the organisation to
learn and adapt, and the allocation of adequate resources, and they are all critical for aligning an
organisation with its strategic goals.
The first key element is the communication of the strategy. This is the process of ensuring that
everyone in the organisation understands the strategy and what it means for them individually
(Jacobs, in Venter 2026:243). In a complex system like Coca-Cola, this is a monumental task. The
company, which coordinates with a global network of bottling partners, retailers, and suppliers,
uses its annual reports and public communications to clearly articulate its strategic framework:
'Loved Brands, Done Sustainably, and For a Better Shared Future' (The Coca-Cola Company Case
Study 2026). This framework provides a clear, shared narrative that guides resource allocation
decisions at all levels. For instance, by communicating its 'World Without Waste' initiative and its
2035 targets for recycled materials, Coca-Cola ensures that its bottling partners, such as CCBSA in
South Africa, understand the strategic priority and can allocate resources towards packaging
innovation and developing recycling partnerships, thereby aligning their local execution with the
global corporate direction.
ASSIGNMENT 1 SEMESTER 2
2026
DUE AUGUST 2026
Question 1: Absorptive Capacity of The Coca-Cola Company
Absorptive capacity is defined as the ability of an organisation to recognise the value of new,
external information, to assimilate it, and to use it effectively to address business problems and
create competitive advantage (Venter, in Venter 2026:101). It is a strategic capability that enables a
firm to learn and adapt more quickly than its competitors. When making a judgement regarding the
absorptive capacity of The Coca-Cola Company, it is essential to evaluate it against the four core
dimensions that determine this capability.
The first dimension is the acquisition of external information, which refers to the organisation's
ability to gather relevant information from its external environment (Venter, in Venter 2026:102).
The Coca-Cola Company demonstrates a high degree of competence in this area. The case study
reveals that the company continuously monitors a wide array of external factors, from changes in
consumer preferences and health regulations like the Sugar Tax in South Africa, to environmental
pressures and supply chain disruptions (The Coca-Cola Company Case Study 2026). Its global
structure, with five major operating segments, suggests a systematic approach to scanning diverse
markets for crucial intelligence. This constant vigilance is a hallmark of a high absorptive capacity,
allowing the company to stay abreast of critical trends that could affect its performance.
The second dimension is the assimilation of acquired information, which concerns the
organisation's ability to analyse, interpret, and make sense of the information it has gathered
(Venter, in Venter 2026:102). Here, Coca-Cola again shows significant strength. The company
processes vast amounts of complex data, such as the economic impact of its R51.2 billion South
African operation or the implications of the 33% decline in sugar consumption from taxable
beverages following the introduction of the Sugar Tax (The Coca-Cola Company Case Study 2026).
Its sophisticated business model, which combines global coordination with local execution,
suggests a powerful central capability to interpret information and translate it into strategic
meaning. The company’s ability to understand that the Sugar Tax required reformulation, pricing,
and portfolio adjustments indicates a strong capacity to assimilate information and derive
actionable strategic insights.
, The third dimension is the transformation of knowledge, which is the ability to combine new,
external knowledge with existing knowledge to develop new insights (Venter, in Venter 2026:102).
Coca-Cola's operations show how it excels at this. The case study highlights how the company
integrates knowledge from environmental scanning with its existing capabilities to create new
initiatives like the 'World Without Waste' programme, which aims for 35-40% recycled material in
primary packaging by 2035 (The Coca-Cola Company Case Study 2026). Furthermore, the
company's ability to apply lessons learned from regulatory challenges in South Africa and adapt its
portfolio strategies across different global segments demonstrates a strong capacity to transform
knowledge and innovate its business model.
The fourth and final dimension is the application of new knowledge, which refers to using the
transformed knowledge and new insights to improve business operations and develop innovations
(Venter, in Venter 2026:102). Coca-Cola provides clear evidence of this capability. The company’s
planned R17.6 billion investment in South Africa until 2030 to expand production, enhance
distribution, and accelerate innovation across the value chain is a direct application of its
knowledge about the local market's potential and challenges (The Coca-Cola Company Case Study
2026). Moreover, its commitment to returning 100% of the total water used in high-risk locations
by 2035 showcases how it applies knowledge about environmental pressures to secure its
long-term operations and legitimacy (The Coca-Cola Company Case Study 2026). In conclusion,
based on a strong performance across all four dimensions, a judgement can be made that The
Coca-Cola Company possesses a very high absorptive capacity. It is exceptionally skilled at acquiring,
assimilating, transforming, and applying external information to sustain its global leadership and
adapt to rapidly changing market conditions.
Question 2: Resource Allocation in The Coca-Cola Company
According to the textbook, resource allocation in the context of strategy deployment can be seen
as consisting of three key elements that function as an integrated whole (Jacobs, in Venter
2026:245). These elements are the communication of the strategy, the ability of the organisation to
learn and adapt, and the allocation of adequate resources, and they are all critical for aligning an
organisation with its strategic goals.
The first key element is the communication of the strategy. This is the process of ensuring that
everyone in the organisation understands the strategy and what it means for them individually
(Jacobs, in Venter 2026:243). In a complex system like Coca-Cola, this is a monumental task. The
company, which coordinates with a global network of bottling partners, retailers, and suppliers,
uses its annual reports and public communications to clearly articulate its strategic framework:
'Loved Brands, Done Sustainably, and For a Better Shared Future' (The Coca-Cola Company Case
Study 2026). This framework provides a clear, shared narrative that guides resource allocation
decisions at all levels. For instance, by communicating its 'World Without Waste' initiative and its
2035 targets for recycled materials, Coca-Cola ensures that its bottling partners, such as CCBSA in
South Africa, understand the strategic priority and can allocate resources towards packaging
innovation and developing recycling partnerships, thereby aligning their local execution with the
global corporate direction.
