A PROJECT REPORT

ON
STRATEGIC MANAGEMENT PROCESS
OF COCACOLA
Submitted to University of Mumbai in
Partial fulfilment Of the requirement of the Degree of
M.COM (BUSINESS MANAGEMENT) PART 1.
Under guidance of
PROF. S.M.CHITALE
SUBJECT
STRATEGIC MANAGEMENT
VPM S
K.G Joshi College of Arts N.G Bedekar College of Commerce
Thane (W)
Academic Year: 2014-15
BY
ROHAN SUNIL PATIL

32

Roll No.57

Vidya Prasark Mandal, Thane

K.G.JOSHI BEDEKAR COLLEGE OF ARTS & N.G.BEDEKAR

COLLEGE OF COMMERCE
CERTIFICATE
OF
PROJECT WORK
This is to certify that MR./MS.ROHAN SUNIL PATIL of M.COM PART-I (BUSINESS
MANAGEMENT) Semester I Roll No.15 has undertaken & completed the project work title
PERFORMANCE APPRAISAL IN PEPSICO during the academic year 2014-15 under the
guidance of PROF. MR. VINAYAK RAJE to this college in fulfillment of the curriculum of
MASTER OF COMMERCE PART-I (BANKING & FINANCE) UNIVERSITY OF
MUMBAI.
This is a bonafied project work & the information presented is true & original to the best of our
knowledge and belief

EXTERNAL EXAMINOR

32

PROJECT GUIDE

DECLARATION

I am ROHAN SUNIL PATIL studying in MCOM Part-1 hereby declare that I have
done a project on reference to STRATEGIC MANAGEMENT PROCESS OF COCACOLA
As required by the university rules, I state that the work presented in this thesis is
original in nature and to the best my knowledge, has not been submitted so far to
any other university.
Whenever references have been made to the work of others, it is clearly indicated
in the sources of information in references.

Student
(ROHAN SUNIL PATIL)

Place: Thane

32

Date:

ACKNOWLEDGEMENT

It gives me great pleasure to declare that my project on STRATEGIC MANAGEMENT PROCESS OF

COCACOLA have been prepared purely from the point of view of students requirements.
This project covers all the information pertaining to STRATEGIC MANAGEMENT PROCESS . I had
tried my best to write project in simple and lucid manner. I have tried to avoid unnecessary discussions and
details. At the same time it provides all the necessary information. I feel that it would be of immense help to
the students as well as all others referring in updating their knowledge.
I am indebted to our principal Dr. Mrs. Shakuntala A. Singh Madam for giving us such an awesome
opportunity. I am also thankful to our coordinator Mr. D.M. Murdeshwar Sir and also librarian and my
colleagues for their valuable support, co-operation and encouragement in completing my project.
Special thanks to Prof. S.M.CHITALE my internal guide for this project for giving me expert guidance,
full support and encouragement in completing my project successfully.
I take this opportunity to thanks my parents for giving guidance and for their patience and understanding me
while I am busy with my project work.
Lastly I am thankful to God for giving me strength, spirit and also his blessings for completing my project

32

successfully.

SR
NO
1

PARTICULARS
STUDY OF STRATEGIC

PAGE NO.
1-11

MANAGEMENT PROCESS

1.1 WHAT IS STRATEGY

1.2 WHAT IS STRATEGIC MANAGEMENT
1.3 BENEFITS OF STRATEGIC
MANAGEMENT
1.4 THREE KEY STRATEGIC QUESTIONS
1.5 STRATEGY FORMULATION

INDUSTRY ANALYSIS OF BEVERAGE

12-15

INDUSTRY

2.1 THE NON ALCHOLIC SEGMENT

2.2 ALCHOLIC SEGMENT
2.3 INDUSTRY LEADERS
2.4 ABOUT THE COMPETITORS
2.5 PORTERS FIVE FORCES

STRATEGIC MANAGEMENT PROCESS

OF COCA COLA

3.1 HISTORY OF COCA-COLA

3.2 MISSION OF COCA-COLA
3.3 EXISTING VISION STATEMENT
3.4 BRINGING VISION TO LIFE

32

3.5 EXISTING GROWTH STRATEGY

16-23

INTERNAL AND EXTERNAL

26-28

ENVIORMENT

5.1 INTERNAL ENVIORMENT

5.2 EXTERNAL ENVIORMENT
6

SWOT

29-34

6.1 STRENGHTS
6.2 WEAKNESS
6.3 OPPORTUNITIES
6.4 THREATS

7.

COMPETITION AND BCG

35-37

7.1 BCG MATRIX

7.2 BCG PRODUCT LIFE CYCLE

8.

FUTURE GOALS

38

9.

CURRENT STATUS

10.

CONCLUSION & RECCOMENDATIONS

43

11.

WEBLIOGRAPHY & BIBLIOGRAPHY

44

32

39-42

CHAPTER 1: A STUDY OF STRATEGIC MANAGEMENT PROCESS

1.1 WHAT IS A STRATEGY?

A strategy is a business approach to a set of competitive moves that are designed to

generate a successful outcome.

A strategy is managements game plan for:

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1.2 WHAT IS STRATEGIC MANAGEMENT?

Strategic management consists of the analysis, decisions, and actions an organization
undertakes in order to create and sustain competitive advantages. This definition captures two
main elements that go to the heart of the field of strategic management.
First, the strategic management of an organization entails three ongoing processes:
analysis, decisions, and actions. That is, strategic management is concerned with the analysis of
strategic goals (vision, mission, and strategic objectives) along with the analysis of the internal
and external environment of the organization. Next, leaders must make strategic decisions. These

32

decisions, broadly speaking, address two basic questions: What industries should we compete in?

How should we compete in those industries? These questions also often involve an
organizations domestic as well as its international operations. And last are the actions that must
be taken. Decisions are of little use, of course, unless they are acted on. Firms must take the
necessary actions to implement their strategies.
Second, the essence of strategic management is the study of why some firms outperform
others. Thus, managers need to determine how a firm is to compete so that it can obtain
advantages that are sustainable over a lengthy period of time. That means focusing on two
fundamental questions: How should we compete in order to create competitive advantages in the
marketplace?
Managers must also ask how to make such advantages sustainable, instead of highly
temporary, in the marketplace. That is: How can we create competitive advantages in the
marketplace that are not only unique and valuable but also difficult for competitors to copy or
substitute?
The set of managerial decisions and actions determines the long-run performance of a
corporation. It focuses on integrating management, marketing, finance/accounting,
production/operations, research and development, and computer information systems to achieve

32

organizational success.

1.3 BENEFITS OF STRATEGIC MANAGEMENT

Clearer sense of strategic vision
Sharper focus on what is strategically important
Improved understanding of rapidly changing environment
Discharges Board Responsibility
Forces An Objective Assessment
Provides a Framework For Decision-Making
Supports Understanding & Buy-In
Provides an Organizational Perspective
Enables Measurement of Progress

32

1.4 THREE KEY STRATEGIC QUESTIONS

VinsoMOjbcSyImtrpaegElvu
1.5 STRATEGY FORMULATION

Strategy formulation is the process by which an organization chooses the most

appropriate courses of action to achieve its defined goals. This process is essential to an

organizations success, because it provides a framework for the actions that will lead to the

anticipated results. Strategic plans should be communicated to all employees so that they are
aware of the organizations objectives, mission, and purpose. Strategy formulation forces an

organization to carefully look at the changing environment and to be prepared for the possible
changes that may occur. The five component approaches to promote successful organizational
performance are composed of:

Vision formulation which leads to the statement of Mission

Mission is then converted into performance Objectives

To achieve objectives you develop Strategies

Strategy implementation

32

Evaluation of performance

CHAPTER 2: INDUSTRY ANALYSIS OF BEVERAGE INDUSTRY:

The Beverage Industry is a mature sector and includes companies that market
nonalcoholic and alcoholic items. Since growth opportunities are limited, many members of the
industry endeavor to diversify their offerings to better compete and gain share. Too, they may
pursue lucrative distribution arrangements and/or acquisitions to expand their operations and
geographic reach. The soft drink industry spans sparkling drinks, concentrates, juices, bottled
water, smoothies, ready-to-drink tea and coffee, and functional drinks. Soft drinks do not usually
contain alcohol; though can have up to 0.5% alcohol content. They are generally made on a still
or carbonated water base with added flavors and sweeteners, and sometimes fruit juices or
caffeine.
2.1 The Nonalcoholic Segment
Historically,

two

large

entities

have

dominated

the

nonalcoholic

beverage

landscape: Pepsi (PEP) and Coca-Cola (KO - Free Coca-Cola Stock Report). They distribute
their well known carbonated and noncarbonated drinks internationally via sizeable bottling
subsidiaries. The bottlers depend on these two industry leaders to create new products, improve
existing offerings and maintain sufficient advertising. Related capital spending amounts to
several billion dollars each year. The industry titans often boost their results (and those of their
subsidiaries) by purchasing smaller market players or by inking promising distribution
agreements. In prosperous economic times, consumers usually favor the most famous brand
names. Sales are seasonal, not surprising, peaking during warm summer months. Consumer
preferences will drive product diversification. Most notably, greater awareness of the causes of

32

common health issues, e.g., obesity and diabetes, has increased demand for bottled water and

other low-sugar or sugar-substitute drinks. Too, beverage companies have capitalized on the
popularity of energy drinks and ready-to-drink coffee. Product diversification may be achieved
through internal or external means. The same goes for geographic expansion. China and Russia,
two, of course, very large markets in the developing-nation arena, have gotten much attention.
2.2 Alcoholic segment: Wine, Beer, and Spirits
The range of wine, beer and distilled spirits offered by brand and type is wide. Demand is
somewhat inelastic across good and bad economic times. There is an overall long-term trend of
rising affluence around the globe. Thus, more and more consumers are becoming increasingly
discerning about what they purchase. Like their nonalcoholic peers, makers of alcoholic
beverages invest large amounts of cash in marketing and advertising to build brand recognition.
Debt burdens can be rather hefty here, as well, especially when a company is aggressively
expanding through acquisitions.
2.3 Industry Leaders
The three main players on the global
soft drink market are Coca-Cola, PepsiCo and
Cadbury Schweppes [now named as Dr
Pepper Snapple Group (DPS)]. US-based
Coca-Cola employs almost 140,000 people and
sells over 3,500 products in more than 200 countries. Headquartered in New York, PepsiCo has
19 leading brands that bring in over $1 billion in yearly retail sales and two dozen other brands

32

with yearly sales of between $250 million and $1 billion.

32

2.4 ABOUT THE COMPETITORS:

The PepsiCo*1 challenge (to archrival Coca-Cola) never loses its fizz for the world's #2
carbonated soft drink maker. Its soft drink brands include Pepsi, Mountain Dew, and their diet
alternatives. Cola is not the company's only beverage: Pepsi sells Tropicana orange
juice, Gatorade sports drink, SoBe tea, and Aquafina water. The company also owns Frito-Lay,
the world's #1 snack maker with offerings such as Lay's, Ruffles, Doritos, and Cheetos. The
Quaker Foods unit makes breakfast cereals (Life, Quaker oatmeal), Rice-A-Roni rice, and Near
East side dishes. Pepsi products are available in 200-plus countries; the US generates 50% of
sales. The company operates its own bottling plants and distribution facilities.
Dr Pepper Snapple Group (DPS)*2: For many consumers, it's a snap decision about
which doctor to choose. Dr Pepper Snapple Group (DPS) is the bottler and distributor of Dr.
Pepper soda and Snapple drinks. Serving Canada, Mexico, and the US, the company offers a vast
portfolio of non-alcoholic beverages including flavored, carbonated soft drinks and noncarbonated soft drinks, along with ready-to-drink non-carbonated teas, juices, juice drinks, and
mixers. Among its brands are Dr Pepper and Snapple of course, along with A&W Root Beer,
Hawaiian Punch, Mott's, and Schweppes. It has some cult favorites as well, including Vernors,
Squirt, and Royal Crown Cola. DPS is the #3 soda business in North America after #1 Coke and

32

#2 Pepsi.

2.5 PORTERS FIVE FORCES

TH REAT

OF

C O M P E T IT IV E
R IV A L R Y
W IT H IN A N
IN D U S T R Y

S U B S T IT U T E
S
IN T E N S IT Y

OF

CU STOM ER

C O M P E T IT IO N

B A R G A IN IN G
POW ER
B A R R IE R S

S U P P L IE R

TO ENTRY

B A R G A IN IN G
POW ER

APPLYING PORTERS FIVE FORCES TO SOFT DRINK INDUSTRY:

32

A fierce competition exists among very few players:

o Duopoly
o Intense rivalry between Coke & Pepsi
The threats of substitutes is reduced by expansion of products portfolio:
o Many alternative beverages e.g. juice & tea
Suppliers have less bargaining power:
o Many substitutes for sugar and packaging
Different levels of bargaining power exists among the groups of buyers:
o Vending machine no power bargaining power
o Fast food chain more bargaining power
Strong barriers to new entrants:
o Amount of capital investment required
o Exclusive territories in distribution channel
o The access to retail chain.

CHAPTER 3: STRATEGIC MANAGEMENT PROCESS OF COCA-COLA COMPANY

3.1 HISTORY OF COCA-COLA:
Timeline
1886-1892

In 1886 is when Atlanta pharmacist created the first Coca-Cola mixture out
various ingredients, where he then put it up for sale for 5 cents a glass

1893-1904

1984 is when Joseph Biedenharn was hired to be the first to put the Coca Cola
in bottles

1905-1918

Due to beverage companies copying Coca-Cola they began to manufacture the

contour bottle in 1916

1919-1940

In the 1928 Olympics located in Amsterdam, Coca-Cola traveled with the team
and began global expansion

In 1943, during WWII General Eisenhower requested 10 bottle plants to be

shipped to them overseas, which then created an overseas business.

32

1941-1951

1960-1981

After 70 years, Coca-Cola added new flavors: Fanta, originally developed in

the 1940s and introduced in the 1950s; Sprite followed in 1961, with TAB
in 1963 and Fresca in 1966

1982-1990

In 1985, was the release of a new taste for Coca-Cola, the first change in
formulation in 99 years. It wasnt long until they changed to their original
New beverages joined the Company's line-up, including Powerade
sports drink, Qoo children's fruit drink and Dasani bottled water

32

1990-1999

HISTORY OF COCA- COLA BOTTLE:3.2 MISSION OF COCA-COLA COMPANY:

EXISTING MISSION STATEMENT
Our Roadmap starts with out mission, which is enduring. It declares our purpose as a
company and serves as the standard against which we weigh our actions and decisions.
To refresh the world.
To inspire moments of optimism and happiness.
To create value and make a difference.
PROPOSED MISSION STATEMENT
With six main operating segments in North America, Latin America, Europe, Eurasia,
Africa, the Pacific, and bottling investments, Coca-Cola is dedicated to being a highly effective
refreshments and fast-moving organization. Our mission is to bring consumers quality
refreshments that anticipate and satisfy their desires and needs. As a company we strive to be
responsible citizens by helping to rebuild and support sustainable communities, while

32

maximizing long-term return to shareowners. Through modern technology and inspiring

employees to be the best they can be we know we can continue to provide the best products on

32

the market.

3.3: EXISTING VISION STATEMENT

Our vision serves as a framework for our Roadmap and guides every aspect of our
business by describing what we need to accomplish in order to continue achieving sustainable,
quality growth.

PEOPLE: Be a great place to work where people are inspired to be the best they can be.
Areas of focus: Employee input
Developed and implemented action plans from Employee Insights Survey
Health and safety: Implemented system-wide metrics for health and safety
Workers rights:
o Formally pledged support for the United Nations Global Compact
o Introduce and implemented Workplace Rights Policy in 2006

PORTFOLIO: Bring to the world a portfolio beverage brands that anticipate and satisfy
peoples desires and needs.
Product range:
o Launched more than 400 new beverage products, bringing the total to nearly 2,400
o Launched Make Every Drop Count marketing campaign to communicate beverage
portfolio breadth and range
Nutrition:
o
o
o
o

PARTNERS: Nurture a winning network of customers and suppliers, together we create

mutual, enduring value.
Bottler relations;

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Extended availability of beverages and nutritional information for consumers

Launched web site for the Beverage Institute for Health and Wellness
Expanded the range of low and no calorie alternatives by 23%
Increased variety of package sizes, including 100-calories cans

o Held first relations workshop with largest bottling partners

o International Labor Organization conducted an independent assessment of human rights
in the workplace at Coca-Cola bottler facilities in Columbia

PLANET: Be a responsible citizen that makes a difference by helping build and support
sustainable communities.
Area of focus: Refrigeration emissions
o Completed transition to hydroflourocardbon free insulation for 98% of new refrigerated
sales and marketing equipment
o Placed 2,000 HFC free CO2- refrigerated coolers and vending machines in the market,
bringing total placements to 4,000
o Introduced EMS-55, a device that can generate energy savings of up to 35% in purchase
of new coolers
Emissions:
o Achieved 100 percent compliance with wastewater standards by 2010
o Developed water strategies and initiative using data from global water risk assessment
o Continued comprehensive reporting on our carbon footprint and our corresponding
climate protection activities.
Packaging:
o Strengthened the integration of environmental considerations into the packaging design
process
o Launched initiatives to enhance global environmental packaging performance metrics
Environmental leadership
Joined Global Greenhouse Gas Register of the World Economic forum
PROFIT: Maximize long-term return to shareholders while being mindful of our overall
responsibilities.
Stakeholder Engagement:

32

o Established a Stakeholder Relations department

o Held stakeholder forums with leading international nongovernmental organizations
o Launched global stakeholder engagement toolkit
PRODUCTIVITY: be a highly effective, lean and fast-moving organization
PROPOSED VISION STATEMENT
Coca-Colas vision is to inspire moments of happiness while refreshing the world.
MUHTAR creates the 2020 VISION!

The world is changing all around us. To continue to thrive as a business over the next ten years
and beyond, we must look ahead, understand the trends and forces that will shape our business in
the future and move swiftly to prepare for what's to come.
We must get ready for tomorrow today. That's what our 2020 Vision is all about. It creates a
long-term destination for our business and provides us with a "Roadmap" for winning together

with our bottling partners

- Muhtar Kent (The Coca-Cola Company, CEO)*

*1http://www.coca-colacompany.com/our-company/mission-vision-values

32

3.4 BRINGING VISION TO LIFE

Our vision to become truly sustainable and achieve long-term growth is changing the way we
think and operate.

Youll see evidence of our progress every day as we work closely with our bottling partners in
achieving our goals:

We will be in the top three for total return to shareowners among a set of comparable global
companies, while ensuring the long-term health of our system.

We will be the employer of choice, where people create extraordinary results every day, in
every country where we operate.

We will double the value of our most recognized brand, Coca-Cola, and grow the rest of our
portfolio so it is comparable in size.

We will be the world's most respected, preferred and trusted global partner, as measured by
superior satisfaction scores and innovations that ignite the categories in which we choose to
compete.
We will be the recognized global leader in corporate social responsibility.
Its in our very nature to innovate, create and excel. The more we grow, the greater the
opportunity for you to grow with us.

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3.5 EXISTING GROWTH STRATEGY

Driving global beverage leadership

Accelerate innovation

Leverage our balanced geographic portfolio

COCA-COLA DEFINES SUSTAINABLE GROWTH IN 3 WAYS:

Environment: practices that

reduce footprint on the planet

Respectful business citizenship:

nurturing communities in which
you operate

Sustainable Growth

32

Process efficiencies: working

smarter, not harder; dont waste

CHAPTER 4. OBJECTIVES, STRATEGIES, AND TACTICS

Decision making is a key aspect to any business. Objectives, strategies, and tactics are
crucial to a businesss success. The main difference between those three terms are that objectives
are medium-long term targets, strategies are long term objectives, and tactics are short term
objectives.
Objectives give a sense of direction, unity, and purpose. They play a big role in forming
the foundation for companies in the decision making process. Objectives can be communicated
through mission statements. Strategies and tactics both refer to a plan or scheme but strategies
are long term plans that will have significant consequences while tactics are short term and may
be less significant in comparison to strategies.
4.1 OBJECTIVES
The main objectives for the Coca-Cola Company are to be globally known as a business
that conducts business responsibility and ethically and to accelerate sustainable growth to operate
in tomorrow's world. By having these objectives, it forms the foundation for companies in the
decision making process.
4.2 STRATEGIES AND TACTICS
The Coca-Cola Company aims to be globally known, they do this by targeting different
areas across the globe with different products, gaining their brand name and popularity. All the
bottling partners work closely with their customers such as convenience stores, grocery stores,
movie theaters and street vendors to create and use localized strategies developed in partnership
with the Company. Their competition with other beverage companies are also narrowed down as
they own various brands that could be possible competition. For example, the company sells

32

Coke without the competition of other popular soft drink brands like Sprite and Fanta because

the company owns those brands as well. The company often reviews and evaluates their business
plans and performance to improve their earnings and analyze their competitive position in the
market. They make decisions in realigning their business models to match the objectives of the
company by using strategies and tactics in the analysis of their performance.
4.3 STRATEGY EVALUATION
INTEGRATION STRATEGIES

We have integrated into many suppliers prior to 2010

We recently purchased CCE which helps integrate our bottling and marketing
PRODUCT AND MARKET DEVELOPMENT

We are highly established worldwide prior to 2010

MARKET PENETRATION

We are currently in 200 different countries prior to 2010

UNRELATED OR RELATED DIVERSIFICATION

We dont offer a food segment (Unrelated)

None of our main competitors offer an alcoholic beverage (Related)

4.4 VALUES
Leadership: The courage to shape a better future

Collaboration: Leverage collective genius

Integrity: Be real

Accountability: If it is to be, it's up to me

Passion: Committed in heart and mind

Diversity: As inclusive as our brands

Quality: What we do, we do well

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CHAPTER 5. INTERNAL & EXTERNAL ENVIRONMENT:

5.1 INTERNAL ENVIRONMENT
5.1.1 Primary Activities:
The inbound logistics aspect of Coca-Cola is very strong as they have over 300 distribution or
bottling centers across the globe serving to over 200 countries. Having many distribution
facilities will minimize shipping time & shipping costs and therefore increase revenue. A lot of
research is put into the design and layout of the warehouse and other bottling centers. Since
having intelligently laid out these warehouses, Coca-Cola has increased efficiency. Not only
having inbounded warehouses being effectively designed, Coca-Cola incorporates this layout
technology in their outbound factories to increase their overall workflow design.
Coca-Cola is one of the most recognizable brands in the world and continues to market their
product extremely well. Coke's trademark value is estimated at a whopping $25 billion. The
brand basically sells itself. The Coca-Cola Company actively researches the needs of its
customer segments and targets to provide drinks and snacks that people will want. For this
reason they provide excellent service to their suppliers and customers.
5.1.2 Support Activities:
With over 500 brands owned by the Coca-Cola Company, there are many raw materials that are
needed to support these snack and beverage brands. The main ingredient most of Coca-Cola's
products is water. Coke understands the difficulties with many countries receiving fresh water
and they work hard to deliver to these remote areas. Other than water, nutritive and nonnutritive sweeteners are used in their products. Coke has developed win-win relationships with
their suppliers because both parties are in understanding that they will do a lot of business
together. Coke does depend on one supplier for different ingredients they use. This could be

32

dangerous for Coke as the supplier may take advantage of this relationship.

 The Coca-Cola Company is massive and has its own internal administration. These internal
divisions include Human Resources, Information Technology, Accounting and others. They
also spend millions of dollars a year on research and development of new products.
Continually changing and understanding the needs and wants of the world's population will
lead to happier customers and increased revenues.
5.2 EXTERNAL ENVIRONMENT
5.2.1 Political Analysis:

Changes in laws and regulations

Changes in the non-alcoholic business environment

Political conditions including civil unrest, government changes

Their ability to penetrate developing and emerging markets, which also depends on economic
and political conditions
5.2.2 Economic Analysis:

After the attacks on September 11, 2001, Coca Cola sales were down. Consumers are now
resuming their normal habits

The Federal Reserve cut the interest rate to recover from recession & this excited consumer
demand. Coca-Cola borrowed money for investing in other products

The non-alcoholic beverage industry has high sales in countries outside the U.S.
5.2.3 Socio-Cultural Analysis:

Many U.S. Citizens are practicing healthier lifestyles. Many are switching to bottled water and
diet colas instead of beer and other alcoholic beverages.
Time management has increased .The need for bottled water and other more convenient and
healthy products are in important in the average day-to-day life.

32

5.2.4 Technological Analysis:

The new technology of internet and television which use special effects for advertising through
media.

Introduction of cans and plastic bottles have increased sales for coca-cola as these are easier to
carry and you can bind them once used.

There has been introduction of new machineries all the time.

The Wakefield factory has the technology to produce cans of coca-cola faster than bullets from
a machine gun.

5.2.5 Legal Analysis:

Soft drink Interbrand competition act of 1980 secured the right of concentrate

Producers to grant exclusive territories to bottlers

The company was granted a trademark for the name coke in 1945.

Pressure from the scientific community for the FDA to enforce caffeine labels warning of the
dangers of caffeine consumption

Obstacles in international operations included regulations, price controls, advertising

restrictions and lack of infrastructure

5.2.6 Demographic Analysis:

Educated people belonging to upper and middle-income groups also commonly use Coca-Cola.

Major emphasis of Coca-Cola is to attract teenagers.

Diet Coca-Cola offered by Company is Very popular among diabetic patients.

Consumers from the ages of 37 to 55 are also increasingly concerned with nutrition.
CHAPTER 6:- SWOT ANALYSIS:

32

6.1 STRENGTHS

1)

Coca-Cola owns four of the worlds top five nonalcoholic sparkling beverage brands
including Coca-Cola, Diet Coke, Sprite and Fanta.

2)

Acquired Coca-Cola Enterprises, Inc., one of the major bottlers for Coca-Cola in North
America which had $3.6 billion in revenues.

3)

Coca-Cola has more than 500 brands and 3,500 beverages and products.

4)

Most extensive beverage distribution channel. Coca-Cola sells 1.7 Billion servings of
beverages per day in over 200 countries.

5) The best global brand in the world in terms of value. According to Interbrand, The Coca
Cola Company is the most valued ($77,839 billion) brand in the world.
6) Worlds largest market share in beverage: Coca Cola holds the largest beverage market
share in the world (about 40%).
7) Strong marketing and advertising. Coca Cola advertising expenses accounted for more than
$3 billion in 2012 and increased firms sales and brand recognition.
8) Customer loyalty. The firm enjoys having one of the most loyal consumer groups.
9) Bargaining power over suppliers. The Coca Cola Company is the largest beverage producer
in the world and exerts significant power over its suppliers to receive the lowest price available
from them.
10) Corporate Social Responsibility (CSR). Coca Cola is increasingly focusing on CSR
programs, such as recycling/packaging, energy conservation/climate change, active healthy
living, water stewardship and many others, which boosts companys social image and result in
competitive advantage over competitors.
6.2 WEAKNESSES
1)

Does not hold number 1 spot for either the water brand or the leading sports drink

2)

Currently does not hold a snacks segment, where Pepsi Co. has a food division which

32

creates for 60% of their total revenue.

3) Significant focus on carbonated drinks. The business is still focusing on selling Coke, Fanta,
Sprite and other carbonated drinks. This strategy works in short term as consumption of
carbonated drinks will grow in emerging economies but it will prove weak as the world is
fighting obesity and is moving towards consuming healthier food and drinks.
4) Brand failures or many brands with insignificant amount of revenues. Coca Cola currently
sells more than 500 brands but only few of the brands result in more than $1 billion sales. Plus,
the firms success of introducing new drinks is weak. Many of its introduction result in failures,
for example, C2 drink.
5) Undiversified product portfolio. Unlike most companys competitors, Coca Cola is still
focusing only on selling beverage, which puts the firm at disadvantage. The overall
consumption of soft drinks is stagnating and Coca Cola Company will find it hard to penetrate
to other markets (selling food or snacks) when it will have to sustain current level of growth.
6) High debt level due to acquisitions. Nearly $8 billion of debt acquired from CCEs
acquisition significantly increased Coca Cola's debt level, interest rates and borrowing costs.
7) Negative publicity. The firm is often criticized for high water consumption in water scarce

32

regions and using harmful ingredients to produce its drinks.

6.3 OPPORTUNITIES
1)

Spurring demand for energy drinks, especially in the US where estimates show about 2
billion.

2)

Approximately 85% of the companys unit case volume is delivered in recyclable bottles
and cans, and the company targets to recover at least 50% of the equivalent bottles and cans
sold worldwide.

3)

Bottled water drinking has increased 11%.

4)

European and China market show large potential to grow by an estimated amount of 7%.

5)

55 billion beverage servings are consumed worldwide each day

6) The non-alcoholic ready to drink (NARTD) beverage industry is expected to grow by 50

billion unit cases by 2020.
7) Bottled water consumption growth. Consumption of bottled water is expected to grow both
in US and the rest of the world.
8) Increasing demand for healthy food and beverages. Due to many programs to fight obesity,
demand for healthy food and beverages has increased drastically. The Coca Cola Company has
an opportunity to further expand its product range with drinks that have low amount of sugar
and calories.
9) Growing beverages consumption in emerging markets. Consumption of soft drinks is still
significantly growing in emerging markets, especially BRIC countries, where Coca Cola could
increase and maintain its beverages market share.
10) Growth through acquisitions. Coca Cola will find it hard to keep current growth levels and
will find it hard to penetrate new markets with its existing product portfolio. All this can be
done more easily through acquiring other companies.

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6.4 THREATS

1) Increasing preference for non carbonated healthy drinks. The Coca Cola soda saw a 5%
volume declines respectively in the carbonated soda brands category.
2) With rising obesity rates of 35.7% for adults and 17% for youth in the U.S. alone, health
concerns may cause reduced consumption of sugar sweetened beverages, impacting
profitability.
3) Water is the main and most significant ingredient in beverages, quality and abundance of water
is scarce worldwide, where 70% is used for agriculture and irrigation.
4) The primary beverage of Coca Cola is sparkling beverages, the most popular drinks consumed
worldwide, in their respective order, are water, tea, and beer.
5) Changes in consumer tastes. Consumers around the world become more health conscious and
reduce their consumption of carbonated drinks, drinks that have large amounts of sugar,
calories and fat. This is the most serious threat as Coca Cola is mainly serving carbonated
drinks.
6) Water scarcity. Water is becoming scarcer around the world and increases both in cost and
criticism for Coca Cola over the large amounts of water used in production.
7) Strong dollar. More than 60% of The Coca Cola Company income is from outside US. Due to
strong dollar performance against other currencies firms overall income may fall.
8) Legal requirements to disclose negative information on product labels. Some Coca Colas
carbonated drinks have adverse health consequences. For this reason, many governments
consider to pass legislation that requires disclosing such information on product labels.
Products containing such information may be perceived negatively and lose its customers.
9) Decreasing gross profit and net profit margins. Coca Colas gross profit and net profit
margin was decreasing over the past few years and may continue to decrease due to higher
water and other raw material costs.
10) Competition from PepsiCo. PepsiCo is fiercely competing with Coca Cola over market share

32

in BRIC countries, especially India.

11) Saturated carbonated drinks market. The business significantly relies on the carbonated
drinks sales, which is a threat for the Coca Cola as the market of carbonated drinks is not
growing or even declining in the world.
6.5 DESIGNING ORGANIZATIONAL STRUCTURE:

The coca cola company realizes that divisional structure gives to react in uncertain
environment and also allow to main level of stability.

Multi visional structure allows divisional managers to handle daily operations while operate
managers are free to follow long term planning.

A multidivisional matrix structure may be better suited for the coca cola company. This would
increase coordination between cooperate and at all levels to create solution to problem.

The core competences that give the organization its best competitive advantages are its strong
brand name and its network of bottlers and distributers.

Relationship with its distributers another completive advantage, the structure of coca-cola is
ideal for its differentiation strategy because they focus on market.
Company known that for innovative marketing that constantly promote their brand name
which protects their domain from competitors, coca-cola is too late for introduction new type
of beverages, energy drinks, as well as blossoming coffee drinks.

32

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32

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CHAPTER 7:- COMPETITION AND BCG:

The number one competitor of the Coca Cola Company is Pepsi Co. Believe it or not at
one point Pepsi Co. was doing much better than Coca Cola. Coca Cola only focused on its one
type of product which was soft drinks. Pepsi on the other hand sold chip snacks. Coca Cola, after
more planning and market research, was re-evaluated and expanded by a strategy formulated by
CEO Roberto Goizveta. Because of his re-evaluation, Coca Cola became one of the worlds most
recognized brands. The company now owns four of the worlds top five non alcoholic sparkling
beverages, The competition and growth of either Pepsi Co or Coca Cola is now based on three
things. They are, The ability to expand internationally where 6 soda sales are growing, to play
health card and introduce a new drink with little or no sugar and fewer calories, and to expand to
carbonated beverages,
The BCG of the company consists of Question marks which, Indicate that a product is
growing rapidly and consumes large amounts of cash, but because they have low market shares
they do not generate much cash; the result is large net cash consumption, The question marks in
Coca Colas case are there energy drinks. An example would be the energy drink Full Throttle.
With the majority of America consuming energy drinks this products quality and taste and
purpose brings the company a profit. They just do not know how long it last.
The next part of the BCG matrix for Coca Cola deals with Stars. The stars are said to,
Generate large amounts of cash because of their strong relative market share, but also consume
large amounts of cash because of their high growth rate, A star in Coca Cola Company is its
Dasani water.
Next are the cash cows. They Exhibit a return on assets that are greater than the market

32

growth rate, and thus generate more cash than they consume, Coca Colas cash cow is Limca.

Last but not lease is the Dog. Dogs have low market share and a low growth rate and
thus neither generate nor consume a large amount of cash, The dog in the Coca Cola Company
is its Hi C drink.

32

7.1 BCG MATRIX

32

7.2 BCG PRODUCT LIFE CYCLE

32

CHAPTER 8: FUTURE GOALS:

COKE WILL ACHIEVE THE FOLLOWING BY THE YEAR 2020
Profits

People

Partners

Planet

Productivit

Double

Become one

Be the most

Attain corporate

Manage

revenue and

of the worlds

trusted and

global

people, time

increase

premier

preferred

Leadership in
& money for
SUSTAINABILITY GOALS:
system
employees
business
corporate
greatest
Planet: Created the live positively initiative to achieve their 2020 goal:
margin
partners
sustainability
effectiveness
Live Positively:
It focuses on seven core areas key to our business sustainability, with measurable goals and
metrics for the company and the Coca-Cola system. Some goals are stretch aspirations, and
at times, despite our efforts, marketplace and other conditions may impact our ability to meet
these goals.
People: 5by20
Created the 5by20 initiative to: Empower 5 Million Women throughout the Coke organization by
2020.
Coca-cola plans to double the size of its business globally by 2020 and women run businesses
play an important role in the coke network. The 5by20 plan provides women access to

32

finances, business skills and mentors in order to grow their business futures.

CHAPTER 9: CURRENT STATUS

A FEW ACHIEVEMENTS:

Currently serving 3,500 products worldwide

Global volume growth in the first quarter of 2013 was 4%

On Earth Day Coca Cola donated more

than 55,000 recycling bins to parks,
schools, colleges, and homes in a 115
communities across the US

72,583,040 likes on Facebook

Coca Cola Rewards program is now offered;

32

COCA COLA- OVER 100+ OF CHOICES:

FULL-YEAR AND FOURTH QUARTER 2012 HIGHLIGHTS

Strong full-year global volume growth of 4%, in line with our long-term growth target and led by
brand Coca-Cola, up 3%. Global volume grew 3% in the quarter, driven by international
volume growth of 4% and North America volume growth of 1%.
Full-year reported net revenues grew 3% and comparable currency neutral net revenues grew
6%, in line with our long-term growth target. Fourth quarter reported net revenues grew 4%
and comparable currency neutral net revenues grew 5%.
Full-year reported and comparable currency neutral operating income both grew 6%, in line with
our long-term growth target. Fourth quarter
reported operating income grew 12% and
comparable currency neutral operating income
grew 14%.
Currency was a 3% headwind on comparable net
revenues and a 5% headwind on comparable
operating income for the full year.
Full-year reported EPS was $1.97, up 6%, and
comparable EPS was $2.01, up 5%. Fourth
quarter reported EPS was $0.41, up 14%, and comparable EPS was $0.45, up 15%.
Full-year cash from operations was up 12%.
Evolution of global bottling system continues, with bottler-led consolidation announced in Japan
and Brazil, and a majority interest in our Philippine bottling operations sold to Coca-

32

Cola FEMSA (transaction completed in January 2013).

PERFORMANCE HIGHLIGHTS
The Coca-Cola Company reported worldwide volume growth of 4% for the full year and
3% in the quarter. The Company reported solid growth for the full year in key developed
markets, including North America (+2%) and Japan (+2%). Europe volume declined 1% for the
full year, reflecting ongoing uncertain macroeconomic conditions. In addition, the Company
delivered strong volume growth in key emerging markets such as Thailand (+22%), India
(+16%) and Russia (+8%) for the full year. China business delivered 4% volume growth for the
full year, cycling double-digit growth in the prior year, and was impacted by the further effects of
a slowing economy, poor weather and a later Chinese New Year.
Worldwide sparkling beverage volume grew 3% for the full year and 1% in the quarter.
This represents approximately 550 million incremental unit cases in 2012, or the equivalent of
adding 13.2 billion new servings to our global business. The volume and value share in global
core sparkling beverages for the full year and in the quarter, led by brand Coca-Cola and
reflecting a balanced portfolio approach to growth in the core sparkling beverage category.
Worldwide brand Coca-Cola volume grew 3% for the full year, with growth across diverse
markets, including India (+33%), Thailand (+31%), Russia (+20%), the Philippines (+8%),
Brazil (+3%) and Mexico (+3%). In addition, Fanta volume grew 5% and Sprite volume grew
4% for the full year, as we activated global marketing campaigns in locally relevant ways such as
the Fanta Play campaign,

now

in

nearly

32

Game NBA partnership.

200

markets,

and

the Sprite Uncontainable

Worldwide still beverage volume grew 10% for the full year and 9% in the quarter, with
growth across beverage categories, including packaged water, ready-to-drink tea and coffee,
juices and juice drinks, sports drinks and energy drinks. Excluding the impact of acquisitions,
still beverage volume grew 8% for the full year and 7% in the quarter. We grew global volume
and value share in still beverages and delivered volume and value share gains across nearly every

32

still beverage category.

CONCLUSION & RECOMMENDATIONS:

For the products like diet coke, pulpy orange and kinley soda it better to stop manufacturing
these products

Invest profits for future growth and for earning more of market share and profits

Invest heavily into products like Fanta and sprite in order to push the products to star status.

For coca-cola -cost management, product differentiation and marketing have become more
important as growth slows and market share becomes the key determinant of profitability

The organization has to carefully study external environment moves and accordingly devise
strategies to gain competitive advantage

Coca cola has to make every possible move to ensure that its image remains that of an FMCG
giant that would never compromise on the quality front

Coca-Cola continues its expansion across the world by using strategic aggressive marketing
methods and campaigns. The continual focus on new products, promotions and advertising which
now include both their famous contour bottle and infamous Sprite dimple bottle

Appraisal system is an effective technique to support and change culture of the organization
optimistically; it would only be possible if the system is equal for all employees of
organization. Therefore, companys management should utilize this system to all employees so
as to increase effectiveness and productivity.

32

BIBLIOGRAPHY
concept in strategic management and business policy
- By Thomas l. Wheelen
Advanced Strategic Management and Business Policies for Managers
- R. Hiremani Naik
Strategic Thinking: A Nine Step Approach to Strategy and Leadership for Managers and
Marketers

- Simon Wootton
strategic management and business policy
- By Azahar Qazmi

WEBLIOGRAPHY

32

www.google.com
www.wikipedia.com
www.coca-cola.com
www.coca-colacompany.com
www.wikipedia.org/wiki/Coca-Cola
www.hindustancoca-cola.com
www.coca-colastore.com