E.T.

YUCHENGCO COLLEGE OF BUSINESS

Academic Year 2017 – 2018

COCA-COLA COMPANY - 2007

Airabelle D. DIVINAGRACIA
Ronnie May C. LABORDO
Aviel Katrina A. TOLEDO

Course Adviser: Mr. Melchor Morandarte

Bachelor of Science in Accountancy

I. Introduction
Coca-Cola was invented in 1886 by John Pemberton, an Atlanta, Georgia, pharmacist.
Pemberton was actually trying to concoct a headache remedy, but once he mixed his
special syrup with carbonated water, and a few customers tasted the result, he
realized that he had the makings of a popular soda fountain beverage. The name Coca-
Cola was coined by Pemberton's bookkeeper, Frank Robinson, who also wrote out the
new name in the expressive script that has become Coca Cola's signature logo.

Though the Coca-Cola Company apparently would rather not talk about the origin of
its name in detail, it's clear that Robinson derived "Coca-Cola" from two of the drink's
ingredients: cola from the cola nut, and extract of coca leaf, also the source of cocaine.
Cocaine was a common ingredient of nineteenth-century patent medicines, and by
the standards of the day Coca-Cola contained a minuscule amount that probably had
no effect on its consumers.

The name Coke appeared in popular usage as a short form of Coca-Cola just before
World War I but was often applied as a generic term to any cola drink (and used by
Coca-Cola's competitors, including the now long-defunct Koke Company) until 1940,
when the U.S. Supreme Court ruled that the name Coke rightfully belongs to the Coca-
Cola Company.

In financial circles, Coca-Cola has been one of the strongest and most reliable
trading stocks, showing a steady return in all of its years of existence but one. Warren
Buffet, one of the world's richest men, has always touted Coca Cola as an essential in
one's stock portfolio.

II. Viewpoint
E. Neville Isdell is Coca-Cola’s Chief Executive Officer and Chairman of the Board.
Coke has a strong leadership team during his administration.
III. Problem Definition
New products can take on a life of their own within an organization, becoming so
hyped that there’s no turning back. Coca-Cola’s management ultimately deemed C2
a failure. Worldwide case volume for all three drinks grew by only 2% in 2004 (and
growth in North America was flat), suggesting that C2’s few sales came mostly at the
expense of Coke and Diet Coke.
IV. Areas of Consideration
V.1.0 Internal Environment
V.1.1 Strengths

 The number one beverages brand in terms of reach and sales

 Popular subsidiary brands like Coca Cola, Fanta, Kinley, Limca, Maaza, Minute
Maid, etc.
 An employee strength of around 1,500,000 people globally
 Strong and efficient supply chain network, ensuring that all the products are
available even in the most remote places
 Strong financial condition
 Strong brand recall through advertising and marketing by associating with
celebrity brand ambassadors
 CSR activities in the field of water conservation and recycling, education,
health etc.
 Effective and efficient packaging technique giving emphasis on recycling and
reusing
 Long association with international sports events, sponsorships etc.

V.1.2 Weaknesses

 The presence of traces of pesticides in the cola beverages have caused damage
to the brand image
 Strong competition in the aerated drinks segment from Pepsi Co. means
constant fight over market share
 No presence in the snacks and food industry
V.2.0 External Assumptions
V.2.1 Opportunities

 Increase its reaching untapped countries and market

 Market and popularize the less known products
 Acquire other companies
 Diversify its product portfolio by entering into snacks industry to compete with
Pepsi Co.
V.2.2 Threats

 One of the serious threats comes from the popular perception that sugar
based drinks lead to various health problems. The company will not prosper
if this perception battle is not won.
  More than 60 percent of the revenue comes from foreign markets. Weak
currency performance of other countries will hamper the sales of the
company.
 Water resources continue to be a problem.
 Rising raw material cost may lead to higher production costs and low profit
ratios.
 Pepsi and RC cola have given stiff competition in emerging markets.
 Finally markets in developed countries are already saturated

V. Alternative Course of Actions (ACA)

VI.I. Pursue Intensive Growth and Related Diversification Strategies
Advantages
• Keeps lush margins
• Arrests the decline of mature market
• Introduces innovation
• Build shareholder value
Disadvantages
• Vulnerable to industry and other
environmental shifts
• Complex and difficult in coordination
VI.II. Forward integration with bottlers
Advantages
• Gains better control
• Enhances coordination of functions and capabilities
• Improves profitability with less costs
• Less dependence with bottlers
Disadvantages:
• Might not translate to sales
growth
• Reduces flexibility due
• Raises exit barriers