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Horizontal Expansion Strategy

Shahnawaz Adil
MBA 3rd Semester 1100122143

Objectives

To understand the concept of Horizontal Expansion with respect to Advance Sales and Services Pvt. Ltd. Evaluate the existing resources. To develop the business , expand market coverage. The benefit of Horizontal Expansion for the company at retailers end.

Contents

Section 1: Company Profile. Section 2: Profile of Organization imparting Training

Section 3: Conceptual background of topic.


Section 4: Details of work completed Section 5: SWOT Analysis

Section 1 Company Profile

Past and Present

1894 A modest start for a bold idea A store's owner, Joseph A. Biedenharn, began bottling Coca-Cola to sell, using a common glass bottle called a Hutchinson

1899 The first bottling agreement In a meeting with Candler, Benjamin F. Thomas and Joseph B. Whitehead obtained exclusive rights to bottle Coca-Cola across most of the United States (specifically excluding Vicksburg) -- for the sum of one dollar.

Past and Present

1940s Post-war growth During the war, 64 bottling plants were set up around the world to supply the troops. Many of these war-time plants were later converted to civilian use, permanently enlarging the bottling system and accelerating the growth of the Company's worldwide business.

1950s Packaging innovations For the first time, consumers had choices of Coca-Cola package size and type -- the traditional 6.5-ounce contour bottle, or larger servings including 10-, 12- and 26-ounce versions. Cans were also introduced, becoming generally available in 1960.

Past and Present

1960s New brands introduced Following Fanta in the 1950s, Sprite, Minute Maid, Fresca and TaB joined brand Coca-Cola in the 1960s. Mr. Pibb and Mello Yello were added in the 1970s. The 1980s brought diet Coke and Cherry Coke, followed by POWERADE and DASANI in the 1990s. 1970s and 80s Consolidation to serve customers The Company encouraged and invested in a number of bottler consolidations to assure that its largest bottling partners would have capacity to lead the system in working with global retailers.

Past and Present

1990s New and growing markets After the fall of the Berlin Wall, the Company invested heavily to build plants in Eastern Europe. And as the century closed, more than $1.5 billion was committed to new bottling facilities in Africa. 21st Century The Coca-Cola bottling system grew up with roots deeply planted in local communities. This heritage serves the Company well today as people seek brands that honor local identity and the distinctiveness of local markets.

Coca-Cola in India

The Coca-Cola Company entered India in the early 1950s. It set up four bottling plants at Bombay, Calcutta, Kanpur and Delhi. In 1950 as there were negligible companies in Indian market therefore Coca-Cola did not face much competition and they were accepted in Indian market more easily. By the end of 1977 Coca-Cola had captured more than 45% of market share in India. Then Coca-Cola left India following public disputes over share holding structure and import permit. As per FERA REGULATION the company was required to India close operation by May 5, 1978 yet strongly enough the companys operation come to end in July 1977.

Coca-Cola in India

In October 1993, Coca-Cola returned to India after 16 years of absence with the slogan Old waves have come to India again first launched in HATHRAS near AGRA HOME of the famous TAJ MAHAL. At this time Parle was the leader in soft drink market and had more than 60% of the total market share in soft drink Coca-Cola joined hand with Parle and strategic alliance with Parle export give the company instant ownership of the nation top soft drinks brands Thums-Up, Limca, Citra, Gold Spot and Maaza access to Parles extensive 62 plant bottling network and a base for the rapid introduction of the companys international brand by striking a $40 million deal with Parle Coke almost a clear sweep and made it goal as To become an all occasion drink not a special treat beverage.

Section 2
Profile of Organization imparting training

Advance Sales & Service Pvt. Ltd.


Advance Sales & Service Pvt. Ltd. is a marketing and distribution, Franchise of Brindavan Bottlers Pvt. Ltd. Lucknow, Barabanki, Lalitpur, Jhansi, Lakhimpur, Sitapur & Faizabad are the distribution and market area for Advane Sales & Service Pvt. Ltd.

Management Profile
General Manager - Sanjeev Garg Head of Sales(City)- Rajan Sharma Head of Sales(Outer)- B.K. Shrivastav Marketing Executive Manager Chitresh Tiwari HR Head Manu Mehrotra HR Executive Pooja Chandwani

Distribution & Marketing of Advance Sales & Service.

Sales & Marketing Division Sales Head Area Sales Manager Sales Executive Team Leader Sales Team

Distribution & Marketing of Advance Sales & Service.

Distributors Criteria Direct Sales Distributor(DSD)


Total company authorised

Indirect Disrtributor(ID)
By Agents

Distribution & Marketing of Advance Sales & Service.

Distributors Segment 1. Anchor Distributor (Investment 40-50 lakhs) 2. General Distributor (Investment 10-20 lakhs) 3. Spoke(Rural Area) (Investment 1-2 lakhs)

Section 3 Conceptual Background of Topic

Horizontal Expansion
Expansion of business capacity through the absorption of facilities or buildings as well as through the acquisition of new equipment to handle an increased volume in sales in which the business is already engaged.

In microeconomics and strategic management, the term Horizontal Expansion describes a type of ownership and control. It is a strategy used by a business or corporation that seeks to sell a type of product in numerous markets.

Reason for Expansion

The ultimate objective of coke is to acquire more customers and serve them properly. While doing Horizontal Expansion take care to the competitors strategy. The main competitor is PEPSI, who has opted Vertical Expansion to generate more sell however Coke do not believe on Vertical Expansion because Vertical Expansion has limited preview so COKE is great believer in Horizontal Expansion and this strategy helped to the company to maintain its leadership in the soft drink industry.

Benefits of Horizontal Expansion

Provides Incremental Volume & Revenue for Business. By horizontal expansion there will be more outlets of our product in the market which will sell our product in more quantity. This will generate incremental revenue for the business.

Helps Improve Route Productivity


Increase market visibility selling at more outlets give more market visibility of the product which gives higher product recognition and brand value to the products. Increase in market power over supplier and downstream market channels.

Section 4 Detail of Work completed

Profile of subject area

Area of Work 1. Vikas Nagar

2. Kalyanpur
3. Khurram Nagar

Number of Clients

Total 65 retailers such as FMCG Outlet, Beverage and Resturant, Medical stores Cyber Caf, Communication Stores, etc of Vikas

Nagar,Kalyanpur and
Khurram Nagar were considered for the new oultlet opening.

Section 5 SWOT Analysis

Strength
Improved quality control. Latest technology. Heavy investment in both infrastructure and sales promotion campaigns. Modified and attractive packaging. Strong advertising network.

Weakness
Entire infrastructure needs a facelift. Unskilled labor. Tight case policy. Fear of retrenchment among the workers.

Opportunities

Wide market. Good rural market. Direct distribution.

Threats

Stiff competition. Illegal distribution done by some distributors. Changing of consumer preference.

Conclusion

As far as journey with the company is concerned, I grasped lots of knowledge within two months Because many of the company officials has assisted and given me the valuable notes and experience of their life. The primary objective of the my research is to analyze the horizontal expansion strategy of Coke and at the end of the research I found that there is requirement of changing the strategy for acquiring new customer for Coke but company should take care of its existing customer because they are the main instrument of promotion for any company so old customer should be fully satisfied with the company.

Thank You

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