Strategic Management Report Final

A Report on Strategic Planning Of  COCA COLA

Subject: Strategic Management Management [MBA – Evening Program] Faculty: Sir Yousuf 

Prepared & Presented by: Rohail Riaz (51515)

Strategic Planning

Table of Contents 1- EXECUTIVE SUMMARY ................................................. ................................. ........................................ ......... ..4 2- HISTORY OF COCA COLA..................................................... ..................................................................................... .................................. ..5 3- BRANDS OF COCA C OCA COLA....................................................... ....................................................................................... .................................. ..7 3.1- Energy Drinks....... ............... ................ ............... ............... ................ ............... ............... ................ ................ ............... ............ ......... ........ ...... .. 7 3.2- Juices/J Juices/Juice uice Drinks....... ............... ................ ................ ............... ............... ................ ............... ............ ......... ........ ........ ........ ........ ........ ...... .. 7 3.3- Soft Drinks........ ................ ................ ............... ............... ................ ............... ............... ................ ................ ............... ............... ............... ........... .... 8 3.5- Tea and Coffee ........ ................ ............... ............... ................ ............... ............... ................ ................ ............... ........... ........ ........ ........ ........ .... 8 3.6 Water........ ................ ............... ............... ................ ................ ............... ............... ................ ............... ............... ................ ................ ............... ............ ..... 8 3.7- Other Drinks........ ............... ............... ................ ................ ............... ............... ................ ............... ............... ............... ........... ........ ........ ........ ......9

................................................. ....................................................... ....................................................................... ....................... .............. ............ ..... 10 5- DIFFERENT PLAYERS IN THE SOFT DRINKS MARKET........... .................. .............. ............ ..... 11 Cadbury Schweppes are joined force of Cadbury found in 1824 of U.K. and Schweppes of  Ireland founded in 1783. Cadbury Schweppes is unified bussing which manages the relations his with over 240 franchised bottling operation on Zambia and Zimbabwe. Cadbury Schweppes has fottlery and partnership operations in 14 countries around the world................................................ world. ............................................... ........................................................ ............................................................... .............. ............... ........... ... 11 6- OUR MISSION:....................................................... .................................................................................. .................................. ............... ............... ......... ..11 7- OUR VISION:................................................ ........................................................ .............................................................. ......11 11 8- IMPROVED MISSION STATEMENT:............................................... ........... ................... ..........12 9- IMPROVED VISION STATEMENT:.................................................. ........ ............... ............ ..... 12 10- CURRENT ORGANIZATIONAL CHART ............................................ ........ ............... ....... 16 11- E-COMMERCE:........................................................ ........................................................................................... .......................................... ............ ..... 16 12- VALUE OF THE FIRM............................................... ....................... ............................... ............... ............. ...... 17 13- KEY INTERNAL FACTORS

Weight

Rating weight Score

............. ........ ......... .... 20

14- KEY EXTERNAL FACTOR ........................................................ ................................................................... ................... ............... .........21 15- COMPETITORS ......................................................................... ................... .......................... .......... ... 22

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16- SWOT ANALYSIS...................................................... ......................................................................................... ........................................ ..... 23

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1- EXECUTIVE SUMMARY

Coca-Cola, the product that has given the world its best-known taste was born in Atlanta, Georgia, on May 8, 1886. Coca-Cola Company is the world’s leading manufacturer, marketer  and distributor of non-alcoholic beverage concentrates and syrups, used to produce nearly 400  beverage brands. It sells beverage concentrates and syrups to bottling and canning operators, distributors, fountain retailers and fountain wholesalers. Coca-Cola was first introduced by John Syth Pemberton, a pharmacist, in the year 1886 inAtlanta, Georgia when he concocted caramelcolored syrup in a threelegged brass kettle in his backyard. He first “distributed” the product by carrying it in a jug down the street to Jacob’s Pharmacy and customers bought the drink for five cents at the soda fountain. Carbonated water was teamed with the new syrup, whether by accident or otherwise, producing a drink that was proclaimed “delicious and refreshing”, a theme that continues to echo today wherever Coca-Cola is enjoyed. Coca-Cola originated as a soda fountain beverage in 1886 selling for five cents a glass. Early growth was impressive, but it was only when a strong bottling system developed that Coca-Cola became the world-famous brand it is today. Coca- Cola was the leading soft drink brand in India until 1977, when it left rather than reveal its formula to the Government and reduce its equity stake as required under the Foreign Regulation Act (FERA) which governed the operations of foreign companies in India. In the new liberalized and deregulated environment in 1993, Coca-Cola made its re-entry into India through its 100% owned subsidiary, HCCBPL, the Indian bottling arm of the Coca-Cola Company. The main main object objective ive of this this study study lies lies in underst understandi anding ng the organizat organization ion and studyi studying ng and understanding the consumers’ perception and opinion about the latest product, Minute Maid Pulpy Pulpy Orange Orange,, introd introduce ucedin dinto to India, India, by the Coca-C Coca-Cola ola Compan Company. y. A consume consumerr sampli sampling ng involving 5.5 lakh people was conducted in a span of 30 days across major cities in order to give the product the required marketing push and to recognize the prospective consumers and their  opinion in order to develop and market the product in a better way in the near future. The methodology used in studying and understanding the perceived views of consumers towards the  product was ‘SAMPLING’. The findings of the activity have been drawn out in form of graphs and suggestions have been offered there from.

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2- HISTORY OF COCA COLA

Coca-Cola® originated as a soda fountain beverage in 1886 selling for five cents a glass. Early growth was impressive, but it was only when a strong bottling system developed that Coca-Cola  became the world-famous brand it is today. 1894 – A modest start for a Bold Idea

In a candy store in Vicksburg, Mississippi, brisk sales of the new fountain beverage called CocaCola impressed the store's owner, Joseph A. Biedenharn. He began bottling Coca-Cola to sell, using a common glass bottle called a Hutchinson. Biedenharn sent a case to Asa Griggs Candler, who owned the Company. Candler thanked him  but took no action. One of his nephews already had urged that Coca-Cola be bottled, but Candler  focused on fountain sales. 1899 The first bottling agreement

Two young attorneys from Chattanooga, Tennessee believed they could  build a business around bottling Coca-Cola. In a meeting with Candler, Benjam Benjamin in F. Thomas Thomas and Joseph Joseph B. Whiteh Whitehead ead obtain obtained ed exclus exclusive ive rights to bottle Coca-Cola across most of the United States (specifically excluding Vicksburg) -- for the sum of one dollar. A third Chattanooga lawyer, John T. Lupton, soon joined their venture. 1900-1909 … Rapid growth

The three pioneer bottlers divided the country into territories and sold bottling rights to local entrep entrepren reneur eurs. s. Their Their effort effortss were were boo booste sted d by major major progre progress ss in bottli bottling ng technol technology ogy,, which which improved efficiency and product quality. By 1909, nearly 400 Coca-Cola bottling plants were operating, most of them family-owned businesses. Some were open only during hot-weather  months when demand was high. 1916 … Birth of the contour bottle

Bottlers worried that the straight-sided bottle fo for Cocawas easily confused with imitators. A group representing Company and bottlers asked glass manufacturers to offer  ideas for a distinctive bottle. A design from the Root Glass Company of Terre Haute, Indiana won enthusiastic appr approv oval al in 1915 1915 and and was was intr introd oduc uced ed in 191 1916. 6. Th Thee cont contou ourr bott bottle le becam becamee one of the the few few packa package gess ever  ever  gran grante ted d trad tradem emar ark k stat status us by the the U.S. U.S. Pate Patent nt Offi Office ce.. Today, it's one of the most recognized icons in the world - even in the dark!

Cola the

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1920s … Bottling overtakes fountain sales

As the 1920s dawned, more than 1,000 Coca-Cola bottlers were operating in the U.S. Their ideas and zeal fueled steady growth. Six-bottle cartons were a huge hit after their 1923 introduction. A few years later, open-top metal coolers became the forerunners of automated vending machines. By the end of the 1920s, bottle sales of Coca-Cola exceeded fountain sales. 1920s and 30s … International expansion

Led by longti longtime me Company Company leader Robert Robert W. Woodru Woodruff, ff, chief  chief  executive executive officer officer and chairman chairman of the Board, the Company Company began a major push to establish bottling operations outside the U.S. Plants were opened in France, Guatemala, Honduras, Mexico, Belgium, Italy, Peru, Spain, Australia and South Africa. By the time World War II began, Coca-Cola was being bottled in 44 countries. 1940s … Post-war growth

During the war, 64 bottling plants were set up around the world to supply the troops. This followed an urgent request for bottling equipment and materials from General Eisenhower's base in North Africa. Many of these warwar-ti time me plant plantss were were late laterr conve convert rted ed to civi civili lian an use, use, perm perman anent ently ly enla enlarg rgin ing g the the bottl bottlin ing g syst system em and accel acceler erati ating ng the the grow growth th of the the Company's worldwide business. 1950s … Packaging innovations

For the first first time, time, consumers consumers had choices choices of Coca-Cola Coca-Cola package and type type -- the tradit tradition ional al 6.5-ou 6.5-ounce nce contou contourr bottle bottle,, or larger  larger  servings including 10-, 12- and 26-ounce versions. Cans were also introduced, becoming generally available in 1960.

size

1960s … New brands introduced

Following Fanta® in the 1950s, Sprite®, Minute Maid®, Fresca® and TaB® joined brand CocaCola 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. Today hundreds of other brands are offered to meet consumer preferences in local markets around the world. 1970s and 80s … Consolidation to serve customers

As technology led to a global economy, the retailers who sold Coca-Cola merged and evolved into international mega-chains. Such customers required a new approach. In response, many small and medium-size bottlers consolidated to better serve giant international 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.

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1990s … New and growing markets

Political and economic changes opened vast markets that were closed or underdeveloped for  decades. 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 deep ly planted in local communities. This heritage serves the Company well today as people p eople seek brands that honor local identity and the distinctiveness of local markets. As was true a century ago, strong locally based relationships  between Coca-Cola bottlers, customers and communities are the foundation on which the entire  business grows. 3- BRANDS OF COCA COLA

Coca-Cola Zero® has been one of the most successful product launch hes in Coca Coca Cola’s Cola’s histor history. y. In 200 2007, 7, Coca Coca Cola’s Cola’s sold sold nearly nearly 450 millio million n cases cases globally. Put into perspective, that's roughly the same size as Coca Cola’s total  business in the Philippines, one of our top 15 markets. As of September 2008, Coca-Cola Zero is available in more than 100 countries.

3.1- Energy Drinks

For those with a high-intensity approach to Coca Coca Cola Cola’s ’s brand brandss of En Ener ergy gy Drin Drinks ks cont contai ain n ingr ingred ediients ents such uch as gins ginsen eng g extrac extract, t, guaran guaranaa extrac extract, t, caffei caffeine ne and B vitamins.

life,

3.2- Juices/Juice Drinks

We brin bring g inno innova vati tion on to the the good goodnes nesss of   juice in Coca Cola’s more than 20 juice and

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  juice juice drink drink brands brands,, offeri offering ng both both adults adults and childr children en nutri nutritio tious, us, refres refreshin hing g and flavor flavorful ful  beverages. 3.3- Soft Drinks

Coca Cola’s dozens of soft drink brands provide flavor and refreshment in a variety of choices. From the original Coca-Cola to most recent introductions, soft drinks from The Coca-Cola Company are both icons and innovators in the beverage industry. 3.4- Sports Drinks

Carbohydrates, fluids, and electrolytes team toge togeth ther er in Coca Coca Cola’ Cola’ss Spor Sports ts Drin Drinks ks,,   providing providing rapid hydration hydration and terrific terrific taste fitness-seekers at any level

for 

3.5- Tea and Coffee

Bott Bottle led d and and cann canned ed teas teas and and coff coffee eess  p pro rovi vide de consu consume mers rs'' favo favori rite te drin drinks ks in conve conveni nien entt take take-an -anyw ywher heree pack packagi aging ng,, satisfying both traditional tea drinkers and today's growing coffee culture.

3.6 Water

Smoo Smooth th and and esse essent ntia ial, l, our our Wate Waters rs and and Wate Waterr Bever Beverage agess offe offerr hydr hydrat atio ion n in its its  purest form.

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3.7- Other Drinks

So much much more more than than soft soft drin drinks ks.. Coca Coca Cola’s Cola’s brands brands also include include milk products, products, and more so you can choose a Coca Cola Company product anytime, anywhere for  nutrition, refreshment or other needs.

soup,

4- CONSUMER CHOICE AT A GLANCE

Coca-Cola Mainly preferred by the Youngster & Kids. Thums-Up Youngster.

Limca Common Drink.

Fanta Basically Preferred by Ladies and Kids.

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Maaza Also Ladies and Kids.

Sprite Not clearly defines.

Kinley Soda Mostly those who consume liquor.

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5- DIFFERENT PLAYERS IN THE SOFT DRINKS MARKET PEPSI

Caleb Brandhum, a North Caroline Pharmacist, structure Pepsi Cola In2 the 1890’s as cure of  dyspepsia (indigestion). In 1902, Bradhum applied for a trade mark, issued ninety seven share of  stock and began selling Pepsi syrup in earnest. In his first year of business he spend $1900 on advertising a huge sum that he sold only 8000 gallons of syrup. In 1905 Bradhum built Pepsi’s  bottling plant. By 1907 he was selling 10,000 gallons a year, two years later, he hired a New York advertising agency. After passing through many troubles for some period now Pepsi is a market leader in international arence and is available in 187 Nations throughout the world. CADBURY SCHWEPPES

Cadbury Schweppes are joined force of Cadbury found in 1824 of U.K. and Schweppes of  Ireland Ireland founded founded in 1783. 1783. Cadbur Cadbury y Schwepp Schweppes es is unifie unified d bussin bussing g which which manages manages the relations his with over 240 franchised bottling operation on Zambia and Zimbabwe. Cadbury Schweppes has fottlery and partnership operations in 14 1 4 countries around the world. 6- OUR OU R MISSION MIS SION :

Our mission declares our purpose as a company. It serves as the standard against which we weigh our actions and decisions. It is the foundation of our Manifesto. (1) To refresh refresh the world in body, body, mind and spirit. spirit. (2) To inspire moments of optimism through our brands and our actions. (3) To create value and make a difference difference everywhere everywhere we engage. 7- OUR VISION:

Our vision guides every aspect of our business by describing what we need to accomplish in order to continue achieving sustainable growth. People : Being a great place to work where people are inspired to be the best they can be. Portfolio : Bringing to the world a portfolio of quality beverage brands that anticipate and satisfy  people's desires and needs.

sup pliers, together we create mutual, Partners : Nurturing a winning network of customers and suppliers, enduring value. Planet : Being a responsible citizen that makes a difference by helping build and support sustainable communities.

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Profit : Maximizing long-term return to shareowners while being mindful of o ur overall responsibilities.

8- IMPROVED MISSION STATEMENT:

(1) At Coca Cola we're committed to achieving business and financial success while while leaving a positive imprint on society – delivering what we call Performance with Purpose. (2) (2) Our miss missio ion n is to be the the worl world' d'ss prem premie ierr cons consum umer er Prod Produc ucts ts Comp Compan any y focu focuse sed d on convenient foods and beverages. We seek to produce financial rewards to in8vestors as we provide opportunities for growth and enrichment to our employees, our business  partners and the communities in which we operate. And in everything we do, we strive for honesty, fairness and integrity. 9- IMPROVED IMPROVE D VISION STATEMENT: STATEMENT:

(1) Coca cola Co responsibili responsibility ty is to continually continually improve all aspects aspects of the world in which we operate – environment, social, economic – creating a better tomorrow than today." (2) Our vision is put into action through programs and a focus focus on environmental stewardship, stewardship, activities to benefit society, and a commitment to build shareholder value by making Coca cola Co a truly sustainable company.

Why it is improved:

There is It is our vision to be the best and leading provider of food and beverage products in Pakistan, to facilitate the people of Pakistan and we emphasis on consumer more rather  than competitors we among the top ten food and beverage companies in the world, by continu continuall ally y challen challengin ging g presen presentt convent convention ionss and always always stayi staying ng a step step ahead ahead of the competition.

It is our mission to be the number one food and Beverage Company in Pakistan by  providing our customers with the highest product quality in terms of taste, experience, and satisfaction. We will ensure this through an unwavering dedication to the continuous development development of our products and processes processes ensuring ensuring that we remain best in class. We will strive to hire the most competent and dedicated employees whose work ethic will set

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Strategic Planning

the standard in the industry. We will be paymasters, paymasters, as we strongly believe believe that human resource is the only asset that that truly appreciates over time. We will also be a responsible social corporate citizen, and strive to enhance en hance the quality of life in the markets we serve.

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Comments on vision and mission (in terms of how they support the strategies)

The vision statement of our company supports the existing strategies that is (generic strategy) that Coca Cola needs to pursue is that of differentiation. differentiation. In their current vision vision and mission statements, the company says it aims to be a low cost leader, yet through our  thorough analysis of the strategic direction the company needs to adopt a generic strategy of differentiation. This will allow Coca cola to do three things; 1. Charge Charge a premium premium 2. Increas Increasee unit sales sales 3. 3. Gain buyer loyalty loyalty However, However, at the the expense expense of soundi sounding ng simpli simplisti stic, c, it is necessa necessary ry that that the compan company y commun communica icate te its its diff differ erent entia iati tion on to its its custo custome mers rs,, othe otherw rwis isee thes thesee thre threee advan advanta tage gess will will not avai availl themselves. Initially Coca cola will need to adopt a focused differentiation approach, which means that they should selectively choose which markets will profit them the most and then target only those markets until such provisions are in place from where the company company is able to expand its target target base. After After which they should should opt for a broad broad differentiation generic strategy. With the market just turning the bend to ‘saturation’, it is entering a phase of intense competition with all major players diversifying their product lines, ranges and even businesses into a versatile range of products to put in place more infantry on the battle ground to use to their advantage in this war war of brands. brands. Therefore, Therefore, we believe believe that that the current current strateg strategic ic objective objective of Coca cola cola should be to consolidate its existing brand, Coca cola through extensive strategic market research and consumer insights to be able to home in on the correct target market like a precision targeting missile rather than as an Anti-aircraft gun

MAP: Showing Workforce [71,000 in

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10- CURRENT ORGANIZATIONAL CHART

CEO

EVP/ President Bottling Invest/ Supply Chain

CFO and EVP

President of Eurasia Group

EVP/ President MKT Strategy

President European Union Market

President & COO

SVP & General Counsel

SVP & Director Human Resources

President of African Group

President Latin America Group

President of Pacific Group

SVP & Director Public Affairs/ Communi-cation

11- E-COMMERCE:

Good points:

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Strategic Planning • • •

• • •

Brand Promotion Attractive products selection Look and feel 8 Provision of multimedia product, catalogue pages Personal attention Community relationships

Weak points: •

•

Performance and service: that is not easy navigation, shopping and purchasing, and  prompt shipping and delivery. Discount pricing is not being offered.

12- VALUE OF THE FIRM Financial and Value Review

Defensive: 1) Size of firm  Net worth of $16.92billion 2) Financial condition with a weighted current ratio of 0.94 Coke falls below the required 2, therefore they fail this test. 3) Earnings stability there has been positive net income for the past ten years and they 8pass this test. 4) Earnings growth Earnings are greater than five years ago. Pass. P ass. Overall we would not suggest Coke being placed in the defensive investor’s portfolio at this time. Opinion: Seeing that currently Coke is trading at a much higher price than our internal valuation we would be skeptical to purchase this security at this time. However, Coke is an excellent firm with great management, products, products, dividend dividend history, history, and earnings. earnings. This stock we would place on our review list and periodically watch the share price to see if it dips and falls more in line with what we would be comfortable paying. Strengths

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World’s leading brand Coca-Cola has strong brand recognition across the globe. The company has a leading brand value and a strong brand portfolio. Coca-Cola is one of the leading brands in their top 100 global brands ranking in 2006.8The value of the Coca-Cola was $67,000 million in 2006. Coca-Cola ranks well ahead of its close competitor Pepsi which has a ranking of 22 having a brand value of $12,690 million Furthermore; Coca-Cola owns a large portfolio of product brands. The compan8y owns four of the top five soft drink brands in the world: Coca-Cola, Diet Coke, Sprite and Fanta. Strong brands allow the company to introduce brand extensions such as Vanilla Coke, Cherry Coke and Coke with Lemon. Over the years, the company has made large investments in brand promotions. Consequently, Coca-cola is one of  the best recognized global brands. The company’s strong brand value facilitates customer  recall and allows Coca-Cola to penetrate new m2arkets and consolidate existing ones. CocaCola Company, The large scale of operations with revenues in excess of $24 billion Coca-Cola has a large scale of operation. Coca-Cola is the largest manufacturer, distributor and marketer  of non nonal alcoh cohol olic ic bever beverag agee conce concent ntra rate tess and syru syrups ps in the the worl world. d. CocoCoco-Co Cola la is sell sellin ing g trademarked beverage products since the year 1886 in the US. The company currently sells its  products in more than 200 countries. Of the approximately 52 billion beverage servings of all types consumed worldwide every day, be8verages bearing trademarks owned by or licensed to Coca-Cola account for more than 1.4 billion. The company’s operations are supported by a strong infrastructure across the world. Coca-Cola owns and operates 32 principal beverage concentrates and/or syrup manufacturing  plants located throughout the world. In addition, it owns or has interest in 37 operations with 95 principal beverage bottling and canning plants located outside the US. The company also owns owns bott bottle led d wate waterr prod product uctio ion n and and stil stilll beve bevera rage ge faci facili liti ties es as well well as a faci facili lity ty that that manufactures juice concentrates. The company’s large scale of operation allows it to feed upcoming markets with relative ease and enhances its revenue generation capacity. Robust revenue growth in three segments Coca-cola’s revenues recorded a double digit growth, in three operating segments. These three segments are Latin America, ‘East, South Asia, and Pacific Pacific Rim’ and Bottling investments. investments. Revenues from Latin America grew by 20.4% during fiscal 2006, over 2005. During the same period, revenues from ‘East, South Asia, and Pacific Rim’ Rim’ grew grew by 10.6% 10.6% while while revenue revenuess from from the bottli bottling ng invest investmen ments ts segmen segmentt by 19.9%. 19.9%. Together, the three segments of Latin America, ‘East, South Asia, and Pacific Rim’ and   bottl bottling ing invest investmen ments, ts, accoun accounted ted for 34.8% 34.8% of total total revenu revenues es during during fiscal fiscal 2006. 2006. Robust Robust revenues revenues growth growth rates rates in these segments segments contribute contributed d to top-line growth for Coca-Cola during 2006.

Weaknesses

 Negative publicity, Company received negative publicity in India during September 2006.The Company was accused by the Center for Science and Environment (CSE) of selling products contai containin ning g pestic pesticide ide residu residues. es. Coca-C Coca-Cola ola product productss sold sold in and around around the Indian Indian nation national al capital region contained a hazardous pesticide residue. These pesticides included chemicals

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which could cause cancers, damage the nervous and reproductive systems and reduce bone mineral density. Such negative publicity could adversely impact the company’s brand image and the demand for Coca-Cola products. This could also have an adverse impact on the company’s company’s growth prospects prospects in the international international markets. markets. Sluggish performance performance in North America Coca-Cola’s performance in North America was far from robust. North America is Coca-Cola’s core market generating about 30% of total revenues during fiscal 2006. Therefore, a strong performance in North America is important for the compan y. Summary in points: Strengths:

• • • • •

•

•

Leading brand value and a strong brand portfolio Coca-Cola, Diet Coke, Sprite and Fanta Large investments in brand promotions sells its products in more than 200 countries Company also owns bottled water production and still beverage facilities as well as a facility that manufactures juice concentrates. These three segments are Latin America, ‘East, South Asia, and Pacific Rim’ and Bottling investments Return on total assets increases over the period consistently 2005, 06, 07 15.47%, 16.55%, and 16.95% respectively.

Weaknesses:

• • • •

•

 Negative publicity in India Inventory turnover decreased by 13.29% Return on equity decreased by 40.50% Sluggish performance in North America Coca-Cola’s performance in North America was far from robust Collection form debtors decreased by 15.68%

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13- KEY INTERNA INTE RNAL L FACTORS ACTOR S weight Score

Weight

Rating Rati ng

Strengths

Average customer purchases increased by 18.54%

0.11

2

0.22

Employee moral

0.05

3

0.15

Technical support and research efficiency

0.08

1

0.08

Newspaper advertisement expenditures increased

0.09

4

0.36

Revenues from other segments

0.14

4

0.56

Debt to total asset ratio decline

0.05

2

0.10

Locations in the world

0.15

4

0.20

Inventory turnover decreased by 13.29%

0.10

3

0.30

Return on equity down decreased

80.11

1

0.11

Website

0.04

2

0.08

Supplier time delivery

0.08

1

0.08

Total

1.00

Weaknesses

2.24

Ranked 1 to 4. Low to High respectively. Current Evaluation: 2.24 Less than average of 2.50 Need efficiency in the Management, Marketing, finance, MIS, R & D, and other operations..

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14- KEY KE Y EXTERN EXT ERNAL AL FACTOR  S. No.

Factor

Weight

Rate

Score

Opportunities 1 2 3

0.100 0.050 0.050

3.50 4.00 4.00

0.35 0.20 0.20

0.025

3.50

0.09

0.015

1.50

0.02

0.075

3.50

0.26

0.050

2.50

0.13

0.025

2.50

0.06

0.025 0.015 0.430 0.100

3.00 3.00 4.00

0.08 0.05 1.43 0.40

0.075 0.075 0.100 0.075 0.075 0.015

3.50 4.00 4.00 3.50 3.50 2.00

0.26 0.30

0.025

3.50

0.09

0.015 0.015

3.50 3.50

0.05 0.05

20 Salesman not equipped with sales ordering devices Threats - Total

0.015 0.570

2.00

0.03 1.43

Grand Total

1.000

4 5 6 7 8

Entering into snacks business (Pepsi earns 60% from snacks) Expansion by taking over Cadbury division or product line Expans Expansion ion by int introd roduci ucing ng new new ready ready-to -to-dr -drink ink produc products ts (tea (tea,, coffee coffee,, etc.) Enteri Entering ng into into or introd introduci ucing ng new new spor sports ts even events ts (e.g (e.g.. Formu Formula la I) I) to to introduce energy drinks Strong Strong financ financial ial and assets assets suppor supportt avail availabl ablee world worldwid widee to to take take financing for expansion Introd Introduce uce soft soft drink drink with with focus focus of "hea "health lthy y soft soft drin drink" k" - elim elimina inate te obesity concept Divers Diversifi ificat cation ion of bot bottli tling ng busi busines nesss to other other indu industr stries ies like like  pharmaceuticals Link Link with with comp compute uterr inter internet net/ne /netwo twork/ rk/cel celll gamin gaming g busin business ess to focu focuss on youth worldwide - to take advantage of technology

9 10 Opportunities - Total 11 Hurtin Hurting g produc products ts conta containi ining ng sugar sugar & sugarsugar-sub substi stitut tutee based based drink drinkss (trend towards more healthy eating & drinking) 12 Increase in raw material costs 13 Government policies may hurdle in expansion 14 Government policies - for disclosure of health warning 15 Ban in public schools due to obesity issues 16 Lack in snacks business 17 Lack Lack of shar sharee in homel homeland and mark market et (ref (refer er Exhib Exhibit it 8) 8) - room room for for other  other   brands 18 Availa Availabil bilit ity y of purifie purified d water water (being (being main main compone component) nt) in diffe differen rentt parts parts of the world 19 Comp Compet etit itor or may may acce access ss unre unreac ache hed d part partss of the the worl world d prio priorr to Coca Coca Cola Cola

0.26 0.03

2.86

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15- COMPET C OMPETITOR ITORS S •

•

Cadbury Schweppes plc  Nestle S.A.

•

PepsiCo, Inc.

•

Unilever 

•

Procter & Gamble

•

Cott Corporation

•

Kraft Foods, Inc.

•

 National Grape Cooperative

•

 National Beverage Corp.

•

Quilmes Industrial S.A.

•

Quinenco SA

•

Yeo Hiap Seng Limited

•

Wimm-Bill-Dann Foods OJSC

•

Co-Ro Food A/S

•

Rynkeby Foods A/S

•

Spadel SA

•

Delta Holding S.A.

•

Spendrups Bryggeri AB

•

Pago

•

Hermann Pfanner Getraenke GmbH

•

J Garcia Carrion

•

Vitasoy International Holding Ltd

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Strategic Planning

16- SWOT ANAL ANA LYSIS

SWOT Analysis is a strategic planning tool used to evaluate the Strengths, Weaknesses, Opportunities, and Threats inside a company, project, or a business venture. It involves identifying the internal and external factors that are favorable/unfavorable for business to succeed SWOT ANALYSIS

FOR COCA COLA COMPANY

STRENGTHS

1. 2. 3. 4. 5. 6. 7.

Brand Brand equit equity/ y/ima image ge & recogni recognitio tion n Produc Productt distrib distributi ution on and worldw worldwide ide netwo network  rk  Soli Solid d financ financia iall perfor performa mance nce One of of the the world' world'ss most most recogn recognize ized d brand. brand. Product Product diversifica diversification tion (water, (water, juices, juices, soft soft drinks, drinks, sport sport drinks, drinks, etc) Co-o Co-ope pera rate te ident identit ity. y. Innov novation

WEAKNESSES

1. Cred Crediit rat ratiing 2. Customer Customer concentrat concentration, ion, particula particularly rly in the the US (Wal-Mart (Wal-Mart accounts accounts for for more than than 10% of Coca Cola's business in the US) 3. A lot of loyal Pepsi custom customers ers are not not enough enough loyal loyal Coca Cola Cola customers customers 4. Does not enjoy the number one position position in India, India, Pakistan. Pakistan. OPPURTUNITIES

1. 2. 3. 4. 5. 6.

Poss Possib ible le gro growi wing ng dem demand and.. Expans Expansion ion – Reach Reaching ing all segmen segments. ts. Glob Global aliizati zation on Cateri Catering ng to Health Health Consc Consciou iousne sness ss of Peopl Peoplee Bott Bottle led d wat water er grow growth th Acquis Acquisiti itions ons of of small smaller er playe players. rs.

THREATS

1. 2. 3. 4. 5.

Health Health Drin Drinks ks – Fruit Fruit Juice Juice Compa Companie niess Key compet competito itors rs (Pepsi (Pepsi,, eetc) tc) Comm Commod odit ity y pric prices es gro growt wth h Image Image percep perceptio tion n in certain certain parts parts of the the world. world. Small Smaller, er, more more nimble nimble opera operator tors/p s/play layers ers

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Strategic Planning

17- BCG MATRIX

Sr#

1 2 3 4 5 6 7 8 Total

Division Africa East South Africa & Pacific Rim European Union Latin America  North America  North Asia, Eurasia & Middle East Bottling Investment Corporate --

Profits $ 2 2 7 .7 5

Percent Profits 4.00%

Percent Market Value 5

3.43%

$ 1 7 4 .4 2

5.00%

10

$4 ,3 64

17.16%

$87 1 .17

18.66%

45

$2 ,6 16

10.29%

$52 2 .27

11.20%

35

$7 ,0 29

27.64%

$1,567.72

25.85%

60

$4 ,1 23

16.21%

$82 3 .35

15.05%

40

$5 ,1 98

20.44%

$87 4 .42

10.48%

20

$93 $25,435

0.37% 100.00%

$ 1 8 .8 8 $5,079.98

9.76% 100.00%

15 -

Percent Revenues 4.48%

$ 87 2

Revenues $ 1 ,1 40

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Perc Gro Ra

Strategic Planning

BCG MATRIX

From our Strategic Alternatives evaluation, we see that it is more attractive to outsource our  distribution networks rather than launch a diet line of products. This is in line with their current strategic direction, and will allow Pakola to fortify their market reach before introducing new  products that will be harder to push through the distribution channels.

18 - STRATEGI STRA TEGIC C GOALS GO ALS : The strategic goals are considered when company is thinking of the long-term objectives but at coca cola strategic strategic objectives objectives and goals are set up for three years. These strategi strategicc goals are decide by the top management with consultation by the parent company head quartered at Singapore. However, they are reviewed every year in the annual meeting to make sure that they are in line with the changing environment. They are: continuee to be an organi organizat zation ion provid providing ing the quality quality products products to the valuable valuable  To continu customers.  To select and retain the professional p rofessional people for the organization.  To project an outstanding corporate image.  To satisfy the customer through extra ordinary service and an excellent service along with the complete tactical and operational op erational support.

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Strategic Planning

19-TACTICAL GOALS: The top management of the company on an annual basis devises these goals together with the consultation of the lower level employees. Then each departmental director is given these annual tasks that then subdivide it on the quarterly or monthly basis to have a proper check to ensure that these objectives are achieved, mainly through marketing, is the job of the director  of each division. For this year, these goals are:    

To increase the revenues by 20% as compared to last year. To increase the total retail customers by around 10%. 1 0%. To increase the market share by 5%. 5 %. To reactivate the discontinued customers by 30%.

20 - OPERATIONAL GOALS: Operational goals are decided by the top management in consultation with the lower level employ employees ees.. They They are follow following ing the concept concept of manage management ment by object objective ivess (MBO). (MBO). Each Each employee is assigned its goals and is told what is expected of him and then he is evaluated on the basis of certain rules and regulations followed evenly by the company. For example: a sales man is given following tasks, duties and certain targets: Each salesman has to oversee around 100-125 outlets. The frequency of visits to each outlet depends upon the sales of that particular outlet. Normally, a salesman has to visit a single outlet thrice a week i.e. every alternate day. This means that a salesman visits v isits at least 20-30 outlets per day. The salesman has three basic functions to perform. • • •

To find new customers, To retain existing ones, To bring back the discontinued accounts.

Each salesman has to bring in at least three new accounts every month. These may either be new customers or the reactivation of the discontinued accounts. Sales manager is made responsible for the performance and achievement of operational goals and is assigned to set certain milestones for the salesman so as to give him proper feedback, which definitely definitely helps the salesman salesman achievement of the above-mentioned goals.

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Strategic Planning

21- CONCLUSION: The Coca Cola Company has a very rich history and spread over the world, the study in this report specially the particular SPACE matrix tells us that Coca Cola Company should pursue an aggressive strategy. Coca Cola Company has a strong competitive position in the market with rapid growth. It needs to use its internal strengths to develop a market penetration and market development strategy. This includes focus on Water and Juices products, and catering to health consciousness of people through introduction of different coke flavor and maintaining   basic coke flavor. Further company should integrate with other companies, acquisition of   potential competitor businesses, innovation in branding and aggressive marketing strategy can  bring long term profitability.

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