CHARLIE

Coca Cola CompanyCHARLIE

Coca Cola Company 2007

CHARLIEAdoptante, AylaMhayAntolijao, JuvyBarro, ZyraMikhailaFelices, Lethryle MayFerrater, Kristell JeanGarcia, Claire AnnNues, AlexineSy, KarlynVergara, Mary CristineAmbayec, Philip JhonDeiparine, VernardMutia, John Llyod

TABLE OF CONTENTS

I. Executive Summary..II. Introduction.A. Company BackgroundB. Statement of the Problem and Objectives.C. Evaluation of Existing Vision, Mission and ObjectivesThe following are the existing mission and vision of Coca Cola Company:D. Evaluation of Existing Strategies.E. Other Case Facts Analysis1. Exhibits InterpretationF. Environmental Scanning1. External Environmenta. Social b. Politicalc. Economicd. Naturale. Technologicalf. Competitive Forces and Porters Five Forces Modeli. Bargaining Power of Suppliersii. Bargaining Power of Customersiii. Threat of New Entrantsiv. Threat of Substitutesv. Rivalry2. Internal Environment a. Marketingb. Management and Human Resourcec. Financed. Operationse. Management Information System and Research and Developmentf. Value Chain AnalysisIII. Strategy Formulation, Implementation, and EvaluationA. Input Stage1. External Factor Evaluation Matrix2. Internal Factor Evaluation Matrix3. Competitive Profile MatrixB. Matching Stage1. Strength, Weaknesses, Opportunities, and Threats Matrix2. Boston Consulting Group Matrix3. Internal-External Matrix4. Grand Strategy Matrix5. Summary of Possible AlternativesMatching TechniquesRecommended Strategies1. SWOT Matrix2. Space Matrix3. BCG Matrix4. IE Matrix5. Grand Strategy MatrixC. Decision Stage1. Quantitive Strategic Planning MatrixD. Recommended Strategies on Alternative Implementation1. Suggested Vision, Mission, and Objectivesa. Segmenting, Targeting, and Positioningb. Productc. Priced. Placee. Promotion2. Management and Human Resource3. Finance4. Operations5. Management Information Systems and Research and DevelopmentE. Action PlanF. Long Term StrategiesG. Evaluation: Monitoring and ControlIV. ReferencesV. AppendicesA. Coca Cola Financial RatiosB. Coca Cola Operational and Personnel Ratios InterpretationC. Coca Cola Value ChainD. Proposed Coca Cola Logo

I. Executive SummaryCoca Cola is one of the largest leading beverage company that produce products such as water, juice and juice drinks, sports drinks, energy drinks, teas and coffees. Coca Cola products are distributed through restaurants, grocery markets, street vendors, and others, all of which sell to the end users: consumers. Coke is increasing investments in bottling investments, front-end capability, equipment and people. Cokes long term bottling strategy is to reduce ownership interest in bottlers and sell the companies interest to investee bottlers. Coca Cola Company has two major rivals: PepsiCo and Cadbury Schweppes PLC. PepsiCo is a fierce competitor in the beverage industrys two fastest growing categories: water and sport drinks. Cadbury Schweppes PLC is the worlds largest confectionery company and has a strong regional beverage presence. In order for Coca Cola to compete with PepsiCo, Coke should also focus in making a sport drinks. Consumers now a day is so conscious of their health that they buy sport drink in order to energize them to exercise more. Coca Cola should produce beverage such as sport drink in order to attract consumers to but their product instead of PepsiCo.This case answers, How can Coca Cola produce healthy products in order to lessen health problems that consumers are facing today, the use of plastic bottles in order to help the environment and to have a new line of energy drink that is less unhealthy and could boost the energy of the athletes. The Company aims at increasing shareowner value over time. It accomplishes this by working with its business partners to deliver satisfaction and value to consumers through a worldwide system of superior brands and services, thus increasing brand equity on a global basis. They aim at managing their business well with people who are strongly committed to the Company values and culture and providing an appropriately controlled environment, to meet business goals and objectives.

II. IntroductionA. Company BackgroundThe Coca-Cola Company is well known by generation to generation, places to places and continued to be the number one multinational beverage company and manufacturer, retailer,and marketer of nonalcoholic beverage concentrates andsyrups for ages. The Company started at Atlanta, Georgia since 1886 till now, they continued refreshing the world by their products. Coca-Cola is a carbonated soft drink sold in the stores, restaurants, and vending machines of more than 200 countries. Coca-Cola produces about 400 brands consisting of over 2,600 beverage products.

The Coca-Cola recipe was formulated at the Eagle Drug and Chemical Company, a drugstore in Columbus, Georgia by John Pemberton, originally as a coca wine called Pembertons French Wine Coca.Bottling Coca-ColaRecognizing the need to create a bottler network, Benjamin F. Thomas and Joseph B. Whitehead, with the support of Chattanooga businessman John T. Lupton, began granting other entrepreneurs bottling franchise rights.The first franchise began operations in1901, serving parts of Tennessee and other nearby locations under the ownership of Mr. Thomas and James F. Johnston, grandfather of former Coca-Cola Enterprises Chairman of the Board, Summerfield K. Johnston, Jr. In the early 1980s, Mr. Johnston helped initiate a phase of consolidation designed to improve system efficiency and effectiveness.

Coca-Cola Enterprises is bornIn1986, The Coca-Cola Company merged some of its company-owned operations with two large ownership groups that were for sale the John T. Lupton franchises and BCI Holding Corporation's bottling holdings forming Coca-Cola Enterprises Inc. (CCE).In December1991, a merger between Coca-Cola Enterprises and the Johnston Coca-Cola Bottling Group, Inc. created a larger, stronger organization with Johnstons senior management team assuming management responsibilities.Coca-Cola Enterprises first began operations in Europe in1993with the purchase of bottling rights in the Netherlands. A significant European expansion began in1996 and 1997with the acquisition of bottling rights in Belgium, France, and Great Britain. Luxembourg was acquired in1998, and Monaco in1999.

The third-largest Coca-Cola bottler in the world (by volume)In2010CCE completed a significant transaction with The Coca-Cola Company, which acquired all of CCEs North American territory. CCE retained its European territories and also acquired bottling rights in Norway and Sweden, with the additional opportunity to acquire German bottling rights within 18 to 36 months of the close of the transaction.Today, CCE is one of the largest Coca-Cola bottlers in the world, and handles approximately 8% of the Coca-Cola system's global volume. We serve the countries of Belgium, France, Great Britain, Luxembourg, Monaco, the Netherlands, Norway, and Sweden, withsuccessful positions in the nonalcoholic ready-to-drink category in each nation.

B. Statement of the Problem and Objectives

ProblemThis case study recommends strategies and general and specific programs of action for Coca Cola Company for the purpose of maintaining sustainable success and securing its title as one of the largest beverage business in the world.Specifically, this case study also aims to answer the following questions:

1. How can Coca Cola produce healthy products in order to lessen health problems that consumers are facing today? 2. How can Coca Cola lessen the use of plastic bottles in order to help the environment? 3. What could Coca Cola propose to have a new line of energy drink that is less unhealthy and could boost the energy of the athletes?

ObjectivesThis case aims to address the following concerns: 1. To engage Coca-Cola in exploring the viability and options for using their distribution networks in developing countries to distribute social products such as oral rehydration salts and related educational materials on health, hygiene and sanitation.2. To support Coca-Cola and its partners in modelling different scenarios which combine Coca-Colas distribution network with local health initiatives in order to achieve the aim.3. To establish a core group of enablers and activists to lead on the different aspects of this campaign.4. To monitor the progress of the campaign and ensure that any trials and roll-outs are effectively monitored and evaluated

C. Evaluation of existing Vision, Mission and ObjectivesOur VisionOur vision serves as the 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. Portfolio:Bring to the world a portfolio of quality beverage brands that anticipate and satisfy people's desires and needs. Partners:Nurture a winning network of customers and suppliers, together we create mutual, enduring value. Planet:Be a responsible citizen that makes a difference by helping build and support sustainable communities. Profit:Maximize long-term return to shareowners while being mindful of our overall responsibilities. Productivity:Be a highly effective, lean and fast-moving organization.From its vision, Coca Cola speaks about achieving something new in the future which will help them sustain an increasing profit income. Though it is not an easy job to achieve this statement tells us that, they are going to achieve these three things which are sustainability, Quality and growth by the help of six variables which are people, Portfolio partners, planet, profit and productivity. There people, partners, productivity and portfolio will give them to achieve better quality and growth in future where as their responsibility towards planet and partners will help them to achieve sustainability. Therefore the Vision of Coca-Cola is clearly a good base for the future.

Our MissionOur Roadmap starts with our 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 - in mind, body and spirit To inspire moments of optimism - through our brands and actions To create value and make a difference everywhere we engage-In Mission statement of Coca-Cola Company, it contains attitude, self concept, consumers, products and services, market. The mission statement is suitable because it is containing five components out of nine. These explain how the consumer is able to experience the coca-cola company offer. The branding of the company has a unique marketing strategy because it lasted to generation to generation. Vision is clear and mission statement of Coca-cola is also supporting its vision.

Vision and Mission Analyses

Does it include?Does it mention values like?

CustomersProducts/ServicesMarketsCitizenshipTeamwork

NoNoYesNoNo

TechnologyConcern forsurvivalPhilosophyExcellenceIntegrity

NoNoYesNoNo

Self-conceptConcern forpublic imageEmployees

NoNoNo

Customer or product-oriented?

Customer-oriented

ObjectivesThe main objectives for the Coca-Cola Company are to be globally known as a business that conducts business responsibility and ethically and toaccelerate sustainable growth to operate in tomorrow's world. By having these objectives, it forms thefoundation for companies in the decision making process.-Above is the Coca-Cola Companys objective statement, which defines the goal of the company. By these it explains the companys motivation in order to be competitive against by their competitors. D. Evaluation of Existing StrategiesOne of our goals is to maximize growth and profitability to create value for our shareholders. Our efforts to achieve this goal are based on:

(1)transforming- Our commercial models to focus on our customers value potential and using a value-based segmentation approach to capture the industrys value potential. To achieve this strategy we need to transform new kinds of bottles that suites the preference of the people. It takes a lot of time to conceptualize it.

(2)implementing - Multi-segmentation strategies in our major markets to target distinct market clusters divided by consumption occasion, competitive intensity and socioeconomic levels. We implement more with a well-planned product, packaging and pricing strategies through different distribution channels.

(3)driving - is one of a product innovation along our different product categories and we continually innovate within our own systems and processes to drive efficiency and effectiveness.

(4)Achieving - The full operating potential of our commercial models and processes to drive operational efficiencies throughout our company.

(5)Collaboration

-We should collaborate with the suppliers and customers to find opportunities to co-create new solutions to existing challenges. We will be committing to building a multi-cultural collaborative team, from top to bottom and to broaden our geographic footprint through organic growth and strategic acquisitions.

E. Other Case Facts Analysis1. Exhibits Interpretation

Exhibit 1The exhibit shows the Consolidated Income Statements of Coca-Cola Company in thousands for 3 year statistics (2004- 2006). In this exhibits it emphasizes on the Gross Profit, Operating Income or Loss and Net income. It shows that the gross profit, operating income or loss and net income is doing fine because it increases its amount in 2006 other than the two years performance.Exhibit 2The exhibit shows the Consolidated Balance Sheet of Coca-Cola Company in thousands for 3 year statistics (2004-2006). In this exhibits it also emphasizes on the Total Current Assets, Total Assets, Total Current Liabilities, Total Liabilities and Total Liabilities and SE. It shows that the total current assets are decreasing as the year 2006 pass by. The total assets are gaining its way to have a large asset in 2006 because in 2005 they are decreasing its amount than the 2004 total assets. Its good to know that they are decreasing there total current liabilities and its total liabilities but still they are increasing their stockholders equity.Exhibit 3The exhibit it shows the Net Operating Revenues by Segment in Coca-Cola Company for 3 year statistics (2004-2006) with the different divisions of Cola. It shows that the Africa, East, South Asia, Pacific Rim, European Union, North Asia, Eurasia and the Middle East and Corporate are decreasing its revenues while Latin America, North America, and the Bottling Investments are increasing their revenues.Exhibit 4The exhibit it shows the Volume Operating Segments in Coca-Cola Company about the percentage change. As what the notes reminder said that the bottling investment segment data reflects unit case volume growth for consolidated bottles only. Geographic segment data reflects unit case volume growth for all bottles in the applicable geographic areas, both consolidated and unconsolidated.Exhibit 5The chart shows the Coca-Colas organizational chart in 2007. It starts from the Chairman of the board/CEO, and then under the CEO are the President and Chief Operation Officer, EVP and President Bottling Invest/Supply Chain, Chief Finance Officer and EVP, EVP and President Marketing Strategy/Innovation, President of the Eurasia Group, President European Union Market, President of the African Group, President Latin America Group, President of the Pacific Group, SVP and General Counsel, SVP and Director of Human Resources, SVP and Director Public Affairs/Communication, SVP Consumer Innovation/R&D Officer, SVP and President North America Group. This structure was admittedly inefficient because of the Cultural Barriers that hinders their way of communication.Exhibit 6The exhibit shows the Direct Competitor Comparison. It shows that the Coca-Cola is having a highest amount of Market Cap which is $111.18B. The PepsiCo are having a large amount of Employees other than the other competitors. The Cadbury are having a 7.80% of their quarterly revenue growth. Coca-Cola has a large amount of revenue and the same as the Gross Margin. The industry of beverages and soft drinks are having a large amount of EBITDA which is 152.55M which means that they have a large amount of taxes. Coke has a large amount of Open Margins. PepsiCo had a large amount of Net Income and the same as the EPS. The industry is highest in P/E. The PEG in 5 years expected the Cadbury has an amount of 2.48. And lastly, the Coca-Cola is highest in P/S which is 4.63. Exhibit 7The exhibit shows the Company Operating Segment Total Net Revenues in $ Millions. It shows that the Coca-Cola is increasing their revenue in the different countries yearly. They had a large amount of eliminations in the year 2006.Exhibit 8The exhibits shows the Company Geographic Data in $ Million. It shows that they had a large amount of the net operating revenues based in international which cost $17,426 in a year 2006 also the property, plant and equipmentnet in international which cost $4,296.F. Environmental Scanning1. External EnvironmentIn order for Lufthansa to explore strategies, it needs to examine its external environment in order to identify potential opportunities they could take advantage of. Moreover, the company should also be mindful of threats, in order for them to proactively manage such threats, or minimize its effects.

a. SocialCoca-Cola is recognized as the worlds most valuable brand. The company has been extremely successful in Global Marketing and experts indicate that this success is largely based on product variation and adaption. The Coca Cola trademark is recognized worldwide, no matter what language is printed on the bottle. Therefore, Coca Cola must continue to tailor their marketing plan and product development to respect each consumers value, beliefs and cultures.Social factors have been carefully considered in the companys marketing plan. It has successfully developed products to please 21st centurys health conscious consumer with brands like Coke Zero, sports drink and bottled water. They must continue to adapt to the external environmental threat of healthy lifestyle movement through product development and marketing of healthy options available in the product line.

b. PoliticalThese include the regulations, legal issues, formal and informal rules of a country the organization is under which it must operate. Coca-Cola has little factors affecting its production and the pattern of selling. The government has control over the manufacturing procedure of these products in terms of regulations. Coca Cola has some factors that influence them to operate well. First is Changes in Laws and Regulations like; changes in Accounting Standards, taxation requirements and environmental laws either in domestic or foreign authorities. And second is Changes in Non-Alcoholic business era. These are; competitive product and pricing policy pressures, ability to maintain or earn share of sales in worldwide market compared to rivals.

c. EconomicsThese factors affect Coca-Cola cost of capital and the purchasing power of present and potential customers. The economic variable in the environment affects Coca-Cola well in that any increase in interest rate could make business task harder.

d. NaturalBecause of the increasing awareness of NO Plastic, Coca Cola should find ways on how to sell their product by not affecting the environment because of the raw materials used in producing their products. Coca Cola should lessen the use of plastics especially that this generation plastic is becoming a problem.

e. TechnologicalIn todays generation, technology is a key player in helping a business stay profitable. Large Corporation, like Coca- Cola Company, must invest in technological research to find ways to become more productive, and ultimately stronger competitor. Coca Cola Company should observe their technological threats if ever there are any, to minimize the threats in their companies production.

f. Competitive forces analysisThe industrys competition is that Pepsi and Coke was often interchangeably by many consumers expressing their interest in a soft drink. Pepsi in particular, is a fierce competitor in the beverage industries with two growing categories which are water and sport drinks.i. Bargaining power of suppliersThe main ingredients for Coca-Cola syrup include eitherhigh fructose corn syruporsucrosederived fromcane sugar,caramel color,caffeine,phosphoric acid,coca extract, limeextract,vanilla, andglycerin. The suppliers are not concentrated or differentiated. Bargaining power of suppliers is low.

ii. Bargaining power of customersThe individual buyer has no pressure on Coca-Cola because just like having large retailers it has a bargaining power of the large order quantity. The bargaining power is lessened because of the end consumer brand loyalty. Bargaining power of customers is low.

iii. Threat of new entrants There are some increasing new brands aside from Coca-Cola with the same price of their product. We all know that Coca-Cola is not only seen just as beverages but also as a brand. The threat of new entrants is medium.

iv. Threat of substitutesCoca-Cola doesnt have an entirely unique flavour because there are many kinds of soda and energy drinks products in the market thats why the people cant tell the difference of Coca-Cola and Pepsi. The threat of substitutes is medium.

v. RivalryThe main competitor of Coca-Cola is Pepsi because its also had a wide range of beverage products under its brand. PepsiCo was recently ranked #19 among Americas most admired companies and ranked in #10 as the worlds most admired company. The 2. Internal environment

a. MarketingHow does the multinational company market their products? Not just product but their names brand name. A multinational like Coca-Cola company has its own uniqueness there is something in there product that everyone wants to try it.

In marketing, every day is different. In the morning they might be working with packaging designers or creating a viral marketing campaign with an advertising agency. The afternoon could see them working with the Operations team to activate a brand plan, or running an innovation workshop for people from all areas of the business. You can see how flexible the marketing teams are.

Honor and respect are what the company advertises. They used the most important ingredient which is the culture in every country they want to invest with. They make sure that it fit to the different culture of such place. Coca-Cola is global family of people working together to bring your family a wide array of beverage choices to meet your beverage needs every day. Coca-Cola offers the quality of different beverages they also focuses with the health of the customers. The Coca-Cola Company has always taken seriously its commitment to market responsibly, across the globe, across all advertising media, and across all of our beverages. The company has a global Responsible Marketing Policy that covers all its beverages, and they do not market any products directly to children under 12. This means they will not buy advertising directly targeted at audiences that are more than 35% children under 12. Our policy applies to television, radio, and print, and, where data is available, to the Internet and mobile phones. As of now the marketing strategy of Coca-Cola has been continued properly that makes it more sellable.

b. ManagementSince the strength of every company runs into the management, Coca-Cola focuses on these human resources because as of 2007 the Coca-Cola has a total of 71,000 employees worldwide this includes Recruitment, succession planning, career mobility and development, as well as their working environment, their culture and compensation and benefits all fall within their remit. The employees must be well managed in order to have a well grown productions. Everything would start out in the operating department in order to cater the total quality of Coca-Cola products.Its the strategy that drives our future. Where is the next big opportunity for The Coca-Cola Company? What will our competitors be doing next weeknext yearin the next decade? Here they take on big challenges and make bold plans for the future. The strategic planning team provides expertise and detailed knowledge to their operations teams. It might be key market information, data about consumer trends and purchasing habits, or even developments within a particular product category. Whatever the specifics of the information, it's always accurate, useful, and essential to sustainable business growth. Central to how they put ideas into practice, the team also helps plan and run big projects. They say knowledge is power, and at Coca-Cola the strategic planning team holds the key to a lot of that knowledge, helping us to determine which projects will provide the best return or offering evidence to support new ideas. The evidence goes beyond the short term too. This team helps to influence where the company goes by analysing and predicting future market trends - so we can keep building a successful business. Kind of roles you can find: Strategic Planning, Business Development, Business Tracking & Metrics, PMO, Integrated sales & Operations Manager.c. FinancialThe company is having a great problem with the liquidity ratios about the current ratio and quick ratio because it had been decreasing. 2004 is most liquid compared to 2005 and 2006. Due to increasing products of beverages sold in the market and consumer have more options on which product to buy. Coca-Cola failed in producing a healthy product for the market which can affect there selling of beverages in different county this can be a factor that investor would not invest in the company but in order to become more attractive by investor they must first develop or produce new product that can fit the needs of the consumers nowadays.Coca Cola must maintain strong financial performance in the business in order to continue investing in the future success of its business and deliver adequate shareholders return. The company should continue to focus on controlling expenses, and to be prepared to adjust their operating structure even further, if necessary, through the year to meet their goals.

d. OperationsSo as to meet their consumers expectation and create a cost effective business, they have to run a robust operation. The operational performance is been monitored by a broad range of measurement at a variety of levels. Operation is being measured by the amount of product produced in different plants of the company all over the world as well as how many products are required by the marketers.

e. Research developmentThe Coca-Cola Company and its partnered company have worked together to conserve and protect freshwater resources around the world and improve the efficiency of Coca-Colas operations. the partnership has led to major conservation gains, including improving the ecological health of seven of the worlds most important freshwater basins across five continents, helping improve the Coca-Cola systems water efficiency by more than 20 percent, and promoting more sustainable agricultural practices in the Companys supply chain.

f. Value chain analysis

III. Strategy Formulation, Implementation, and EvaluationA. Input Stage1. External Factor Evaluation MatrixKey External FactorsWeightRateWeighted Score

Opportunities

Nutritional Offering0.07510.075

Global expansion0.140.4

Innovation0.0530.15

Product diversification0.0530.15

Explore new markets0.0530.15

Digital Programs0.07530.225

Sensitivity Marketing0.037530.1125

Develop costumer relation0.07520.15

Coffee/tea dispensing technology0.037510.0375

Threats

Changing trend of healthy eating and drinking0.120.2

Strong competitors0.0520.1

Substitute products0.0520.1

Bottled tea market of competitor0.037510.0375

High cost of production0.0520.1

Unbranded products0.0520.1

Rising price of inputs0.037510.0375

Decreasing value of dollars0.0520.1

Tailored brands0.0520.1

TOTAL1.02.325

Analysis of EFE Matrix of Coke. According to the analysis of EFE, the rating is 2.32. This shows that the threats being faced by Coca Cola fierce, and it should take some actions to prevent the threats and utilize the upcoming opportunitiesThe market has begun to saturate for carbonated drinks since there are a lot of companies which produces different classes of drinks and a possible substitute for Coca-Cola drinks. Obesity is becoming alarming today, as this rate increases, it also increases the threats for Coca-Cola Company since it is selling high carbonated drinks in the market. Coca-Cola only focuses on selling beverages unlike their major rival, Pepsi, which is more diversified and do not only focus on beverages. This is a threat for Coca-Cola Company.Due to the increasing demand for healthy food and beverages, this might be an opportunity for Coca-Cola Company to sell beverages that are healthy and they could also introduce a healthy snack, to counterpart PepsiCos Doritos. Technology can be a great help in the operations to make it fast. It can also help in communicating to the international segments.2 Internal Factor Evaluation Matrix

Key Internal FactorWeightRateWeighted Score

Strengths

Brand name0.1240.48

Variety of products0.130.3

High market share0.130.3

Financial strength0.140.4

Strong global presence0.130.3

Product quality0.0530.15

Geographic spread0.0540.2

New products0.0540.2

Innovative packing0.0530.15

Weaknesses

Strong & tough competition0.110.1

Substitute products0.0510.05

Significant focus on drinks0.0820.16

Non availability of all flavours/ products in every operating group0.510.05

Unfavourable health effects0.07520.15

TOTAL1.02.99

Analysis of IFE matrix of Coke. According to the analysis of IFE, the score of Coke is 2.99. This shows that Coca-cola is internally strong and good enough. So by using their strengths, the can overcome their weaknesses.Coca-Cola Companys greatest strength is its strong brand name due to its good marketing skill that makes their products easily recognized. Its international segments are also its strength because it helps in making its beverages reach to the hands of the customers. These segments will also lessen their distribution cost since their beverages will not only supply from one country.In contrast, selling high carbonated drinks gave a negative to consumers, especially to those who are health conscious. Significant focus on carbonated drinks is also a weakness since its competitors, PepsiCo and Cadbury Schweppes PLC, are well diversified because it sells beverages and foods.3. Competitive Profile MatrixCoca-Cola CompanyPepsiCoCadbury Schweppes PLC

Critical Success FactorsWeightRatingScoreWeightRatingScoreWeightRatingScore

Market shares0.1040.400.1040.400.1020.20

Brand image0.1240.480.1240.480.1230.36

Market positioning0.0930.270.0930.270.0930.27

Management Operations0.0940.360.0940.360.0930.27

Sales Volume0.0830.240.0830.240.0830.24

Acquisition0.0740.280.0740.280.0720.14

Health Benefits for Consumers0.0710.070.0730.210.0730.21

Innovative Marketing0.0840.320.0830.240.0830.24

Domestic and International Revenues0.0730.210.0730.210.0730.21

Employees0.0830.240.0830.240.0830.24

Financial Position0.0730.210.0730.210.0730.21

Product line0.0820.160.0840.320.0830.24

13.2413.4612.83

Coca-Cola Company is compared by its two major rivals, PepsiCo and Cadbury Schweppes PLC, since there were information provided in the case study that able the researchers to conduct a competitive profile matrix. Unfortunately, PepsiCo is the most competitive than Coca-Cola Company and Cadbury Schweppes PLC. Coca-Cola Company performed well when it comes to its brand image and is well-know to the market, like PepsiCo, which is also a factor for their high sales volume. Its acquisition also got a high rate than the two companies, PepsiCo and Cadbury Schweppes PLC, since it had acquired many international bottling companies. However, when it comes to giving health benefits to its customer, Coca-Cola got a low rate since it produces beverages that are high carbonated that cause a high rate of obesity, especially in the United States. Coca-Colas product line got a low rate since it only focus on beverages, unlike PepsiCo and Cadbury Schweppes which do not only serve beverages, but they also have snacks, chocolates, and etc. Coca-Cola Company should recover from this to be able to compete with these companies.

B. Matching Stage1. Strength, Weaknesses, Opportunities, and Threats Matrix

Strengths1. Worlds largest market share in beverage2. Coke and its bottlers are among the world's top purchasers of citrus juice, coffee and sugar.3. Customer loyalty4. Coca-Cola has very effective advertising Cola-Cola gets competitive advantage

Weaknesses1. Significant focus on carbonated drinks2. Negative publicity3. Coke has been criticized for its unfavorable health effects

Opportunities1. Bottled water consumption growth2. Increasing demand for healthy food and beverage3. Growing beverages consumption in emerging markets 4. Growth through acquisitionsSO Strategies1. The company has the opportunity to enter into new industries such as snacks (S3,S4,O2)2. The success of the company is an opportunity for selling more energy drinks in coming events like The Olympic Games. (S1,S2,O1,O3,O4)WO Strategies1. To conduct research on healthy beverages that may apply for product development (W1,W3, O1,O2,O3)2. To utilize international segments, with marketing to easily promote good publicity of the company (W2,O4)

Threats1. Changes in consumer preferences2. Water scarcity3. Competition from PepsiCo4. Saturated carbonated drinks marketST Strategies1. Developing their health drinks products (S1,S2,S3,T1,T3,T4)2. Penetrating in snack business (S3,S4,T2,T3,T4)WT Strategies1. Investing in Healthy drinks would be an advantage for company (W1,W2,W3,T1,T3,T4)2. Implement R&D department for company (W1,W2,W3,T1,T2,T3,T4)

Strategic Position and Action Evaluation MatrixFinancial Strength

Rating

Return of investments5.0

Economies of scale5.0

High fixed costs 2.0

Good liquidity and bottom-line figures 2.0

Risky leverage ratios2.0

Total16.0

Industry Strength

Many distribution channels6.0

Cost-saving policy4.0

Competitive Agility4.0

Total14.0

Environment Stability

Demand variability-1

Technological changes -2

Competitive pressure -3

Total-6

Competitive Advantage

Market share-3

Strong brand name-1

Consensus-oriented culture, management-3

Customer loyalty-2

Total-8

Conclusion

ES average is -6/3=-2 IS average is 14/3=4.67

CA average is -8/4 =-2 FS average is 16/5= 3.2

X axis -2+4.67 = 2.67

Y axis -2+3.2 = 1.2

Although the liquidity of Coca-Cola Company is low, knowing that it got a 0.95x lower than the previous years. The good thing is that they lowered their cost but it generated a higher net income than the previous years, which give a good ROI. Through its international segments, Coca-Cola continuously increases its sales, except for the European Union & North Asia, Eurasia, and Middle East. Coca-Cola Companys international makes it firm with their operations on distributing consumers, which lessen their costs since distribution are near to a specific market. Although, Coca-Cola only offers beverages it still competes aggressively with its competitors.The demand of Coke from its well formulated taste is high, compared to other soft drinks, by its competitors, sold in the market, which gives a good score of -1 to Coca-Cola Company. Since it entails big production in Coca-Cola, technology must also a part of it for a fast-paced production. Even though, Coca-Cola Companys well-known product is only Coke, they maintain a good competition with its rivals.Cokes commercials and advertisements gave a strong impact that they do not only tackle on their product but they also but culture to it, which enables consumers from other countries could relate. This also captures the core of a person to obtain customer loyalty. Like for example, in the Philippines, Cokes commercial focus on dining together with families and friends. This type of marketing really affects the view of the consumers.

9

8

7

6

5

Conservative4Aggressive

3

2

CA1IS

-9-8-7-6-5-4-3-2-1123456789

-2

-3

Defensive-4Competitive

-5

-6

-7

-8

-9ES

3. Internal-External Matrix

IFE Total Weighted Score

StrongAverageWeak

4.0 3.02.01.0

EFE Total Weighted ScoreStrong3.0IIIIII

Average2.0IVVVI

Weak1.0VIIVIIIIX

As indicated in the Internal-External (IE) Matrix, the IFE shows an above average rating (2.99), while EFE also indicates an above average rating (2.325). The internal rating is highly attributed to Coca-Cola Companys management and company culture which include its strong brand name that leads to high global presence and market share. At the same time, the external rating is brought about by the presence of strong competitors, PepsiCo and Cadbury Schweppes PLC, and changing trend of eating and drinking healthy products. Thus, the matrix suggests that Coca-Cola Company belongs to Division V which suggests the company to apply a Hold and Maintain strategy, which include market penetration and product development strategies to retain its current market position by banking on new product opportunities, like selling healthy beverages than high carbonated drinks.

4. Grand Strategy MatrixWEAK COMPETITIVE POSITIONRAPID MARKET GROWTHSTRONG COMPETITIVE POSITION

II1. Market Development2. Market Penetration3. Product Development4. Horizontal Integration5. Divestiture6. Liquidation

I1. Market Development2. Market Penetration3. Product Development4. Forward Integration 5. Backward Integration6. Horizontal Integration7. Concentric Diversification

III1. Retrenchment2. Concentric Diversification3. Horizontal Diversification4. Conglomerate Diversification5. Divestiture6. Liquidation

IV1. Concentric Diversification2. Horizontal Diversification3. Conglomerate Diversification4. Joint Ventures

SLOW MARKET GROWTH

There is still rapid growth in the industry especially in their best-selling drink, Coke. Although Coca-Cola Companys beverages are unhealthy due to its high-carbonated ingredients, it still remain competitive in the industry. Based on the companys internal strengths, the company is determined to have a strong competitive position and brand name in the industry, proven as well by the top position of its other subsidiaries in their respective markets. Thus intensive strategies such as product development, market development and penetration are recommended.

5. Summary of Possible AlternativesMatching Techniques Recommended Strategies

1. SWOT MatrixVarious strategies including market penetration through promotions, market development in low-cost segment or other geographic areas, and utilize acquired bottling investments. Product development in introducing healthier beverages.

2. Space MatrixAggressive strategies including backward, forward, and horizontal integration, market penetration, market development, product development, diversification (related or unrelated)

3. IE MatrixMarket development and Product Development

4. Grand Strategy MatrixMarket Development, Market Penetration, Product Development, Forward Integration, Backward Integration, Horizontal Integration, and Concentric Diversification

C. Decision Stage

1. Quantitative Strategic Planning MatrixBased on the tallied possible strategies that the firm can implement, two possible repeating strategies are evaluated, chosen mainly through the opportunities presented primarily the segmented international market, and other introducing new healthy products. Alternative 1: Product Development

Living in a healthy lifestyle is becoming a trend today, Coca-Cola Company should take advantage on this external factor. Coca-Company can use its Research & Development area for 1-year intensive research on developing a new healthy product. That could compete with PepsiCo and Cadbury Schweppes PLC.

Alternative 2: Market Penetration: Existing Business Segment

Coca-Cola Company can penetrate its existing market through intensive promotions designed to primarily attract the business class segment. The company can do sponsorship in big events, like big celebrations or parties, for example spring breaks or big concerts. This may boost the market share for they are a lot of people are coming in these events.

Internal and External FactorWeightProduct DevelopmentMarket Penetration

StrengthASTASASTAS

1. Brand Equity / Image & Recognition0.083.000.244.000.32

2. Product Distribution and worldwide network0.103.000.303.000.30

3. Solid Financial Performance0.103.000.304.000.40

4. One of the Worlds most recognized brand0.124.000.484.000.48

5. Product Diversification ( Water, juices, soft drinks, sports drinks, etc. )0.080.002.000.16

6. Co-operate identity0.083.000.240.00

Weaknesses

1. Credit Rating0.101.000.102.000.20

2. Customer Concentration particularly in the US0.101.000.102.000.00

3. A lot of Loyal Pepsi customer are not enough loyal Coca Cola customers0.080.000.00

4. Does not enjoy the number one position 0.082.000.160.00

1.00

Opportunities

1. Possible growing demand0.122.000.240.00

2. Expansion- Reaching all segments0.063.000.183.000.18

3. Globalization0.112.000.221.000.11

4. Catering to Health Consciousness of People0.120.002.000.24

5. Bottled Water Growth0.131.000.131.000.13

6. Acquisitions of Smaller players0.061.000.061.000.06

Threats

1. Health Drinks Fruit Juice Companies0.12

2. Key Competitors0.06

3. Commodity price growth0.12

4. Image Perception in certain parts of the world0.05

5. Smaller, more nimble operators/players0.05

TOTAL : 1.002.752.78

Product Development is one of the strategies fit for a higher demand for healthy products. It is an opportunity for Coca-Cola Company to use its strength to cope up with this trend. Through intensive research on developing a product, the companys product may reach to those who are health conscious. Coca-Colas strong brand name and a wide distribution channels, it would be easy to introduce new products to the market. Since Coca-Cola Company is one of the most recognized brands, this status should be maintained or be improved. Market Penetration comes in to the picture. Promoting products should have interaction with the market. A strategy that Coca-Cola should use is that they should go directly to the market and be a part of them. Since its slogan says, Open Happiness, then for every moment of happiness of its customers, Coca-Cola should be a part of it. One of the best examples is sponsoring in big events, like spring breaks and concerts.After evaluation, it has been determined that Alternative 2 received the higher score, 2.78, thus market penetration was chosen. This strategy will be the focus of the company, however, the product development can still be carried simultaneously.D. Recommended Strategies on Alternative Implementation

The chosen solution, Product Development, aims to improve market share and get more sales. Product Development is Building on existing relationships with consumers and on a creative ability to develop new products suited to consumer wants. Like for example, producing a healthier beverage that has less sugar that could affect the customers health.

1. Suggested Vision, Mission, and Objectives

After the analyses of Coca Colas existing mission and vision statements, the proponents of this group recommend the following mission and vision statements as well as objectives for the company:

VisionTo refresh the world... To inspire moments of optimism and happiness...To create value and make a difference.

Mission

Identify and meet the consumers needs for soft drinks, provide added values through constant development of our products and services.

Objectives:1. To exceed customers' expectation2. To establish a core group of enablers and activists to lead on thedifferent aspects of this campaign3. To increase profit

2. Marketinga. Segmenting, Targeting, and Positioning

SegmentingTargetingPositioning

a. ProductCoca-Cola bottles are sold throughout each part of the world. The main product is the concentrate, produced with a secret recipe. Finished product produced from concentrate in combination with filtered water and sweeteners. The Coca-Cola Company also sells concentrate for soda fountains to main cafs and food service providers. Nowadays their drinks have different type of tastes and variety of bottles used.

b. Price The price for Coca-Cola product is fluctuating; at the beginning the price wasnt so high. Nowadays it tends to increase because of tax and peoples income. Also competition influence on the price strategy, so it can be said that price usually tend to be adapted for potential customers.

c. Promotion Coco-Cola is commonly known all over the world because of their great marketing strategy. It includes variety of methods to present their product: Uses famous people to advert their product Advertising in TV and magazines Sponsorship activity

d. PlaceCoke is multinational company with many sales offices throughout the world. Its available for everyone in the earth to buy Coca-Cola products. It sold mostly in supermarkets and local shops. Also it is easy to find their products in cafe, restaurants and gas stations.

3. Management and Human ResourceThe Coca Cola Company is the leading beverage companies industry. Coca Cola Company runs different variety of products such as soft drinks, bottled water, tea, sports juice and etc. Coca cola has a franchising model for the production and distribution purposes. It is important on the part of management to organize the activities of human resource and organizing its technology along with the resources such as physical assets, monetary resources and knowledge of the employees and establish effective and efficient internal organizational structure of the business Management at Coca Cola Company is focuses on the acquisitions and retention of highly skilled and knowledgeable employees so that it can maintain its top position in the market. It treats these resources as an asset. It provides such conditions of employment and procedures that enables all employees to develop a sense of unity with the enterprise and to carry out their duties in the most willing and effective manner.Coca Cola Organizational Structure

The figure in the previous page is the suggested organizational structure of Coca Cola Company. It is headed by the Chief Executive Officer. The organizational structure of the Coca-Cola company breaks down into several sectors. It focuses on seeing the trends in each country that the products are sold in and meeting the needs of each area. The organizational structure focuses on meeting the needs and demands of their customers.4. FinanceCoca-Cola Company has reached its goal to be the worlds largest beverage company. Since Coca-Cola distributes products throughout the world, their finance also varies. From the year 2005 to 2006 the Net Income increased up to 4.2% while in revenues also increased 4.2%. So, being on the top selling beverage company they must continue to strengthen their strategies and lean not on the fact that yearly they increased in their sales and profit. For a company, it is hard to create something different strategies to increase profit and sales and lessen its debt. But there are expenses that need to be supported, like in the place where coca-cola products were decreasing in sales. Different places has different needs, do they also have different budget allocated, so they need to provide higher cost to the declining country. Financial tools can be a good strategy to be used such Cash Flow to indicate also the movement of cash, from the operating activities, investing activities and financing activities. To continuously generate income they must spend its finances wisely and provide proper budget allocation, so that Coca-Cola Company will last for another 100 years.5. Operation Operating such as big company as Coca-Cola isnt that easy. From producing 400 brands and consisting 2,600 beverage products, the operation management gives high standard to produce quality products. So basically the target market of the company is everyone, so they want to produce products that suites the taste of different cultures from different countries. Not all countries do have manufacturing workplace, so this could possible strategy to be enhanced that they could build manufacturing place to countries that dont have so that the distribution of the products would be much easy. They can also manufacture eco-bottles to lessen waste pollution that can help our environment and can lessen the cost for bottling. In addition, the company can strengthen its ability to work closely with chain retailers and small retailers to help them reduce costs and improve sales. Through this Coca-Cola Company can improve its operating system. 6. Management Information Systems and Research and Development The company exploring the international market for products that they are already selling. The company first entered the international market in 1897 when it made Coke available in Mexican & Canadian shops with soda fountains. This was followed by setting up plants in China and many other locations around the world. The company has formed alliances and joint ventures with global companies in the bid to increase its global market share. The company has been introducing different flavours in order to change the beverage industry .

IV. References External Environment retrieved on May 1, 2014--- http://www.slideshare.net/dgclip1981/the-coca-cola-companySWOT retrieved on May 1, 2014--- http://mba-posts.blogspot.com/2012/06/swot-analysis-of-coca-cola-company.htmlCompany Background retrieved on May 3, 2014--- https://www.cokecce.com/about-cce/our-storyVision and Mission retrieved on May 3, 2014--- http://www.coca-colacompany.com/our-company/mission-vision-value

V. AppendicesA. Coca Cola Financial Ratios (2007)

LIQUIDITYFormula200620052004Comments

Current RatioCA/CL0.95x1.04x1.10xWeakness

Quick RatioCA-Inventory/CL0.60x0.72x0.81xWeakness

LEVERAGE RATIOS

Debt-to-Total AssetsTotal Debt/ TA43.53%44.42%49.13%Strength

Debt-to-Equity-Ratio TD Total Stockholder's Equity77.07%79.93%96.59%Strength

Long Term Debt-to-Equity-RatioLong-term DebtTotal Stockholder's Equity7.77%7.06%7.26%Weakness

TIE RatioEBIT/ Interest Charges30.90x28.88x32.74xStrength

ACTIVITY RATIOS

Inventory TurnoverCOGS/Average Inventory5.33x5.76x5.38xWeakness

Fixed Assets TurnoverSales/Average Fixed Asset3.80x3.89x3.61xWeakness

Total Assets TurnoverSales/Average Total Asset0.81x0.76x0.70xStrength

A/R TurnoverAnnual Credit Sales_______________________ Average AR9.66x10.38x10.12xWeakness

Average Collection Period 365 days Receivable Turnover 37.78days35.16days36.07daysWeakness

PROFITABILITY RATIOS

Gross Profit MarginGross Profit/Sales66.11%64.53%65.22%Strength

Operating Profit MarginEBIT/Sales28.22%30%29.22%Weakness

Net Profit MarginNet Income/Sales21.09%21.09%22.07%Same

Return on AssetsNet Income/TA17.11%16.04%15.47%Strength

Return on Equity Net Income Total Stockholder's Equity30.53%30.18%30.42%Strength

GROWTH RATIOS

SalesCurrent Sales Previous Sales Previous Sales4.26 %5.20%-Weakness

Net IncomeCurrent Net Income Previous Net Income Previous Net Income4.27%0.52%-Strength

B. Coca-Cola Company Financial Ratios Interpretation

FINANCIAL RATIOS Liquidity Ratios Coca-Cola Companys current ratio and quick ratio had been decreasing. 2004 is most liquid compared to 2005 and 2006. Considering its decreasing assets and increasing inventory, which is considered as a slow-moving asset in terms of its convertibility into cash, it resulted to a lower liquidity. Due to increasing products of beverages sold in the market and consumer have more options on which product to buy. This might be a factor on the increase the inventory of a company.

Leverage Ratios Coca-Cola Companys liabilities continuously decrease. A lower leverage ratio indicates a low risk capital structure. Coca-Cola Companys leverage ratios present a low risk in the firm capital structure. This means that they are able to use the money wisely to improve operations leading to a higher income, and indeed their income increase as shown in Exhibit 1 of the case study.

Activity Ratios Coca-Cola Companys activity ratios were slightly decreasing except for the total asset turnover. It indicates less efficiency on utilizing their assets to generate revenue.

Profitability Ratios Most of the profitability ratios were increasing. Coca-Cola Company has the ability to control production/acquisition costs marks ups in the selling of their products.

Growth Ratios Although Coca-Cola Companys sales decrease from 5.20% to 4.26%, its net income showed a drastic increase.

C. Coca Cola Value Chain