Presentation byDenny Tabula, Edward Charfauros, Rowan Kamaunu, and Tawnya Tanudra

• Introduction• Previous Findings• The Rationale for South Africa• Market Mix• Financial Over-view• Finance Options• Organized Structure• Organizational Chart: Corporate Level• Organizational Chart: Bottling Investments• Conclusion• References

Questions/More Information

• Organizations require decisions concerning how to proceed and operate, pursue global interests, local interests, multi-domestic strategies, export strategies, products for sell, and consumers of choice.

• Team A investigates Coca-Cola Company’s strategies and actions within its global plans.

• Team A embraces five aspects• First section describes Coca-Cola’s generic strategy indicating

important developments and concerning issues• Second section describes management’s challenges between

headquarters and its subsidiaries and regional offices • Third section describes Coca-Cola’s implementation problems and

reward• Forth section describes the relationships with stakeholders

emphasizing the codes of conduct• Fifth section reveals strategy intentions and actual strategy

implementation upon its chosen location.

Previous Findings• The Coca-Cola Company succeeds through cheaper resources. • The South Africa location possesses many benefits providing an ideal

infrastructure with lower labor costs. • Coca-Cola Company offers an abundance of products and businesses. • Coca-Cola establishes itself as a high internationalization index and is

the most recognizable brand worldwide. • Coca-Cola offers its products to majority of nations globally. • Coca-Cola’s strategy and international efforts reaps profits of over 60

percent outside its home market while producing abroad with more than 65 percent of its assets internationally.

• Coca-Cola possesses a significant amount of investments within the United States and South Africa catering to a large market.

• The cultural, geographical and operational distance largely affects both business and entrance strategies requiring Coca-Cola to invest in training employees with cultural awareness to benefit within its new markets.

Previous Findings• Coca-Cola focuses on regarding corporate responsibility to care of the

environment while still pleasing society. • Coca-Cola puts effort into its environmental projects involving

communities within society.• Coca-Cola’s senior government relation leadership approves political

contributions ensuring compliance with South Africa government officials.

• Coca-Cola enters contracts to gain an edge on exchange rates through net investment hedges for international operations.

• Coca-Cola uses the CCA Risk Management Framework and Guide for risk analysis.

• Coca-Cola uses the four P’s product, price, promotion and place when marketing exposing and educating its target market for its operation within South Africa.

• Coca-Cola gains more net revenues from external than internal operations through taxation and double taxation. The water source is what the locals and native tribes use to conduct business when dealing with Coca-Cola.

The Rationale for South Africa• The South Africa Reserve Bank and South Africa's central bank

maintain independence from government. • Real interest rate is stabile while the currency remains competitive.• South Africa’s government welcomes foreign investments within South

Africa and represents investor-friendly policies supporting public pronouncements.

• South Africa’s government strategy increases economic growth rate toward a gross domestic product of 6% by 2014 to reduce unemployment.

• South Africa possesses a world-class progressive legal system. Legislation is particularly well developed pertaining to commerce, labor, and maritime concerns, while laws relate to policing competition through policy, copyrighting, patenting, trademarking, and disputing conformity, and international norming.

• Common law protects sanctity of contract, as independent courts respect commercial rights and obligations, as the Constitution guarantees independence.

The Rationale for South Africa• South Africa’s banking regulations globally ranks among the top 10

throughout the world.• South Africa's labor costs are lower versus other emerging markets.• According to the business environment South Africa: open for business

article upon the Embassy of the Republic of South Africa website (2008). “South Africa ranks 35th among 178 countries in the World Bank and International Finance Corporation's Doing Business 2008 report, an annual survey that measures the time, cost and hassle for businesses to comply with legal and administrative requirements. South Africa is ranked above developed countries such as Portugal (37) and Spain (38), as well as major developing economies such as Mexico (44), China (83), Russia (106), India (120) and Brazil (122)” (ease of doing business in SA, p. 1, para. 1)

• South Africa’s government provides an environment for small business development, industrial innovation support, finance access, and gives incentives to value-adding manufacturing projects.

Market Mix• Coca~Cola’s Target• Marketing Plan

• Product/s• Price/s• Place/s• Promotion/s

Financial Over-view• General budget

http://www.thecoca-colacompany.com/ourcompany/ar/pdf/TCCC_2010_Annual_Review.pdf

• Foreign exchange rate and risks involved

Finance Options• Domestic

• Capital Market• Foreign Direct Investment• Currency Hedges

Forward exchange contracts in South African Rand (ZAR) currency

• International• Start-up Capital from parent nation• Venture Capital• Currency derivatives• Regional and International Stock Markets

Organized Structure• Decentralized Organization

• Disperses decision-making authority throughout the organization

• Ideal for complex (size, diversity) organization• Fosters empowerment

• Coca-Cola decentralization• Cut half of its staff at Atlanta based headquarters• Move regional managers closer to local markets

CEO

Board of

Directors

FinanceStrategic Planning

MarketingInnovationHuman

Resources

Regional Structure

PacificAfricaand

EurasiaNorth America Europe

LatinAmerica

South AfricaBusiness Unit

Subsidiaries

Amalgamated BeverageIndustries

Coca-Cola Fortune

PeninsulaBeverages

Coca-Cola ShandukaBeverages

Exit Strategies• IPO’s• Strategic Acquisition• Management Buyout• Divestiture of assets• Handing over a joint venture partner• Diversification• Shutting down operations• Contingency

Recommendation• Pursue the global venture in South Africa

• Low labor cost• Abundant resources• Generate jobs, local economy• Community efforts• Open more markets in different countries.

Conclusion• Team A analyzed South Africa demographics,

market shares and risks.• Coca-Cola(CC) discovers opportunities of a new

market. • Operations to bring drinkable water source to the

disease stricken villages. These efforts are part of CC marketing mix.

• Organizational structure decentralized fostering empowerment.

• Exit strategies can aide

References

• Embassy of the Republic of South Africa (2008). business environment south africa: open for business. Retrieved from http://www.embaixada-africadosul.pt/investing-in-sa/business-environment/131-south-africa-open-for-business

• Investors Network. (n.d.). Business Finance in South Africa. Retrieved from http://www.investorsnetwork.co.za/component/content/article/117-business-finance-in-south-africa

• The Coca Cola Company. (2012). Leadership. Retrieved from http://www.thecoca-colacompany.com/ourcompany/leadership.html

• Coca-Cola South Africa. (2009). Company Profile. Retrieved from http://www.cocacola.co.za/about.aspx

Questions? More Information?