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Coca-Cola India's Corporate Social Responsibility Strategy

Strategic Management

Ali Hemati

on 29 May 2013

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Transcript of Coca-Cola India's Corporate Social Responsibility Strategy

Agenda Background Corporate Social Responsibility Recommendation Dr John Smith Pemberton
May 08, 1886
Atlanta, Georgia, US Model Criticisms Dr Sharan Kaur Garib Singh &
Dr Norizah binti Mohd Mustamil Strategic Management CSGB6201 Prepared for: Coca-Cola India's Corporate Social Responsibility Strategy Chan Mun Kit
CGA100074 Ali Hemati
CGA100080 Cheah Chee Wei
CGA 100093 Background Coca Cola India Corporate Social Responsibility Model & Initiatives Case Analysis Five forces competition PESTLE SWOT Recommendation People Partners Portfolio Planet Profit Sustainable Business and Communities Civil Society Government Businesses Corporate Social Responsibility Initiatives Environmental Packaging & Recycling:
- Polyethylene Terephthalate (PET) recycling project
- e3-eco-innovation, improve efficiency & life-cycle effectiveness
- Community recycling programs Water:
Global Water Conservation Goals - Reduce, Recycle & Replenish
- Watershed protection
- Rainwater harvesting project
- Community initiatives
- Collaboration with research group and other NGOs Energy:
- HFC-free refrigerator - curb emission of GHGs
- Energy management system (EMS);
- Project esKO. Fuel:
- Local operation. We commit to the fair and dignified treatment of all people who work for The Coca-Cola Company. In almost 90% of more than 200 countries, our beverages are produce by local people with local resources. We are working to be leaders in responsible water use, striving to ensure that our packaging is seen as a valuable resource for future use, and growing our business but not our carbon footprint. We seek to maximize value for shareholders while being mindful of our overall responsibilities. We offer the highest quality beverage starting with Coca-Cola and extending through more than 2,600 beverage product. Our company strives to engage effectively and cooperatively with our partners and stakeholders in order to realize future opportunities. Corporate Social Responsibility Initiatives Economic Responsibility Communities: Elixir for Life.
Health Overall economic growth & development in and around all Indian bottling facilities Criticisms CSR initiatives merely PR strategy Depleting groundwater levels Hazardous material and sludge. Rainwater harvesting initiative common in India & too little water replenished Case Analysis SWOT PESTLE 5 forces competition Demographic; population & age distribution
- 2008 - 1.15 billion
- 2012 - 1.2 billion
- 15-64 years old - 65% in 2011 Global
- Kashmir issue - tension between India & Pakistan Technological
- IT & business process outsourcing - one of most important sectors
- IT sector contributed 7.5% GDP in year 2012
- Continuous research on Coca-cola products & manufacturing process Social cultural
- Growing middle class - estimate 50 million in 2010
- Growing concern of environment, health & fitness issue Political/Legal
- A major power; Largest democracy
- Government challenges - corruption & communal, caste & regional tensions: social, politic, economy & environment;
- Corruption & bribery: rank 94 in Corruption Perceptions Index 2012 Economic
- One of world's fastest growing economy
- GDP growth in 2011 - 7%;
- GDP per-capita in 2009 - USD 3200. Rivalry among competing sellers
- Fierce competition between Coca-Cola & PepsiCo i.e. pricing, advertising & distribution front
- 2011 - Coca-Cola market share 60% ; PepsiCo 37%
- But dominance thru Thums Up and Sprite (16.5% market share)
- Between Coke and Pepsi - 8.8% & 15% respectively Potential new entrants
- Low entry cost - International & local brand could easily enter market
- Some difficulties in securing stable network of distribution channels or dealers Firms in other industries offering substitute products
- Local wholesaler/retailer could easily produce substitute products
- Technology & skills to produce soft drink easy to adopt Bargaining power of buyers/customers
- Relatively low switching cost - buyers could easily change product preference
- Products quite standardized - tastes of beverages quite similar Bargaining power of supplier
Suppliers’ products such as bottling plant and chemicals suppliers are available in the market. Coca-cola formed a strategic alliance with local beverage producer, Parle in year 1993. The well establishes network of 56 bottlers provides Coca-cola immediate access to local beverage industry. High High High Weaknesses
- Water supply shortage
- Environmental issues
- High water consumption for production-impact local water supply; legal suit & compensation payment Strength
- Global brand; strong branding strategies
- Abundance of resources - provides direct & indirect employment to > 1, 50,000 people
- Ready local bottling operation & distribution channel
- Acquisition of local brand ‘Thums Up’ - easy increase in market share to compete against PepsiCo Opportunity
- India one of world's fastest growing developing counties; 3rd largest consumer of beverages after US & China
- 2008 - Indian beverage market estimated at US$3.8 billion with annual growth rate of 6.5% Threat
- Fierce competition between Coca-cola & PepsiCo; aggressive pricing strategy drive down profits margin
- Perceived negative image by locals - operations hazardous to India environment. Improves its local image;
Develops its value chain strategy;
Works more on its bottlers;
Emphasizes on potential partners;
Branding its green business;
Promotes sustainable agriculture. Thank you for your attention
Welcome to questions Amarjit Kaur
CGA090097 Salwa Faharudin
CGA 110110 in India Entered India during 1970s & exited in 1977 ! ! !
Return in 1993, 4 years behind PepsiCo. contained extracts of Coca leaves Kola nuts Coca-Cola established in 1892 by Griggs Candler Ernest Woodruff & W. C. Bradley in 1919 Robert in 1923 2011, Coca-Cola continue to dominate Indian soft drink market - 60% market share "Coca-Cola India has always placed high value on good citizenship and has undertaken several initiatives for community development and inclusive growth". CEO, Coca-Cola India: Greenwashing
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