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Coca-Cola Strategic Analysis
Transcript of Coca-Cola Strategic Analysis
Angelica Emmy Seraphine (336050)
Andita Suri Aristyani (349897)
Invented in 1886 by pharmacist John Stith Pemberton in Columbus, Georgia.
Formula and brand was bought in 1889 by Asa Griggs Candler
CEO: Muhtar Kent
Headquarter: Atlanta, Georgia
As of May 2015:
#4 World’s Most Valuable Brands
$179.9 Billion Market Capital
: Be a great place to work where people are inspired to be the best they can be.
: Bring to the world a portfolio of quality beverage brands that anticipate and satisfy people's desires and needs.
: Nurture a winning network of customers and suppliers, together we create mutual, enduring value.
: Be a responsible citizen that makes a difference by helping build and support sustainable communities.
: Maximize long-term return to shareowners while being mindful of our overall responsibilities.
: Be a highly effective, lean and fast-moving organization.
Our 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.
Our 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...
To inspire moments of optimism and happiness...
To create value and make a difference.
Its approach to pleasing customers
Not identifying products
Does not specify:
Customer groups or markets
Our values serve as a compass for our actions and describe how we behave in the world.
: The courage to shape a better future
: Leverage collective genius
: Be real
: If it is to be, it's up to me
: Committed in heart and mind
: As inclusive as our brands
: What we do, we do well
Financial Objectives and Strategy
Maintaining its long-term high single-digit EPS growth target while adjusting its net revenue target to mid single-digit growth and replacing its operating income metric with profit before tax (All long-term growth targets are on a comparable currency neutral basis)
Streamlining and simplifying its operating model to drive the speed and agility of the organization and provide line of sight to aligned compensation targets
. Expanding productivity initiatives with $3 billion in expected annualized savings by 2019
. Refocusing on its core business model of building the world’s greatest beverage brands and leading an unmatched global system of strong local bottling partners
Porter's Five Forces
Threats of Substitute: Medium to High Pressure
Threats of New Entrants: Medium Pressure
Medium Capital Investment
Bargaining Power of Suppliers: Low
High number of suppliers
Easily obtain materials
Bargaining Power of Consumers: Low
High numbers of consumers
Competitive Rivalry Among Competing Sellers: High
Main competitor: Pepsi Co.
Key Success Factors
Manufacturing Related KSFs
High utilization of fixed assets
Distribution Related KSFs
Huge numbers of plants across the globe
Marketing Related KSFs
Well recognized and cherished brand name
Product innovation capabilities
Other types of KSFs
Internal Situation Analysis
Higher overall unit costs
Expansion in new and existing market
New geographic market
Slowdowns in market growth
Strong Financial Investment
Operates in > 200 countries
900 physical plants
Employee up to 129,000 people
Builds infrastructure, staff training, and development of the distribution network
Strengthen its already strong marketing and advertising
Employing more than 100 thousand employees worldwide with an efficient organizational capability
Competitive Strength Assessment
Generic Competitive Strategy
“Broad Differentiation Strategy”
Market leader by offering differentiated product
The classic bottle of coca-cola
The everlasting logo/font
Coca-cola “open happiness”
Coca-cola “name” bottle
First cola taste beverage company
Most valuable brands in the world (#4, ranked by Forbes.com)
Strategic Alliances and Partnership
Merger and Acquisition
Glacéau vitamin water
Acquire Coca-Cola Enterprises (bottler company)
50-50 joint venture agreement with Nestlé
Beverage Partners Worldwide
Strategy in International Market
“Think Global, Act Local”
Differentiating the product offering across geographic markets to account for local differences
Packing based on countries needs
Developing Countries Market
Involvement in community life.
Initiating sports scholarships, sports development, entrepreneurial development, scholarships and education projects.
1. Coca-Cola 2. Ades 3. Frestea 4. Minute Maid 5. Aquarius
Strategic Fit: Manufacturing Industry
Resource Fit: Cash Cows
Generates substantial cash surpluses over what is needed to adequately fund their operations.
Ranking business units and resource allocation
Sticking closely with the existing business lineup
Ethical Business Units
Code of Business Conduct
Acting with integrity around the globe
Integrity with the company
Conflict with interest
Integrity in Dealing with Others
Water scarcity and polluted water that resulted from its bottling operations
Solid waste and water issue
Corporate Social Responsibility
Water for Life
Social Work Through Associations
Disaster Relief Assistance
Building an organization
Operates in over 200 countries
Employ many local staffs
Implementation of Strategy
Instituting Policies and Procedures that facilitate Strategy Execution
Human rights policies
Product safety and quality policies
Responsible marketing policies
Installing information and operation system
SAP R/3 from IBM together with ERP system
Incentives and rewards
“One Company. One Team. One Passion”