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Coca-Cola Strategic Analysis

Strategic Management - All references will be included in the paper
by

Emmy Seraphine

on 23 November 2015

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Transcript of Coca-Cola Strategic Analysis

Strategic Analysis of Coca Cola
Angelica Emmy Seraphine (336050)
Andita Suri Aristyani (349897)
Haruki Fukui

Company Profile
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
129,200 employees
$45.91 Billion

Vision
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.

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.
Focused

Flexible

Feasible

Desirable
Long

Not forward-looking
Mission
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:
Buyer needs
Customer groups or markets
Identity(?)

Values
Our values serve as a compass for our actions and describe how we behave in the world.
Leadership
: The courage to shape a better future
Collaboration
: Leverage collective genius
Integrity
: Be real
Accountability
: If it is to be, it's up to me
Passion
: Committed in heart and mind
Diversity
: As inclusive as our brands
Quality
: What we do, we do well
Financial Objectives and Strategy

1.
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)

2.
Streamlining and simplifying its operating model to drive the speed and agility of the organization and provide line of sight to aligned compensation targets

3
. Expanding productivity initiatives with $3 billion in expected annualized savings by 2019

4
. 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

Specific
Measurable
Achievable
Realistic
Time bound
Objective/Goals
2020 Vision/Goals
Porter's Five Forces
Threats of Substitute: Medium to High Pressure
Fierce Competitors

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.

Matrix
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
Brand Loyalty
Product innovation capabilities
Other types of KSFs
Trade Secret
Internal Situation Analysis
Brand image

Customers loyalty

Marketing strategies

Unhealthy product

Higher overall unit costs

Expansion in new and existing market

New geographic market

Increasing competition

Slowdowns in market growth
Resources
Tangible
Financial
Strong Financial Investment
Physical
Operates in > 200 countries
900 physical plants
Technology
Intangible
Brand
Company culture
Human assets
Employee up to 129,000 people
Trade Secret

Capabilities
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
VRIO
Competitive Strength Assessment
Competitive Strategy
Generic Competitive Strategy
“Broad Differentiation Strategy”

Market leader by offering differentiated product

Strategic Defensive
The classic bottle of coca-cola
The everlasting logo/font
Coca-cola “open happiness”
Coca-cola “name” bottle
Timing
First cola taste beverage company

Most valuable brands in the world (#4, ranked by Forbes.com)

Strategic Alliances and Partnership
Merger and Acquisition
Minute Maid
Glacéau vitamin water
Hi-C
Vertical Integration
Acquire Coca-Cola Enterprises (bottler company)
Joint Venture
50-50 joint venture agreement with Nestlé

Beverage Partners Worldwide
Strategy in International Market
Transnational Market
“Think Global, Act Local”
Differentiating the product offering across geographic markets to account for local differences
Specified product
Packing based on countries needs

Licensing
Developing Countries Market
Involvement in community life.
Initiating sports scholarships, sports development, entrepreneurial development, scholarships and education projects.

Industry Attractiveness
Competitive Strength
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
 Carbonated Drinks

Strategic Moves
 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
Ethical Issues
Water scarcity and polluted water that resulted from its bottling operations

Solid waste and water issue

Corporate Social Responsibility
Environment
Eco Uniform
Water for Life
Coca-Cola Forest
Energy Efficiency
Waste Management
Social Work Through Associations
Disaster Relief Assistance
Economic Impact
Community
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
Total Rewards
Corporate Culture
“One Company. One Team. One Passion”
Full transcript