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coke sally

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sally firnkes

on 26 January 2013

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Transcript of coke sally

2010 1.7B servings/day in 200 countries through more than 300 bottling partners. Most recognized powerful brand $70B value.
Made a mistake with New Coke, corrected in 90 days with Classic Coke
1989 – Invested 1.5B in Asia & Eastern Europe after Berlin Wall fell, by 1992 doubled marketshare
After decade of poor decisions, replaced Douglas Ivester with E. Neville Isdell “Manifesto for Growth” 150 Sr managers from across the globe to develop a new 10 year strategic plan. Committed $400M to marketing
Muhta Kent – World’s Best Networker
CDA’s – Bottlers used funds provided by Coke to secure shelf space.-
Coke negotiated directly with major bottling suppliers to guarantee low prices and reliable supply for key ingredients.
CCE bought 2 biggest bottlers for 2.4B, 1/3 of Coke’s volume under it’s control.-
1987 Master Bottler Contract gave Coke the right to determine concentrate price and other terms of sale for cola flavored sparking beverages.-
Anchor bottler strategy-2010 – Coke held 69% of US Fountain Business
BIG ( bottling operations and investments under one roof)
Incidence pricing : aligned company and bottler to drive revenue.
CCE – North America - $350M in operation synergies . Reducing overcapacity - consolidation-Southern Smile – 80% of pop growth.-IT systems & administrative operations coordinated-CCR (CCE & Cokes North American Food Service)
new CCR had $20B in sales-offer comprehensive harmonized customer services-products gain new points of sale
CCE good because:consolidation and ready for growth
In a position to take advantage of changing demographics ($34K per capita, 300M urban Americans, 20% total industry volume, still beverages generate 45% of Cokes retails sales). Allowed Coke to react quicker to Pepsi’s decision to control it’s US bottling business as well. “Pause that Refreshes”
“It’s the Real Thing”
"Every man in uniform gets a bottle of coke for 5¢” Received sugar rationing exemptions. 64 overseas bottlers set-up throughout Europe and Asia, gave locals 1st taste of coke
Minute Maid (1960) – new flavors (Fanta , Sprite)
Sugar replaced by high fructose corn syrup, costing 40% less than sugar.
New digital media platforms & global campaigns (World Cup)
CCE - Could change marketing, packaging quickly 1886 John Pemberton – Atlanta
Woodruff – 6 Bottle Carton, Open top cooler, automatic fountain dispenser and vending machines
1980’s – 11 new products, greater variety of packaging
1982 – Diet Coke, best selling diet soft drink by the end of 1983
Coke Zero – response to obesity (2005 double digit sales gain) most successful soda launch since Diet Coke.
2009 Smaller Bottlers (North Carolina Coca-Cola Bottling) invested in new packaging (16 and 20 oz.).
2009 – Freestyle machines to revitalize sparkling drinks.
CCE gave coke the flexibility, control and speed to adjust to the future preferences of consumers.
No more separate ownership of fountain vs bottle can drinks.
Bigger = bigger competitive edge Creativity Innovation Leadership Coca Cola's 2010 Acquisition
of CCE: Five Forces Analysis Threat of New Entry High Barrier to Entry
High cost for new entry
Economies of scale
Consolidation Bargaining Power of Suppliers Control over Supply Chain
Suppliers have little bargaining power
Large volume; scale Bargaining Power of Consumer Unified Coke
Leverage over Customers
Faster and Increased Efficiency Rivalry amongst Competitors Two main competitors
Adapt to new competitors
Private Labels
Compete on Advertising Threat of Substitutes Changing industry
Non-Sparkling Drinks
Adaptation & Innovation
Increased Market Share Forecasting to 2020 Advantages of owning CCE
Maintaining specialized bottling plants Control, Control, Control Basic fundamentals of their business


Pricing Sticking to the Mission Focusing on the company's visions and goals
Productivity Keeping ownership of CCE
Maintaining Specialized Bottling Plants
Flexibility, Adaptability, Control
Decisions that contribute to the Mission
Doubling revenue by 2020 2011 Review Forecasting to 2020 Innovation Creativity Leadership Control, Control, Control Sticking to the Mission Putting the Pieces Together U.S. Non Alcoholic Ready to Drink Consumption Changing People’s Habit U.S. Non Alcoholic Ready to Drink Consumption Changing People’s Habit $10 B Fragmented Market of Still Beverages
Split Pallets
Hot-Filled Manufacturing
Bottlers loosing manufacturing profit Embracing Change: Challenges BIG (Bottling Investment Group)
Incidence Pricing
Not Enough? - Issues with CCE in 2010 Embracing Change: Supporting Bottlers Synergies in advertising and manufacturing expenditures
Easy Consolidation by engulfing the biggest player
Increased cash flow Benefits of buying CCE Putting the Pieces Together $70,000,000,000 1,700,000,000 serving per day Recommendation:
Keep the bottling business to achieve 2020 vision Coca-Cola Company Coca-Cola Enterprise Present Day:
October 3, 2010 Accrued debt
High cost for plant conversion
High production costs Bottler's Dilemma ...Enters Coke Sally Firnkes - Strategic Fit
Matt Fine - Porter's 5 Forces
Sangharsh Aggarwal - Economical Analysis
Eric Deans - 2020 Vision Muhtar Kent John Brock Direct Store Deliver 1980 Customer Development Agreements 1980 2005 2009 Exclusive Bottler Territories
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