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Coca-Cola Company Presentation

Business Problem Solving final group presentation.

April Bundridge

on 9 May 2013

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Transcript of Coca-Cola Company Presentation

Executive Summary Current Situation Macro (General) Environmental Forces - PESTEL Analysis Political/Legal
Environmental Task (Specific) Environmental Forces - Porter's Five Forces Model Suppliers
New Entrants
Substitute Products
Other Stakeholders Estimate the Future Direction of External Forces Energy Conservation/Climate Change
Sustainable Packaging/Recycling
Product Portfolio/Well-being
Water Stewardship
Diverse & Inclusive Culture Sharing Information Intranet Site
Face-to-face meetings
Communication Framework
Create a Shared Notebook
Newsletters & Memos Corporate Governance Our Mission Our Vision 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... in body, mind, and spirit
• To inspire moments of optimism and happiness... through our brands and our actions
• To create value and make a difference… everywhere we engage 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.

• 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. SWOT Analysis of Coca-Cola Company • Coca-Cola is the world's largest beverage company, offering consumers almost 500 still and sparkling brands.
• Coke has the world's largest beverage distribution network; with consumers in more than 200 countries.
• Coke’s beverages are consumed at an average of nearly 1.6 billion servings a day.
• In 2011, Coca-Cola was declared the world’s most valuable brand according to Interbrand's best global brand.
• Cola-Cola gets competitive advantage through the well-known global trade marks by achieving the premium prices. It means Cola-Cola has something their competitors do not have.
• Coca-Cola is sold in restaurants, vending machines and stores in more than 200 countries.
• Coca-Cola achieves both competitive advantages, differentiation and low cost, which maintain its low cost which simultaneously differentiate its products.
• Most diversified range of products such as Cola-Cola Cherry, Coca-Cola Vanilla, Diet Coke, Diet Coke Caffeine-Free, Caffeine-Free Coca-Cola and a range of lime, coffee and lemon.
• Coca-Cola has a very effective advertising campaign; its advertising also represents the US culture, by sponsoring different games and teams and is also featured in countless television programs and films.
• Coke and its bottlers are among the world's top purchasers of citrus juice, coffee and sugar.
• Coke has started to work with the International Labor Organization's International Program on the removal of Child Labor. • Coke is criticized for lofty levels of pesticides in its products, exploitative labor practices, environmental destruction, building plants in different countries some of those employ slave labor and monopolistic business practices.
• Less inventory turnover as compared to Pepsi Co and a product line restricted to the beverages only.
• By giving the distributing and bottling authorization of its own products, without requesting payment, results in dropping a major portion of potential revenue.
• Coke has been criticized for its aggressive marketing to children and suspected unfavorable health effects.
• Different studies have been conducted and found other drinks, including Coke harmful if consumed excessively.
• In India Coca-Cola gaining negative publicity due to water issues, it resulted in lower growth and pitiable brand image.
• Lack of management enthusiasm for offering foreign products into U.S.A markets. • It is highly difficult for the new entrants to enter in the soft drink industry because of some factors such as brand image and loyalty, bottling network, advertising expense, retail distribution and fear of retaliation.
• Coke has significant opportunities within global supply chain to encourage and develop more sustainable practices to consumers, customers and suppliers. While; it is still in the premature stages of exploring these opportunities and dedicated to the economic vitality and health of the farming communities its supply chain engages.benefit
• Bill & Melinda Gates Foundation and nonprofit TechnoServe initiated a partnership to facilitate more than 50,000 small fruit farmers in Kenya Uganda to increase their productivity and double their incomes by 2014.
• Coke can diminish the fear of substitute by diversifying (related or unrelated) by offering substitute products.
• World population is expected to grow to 8 billion in 2025, and 9.2 billion by 2050. Nearly 99% growth will take place in developing countries.
• Changing consumer lifestyle; by becoming health conscious and preferring substitute products. Coke can relatively diversify by offering health conscious products.
• Coke promotes and supports sustainable agriculture because it makes good business sense.
• Focusing on its advertising and differentiation can increase its profits.
• Bottled water consumption is increasing day by day, 11 percent growth is reported. • Pepsi is the major and primary rival of the Coca-Cola in the soft drink industry; Pepsi is 2nd in revenue behind Coca-Cola, and also hit Coca-Cola in some markets.
• Its primary competitor Pepsi Co is highly diversified by providing a large range of food products.
• Coca-Cola also faces the tough competition from local brands all over the world, such as in Central and South America. Kola Real also known as Big Cola in Mexico is giving tough competition to Coca-Cola etc.
• A large number of substitutes are available in the market such as water, tea, juices coffee etc.
• Coca-Cola is facing different regulations and policies set by governments in different countries.
• Low growth rate in carbonated drinks, which is recorded less than one percent in primary market of Coca-Cola.
• Changing consumer lifestyle; becoming health conscious and preferring substitute products. Different studies have been conducted and found other drinks and Coke harmful if consumed excessively. Jorge Avalos
April Bundridge
Connie Harmsen "Happiness is not something ready made. It comes from your own actions." - Dalai Lama “Most folks are about as happy as they make up their minds to be” – Abraham Lincoln “The moments of happiness we enjoy take us by surprise. It is not that we seize them, but that they seize us.” – Ashley Montagu Since their first soda fountain sales in 1886, Coca-Cola has been a driver of marketplace innovation and an investor in local economies for the past 127 years. Today they lead the beverage industry with more than 500 beverage brands -- including four of the world's top-five sparkling brands. But while their business opportunities are enormous, their commitment to their consumers and the communities in which they operate is even greater. • Energy conservation/climate change - reduce the overall carbon footprint of our business operations by 15% by 2020, as compared to 2007 baseline.
• Sustainable packaging/recycling - reduce the impact of our packaging; maximize our use of renewable, reusable, and recyclable resources to recover the equivalent of 100 percent of our packaging.
• Water stewardship - establish a water sustainable operation in which we minimize our water use and have water neutral impact on the local communities in which we operate. We'll safely return the amount of water equivalent to that used in our beverages and their production to these communities and their environment
• Product portfolio/wellbeing - provide refreshing beverages for every lifestyle and occasion, while helping consumers make informed beverage choices.
• Diverse and inclusive culture - create a culture where diversity is valued, every employee is a respected member of the team, and our workforce is a reflection of the communities in which we operate. 2020 Vision & Commitment The Coca-Cola Company is committed to good corporate governance, which promotes the long-term interests of shareowners, strengthens Board and management accountability and helps build public trust in the Company. The Board of Directors has established Corporate Governance Guidelines which provide a framework for the effective governance of the Company. Energy Conservation/Climate Change • To reduce their emissions by 5% by 2015, as compared with the 2004 baseline.
• To reduce the overall carbon footprint of their business operations by 15% by 2020, as compared to 2007 baseline.
• In 2008, the Climate Change Act was created with the aim to reduce greenhouse gas emissions by 34% by 2020 and 80% by 2050, from the 1990 baseline Sustainable Packaging/Recycling • Glass bottles that contain an average of 37% recycled glass
• Aluminum cans that contain around 50% recycled aluminum
• Plastic bottles that contain 22% recycled PET plastic
• 99.9% of waste at their manufacturing sites is now recycled or recovered
• Only 0.1% goes to landfill Product Portfolio/Well-being • Providing choice and extending the portfolio
• The nutritional information they provide
• The way they market their products
• Supporting programs that encourage well being and healthy lifestyles Water Stewardship • Protect: protect their local sources of water
• Reduce: continually improve their water efficiency
• Recycle: return waste water to the environment at a level that supports aquatic life
• Replenish: Invest in programs to replenish and protect water sources in areas of water risk Diverse & Inclusive Culture • Excel in their performance
• Develop skills for improvement
• Move toward their career goals Internal Environment Financial Measures Current Ratio =1.09
Quick Ration = 0.77
Debt to Equity Ratio =1.33
Inventory Turnover = 14.71
Accounts Receivable = 10.09
Gross Profit Margin = 60.32%
Return on Total Assets = 10.47%
Return on Equity = 27.51% Value Chain Analysis Core Competencies Coca-Cola is currently at the leadership position in the beverage industry and it has been successful through its strong brand image, exceptional outsourcing strategies and efficient supply chain management. Coca-Cola also distributes a variety of still beverages, such as waters, enhanced waters, juices and juice drinks, ready-to-drink teas and coffees, and energy and sports drinks. Coca-Cola manufactures, or authorizes bottling partners to manufacture, fountain syrups, which it sells to fountain retailers, such as restaurants and convenience stores. Fountain retailers use the fountain syrups to produce finished beverages for immediate consumption. Marketing Strategy 1. Implementing multi-segmentation strategies in the company’s major markets to target distinct market groups divided by competitive intensity and socioeconomic levels.

2. Implementing well-planned product, packaging and pricing strategies through channel distribution considering the location of their selling.

3. Setting reachable operational goals throughout the company and Achieving those goals, the company will continue to develop a business model to continue exploring new lines of beverages extend existing products, participate in new beverage segments and effectively advertise and market the company’s products.

4. Developing and expanding the non-carbonated beverage portfolio organically and through strategic acquisitions should definitely increase and target more potential consumers.

5. Implementing packaging strategies designed to increase consumer demand for the company’s products and to build a strong returnable base for the Coca-Cola brand selectively.

6. Strengthening the company’s selling capabilities and selectively implementing pre-sale system, in order to get closer to clients and help them satisfy the beverage needs of consumers. Strengths Weaknesses Opportunities Threats Strategic Objectives Strategic Alternatives & Recommended Strategy Long-Term Objectives 1. Energy conservation/climate change - reduce the overall carbon footprint of their business operations by 15% by 2020, as compared to 2007 baseline.
2. Coca-Cola’s game changing long term plans are to make the company more efficient, green, and profitable with goal of providing more value to its investors over the next decade and beyond. Its devotion to giving back clean and drinkable water is only one of its current initiatives that are centered on becoming an environmentally friendly company.
3. As Coca-Cola continues its effort to become a leaner and more efficient company that provides healthier options to its consumers, the sky is the limit for its potential. The company is dependable and consistent and is sure to reward investors through dividend payouts and long-term growth. Short-Term Objectives 1. Marketing new diet drinks that have a more healthy sugar substitute. (S7, O4)

Pros – Healthier overall drink; help to turn around the national obesity issue; healthier for diabetics and others suffering from sugar related illness.
Cons – May affect the taste, more competition from other companies that already produce diet drinks, added threat to health despite the sugar substitute.

2. Increase marketing efforts for bottled water sales. (W6, O9)

Pros – Healthier; large market for clean water in other countries; cheaper to produce.
Cons – Health conscience consumers may choose water which is cheaper, over soda

3. Market international beverages to American consumers. (W7, O2)

Pros – Introducing new lines of products to the public; increase revenue through distribution to new market; offering more products to the consumer.
Cons – Competition with other companies currently in the US markets; cost related if products are primarily produced in other countries; risk of losing customers if marketing fails. Strategic Alternatives Recommended Strategy The recommended strategy is to market new diet drinks that have a more healthy sugar substitute. The reasoning behind this strategy is to supply product well being by providing refreshing beverages for every lifestyle and occasion while helping consumers make informed beverage choices. Being able to be available to markets like those with diabetes, will open up new revenues and overall positively affect the national obesity issue. Proper marketing strategies will help the company to properly compete in the market with other companies, such as Pepsi Co. and their diet products. External Environment 1. Work towards less aggressive marketing aimed at children who are still learning how to manage a healthy diet and lifestyle. This can be accomplished by ads that are geared more towards older teens and adults.
2. Coca-Cola has set short term objectives for the future to have sustainable packaging/recycling. Reduce the impact of packaging; maximize the use of renewables and recycle resources to recover equivalent of 100 percent of their packaging; and to provide product well being. Providing refreshing beverages for every lifestyle and occasion while helping consumers make informed beverage choices.
3. They want to demonstrate best practice across all their commitments; they believe they can make the biggest difference in two specific areas: Energy and Climate Change and Sustainable Packaging and Recycling. Implementation Marketing new diet drinks that have a more healthy sugar substitute should be fairly simple for Coca-Cola. As the world’s largest beverage company, with the world’s largest beverage distribution networks and after being declared the world’s most valuable brand by Interbrand, marketing a new drink should be reasonably straightforward. With Coke beverages being consumed at an average of nearly 1.8 billion servings per day, entering the market with a new diet drink would definitely help Coca-Cola’s standing as far a previous health concerns. Evaluation & Control Monitoring is a task that continues throughout the period of implementation. It involves checking to see whether tasks are complete, objectives are met and work is generally running according to schedule. Survey’s sent out during the introduction and at various times over the first few months would help the company to know if the new product is successful. If it is not successful, this gives the company a chance to alter their plans to make it more successful in the coming months. Future Expectations Conclusion Coca-Cola must look ahead, understand the trends and forces that will shape their business in the future and move quickly to prepare for what's to come, if they wish to continue to flourish as a business over the next ten years and beyond. A successful integration of this new sugar substitute into a diet drink would help the company’s image as far as previous health concerns. If the sugar substitute is very successful, it could open the company to the opportunity to use this substitute in all of its products to decrease the health concerns related to sugar consumption of all of them.
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