A Report on

Strategic Management Case

Of

COCA COLA

Subject: Marketing

Prepared & Presented by:

Name: - Preeti Patel

Roll No: - 82

Table of Contents

1
1- EXECUTIVE SUMMARY 4

2- HISTORY OF COCA COLA

5

3- BRANDS OF COCA COLA

9

3.1- Energy Drinks 9

3.2- Juices/Juice Drinks 9

3.3- Soft Drinks 10

3.5- Tea and Coffee 10

3.6 Water 10

3.7- Other Drinks 11

4- CONSUMER CHOICE AT A GLANCE 12

5- DIFFERENT PLAYERS IN THE SOFT DRINKS MARKET 13

5- DIFFERENT PLAYERS IN THE SOFT DRINKS MARKET 14

6- OUR MISSION 14

6- OUR MISSION 15

7- OUR VISION 15

8- IMPROVED MISSION STATEMENT 16

9- IMPROVED VISION STATEMENT 16

10- COCA COLA - RATIO ANALYSIS 19

10.1 RATIO ANALYSIS 20

11- FINANCIAL HIGHLIGHTS 21

12- UNIT CASE VOLUME 22

13- CURRENT ORGANIZATIONAL CHART 23

14- VALUE CHAIN ANALYSIS FOR COCA COLA 23

15- E-COMMERCE 27

2
16- VALUE OF THE FIRM 28

Table of Contents

17- KEY INTERNAL FACTORS 32

18- KEY EXTERNAL FACTOR 34

19- COMPETITORS 36

20- SWOT ANALYSIS 37

21- SPACE MATRIX STRATEGIC MANAGEMENT METHOD 41

22- BCG MATRIX Error! Bookmark not defined.

23- IE MATRIX 45

24- QSPM OF COCA COLA Error! Bookmark not defined.

25- PROJECTED RATIO ANALYSIS 48

26- CONCLUSION 49

3
1- EXECUTIVE SUMMARY

Coca-Cola, the product that has given the world its best-known taste was born in
Atlanta, Georgia, on May 8, 1886. Coca-Cola Company is the world’s leading
manufacturer, marketer and distributor of non-alcoholic beverage concentrates and
syrups, used to produce nearly 400 beverage brands. It sells beverage concentrates
and syrups to bottling and canning operators, distributors, fountain retailers and
fountain wholesalers. Coca-Cola was first introduced by John Syth Pemberton, a
pharmacist, in the year 1886 in
Atlanta, Georgia when he concocted caramel-colored syrup in a threelegged brass
kettle in his backyard. He first “distributed” the product by carrying it in a jug down the
street to Jacob’s Pharmacy and customers bought the drink for five cents at the soda
fountain. Carbonated water was teamed with the new syrup, whether by accident or
otherwise, producing a drink that was proclaimed “delicious and refreshing”, a theme
that continues to echo today wherever Coca-Cola is enjoyed. Coca-Cola originated as
a soda fountain beverage in 1886 selling for five cents a glass. Early growth was
impressive, but it was only when a strong bottling system developed that Coca-Cola
became the world-famous brand it is today. Coca- Cola was the leading soft drink
brand in India until 1977, when it left rather than reveal its formula to the Government
and reduce its equity stake as required under the Foreign Regulation Act (FERA)
which governed the operations of foreign companies in India. In the new liberalized
and deregulated environment in 1993, Coca-Cola made its re-entry into India through
its 100% owned subsidiary, HCCBPL, the Indian bottling arm of the Coca-Cola
Company. The main objective of this study lies in understanding the organization and
studying and understanding the consumers’ perception and opinion about the latest
product, Minute Maid Pulpy Orange, introduced
into India, by the Coca-Cola Company. A consumer sampling involving 5.5 lakh
people was conducted in a span of 30 days across major cities in order to give the
product the required marketing push and to recognize the prospective consumers and
their opinion in order to develop and market the product in a better way in the near
future. The methodology used in studying and understanding the perceived views of
consumers towards the product was ‘SAMPLING’. The findings of the activity have
been drawn out in form of graphs and suggestions have been offered there from

4
2- HISTORY OF COCA COLA

Coca-Cola® originated as a soda fountain beverage in 1886 selling for five cents a
glass. Early growth was impressive, but it was only when a strong bottling system
developed that Coca-Cola became the world-famous brand it is today.

1894 – A modest start for a Bold Idea

In a candy store in Vicksburg, Mississippi, brisk sales of the new fountain beverage
called Coca-Cola impressed the store's owner, Joseph A. Biedenharn. He began
bottling Coca-Cola to sell, using a common glass bottle called a Hutchinson.

Biedenharn sent a case to Asa Griggs Candler, who owned the Company. Candler
thanked him but took no action. One of his nephews already had urged that Coca-
Cola be bottled, but Candler focused on fountain sales.
1899 The first bottling agreement
Two young attorneys from Chattanooga, Tennessee believed
they could build a business around bottling Coca-Cola. In a
meeting with Candler, Benjamin F. Thomas and Joseph B.
Whitehead obtained exclusive rights to bottle Coca-Cola across
most of the United States (specifically excluding Vicksburg) -- for
the sum of one dollar. A third Chattanooga lawyer, John T. Lupton, soon joined their
venture.
1900-1909 … Rapid growth
The three pioneer bottlers divided the country into territories and sold bottling rights to
local entrepreneurs. Their efforts were boosted by major progress in bottling
technology, which improved efficiency and product quality. By 1909, nearly 400 Coca-
Cola bottling plants were operating, most of them family-owned businesses. Some
were open only during hot-weather months when demand was high.
1916 … Birth of the contour bottle
Bottlers worried that the straight-sided bottle for
Coca-Cola was easily confused with imitators. A
group representing the Company and bottlers asked
glass manufacturers to offer ideas for a distinctive
bottle. A design from the Root Glass Company of
Terre Haute, Indiana won enthusiastic approval in
1915 and was introduced in 1916. The contour bottle became one of
the few packages ever granted trademark status by the U.S.

5
Patent Office. Today, it's one of the most recognized icons in the world - even in the
dark!

6
1920s … Bottling overtakes fountain sales
As the 1920s dawned, more than 1,000 Coca-Cola bottlers were operating in the U.S.
Their ideas and zeal fueled steady growth. Six-bottle cartons were a huge hit after
their 1923 introduction. A few years later, open-top metal coolers became the
forerunners of automated vending machines. By the end of the 1920s, bottle sales of
Coca-Cola exceeded fountain sales.
1920s and 30s … International expansion
Led by longtime Company leader Robert W. Woodruff, chief
executive officer and chairman of the Board, the Company
began a major push to establish bottling operations outside the
U.S. Plants were opened in France, Guatemala, Honduras, Mexico, Belgium, Italy,
Peru, Spain, Australia and South Africa. By the time World War II began, Coca-Cola
was being bottled in 44 countries.
1940s … Post-war growth

During the war, 64 bottling plants were set up around the world to
supply the troops. This followed an urgent request for bottling
equipment and materials from General Eisenhower's base in
North Africa. Many of these war-time plants were later converted
to civilian use, permanently enlarging the
bottling system and accelerating the growth of the
Company's worldwide business.
1950s … Packaging innovations

For the first time, consumers had choices of Coca-Cola

package size and type -- the traditional 6.5-ounce contour bottle, or larger servings
including 10-, 12- and 26-ounce versions. Cans were also introduced, becoming
generally available in 1960.
1960s … New brands introduced
Following Fanta® in the 1950s, Sprite®, Minute Maid®, Fresca® and TaB® joined
brand Coca-Cola in the 1960s. Mr. Pibb® and Mello Yello® were added in the 1970s.
The 1980s brought diet Coke® and Cherry Coke®, followed by POWERADE® and
DASANI® in the 1990s. Today hundreds of other brands are offered to meet
consumer preferences in local markets around the world.
1970s and 80s … Consolidation to serve customers

7
As technology led to a global economy, the retailers who sold Coca-Cola merged and
evolved into international mega-chains. Such customers required a new approach. In
response, many small and medium-size bottlers consolidated to better serve giant
international customers. The Company encouraged and invested in a number of
bottler consolidations to assure that its largest bottling partners would have capacity to
lead the system in working with global retailers.

1990s … New and growing markets

Political and economic changes opened vast markets that were closed or
underdeveloped for decades. After the fall of the Berlin Wall, the Company invested
heavily to build plants in Eastern Europe. And as the century closed, more than $1.5
billion was committed to new bottling facilities in Africa.
21st Century
The Coca-Cola bottling system grew up with roots deeply planted in local
communities. This heritage serves the Company well today as people seek brands
that honor local identity and the distinctiveness of local markets. As was true a century
ago, strong locally based relationships between Coca-Cola bottlers, customers and
communities are the foundation on which the entire business grows.

8
3- BRANDS OF COCA COLA

Coca-Cola Zero® has been one of the most successful product launch
hes in Coca Cola’s history. In 2007, Coca Cola’s sold nearly 450
million cases globally. Put into perspective, that's roughly the same
size as Coca Cola’s total business in the Philippines, one of our top 15
markets. As of September 2008, Coca-Cola Zero is available in more
than 100 countries.

3.1- Energy Drinks

For those with a high-intensity

approach to life, Coca Cola’s brands of
Energy Drinks contain ingredients such as
ginseng extract, guarana extract,
caffeine and B vitamins.

3.2- Juices/Juice Drinks

We bring innovation to the goodness of
juice in Coca Cola’s more than 20 juice
and juice drink brands, offering both
adults and children nutritious, refreshing
and flavorful beverages.

9
3.3- Soft Drinks

Coca Cola’s dozens of soft drink brands

provide flavor and refreshment in a
variety of choices. From the original
Coca-Cola to most recent introductions,
soft drinks from The Coca-Cola
Company are both icons and innovators in
the beverage industry.

3.4- Sports Drinks

Carbohydrates, fluids, and electrolytes

team together in Coca Cola’s Sports
Drinks, providing rapid hydration and
terrific taste for fitness-seekers at any
level

3.5- Tea and Coffee

Bottled and canned teas and coffees

provide consumers' favorite drinks in
convenient take-anywhere packaging,
satisfying both traditional tea drinkers
and today's growing coffee culture.

3.6 Water

Smooth and essential, our Waters and

Water Beverages offer hydration in its
purest form.

10
3.7- Other Drinks

So much more than soft drinks. Coca

Cola’s brands also include milk
products, soup, and more so you can
choose a Coca Cola Company product
anytime, anywhere for nutrition,
refreshment or other needs.

11
4- CONSUMER CHOICE AT A GLANCE

Coca-Cola Mainly preferred by the Youngster & Kids.

Thums-Up Youngster.

Limca Common Drink.

Fanta Basically Preferred by Ladies and Kids.

12
Maaza Also Ladies and Kids.

Sprite Not clearly defines.

Kinley Soda Mostly those who consume liquor.

13
 5- DIFFERENT PLAYERS IN THE SOFT DRINKS
MARKET

PEPSI

Caleb Brandhum, a North Caroline Pharmacist, structure Pepsi Cola In2 the 1890’s as
cure of dyspepsia (indigestion). In 1902, Bradhum applied for a trade mark, issued
ninety seven share of stock and began selling Pepsi syrup in earnest. In his first year
of business he spend $1900 on advertising a huge sum that he sold only 8000 gallons
of syrup. In 1905 Bradhum built Pepsi’s bottling plant. By 1907 he was selling 10,000
gallons a year, two years later, he hired a New York advertising agency. After passing
through many troubles for some period now Pepsi is a market leader in international
arence and is available in 187 Nations throughout the world.

CADBURY SCHWEPPES

Cadbury Schweppes are joined force of Cadbury found in 1824 of U.K. and
Schweppes of Ireland founded in 1783. Cadbury Schweppes is unified bussing which
manages the relations his with over 240 franchised bottling operation on Zambia and
Zimbabwe. Cadbury Schweppes has fottlery and partnership operations in 14
countries around the world.

14
6- OUR MISSION:

Our mission declares our purpose as a company. It serves as the standard against
which we weigh our actions and decisions. It is the foundation of our Manifesto.

(1) To refresh the world in body, mind and spirit.

(2) To inspire moments of optimism through our brands and our actions.
(3) To create value and make a difference everywhere we engage.

7- OUR VISION:

Our vision guides every aspect of our business by describing what we need to
accomplish in order to continue achieving sustainable growth.

People: Being a great place to work where people are inspired to be the best they can
be.

Portfolio: Bringing to the world a portfolio of quality beverage brands that anticipate
and satisfy people's desires and needs.

Partners: Nurturing a winning network of customers and suppliers, together we create

mutual, enduring value.

Planet: Being a responsible citizen that makes a difference by helping build and
support sustainable communities.

Profit: Maximizing long-term return to shareowners while being mindful of our overall
responsibilities.

15
8- IMPROVED MISSION STATEMENT:

(1) At Coca Cola we're committed to achieving business and financial success
while leaving a positive imprint on society – delivering what we call
Performance with Purpose.
(2) Our mission is to be the world's premier consumer Products Company focused
on convenient foods and beverages. We seek to produce financial rewards to
in8vestors as we provide opportunities for growth and enrichment to our
employees, our business partners and the communities in which we operate.
And in everything we do, we strive for honesty, fairness and integrity.

9- IMPROVED VISION STATEMENT:

(1) Coca cola Co responsibility is to continually improve all aspects of the world in
which we operate – environment, social, economic – creating a better tomorrow
than today."
(2) Our vision is put into action through programs and a focus on environmental
stewardship, activities to benefit society, and a commitment to build
shareholder value by making Coca cola Co a truly sustainable company.

Why it is improved:

There is It is our vision to be the best and leading provider of food and
beverage products in Pakistan, to facilitate the people of Pakistan and we
emphasis on consumer more rather than competitors we among the top ten
food and beverage companies in the world, by continually challenging present
conventions and always staying a step ahead of the competition.

It is our mission to be the number one food and Beverage Company in Pakistan
by providing our customers with the highest product quality in terms of taste,
experience, and satisfaction. We will ensure this through an unwavering
dedication to the continuous development of our products and processes
ensuring that we remain best in class. We will strive to hire the most competent
and dedicated employees whose work ethic will set the standard in the industry.
We will be paymasters, as we strongly believe that human resource is the only
asset that truly appreciates over time. We will also be a responsible social
corporate citizen, and strive to enhance the quality of life in the markets we
serve.

16
Compare Vision & mission with leading competitors

Pakola is firstly introducing in Pakistan in 1950 by Haji Ali Muhammad. It is the

first Nationally branded soft drink in Pakistan, it is produced by mehran bottlers
(Pvt) Ltd.

Mehran is the first bottling plant in South Asia. Which has been certified to
integrated management system based on (ISO 9001:2000), (ISO 14001:1996)
Standard and (RVA HACCP) standard Pakola quality and food safety system
follows the FDA GMP requirements and codex. Pakola products are
manufactured under strict CGMP and Hygiene controls.

Mission statement:

We are focused on driving growth in our business in selected profitable and

emerging categories. To develop, implement and continuously improve the
integrated management systems in a culture of continuous improvement which:
(1) Directs the continual up-gradation for efficient and environment friendly
manufacturing technology.
(2) Monitor and improve the efficiency and effectiveness of all business
processes.
(3) Promotes professional and flexible work environment, teamwork and
innovation through employee participation and process ownership.
(4) Drives customer orientation at all levels within the organization.
(5) Monitor and economize the Cost of Quality.

Vision statement:

To be SECOND TO NONE in exceeding customer expectations for Taste and

Flavor, Product Safety, Quality and Price Competitiveness.

In comparison to coca cola the mission statement of Pakola is simple one.

The players in the beverage industry have one of the moat competitive rivalries
in any industry. In Pakistan the market is dominated by the two international
giants. Pepsi and Coke, with market shares respectively of 77%, and 16%,
leaving little room for others to grow. Yet even with approximately 5% of the
total market share, Pakola can still manage to be profitable in a cut-throat
Industry, and hive plan to position it strategically in order to do so. The
beverage Industry is a reasonably attractive industry to be in, and with Its 55

17
 years of established presence, Pakola is well positioned to leverage that history
so as to attain a competitive edge.
It is our vision to be the best and leading provider of food and beverage
products in Pakistan, and among the top ten food and beverage companies in
the world, by continually challenging present conventions and always staying a
step ahead of the competition.

Comments on vision and mission (in terms of how they support the
strategies)

The vision statement of our company supports the existing strategies that is
(generic strategy) that Coca Cola needs to pursue is that of differentiation. In
their current vision and mission statements, the company says it aims to be a
low cost leader, yet through our thorough analysis of the strategic direction the
company needs to adopt a generic strategy of differentiation. This will allow
Coca cola to do three things;
1. Charge a premium 2. Increase unit sales 3. Gain buyer loyalty However, at
the expense of sounding simplistic, it is necessary that the company
communicate its differentiation to its customers, otherwise these three
advantages will not avail themselves. Initially Coca cola will need to adopt a
focused differentiation approach, which means that they should selectively
choose which markets will profit them the most and then target only those
markets until such provisions are in place from where the company is able to
expand its target base. After which they should opt for a broad differentiation
generic strategy.

With the market just turning the bend to ‘saturation’, it is entering a phase of intense
competition with all major players diversifying their product lines, ranges and even
businesses into a versatile range of products to put in place more infantry on the battle
ground to use to their advantage in this war of brands. Therefore, we believe that the
current strategic objective of Coca cola should be to consolidate its existing brand,
Coca cola through extensive strategic market research and consumer insights to be
able to home in on the correct target market like a precision targeting missile rather
than as an Anti-aircraft gun

18
10- COCA COLA - RATIO ANALYSIS

  2006 2005 2004

  $ Percent $ Percent $
(in (in (in
Income Statement millions)   millions)   millions)
Revenue 24,088 100.0% 23,104 100.0% 21,962
Cost of Goods Sold 8,164 33.9% 8,195 35.5%  
Interest Expense 220 0.9% 240 1.0%  
Tax Expense 1,498 6.2% 1,818 7.9%  
Income from Cont Operations 5,080 21.1% 4,872 21.1% 4,847
Net Income 5,080 21.1% 4,872 21.1%  
         
Balance Sheet        
Cash 2,440 8.1% 4,701 16.0%  
Short Term Investments 150 0.5% 66 0.2%  
Accounts Receivable 2,704 9.0% 2,281 7.8% 2,171
Inventory 1,641 5.5% 1,424 4.8% 1,420
Current Assets 8,441 28.2% 10,250 34.8%  
Long Term Investments 6,783 22.6% 6,922 23.5%  
Net Fixed Assets 6,903 23.0% 5,786 19.7%  
Other Assets 7,668 25.6% 6,469 22.0%  
Total Assets 29,963 100.0% 29,427 100.0% 31,327
Current Liabilities 8,890 29.7% 9,836 33.4%  
Total Liabilities 13,043 43.5% 13,072 44.4%  
Stockholders' Equity 16,920 56.5% 16,355 55.6%  
           
Cash Flow          
Cash Flow from Operations 5,957   6,423   5,968
Dividends Paid 2,912   2,679    
Interest Paid 220   240    
           
Per Share          
Market Price at Year End 48.25   40.31    
Earnings Per Share - Basic 2.16   2.04    
           

19
10.1 RATIO ANALYSIS          
Growth Ratios          
Sales Growth 4.3%   5.2%    
Income Growth 4.3%   0.5%    
Asset Growth 1.8%   -6.1%    
Activity Ratios          
Receivable Turnover 9.7   10.4    
Inventory Turnover 5.3   5.8    
Fixed Asset Turnover 3.5   4.0    
Profit Ratios          
Profit Margin 21.1%   21.1%    
Return on Assets 17.1%   16.0%    
Return on Equity 30.5%   59.6%    
Dividend Payout Ratio 57.3%   55.0%    
Price Earnings Ratio 22.3   19.8    
Liquidity Ratios          
Current Ratio 0.95   1.04    
Quick Ratio 0.60   0.72    
Solvency Ratios          
Debt to Total Assets 0.44   0.44    
Times Interest Earned (Accrual) 30.90   28.88    
Times Interest Earned (Cash) 28.08   27.76    
           
           

20
11- FINANCIAL HIGHLIGHTS

2006  2005 
  Percent
Year Ended December 31, ($)  ($)  Change

Net operating revenues  24,088  23,104 4%

Operating income 6,308 6,085 4%

Net income 5,080 4,872 4%

Net income per share (basic and 2.161 2.042 6%

diluted)

Net cash provided by operating 5,957 6,423 (7%)

activities

Dividends paid 2,911 2,678 9%

Share repurchase activity 2,474 2,019 23%

Unit case volume (in billions)

   International operations 15.6 14.8 6%

   North America operations 5.8 5.8 0%

   Worldwide 21.4 20.6 4%

21
12- UNIT CASE VOLUME

MAP: Showing Workforce [71,000 in 2006]

13- CURRENT ORGANIZATIONAL CHART

22
 CEO

EVP/ President Bottling Invest/ Supply

CFO Chain
and EVP
EVP/ President MKT Strategy
President & COOSVP & General
SVP Counsel SVP &
& Director Director
Human Public Affairs/ Communi- -cation
Resources

President of Eurasia
President
Group
European Union
President
Market of African
President
Group Latin America
President
Groupof Pacific Group

14- VALUE CHAIN ANALYSIS FOR COCA COLA

2006 2005
(in thousands) (in thousands)
SUPPLIER COSTS
Raw Materials 1,641,000 1,424,000
Fuel
Energy
Transportation Sufficient date is not provided,
Truck Drivers but since Inventory is increased
Truck in 2006, hence, we can infer
Maintenance that suppliers are effeciently
Component providing Raw Materials. At the same time,
Parts increase will result in some incline in store/ ware
Inspection house charges.
Storing
Warehouse

PRODUCTIONS COSTS
Inventory Since cost of revenue in 2006 is

23
 System
Receiving 34% of total revenue compared to
Plant Layout 36% cost of revenue in 2005, we can deduce that
Maintenance Coca Cola has improved its operating
Plant Location performance.
Computer
R&D nil
Cost
nil
Accounting

DISTRIBUTION COSTS
Loading Income statements shows just
Shipping one head and that is Selling, Gen.
Budgeting and Admin. Expenses, which
Personnel
were 39% of total revenue in 2005
Internet
Trucking and 40% in 2006. Hence, there is
Railroads increase in these expenses. We see Net Income
Fuel proportion remain same in year 2006 as it was in
Maintenance year 2005 i.e. 21% of total revenue. Therefore,
despite of the fact that some expenses were
SALES & MARKETING increased, Coca Cola still enjoy same percentage
COSTS of Net Income. Which would be because of,
Salespersons
efficiency of production, management or
Website
Internet distribution departments.
Publicity
Promotion
Advertising
Transportation
Food and
Lodging

CUSTOMER SERVICE
COSTS
Postage
Phone
Internet
Warranty

MANAGEMENT COSTS
Human
Resources
Administration
Employee
Benefits

24
 Labor
Relations
Managers
Employees
Finance and
Legal

Analysis:
We do not see R&D head of expenses, which would show that Coca Cola does
not
assign sufficient amount to its R&D department which is key to excel in the
market.
If we see the proportion of Income generated by different regions, we can easily
infer
that Coca Cola, because of innovative advertisements or because of intelligent
decision making, still enjoys a competitive market position. We can still suggest
them to make an efficient R&D head/ department which will surely make them
compete in market, effectively and profitably.

25
15- E-COMMERCE:

Good points:

 Brand Promotion
 Attractive products selection
 Look and feel 8
 Provision of multimedia product, catalogue pages
 Personal attention
 Community relationships

Weak points:

 Performance and service: that is not easy navigation, shopping and purchasing,
and prompt shipping and delivery.
 Discount pricing is not being offered.

26
16- VALUE OF THE FIRM

Financial and Value Review

Defensive:

1) Size of firm
Net worth of $16.92billion

2) Financial condition
with a weighted current ratio of 0.94 Coke falls below the required 2, therefore they fail
this test.

3) Earnings stability
there has been positive net income for the past ten years and they 8pass this test.

4) Earnings growth
Earnings are greater than five years ago. Pass.

Overall
we would not suggest Coke being placed in the defensive investor’s portfolio at this
time.

Opinion:
Seeing that currently Coke is trading at a much higher price than our internal valuation
we would be skeptical to purchase this security at this time. However, Coke is an
excellent firm with great management, products, dividend history, and earnings. This
stock we would place on our review list and periodically watch the share price to see if
it dips and falls more in line with what we would be comfortable paying.

Strengths

World’s leading brand Coca-Cola has strong brand recognition across the globe. The
company has a leading brand value and a strong brand portfolio. Coca-Cola is one of
the leading brands in their top 100 global brands ranking in 2006.8The value of the
Coca-Cola was $67,000 million in 2006. Coca-Cola ranks well ahead of its close
competitor Pepsi which has a ranking of 22 having a brand value of $12,690 million
Furthermore; Coca-Cola owns a large portfolio of product brands. The compan8y
owns four of the top five soft drink brands in the world: Coca-Cola, Diet Coke, Sprite
and Fanta. Strong brands allow the company to introduce brand extensions such as
Vanilla Coke, Cherry Coke and Coke with Lemon. Over the years, the company has

27
made large investments in brand promotions. Consequently, Coca-cola is one of the
best recognized global brands. The company’s strong brand value facilitates customer
recall and allows Coca-Cola to penetrate new m2arkets and consolidate existing ones.
Coca-Cola Company, The large scale of operations with revenues in excess of $24
billion Coca-Cola has a large scale of operation. Coca-Cola is the largest
manufacturer, distributor and marketer of nonalcoholic beverage concentrates and
syrups in the world. Coco-Cola is selling trademarked beverage products since the
year 1886 in the US. The company currently sells its products in more than 200
countries. Of the approximately 52 billion beverage servings of all types consumed
worldwide every day, be8verages bearing trademarks owned by or licensed to Coca-
Cola account for more than 1.4 billion. The company’s operations are supported by a
strong infrastructure across the world. Coca-Cola owns and operates 32 principal
beverage concentrates and/or syrup manufacturing plants located throughout the
world. In addition, it owns or has interest in 37 operations with 95 principal beverage
bottling and canning plants located outside the US. The company also owns bottled
water production and still beverage facilities as well as a facility that manufactures
juice concentrates. The company’s large scale of operation allows it to feed upcoming
markets with relative ease and enhances its revenue generation capacity. Robust
revenue growth in three segments Coca-cola’s revenues recorded a double digit
growth, in three operating segments. These three segments are Latin America, ‘East,
South Asia, and Pacific Rim’ and Bottling investments. Revenues from Latin America
grew by 20.4% during fiscal 2006, over 2005. During the same period, revenues from
‘East, South Asia, and Pacific Rim’ grew by 10.6% while revenues from the bottling
investments segment by 19.9%. Together, the three segments of Latin America, ‘East,
South Asia, and Pacific Rim’ and bottling investments, accounted for 34.8% of total
revenues during fiscal 2006. Robust revenues growth rates in these segments
contributed to top-line growth for Coca-Cola during 2006.

Weaknesses

Negative publicity, Company received negative publicity in India during September

2006.The Company was accused by the Center for Science and Environment (CSE)
of selling products containing pesticide residues. Coca-Cola products sold in and
around the Indian national capital region contained a hazardous pesticide residue.
These pesticides included chemicals which could cause cancers, damage the nervous
and reproductive systems and reduce bone mineral density. Such negative publicity
could adversely impact the company’s brand image and the demand for Coca-Cola
products. This could also have an adverse impact on the company’s growth prospects
in the international markets. Sluggish performance in North America Coca-Cola’s

28
performance in North America was far from robust. North America is Coca-Cola’s core
market generating about 30% of total revenues during fiscal 2006. Therefore, a strong
performance in North America is important for the company.

Summary in points:

Strengths:

 Leading brand value and a strong brand portfolio

 Coca-Cola, Diet Coke, Sprite and Fanta
 Large investments in brand promotions
 sells its products in more than 200 countries
 Company also owns bottled water production and still beverage facilities as well
as a facility that manufactures juice concentrates.
 These three segments are Latin America, ‘East, South Asia, and Pacific Rim’
and Bottling investments
 Return on total assets increases over the period consistently 2005, 06, 07
15.47%, 16.55%, and 16.95% respectively.

Weaknesses:

 Negative publicity in India

 Inventory turnover decreased by 13.29%
 Return on equity decreased by 40.50%
 Sluggish performance in North America Coca-Cola’s performance in North
America was far from robust
 Collection form debtors decreased by 15.68%

29
30
17- KEY INTERNAL FACTORS Weight Rating
weight Score

Strengths

Average customer purchases increased by 18.54% 0.11 2

0.22

Employee moral 0.05 3 0.15

Technical support and research efficiency 0.08 1

0.08

Newspaper advertisement expenditures increased 0.09 4

0.36

Revenues from other segments 0.14 4 0.56

Debt to total asset ratio decline 0.05 2 0.10

Locations in the world 0.15 4 0.20

Weaknesses

Inventory turnover decreased by 13.29% 0.10 3

0.30

Return on equity down decreased 80.11 1 0.11

Website 0.04 2 0.08

Supplier time delivery 0.08 1 0.08

Total 1.00 2.24

Ranked 1 to 4. Low to High respectively.

Current Evaluation: 2.24

Less than average of 2.50

31
Need efficiency in the Management, Marketing, finance, MIS, R & D, and other
operations..

32
18- KEY EXTERNAL FACTOR

S. Weigh
Factor Rate Score
No. t
Opportunities      
1 Entering into snacks business (Pepsi earns 60% from
snacks) 0.100 3.50 0.35
2 Expansion by taking over Cadbury division or product
line 0.050 4.00 0.20
3 Expansion by introducing new ready-to-drink products
(tea, coffee, etc.) 0.050 4.00 0.20
4 Entering into or introducing new sports events (e.g.
Formula I) to introduce energy drinks 0.025 3.50 0.09
5 Strong financial and assets support available
worldwide to take financing for expansion 0.015 1.50 0.02
6 Introduce soft drink with focus of "healthy soft drink" -
eliminate obesity concept 0.075 3.50 0.26
7 Diversification of bottling business to other industries
like pharmaceuticals 0.050 2.50 0.13
8 Link with computer internet/network/cell gaming
business to focus on youth worldwide - to take 0.025 2.50 0.06
advantage of technology
9  
0.025 3.00 0.08
10  
0.015 3.00 0.05

Opportunities - Total 0.430   1.43

11 Hurting products containing sugar & sugar-substitute
based drinks (trend towards more healthy eating & 0.100 4.00 0.40
drinking)
12 Increase in raw material costs
0.075 3.50 0.26
13 Government policies may hurdle in expansion
0.075 4.00 0.30
14 Government policies - for disclosure of health warning  
0.100 4.00
15 Ban in public schools due to obesity issues  
0.075 3.50
16 Lack in snacks business
0.075 3.50 0.26
17 Lack of share in homeland market (refer Exhibit 8) -

33
 room for other brands 0.015 2.00 0.03
18 Availability of purified water (being main component)
in different parts of the world 0.025 3.50 0.09
19 Competitor may access unreached parts of the world
prior to Coca Cola 0.015 3.50 0.05
20 Salesman not equipped with sales ordering devices
0.015 2.00 0.03

Threats - Total 0.570   1.43

Grand Total  
1.000 2.86

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19- COMPETITORS

 Cadbury Schweppes plc

 Nestle S.A.

 PepsiCo, Inc.

 Unilever

 Procter & Gamble

 Cott Corporation

 Kraft Foods, Inc.

 National Grape Cooperative

 National Beverage Corp.

 Quilmes Industrial S.A.

 Quinenco SA

 Yeo Hiap Seng Limited

 Wimm-Bill-Dann Foods OJSC

 Co-Ro Food A/S

 Rynkeby Foods A/S

 Spadel SA

 Delta Holding S.A.

 Spendrups Bryggeri AB

 Pago

 Hermann Pfanner Getraenke GmbH

 J Garcia Carrion

 Vitasoy International Holding Ltd

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20- SWOT ANALYSIS

SWOT Analysis is a strategic planning tool used to evaluate the Strengths,

Weaknesses, Opportunities, and Threats inside a company, project, or a business
venture. It involves identifying the internal and external factors that are
favorable/unfavorable for business to succeed

SWOT ANALYSIS FOR COCA COLA COMPANY

STRENGTHS

1. Brand equity/image & recognition

2. Product distribution and worldwide network
3. Solid financial performance
4. One of the world's most recognized brand.
5. Product diversification (water, juices, soft drinks, sport drinks, etc)
6. Co-operate identity.
7. Innovation

WEAKNESSES

1. Credit rating
2. Customer concentration, particularly in the US (Wal-Mart accounts for more
than 10% of Coca Cola's business in the US)
3. A lot of loyal Pepsi customers are not enough loyal Coca Cola customers
4. Does not enjoy the number one position in India, Pakistan.

OPPURTUNITIES

1. Possible growing demand.

2. Expansion – Reaching all segments.
3. Globalization
4. Catering to Health Consciousness of People
5. Bottled water growth
6. Acquisitions of smaller players.

THREATS

1. Health Drinks – Fruit Juice Companies

2. Key competitors (Pepsi, etc)
3. Commodity prices growth
4. Image perception in certain parts of the world.

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5. Smaller, more nimble operators/players

37
Suggestion To Stay ahead Of Competition

The three main ways are through innovation, relations or reputation.  

 First of all innovation can be used. This may certainly give coca cola
competitive advantage because it introduces a new product, which many
people will want to try. People will like to purchase the commodity even
though price is high because no substitutes are available. It may also give coca
cola brand loyalty which means customers will stay loyal to them no matter
what happens.

  Another factor is marketing. This is a very important factor for coca cola. In
order for the company to maintain its strong market position, Coca Cola needs
to continuously strengthen its brand to maintain brand loyalty and positive
responses and differentiate itself from its competitors.

  If coca cola used strong marketing with environment friendly attitude it may
raise barriers to entry, thus decreasing the threat of new entrants to the
industry. 
 Coca Cola's brand represents quality, taste and excitement to the market,
qualities that remain unmatched by the company's competitors, thus severely
reducing any threat of being substituted.

 Reason of not being popular in India is the mis-utilization of rear water

resources. This put negative effect on the brand image, because of cola plant
water level in the area decreases which makes the resident life miserable. If
Cola Company wants a number one position in India they have to follow
following criteria

 Environmental due diligence before acquiring land or starting projects

 Environmental impact assessment before commencing operations
 Ground water and environmental surveys before selecting sites
 Compliance with all regulatory environmental requirements
 Ban on purchasing CFC-containing refrigeration equipment
 Waste water treatment facilities with trained personnel at all company-owned
 bottling operations
 Energy conservation programs

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 They should installed hi-tech water recycling system so that they can save 50%
water savings of its operations.

 Many of coca cola’s plastic bottles are recycled and as a result less resources
are lost and costs decrease. Through diversification & innovation in water &
juices business supported with aggressive advertising strategy Coca Cola
Company can attracts a new market segment. This will mean they will have a
higher revenue increasing long term profitability and improve credit rating.

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21- SPACE MATRIX STRATEGIC MANAGEMENT METHOD

The SPACE matrix is a management tool used to analyze a company. It is used to

determine what type of a strategy a company should undertake. The Strategic
Position & Action Evaluation matrix or short a SPACE matrix is a strategic
management tool that focuses on strategy formulation especially as related to the
competitive position of an organization.

The SPACE matrix can be used as a basis for other analyses, such as the SWOT
analysis, BCG matrix model, industry analysis, or assessing strategic alternatives (IE
matrix).

The SPACE matrix calculates the importance of each of these dimensions and places
them on a Cartesian graph with X and Y coordinates.

The following are a few model technical assumptions:

 - By definition, the CA and IS values in the SPACE matrix are plotted on the X
axis.
-CA values can range from -1 to -6.
- IS values can take +1 to +6.

 -The FS and ES dimensions of the model are plotted on the Y axis.

- ES values can be between -1 and -6.
- FS values range from +1 to +6.

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  Internal Strength Position External Strength Position

Competitive Advantage Industry Strength

(Worst -6,Best (Worst +1,Best

-1) +6)

  Product Quality -1 Barriers to entry 5

Axis x Market Share -1 Growth Potential 5

Access to
Brand & Image -1 Financing 4

Product Life
Cycle -2 Consolidation 5

Average Score =-1.25 Average Score =4.75

  Total X-Axis score: 3.5

  Financial Strength Environment Strength

(Worst +6,Best (Worst -6,Best

+1) -1)
  ROA 5 Inflation -2.5
Axis
Y Leverage 4.5 Technology -1
Demand
Liquidity 5 Elasticity -2.5
Cash Flow 4.5 Taxation -4

  Average Score =4.75 Average Score =-2.5

  Total Y-Axis score: 2.25

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 +6.00

Conservative Aggressive

+2.25

-6.00 -1.00 +1.00 +3.5 +6.00

Defensive Competitive
-6.00

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 23- IE MATRIX

Strong = 3.0 to Average = 2.0 to

3.99 2.99 Weak 1.0 to 1.99

High = 3.0 to
3.99 I II III

Medium = 2.0 to V
2.99 IV COCA COLA VI

Low = 1.0 to 1.99 VII VIII IX

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 2006 2007
EPS 2.162 2.57

5,080,000.0 5,981,000.0
NET INCOME 0 0

Company is performing well

Company is more stable in getting

loans from financial institutions
because it will help in tax saving
and if it will go for raising stocks, it will
costs more.

INCOME STATEMENT
  2010 2009
Percen
  $ Percent $ t
(in
millions
Income Statement (in millions)   )  
100.0
Revenue 46,573 100.0% 38,810 %
Cost of Goods Sold 18,693 40.1% 13,156 33.9%
Interest Expense 421 0.9% 381 1.0%
Tax Expense 3,027 6.5% 2,834 7.3%
Income from Cont Operations 9,827 21.1% 8,189 21.1%
Net Income 9,827 21.1% 8,189 21.1%
   
PROJECTED BALANCE SHEET      
  2010 2009
Balance Sheet      
Cash 3,984 12.7% 3,306 10.8%
Short Term Investments 324 1.0% 66 0.2%
Accounts Receivable 2,704 8.6% 2,281 7.4%
Inventory 1,641 5.2% 1,424 4.6%
Current Assets 8,441 26.9% 10,250 33.5%
Long Term Investments 6,783 21.6% 6,922 22.6%
Net Fixed Assets 6,903 22.0% 5,786 18.9%
Other Assets 7,843 25.0% 6,652 21.7%
100.0
Total Assets 31,374 100.0% 30,638 %
Current Liabilities 8,942 28.5% 8,272 27.0%

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Total Liabilities 13,178 42.0% 12,968 42.3%
Stockholders' Equity 17,256 55.0% 16,843 55.0%
         
Cash Flow        
Cash Flow from Operations 11,644   9,703  
Dividends Paid 4,489   3,982  
Interest Paid 421   381  
         
Per Share        
Market Price at Year End 92.00   77.00  
Earnings Per Share - Basic 4.20   3.51  
         

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25-RATIO ANALYSIS
       
Growth Ratios        
Sales Growth 20.0%   28.0%  
Income Growth 20.0%   35.0 %  
Asset Growth 2.4%   4.0%  
Activity Ratios        
Receivable Turnover 18.7   34.0  
Inventory Turnover 12.2   18.5  
Fixed Asset Turnover 6.7   6.7  
Profit Ratios        
Profit Margin 21.1%   21.1%  
Return on Assets 31.7%   53.5%  
Return on Equity 57.6%   97.2%  
Dividend Payout Ratio 45.7%   48.6%  
Price Earnings Ratio 21.9   21.9  
Liquidity Ratios        
Current Ratio 0.94   1.24  
Quick Ratio 0.78   0.68  
Solvency Ratios        
Debt to Total Assets 0.42   0.42  
Times Interest Earned (Accrual) 31.53   29.93  
Times Interest Earned (Cash) 28.66   26.47  
         
         

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S26- CONCLUSION:

The Coca Cola Company has a very rich history and spread over the world, the study
in this report specially the particular SPACE matrix tells us that Coca Cola Company
should pursue an aggressive strategy. Coca Cola Company has a strong competitive
position in the market with rapid growth. It needs to use its internal strengths to
develop a market penetration and market development strategy. This includes focus
on Water and Juices products, and catering to health consciousness of people
through introduction of different coke flavor and maintaining basic coke flavor. Further
company should integrate with other companies, acquisition of potential competitor
businesses, innovation in branding and aggressive marketing strategy can bring long
term profitability.

47