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Presented to: Prof. Amal El Kurdi Presented by: Roula Jannoun Spring 2011
Introduction
Coca-Cola Company is the world's largest nonalcoholic beverage company. It offers a portfolio of world class quality sparkling and still beverages, starting with Coca-Cola and extending through over 400 soft drinks, juices, teas, coffees, waters, sports and energy drinks that refresh, hydrate, nourish, relax and energize. Coca-Cola has more than 400 brands are nearly 2,400 beverage products. Four of the world's top-five soft-drink brands are : CocaCola, Diet Coke, Sprite and Fanta. Thums Up and Limca, which are formulated to appeal to local cultures and lifestyles. With operations in more than 200 countries, we have a diverse workforce of approximately 55,000 Company employees. Coca Cola family of beverages accounts for approximately 1.3 billion servings worldwide of the 50 billion beverage servings consumed every day-a figure that indicates both strength and growth opportunity of the company.
PRODUCTS DESCRIPTION
The Rejuvenation division offers a range of drinks designed to improve how people feel physically and mentally. Products include ready-to-drink coffees, teas and herbal beverages. The Health & Nutrition division produces a range of products to promote health and well being. In the US, its products encompass Minute Maid Premium 100% juices, Hi-C fruit drinks and Minute Maid Coolers.
The
Replenishment division offers a range of water products around the world. The division also produces a range of energy drinks, such as PowerAde. Elsewhere in the world, the company has created other products designed to meet the needs of local consumers and communities. For example, in Chile, it developed Bibo (Kapo) because mothers wanted a healthy, noncarbonated drink for their children.
The Coca-Cola Company and bottling partners are not one and the same from a legal or managerial perspective. The Company's business is focused on creating and marketing brands and trademarks, while Coca-Cola bottling companies produce and package the finished beverage products and then sell and distribute them to retail and wholesale customers. These bottling partners range from international and publicly traded businesses to small, family-owned operations. Their governance and management structures are separate from those of The Coca-Cola Company.
1.Bottlers in which coca cola company have invested and have a non-controlling ownership interest; 2.Independently owned bottlers in which the company have no ownership interest; 3.Bottlers in which the company has invested and has a controlling ownership interest.
The Coca-Cola Company owns minority shares in some of its largest franchisees, like: Coca-Cola Enterprises, Coca-Cola Amatil, Coca-Cola Hellenic Bottling Company (CCHBC) Coca-Cola FEMSA,
Suppliers include those business partners who supply system with materials, including ingredients, packaging and machinery as well as goods and services. At a minimum, all authorized and direct suppliers must comply with all applicable laws and regulations, including those concerning child labor, forced labor, abuse of labor, freedom of association and collective bargaining, discrimination, wages and benefits, working hours and overtime, health and safety, and environmental practices.
Coca- Cola Customers Customers include large, international chains of retailers and restaurants, as well as small, independent businesses. Some of our customers are major corporations as globally familiar as the name Coca-Cola; others are the corner market or the local pushcart vendor.
It employs approximately 6,000 people, and indirectly creates employment for more than 125,000 people in related industries through vast procurement, supply and distribution system The Coca-Cola system in India comprises 27 wholly-owned companyowned bottling operations and another 17 franchisee-owned bottling operations The complexity of the Indian market is reflected in the distribution fleet, which includes 10-tonne trucks, open-bay three-wheelers that can navigate the narrow alleyways of Indian cities, and trademarked tricycles and pushcarts. Coca-Cola serves in India some of the most recalled brands across the world, which include names such as Coca-Cola, Diet Coke, Sprite, Fanta, along with the Schweppes product range. In 2002, Coca-Cola India (CCI) launched a new advertisement campaign featuring leading bollywood actor - Aamir Khan. The advertisement with the tag line - 'Thanda Matlab Coca-Cola ' was targeted at rural and semiurban consumers.
Executive Summary
A company that fully understands the importance of value chain in business is the Coca-Cola Company. A global leader in the beverage industry, the Coca-Cola Company further indulges in enhancing their value propositions as an instrument to create virtuous cycles of geographic expansion' and thus greater advantage. Coca-Cola owns the most important elements of the value chain such as the brand, the technology, the management, the marketing expertise and the relationships This search includes Coca-Cola SWOT Analysis, Porter's five forces analysis and diverse value-chain activities in different areas. In addition, the search presented the interplay between the Research Councils and how it impacts Coke's value chain as well as creating the absolute effective position.
WEAKNESSES
Carbonates Market is in Decline Over-complexity of relationship with bottlers in North America The existing distribution system is not so efficient for non carbonates
OPPURTUNITIES
Expansion Reaching all segments Catering to Health Consciousness of People Soft drinks volumes in the Asia- Pacific region forecast to increase by over 45% Use distribution strengths in Eastern Europe and Latin America Increased Consumer Concerns with Regard to Drinking Water
THREATS
Health Drinks Fruit Juice Companies
Buyers
Rivalry (Industrial competitors)
Power of Suppliers
Sugar Packaging Bargaining power of suppliers is low due to two reasons. First, the main inputs are sugar and packaging. Sources of sugar are on the open market which subsequently makes the creation power of suppliers at low levels. There are several suppliers for packaging as well as the abundance in supply of inexpensive aluminum.
Exclusive Territories Direct-store-delivery (DSD) Substantial Investment Current Market Presence of CocaCola
Coca-Cola has long-term relationships with their retailers and distributors making possible the defense of the position by means of discounts and Second, direct negotiations from other tactics, and regulation make it concentrate producers to suppliers are impossible for new bottlers to enter present; an initiative to encourage reliable areas where an existing bottler operates. supply, faster delivery and lower prices.
Bargaining power of buyer is high for fountain supermarkets and mass merchandising because of the low profitability and strong negotiation power of retail channels but for vending bargaining power is non-existing caused by high profitability.
Inbound logistics
Process
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Component Manufacture: The three largest components within the system are manufacturing, fleet/transport and sales/marketing equipment. There are nearly 850 plants in the manufacturing process, with system's fleet of approximately 200, 000 vehicles to transport ingredients, packaging and finished beverages. Beverage concentrates are shipped to bottling operations by sea while finished beverages are mostly transported by road into distributors and retail customers. There are 9 million vending machine and coolers that keep products cold. These components are placed in 200+ countries of operation. Testing/Quality Control: Coke uses different technology to control
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product quality like the Chemunex. Coca-Cola invested in realtime microbiology analyzer or the D-count. Such technology is adapted because of: quantitative analysis with satisfying detection limit, automated analysis with reduction of the analytical time, reliability of the results and robustness of the system for an intensive routing use.
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Distribution: In the distribution of products, the wholesalers have no involvement; but rather conform to agent network. The company divides a country into various regions and established a franchisee within these regions. Franchisees have own bottling plants and has the autonomy to manage daily operations
10. Service/Dealer Support: Within each region are different dealers that orders through three primary categories: bulk, side load and full service. Coca-Cola system ensures that dealerships are assisted upon. So the company opened their distribution system and embraced the DSD system or the direct-to-store concept. The movement is from wholesalers channels into Direct-store-delivery DSD channels.
There are five council members: Asia, Europe, Latin and North America and National Association of Convenience Stores (NACS). Such councils are cashing in on research to innovations of product portfolio by means of introducing new concepts and ideas about merchandising and store formats as well as idea generation for connecting store performance and the actions of store management teams as examples of retail innovations.
Products-wise, the Council aimed at ensuring sustainable products and responsibly-sourced and traceable products as well as eco-friendly packaging, and this product must be accessible at reasonable prices. Ensuring product assortment is also under the Council's scrutiny to further guarantee innovative health goods. Assortment for Coca-Cola means small/fractionable, to consume right after at affordable prices
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Conclusion
At Coke, the creation of the absolute effective position is central on investing on Coca-Cola Retailing Research Councils. Along with its four key processes, Coke creates value through proactively engaging their retailers at technically every levels of the value chain from raw materials down to end-products. Conforming to holistic improvements, Coke strategically put value to store management, providing consumers with the right to choose while also enjoying the health benefits of its brands. More than complying to standards and acquiring first rates, Coke aimed at enhancing the shopping experience and enjoyment of refreshments which are reflected in the figures they accumulate coupled with ethical operation.