Coca-Cola Case study

Strengths Coca-Cola has been an intricate part of American culture
for over a century. The product’s image is laden with sentimentality, and this is an image many people have taken deeply to heart. The Coca- Cola image is displayed on T-shirts, hats, and collectible memorabilia. This extremely recognizable branding is one of CocaCola’s greatest strengths. “Enjoyed more than 685 million times a day around the world Coca-Cola stands as a simple, yet powerful symbol of quality and enjoyment” (Allen, 1995). Additionally, according to Bettman, et. al, (1998) Coca-Cola’s bottling system is one of their greatest strengths. It allows them to conduct business on a global scale while at the same time maintain a local approach. The bottling companies are locally owned and operated by independent business people who are authorized to sell products of the Coca-Cola Company. Because Coke does not have outright ownership of its bottling network, its main source of revenue is the sale of concentrate to its bottlers (Bettman, et. al, 1998).

Weaknesses: Although domestic business as well as many
international markets are thriving (volumes in Latin America were up 12%), Coca-Cola has recently reported some "declines in unit case volumes in Indonesia and Thailand due to reduced consumer purchasing power." According to an article in Fortune magazine, "In Japan, unit case sales fell 3% in the second quarter [of 1998]...scary because while Japan generates around 5% of worldwide volume, it contributes three times as much to profits. Latin America, Southeast Asia, and Japan account for about 35% of Coke's volume and none of these markets are performing to expectation (Mclean, 1998).

Opportunities: Brand recognition is the significant factor
affecting Coke’s competitive position. Coca-Cola’s brand name is known well throughout 90% of the world today. The primary concern over the past few years has been to get this name brand to be even better known. Packaging changes have also affected sales and industry positioning, but in general, the public has tended not to be affected by new products (Allen, 1995).

al. 1991). from one party to another in control. diverse. Economical. and hot chocolate (“Cola Wars”. 1991). PEST ANALYSIS The PEST analysis examines changes in a marketplace caused by Political. . The government plays a role within the operation of manufacturing these products in terms of regulations. This strategy gives Coke the opportunity to service a large geographic. 1991).for example the rise in private healthcare and privatisations under Conservative governments. area (Bettman. but consumers are not necessarily married to it. allowing them to have further significant market shares and offset any losses incurred due to fluctuations in the market (“Cola Wars”. is a very real threat. the changing healthconsciousness of the market could have a serious affect. the threat of new viable competitors in the carbonated soft drink industry is not very substantial. The rivalry between Pepsi and Coke has produce a very slow moving industry in which management must continuously respond to the changing attitudes and demands of their consumers or face losing market share to the competition.Coca-Cola’s bottling system also allows the company to take advantage of infinite growth opportunities around the world. juices. both Coke and Pepsi have already diversified into these markets. Threats: Currently. however. Furthermore. coffee. Even though Coca-Cola and Pepsi control nearly 40% of the entire beverage market. consumers can easily switch to other beverages with little cost or consequence (“Cola Wars”. milk. The soft drink industry is very strong. Social and Technological factors. et. P: Political change. 1998). Possible substitutes that continuously put pressure on both Pepsi and Coke include tea. Consumer buying power also represents a key threat in the industry. Of course. The threat of substitutes. There are potential fines set by the government on companies if they do not meet a standard of laws. Political Analysis for Coca-Cola Non-alcoholic beverages fall within the food category under the FDA.

" U. Economic Analysis for Coca-Cola Last year the U. (CBS Market Watch. Changes in the non-alcoholic business environment.S. including changes in accounting standards. Their ability to penetrate developing and emerging markets. which also depends on economic and political conditions. sales equipment and technology. distribution networks. Officially in a recession. positive growth in the first half of 2002. government changes and restrictions on the ability to transfer capital across borders. taxation However. E: Economic change. because of aggressive action by the Federal Reserve and Congress it will be short and mild. and how well they are able to acquire or form strategic business alliances with local bottlers and make necessary infrastructure enhancements to production facilities. Future Outlooks The Federal Reserve is doing all that it can help the economy recover. Most economists loosely define a recession as two consecutive quarters of contraction. On Monday 26. new tax laws and revised tax law interpretations) and environmental laws in domestic or foreign jurisdictions. Lowering the .S. competitive product and pricing pressures and their ability to gain or maintain share of sales in the global market as a result of action by competitors. www. for example a recession creating increased activity at the lower ends of product price ranges. the government officially declared that the U. especially in international markets. has been in recession since March. things changed.2001]. However. Political conditions. They have cut the interest rate ten times this year." Rex Nutting. or negative GDP growth. (including tax rate changes.The following are some of the factors that could cause Coca-Cola company's actual results to differ materially from the expected results described in their underlying company's forward statement:Changes in laws and regulations. economy was strong and nearly every part of it was growing and doing well.S. including civil unrest.cbsmarketwatch. [nov 26. The economy will return to sustained. Rate of interest rises depressing business and causing redundancies and lower spending levels. The rate now lies at a 40-year low of 2%. without limitation. These include.

car shopping. Consumers from the ages of 37 to 55 are also increasingly concerned with nutrition. citizens are practicing healthier lifestyles.interest rates will ultimately excite consumer demand in the economy. Companies will expand and increase use of debt as a result of the low borrowing rates. Social Analysis for Coca-Cola Many U.cdf-mn. and eating out at restaurants. there has been economic improvement in many major international markets. the United States was starting tot see the economy recover slightly and it is only just recently that they achieved the economic levels. The increasing number of women going out to work. This has affected the non-alcoholic beverage industry in that many are switching to bottled water and diet colas instead of beer and other alcoholic beverages. Consumers are now resuming their normal habits. They believe that with lower inflation still to come. S: Social change involves changing attitudes and lifestyles. consumers will recover their confidence over the next year. It can use the borrowing on research of new products or technology. Before the attacks on September The non-alcoholic beverage industry has high sales in countries outside the U.S. (http://www. going to the malls. led to the need for time-saving products for the home. 2001. Coca-Cola can borrow money for investing in other products as the interest rates are low. time management has increased and is at approximately 43% of all households." These markets will continue to play a major role in the success and stable growth for a majority of the nonalcoholic beverage industry. Also. many are still handling their money cautiously. and Germany. However. As researching for new products would cost less the Coca-Cola Company will sell its products for less and the people will spend as they would get cheap products from Coca-cola.S. such as Japan. "For major soft drink companies. There is a large population of the . According to the Standard and Poor's Industry surveys. Brazil. The need for bottled water and other more convenient and healthy products are in important in the average day-to-day life. for example.

marketing and promotional programs. Introduction of cans and plastic bottles have increased sales for Coca-Cola as these are easier to carry and you can bin them once they are used. The Wakefield factory has the technology to produce cans of Coca-Cola faster than bullets from a machine gun. Europe's largest soft drinks factory was opened by CCE in Wakefield. Since many are reaching an older age in life they are becoming more concerned with increasing their longevity.creates opportunities for new products and product improvements and of course new marketing techniques. T: Technological change . . This advertising makes the product attractive.age range known as the baby boomers. Technological Analysis for Coca-Cola Some factors that cause company's actual results to differ materially from the expected results are as follows: The effectiveness of company's advertising. This will continue to affect the nonalcoholic beverage industry by increasing the demand overall and in the healthier beverages. This helps in selling of the products. e-commerce.the Internet. The new technology of internet and television which use special effects for advertising through media. As the technology is getting advanced there has been introduction of new machineries all the time. This technology is being used in media to sell their products. Yorkshire in 1990. Due to introduction of this machineries the production of the Coca-Cola company has increased tremendously then it was few years ago CCE has six factories in Britain which use the most stat-of the-art drinks technology to ensure top product quality and speedy delivery. They make some products look attractive.

R. 57 SEC.Sujatha Submitted by -: Kanika Gupta MBA (HR) ROLL NO.STRATEGIC MANAGEMENT ASSIGNMENT Submitted to -: Dr.B .

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