WRITTEN CASE STUDY

I. Case Title
THE COCA COLA COMPANY

II. Disclosure Statements

This case study is solely an educational exercise in compliance with a
student project and does not necessarily represent Coca-Cola Company or any
other individuals referenced or acknowledged within the study. Any opinions,
information, findings and conclusions contained in this study are intended to
stimulate and enhance skills of students relating to strategic management.

III. Introductory Statements and the Time Context

The Coca-Cola Company, is an American corporation founded in 1892 and today

engaged primarily in the manufacture and sale of syrup and concentrate for Coca-
Cola, a sweetened carbonated beverage that is a cultural institution in the United
States and a global symbol of American tastes. The company also produces and
sells other soft drinks and citrus beverages. With more than 2,800 products
available in more than 200 countries, Coca-Cola is the largest beverage
manufacturer and distributor in the world and one of the largest corporations in
the United States. Headquarters are in Atlanta, Georgia.

IV. Company Background

Brief History
The Coca-Cola Company, is an American corporation founded in 1892
and today engaged primarily in the manufacture and sale of syrup and concentrate
for Coca-Cola, a sweetened carbonated beverage that is a cultural institution in
the United States and a global symbol of American tastes. The company also
produces and sells other soft drinks and citrus beverages. With more than 2,800
products available in more than 200 countries, Coca-Cola is the largest beverage
manufacturer and distributor in the world and one of the largest corporations in
the United States. Headquarters are in Atlanta, Georgia.

Milestone/Timelines
a. 1886- John S. Pemberton creates the flavoured syrup that becomes Coca-
Cola.
 b. 1888-Before Pemberton’s passing, he divested parts of his business, with
Asa G. Cander gaining the largest holdings. The businessman began to turn
Coca-Cola into a larger scale business. He drove distribution past the
borders of Atlanta, with a focus on a more national strategy.
c. 1894-Bottling machines were added to a soda source in Mississippi by
Joseph Biedenharn.
d. 1899- Bottling is expanding on a grander scale, businessmen in Tennessee
gain rights to the bottling and sale of the soda.
e. 1916-The year that the unique classic glass bottle, with its contoured shape,
came into the picture.
f. 1971- Coca-Cola airs one of the most iconic ads in the history of
advertising, their “I’d like to buy the world a Coke” commercial.
g. TODAY- Coca-Cola does billions in revenues, and is a dividend staple for
many portfolios. The company has faced some adversity in more recent
times, as they’ve had to broaden their portfolio in order to stem declining
revenues.
Current Company Situation
As of 2020, Coca-Cola, along with PepsiCo and Nestlé top a list of the
biggest plastic polluters globally based on how often their packaging turns up
discarded on beaches, in rivers, at parks and elsewhere.
Coca-Cola was well ahead of the rest of the list; its branding was found
on 13,834 pieces of plastic, with PepsiCo PEP, -0.70% branding on 5,155 and
Nestlé 0QR4, on 8,633.
On the other hand, Coca-cola Company have proven to be one of the
companies who adapted well in the face of the pandemic, the COVID-19, and
handled it accordingly and made effective measures against the threats of the
COVID-19 pandemic and even looked for the possible and new opportunities that
have arisen in the middle of the pandemic and which they can take advantage of.
The company is keeping a close eye on new trends emerging in the COVID-19
era and innovating accordingly. “The area of hygiene, for example, is one I think
is going to be very much on consumers’ minds going forward,” John Murphy,
Chief Financial Officer of the Coca-cola Company, said. “Building touchless
solutions, therefore, in the away-from-home channel is a big opportunity we need
to tap into. There also will be some new motivations in the functional arena that
we need to bring into our portfolio faster.”
Finally, Coca-cola Company have prioritized the following things
during this pandemic; (1) the safety of Coca-Cola system employees’ health and
well-being (2) the safety in production and distribution facilities (3) encouraging
remote working by asking the majority of office-based employees to work
remotely (4) restricting travel by suspending domestic and international travels of
its employees, (5) serving customers and consumers by ensuring their products
are delivered safely to the stores and communities (6) ensuring product safety and
availability by making sure that the products are handled hygienically at every
step, from manufacturing facilities to customer outlets and, lastly (7) supporting
communities by making contributions to support relief efforts around the world
and, redirecting a big part of their marketing spend for community relief
programs, medical supplies and equipment during the outbreak phase, as well as
developing other actions for the recovery and back-to-normal phases in markets
hit hardest by the pandemic.

Company Strategic Posture

Vision and Mission
The Vision of Coca Cola Company is “to craft the brands and choice of
drinks that people love, to refresh them in body & spirit. And done in ways that
create a more sustainable business and better shared future that makes a
difference in people’s lives, communities and our planet.”
Coca Cola’s mission is “To refresh the world… To inspire moments of
optimism and happiness… To create value and make a difference.”
The main objectives for the Coca-Cola Company are:

● To be globally known as a business that conducts business

responsibility and ethically.
● To accelerate sustainable growth to operate in tomorrow’s world.
● To maximize share owner value over time.

Coca-Cola Objectives:

● To maximize long-term cash flow

● To ensure the strongest and most efficient production, distribution, and
marketing systems possible

By having these objectives, it forms the foundations for companies in

the decision making process.

Values
The Value Statement of the Coca-Cola Company is clear described on
the society’s website:

● Leadership: The courage to shape a better future

● Collaboration: Leverage collective genius
● Integrity: Be real
● Accountability: If it is to be, it’s up to me
● Passion: Committed in heart and mind
● Diversity: As inclusive as our brands
● Quality: What we do, we do well

Strategy
The marketing strategy of Coca Cola is a mix of three important
elements – affordable prices, worldwide accessibility, and great customer
connection.
Targeting and Positioning of Coca Cola:
Coca Cola has strategically positioned itself as the brand for the youth.
It targets mainly young consumers in the 13-35 age group. The millennials are
tech-savvy and independent-minded people. Coca Cola targets mainly millennials
in its ads including print and video ads. The company has always strived to be the
first choice of the youth. However, it does not mean Coca Cola does not have a
customer base among the middle-aged. Youth is the largest part of its global
customer base. Coca Cola promotes a consistent customer-friendly image through
its advertising campaigns globally.

One Global Brand

Now, in the 21st century, the brand has focused on its global branding
as one brand. Instead of branding its products separately, the brand has brought
all its products together in its ads. The ‘Taste the Feeling’ slogan is aimed at
connecting with the millennial generation and its emotions.

Localized Marketing Strategies

Coca Cola is a global brand, but mostly it has used localized strategies
in the local markets to promote its brand and its products. It has mainly been
doing this because of the regional and cultural differences that exist between the
various regions in the world. Coca Cola offers it consumers a wide range of
choices and the new strategy underscores its commitment to people’s choices
ranging from with and without calories to with or without caffeine products.

Coca Cola investment in marketing and promotions:

The soda industry has grown highly competitive where the main rival of
Coca Cola is Pepsico. While Coca Cola’s product mix has mainly remained
limited to the nonalcoholic beverages, its rival Pepsico has expanded its product
portfolio and diversified it considerably in recent years. The fierce competition
between the two has remained a topic of discussion for years in the media and
academic circles. To retain their customers and maintain market share, each of
the two invests a heavy fortune in marketing and promotions each year.

Strategic Directions
As of 2020, The Coca-Cola Company announced strategic steps to
reorganize and better enable the Coca-Cola system to pursue its Beverages for
Life strategy, with a portfolio of drinks that are positioned to capture growth in a
fast-changing marketplace.
The company is building a networked global organization, combining
the power of scale with the deep knowledge required to win locally. The
company will create new operating units focused on regional and local execution
that will work closely with five marketing category leadership teams that span the
globe to rapidly scale ideas.
 This structure will be supported by the company’s newly created
Platform Services organization, which will provide global services and enhanced
expertise across a range of critical capabilities.
“We have been on a multi-year journey to transform our organization,”
said Chairman and CEO James Quincey. “The changes in our operating model
will shift our marketing to drive more growth and put execution closer to
customers and consumers while prioritizing a portfolio of strong brands and a
disciplined innovation framework. As we implement these changes, we’re
continuing to evolve our organization, which will include significant changes in
the structure of our workforce.”

V. External Situation
Societal Environment
Natural
The Coca-Cola Company markets, manufactures and sells: beverage
concentrates and syrups; and, finished beverages (including sparkling soft drinks;
water and sports drinks; juice, dairy and plant based drinks; and tea and coffee).

Demographic
In demographic segmentation of Coca-cola Company, the market is
divided into groups on the basis of variables like gender, age, family life cycle,
education, income, generation, occupation, religion, race, nationality, and social
class.
In general, Coca-cola company focus on all age groups irrespective of
other criteria of demographic segmentation, but the young generation is the target
market of the company. The Company also wants to show their products full of
youth and energy to their customers. Coca Cola also uses different blends to
target different lifestyles, age groups, sexes, ethnic groups, etc.

Political-Legal
The most important political factors which can have a direct impact on
Coca Cola are laws and government regulation of food products. For example in
the US, the Food and Drug regulations apply to its business. Apart from it, these
laws may vary from country to country. Coca Cola and its products must confirm
to the relevant laws in the countries they are sold. (Coca Cola is a maker of non-
alcoholic beverages) However, apart from the food and beverages related
regulations and the quality standards, the business is also subject to the common
accounting or business regulations and Tax Laws.

Economic
Economic factors too have a major and direct impact on the business of
large and global companies. The recent global financial crisis (Global Pandemic)
reduced the profits of the businesses significantly. Coca Cola managed to remain
relatively unscathed (the effects were felt the most by the financial companies),
still its profits were to some degree affected. The way in which Coca Cola
managed to retain its profits was surprising. Such economic crises impact the
customers. People switch to the purchase of only the basic necessities under such
conditions.
Similarly, the rising costs of the raw products is an important factor
affecting Coca Cola. Water scarcity is another major trouble. Coca Cola needs
water in very large amounts for production, but its availability is limited. The cost
of other raw products and labor has risen over time. All of these factors can have
a deep impact on business and profits of global brands.

Social-Cultural
Social factors too are just as important from a business point of view.
During recent decades people have mostly switched from flavored to healthy
drinks. Such trends can lead to a decline in the popularity of Coca Cola products.
Any major change in people’s preference and taste can impact the profits of a
business. The Coca Cola products are mainly popular for their flavors. However,
with people moving towards healthier drinks, Coca Cola had to focus and invest
more on its marketing efforts. Media has also played an important role in
changing people’s perception of soda drinks which are mainly seen as ‘loaded
with calories’.

Technology
Technology is an important factor for large businesses like Coca Cola.
Their production and packaging as well as distribution, depend heavily on
technology. In order to remain profitable, Coca Cola has to invest heavily in it.
Technological efficiency ensures timely production and an efficient supply chain.
All these factors are important for generating revenues. While technology in this
area might not change daily, it requires lots of investment and maintenance.

Task Environment
Competitors
The intensity of competitive rivalry in the beverage industry is getting
aggressive between PepsiCo. and Coca-cola. The main competitor of Coca-Cola
is Pespi while the other producers of soft drinks, bottled water and juices have a
comparatively lower market share. Moreover, the small scale companies do not
have the potential to affect the market share of Coca-Cola to a significant degree,
thus indicating that the main competition is among Pepsi and Coca-Cola.
Apart from this, according to the company annual report the main
competitors of coca cola are but not limited to PepsiCo, Dr Pepper Snaple,
Nestle, The Kraft Heinz Company, Unilever, Mondelēz International, Suntory
Beverage and Food Limited.
Lastly, Coca-Cola is the largest beverage company in the world;
however, it does not earn as much revenue as its closest competitor Pepsi. The
reason being the portfolio. Pepsi portfolio contains a wide range of products, and
the one that pays Pepsi the most is not even beverage products but processed
food. If Coca Cola wants to improve its competitiveness, they must diversify their
products further so that they reduce industrial specific systematic risks.

Suppliers
The suppliers of the beverage industry include firms that supply basic
commodity items such as sugar, caffeine, flavors and other ingredients required
to manufacture beverages. the suppliers providing these items have limited
control over the price shift and can't exert a significant influence on the price
structure. Since suppliers view their contract with larger scale beverage
companies such as coca-Cola as an important part of their distribution network,
they are not likely to exert much influence or bargaining power in setting up
prices of the ingredients.

Distributors
While it is generally perceived that Coca-Cola runs all its operations
globally, this process is done through various local channels.
The firm's distribution system is one of the most well planned and
executed compared to all other drinks of the same category. It has such an impact
on consumers and is so successful that even wholesalers and distributors need the
product for their business’ success.
Overall, Coca-Cola is seen as the most efficient and has the most
widespread distribution network across the world. For its bottling to be set up, it
has connected with about 250 bottling partners across the globe. Its largest
distribution network is because of its great demand in the market for its
beverages. As such due to its effective distribution network, Coca-Cola has been
able to gain a very high market presence.

Creditors
Creditors of Coca-cola corporation fall under the group of external
stakeholders.
Coca-Cola partners with hundreds of stakeholders across the country, at
both a local and global level, and across many different functions. This includes
stakeholders including bottling partners, suppliers, consumers, customers,
industry partners, governments and NGOs.

Customers
The beverage industry comprises corporate buyers as well as individual
buyers. Coca-Cola has established its market presence through forming favorable
ties with its leading corporate buyers such as fast food chains. In addition , the
company has taken advantage of the other distribution such as vending machines,
and convenience stores to expand the reach to the target market.
 Today, consumers are more health conscious and avoid carbonated and
sugar drinks. Not only in developed countries i.e. the United States and European
markets but also in developing countries calorie conscious consumers taste is
changing. Changing Consumer taste is an alarming threat to Coca Cola, Pepsi and
other soda companies in the beverage industry.

VI. Internal Situation

Coca-Cola partners with hundreds of stakeholders across the country, at
both a local and global level, and across many different functions. This includes
stakeholders including bottling partners, suppliers, consumers, customers,
industry partners, governments and NGOs.

Review of Company Posture

Coca Cola has strategically positioned itself within the world soft drink
market. It has a strong brand value across the globe. Being the largest beverage
company that is non-alcoholic, the company serves about 1.9 billion of the total
60 billion servings of the beverage of many other types taken across the world per
day. The Coca-Cola Company owns, produces, distributes, and sells about 500
types of beverage brands in about 200 countries. The leadership position of Coca-
Cola in the carbonated beverage provides substantial manufacturing and
distributing efficiency over any rival. Coca-Cola’s heavy investment in its
leading brands has brought its popularity among consumers. According to
Euromonitor data, the top 10 carbonated brands, based on market shares, are
Coca Cola, Pepsi, Sprite, Fanta, Diet Coke, Coca-Cola Zero Sugar, Mountain
Dew, 7-Up, Mirinda, and Diet Pepsi. Coca Cola owns five brands on the list,
accounted for 39% of the market in 2019, and the rest belongs to its greatest rival
Pepsi. Among them, Coca-Cola is the most popular soft drink brand that enjoys
22.9% of the sales, followed by Pepsi’s 9.3%.

Review of Company Culture

The culture of Coca-Cola Company is diversity and inclusion office
works cross-functionally with senior leaders, human resources, business relations
and councils to help create an inclusive environment. The Coca-Cola Company
focuses on four strategic imperatives called CARE; create, articulate, regulate and
evaluate. Also, Coca-Cola recognizes the need to protect the environment from
global warming that arises because of intense uncontrolled production activities
within the company. It recognizes the need to ensure the safety of its customers
as they may be the victims of uncontrolled production activities. The company
strives to protect the surrounding environment from pollution by preventing the
emission of harmful substances into the atmosphere during mass production and
the manufacture of bottles used for packaging.

Review of Company Resources

Tangible resources of Coca-Cola Company contain fiscal resources and
physical resources. In 2019, Coca-Cola earned around $37 billion income and its
market value is estimated at $247 billion ( Forbes, 2019). Coca-Cola owns the
strong and sustainable fiscal resources. They use strong fiscal resources to put
one million millions of dollars in major markets such as India, China, Russia and
a few possible markets such as Vietnam. For its physical resources, the company
had over 900 bottling and manufacturing facilities located around the globe. On
the other hand technological resources and repute of Coca-Cola are considered as
intangible resources. In terms of technological resources, Coca-Cola invested to
overhaul machinery. The brand image, beverage's formulas, taste, flavors and
quality are also included in the intangible resources of Coca-Cola Company. The
following are also part of the Coca-Cola's resources:

Marketing: Coca Cola is known for its great marketing strategy and
promotional techniques. Apart from digital marketing, the company uses social
media channels for promotions and customer engagement. Marketing helps Coca
Cola strengthen its sustainable competitive advantage as well as retain sales and
customers in a hyper competitive industry and market. The brand also runs
seasonal campaigns from time to time to grow its popularity and the excitement
surrounding the brand and its products.

Finance: Coca-Cola has a strong financial position throughout the year. In 2019,
the company's net income increased by $2.5 billion to $8.9 billion. The increase
was due to worldwide concentrate sales volume. The finance function helps the
company to maintain its strong position in financial terms. However, being a
global company, Coca-Cola Company has the most exposure to foreign exchange
rate risk. With more than 60% of income coming from outside of the U.S, Coca
Cola has to be on top of its hedging strategy to be able to control the gain and loss
due to exchange rate fluctuation. Hedging instruments also incur some expenses.

Operations: The Coca-Cola Company manages six operating segments including

Europe, Middle East, Africa (EMEA), Latin America, North America, Asia
Pacific, Bottling Investments and Global Ventures. The company operations of
Coca Cola involved manufacturing and selling of beverage concentrates, syrups,
and finished beverages such as sparkling soft drinks, water and sports drinks,
juice, dairy, plant based drinks, tea and coffee. These are primarily manufactured
in its geographic operating segments.

Research and Development: Coca-Cola is driving innovation and

experimentation across its business to bring new products to market and expand
existing products into new markets. Their experimentation is not only for the sake
of experimentation but to connect the product produced with consumers.
Research and innovation of Coca-Cola Company uses sensory science, product
development and consumer insights to create totally new beverages and to
improve existing ones. The company works with other R&D centres around the
world as well as suppliers, agencies and outside research institutes to create the
best beverages in the world.
 Human Resource Management: The company has maintained a heavy focus
on managing its people strategically. The company apart from paying good
salaries, has also made attractive benefits including financial and non financial
available to its employees throughout the world. Moreover, it spends a large sum
each year on the training and development of its people. Coca Cola has an
excellent performance management system in place to manage the performance
of its employees worldwide. Also, the company has maintained an environment
of continuous learning and a culture that fosters diversity and inclusion. The
brand was ranked 28th best employer for women for 2019 as well as 33rd among
the world’s best employers for 2018 by Forbes.

Information System: Coca-Cola Company started out with an old system called
the legacy system. This turned out to be very inefficient as it was not user
friendly and a lot of costs were incurred in this system. They also did their
financial plans manually on spreadsheets and were submitted as hard copies. This
made it very difficult to update information and was a very big issue as they
began to expand globally. But, as they were growing, an integrated business
management system was needed to handle the different aspects of their
worldwide corporation. They decided to incorporate Strategic Enterprise
Management (SEM). This provided them with business planning for finances,
data warehousing for information collection and data analysis, and can also
generate financial reports and monthly sales forecasts. This information system is
now fully implemented in the company and all the data it collects provides
baseline information so that Coca-Cola can track the financial health and growth
of the company.

VII. Concluding Statements