Professional Documents
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The Coca-Cola Company is currently the world’s largest beverage Company. They manufacture
beverages including sparkling sodas, juices, and sports drinks and operate in more than 200
countries across the globe. Examples of well-known brands they own include Coke, Sprite,
Fanta, Vitamin Water, Minute Maid, Bonaqua and Powerade. With all those general information
Mission
“The world is changing all around us. To continue to thrive as a business over the next ten years
and beyond, we must look ahead, understand the trends and forces that will shape our business in
the future and move swiftly to prepare for what's to come. We must get ready for tomorrow
today. That's what our 2020 Vision is all about. It creates a long-term destination for our
business and provides us with a "Roadmap" for winning together with our bottling partners.”
Coca-Cola’s Roadmap starts with their mission, which is enduring. It declares their purpose as a
Company and serves as the standard against which they weigh their actions and decisions.
“To inspire moments of optimism through our brands and our actions”
Vision
Coca-Cola’s vision serves as the framework for their Roadmap and guides every aspect of their
business by describing what they 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
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.
Objectives
The main objectives for the Coca-Cola Company are to be globally known as a business that
conducts business responsibility and ethically and to accelerate sustainable growth to operate in
tomorrow’s world. By having these objectives, it forms the foundation for companies in the
Strategies
The Coca-Cola Company aims to be globally known, they do this by targeting different areas
across the globe with different products, gaining their brand name and popularity. All the
bottling partners work closely with their customers such as convenience stores, grocery stores,
movie theaters and street vendors to create and use localized strategies developed in partnership
with the Company. Their competition with other beverage companies are also narrowed down as
they own various brands that could be possible competition. For example, the Company sells
Coke without the competition of other popular soft drink brands like Sprite and Fanta because
the Company owns those brands as well. The Company often reviews and evaluates their
business plans and performance to improve their earnings and analyze their competitive position
in the market. They make decisions in realigning their business models to match the objectives of
the Company by using strategies and tactics in the analysis of their performance.
The main difference between mission and vision statements are the mission statements
communicate where a Company is now while vision statements communicate where it wishes to
be in the future. Vision statements are often more abstract and less direct than a mission
statements and mission statements can vary from being very simple to very complex.
Mission:
Vision:
- 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
- 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.
We thought that the vision statement points were more in depth and details in comparison to their
mission statement points when it should’ve been the other way around. The mission statement
was more abstract and broad whereas the vision statement was more clear and direct. Both
statements somewhat communicated what their goal is for the future and where the Company is
at now and we thought that both statements together did portray what the Company was trying to
achieve.
Opportunities
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 benefit 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 our supply chain engages.
substitute products. Focusing on its advertising and differentiation can increase its profits. Coke
promotes and support sustainable agriculture not only because it makes good business sense.
World population is expected to grow at 8 billion 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 and offering health
conscious products.
Threats
Pepsi is the major and primary rival of the Coca-Cola in the soft drink industry, Pepsi is 2 nd in
revenue behind the Coca-Cola, and also hit Coca-Cola in some markets. Its primary competitor
Coca-Cola also faces the tough competition from local brands in all over world such as
in Central and South America Kola Real also known as Big Cola in Mexico is giving tough
Coca-Cola is facing different regulations and policies set by government 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; by becoming health conscious and preferring substitute products.
Different studies has been conducted and found other drinks and Coke harmful if consumed
excessively.
A competitive profile matrix (CPM) categorizes a firm’s main rivals and its particular strengths
and weaknesses in relation to a design firm’s strategic position. In CPM, an organization assess
itself as well its rivals by giving rating and weights to the critical/key success factors. It then
recognizes its strategic competitive place with its major rivals. A firm which obtains superior
weighted points would have the stronger competitive place than its rivals. We will be using
weighted rating system for the construction of CPM. Some of the important steps involved in the
1. In the first column, list down all the key success factors of Coca-Cola (usually from 6 to 10).
2. In the second column, assign weights to each factor ranging from 0.0 (not important) to 1
(most important). Greater weights should be given to those factors which have greater influence
3. Now rate each factor ranging from 1 to 4 for all the firms in analysis. Here, rating 1 represents
major weakness, rating 2 shows minor weakness. Similarly, rating 3 indicates minor strength
whereas rating 4 shows major strength. It means that weakness must receive 1 or 2 rating while
The competitiveness of a Company can be assessed on the basis of its general strength rating. If
the dissimilarity among firm’s overall rating and the points of lower-rated rivals is greater than
the firm has greater net competitive advantage Alternatively, if the dissimilarity among a firm’s
overall rating and the points of higher-rated rivals is larger than the Company has net
competitive advantage.
Conclusion: In the above matrix, it demonstrates that Coca-Cola is the market leader and
dominates its rivals with highest points of 3.74. Pepsi is the runner up with 3.42 points and
Cadbury Schweppes is the weakest rival among these three with the score of 2.80. This Matrix
also shows that Coca-Cola is strong in all the aspects of rivalry and has strong position in the
market place.
use for evaluation of current business environment. The EFE Matrix is a superior instrument to
prioritize and visualize the opportunities and threats that a Company is facing. An external factor
in the EFE Matrix comes from social, political, legal, economic and other external forces.
1. In the first column, lists down all the opportunities and threats. EFE matrix should
2. In the second column assign weights to each factor that ranges from 0.0 (not important)
to 1 (most important). The total weights must sum up to 1.00 (It should be noted that the
importance of weights depend upon the probable impact of factors on the strategic
3. In the column three, rate each factor (ranging from 1 to 4) on the basis of Company’s
response to that factor. (Here, 1 shows poor response, 2 shows average response, 3 shows
4. In the column four, calculate the weighted score by multiplying the each factor’s weight
by its rating.
5. Find the total weighted score by adding the weighted score for each variable.
External Factor Evaluation Matrix of Coca-Cola Company
By adding the weighted score of various opportunities and threats of Coca-Cola Company, we
get the total weighted score of 3.05. Here it should be noted that the highest possible total
weighted score of a firm is 4 whereas the lowest possible total weighted score is 1. The total
weighted score remains in the limit of 1 to 4 regardless of the total number of opportunities and
threats. Similarly, the average total weighted score is 2.5. If the total weighted score of a
1 show that firm is not able to take advantage of current opportunities or avoid external threats.
Conclusion: In the case of Coca-Cola Company, the total weighted score is above average, which
means that the Coca-Cola Company strategies are effective and the Company is taking advantage
of existing opportunities along with minimizing the potential adverse effects of external threats.
All organizations have strengths and weaknesses in the functional areas of business. No
enterprise is equally strong or weak in all areas. To determine a firm’s strengths and weaknesses
requires gathering and assimilating information about the firm’s management, marketing,
FINANCIAL STATEMENT
Period Ending Dec.31,2006 Dec.31,2005 Dec.31,2004
$ (in Percent $ (in Percent $ (in Percent
thousands) % thousands) % thousands) %
Income statement
Revenue 24,088 100.0% 23,104 100.0% 21,962 100.0%
Cost of goods sold 8,164 33.9% 8,195 35.5% 7,638 34.8%
Operating expenses 9,616 39.9% 8,824 38.2% 8,626 39.3%
Interest Expense 220 0.9% 240 1.0% 196 0.9%
Tax expense 1,498 6.2% 1,818 7.9% 1,375 6.3%
Income from cont. operations 5,080 21.1% 4,872 21.1% 4,847 22.1%
Net income 5,080 21.1% 4,872 21.1% 4,847 22.1%
Balance sheet
Cash 2,440 8.1% 4,701 16.0% 6,707 21.4%
Short term investments 150 0.5% 66 0.2% 61 0.2%
Accounts receivables 2,704 9.0% 2,281 7.8% 2,171 6.9%
Inventory 1,641 5.5% 1,424 4.8% 1,420 4.5%
Current Assets 8,441 28.2% 10,250 34.8% 12,094 38.6%
Long term investments 6,783 22.6% 6,922 23.5% 6,252 20.0%
Net fixed assets 6,903 23.0% 5,786 19.7% 6,091 19.4%
Other assets 7,668 25.6% 6,469 22.0% 6,890 22.0%
Total assets 29,963 100.0% 29,427 100.0% 31,327 100.0%
Current Liabilities 8,890 29.7% 9,836 33.4% 10,971 35.0%
Total liabilities 13,043 43.5% 13,072 44.4% 15,392 49.1%
Stockholder's equity 16,920 56.5% 16,335 55.5% 15,935 50.9%
Cash flow
Cash flow from operations 5,957 6,423 5,968
Dividends paid 2,912 2,679 2,390
Interest paid 220 240 196
Per share
Market price at year end 48.25 40.31
Earnings per share - basic 2.16 2.04
RATIO ANALYSIS
Growth ratios
Sales growth 4.30% 5.20%
Income growth 4.30% 0.50%
Activity ratios
Receivable turnover 9.70% 10.40%
Inventory turnover 5.30% 5.80%
Profits ratios
Profit margin 21.10% 21.10%
Return on assets 17.10% 16.00%
Return on Equity 30.50% 59.60%
Dividend Payout ratio 57.30% 55.00%
Price earnings ratio 22.30 19.80
Liquidity ratios 0.95 1.04
Current ratios 0.60 0.72
Strengths:
1. The Coca-Cola Company operates in over 200 countries and product line has over 400 brands
– is the world’s largest beverage Company.
7. Joint venture between The Coca-Cola Company and Nestle has resulted in the establishment
of Beverage Partners Worldwide (BPW).
8. Coca-Cola has formed a strong partnership with McDonalds, with McDonalds becoming their
largest customer.
Weaknesses:
3. Negative publicity in India because of water issues has led to poor brand image and hindered
growth there.
Internal Factor Evaluation (IFE) Matrix is a strategic management instrument for assessing main
strengths and weaknesses in useful areas of a Company. IFE matrix also gives a foundation for
recognizing and assessing associations among those parts. The IFE matrix is utilized in strategy
1. In the first column, lists down all the strengths and weaknesses. IFE matrix should
(most important). Greater weights should be given to those internal factors which gave
greater influence on the organizational performance. The sum of all weights must equal 1
3. In the third column, rate each factor ranging from 1 to 4. Here, rating 1 represents major
weakness, rating 2 shows minor weakness. Similarly, rating 3 indicates minor strength
whereas rating 4 shows major strength. It means that weakness must receive 1 or 2 rating
4. In the fourth column, calculate weighted score by multiplying each factor’s score by its
rating.
5. Find the total weighted score by adding the weighted scores for each variable.
regardless of the total number of internal factors used in the analysis. If the total weighted score
is less than 2.5 it indicates that the organization is weak internally. On the other hand, the scores
above 2.5 show strong internal position. An internal factor could be included twice in the IFE
Conclusion: In case of Coca-Cola Company, the total weighted score is above than average, it
Business owner's challenge is to create products and services the customer values and the means
to produce and deliver those products and services in ways that are exceptional compared to the
competition. To address these challenges, a company must define business objectives and
address operational issues based on its current situation and the factors that impact its financial
and operational goals. Such decision-making processes are frequently supported by structured
Advantages
The advantages of the SWOT methodology, such as its appropriateness to address a variety of
Disadvantages
reliable, relevant and comparable data. SWOT data collection and analysis entail a subjective
process that reflects the bias of the individuals who collect the data and participate in the
brainstorming session. In addition, the data input to the SWOT analysis can become outdated
fairly quickly.
SWOT Matrix of Coca-Cola
Strengths Weaknesses
Internal - Popularity - Word of mouth
- Well known - Lack of popularity of many Coca-
- Branding obvious and easily Cola’s brands
recognized - Most unknown and rarely seen
- A lot of finance - Result of low profile or non-existent
- Customer loyalty advertising
- International Trade - Health issues
Threats Opportunities
Externa - Changing health-consciousness - Many successful brands to pursue
l attitude - Advertise its less popular products
- Legal issues - Buy-out competition.
- Health ministers - More Brand recognition
- Competition (Pepsi)
Strengths: Coca-Cola is an extremely recognizable Company. Popularity is one of its superior
is obvious and easily recognized. Things like, logos and promos shown on t-shirts, hats, and
popularity status. Some people buy coke, not only because of its taste, but because it is widely
accepted and they feel like they are part of something so big and unifying. At the other end of
the spectrum, certain individuals choose not to drink coke, based solely on rebelling from the
world's idea that coke is something of such great power. Overwhelming is the best word to
describe Coca-Cola's popularity. It is scary to think that its popularity has been constantly
growing over the years and the possibility that there is still room to grow. If you speak the words
“Coca-Cola”, it would definitely be recognized all around the world. Money is another thing
that is a strength of the Company. Coca-Cola deals with massive amounts of money all year.
Like all businesses, they have had their ups and downs financially, but they have done well in
this compartment and will continue to do well and improve. The money they are earning is
substantially better than most beverage companies, and with that money, they put back into their
own Company so that they can improve. Another strength that is very important to Coca-Cola is
customer loyalty. The 80/20 rule comes into effect in this situation. Eighty percent of their profit
comes from 20% of their loyal customers. Many people/families are extremely loyal to Coca-
Cola. It would not be rare to constantly find bottles and cases of a product such as coke in a
house. It seems that some people would drink coke religiously like some people would drink
water and milk. This is an improbable feat. Customers will continually purchase these products,
and will probably do so for a very long time. If two parents were avid Coca-Cola drinkers, this
will be passed down do their children as they grow loyal to the Company. With Coca-Cola’s
ability to sell their product all over the world, customers will continue to buy what they know
do have a variety of weaknesses that need to be addressed if they want to rise to the next level.
Word of mouth is probably a strength and weakness of every Company. While many people
have good things to say, there are many individuals who are against Coca-Cola as a Company,
and the products in which they produce. Word of mouth unfortunately is something that is very
hard to control. While people will have their opinions, you have to try to sway their negative
views. If bad comments and views are put out to people who have yet to try Coca-Cola products,
then that could produce a lost customer which shows why word of mouth is a weakness.
Another aspect that could be viewed as a weakness is the lack of popularity of many of Coca-
Cola’s drinks. Many drinks that they produce are extremely popular such as Coke and Sprite but
this Company has approximately 400 different drink types. Most are unknown and rarely seen
for available purchase. These drinks do not probably taste bad, but are rather a result of low
profile or non-existent advertising. This is a weakness that needs to be looked at when analyzing
their Company. Another weakness that has been greatly publicized is the health issues that
surround some of their products. It is known that a popular product like coke is not very
beneficial to your body and your health. With today’s constant shift to health products, some
products could possibly loose customers. This new focus on weight and health could be a
problem for the product that are labeled detrimental to your health.
Opportunities: Coca-Cola has a few opportunities in its business. It has many successful brands
that it should continue to exploit and pursue. Coca-Cola also has the opportunity to advertise its
less popular products. With a large income it has the available money to put some of these other
beverages on the market. This could be very beneficial to the Company if they could start selling
these other products to the same extent that they do with their main products. Another
opportunity that we have seen being put to use before is the ability for Coca-Cola to buy out
their competition. This opportunity rarely presents itself in the world of business. However, with
Coca-Cola’s power and success, such a task is not impossible. Coca-Cola has bought out a
countless number of drink brands. An easy way to turn their profit into your profit is too buy out
their Company. Even though this may cost a vast amount of money initially, in the long run, if
all goes to plan, it results in a large profit. Also, the Company will no longer need to worry
about this product being part of the competition. Brand recognition is the significant factor
affecting Cokes competitive position. Coca-Cola is known well throughout 90% of the world
population today. Now Coca-Cola wants to get there brand name known even better and
possibly get closer and closer to 100%. It is an opportunity that most companies will ever dream
Threats: Despite the fact that Coca-Cola dominates its market, it still has to deal with many
threats. Even though Coca-Cola and Pepsi control nearly 40% of the entire beverage market, the
changing health-consciousness attitude of the market could have a serious effect on Coca-Cola.
This definitely needs to be viewed as a dominant threat. In today’s world, people are constantly
trying to change their eating and drinking habits. This could directly affect the sale of Coca-
Cola’s products. Another possible issue is the legal side of things. There are always issues with
a Company of such supreme wealth and popularity. Somebody is always trying to find fault with
the best and take them down. Coca-Cola has to be careful with lawsuits. Health minister could
also be looked at as a threat. Again, some people may try to exploit the unhealthy side of Coca-
Cola’s products and could threaten the status and success of sales. Other threats are of course the
competition. Coca-Cola’s main competition being Pepsi, sells a very similar drink. Coca-Cola
needs to be careful that Pepsi does not grow to be a more successful drink. Other product such
as juices, coffee, and milk are threats. These other beverage options could take precedent in
some people’s minds over Coca-Cola’s beverages and this could threaten the potential success it
presents again.
The Strategic Position and Action Evaluation (SPACE) Matrix is one of the important tools to
Advantages
It is relatively easy to understand and use method as a decision aid. It has four quadrants and
each quadrant indicates which strategy a firm should adopt i.e. competitive, aggressive,
conservative, or defensive in a current position. These four dimensions are the most important
determinants of a firm’s overall strategic position. Each dimension holds many factors from
Disadvantages
However, as pointed out by Radder and Loew, there are some drawbacks in the method. For
example: While the method is applied, the factors included in each dimension are considered of
equal importance. Whilst the factors may be considered of equal importance (as a hypothesis)
one has to take into consideration the fact that most of the time, the factors under each
dimension does not have equal weights. Hence, the final result may show some differences and
this will affect the outcome of the method, i.e. the appropriate strategy of the company under
evaluation.
According to the graph above, we noticed that the Coca-Cola Company falls into the aggressive
quadrant of the SPACE matrix. It is located at the coordinates of +3.50 for x-component and a
y-component of +3.17. It shows that the company has an admirable position to use its IS in order
Conclusion: In this position Coca-Cola has set of possible strategies such as market
Grad Strategy Matrix is famous tool for alternative strategies in addition to SPACE Matrix, and
SWOT Matrix. All the firms can fall one of the GSM’s four strategy quadrants. GSM evaluation
is based on two dimensions i.e. market growth and competitive position. Each quadrant provides
the set of possible strategies in which company falls such as quadrant 2 contains market
diversification and liquidation strategies. Quadrant 4 contains the set of diversification, joint
The model allows better implementation of strategy because of the intensified focus and
Disadvantages
However, it may not be as simple as it seems, upon application to real life due to the unforeseen
factors and also complications in the business world. In addition, the relationship between
Another issue about this model is that, the grand strategy options are mostly concern on cash
management must focus on current market and achieve growth by adopting product
development, market development and market penetration strategies. The company has
abundant resources and competitive advantage through which it can achieve growth by adopting
the backward and forward integration strategies. Coca-Cola can also adopt the related
diversification strategy to reduce its risk with broad portfolio or product line. Coca-Cola can
afford to take benefit of external opportunities in many areas. It can also take risks being
Long-term objectives
Sustainability is an integral part of Coca-Cola’s 2020 Vision, their roadmap for winning
Climate Goal: To use the best possible mix of energy sources while improving energy
efficiency of manufacturing and distribution processes.