STRATEGIC MANAGEMENT

CIA III

COMPANY ANALYSIS
COCA COLA

Submitted By

Rashi Aneja

REGISTER NUMBER
2027455

Under the Guidance of

Prof. AMIT RAY

SCHOOL OF BUSINESS AND MANAGEMENT

CHRIST (DEEMED TO BE) UNIVERSITY,
BANGALORE
SEPTEMBER 2021
 STRATEGIC MANAGEMENT

CIA III

COMPANY ANALYSIS
COCA COLA

Submitted By

Rashi Aneja

REGISTER NUMBER
2027455

Under the Guidance of

Prof. AMIT RAY

SCHOOL OF BUSINESS AND MANAGEMENT CHRIST

(DEEMED TO BE) UNIVERSITY, BANGALORE
SEPTEMBER 2021
INTRODUCTION OF COCA COLA

Coca-Cola is a global leader in the beverage industry; nowadays Coca-Cola Company

provides more than 500 brands including soft drinks, fruit juices, sport drinks and other
beverages in over 200 countries or regions and serves over 1.7 billion servings each day.
Coca-Cola drink contains material that only produced in the main Atlanta factories Georgia,
United States. Then the company distributes it to other Coca-Cola factories around the world.
(Coca-Cola Offical Website)
The target market for the Coca-Cola is all age group especially male and female teenagers, it
is sold all around so that everyone can buy it and drink it. Furthermore, we could find on their
TV advertisement that they target families to choose Coca-Cola drink as favorite family
drink.

VISION OF COCA COLA

Coca-Cola's Vision serves as the foundation for the Framework, directing every area of the
organisation by referring what needs to be done to achieve long-term, rapid growth.

People: Make your workplace a great place to work where people are inspired to do their
best.

Portfolio: Include a range of high beverage brands to the world that predict and satisfy
people's needs and desires.
Partners: To establish a common, long-term worth, we must cultivate a winning network of
customers and suppliers.

Planet: As a responsible citizen, you can make a difference by supporting the development
and assistance of sustainable communities.

Profit: Enhance long-term shareowner yields while retaining our main responsibility in mind.

Productivity: Make a name for yourself as a highly efficient, lean, and quick-moving
organisation.

MISSION OF COCA COLA

The long-term mission of the company is the starting point for their Roadmap. It expresses
the company's mission and serves as the yardstick against which our actions and decisions are
measured.

• To revitalize the world

• To elicit feelings of optimism and happiness...

• Adding value and making a difference.

STRATEGIC ANAYLSIS OF COCA COLA

SWOT ANALYSIS OF COCA COLA

 STRENGTH WEAKNESS
# World's Leading Brand
# Largest Market Share # Growing Health Conscious Consumers
# Distribution Network # Numerous Brand Failures
# Good Corporate Culture # Significant focus on Carbonated Drinks
# Customer Loyalty
# Highly effective sales team .
# High Share of Targeted Markets
OPPORTUNITY THREAT
# Brand Extension # Huge Competitors
# Huge Cutsomer Base # Reducing demand for Carbonated drinks
# Growing Beverage Consumption # Water Scarcity
# More Acquisitions # Legal Requirements

PORTER’S 5 FORCES

The five forces can be used to determine the nature of the competition in the industry. In
industry i.e. Coca Cola and the conclusion from the same is used to determine the nature of
competition in this particular industry. The Porter’s Five Forces include:

Threat of new entrants and potential competitors: It has been observed that in the
beverage industry the entry barriers are relatively low. One can see the frequent emergence of
new brands in the market which are usually priced at a rate which is lower in price as
compared to Coke products. However, it cannot be denied that now Coca Cola is not seen as
a mere beverage but as a brand. Owing to this very reason it cannot be ruled out that it has
loyal customers and Coca Cola has a very significant market share for a long time.

Threat of Substitutes: It cannot be denied that there are a number of other sodas and energy
drinks in the market apart from Coke. But the threat against Coke is low due to the brand
loyalty and market reputation where it has been successfully differentiating its products
remarkably.

Bargaining power of buyers: The third which pertains to the bargaining power of the buyer
can be rated as low. It has been seen that the individual has no pressure on Coca Cola. It has
been however observed that the vending machines, convenience stores and supermarkets
given to the fact that they have not many alternatives, have low bargaining power. It should
also be pointed out here that given to the fact that people now are realizing the adverse
impacts of the carbonated drink on health, they tend to turn towards fruit juices instead of
carbonated drinks.

Bargaining power of the Suppliers: The fourth which pertains to the bargaining power with
the suppliers can be again rated as low. Coca Cola is primarily concerned with the task of
supplying either fructose or sucrose and undertakes the bottling work. As a matter of fact any
supplier would not be willing to lose a huge customer like Coca Cola.

Business Rivalry or rivalry among the existing firms: The market is essentially shared by
Pepsi and Coca Cola which are always striving for international presence. It is seen that both
the brands commit heavily to sponsoring outdoor festivals. Coca Cola resorts more to the
classical way of advertising in comparison to its rival Pepsi which basically tries to captivate
the attention of the younger generation by using Pop Stars as brand ambassadors.

CHALLENGES FACED BY THE COMPANY

The company is facing various challenges such as:

 Medicinal challenge

The beverage and the drink is said to contain the coca plant and cola nuts (a valuable
brain tonic and cure for all nervous affections, sick head-ache and melancholy among
 others). With governments across the globe and media publicizing health problems
arising from obesity and inactive lifestyles represents a significant challenge.

 The bottle challenge

The company is experiencing the problem of uniformity in its bottles with hundreds
of bottlers selling the Coca-Cola around the country. Hence this leads to know
uniformity on how the products look like.

 The diet challenge.

Two years later, Diet-Rite cola hit the market. But this time, Coca-Cola reacted
quickly. The following year, the company launched Tab.A year later, Pepsi responded
with Diet Pepsi.Eighteen years later, the year Coca-Cola introduced Diet Coke, Tab
was outselling Diet Pepsi by 23 percent.As it turned out, Diet Coke could be one of its
best-ever decisions.

 The second Pepsi challenge.

Seven years before the launch of Diet Coke, Pepsi shocked the folks in Atlanta with
its “Pepsi Challenge” advertising campaign.What was even more shocking was that
Coca-Cola’s own taste tests showed consumers preferred the taste of Pepsi 58 to 42
over Coke.A third shock occurred when Pepsi overtook Coke in supermarket sales.

 The sugar challenge.

Three years after the New Coke debacle, per-capita consumption of carbonated soft
drinks (mostly colas) reached its all-time high. Since then, it has declined every year
for 14 years in a row. On average, a decline of 1.5 percent a year.

 Unemployment
 Over the past few years, the Coca-Cola Company has seen a decrease in the demand
for the Coca-Cola product among consumers in the United States. "The company has
relied on strength overseas to counter a weak North American market that has
experienced high unemployment and low consumer confidence"

 Impact of Economic Variables on the Coca-Cola Product

With an economy that often tethers on the brink of recession, a study of the variables
that affect supply and demand of the Coca-Cola product becomes an increasingly
critical task for the Coca-Cola Company. Those who study macroeconomics are
concerned primarily with the “forecasting of national income, through the analysis of
major economic factors that show predictable patterns and trends, and their influence
on one another”. Profitability of the Coca-Cola product is affected by many
macroeconomic variables.

GLOBAL STRATEGY OF COCA COLA

 One of Coca-Cola company goals is to maximize growth and profitability to create

value for their shareholders which will also create advocacy for the brand under the
following strategies:

 Transforming coca cola commercial models to focus on coca cola customers’ value
potential and using a value-based segmentation approach to capture the industry’s
value potential.

 Implementing multi-segmentation strategies in coca cola major markets to target

distinct market clusters divided by consumption occasion, competitive intensity and
socioeconomic levels.

 Implementing well-planned product, packaging and pricing strategies through

different distribution channels.
  Driving product innovation along coca cola different product categories.

 Achieving the full operating potential of coca cola commercial models and processes
to drive operational efficiencies throughout coca cola company. (Strategy and
Competitive Advantages, 2011)

 Other effective strategies to achieve the business goals are:

 Deliver shared value

 Engage the market through storytelling and thought provoking ideas

 Be a leader in the cultural dialogue

 Create a network advantage

APPLICABLE STRATEGICAL TOOLS AND

TECHNIQUES

1. Boston Consulting Group (BCG) Matrix

The Boston Consulting Group Matrix (BCG Matrix) can be used to
analyze the different products being sold by the company in terms of
their market share, sales generated on an annual basis and the
potential for growth.
 The BCG Matrix for Coca-Cola is as follows:

Cash Cows
Cash cows are those business products which are a significant source of income for a
business entity and generate enough sales to obtain a significant market share in the local or
global industry. The market is at a mature stage for these products, nevertheless, these
products continue to generate cash for the organization. The Cola market, as a specific part of
the beverage industry has matured over the years, becoming concentrated by various
companies selling their own brand of cola. Coca-Cola as a beverage has been operating as a
cash cow for the Coca-Cola Company, as the brand is sold across 200 countries in a mature
beverage industry. A larger segment of the operations is based on finished products .The
bottling partners in different locations help in making the finished beverages available to the
market in their respective regions, enabling the organization to earn significant amount of
revenues from its finished products categories. A slowdown in sales has been a temporary
setback for the organization, however adjusting the business strategy has helped the
management to regain its firm hold in the industry.

Stars
The products that are viewed as stars are defined by the key feature of having a high market
share as compared to the other products which have a lower share in the market. The market
is still in the phase of development, therefore, the stars have the likelihood of further adding
to the existing market share and create a steady source of revenue for a business entity. The
bottled water produced by the Coca-Cola Company can be categorized as a star for the
organization. The reason for this classification is that the mineral water industry is still
viewed as a gradually evolving segment on an international scale.
Even though the company faces competition from other bottled water producers, the growing
market offers it significant opportunities to attain a large market share and expand it further
in future.

Question Marks
The products that are categorized as questions marks seem to have a dubious outlook for the
future development. These products have not thrived into the market to such as extent that
they can be recognized as stars. The market has growth opportunities, but these products have
not been able to take benefit of these opportunities in an effective manner. Minute maid is
one such example where the business units can be seen as a question mark. Even though in
some regions minute maid has been able to obtain a generous sales volume of $ 1 billion, the
brand has not been able to gain widespread popularity as the coke (Arnett, 2015). Apart from
minute maid, the sales volume of Diet coke doesn’t present favourable prospects for the
future. Recent data shows that the brand is losing its popularity. The health conscious
consumers formulate a significant part of the industry, suggesting the growth potential, but
diet coke has not been able to tap this market potential to gain sustainable revenues.

Dogs
The products that are included in the category of dogs are a part of mature industry, thus the
chances of further growth are limited. Another issue that raises question about the feasibility
of these business units or products for the company is that they do not offer significant
revenues to the organization. Moreover, the future outlook of these products is also bleak,
necessitating the evaluation of the viability of continuing business operations in this domain.
Coca-Cola life is a brand that has been launched with the aim of targeting the market that is
seeking low calorie soda. The brand has not been able to perform well as depicted through
the declining sales of this business unit. The soda industry has matured over the years,
limiting the growth prospects for new products. Murphy (2015) has mentioned that in an
effort to keep the market share of the leading brand of coke (which is cash cow for the
organization), coke life was presented to the market. However, it was not readily accepted by
the targeted market, leading to low sales of the new brand. It has been further stated that the
decision to launch the low calorie version of coke didn’t take the market needs into
consideration, which has resulted in the brand becoming an initiative with low market share.

2. Blue Ocean Strategy (BOS)

The blue ocean strategy seeks to bring differentiation to organizations and brands like
Coca-Cola to create awareness and presence in a new market place and create demand
amongst consumers. The blue ocean strategy focuses on creating demand in the
uncontested market space, and by doing this, it makes the competition unrelated and
irrelevant. Through the blue ocean strategy, industry players like Coca-Cola are able to
reconstruct the market boundaries as well as the industry structure through their strategies
and actions. Under the blue ocean model and framework, the industry structures are
assumed to be flexible, and not rigid.

With Coca-Cola, the blue ocean model and framework has allowed the company to
explore new market spaces that have not been competitive, or actively utilized by players
existing in the present business environment. By doing so, Coca-Cola has been able to
create new demand, rather than fight over and encroach existing competitive space. In
doing so, Coca-Cola has been able to experience rapid growth as well as enjoy increased
profits. When Coca-Cola adopts the blue ocean strategy, it changes the rules of the game
and eradicates the competition – rendering them unimportant, and irrelevant factors of the
environment.

ERRC GRID OF COCA COLA

Eliminate Raise

-Coca-Cola identifies and shortlists the -identify the factors that it wants to rise
factors through which a given industry well above the industry’s average in its
has competed over a long period of own settings and operations
time, and which may be eliminated -give edge & sustainable advantage
now.
-for example, obsolete technology,
mundane operational processes, and
 stringent human resource policies.

Reduce Create

-Coca-Cola assesses and reviews a - Coca-Cola is able to develop and

given industry identify strategic factors and capacities
- identifies factors and aspects that it that are new to the industry at large
should reduce in its expansion plans to -maintain & control costs
be able to maximally benefit from -offer high value to buyers
untapped market spaces and related
opportunities.
-These factors are reduced
considerably in comparison to industry
standards.

3. Bowman’s Strategy Clock

 The Bowman Strategy Clock looks at product/ service positioning in a market against
price and perceived quality. There are 8 points on the clock depicting a trade-off between
price and perceived product/service quality.

The clock therefore allows companies to critically access their

strategic positioning of the brand and to also determine the position of
their competitors.

 Low Price
Low price is a strategic position on the Bowman’s clock. The aim of the low-price strategy is
to be a cost cutter and offer exponential savings to the consumer. To achieve market
penetration, coca cola charges lowest price. Coke also uses the promotional pricing strategy.
Coca Cola has offered promotional prices as often as possible. In store that offer Coca-Cola,
costs are regularly incidentally valued underneath the rundown cost to build short-run deals.
Particularly on some event Coca Cola diminishes its rates like in Ramadan Coca Cola
decreases its rate unto 5 Rupees on 1.5 litre container. It gives the item a feeling of
criticalness and customers buy the item in view of the lower cost.

Hybrid
The hybrid stage on the Bowman’s strategy clock works well for products that are well-
known and marketed. That is because the hybrid product beyond the low price also has some
perceived inbuilt value. For such products the brand can charge a slightly premium price,
given that there is loyalty to the product or the product has existed for a number of years. For
example the Coca Cola brand of beverages is well-known and beloved. Given that situation,
Coca Cola can command a slightly higher price than competing brands. Brands in the hybrid
category are still seen as low-cost and do not necessarily advertise themselves as luxury
brands. A mix of loyalty, popularity and accessibility is needed for products/services deemed
as hybrid to succeed.

Differentiation
The differentiation stage of the Bowman’s Strategy clock, the perceived value of the product
(or service) must clearly be demonstrated, whether it is correct packaging, added nutritional
benefits etc. It must be clear enough that consumers are willing to pay a premium for that
type of product. Coke differentiation strategy is for development of product (soft drinks) and
services (delivery) to offers unique feature & attributes. Coca Cola maintains their
differentiation from other soft drinks by spending more than 20% of their advertisement
budget to only differentiate their product. It has positioned successfully with following
standards

Corporate repute for innovation and quality Communication of product strength perceived by
users Enjoy & fun symbol this strategy is a good choice for Coca-Cola, however it can be
detrimental if they are not careful.

In the beverages industry, sparkling water commands a higher price and is innately distinct
than other brands or forms of packaged water. This allows sparkling water to be highly priced
and served in niche places such as 5-star hotels.

COCA COLA STRATEGY FOR EVERY LOCAL ENVIRONMENT

The Coca-Cola Company is building a networked global organisation, combining the power
of scale with the deep knowledge required to win locally. Coca Cola has created 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
is supported by the company’s newly created Platform Services organisation, which will
provide global services and enhanced expertise across a range of critical capabilities.

Vision at the new Coca-Cola India is to craft the brands and choice of drinks that people love.
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.

Strategic investment of building long-term presence in India is intact. To capture this growth
potential, coca cola journey forward will require new investments, new capabilities and new
business models, all supported by an ecosystem of new local partnerships. Coca cola will
continue to explore new opportunities and new business models that create value locally in-
line with our endeavour to be a locally relevant, consumer centric company. Coca cola are
committed to deliver sustainable growth and create shared value for our local partners,
customers, consumers and communities alike.

Coca-Cola had divested its company-owned bottling operations in the northern region to
franchise partners in 2019.

Coca cola are on course to building a stronger and more sustainable local business. The re-
alignment of bottling operations in the northern region was designed to build regional scale,
stimulate investments and growth in the northern part of the country. This realignment
optimised existing capacities, supply chain, brings further investments and improves
distribution routes through contiguous territories.

Coca-Cola India had to initiate voluntary separation programme in India last year.

Coca cola is expanding its digital presence through partnerships with multiple customer
platforms. Coca cola is seen increase in digital commerce, and coca cola is going to
concentrate our efforts in that area significantly both in urban and rural markets. An example
is coca cola tie-up with Common Services Centre, coca cola has ensured rural last-mile
delivery by listing all its popular products on their Grameen e-store platform — thereby
building least-expensive solutions to essential hydration needs.

References

http://thefreedictionart.com/
http://en.academic.com/
http://scribd.com/
https://www.coca-colacompany.com/