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PROJECT

Risk Management
Submitted To: Sir Tahseen Mohsin Submitted By: Rana Aamir Saleem Adnan Sajid M.Rizwan Virk 100645-007 100645-011 100645-010

M.Waqar Akram Gujar 100645-017 Programme: M.Com (Batch-6) 3rd Semester

University Of Management & Technology.

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ACKNOWLEDGEMENT
First and foremost, we are grateful to µALLAH ALMIGHTY¶, most beneficent and the most merciful Who made us able to complete our given project successfully. We would also like to pay tribute to the benefactor of humanity µHOLY PROPHET¶ (P.B.U.H.), Who gave us complete knowledge on every aspect and field of life. In short of words, to express our modest gratitude and recognition to cuddly and loveable µPARENTS¶, who at each and every moment prays for our success. We are also deeply thankful to our µTEACHERS¶ to have taught us from childhood to still especially µSIR.TEHSEEN MOHSIN´, who taught us µFINANCIAL RISK MANAGEMENT´. Thank you all, without you this would have not been possible.

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DEDICATION
We dedicate this report to our parents and friends in recognition of their worth and to our teachers who are the guiding force for us and it is their effort and hard work that showed us the path of success and prosperity which would be there for us for the rest of our life. Our thanks to all those who have generously contributed their theoretical knowledge to this report including our teachers. Without their understanding and support, completion of this work would not have been possible. We hope people find this report useful and the subject matter adds to their knowledge. ³Keep your dreams alive. Understand to achieve anything requires faith and belief in yourself, vision, hard work, determination, and dedication. Remember all things are possible for those who believe.´

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TABLE OF CONTENTS
Introduction Vision Statement Mission Statement & Share Values Goals & Coke History In Pakistan Industry Analysis Port Folio Analysis Quantize Analysis Global Unit Sales of Coca Cola Region wise Consumption of Coca Cola Quantitative Factor Competitors SWOT Analysis Expectation for the coming year Conclusion Bibliography . . 1 1 2 3 5 9 11 12 13 16 23 26 28 28 29

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INTRODUCTION
Founded in 1886, the coca-cola company is the world¶s leading manufacturer, marketer, and distributor of nonalcoholic beverage concentrates and syrups. The company¶s corporate headquarters are in Atlanta, with local operations in over 200 countries around the world. Although Coca-Cola was first created in the United States, it quickly became popular wherever it went. Our first international bottling plants opened in 1906 in Canada, Cuba and Panama, soon followed by many more. Today, Coca-Cola has a portfolio of more than 3,000 beverages. Coca-Cola has 92,400 employees worldwide. More than 70 percent of our income comes from outside the U.S., but the real reason we are a truly global company is that our products meet the varied taste preferences of consumers everywhere.

VISION STATEMENT
Our vision guides every aspect of our business by describing what we need to accomplish in order to continue achieving sustainable 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 satisfy people's desires and needs.  Partners: Nurture a winning network of customers and suppliers, together we create mutual, enduring value.  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.  Productivity: Be a highly effective, lean and fast-moving organization.

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MISSION STATEMENT
Mission statement is a statement of organization¶s purposes that what it wants to accomplish. In order to achieve mission of increasing market share and maintaining good relations with our customers all over the world, we wish to create value for all the constraints we serve, including our consumers, our bottlers, and our communities. The Coca Cola Company creates value by executing business strategy guided by four key beliefs:  Customer is king; Customer demand drives everything we do.  Brand Coca Cola is the core of our business.  We will serve consumers a broad selection of the nonalcoholic ready-to-drink beverages they want to drink throughout the day.  We will be the best marketers in the world. Everything we do is inspired by our enduring Mission: 
To Refresh the World...in body, mind, and spirit.  To Inspire Moments of Optimism...through our brands and our actions.  To Create Value and Make a Difference...everywhere we engage.

SHARED VALUES
Our values serve as a compass for our actions and describe how we behave in the world.        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

OBJECTIVE OF COCA COLA
The company has sales based objective .Everything else (marketing plan, advertising plan, production etc.) is derived from this objective. Currently the companyµs objective is to ³Increase the volume of sales up to the maximum level as much as possible during the current fiscal year.´

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The company sets its objective keeping in view the past performance, Historical trends, current market position, economic condition, macro environment and micro environment factors, social values, market size and growth rate ,future expectations and predictions

GOALS OF COCA COLA
All CCBPL plants setup their own goal to achieve the objective.The company goal is ³To increase sales volume and gain market leadership in Lahore.´

Executive Summary
In the project of coca cola Company, as a manufacturing company. We work at different areas. Here, we do industrial review of coke; effectiveness and efficiency of the coke processes, their technology, and their man power utilization and also check their other resources. We evaluate their need facility either they have need for the loan or not and also do the SWOT analysis of the company to check the strengths and weakness of the company. We calculate income to repayment amount ratio and also the amount of collateral ratio etc. We do the Qualitative and also Quantitative analysis of the coca cola Company and we conclude that the company has need of facility for this project.

COKE HISTORY IN PAKISTAN
³To provide Coca-Cola at arms µlength´ The Coca-Cola Company began operating in Pakistan in 1953. Coke, Fanta and Sprite are the brands with whom Coca-Cola is operating in Pakistan. The Coca-Cola System in Pakistan operates through eight bottlers, four of which are majority-owned by Coca-Cola Beverages Pakistan Limited (CCBPL). The CCBPL plants are in Karachi, Hyderabad, Sialkot, Gujranwala, Faisalabad, Rahim Yar Khan, Multan and Lahore. The Coca-Cola System in Pakistan serves 70,000 customers/retail outlets. The Coca-Cola System in Pakistan has nearly 3,000 people working constantly for the company. During the last two years, The Coca-Cola Company in Pakistan has invested over $130 million (U.S) and coke has successfully provided 56 years of dedicated service to its customers in Pakistan. Since the beginning of Coke Company the firm

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has been continuously changing its slogans and that¶s a very creative idea to get the attention of the customers. . Here we would like to include some of the popular slogans of coke since the coke journey started.                1886 Drink Coca-Cola 1908 Get the genuine 1923 Enjoy thirst 1934 When it's hard to get started, start with a Coca-Cola 1942 The only thing like Coca-Cola is Coca-Cola itself 1956 The friendliest drink on earth 1963 Things go better with Coke 1993 Always. Coca-Cola 2001 Life is Good 2003 Jo Chaho Ho Jaye Coca Cola Enjoy 2004 Flight Of Delight 2005 Galay Delicious Taste 2006 Thanda matlab coca cola 2007 khaly pily jila coca cola 2008 Aja jashan mena ly

TODAY
Today CCBPL is operated directly under the supervision of the Coca-Cola International based in Atlanta Georgia State___ USA .It owns 8 plants all around in Pakistan. Coca Cola Company offers
the brand range as Coca Cola, Diet Coke, Fanta, Sprite and Kinley water in Pakistan. 

Coca-Cola introduced in Pakistan  Fanta introduced in Pakistan

1953 1965

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Sprite was introduced  Diet Coke & Fanta Lemon

1972 2001

Type Manufacturer Founder(s) Country of Origin Introduced Area served Color Flavors

Soft Drink (Cola) The Coca- Cola Company
John S. Pemberton

Related Products

Employees Servings per Day Website

United States 1886 Over 200 countries Caramel E-150d Cola, Cola Green Tea, Cola Lemon, Cola Lemon Lime, Cola Lime, Cola Orange and Cola Raspberry. Pepsi, Irn Bru, RC Cola, Cola Turka, Zam Zam Cola, Mecca Cola, Virgin Cola, Parsi Cola, Qibla Cola, Evoca Cola, Corsica Cola, Breizh Cola, Afri Cola 92,400 1.6 Billion www.coca-cola.com

INDUSTRY ANALYSIS 

     

POPULATION: CHILDREN: ADULTS: CHILDREN EQUITY: ADULT EQUITY: TOTAL TARGET MARKET: GROWTH RATE:

176,242,949 (July, 2009 est.) 37.2% (65,607,612) 62.8% (110,680,572) 60% (14,643,619) 40% (27,802,960) 42,446,579 1.828% 27.74 births/1,000 population 8 deaths/ 1,000 population 

BIRTH RATE:  DEATH RATE:

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NET MIGRATION RATE: 0-14 YEARS: 15-64 YEARS: 65 YEARS AND OVER:

1.24 migrant(s) / 1,000 population 37.2% ( male: 33,739,547 / female: 31,868, 065) 58.6% (male: 52, 849, 607 / female: 50, 378, 198) 4.2% (male: 3,475,927/female: 3,931,605)

Beverages are a major consumer able item and there is a huge demand and potential in this market particularly the nonalcoholic ready to drink soft drink. The nonalcoholic ready to drink beverage has grown year on year and as a result, the pie is growing bigger every year. The market analysis investigates both the internal and external business environment. It is vital that Coca Cola carefully monitor both the internal and external aspects regarding it¶s business as both the internal and external environment and their respective influences will be decisive traits in relation to Coke¶s success and survival in the soft drink industry. 

INTERNAL BUSINESS ENVIRONMENT
The internal business environment and its influence is that which is to some extent within the business¶s control. The main attributes in the internal environment include efficiency in the production process, through management skills and effective communication channels. To effectively control and monitor the internal business environment, Coke must conduct continual appraisals of the business¶s operations and readily act upon any factors, which cause inefficiencies in any phase of the production and consumer process. 

EXTERNAL BUSINESS ENVIRONMENT
The External business environment and its influences are usually powerful forces that can affect a whole industry and, in fact, a whole economy. Changes in the external environment will create opportunities or threats in the market place Coca cola must be aware off. Fluctuations in the economy, changing customer attitudes and values, and demographic patterns heavily influence the success of Coca Cola¶s products on the market and the reception they receive from the consumers.  COMPETITION
All over world there are two soft drink giants, Coke and Pepsi. The competition between two companies has always been neck to neck. Both these companies keep on try to take lead in terms of pricing, packaging, promoting and placing. In Pakistan recently a few other beverages are also introduced such as Mecca-Cola, Shandy Cola and Amrat-Cola but currently these soft drinks are not a threat for coke due to their very low market share and secondly due to brand loyalty of customers for coke.

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POLITICAL/LEGAL These are uncertainties that are extremely variable in the political conditions of Pakistan. Constant political instability does affect the company in terms of building new relations with new Governments all the time.  SOCIAL AND CULTURAL FACTORS The company has to be very careful in the implementation of its promotional campaigns, since the social cultural environment of Pakistan is very conservative and any suggestive advertisements usually face a lot of negative reactions on the part of the consumer.  SOCIAL FACTORS: Social factors include consumer¶s family, small groups and status. Family members can affect buying behavior in such a way that if number of children is more in a family than the elders, then the children choice can matter a lot at the time of soft drink purchase. On the contrary, sometimes people go for the product that shows their status in society. CULTURAL FACTORS: Every group and society has its own culture. Cultural factors affect coke purchasing massively. Different communities and groups of people have reshaped Pakistan¶s culture. In recent years the Bahar/ Basant festival in Punjab specially become important part of our culture in which sales of coke go very high. Soft drink is purchased in bulk for the parties and other occasions.  

PERSONAL FACTORS Buyer¶s decision is also influenced by personal characteristics such as buyer¶s age and life cycle stage, occupation, personality and self-concept. Age and lifecycle stage means that people taste and way of living changes with passage of time. Lets say in earlier stage of life if a person¶s best choice for soft drink was Coke classic but as he proceeds with his life, way of thinking and style may change. He may not opt for classic coke anymore and might be more interested in diet coke. Occupation matters a lot when consumer is indulge in buying. If consumer is a student by occupation he will certainly go for returnable bottle of or may be disposable bottle of 25 RS but most probably not for the coke CAN which is high in price. Where as if the consumer is a business executive who is financially strong will prefer more the coke classic can or diet coke can. This change is mainly because of occupation.

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PSYCHOLOGICAL FACTORS A person¶s buying behavior is further influenced by major psychological factors such as motivation, perception, learning and self benefits. Motivation is basically a drive that¶s sufficiently pressing a person to seek satisfaction of the need. Sometimes a person has no intention to buy a particular product but what happens is that the group of people around him motivates him motivates. If a person is highly satisfied with the taste of ³diet coke´, he may share his experience with another person and as a result the latter person might get motivated by his opinion and end up buying ³diet coke´ In some cases, consumers have descriptive thoughts and beliefs about something. It may change with the passage of time because mostly all the self beliefs are secondary and not the core ones.  OTHER FACTORS Other factors like the Government rules, regulations and technological advancements have had no significant effect on the product and the company.

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PORTFOLIO ANALYSIS
A tool by which the management identifies and evaluates the various businesses that makes up the company. Generally there are two approaches of doing the portfolio analysis & Coca Cola¶s portfolio analysis is done with both the methods & the results are as follows:

BCG (BOSTON CONSULTING GROUP) APPROACH
In the BCG approach, a company classifies all its Bus according to the growth share matrix.

Coke is one of the main product lines of the Coca Cola Company. It is the one which is giving maximum revenues to it by different products in this line. Here we have classified some of its major products in the BCG matrix on the basis of their fame and liking of the people.

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STAR
Coke Classic is the basic product through which the Coca Cola Company got the fame. It is one product, which gives the maximum revenue from all over the world. It is one flavor, which has the maximum consumers all over the world. Coke has already worked a lot on it by launching new flavors in it, but still it is a product they can turn as famous as coke Classic.

CASH COWS
Fanta and Sprite are the products, which the Coca Cola Company can never think of stop producing. It is the one which make the coke company a huge success; it was one product which gives billions of dollars as revenue from world over. Whenever the company thinks of launching its product in a country the first product they launch is coke classic as they know that if don¶t work here then nothing else can.

QUESTION MARK
Products that are still not a big hit as they haven¶t consumed much time yet. Sprite 3G, Sprite Zero, Diet Coke and Kinley are the examples of these question marks as the question marks as they have not taken much time yet to get a hold of market & not even the large percentage of the people have tasted it. So it needs time to be fully tested by the company & the company needs to think whether it should continue the production or should divert to something new.

DOGS
A product that has not worked good or a product which has been a source of loss. flavored Fanta is one product that was not a big hit. Even it¶s not a long period which flavored Fanta has consumed but still there are signs that it won¶t be a success. So it¶s better for the company to get rid of it.

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DEPARTMENTS
Every organization is made up of different departments, each of these departments help Coca Cola achieve their objectives. As Coca Cola is a large multinational company, the amounts of departments are huge. Each country has their own Head Office and departments. Coca Cola is geographically split into five geographic operating segments, also known as strategic business units (SBU's). The six SBU's are North America, Africa, Asia, Europe, Middle East and finally Latin America. If all departments perform in the correct way then that will continue the success of Coca Cola. There are 6 functional departments within Coca Cola, these are:  Marketing  Finance  Packaging  Sales  Research and development  Administration

Quantitative analysis:
Coca Cola is now one of the largest corporations in the world, with a global workforce of over 90,000 and revenues of $31.9 billion in revenues in 2008. Over the years, the brand equity of the Coca-Cola trademark, as well as that of other Coca Cola-produced brands, has established Coca Cola as a prominent figure in the non-alcoholic beverage industry and allowed the company to keep both revenues and profits high.

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Sales and Income Data in Millions Net Sales Net Income (Profits) Units sold in Billions

2004

2005

2006

2007

2008

$21,742 $4,847 19.8

$23,104 $4,872 20.6

$24,088 $5,080 21.4

$28,857 $5,981 22.7

$31,944 $5,807 23.7

Quarterly Earnings: 1Q2009 In the first quarter of 2009, the Coca-Cola Company posted revenues of $7.169 billion, a 3% decrease from 1Q 2008 figures; net income fell 10% to $1,348 billion. Although sales volumes actually rose 7% during the quarter, the Coca-Cola Company was negatively impacted by the dollar's strengthening against the euro, Brazilian real, Mexican peso, and South African rand. 2Q2009: In the second quarter of 2009, the Coca-Cola Company posted revenues of $8.267 billion, an 8.6% decrease from 2Q2008 figures; net income grew 43% to $2.037 billion. Although the company managed to grow worldwide case volume by 4% (with especially important increase of 33% in India and 14% in China), adverse fluctuations in the foreign exchange caused the decrease in revenue. On a currency neutral basis, revenues grew by 4% during 2Q2009, as pricing remained constant during the year. The growth in net income is deceptively large, as the 2008 figure includes an $843 million, or $0.40 per share, charge due to changes in the company's accounting policy of its equity investments in its bottlers. Ignoring this charge, net income would've fallen by 12%.

GLOBAL UNIT SALES OF COCA COLA
The global unit sale of the Coca Cola Company is increasing from last years. The data of the global unit sale of the Coca Cola Company can be represented by the following chart.

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unit sale in billions
24 23 22 21 20 19 18 17 2004 2005 2006 2007 2008 19.8 20.6 unit sale in billions 21.4 22.7 23.7

So there is a positive growth in the market of Coca Cola Company. There is a worldwide volume increase with strong international growth. This is only due to the innovative marketing programmers, which has deepened the relationship of the customers and Coca Cola. The financial health and success of their bottling partners is a critical component of the Coca Cola Company¶s ability to build and deliver leading brands. In 2008, the company had worked with their bottlers to turn good intentions into reality by improving the system economics. The results in 2008 reflect this steadily improving and mutually constructive relationship between the Company and their bottling partners. The main reason behind this relationship is to continue realizing shared opportunities for growth, with closer coordination of operations including customer relationships, logistics and production.

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REGION WISE CONSUMPTION OF COCA COLA
Coca Cola is the world renowned soft drink and the company is currently operating throughout the world. The world wide total is 23.7 Billions. Review according to the regions is as follows:So the volume is least in Eurasia & Africa and the most in Latin America. From this data we can find out that the customers of Coca Cola are increasing which is shown the company¶s per capita income.

Region wise Consumption of Coca Cola

15% 3.555 billion cases 27% 6.399 billion cases Latin America North America 4.029 billion cases Europe Pacific Eurasia & Africa 17% 4.029 billion cases 24% 5.688 billion cases

17%

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WORLDWIDE
10%

Coca Cola 30% 60% Pepsi Others

IN PAKISTAN
10%

Pepsi Coca Cola 36% 54% Others

On global level Coca-Cola is the most popular brand and market leader controlling 60% of market share. In Pakistan Coca Cola is the market follower but still in a very strong and stable position holding 36% of the local market with a growing and increasing market share every year.

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International financial report:
This company is financially very strong. It is due to the strong finances, the company is still surviving the ups and down of the business world. The financial report of Coca Cola Company of the year 2009 and 2010 along with the percentage change is as follows. Year Ended December 31, (In millions except per share data, ratios and growth rates) 2010 2009 %

Net operating revenues Operating income Net income Net income per share (basic) Net income per share (diluted) Net cash provided by operating activities Business reinvestment Dividends paid Share repurchase activity Free cash flow Return on capital Return on common equity Unit case sales (in billions) International operations North America operations Worldwide

31,944 8,446 5,874 1.601 1.601 4,110 (963) (1,791) (277) 3,147 26.6% 38.5% 12.5 5.3 17.8

28857 7,252 6,027 0.882 0.882 3,585 (779) (1,685) (133) 2,806 16.2% 23.1% 11.9 5.2 17.1

1% 45% 82% 82% 82% 15% 24% 6% 108% 12% 5% 2% 4%

2009 basic and diluted net income per share included a non-cash gain of $.02 per share after taxes, which was recognized on the issuance of stock by Coca-Cola Enterprises Inc., one of the equity investors of this company. 2010 basic and diluted net income per share includes the following charges: y y y y $.24 per share after income taxes related to an organizational Realignment. $.19 per share after income taxes related to the Company's portion of charges recorded by the investors of the company. $.16 per share after income taxes related to the impairment of certain bottling, manufacturing and intangible assets. $.05 per share after income taxes related to the settlement terms of a discrimination lawsuit.

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Quantitative Factors Financial Risk Management

Overview
Beverages are considered to be more risky and the business addresses different types of risks involved like market, credit, liquidity and operational risks. Coca cola management no doubt has taken sufficient measures in order to mitigate risk in all aspects to a greater extent. Let¶s see these risks factors in detail. Market Risk Market risks deals with the unfavorable fluctuations in the cash flows on account of significant changes in the market values. The potential market risk deals with the 1) 2) 3) 4) Fuel Price Risk Currency Risk Interest rate Risk Other Price Risk

Fuel Price Risk: As the fuel prices are highly unpredictable and in spite of forecasting it is very difficult to manage fuel price risk. Coca cola management adopted a reasonable measure to hedge fuel price risk. The management hedges its fuel price risk by entering forward contracts in derivative market. Currency Risk: Currency risk relates with the unfavorable fluctuation in the price of financial instruments with the change in foreign exchange rates. Coca coal¶s revenue comes from different currencies that are why fluctuations in foreign exchange rates can be adversely affect on corporation earning. More the corporation has borrowed a substantial part of borrowing from foreign currencies like Great Britain Pound (GBP), US dollar and Saudi Riyal. The fluctuations in foreign exchange rates can impact in both way, negatively and positively.

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Risk Management in the Corporation To handle the adverse impact on financial soundness of the corporations, the management always looks a sharp look in the prices of foreign currencies in order to retaliate and mitigate any currency risk arising through market conditions. The corporations also use its foreign receipts to meet its foreign obligations. The following table will demonstrate the effects of currency rate affects; will result in a financial loss in the last couple of years.

Particulars

2009 (000) 1,113,300 20,220 44,660 1,178,180

Changes in Rate +5 in USD +5% in GBP +5% in SAR

2008 (000) 1,166,970 20,120 3,450 1,190,540

Impact of loss due to Change in USD rate Change in GBP rate , loss impact on before tax Change in SAR rate , loss impact on before tax Total

The table is representing that the corporations is more need to take measure to hedge risks in order to avoid loss. There is a stringent need of making forward commitments in order to hedge risks. Interest Rate Risk Interest rate risk defines the fluctuation in the value of financial instrument due to the rapid changes of market interest rates; London interbank offer rate, Karachi interbank offer rate etc. the corporation has obtained long term borrowings. These borrowing that are obtained by corporation through internal and external financial institutions that is affected when the interest rate goes up. In other words, corporation is exposed to risk in terms of long term borrowing and bank balances. In this way cost of funding can be increased and interest rate risk will increase, by which the impact will lead to reduction in profitability of coca cola. Risk Management in the Corporation Coca cola¶s management has taken according to data available in the annual report 2009, certain measures in the form of financial derivatives to hedge interest rate risk

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Sensitivity Analysis for Cash Flows

Particulars

KIBOR December 2009 December 2008

LIBOR December 2009 December 2008

Change in interest rate Effect on Loss Before Tax Change in interest rate Effect on Loss Before Tax

+1% Rs (000) (386,728) -1% 386,728 287,610 233,285 (287,610) (233,285)

+0.25 % Rs (000) (237,435) -0.25% 237,435

The table is clearly depicting the resultant change in the amount of cash flows in case of positive and negative fluctuations in the interest rates.

Other Price Risk The other price risk is arises due to changes in the fair value of future cash flows of a financial instrument other than the currency and interest rate risk. At now the corporation is not significantly exposed to price risk because most of its investments are in subsidiaries, associated companies and joint venture which are stated at cost. Liquidity Risk If an organization feel difficult meet its obligation at the scheduled time, this explains managing the liquidity risk. In this regard we will evaluate whether the corporation by observing that whether it is maintaining sufficient cash balances for meeting short term obligations and working capital requirements. For this we will examine its schedules of future obligations. We need here to compare between two years long term and short term financing for assessing the trends of improving or deteriorating.

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2009 Long term Financing Term Finance & Sukuk Certificates Liabilities Against Assets Subject to finance Lease Trade & Other Payables Accrued Interest (profit) Short term Borrowing Total

Weighted Average Rate of Interest
5.91% 10.22%

Less than 1 Year (000)
7,095,953 6,297

1-5 years
25,056,586 19,599,516

More than 5 Years
11,621,895 -

Total (000)
43,775,434 19,605,795

2.62% 13.50%

10,568,706 20,330,967 1,845,592

41,540,459 -

27,767,691 -

79,876,856 20,330,967 1,845,592 28,684,514 194,119,158

13.50%

28,684,514

2008 Long term Financing Term Finance & Sukuk Certificates Liabilities Against Assets Subject to finance Lease Trade & Other Payables Accrued Interest (profit) Short term Borrowing Total

Weighted Average Rate of Interest
3.68% 12.50%

Less than 1 Year (000)
11,697,092 -

1-5 years
13,126,846 12,430,143

More than 5 Years
-

Total (000)
24,823,938 12,430,143

2.51% -

9,762,644 19,726,002 1,475,456

45,534,568 -

27,974,758 -

83,271,970 19,726,002 1,475,456 30,500,062 172,227,571

12.34%

30,500,062

These graphs are representing the obligations that PIA will have to make according to terms and conditions. By sketching diagrams we can better compare the trends.

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16.00% 14.00% 12.00% 10.00% 8.00% 6.00% 4.00% 2.00% 0.00%

Obligations due Within a Year
Obligations Less than 1 Year 2008 Short term Borrowing Accrued Interest (profit) Trade & Other Payables Subject to finance Lease Liabilities Against Assets Term Finance & Sukuk Certificates Long term Financing 0 6,297 11,697,092 7,095,953 9,762,644 10,568,706 1,475,456 1,845,592 19,726,002 20,330,967 Obligations Less than 1 Year 2009 30,500,062 28,684,514

According to the data available the borrowings has been increased to a greater extent. The main reason about current liabilities have increased in the form of greater long-term financing and short-term borrowing. The greater long-term borrowing had been facilitated for the purchase of three Boeing 777 and three ATR aircrafts. In financial year 2009, the current liabilities have dropped by 4% while the current assets showed a growth of 12%. The current liabilities'

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composition shows that short term borrowings dropped by 20% in the year 2009.

Long Term Obligations 1-5 years
2,008 2009

Liabilities Against Assets

41,540,459

Term Finance & Sukuk Certificates

19,599,516

Long term Financing

25,056,586

The corporation arranged its amount of borrowings. After four years now the corporations is able to attain some profit. Finance cost has increased to Rs 9.24 billion in the year 09, primarily due to increased mark-up on short term borrowings. So the credit risk is considered to be very high. As far as the liquidity position of coca cola is concerned, the corporation has faced a declining trend over the past couple of years but in the year2009, it has showed a little growth. The declining trend can be primarily attributed to a sharp rise in the current liabilities of the company over the years. Mainly, current liabilities have increased in the form of greater long-term financing and short-term borrowing. Credit Risk Credit risk arises when one party having financial instrument cause a loss for the other party in absence of meeting the due obligation. We come to know that all financial assets except cash in hand are subject to credit risk. The corporation has a credit policy in place and proper monitoring is done by management on timely basis. The following table has clearly distinguished the credit items that are taken from corporations¶ balance sheet.

Cost effectiveness due to technology: 
They purchase the raw material at low price and then process it with their automatic machines to make quality products. They have very short listed employees in their manufacturing because of the new technology. They use batching process for the productivity. Due to this their cost is effectively reduced at the production.

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They have storing capacity of their products and they reduce their cost because they have their own stores not hired at rent.  They are using modern technology for their production like production at lowest price with comparison to their competitors.  They have adequate imported machinery and technology according to their need and there is lien on some machinery of the MCB and UBL for a long term debt..  The machinery engineers are hired by the coca cola company for the maintenance and supervision of the machinery.  They give training about the new technology to their employees and then they use their man power according to their need.

COMPETITORS 
Mecca Cola  Amrat Cola  RC Cola  Shandy Cola  Qibla Cola  Future Cola  Unilever  Kraft Foods, Inc.

³Needs´
The Coca Cola Company exists to satisfy the consumers¶ needs. The Coca Cola Company has over 400 brands of drinks designed to satisfy a very wide range of consumers. They are able to provide drinks for many different target markets including, people of all ages, sexes, races, etc. Coca-Cola products are able to sell to a diverse worldwide population and its success is unmatched. In today¶s society, people are looking to lead better, healthier lives, Coca Cola seeing this trend has begun to produce, diet drinks that have the same great taste as their regular drinks

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while still being low fat or low calorie drinks, such as diet coke, or coke zero. Coca Cola products are purchased by all the different classes, but mainly by the middle and high-class citizens, because they have more money to spend on luxury items. Coca Cola is a very successful company; due to their success they are able to spend more money making their factories work more efficiently. They can do this by updating the equipment used to produce their drinks. Although people today are becoming more conscious about their environment, and the damage that has been done in prior years. Many people make their purchase decisions partially based on a company¶s ethics, or social responsibility. By contributing to stop pollution both within and outside their factories, they will gain the trust and respect of the potential buyers, who care about saving our environment. In gaining their trust and respect more people will be willing to purchase their products, because the company stands for the same goals that their consumers are trying to protect. The Coca Cola Company tries to be more environmentally aware.

PERIOD STARTING CASH NET SALES ACCOUNT RECEIVABLES OPENED A/R COLLECTED OTHER OPERATING REVENUES INFLOWS FROM OPERATIONS TOTAL PURCHASES A/P TAKEN A/P PAID GEN. & ADMIN CASH OUTFLOWS OTHER OPERATIONAL OUTFLOWS

JAN X4 3254 20000

FEB

MAR

APR

MAY

JUN

JUL

AUG

SEP

OCT

NOV

DEC

22000 24000 24000 24000

30000 32000

34000 36000

36000 36000 30000

20000 18000

22000 24000 24000 24000 18000 18000 20000 22000

30000 32000 24000 24000

34000 36000 24000 30000

36000 36000 30000 32000 34000 36000

2000

2000

2000

2000

2000

2000

2000

2000

2000

2000

2000

2000

20000 13464 13464 12500

20000 20000 22000 24000 14688 14688 14688 18360 14688 14688 14688 18360 12500 13464 14688 14688

26000 26000 19584 20808 19584 20808 14688 18360

26000 32000 22032 22032 22032 22032 19584 20808

34000 36000 38000 22032 18360 18360 22032 18360 18360 22032 22032 22032

1500

1500

1500

1500

1500

1500

1500

1500

1500

1500

1500

1500

1000

1000

1000

2000

2000

2000

2000

2000

2000

2000

2000

2000

P a g e | 29 INTEREST PAYMENTS TAX PAID OUTFLOWS FROM OPTERATIONAL LONG TERM DEBT TAKEN CASH SALE OF ASSETS, OTHERS NONOPERATIONAL INFLOWS PLANT & EQUIPMENT EXPENDITURE PAYMENT LONG TERM DEBT DIVIDENDS PAID NON- Oprt. OUTFLOWS OPENING CASH BALANCE NET CASH INFLOW (OUTFLOW) CASH BALANCE SHORT TERM LOANS TAKEN SHORT TERM LOANS PAID ENDING CASH SHORT TERM DEBT O/S SHORT TERM LINE AVAILABLE EXCESS (DEFICIT) OF LINE

6.78 1200

25.13 1200

20.39 1200

18.99 1200

5.385 232.19 1200 1200

213.8 1200

221.4 1200

186.8 147.48 1200 1200

39.05 1200

136.9 1200

16206.78

16225 17184 19407 19393

19620 23274

24505 25695

26879 26771 26869

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

3000

5000

2500

2500

3700

1500

1500

2000

4000

4500

2000

1000

0 0 3000 3254

0 0 5000 4500

0 0 2500 4500

0 0 2500 4500

0 0 3700 4500

0 20000 21500 4500 15120 10620 15120 0 4500

0 0 1500 4500

0 0 2000 4500

0 0 4000 4500

0 0 4500 4500

0

0

0 15000 2000 16000 4500 4500

794 4048 452 0 4500 452 20000

1225 3275 1675 0 4500 1675

316 4816 0 316 4500 1359

93 4593 0 93 4500 1266

907 5407 0 907 4500 359

1226 5726 0 1226 4500

-505 3995 505 0 4500

2305 6805 0 2305 4500

2621

7229

-9126 -4626 6844 0 4500 9126

7121 11729 0 2621 4500 9832 0 7229 4500 2603

15479 14253 20000 20000

14758 12453 20000 20000

20000 20000 20000 20000

20000 20000 20000

19458

18325 18641 18374 19641

4521

5747

5242

7547

10168 17397 10874

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SWOT ANALYSIS
SWOT Analysis is a strategic planning tool used to evaluate the Strengths, Weaknesses, Opportunities, and Threats inside a company, project, or a business venture. It involves identifying the internal and external factors that are favorable/ unfavorable for business to succeed.

INDUSTRIAL SWOT ANALYSIS
STRENGTHS
The soft drinks market in Pakistan enjoyed dynamic growth over the review period in both volume and current value terms. Carbonates dominate the market in both the on-trade and off-trade with the lion¶s share of sales. Carbonates have become part of the culture in Pakistan and multinational companies have maintained their standards over the years to provide consumers with high quality carbonated drinks. Off-trade sales of carbonates are higher than those of the on-trade but both achieved strong growth over the review period.

WEAKNESSES
Liquid concentrates and power concentrates are both seasonal categories in the market and their sales peak in the summer in Pakistan. Both Rooh Afza and Jam-e-Shirin are traditional sandalwood drinks in Pakistan which are highly regarded by consumers. These drinks can be found in every home in Pakistan, especially in rural areas throughout the summer and are the mainstay of liquid concentrates.

OPPORTUNITIES
The Government of Pakistan has reduced excise taxes to encourage soft drinks manufacturers and importers. The Government also reduced other applicable taxes to promise more profit not only for soft drink manufacturers already in the market but also to attract potential soft drinks manufacturers to invest in Pakistan. Tax reductions proved extremely beneficial to the soft drinks market in Pakistan and certainly encouraged and attracted multinational companies to invest in the country¶s soft drinks industry. The government also decided to tax the beverage industry on capacity of production rather than on actual production

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and that brave move encouraged soft drinks manufacturers to maximize production and reduce prices.

THREATS
Increasing health and hygiene awareness among Pakistanis has greatly increased sales of fruit/vegetable juice products. Both the government and the media have started health awareness campaigns to make Pakistanis realize that consumption of fruit/vegetable juice is as essential as eating food. Fruit/vegetable juices are doing very well in both urban and rural areas. On the other hand, health and hygiene awareness has also led to increased sales of bottled water in Pakistan. Previously bottled water was targeted on at major cities where consumers are more healthconscious and aware of the difference between bottled water and tap water. Nowadays, health conscious rural inhabitants also drink bottled water due to health concerns.

SWOT ANALYSIS OF COCA COLA

Strengths Internal
-Popularity -well known -branding obvious and easily recognized -A lot of finance -customer loyalty -International Trade

Weaknesses
-Word of mouth -lack of popularity of many Coca Cola¶s brands -Most unknown and rarely seen -result of low profile or non-existent advertising -health issues

Threats External
-changing health-consciousness attitude -legal issues -Health ministers -competition (Pepsi)

Opportunities
-many successful brands to pursue -advertise its less popular products -buy out competition. -More Brand recognition

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EXPECTATIONS FOR THE COMING YEAR
Everything starts from the attitude of consumer¶s behavior. And the basic key to attract the consumers is to throw the ³money away´. And positive feeling felling with the brand, which they used to have Coke wants to advertise their products heavily in the coming year. And it will take the 10% of their profits. And when we take it as a global level it is $ I billion. Coming year is the challenging year for the industry of Coke. They have to take lots of decisions that how to increase the production and where they have to spend money. For gaining success in coming year they have to have some important things like:  Loyal consumers are important for company¶s success.  Workers should be the brand centric not the promotion centric.  They should know how much to for the brand activities.  They should also know that how much to do with the promotion activities for brand.

CONCLUSION
We have concluded from this detailed report that despite the fact Coca Cola currently occupies the market leadership position overall but it does not guarantee that the company will sustain its position in the future as well. In Pakistan as compared to Pepsi, Coca-Cola has less number of consumers as Pepsi¶s market share in Pakistan is approximately 54% where as Coke market share is hovering about 36%, hence the conclusion is that Coca-Cola must enhance factors such as relationship marketing, innovation and technology especially in Pakistan to attain market leader position in this region as well.

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BIBLIOGRAPHY
www.cocacola.com www.thecocacolacompany.com www.wikipedia.com www.google.com Local Newspapers International Herald Tribune Newspaper The Nikkei Weekly magazine, Japan (Winter, 2009) Jamal Hassan