COMPANY

Submitted by:

Group 10

Anish Gupta (UH140Pratyusa Mohanty (UH14081)Sonal Saini (UH14094)Swati Sinha (UH140

HISTORY AND EVOLUTION OF SOFT DRINK INDUSTRY: The history of soft drinks throws light upon some of the important business innovations, such as product development, mass marketing, franchising, evolution of consumer tastes and cultural trends. Europeans believed that natural mineral waters had medicinal qualities and it was favoured as an alternative to polluted common drinking water. British chemist Joseph Priestley in 1772 invented means to synthetically carbonate the water and the manufacturing of artificial mineral waters started in 1780’s in Geneva and 1790’s in London with Jacob Schweppes’s business. The term soda water originated in 1798 and the first known manufacturer of soda water was Yale University chemist Benjamin Silliman. Two years later Joseph Hawkins of Baltimore was the first person to secure the patent in U.S. for the equipment to produce the drink. Around 1820’s the pharmacies provided beverage as a remedy for various digestive ailments. Slowly the drink gained popularity and was increasingly consumed for refreshment, after the addition of sugar and flavourings to the beverage in 1830’s.The first cola drink was introduced in the year 1881, followed by several brands emerging in late 1800’s. Pharmacists experimenting at local soda fountains invented Dr. Pepper in Texas in 1185, Coca-Cola in Georgia in 1886 and Pepsi-Cola in the state of North Carolina in 1893, among several other brands. Post World War II the soft drink industry pioneered television advertising, catchy slogans, celebrity endorsements and various other forms of mass marketing targeting the youth.

Throughout the years the most famous rivalry within the soft drinks industry has been between the major giants, Coke and Pepsi, which waged the famous cola wars in the 20th century. During 1930’s and 1940’s Pepsi challenged Coke by introducing a twelve ounce bottle for the same price as Coke’s five cent six ounce bottle. In 1970’s the Pepsi challenge in form of taste test results leaned toward a consensus that Pepsi was preferred over Coke by more Americans. In the year 2001, the soft-drink industry included approximately 500 U.S. bottlers employing more than 180,000 people, and it achieved retail sales of more than $60 billion. Americans that year had an average consumption of 55 gallons of soft drinks per person, which was up from 48 in 1990 and 34 in the year 1980. Coca-Cola led with more than 43 percent of the soft drink market and Pepsi with 31 percent and they were among the nine leading companies which accounted for 96.5 percent of industry sales. Seven individual brands accounted for almost two thirds of the sales: Coca-Cola Classic, Pepsi, Diet Coke, Mountain Dew, Dr. Pepper, Sprite and Diet Pepsi. Domestic sales growth started falling in the late 1990s due to increased competition from other beverage segments like coffee drinks, iced teas, juices, sports drinks, and bottled waters. The industry still continues to tap lucrative international markets.

BRIEF INSIGHT INTO THE SOFT DRINK INDUSTRY:

The non-alcoholic beverage industry can be broadly classified into soft drinks and hot drinks. Soft drinks contain carbonated/non-carbonated water, a sweetener and a flavour. The soft drink category leads the industry and includes bottled waters, carbonates, juices, sports and energy drinks, etc. Soft drinks are also referred to as liquid refreshment beverages. In the US, sales of liquid refreshment beverage lead food and beverage retail sales. The global soft drink industry is witnessing constant growth over the years and is expanding rapidly. The two major drivers contributing to this trend are: Rapid expansion of markets in developing countries and people are shifting towards more natural and healthy low calorie drinks. This new-age trend is considerably simulating the development in soft drink industry and is posing serious threat to the carbonated beverage segment. To address this growing concern, big soft drink giants like Pepsi and Coke are thriving to become a total beverage company, thereby catering to the needs of the varied soft drink demands.

The 50 billion rupee soft drink industry is now growing at an annual rate of 6-7%. In India, Coke and Pepsi have a combined market share of around 95% through both its direct operations or through franchisees. At present there are about 110 soft drink producing units employing over 125,000 people. Soft drink market can be divided into two segments, Cola and the Non-Cola drinks. Cola segment has about 62% market share whereas the non-cola drink segment covers the remaining market including soda, flavoured drinks, etc. Gone are the days when soft and aerated drinks were considered as drinks for the middle class and the affluent segment, that segmentation is no more valid in the current scenario. According to an NCAER study 91% of the soft drink sales are made to the lower, middle and the upper middle class segment of the society. The industry estimates that the soft drinks market should grow at twice the GDP growth rate. The Chinese and the Russian market grew by three and four times as compared to the Indian market over the past year.

INDUSTRY ANALYSIS:

1. PESTLE Analysis:

With the help of PESTEL analysis framework following is the analysis of the macro-environmental factors and their impact on the soft drink industry:

1. Political Factors: Food and Drug Administration (FDA) Regulation:

o These regulations define what all ingredients can and cannot be used in the product, how the product is being produced, where it is produced, as well as other laws concerned with the production quality and health effects of the product.

o The government has set potential fines if the companies do not comply with the standard of laws of manufacturing, production, and distribution.

Political

Food and Drug Administration

Political Scenario

Economic

Reccesssion

Raw Materials

Interest Rate

Socio-Cultural

Consumer Choice

Diet Consciousness

Social Media

Technology

Automation

Marketing

Legal

Laws

Environment

Waste Management

Public Concern

P E S T L E

Political Scenario:The political scenario also matters to a great extent as there can be some civil unrest in certain markets or due to factors like inflation thereby leading to decrease in sales. Most importantly, cross border situations are starkly different in different countries, hence company’s needed to stay in line with all those policies and changes so that they can adapt to all those changes as per the situation.

2. Economic Factors:

Recessions:o The soft drink industry may experience market shocks in the periods of recessiono Since 2008, the industry has been struggling to regain its previous market strengtho The industry is expected to make an significant changes with an expansion of 27% by the

year 2015 which is the highest increase since 2008o Consumers have continued to spend their money carefully over the past few years after the

2010 recession.

Raw Materials:o Cost of raw materials can be a factor if the economy for certain materials is weak or there is

shortage of the raw materialso Sugar and carbonated water are the main ingredients, apart from it there are a lot of

preservatives and flavouring such as ascorbic acid, gums, aspartame, etc.Interest rateTo reduce the overall borrowing costs, the firms in beverage industry are using currency swaps and interest rate to significantly adapt the rates in order to minimize the borrowing cost.

3. Socio-Cultural Factors

Consumer Choice:o Age plays an important role when evaluating consumer choiceo The older generation is more health conscious and tends to make nutritional choices

between productso The younger generation leans towards products that are fun, new, and trendyo Celebrity endorsements, attractive commercials, and sweepstakes become more important

to the younger generation in their product decision.

Diet Consciousness:o According to a study about one-third of Americans are considered obese and it is speculated

that there is a link between soft drink consumption and obesityo Dieting has become a very marketable, popular trend which forces the soft drink industry to

create new products that meet consumer preferences

Social Media:o Social media outlets keep consumers directly connected to the brando Firms are able to obtain valuable information and feedback from consumers about potential

or current new products o Low advertising costs thereby providing a global outreach

4. Technological Factors:

Automation:o New technological advancement in manufacturing and quality control concepts are

improving bottling operations efficiencyo High product volume requires high levels of automation. Technological advances increase

the utility of employees and capital, thereby increasing the productivity.o Cost factor related with the new technology can be an entry barrier to new competitors.

Marketing:o Technological advancement helps create new brands and product lines to meet consumer

preferences.o Improved logistics help products move through distribution channels more effectively. This

keeps distribution costs down while increasing sales information to consumers.o Social media provides huge growth in consumer awareness, brand value/identity, product

promotions and direct communication to consumers.

5. Legal Factors:The legal factors include consumer laws, discrimination laws, employment laws, health and safety laws, etc.

o As per abiding by the standards the firms must provide nutritional facts information of their product to the customer

o Employees must be provided with at least the required minimum wage as per the minimum wages act and any sort of discrimination shall not be tolerated in the workplace

o All factories of the firms must abide by Occupational safety and health administration standards and regulations.

o If any of these laws change, companies must change their operations and procedures to abide by the new changes made in order to avoid being fined or even shut down.

6. Environmental Factors:

Waste management and public concerns:Increasing environmental consciousness is one of the most important concerns nowadays. The firm’s operation is exaggerated by federal legislative applications that concentrate on the four objectives.

o Decrease the quantity of packaging material which is affecting the nation’s solid waste management system

o Diminishing the consumption of natural and scarce resourceso Increase the reuse and recycling packaging materials

To shelter the natural environment and human health from undesirable effects related with the dumping and recyclability of the packaging materials.

2.Porter’s Five Forces Analysis:

1. Bargaining Power of Buyers:

o The soft drink market covers the largest share in the beverage industry. Net worth of soft drinks industry is $60 billion dollars. In U.S. three firms control 89% of the soft drink sales thereby making it hard to gain market share.

o Soft drinks are hard to duplicate at ones house and it takes a considerable amount of time, manufacturing your own soft drink especially when you take into consideration the low price of the product.

o Large numbers of customers in America consume over 56 gallons of soda in a year. On an average cost of soft drink is under $2 which makes each individual purchase relatively insignificant.

o There is a high sensitivity to the price of soft drinks and the consumers are willing to change brands if one becomes much more expensive than the other. Soft drinks are do not come under the need segment and people won’t pay any price for it.

o Due to competitiveness of the soft drink industry switching supplier cost is relatively low and also the price difference is rather small. Difference can occur based on location and the proximity of the product to the market.

o There are no steps to use the product and all nutrition facts and ingredients are listed on the label. Therefore no additional information is required to be made available to the customers.

o The products offered are very unique in the soft drink industry and consumers are very brand loyal to the drink of their choice. Though many varieties of the sodas are similar in type yet have distinct tastes.

2. Bargaining Power of Suppliers:

o The firms can quickly and easily switch between suppliers as they do not hold much competitive pressure. Suppliers to the soft drinks industry are the bottling equipment manufacturers and the packaging suppliers. The numbers of equipment suppliers are easily available in the market and it is fairly easy for a company to switch suppliers. This takes away much of the suppliers power to bargain.

o The inputs materials are extremely differentiated as every firm is trying to create the best product competing with each other. Each firm has a different formula, color, and taste for their beverage. No two products are typically exactly alike and differentiate in some form or the other. Constant product innovation is a key to fill in the buyers need for a variety of tastes.

o The companies chooses a suppliers that does the the best job and offers the best price. If another supplier does the same job at a cheaper price, the firm can switch without any second thoughts.

o The Business is extremely important to the suppliers as the soft drink industry is one of the extremely profitable markets. The main revenue for the supply companies comes from delivering the beverages and equipment to the customers.

o There is a wide variety of current and potential suppliers in this soft drink industry. For current and potential suppliers it is easy to enter or succeed in the industry as supplying the soft drinks is not a complex task.

3. Threat of New Entrants

o Soft drinks are not proprietary products because it can be made by any one. The proprietorship is restricted only to patented flavors and brands.

o Supplier switching costs in soft drink industry are negligible. The soft drink industry being very competitive the prices only fluctuate slightly depending on geographical location or sale discounts.

o The existing firms in this industry have a cost and performance advantage over the new

3. Threat of New Entrants

o Soft drinks are not proprietary products because it can be made by any one. The proprietorship is restricted only to patented flavors and brands.

o Supplier switching costs in soft drink industry are negligible. The soft drink industry being very competitive the prices only fluctuate slightly depending on geographical location or sale discounts.

o The existing firms in this industry have a cost and performance advantage over the new

o Once entered it would be really difficult to get out of the business because of the amount of cost involved in terms of fixed costs and advertisements, as well as binding contracts with the distribution channels.

o Customers would not be affected from switching from one player to another as the cost involved is really low. The most they may incur would be a few cents because of the low prices which do not fluctuate much among the firms.

o Because of the products in this industry being simple carbonated beverages, there is no need for significant customer-producer interaction because the customers purchase decision is mainly based on taste.

3. Economic Features of the Industry

60 billion dollar industryCurrent growth rate is 7%Maturation phase of the industry life cycle because the number of competitors is stable, market growth is low, profits are high, market size is the largest to date and investment in the industry is also stable

M a r k e t S i z e a n d G r o w t h R a t e

Products are becoming more and more differentiated as there are a number of new soft drinks hitting the market each and every dayDifferentiation is key for a firm to maximize their revenue due to customer trends and tastes always changing and the firms need to create new products and flavors

P r o d u c t D i ff e r e n ti a ti o n

The industry is not entirely characterized by rapid product innovation and short product life cycles but it is very common to see both occurring rather oftenThe most profitable soft drinks do not have short product life cycles as they have been around for yearsSome new beverages however do experience short product life cycles as they can be introduced to the market and not be received well and need to be taken off the shelf

P r o d u c t I n n o v a ti o n

The amount of companies in the industry creates competition amongst members.Companies have to stay similar on product price in order to keep market shareThe industry is not overcrowded because all the competitors are still able to make profit

D e m a n d S u p p l y C o n d i ti o n s

Competitors operate in multiple stages of the industry.The majority of competitors all engage in manufacturing and distribution.The larger competitors also have bottling operations.Competitors sell to retailers.

V e r ti c a l I n t e g r a ti o n

The entire industry is characterized by economies of scale in every aspect.Since soft drinks are sold in high volume, costs may only be kept down by manufacturing, shipping, etc. at the highest cost-efficient volume.Advertising may be on economies of scale since the industry leaders have maintained aggressive marketing campaigns since founded, and might have capitalized on long-term relationships and high volume incentive rates.Large-scale operations pass on cost savings to the customer and are able to retail their products at a significantly lower price.

E c o n o m i e s o f S c a l e

o Once entered it would be really difficult to get out of the business because of the amount of cost involved in terms of fixed costs and advertisements, as well as binding contracts with the distribution channels.

o Customers would not be affected from switching from one player to another as the cost involved is really low. The most they may incur would be a few cents because of the low prices which do not fluctuate much among the firms.

o Because of the products in this industry being simple carbonated beverages, there is no need for significant customer-producer interaction because the customers purchase decision is mainly based on taste.

Coca Cola: An OverviewCoca Cola is the world's leading manufacturer, marketer and distributor of non-alcoholic beverages. It operates in over 200 countries and has around 500 brands. It has a revenue of $45.72 billion ( June, 2015).

Vision, Mission and ValuesVISION

The Vision of Coca Cola is as follows:

Coca Cola's vision serves as the framework for their future growth and guides every aspect of our business plan by describing what we need to accomplish in order to continue achieving sustainable, business growth and profitability.

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.

Productivity: Be a highly effective, lean and fast-moving organization. People: Be a great place to work where people are inspired to be the best they can be. Profit: Maximize long-term return to shareowners while being mindful of our overall

responsibilities.

MISSION

The mission of the Coca Cola is as follows:

Their mission is enduring and they declare their purpose as a Coca Cola and serves as the standard against which we weigh our actions and decisions.

To inspire moments of optimism and happiness. To refresh the world.

VALUES

Coca Cola believes in fostering the following values:

Their values serve as a compass for our future work method and describe how we behave in the world.

Collaboration: Leverage collective genius Leadership: The courage to shape a better future Passion: Committed in heart and mind Diversity: As inclusive as our brands Quality: What we do, we do well Integrity: Be real Accountability: If it is to be, it's up to me

FOCUS ON THE MARKET Focus on consumers needs, customers needs and franchisees Get into the market and listen, observe and learn the market conditions Possess a worldwide view Lay focus on execution in the marketplace every day Be insatiably curious and different

WORK SMART Remain responsive to change Have the courage to change course when needed as per the organizational position Remain constructively discontent and wanting Act urgently Work efficiently and effectively

ACT LIKE OWNERS Steward system assets and focus on building value for company Rewards people for taking risks and finding better ways to solve company problems Learning from our outcomes -- what worked and what didn’t in the past We are accountable for our actions and inactions to our stakeholders

BE THE BRAND Inspire optimism, creativity, passion and fun

Coca Cola HistoryIt began when Atlanta pharmacist , Dr. John S. Pemberton, started a distinctive tasting soft drink that could be sold at soda fountains in nearby areas. He mixed flavoured syrup and carbonated water in the neighborhood pharmacy . Frank M. Robinson, Dr. Pemberton’s partner and bookkeeper, named the beverage as Coca Cola.

By 1888, three versions of Coca Cola were on the market. As Griggs Candler acquired a part in Pemberton's Coca Cola in 1887 and refurbished it as the Coca Cola Coca Cola in 1888. The same time Pemberton sold the rights a second time to four more businessmen: C.O. Mullahy, E.H. Bloodworth, J.C. Mayfield, A.O. Murphey. Pemberton's son Charley Pemberton began selling his own version of the product.

John Pemberton declared that the name "Coca Cola" belonged to Charley, but the other two manufacturers could continue to use the formula. So, in the summer of 1888, Candler sold his beverage under the names Yum Yum and Koke. After both failed to catch on, Candler set out to establish a legal claim to Coca Cola in late 1888, in order to force his two competitors out of the business. Candler purchased exclusive rights to the formula from John Pemberton, Margaret Dozier and Woolfolk Walker. However, in 1914, Dozier came forward to claim her signature on the bill of sale had been forged, and subsequent analysis has indicated John Pemberton's signature was most likely a forgery as well.

In 1892 Candler incorporated a second Coca Cola, The Coca Cola Coca Cola (the current corporation), and in 1910 Candler had the earliest records of the Coca Cola burned, further obscuring its legal origins. By the time of its 50th anniversary, the drink had reached the status of a national icon in the USA. In 1935, it was certified kosher by Rabbi Tobias Geffen, after the Coca Cola made minor changes in the sourcing of some ingredients.

Coca Cola was sold in bottles for the first time on March 12, 1894. The first outdoor wall advertisement was painted in the same year as well in Cartersville, Georgia. Cans of Coke first appeared in 1955. The first bottling of Coca Cola occurred in Vicksburg, Mississippi, at the Biedenharn Candy Coca Cola in 1891. Its proprietor was Joseph A. Biedenharn. The original bottles were Biedenharn bottles, very different from the much later hobble-skirt design that is now so familiar. Asa Candler was tentative about bottling the drink, but two entrepreneurs from Chattanooga, Tennessee, Benjamin F. Thomas and Joseph B. Whitehead, proposed the idea and were so persuasive that Candler signed a contract giving them control of the procedure for only one dollar. Candler never collected his dollar, but in 1899 Chattanooga became the site of the first Coca Cola bottling Coca Cola. The loosely termed contract proved to be problematic for the Coca Cola for decades to come. Legal matters were not helped by the decision of the bottlers to subcontract to other companies, effectively becoming parent bottlers. Coke concentrate, or Coke syrup, was and is sold separately at pharmacies in small quantities, as an over-the-counter remedy for nausea or mildly upset stomach.

On April 23, 1985, Coca Cola, amid much publicity, attempted to change the formula of the drink with "New Coke". Follow-up taste tests revealed that most consumers preferred the taste of New Coke to both Coke and Pepsi, but Coca Cola management was unprepared for the public's nostalgia for the old drink, leading to a backlash. The Coca Cola gave in to protests and returned to a variation of the old formula, under the name Coca Cola Classic on July 10, 1985.

On February 7, 2005, the Coca Cola Coca Cola announced that in the second quarter of 2005 they planned to launch a Diet Coke product sweetened with the artificial sweetener sucralose, the same sweetener currently used in Pepsi One. On March 21, 2005, it announced another diet product, Coca Cola Zero, sweetened partly with a blend of aspartame and acesulfame potassium. In 2007, Coca Cola began to sell a new "healthy soda": Diet Coke with vitamins B6, B12, magnesium, niacin, and zinc, marketed as "Diet Coke Plus”. On July 5, 2005, it was revealed that Coca Cola would resume operations in Iraq for the first time since the Arab League boycotted the Coca Cola in 1968.

In April 2007, in Canada, the name "Coca Cola Classic" was changed back to "Coca Cola." The word "Classic" was truncated because "New Coke" was no longer in production, eliminating the need to differentiate between the two. The formula remained unchanged.

In January 2009, Coca Cola stopped printing the word "Classic" on the labels of 16-ounce bottles sold in parts of the south-eastern United States. The change is part of a larger strategy to rejuvenate the product's image. In November 2009, due to a dispute over wholesale prices of Coca Cola products, Costco stopped restocking its shelves with Coke and Diet Coke.

Products and BrandsCoca Cola has a wide range of products marketed under different brands. Some of them are as follows:

Strategic Positioning of Coca Cola in the Global MarketWe would be analyzing Coca Cola's positioning strategy through various standard models and matrices.

Porters Five Forces ModelThis model was propounded by Michael Porter and enumerates the external factors that impact the competitive positioning of a firm.

Following are the Porter's Five Forces:

1. Rivalry among various competitors: Coca Cola, PepsiCo and Cadbury Schweppes are the major players in this industry. PepsiCo is the largest competitor of Coca Cola. Coca Cola has an advantage over PepsiCo as it made early entry into the market. Pepsi is trying to compete with Coke by concentrating to spread their market share in the emerging economies where the presence of Coke is weak. It is also diversifying into food segment and has launched brands like Quaker Oats, Tropicana, etc. While the Coke targets the matured generation, Pepsi is targeting the youngsters; it has positioned itself as 'Choice of New Generation'.Another competitive pressure is Brand Loyalty. Coca Cola has a large customer base who are completely loyal to the brand. But according to the Brand Keys Customer Loyalty leaders survey(2004), Diet Coke ranked 36th and Diet Pepsi was ranked 17th as having the most loyal customers.

2. Threat of new entrants: The treat of potential entrants is low in the soft drinks industry. This can be attributed to the fact that Coke and Pepsi have a strong Brand image and great distribution channels that is very difficult for a new firm to build.

Another barrier to entry would be high fixed costs like warehouses and logistics. Capital requirements for promoting and establishing a soft drink is also very high. Morever, the soft drinks industry is saturated

3. Threat of Substitutes: Presence of wide product portfolio of Coca Cola mitigates the threat of substitution to some extent. But local versions of the soft drinks pose threat as they are cheaper. Substitutes also include the competitors who are not a part of the soft drink industry. Health conscious customers are now preferring bottled water and sports drinks. Drinks like Paperboat are becoming increasingly popular. Tea and Coffee also act as substitutes as they contain caffeine. Blended Coffee is becoming popular owing to the mushrooming of Starbucks, CCD and Barista, which offer a wide variety of flavours appealing to a wide range of customers.

4. Bargaining power of Suppliers: The supplier bargaining power is low due to the scale of Coca Cola. The principal raw material used by the soft drink industry is fructose corn syrup while is available from many sources. Outside US, sucrose is used, which is also available from many sources.Aspartame, an artificial sweetener, is used for low calorie soft drinks. Until January 1993, it was available from only one source, viz., the NutraSweet Coca Cola due to its patent. But, its patent expired at the end 0f 1992. This has further enhanced Coca Cola's power over the suppliers.

5. Bargaining power of Buyers: Individual customers are the ultimate buyers of soft drinks. They have a low bargaining power but Coca Cola should be careful not to price themselves out of the market.

Strategy

Tactics

Efficient

Inefficient

Ineffective Effective

Die(Slowly)

Die(Quickly)

Thrive

Survive

Strategy Tactics Grid

In order to be successful, a Coca Cola needs to get both its strategy and tactics working in harmony to provide the optimum return bounded by efficiency(McDonald and Leppard, 1993). Situational environment should be carefully considered before designing strategy and tactics.

In the above matrix, the companies finding themselves on the left portion are destined to perish, the pace of which is determined by the efficiency/ inefficiency of tactics.

Coca Cola lies in the second quadrant as it is effective in doing things right (getting the desired result) and efficiently doing things right. (working efficiently with minimum wastage of resources).

Porters Generic Strategy Grid

Coca Cola follows Differentiation strategy(first quadrant) as well as Cost Leadership strategy(second quadrant).

Coca Cola achieves differentiation by: perceived superior quality product high Brand image

promotion and packaging(Coca Cola bottle has become an internationally recognized symbol; the contour bottle design was revitalized in 1999)

Coca Cola achieves cost leadership by: economies of scale in R&D and promotion knowledge and experience of production and operation processes effective distribution networks efficient manufacturing systems

Ansoff MatrixInitially, Coca Cola had a single core product which had presence only in the US. It followed Market Penetration Strategy to capture the US market.

When it was launched in the foreign markets, Coca Cola followed a Market Development strategy for targeting new geographies and segments.

In order to further penetrate the markets, Coca Cola followed the Product Development strategy by introducing new products like Fanta, Sprite, etc.

For further penetration, Coca Cola followed the diversification strategy by introducing new product in new market. Some example could be bottled water (Kinley), fruit juices(Minute Maid), etc

BCG Matrix

BCG matrix provides a strategic view of the business that helps the Coca Cola in decision making.Coca Cola's business is a problem child in some Nordic countries.

Divesting a business(Dogs) in poorly performing countries will affect Coca Cola's presence, it is highly unlikely for it to do so. It is also possible that these businesses i.e. Dogs might form the basis of growth and emerging markets in future.

Coca Cola: Financial Ananlysis

Market Share:It being the biggest corporation in the soft drink sector, Coca Cola has the largest market share. This corporation manages about 59% of the world market share.

Financial Report:This corporation is financially very good due to strong finances. Corporation is still surviving the ups and down of the occupation world. In 2013, basic and diluted net income per share has a component of non-cash gain of $.02 per share after taxes, which was given recognition on the notion of stock being issued by Coca Cola Inc., one of the valuation stockholders in this corporation.

Profitability analysis:The second thing after past performance through which they determine budget is “profit”. If they get profits with the high margin, then they mostly go for increasing their profits in the subsequent years.

Liquidity Ratio Working capital

It measures a corporation's efficiency and its financial health. It is a financial metric which depicts liquidity available in occupation. Alongside fixed valuables like equipment and plant, working capital is usually appraised as a part of (OC) operating capital.

(WC) Working capital = current valuables – current in outstanding debt

Though working capital is improving on a yearly basis, Coca Cola is still not able to deliver performance compared to soft sector average and its other counterparts. Current ratio balance

It measures a corporation's ability to pay short-term in outstanding debt.

(CR) Current ratio balance=Current Valuables/Current In outstanding debt

From Coca Cola’s perspective, current ratio balance is increasing every year. The corporation is hence performing above sector average. Quick ratio balance

It’s an indicator of a corporation’s short-term liquidity and measures a corporation’s ability to meet its short-term covenants with the most liquid valuables like cash etc. Hence, the ratio balance excludes inventories from current valuables, and is calculated as: we measure the dollar amount of liquid valuables (cash etc.) available for each dollar of current in outstanding debt (short term). The figure 2.5 value of Quick ratio means that a corporation has $2.50 of liquid valuables available to cover each $1 of current in outstanding debt recorded. Higher the quick ratio balance better is the liquidity position of the corporation. Quick ratio balance = (CA – inventory) / CL

Where CA = current assets, CL = current liabilities

Coca Cola’s quick ratio balance is on a rise every year, showing that it is able to deliver results above expectations. Accounts receivable throughput

It is the ratio balance of net sales of employer’s occupation on solvency terms to its average sum of accounts receivable. It can be equated with activity ratio balance which determines the number of

times during that period an occupation collects its average sum of accounts balance which is pending under receivable terms.

Accounts receivable throughput = Net Sales as Credit/ Net Average Accounts Receivable

This amount for Coca Cola has been slightly increasing, thereby signaling that the corporation has been over performing in its sector. Next ratio : Average collection period (number of days’ sales in receivables)

The amount of time it takes for an occupation to receive money that is owed in parameters of receivables from its clients. Calculated as: Average Period of collecting time (Days) = (AR x Days) / Sales in Credit (nominal value)

Where:

AR = Average amount of accounts receivables

Sales in credit= Total amount of net-credit sales during period

Days = Total amount of days in period

The average collection period has also been on rise during the last 3 years, though slightly. The corporation is not delivering results in its sector because Coca Cola’s operation balance runs much differently than sector competitors due to its stress on distribution of syrup-liquids, thereby directly varying Average Collection Period. Inventory throughput

It shows how many times a corporation's inventory is sold off and replaced during a given time. The period (days) is further divided by the available or calculated value of inventory throughput formula to arrive at the required number of days it takes to sell the inventory.

Inventory Throughput = COGS / Average Inventory OR

Inventory Throughput = Sales / Inventory

The above value for Coca Cola has been on decline year over year. The corporation has been underperforming in its sector. Ratio balance of in outstanding debt to stockholder’s valuation

It’s a measure of a corporation's financial leverage/ability derived by dividing its total in outstanding debt by stockholders' valuation held currently. It depicts what proportion of outstanding debt and valuation the corporation is using for financing purposes.

Outstanding debt/Valuation Ratio balance = total in outstanding debt (TL) / all of the value of

stockholder’s valuation (E)

If the outstanding debt/valuation ratio balance for Coca Cola is 2.5, it means that for every dollar that shareholders own, Coca Cola owes $2.50 to creditors in total. This ratio balance has gone spiraling towards the bottom year over year, showing that the corporation is also underperforming in its sector. Ratio balance of fixed valuables to outstanding debt

The fixed-valuables- to long-term-in outstanding debt ratio balance is a way of measuring the solvency of a corporation. A corporation's long-term outstanding debts are often secured with fixed valuables, which is why creditors are interested in this ratio balance. This ratio balance is calculated by dividing the value of fixed valuables by the amount of long-term outstanding debt.

Ratio balance = Fixed valuables / long-term in outstanding debt.

This ratio balance has been improving for Coca Cola. The corporation is also over performing in its sector.

Net profit margin

Net profit margin is the percentage of earnings remaining after all interest, operating expenses, taxes and preferred stock dividends have been subtracted from a corporation's total earnings.

Net profit = (Total Earnings – Total Expenses)/Total Earnings

Net profit margin = Net profit / Total earnings

By dividing net profit by total earnings, we can see what percentage of earnings made it all the way to the bottom line, which is good for stockholders.The net profit margin for Coca Cola had seen no significant alters in the last 3 years. The corporation is over performing in its sector. Gross profit margin

A financial metric used to determine a firm's financial health by calculating the proportion of sum of money left over from earnings after accounting for the COGS. Thus, Gross profit margin serves as the source for paying additional expenses and future savings.

Gross Profit Margin = (Earnings-COGS)/Earnings

COGS = cost of goods sold

The gross profit margin for Coca Cola had seen no significant alters in the last 3 years. The corporation is over performing in its sector. Times interest earned

A metric used to measure a corporation's ability to meet its outstanding debt liabilities. It is usually quoted as a ratio balance and indicates how many times a corporation can cover its interest charges on a pretax basis. Failing to meet these liabilities could force a corporation into bankruptcy. Also referred to as "interest coverage ratio balance" and "fixed-charged coverage."

(TIE) it is the value calculated for connotation of Times Interest Earned = Earnings before

interest and taxes (EBIT) / Total interest payable contractual outstanding debt

Times interest earned has been improving for the corporation. Coca Cola is also over performing in its sector. Total asset throughput (ratio balance of nets sales to valuables)

The total asset throughput ratio balance measures the ability of a corporation to use its valuables to efficiently generate sales. This ratio balance considers all valuables, current and fixed. Those valuables include fixed valuables, like plant and equipment, as well as inventory, accounts receivable, as well as any other current valuables. The smaller the total asset throughput ratio balance, the smaller the # when compared to historical data for the firm and sector data, the more sluggish the firm's sales.Total asset throughput is calculated as Net Sales in notional quantity of sales/Total Valuables = $ TimesThe smaller the total asset throughput ratio balance (the smaller the $ Times), as compared to historical data for the firm and sector data, the more sluggish the firm's sales. This may reflect a problem with one or more of the asset categories composing total valuables - inventory, receivables, or fixed valuables.Also, the above calculation of Total asset throughput has been on the decline for Coca Cola for the last 3 years. The corporation is underperforming in its sector. Pace/rate earned on total valuables (requite on valuables)

An indicator of how much revenue a corporation is making relative to its total valuables. ROA gives an idea as to how efficient senior level management is at using its valuables to accelerate earnings. Calculated by dividing a corporation's annual earnings by its total valuables, ROA is displayed as a percentage. Sometimes this is referred to as "requite on investment".

Requite on valuables = Net quantity of income value / Total Valuables

Also noted is the fact that Coca Cola’s ROA has been decreasing slightly over the last 3 years. The corporation is underperforming in its sector. Pace/rate earned on total stockholder’s valuation (requite on valuation)

It’s the quantity of net revenue requited as a percentage of shareholders valuation. Requite on valuation measures a corporation balance’s profitability by revealing how much profit a corporation generates with the money of the stockholder investment. ROE is expressed as a percentage and calculated as:

Requite on Valuation = Net Income/Shareholder's Valuation

Coca Cola has been on a slight decline the past 3 years. The corporation has been underperforming in its sector. Pace/rate earned on common stockholder’s valuation

Ratio balance indicating the earnings on the common stockholders' investment. Pace/rate earned on common stockholder’s valuation is calculated as a percentage and calculated as:

Pace/rate earned on common stockholder’s valuation =

(Net income - preferred dividends) / average common stockholders' valuation.

There has been no alter with this metric the last 3 years, however the corporation is underperforming in its sector. Earnings per share on common stock

The portion of a corporation's profit allocated to each outstanding share of common stock. Earnings per share serves as an indicator of a corporation's profitability.

Calculated as:

(Net income – Dividends on preferred stock) / Average outstanding shares

Earnings per share on common stock have been increasing for Coca Cola. The corporation is also over performing in it sector.

Coca Cola Financials 2013-20152013 2014 2015 Status Sector

average

Working capital 25,497 30,328 31,304 Improving 23,500

Ratio balance of fixed valuables to L.T. in

outstanding debtedness

2.86 2.76 2.60 Improving 2.2

Ratio balance of in outstanding debtedness

to S.E.

1.36 1.45 1.51 Decreasing 1.22

Total asset throughput 1.58 1.56 1.52 Decreasing 2.3

Current ratio balance 1.05 1.09 1.13 Increasing 1

Quick ratio balance .92 .97 1.0 Increasing .59

Pace/rate earned on total valuables 11% 11% 10% Decreasing 11.8%

Earnings per share on common stock 1.90 2.01 1.95 Increasing 1.52

Accounts receivable throughput 9.46 10.09 9.62 Improving 9.32

Average collection period 38.58 36.18 37.96 Improving 31.2

Times interest earned 19 19.2 19.5 Improving 15.4

Inventory throughput 15.05 14.71 14.30 Decreasing 15.5

Net profit margin 25.3% 26.9% 28.4% n/a 18%

Gross profit margin 61.2% 60.9% 61.2% n/a 43%

Pace/rate earned on common S.E. .42 .42 .42 n/a .63

Pace/rate earned on total S.E. .27 .27 .26 decreasing .36

Coca Cola Common Size Income Statement

2015 2014 2013

Net Operating Earnings 100.00 100.00 100.00

Cost of Goods Sold -39.32 39.68 -39.14

Gross Profit 60.68% 60.32% 60.86%

Selling, general and Admin. Expenses -36.94 36.94 -37.47

Other operating charges -1.91 -.93 -1.57

Operating Income 21.83% 22.45% 21.82%

Interest income 1.14 .98 1.04

Interest expense -.99 -.83 -.90

Valuation income, net 1.28 1.71 1.48

Other income (loss), net 1.23 .29 1.14

Income before income taxes 24.50% 24.59% 24.58%

Income taxes -6.08 -5.67 -6.03

Consolidated net income 18.41% 18.92% 18.55%

Net income attributable to non-controlling interests -.09 -.14 -.13

Net income attributable to shareowners 18.32% 18.78% 18.42%

FINANCIAL STATEMENTS ANALYSIS

The in-depth analysis of key financial ratio balances in this project helps in measuring the financial strength, liquidity conditions and operating efficiency of the corporation. It also provides valuable interpretation separate for each ratio balance that helps organization implementing the findings that would help the organization to increase its efficiency (Sharma, 1) Ratio balances are only post mortem analysis of what has happened between two balance sheet dates. For one thing, they gain no clue about the future. Ratio balance analysis in view of its several limitations should be considered for analyzing purposes rather than being considered as an end itself.From the analysis it is quite clear that the gross profit ratio balance is providing a steady growth number whereas operating ratio balance is around optimum level to the sector standards. As a whole, the liquidity position of the corporation is good. Thus finally the corporation must try to improve its profit margins as they are small sector levels. This improvement may also bring up its requite on investment and overall efficiency to the corporation. The occupation environment of the corporation is reasonably good. The corporation’s track record is always inclined to strong principles based profit growth.

Demand for carbonated soft drinks has been negatively affected from the concerns of the obesity and nutrition concerns of today’s population. Carbonated soft drinks have dropped from 60% to 35% of the total US beverage volume. Carbonated soft drink companies such as Coca Cola have also been under public eye because of public policy challenges infuriated from the sales of soft drinks in grade schools. The last market data information has led to alteration from carbonated soft drinks to flavored water, diet beverages, and sports drinks.Coca Cola faces a risk from increasing price movements for commodities that are required in for its operation balances. Alters in the prices of these raw materials will pass onto the customers if the corporation wishes to remain profitable. This alters and potential increase in price of products could potentially result in loss of target audience, as they may switchover to more inexpensive alternatives. Coca Cola faces price risk on commodities such as resin and corn which affects the cost of raw materials used in the manufacturing of finished goods. Also, Coca Cola is exposed to commodity price fluctuations on crude oil. This is important because this affects the corporation's cost of fuel used in the movement and delivery of its products. In the fiscal year 2013, Coca Cola reported very strong financial performance with a reported net income of $36.1 million. Throughout the year, Coca Cola saw an improvement across many channels of their occupation that helped drive an increase in case volume of 4.4%. This was the highest volume growth the corporation has seen in over five years. Coca Cola is also focusing its efforts to improve the balance sheet in order to better position the corporation to react to opportunities when they are available. This dedication is shown through the decrease of long-term outstanding debt by over $450 million in past 10 years. Coca Cola plans to continue to use its available annual cash falls to reduce long-term outstanding debt. Coca Cola is on the smaller end when compared in market capitalization to its competitors and the sector. This is because the corporation strictly focuses on distribution specifics, whereas its competitors are focused on development, marketing, selling, and distribution of their products.

Based on its positive net, operating, and gross margins, we can clearly visualize that Coca Cola operates under profitable conditions. Although the corporation converts an above median percentage of its earnings to gross profits, it fails to do the same for operating and net profits. The corporation’s 6.36% operating margin and 2.61% net profit margin is far smaller than the competitors listed and the overall sector average. In addition, Coca Cola saw its earnings drop despite of positive earnings growth in last financial year. When compared to the sector average, Coca Cola is heavily lagging behind in both these metrics.

In the last 7 years, the corporation has been averaging a compound annual growth pace/rate of just fewer than 5%. In addition to the higher earnings, profit margin is slightly improving year over year. The Corporation’s outstanding debt to total capital ratio balance number75.44% is relatively high when compared with the non-alcoholic beverages sector's norm. Coca Cola is moving in the right direction as it is decreasing its outstanding debt-to-total capital ratio balance year over year; on the other hand, the sector is actually moving the opposite direction as its outstanding debt-to-total capital ratio balance is increasing. When compared with competitors that are similar in market capitalization, the corporation’s quick ratio balance is high. With a quick ratio balance of 1.13 and an interest coverage ratio balance of 1.75, the corporation should be able to comfortably repay its outstanding debt. Coca Cola’s cash conversion cycle shows that it is almost twice as large as the sector average. This is a bad sign as this shows that the corporation takes a longer time than its competitors to convert resource inputs into cash pitfalls.

During last seven years, Coca Cola is showing steps in both reducing its dependence on outstanding debt and also increasing its liquidity. Its LT Outstanding debt/Valuation ratio balance has decreased substantially from 765.15 to 315.76. This is the same case for LT Outstanding debt/ Total Capital ratio balance, which decreased from 87.34 to 75.44. The metrics based on liquidity shows that all three ratio balances have increased during the timeline. This is a positive sign as the corporation is better positioning itself to handle any unanticipated conditions.

We can clearly see that ROA, ROC, and earnings per employee are on an upward trend, ROE has been very vulnerable. ROA has almost doubled from 1.64% in 2004 to 3.05% in 2010. ROC has increased from 5.87% to 8.10% in these same 7 years. Earnings per employee has been on a constant rise and increased almost by $93,000 within this time range. But still this doesn’t allow us to really deduce anything from ROE since there doesn’t seem to be a noticeable trend. ROE hit its high in 2004 at 37.38% and had its small in 2008 at 9.24%. Since then, ROE has recovered and continued to hover around its usual range of 30%.

Cash falls from operation balances, investments and other financial activities:

2015 2014 2013

Net Income 8626.00 9086.00 8634.00

Depreciation/Amortization and depletion 1977.00 1982.00 1954.00

Net Alter from Valuables/In outstanding debtedness -932.00 1080.00 -1893.00

Net cash from Discontinued Operation balances 0.00 0.00 0.00

Other operation balance activities 871.00 657.00 779.00

Net case from operating activities 10542.00 10645.00 9474.00

Property and equipment 2439.00 2637.00 -2819.00

Acquisition/disposition of subsidiaries 519.00 654.00 -415.00

Investments -1991.00 -9234.00 803.00

Other investing activities -303.00 -187.00 -93.00

Net cash from investing activities -4214.00 -11404.00 -2524.00

Uses of funds:

2015 2014 2013

Issuance (repurchase) of capital stock -3054.00 -3070.00 -2944.00

Issuance (repayment) of outstanding debt 4711.00 4218.00 4965.00

Increase (decrease) short-term outstanding debt 0.00 0.00 0.00

Payment of dividends and other distributions -4969.00 -4595.00 -4300.00

Other financing activities 17.00 100.00 45.00

Net cash from financing activities -3745.00 -3347.00 -2234.00

Effect of exalter pace/rate alters -611.00 -255.00 -430.00

Net alter in cash and equivalents 1972.00 -4361.00 4286.00

Cash at beginning of period 8442.00 12803.00 8517.00

Cash at end of period 10414.00 8442.00 12803.00

Diluted net EPS 1.90 1.97 1.85

Coca Cola’s financing activities include share issuances, net borrowings, dividend payments and share repurchases. The current yield on Coca Cola bonds is 3.03%; Coca Colas current stock price is $40.88. Also, the company maintains outstanding debt levels considered prudent based on the corporation’s cash falls, interest coverage ratio balance and percentage of outstanding debt to capital. Coca Cola uses outstanding debt financing to smaller their overall cost of capital, which increases their requisite on shareowners' valuation. This exposes them to adverse alters in interest pace/rates. Its capital structure consists of 54.2% outstanding debt and 45.8% valuation. The corporation keeps a tab on their interest coverage ratio balance and the rating agencies consider the

ratio balance in assessing provided ratings of credit. But, the rating agencies aggregate financial data for certain bottlers along with the corporation when assessing their outstanding debt rating. As such, the key measure to rating agencies is the aggregate interest coverage ratio balance of the Coca Cola and certain bottlers. Coca Cola’s global presence and strong capital structural presence gives them access to key financial markets around the world, enabling them to raise funds at a small effective cost. This position, coupled with active top management of Coca Cola’s mix of short-term and long-term outstanding debt and their mix of fixed-pace/rate and variable-pace/rate outstanding debt, results in a smaller overall cost of borrowing. Coca Cola’s outstanding debt top management policies, in conjunction with their share repurchase programs and investment activity, can result in current in outstanding debt exceeding current valuables.

STRATEGIC ALLIANCES

The Coca-Cola Company works globally with partners to address their collective environmental and social challenges and responsibly manage the planet's resources. Coca Cola Company is based on Business to Business marketing, which means that the company provides goods that bought for a resell rather than personal use. It is focused on sequential synergies. It utilizes a variety of alliance types. The company partners with some of its largest customers to achieve heightened brand presence and sell more product. The company's alliances are based on commitment and trust.

Coca-Cola prefers to acquire brands and ally with bottlers to package and distribute those brands. The company makes its Coke syrup, for example, and after completing its task, passes the product on for bottling by partners, or for consumption. This approach fits with the company’s strategy and enhances its operational effectiveness. There are other benefits of various alliance types which Coke enjoys:

A. Partnerships with Bottlers and Distributors • Lowers the costs of entering markets.• Reduces the need for capital.• Streamlines the company’s portfolio or operational activities.

B. Acquisition of Brands and Products • Fills gaps in Coca-Cola’s brand portfolio.• Reduces competition in the beverage industry.• Prevents competitors (i.e. Pepsi Co.) from gaining the same market space.• Grows total company revenue.

While Coca-Cola generally partners with bottlers, it sometimes takes a minority equity interest in them. In some uncommon instances, Coke buys an entire bottler’s operations. The equity interest in its bottlers is a sign of encouragement, an indication that Coca-Cola wants its partners to succeed. Some of the company’s oldest bottling partners are Coca-Cola Enterprises and Coca-Cola Hellenic Bottling. Coca-Cola focuses on its core operation, making syrups, and lets other handle the intense logistical challenge of bottling and distributing its products.

Coca-Cola Company works together with more than 300 bottling partners globally and operates the most extensive beverage distribution system in the world.

Bottling Investments Group (BIG) – It was created to ensure that the bottling franchises receive appropriate investments and expertise to ensure their long-term success. BIG strategically invests in select bottling operations and temporarily takes them under Coca-Cola’s ownership. When an operation is stable and thriving, BIG’s goals are to find a qualified bottler to assume operations and continue to grow the business.

Apart from the bottling partners, Coca Cola Company has strategic alliances with a vast range of other companies to leverage their brand in different domains.

1. In 2006, Apple and Coca Cola collaborated to promote calorie-free Coke Zero along with iTunes.2. Since 2001, Procter & Gamble has a joint venture with Coca-Cola to develop and market their

juices and snacks.

3. McDonald’s

McDonald partnered with Coca-Cola in 1955, when McDonald’s opened its first restaurants in Des Plaines and a beverage supplier was required.

McDonald’s and Coca-Cola alliance is a big success, making the two companies what they are today. McDonald’s is now the world’s leading global food service retailer with more than 35000 local restaurants serving nearly 70 million people in more than 100 countries (McDonald’s, 2014), while Coca-Cola is the world’s largest beverage company owning and licensing around 1.9 billion beverage servings worldwide every day in more than 200 countries (Coca-Cola Annual Report, 2013). Customers are accustomed to enjoying a meal with a coke inside all along, which makes the soft drink a key revenue stream, covering about 5% of McDonald’s revenue.

Why did McDonald’s and Coca Cola partnership become successful?

It is the compelling partnership ‘Value Propositions’ and ‘offers’ they jointly designed that made the partnering extraordinary. Some of the reasons are:

1. The joint expansion vision

McDonald’s and Coca-Cola shared a common mission and vision to expand globally

2. Source of value (SoVs)

Coca-Cola has saved the cost of vertical integration from the partnership with McDonald’s (Douglas et al., 1996), compared to Pepsi who expanded distribution of its products to end customers by acquiring Kentucky Fried Chicken, Pizza Hut and Taco Bell at an expensive cost (PepsiCo, 2014). Meanwhile, targeting similar demographic end customers, that partnership benefited each other in terms of resources & expertise sharing, marketing synergies and risk reduction.

3. Areas of co-operation (AoCs)

A. Market expansion

Both of them are the leaders in their industries and possess numerous resources and operation experiences, thus adding more symmetry to the vision of global expansion (David, 2014). E.g- to help McDonald’s expand worldwide, Coca-Cola often provides existing offices in different regions as a base of operation for McDonald’s to get up.

B. Product development

The know-how and expertise from Coca-Cola benefits the product development of McDonald’s. In 1993, Coca-Cola offered business advice on the product offering of McDonald’s, creating the Extra Value. In 2002, both of them executed collaborative strategies for Latin America, designing and testing of new packaging for drinks. Moreover, recently, Coca-Cola helped McDonald’s create a new product line of smoothies.

C. Unique strategic values created by the supply chain integration

The unique supply chain co-operated by both Coca-Cola and McDonald’s creates added values. Evidence shows that the best taste of Coca-Cola is only available in McDonald’s, as they established a unique system for the delivery and production of coke. Coke syrup is normally delivered in plastic bags; however, since McDonald’s sells a larger amount of coke, syrup can be delivered in stainless steel tanker truck. Additionally, McDonald’s has a reverse osmosis filter offering the cleanest water. All these make coke taste fresher and better; enabling McDonald’s to possess competitive advantage of better-taste coke.

D. Advertising and Corporate social responsibilities (CSR)

From opposing Bloomberg on super-size sodas (Watson, 2012) to being the ‘biggest sponsors of Brazil’s 2014 world cup’, McDonald’s and Coca-Cola have worked countless campaigns globally over years. Most recently, in Philippines, both partners started #BetterTogether, a social media campaign to promote ‘the fast food chain’s BFF Bundle, a set meal which includes Coca-Cola drinks.’

Moreover, McDonald’s and Coca-Cola constantly innovate together in a more sustainable supply chain. In 2002, they pursued new sponsorship and charity opportunities in Latin America, and helped more than 100 local schools to allow students to see the collection from Art Museum. Furthermore, they also developed a new cup with a locking lid to prevent children from spilling their drinks.

1. The Walt Disney Company has a 47 years alliance with Coca-Cola Company. On September 2002, DASANI water bottles were featured at the Walt Disney’s parks and resorts. DASANI were also served on the Walt Disney cruise lines, and became the sponsor of the Walt Disney’s World Marathon.

4. Since 1991, Nestlé Company - Switzerland, and Coca Cola Company have a joint venture in which Nestlé shares its coffee, tea and chocolate beverages while Coke their distribution system.

5. In April, 2014 Coca-Cola entered into agreement with InterContinental Hotels Group (IHG), one of the world's leading hotel companies, wherein the hotel chain would offer Coca-Cola’s soft drink and juice brands to guests during their stays at IHG hotels in the United States.

6. Sustainability Partners - Coca Cola has also partnered with many organizations around the world so as to contribute to positive change and achieve their sustainability goals,. These organizations are as follows:

A. The Company announced a partnership with WWF on June 5, 2007 to work toward conserving and protecting freshwater resources around the world; to improve their carbon emissions and energy use and to improve water efficiency within their operations.

B. The company is engaged with PNB through participation in local chapters and projects. Across the Middle East and North Africa region, for example, the Company partnered with the U.S. State Department to sponsor a month-long summer entrepreneurship program at Indiana University’s Kelley School of Business.

C. Through their partnership with the Inter-American Development Bank (IDB), the company has undertaken multiple initiatives throughout Latin America in the areas of agriculture, sports for development, recycling and water and sanitation.

D. The Company has undertaken several innovative projects in association with the Gates Foundation. In October 2009, the company undertook a four-year, $11.5 million project in Kenya and Uganda to increase local mango and passion fruit sourcing, benefitting more than 50,000 small farmers, many of them women.

E. The Coca-Cola Company has launched more than two dozen programs in partnership with USAID, the principal U.S. federal agency providing development and humanitarian assistance, since 2002. In 2005, the company launched the Water and Development Alliance (WADA)—a unique partnership to address community water needs in developing countries around the world.

F. On December 1, 2011, World AIDS Day, the Company announced a multi-year partnership with RED to help raise awareness and money for The Global Fund to Fight Aids, Tuberculosis and Malaria with the aim of virtually eliminating mother-to-child HIV transmission by 2015.

G. The Coca-Cola Company has been in collaboration with IFRC, the International Federation of Red Cross and Red Crescent Societies, since 1917 to serve disaster victims more quickly and effectively.

H. The Coca-Cola Company purchased 10% Minority Equity Stake in Green Mountain Coffee Roasters

4. Marketing Strategies – The Coca-Cola Company has a strong marketing strategy that focuses on growth in all types of markets namely; generating more volume in the emerging markets, increasing their brand value in developing markets and growing profit in their most developed markets.

A. The Company announced a partnership with WWF on June 5, 2007 to work toward conserving and protecting freshwater resources around the world; to improve their carbon emissions and energy use and to improve water efficiency within their operations.

B. The company is engaged with PNB through participation in local chapters and projects. Across the Middle East and North Africa region, for example, the Company partnered with the U.S. State Department to sponsor a month-long summer entrepreneurship program at Indiana University’s Kelley School of Business.

C. Through their partnership with the Inter-American Development Bank (IDB), the company has undertaken multiple initiatives throughout Latin America in the areas of agriculture, sports for development, recycling and water and sanitation.

D. The Company has undertaken several innovative projects in association with the Gates Foundation. In October 2009, the company undertook a four-year, $11.5 million project in Kenya and Uganda to increase local mango and passion fruit sourcing, benefitting more than 50,000 small farmers, many of them women.

E. The Coca-Cola Company has launched more than two dozen programs in partnership with USAID, the principal U.S. federal agency providing development and humanitarian assistance, since 2002. In 2005, the company launched the Water and Development Alliance (WADA)—a unique partnership to address community water needs in developing countries around the world.

F. On December 1, 2011, World AIDS Day, the Company announced a multi-year partnership with RED to help raise awareness and money for The Global Fund to Fight Aids, Tuberculosis and Malaria with the aim of virtually eliminating mother-to-child HIV transmission by 2015.

G. The Coca-Cola Company has been in collaboration with IFRC, the International Federation of Red Cross and Red Crescent Societies, since 1917 to serve disaster victims more quickly and effectively.

H. The Coca-Cola Company purchased 10% Minority Equity Stake in Green Mountain Coffee Roasters

I. On August 2014, the Company purchased 16.7% Equity Stake in Monster Beverage. The Coca-Cola Company would contribute its Energy Portfolio to Monster, and Monster its Non-Energy Portfolio to the Company.

CORE COMPETENCIES

The company has developed following competencies over the years that has enabled it to position itself strongly in the global market.

1. Comprehensive distribution network – Its distribution system spans over 200 countries. This has made Coca-Cola accessible to billions of people worldwide. Coca-Cola is often available in ample supply to people in areas where other consumer goods companies would never consider delivering their products. The African continent is an excellent example – it’s fairly common to see a small shop selling cold Coke in the middle of nowhere.

2. Secret Recipe - The secret recipe for Coca-Cola, which tastes better than other cola drinks.3. Innovation – The company’s ability to continue developing new products and re-inventing old ones

– Coca-Cola currently offers over 400 brands in 200 markets worldwide. Coca-Cola’s production techniques are so well developed that it costs a fraction of the selling price to manufacture their product, resulting in high profit margins.

Coca-Cola’s Business Model Canvas

Marketing Strategy

Going Global

Co's Quality Promises

Taegting young mind

Change of Bottle

Designs

Fun IslandCocateria

Coca Cabs

Coca Hookha

Coke Pumps

OUR RECOMMENDATIONS

In today’s economic slowdown market, it is very important for Coca-Cola to manage cost, foster product differentiation and promote marketing. The company can take following steps:

References:

Absolute, Repair and RefranchiseTake over management of the various facets of the Coca-Cola supply chain, primarily the bottling distilleries.Revamp and update the current model utilized by the lie of production.After “fixing” the problematic stages of product creation, refranchise the organization to further cut future costs associated with owning an entire supply chain

Absolute control over ProductionVertically integrate the product towards a streamlined model to minimize the total cost of goods soldAcquire each part of the Coca-Cola supply chain from raw material to distributionThis would enable them to achieve 2020 goal of doubled revenue over a 10 year period

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