Coca Cola Company 2007

CHARLIE
Adoptante, AylaMhay
Antolijao, Juvy
Barro, ZyraMikhaila
Felices, Lethryle May
Ferrater, Kristell Jean
Garcia, Claire Ann
Nues, Alexine
Sy, Karlyn
Vergara, Mary Cristine
Ambayec, Philip Jhon
Deiparine, Vernard
Mutia, John Llyod


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TABLE OF CONTENTS

I. Executive Summary..
II. Introduction.
A. Company Background
B. Statement of the Problem and Objectives.
C. Evaluation of Existing Vision, Mission and Objectives
The following are the existing mission and vision of Coca Cola Company:
D. Evaluation of Existing Strategies.
E. Other Case Facts Analysis
1. Exhibits Interpretation
F. Environmental Scanning
1. External Environment
a. Social
b. Political
c. Economic
d. Natural
e. Technological
f. Competitive Forces and Porters Five Forces Model
i. Bargaining Power of Suppliers
ii. Bargaining Power of Customers
iii. Threat of New Entrants
iv. Threat of Substitutes
v. Rivalry
2. Internal Environment
a. Marketing
b. Management and Human Resource
c. Finance
d. Operations
e. Management Information System and Research and
Development
f. Value Chain Analysis
III. Strategy Formulation, Implementation, and Evaluation
A. Input Stage
1. External Factor Evaluation Matrix
2. Internal Factor Evaluation Matrix
3. Competitive Profile Matrix
B. Matching Stage
1. Strength, Weaknesses, Opportunities, and Threats Matrix
2. Boston Consulting Group Matrix
3. Internal-External Matrix
4. Grand Strategy Matrix
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5. Summary of Possible Alternatives
Matching Techniques
Recommended Strategies
1. SWOT Matrix
2. Space Matrix
3. BCG Matrix
4. IE Matrix
5. Grand Strategy Matrix
C. Decision Stage
1. Quantitive Strategic Planning Matrix
D. Recommended Strategies on Alternative Implementation
1. Suggested Vision, Mission, and Objectives
a. Segmenting, Targeting, and Positioning
b. Product
c. Price
d. Place
e. Promotion
2. Management and Human Resource
3. Finance
4. Operations
5. Management Information Systems and Research and Development
E. Action Plan
F. Long Term Strategies
G. Evaluation: Monitoring and Control
IV. References
V. Appendices
A. Coca Cola Financial Ratios
B. Coca Cola Operational and Personnel Ratios Interpretation
C. Coca Cola Value Chain
D. Proposed Coca Cola Logo








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I. Executive Summary
Coca Cola is one of the largest leading beverage company that produce products such
as water, juice and juice drinks, sports drinks, energy drinks, teas and coffees. Coca Cola
products are distributed through restaurants, grocery markets, street vendors, and others, all of
which sell to the end users: consumers.
Coke is increasing investments in bottling investments, front-end capability, equipment
and people. Cokes long term bottling strategy is to reduce ownership interest in bottlers and
sell the companies interest to investee bottlers.
Coca Cola Company has two major rivals: PepsiCo and Cadbury Schweppes PLC.
PepsiCo is a fierce competitor in the beverage industrys two fastest growing categories: water
and sport drinks. Cadbury Schweppes PLC is the worlds largest confectionery company and
has a strong regional beverage presence. In order for Coca Cola to compete with PepsiCo,
Coke should also focus in making a sport drinks. Consumers now a day is so conscious of their
health that they buy sport drink in order to energize them to exercise more. Coca Cola should
produce beverage such as sport drink in order to attract consumers to but their product instead
of PepsiCo.
This case answers, How can Coca Cola produce healthy products in order to lessen
health problems that consumers are facing today, the use of plastic bottles in order to help the
environment and to have a new line of energy drink that is less unhealthy and could boost the
energy of the athletes.
The Company aims at increasing shareowner value over time. It accomplishes this by
working with its business partners to deliver satisfaction and value to consumers through a
worldwide system of superior brands and services, thus increasing brand equity on a global
basis. They aim at managing their business well with people who are strongly committed to the
Company values and culture and providing an appropriately controlled environment, to meet
business goals and objectives.



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II. Introduction
A. Company Background

The Coca-Cola Company is well known by generation to generation, places to
places and continued to be the number one multinational beverage company and
manufacturer, retailer, and marketer of nonalcoholic beverage concentrates and syrups
for ages. The Company started at Atlanta, Georgia since 1886 till now, they continued
refreshing the world by their products. Coca-Cola is a carbonated soft drink sold in the
stores, restaurants, and vending machines of more than 200 countries. Coca-Cola
produces about 400 brands consisting of over 2,600 beverage products.

The Coca-Cola recipe was formulated at the Eagle Drug and Chemical
Company, a drugstore in Columbus, Georgia by John Pemberton, originally as a coca
wine called Pembertons French Wine Coca.
Bottling Coca-Cola
Recognizing the need to create a bottler network, Benjamin F. Thomas and
Joseph B. Whitehead, with the support of Chattanooga businessman John T. Lupton,
began granting other entrepreneurs bottling franchise rights.
The first franchise began operations in 1901, serving parts of Tennessee and other
nearby locations under the ownership of Mr. Thomas and James F. Johnston,
grandfather of former Coca-Cola Enterprises Chairman of the Board, Summerfield K.
Johnston, Jr. In the early 1980s, Mr. Johnston helped initiate a phase of consolidation
designed to improve system efficiency and effectiveness.

Coca-Cola Enterprises is born
In 1986, The Coca-Cola Company merged some of its company-owned operations with
two large ownership groups that were for sale the John T. Lupton franchises and BCI
Holding Corporation's bottling holdings forming Coca-Cola Enterprises Inc. (CCE).
In December 1991, a merger between Coca-Cola Enterprises and the Johnston Coca-
Cola Bottling Group, Inc. created a larger, stronger organization with Johnstons senior
management team assuming management responsibilities.
Coca-Cola Enterprises first began operations in Europe in 1993 with the purchase of
bottling rights in the Netherlands. A significant European expansion began in 1996 and
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1997 with the acquisition of bottling rights in Belgium, France, and Great Britain.
Luxembourg was acquired in 1998, and Monaco in 1999.

The third-largest Coca-Cola bottler in the world (by volume)
In 2010 CCE completed a significant transaction with The Coca-Cola Company, which
acquired all of CCEs North American territory. CCE retained its European territories and
also acquired bottling rights in Norway and Sweden, with the additional opportunity to
acquire German bottling rights within 18 to 36 months of the close of the transaction.
Today, CCE is one of the largest Coca-Cola bottlers in the world, and handles
approximately 8% of the Coca-Cola system's global volume. We serve the countries of
Belgium, France, Great Britain, Luxembourg, Monaco, the Netherlands, Norway, and
Sweden, with successful positions in the nonalcoholic ready-to-drink category in each
nation.

B. Statement of the Problem and Objectives

Problem
This case study recommends strategies and general and specific programs of
action for Coca Cola Company for the purpose of maintaining sustainable success and
securing its title as one of the largest beverage business in the world.
Specifically, this case study also aims to answer the following questions:

1. How can Coca Cola produce healthy products in order to lessen health problems
that consumers are facing today?
2. How can Coca Cola lessen the use of plastic bottles in order to help the
environment?
3. What could Coca Cola propose to have a new line of energy drink that is less
unhealthy and could boost the energy of the athletes?


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Objectives
This case aims to address the following concerns:
1. To engage Coca-Cola in exploring the viability and options for using their
distribution networks in developing countries to distribute social products such as oral
rehydration salts and related educational materials on health, hygiene and sanitation.
2. To support Coca-Cola and its partners in modelling different scenarios which
combine Coca-Colas distribution network with local health initiatives in order to achieve the
aim.
3. To establish a core group of enablers and activists to lead on the different
aspects of this campaign.
4. To monitor the progress of the campaign and ensure that any trials and roll-outs
are effectively monitored and evaluated

C. Evaluation of existing Vision, Mission and Objectives
Our Vision
Our vision serves as the framework for our Roadmap and guides every aspect of
our business by describing what we need to accomplish in order to continue
achieving sustainable, quality growth.
People: Be a great place to work where people are inspired to be the best they can be.
Portfolio: Bring to the world a portfolio of quality beverage brands that anticipate and
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.
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Profit: Maximize long-term return to shareowners while being mindful of our overall
responsibilities.
Productivity: Be a highly effective, lean and fast-moving organization.
From its vision, Coca Cola speaks about achieving something new in the future
which will help them sustain an increasing profit income. Though it is not an easy
job to achieve this statement tells us that, they are going to achieve these three
things which are sustainability, Quality and growth by the help of six variables
which are people, Portfolio partners, planet, profit and productivity. There people,
partners, productivity and portfolio will give them to achieve better quality and
growth in future where as their responsibility towards planet and partners will
help them to achieve sustainability. Therefore the Vision of Coca-Cola is clearly a
good base for the future.

Our Mission
Our Roadmap starts with our mission, which is enduring. It declares our purpose
as a company and serves as the standard against which we weigh our actions and
decisions.
To refresh the world - in mind, body and spirit
To inspire moments of optimism - through our brands and actions
To create value and make a difference everywhere we engage
-In Mission statement of Coca-Cola Company, it contains attitude, self concept,
consumers, products and services, market. The mission statement is suitable because it is
containing five components out of nine. These explain how the consumer is able to experience
the coca-cola company offer. The branding of the company has a unique marketing strategy
because it lasted to generation to generation. Vision is clear and mission statement of Coca-
cola is also supporting its vision.


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Vision and Mission Analyses
Does it include? Does it mention values like?
Customers
Products/
Services
Markets Citizenship Teamwork
No No Yes No No
Technology
Concern for
survival
Philosophy Excellence Integrity
No No Yes No No
Self-concept
Concern for
public image
Employees
No No No
Customer or product-oriented?
Customer-oriented

Objectives
The main objectives for the Coca-Cola Company are to be globally known as a business
that conducts business responsibility and ethically and to accelerate sustainable growth to
operate in tomorrow's world. By having these objectives, it forms the foundation for companies
in the decision making process.
-Above is the Coca-Cola Companys objective statement, which defines the goal of the
company. By these it explains the companys motivation in order to be competitive against by
their competitors.
D. Evaluation of Existing Strategies
One of our goals is to maximize growth and profitability to create value for our shareholders.
Our efforts to achieve this goal are based on:

(1) transforming
- Our commercial models to focus on our customers value potential and using a value-based
segmentation approach to capture the industrys value potential. To achieve this strategy we
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need to transform new kinds of bottles that suites the preference of the people. It takes a lot of
time to conceptualize it.

(2) implementing
- Multi-segmentation strategies in our major markets to target distinct market clusters divided by
consumption occasion, competitive intensity and socioeconomic levels. We implement more
with a well-planned product, packaging and pricing strategies through different distribution
channels.

(3) driving
- is one of a product innovation along our different product categories and we continually
innovate within our own systems and processes to drive efficiency and effectiveness.

(4) Achieving
- The full operating potential of our commercial models and processes to drive
operational efficiencies throughout our company.

(5) Collaboration

-We should collaborate with the suppliers and customers to find opportunities to co-create new
solutions to existing challenges. We will be committing to building a multi-cultural collaborative
team, from top to bottom and to broaden our geographic footprint through organic growth and
strategic acquisitions.

E. Other Case Facts Analysis
1. Exhibits Interpretation

Exhibit 1
The exhibit shows the Consolidated Income Statements of Coca-Cola Company in
thousands for 3 year statistics (2004- 2006). In this exhibits it emphasizes on the Gross
Profit, Operating Income or Loss and Net income. It shows that the gross profit,
operating income or loss and net income is doing fine because it increases its amount in
2006 other than the two years performance.
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Exhibit 2
The exhibit shows the Consolidated Balance Sheet of Coca-Cola Company in thousands
for 3 year statistics (2004-2006). In this exhibits it also emphasizes on the Total Current
Assets, Total Assets, Total Current Liabilities, Total Liabilities and Total Liabilities and
SE. It shows that the total current assets are decreasing as the year 2006 pass by. The
total assets are gaining its way to have a large asset in 2006 because in 2005 they are
decreasing its amount than the 2004 total assets. Its good to know that they are
decreasing there total current liabilities and its total liabilities but still they are increasing
their stockholders equity.
Exhibit 3
The exhibit it shows the Net Operating Revenues by Segment in Coca-Cola Company
for 3 year statistics (2004-2006) with the different divisions of Cola. It shows that the
Africa, East, South Asia, Pacific Rim, European Union, North Asia, Eurasia and the
Middle East and Corporate are decreasing its revenues while Latin America, North
America, and the Bottling Investments are increasing their revenues.
Exhibit 4
The exhibit it shows the Volume Operating Segments in Coca-Cola Company about the
percentage change. As what the notes reminder said that the bottling investment
segment data reflects unit case volume growth for consolidated bottles only. Geographic
segment data reflects unit case volume growth for all bottles in the applicable
geographic areas, both consolidated and unconsolidated.
Exhibit 5
The chart shows the Coca-Colas organizational chart in 2007. It starts from the
Chairman of the board/CEO, and then under the CEO are the President and Chief
Operation Officer, EVP and President Bottling Invest/Supply Chain, Chief Finance
Officer and EVP, EVP and President Marketing Strategy/Innovation, President of the
Eurasia Group, President European Union Market, President of the African Group,
President Latin America Group, President of the Pacific Group, SVP and General
Counsel, SVP and Director of Human Resources, SVP and Director Public
Affairs/Communication, SVP Consumer Innovation/R&D Officer, SVP and President
North America Group. This structure was admittedly inefficient because of the Cultural
Barriers that hinders their way of communication.
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Exhibit 6
The exhibit shows the Direct Competitor Comparison. It shows that the Coca-Cola is
having a highest amount of Market Cap which is $111.18B. The PepsiCo are having a
large amount of Employees other than the other competitors. The Cadbury are having a
7.80% of their quarterly revenue growth. Coca-Cola has a large amount of revenue and
the same as the Gross Margin. The industry of beverages and soft drinks are having a
large amount of EBITDA which is 152.55M which means that they have a large amount
of taxes. Coke has a large amount of Open Margins. PepsiCo had a large amount of Net
Income and the same as the EPS. The industry is highest in P/E. The PEG in 5 years
expected the Cadbury has an amount of 2.48. And lastly, the Coca-Cola is highest in
P/S which is 4.63.
Exhibit 7
The exhibit shows the Company Operating Segment Total Net Revenues in $ Millions. It
shows that the Coca-Cola is increasing their revenue in the different countries yearly.
They had a large amount of eliminations in the year 2006.
Exhibit 8
The exhibits shows the Company Geographic Data in $ Million. It shows that they had a
large amount of the net operating revenues based in international which cost $17,426 in
a year 2006 also the property, plant and equipmentnet in international which cost
$4,296.
F. Environmental Scanning
1. External Environment
In order for Lufthansa to explore strategies, it needs to examine its external
environment in order to identify potential opportunities they could take advantage of.
Moreover, the company should also be mindful of threats, in order for them to
proactively manage such threats, or minimize its effects.

a. Social
Coca-Cola is recognized as the worlds most valuable brand. The company has
been extremely successful in Global Marketing and experts indicate that this success is
largely based on product variation and adaption. The Coca Cola trademark is
recognized worldwide, no matter what language is printed on the bottle. Therefore, Coca
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Cola must continue to tailor their marketing plan and product development to respect
each consumers value, beliefs and cultures.
Social factors have been carefully considered in the companys marketing plan. It
has successfully developed products to please 21st centurys health conscious
consumer with brands like Coke Zero, sports drink and bottled water. They must
continue to adapt to the external environmental threat of healthy lifestyle movement
through product development and marketing of healthy options available in the product
line.

b. Political
These include the regulations, legal issues, formal and informal rules of a country
the organization is under which it must operate. Coca-Cola has little factors affecting its
production and the pattern of selling. The government has control over the
manufacturing procedure of these products in terms of regulations. Coca Cola has
some factors that influence them to operate well. First is Changes in Laws and
Regulations like; changes in Accounting Standards, taxation requirements and
environmental laws either in domestic or foreign authorities. And second is Changes in
Non-Alcoholic business era. These are; competitive product and pricing policy
pressures, ability to maintain or earn share of sales in worldwide market compared to
rivals.

c. Economics
These factors affect Coca-Cola cost of capital and the purchasing power of
present and potential customers. The economic variable in the environment affects
Coca-Cola well in that any increase in interest rate could make business task harder.

d. Natural
Because of the increasing awareness of NO Plastic, Coca Cola should find ways
on how to sell their product by not affecting the environment because of the raw
materials used in producing their products. Coca Cola should lessen the use of plastics
especially that this generation plastic is becoming a problem.

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e. Technological
In todays generation, technology is a key player in helping a business stay
profitable. Large Corporation, like Coca- Cola Company, must invest in technological
research to find ways to become more productive, and ultimately stronger competitor.
Coca Cola Company should observe their technological threats if ever there are any,
to minimize the threats in their companies production.

f. Competitive forces analysis
The industrys competition is that Pepsi and Coke was often interchangeably by many
consumers expressing their interest in a soft drink. Pepsi in particular, is a fierce competitor in
the beverage industries with two growing categories which are water and sport drinks.
i. Bargaining power of suppliers
The main ingredients for Coca-Cola syrup include either high fructose corn
syrup or sucrose derived from cane sugar, caramel color, caffeine, phosphoric
acid, coca extract, lime extract, vanilla, and glycerin. The suppliers are not
concentrated or differentiated. Bargaining power of suppliers is low.

ii. Bargaining power of customers
The individual buyer has no pressure on Coca-Cola because just like having
large retailers it has a bargaining power of the large order quantity. The bargaining
power is lessened because of the end consumer brand loyalty. Bargaining power of
customers is low.

iii. Threat of new entrants
There are some increasing new brands aside from Coca-Cola with the same price of
their product. We all know that Coca-Cola is not only seen just as beverages but also
as a brand. The threat of new entrants is medium.

iv. Threat of substitutes
Coca-Cola doesnt have an entirely unique flavour because there are many kinds of
soda and energy drinks products in the market thats why the people cant tell the
difference of Coca-Cola and Pepsi. The threat of substitutes is medium.

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v. Rivalry
The main competitor of Coca-Cola is Pepsi because its also had a wide range of
beverage products under its brand. PepsiCo was recently ranked #19 among
Americas most admired companies and ranked in #10 as the worlds most admired
company. The
2. Internal environment

a. Marketing
How does the multinational company market their products? Not just
product but their names brand name. A multinational like Coca-Cola company
has its own uniqueness there is something in there product that everyone wants
to try it.

In marketing, every day is different. In the morning they might be working with
packaging designers or creating a viral marketing campaign with an advertising agency.
The afternoon could see them working with the Operations team to activate a brand
plan, or running an innovation workshop for people from all areas of the business. You
can see how flexible the marketing teams are.

Honor and respect are what the company advertises. They used the most
important ingredient which is the culture in every country they want to invest with. They
make sure that it fit to the different culture of such place. Coca-Cola is global family of
people working together to bring your family a wide array of beverage choices to meet
your beverage needs every day. Coca-Cola offers the quality of different beverages they
also focuses with the health of the customers. The Coca-Cola Company has always
taken seriously its commitment to market responsibly, across the globe, across all
advertising media, and across all of our beverages. The company has a global
Responsible Marketing Policy that covers all its beverages, and they do not market any
products directly to children under 12. This means they will not buy advertising directly
targeted at audiences that are more than 35% children under 12. Our policy applies to
television, radio, and print, and, where data is available, to the Internet and mobile
phones. As of now the marketing strategy of Coca-Cola has been continued properly
that makes it more sellable.

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b. Management
Since the strength of every company runs into the management, Coca-Cola
focuses on these human resources because as of 2007 the Coca-Cola has a total of
71,000 employees worldwide this includes Recruitment, succession planning, career
mobility and development, as well as their working environment, their culture and
compensation and benefits all fall within their remit. The employees must be well
managed in order to have a well grown productions. Everything would start out in the
operating department in order to cater the total quality of Coca-Cola products.
Its the strategy that drives our future. Where is the next big opportunity for The
Coca-Cola Company? What will our competitors be doing next weeknext yearin the
next decade? Here they take on big challenges and make bold plans for the future. The
strategic planning team provides expertise and detailed knowledge to their operations
teams. It might be key market information, data about consumer trends and purchasing
habits, or even developments within a particular product category. Whatever the
specifics of the information, it's always accurate, useful, and essential to sustainable
business growth. Central to how they put ideas into practice, the team also helps plan
and run big projects. They say knowledge is power, and at Coca-Cola the strategic
planning team holds the key to a lot of that knowledge, helping us to determine which
projects will provide the best return or offering evidence to support new ideas. The
evidence goes beyond the short term too. This team helps to influence where the
company goes by analysing and predicting future market trends - so we can keep
building a successful business. Kind of roles you can find: Strategic Planning, Business
Development, Business Tracking & Metrics, PMO, Integrated sales & Operations
Manager.
c. Financial
The company is having a great problem with the liquidity ratios about the current
ratio and quick ratio because it had been decreasing. 2004 is most liquid compared to
2005 and 2006. Due to increasing products of beverages sold in the market and
consumer have more options on which product to buy.
Coca-Cola failed in producing a healthy product for the market which can affect
there selling of beverages in different county this can be a factor that investor would not
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invest in the company but in order to become more attractive by investor they must first
develop or produce new product that can fit the needs of the consumers nowadays.
Coca Cola must maintain strong financial performance in the business in order to
continue investing in the future success of its business and deliver adequate
shareholders return. The company should continue to focus on controlling expenses,
and to be prepared to adjust their operating structure even further, if necessary, through
the year to meet their goals.

d. Operations
So as to meet their consumers expectation and create a cost effective business,
they have to run a robust operation. The operational performance is been monitored by
a broad range of measurement at a variety of levels. Operation is being measured by the
amount of product produced in different plants of the company all over the world as well
as how many products are required by the marketers.

e. Research development
The Coca-Cola Company and its partnered company have worked together to
conserve and protect freshwater resources around the world and improve the efficiency
of Coca-Colas operations. the partnership has led to major conservation gains, including
improving the ecological health of seven of the worlds most important freshwater basins
across five continents, helping improve the Coca-Cola systems water efficiency by more
than 20 percent, and promoting more sustainable agricultural practices in the Companys
supply chain.

f. Value chain analysis






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III. Strategy Formulation, Implementation, and Evaluation
A. Input Stage
1. External Factor Evaluation Matrix














Analysis of EFE Matrix of Coke. According to the analysis of EFE, the rating is 2.32.
This shows that the threats being faced by Coca Cola fierce, and it should take some actions to
prevent the threats and utilize the upcoming opportunities
The market has begun to saturate for carbonated drinks since there are a lot of
companies which produces different classes of drinks and a possible substitute for Coca-Cola
drinks. Obesity is becoming alarming today, as this rate increases, it also increases the threats
for Coca-Cola Company since it is selling high carbonated drinks in the market. Coca-Cola only
Key External Factors Weight Rate Weighted Score
Opportunities
Nutritional Offering 0.075 1 0.075
Global expansion 0.1 4 0.4
Innovation 0.05 3 0.15
Product diversification 0.05 3 0.15
Explore new markets 0.05 3 0.15
Digital Programs 0.075 3 0.225
Sensitivity Marketing 0.0375 3 0.1125
Develop costumer
relation
0.075 2 0.15
Coffee/tea dispensing
technology
0.0375 1 0.0375
Threats
Changing trend of
healthy eating and
drinking
0.1 2 0.2
Strong competitors 0.05 2 0.1
Substitute products 0.05 2 0.1
Bottled tea market of
competitor
0.0375 1 0.0375
High cost of production 0.05 2 0.1
Unbranded products 0.05 2 0.1
Rising price of inputs 0.0375 1 0.0375
Decreasing value of
dollars
0.05 2 0.1
Tailored brands 0.05 2 0.1
TOTAL 1.0 2.325
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focuses on selling beverages unlike their major rival, Pepsi, which is more diversified and do not
only focus on beverages. This is a threat for Coca-Cola Company.
Due to the increasing demand for healthy food and beverages, this might be an
opportunity for Coca-Cola Company to sell beverages that are healthy and they could also
introduce a healthy snack, to counterpart PepsiCos Doritos. Technology can be a great help in
the operations to make it fast. It can also help in communicating to the international segments.
2 Internal Factor Evaluation Matrix

Key Internal Factor Weight Rate Weighted Score
Strengths
Brand name 0.12 4 0.48
Variety of products 0.1 3 0.3
High market share 0.1 3 0.3
Financial strength 0.1 4 0.4
Strong global
presence
0.1 3 0.3
Product quality 0.05 3 0.15
Geographic spread 0.05 4 0.2
New products 0.05 4 0.2
Innovative packing 0.05 3 0.15
Weaknesses
Strong & tough
competition
0.1 1 0.1
Substitute products 0.05 1 0.05
Significant focus on
drinks
0.08 2 0.16
Non availability of all
flavours/ products in
0.5 1 0.05
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every operating group
Unfavourable health
effects
0.075 2 0.15
TOTAL 1.0 2.99

Analysis of IFE matrix of Coke. According to the analysis of IFE, the score of Coke is
2.99. This shows that Coca-cola is internally strong and good enough. So by using their
strengths, the can overcome their weaknesses.
Coca-Cola Companys greatest strength is its strong brand name due to its good
marketing skill that makes their products easily recognized. Its international segments are also
its strength because it helps in making its beverages reach to the hands of the customers.
These segments will also lessen their distribution cost since their beverages will not only supply
from one country.
In contrast, selling high carbonated drinks gave a negative to consumers, especially to
those who are health conscious. Significant focus on carbonated drinks is also a weakness
since its competitors, PepsiCo and Cadbury Schweppes PLC, are well diversified because it
sells beverages and foods.
3. Competitive Profile Matrix
Coca-Cola Company PepsiCo Cadbury Schweppes PLC
Critical Success Factors Weight Rating Score Weight Rating Score Weight Rating Score
Market shares 0.10 4 0.40 0.10 4 0.40 0.10 2 0.20
Brand image 0.12 4 0.48 0.12 4 0.48 0.12 3 0.36
Market positioning 0.09 3 0.27 0.09 3 0.27 0.09 3 0.27
Management Operations 0.09 4 0.36 0.09 4 0.36 0.09 3 0.27
Sales Volume 0.08 3 0.24 0.08 3 0.24 0.08 3 0.24
Acquisition 0.07 4 0.28 0.07 4 0.28 0.07 2 0.14
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Health Benefits for
Consumers 0.07 1 0.07 0.07 3 0.21 0.07 3 0.21
Innovative Marketing 0.08 4 0.32 0.08 3 0.24 0.08 3 0.24
Domestic and International
Revenues 0.07 3 0.21 0.07 3 0.21 0.07 3 0.21
Employees 0.08 3 0.24 0.08 3 0.24 0.08 3 0.24
Financial Position 0.07 3 0.21 0.07 3 0.21 0.07 3 0.21
Product line 0.08 2 0.16 0.08 4 0.32 0.08 3 0.24
1 3.24 1 3.46 1 2.83

Coca-Cola Company is compared by its two major rivals, PepsiCo and Cadbury Schweppes
PLC, since there were information provided in the case study that able the researchers to
conduct a competitive profile matrix. Unfortunately, PepsiCo is the most competitive than Coca-
Cola Company and Cadbury Schweppes PLC.
Coca-Cola Company performed well when it comes to its brand image and is well-know to
the market, like PepsiCo, which is also a factor for their high sales volume. Its acquisition also
got a high rate than the two companies, PepsiCo and Cadbury Schweppes PLC, since it had
acquired many international bottling companies. However, when it comes to giving health
benefits to its customer, Coca-Cola got a low rate since it produces beverages that are high
carbonated that cause a high rate of obesity, especially in the United States. Coca-Colas
product line got a low rate since it only focus on beverages, unlike PepsiCo and Cadbury
Schweppes which do not only serve beverages, but they also have snacks, chocolates, and etc.
Coca-Cola Company should recover from this to be able to compete with these companies.




Coca Cola Company
CHARLIE


B. Matching Stage
1. Strength, Weaknesses, Opportunities, and Threats Matrix

Strengths
1. Worlds largest market
share in beverage
2. Coke and its bottlers
are among the world's
top purchasers of
citrus juice, coffee and
sugar.
3. Customer loyalty
4. Coca-Cola has very
effective advertising
Cola-Cola gets
competitive advantage

Weaknesses
1. Significant focus on
carbonated drinks
2. Negative publicity
3. Coke has been
criticized for its
unfavorable health
effects
Opportunities
1. Bottled water
consumption
growth
2. Increasing demand
for healthy food
and beverage
3. Growing beverages
consumption in
emerging markets
4. Growth through
acquisitions
SO Strategies
1. The company has the
opportunity to enter into
new industries such as
snacks (S3,S4,O2)
2. The success of the
company is an opportunity
for selling more energy
drinks in coming events
like The Olympic Games.
(S1,S2,O1,O3,O4)
WO Strategies
1. To conduct research
on healthy beverages
that may apply for
product development
(W1,W3, O1,O2,O3)
2. To utilize international
segments, with
marketing to easily
promote good publicity
of the company
(W2,O4)
Threats
1. Changes in
consumer
preferences
2. Water scarcity
3. Competition from
PepsiCo
4. Saturated
carbonated drinks
market
ST Strategies
1. Developing their health
drinks products
(S1,S2,S3,T1,T3,T4)
2. Penetrating in snack
business (S3,S4,T2,T3,T4)
WT Strategies
1. Investing in Healthy
drinks would be an
advantage for
company
(W1,W2,W3,T1,T3,T4)
2. Implement R&D
department for
company
(W1,W2,W3,T1,T2,T3,
T4)

Coca Cola Company
CHARLIE


Strategic Position and Action Evaluation Matrix
Financial Strength

Rating
Return of investments 5.0
Economies of scale 5.0
High fixed costs 2.0
Good liquidity and bottom-line figures 2.0
Risky leverage ratios 2.0
Total 16.0
Industry Strength
Many distribution channels 6.0
Cost-saving policy 4.0
Competitive Agility 4.0
Total 14.0
Environment Stability
Demand variability -1
Technological changes -2
Competitive pressure -3
Total -6
Competitive Advantage
Market share -3
Strong brand name -1
Consensus-oriented culture, management -3
Customer loyalty -2
Total -8
Coca Cola Company
CHARLIE


Conclusion
ES average is -6/3=-2 IS average is 14/3=4.67
CA average is -8/4 =-2 FS average is 16/5= 3.2
X axis -2+4.67 = 2.67
Y axis -2+3.2 = 1.2

Although the liquidity of Coca-Cola Company is low, knowing that it got a 0.95x lower than
the previous years. The good thing is that they lowered their cost but it generated a higher net
income than the previous years, which give a good ROI. Through its international segments,
Coca-Cola continuously increases its sales, except for the European Union & North Asia,
Eurasia, and Middle East.
Coca-Cola Companys international makes it firm with their operations on distributing
consumers, which lessen their costs since distribution are near to a specific market. Although,
Coca-Cola only offers beverages it still competes aggressively with its competitors.
The demand of Coke from its well formulated taste is high, compared to other soft drinks, by
its competitors, sold in the market, which gives a good score of -1 to Coca-Cola Company.
Since it entails big production in Coca-Cola, technology must also a part of it for a fast-paced
production. Even though, Coca-Cola Companys well-known product is only Coke, they maintain
a good competition with its rivals.
Cokes commercials and advertisements gave a strong impact that they do not only tackle
on their product but they also but culture to it, which enables consumers from other countries
could relate. This also captures the core of a person to obtain customer loyalty. Like for
example, in the Philippines, Cokes commercial focus on dining together with families and
friends. This type of marketing really affects the view of the consumers.





Coca Cola Company
CHARLIE


9
8
7
6
5
Conservative 4 Aggressive
3
2
CA 1 IS
-9 -8 -7 -6 -5 -4 -3 -2 -1 1 2 3 4 5 6 7 8 9
-2
-3
Defensive -4 Competitive
-5
-6
-7
-8
-9 ES




Coca Cola Company
CHARLIE


3. Internal-External Matrix


IFE Total Weighted Score

Strong Average Weak

4.0 3.0 2.0 1.0
E
F
E

T
o
t
a
l

W
e
i
g
h
t
e
d

S
c
o
r
e

Strong
3.0
I II III
Average
2.0
IV V VI
Weak
1.0
VII VIII IX

As indicated in the Internal-External (IE) Matrix, the IFE shows an above average
rating (2.99), while EFE also indicates an above average rating (2.325). The internal
rating is highly attributed to Coca-Cola Companys management and company culture
which include its strong brand name that leads to high global presence and market
share. At the same time, the external rating is brought about by the presence of strong
competitors, PepsiCo and Cadbury Schweppes PLC, and changing trend of eating and
drinking healthy products. Thus, the matrix suggests that Coca-Cola Company belongs
to Division V which suggests the company to apply a Hold and Maintain strategy,
which include market penetration and product development strategies to retain its
current market position by banking on new product opportunities, like selling healthy
beverages than high carbonated drinks.








Coca Cola Company
CHARLIE


4. Grand Strategy Matrix
W
E
A
K

C
O
M
P
E
T
I
T
I
V
E

P
O
S
I
T
I
O
N

RAPID MARKET GROWTH
S
T
R
O
N
G

C
O
M
P
E
T
I
T
I
V
E

P
O
S
I
T
I
O
N



II
1. Market Development
2. Market Penetration
3. Product Development
4. Horizontal Integration
5. Divestiture
6. Liquidation


I
1. Market Development
2. Market Penetration
3. Product Development
4. Forward Integration
5. Backward Integration
6. Horizontal Integration
7. Concentric Diversification



























III
1. Retrenchment
2. Concentric Diversification
3. Horizontal Diversification
4. Conglomerate Diversification
5. Divestiture
6. Liquidation



IV
1. Concentric Diversification
2. Horizontal Diversification
3. Conglomerate Diversification
4. Joint Ventures









SLOW MARKET GROWTH

There is still rapid growth in the industry especially in their best-selling
drink, Coke. Although Coca-Cola Companys beverages are unhealthy due to its
high-carbonated ingredients, it still remain competitive in the industry. Based on
the companys internal strengths, the company is determined to have a strong
competitive position and brand name in the industry, proven as well by the top
position of its other subsidiaries in their respective markets. Thus intensive
strategies such as product development, market development and penetration
are recommended.



Coca Cola Company
CHARLIE


5. Summary of Possible Alternatives
Matching Techniques Recommended Strategies
1. SWOT Matrix Various strategies including market penetration through
promotions, market development in low-cost segment or
other geographic areas, and utilize acquired bottling
investments. Product development in introducing healthier
beverages.
2. Space Matrix Aggressive strategies including backward, forward, and
horizontal integration, market penetration, market
development, product development, diversification
(related or unrelated)
3. IE Matrix Market development and Product Development
4. Grand Strategy Matrix Market Development, Market Penetration, Product
Development, Forward Integration, Backward Integration,
Horizontal Integration, and Concentric Diversification

C. Decision Stage

1. Quantitative Strategic Planning Matrix
Based on the tallied possible strategies that the firm can implement, two possible
repeating strategies are evaluated, chosen mainly through the opportunities presented
primarily the segmented international market, and other introducing new healthy products.
Alternative 1: Product Development

Living in a healthy lifestyle is becoming a trend today, Coca-Cola Company should take
advantage on this external factor. Coca-Company can use its Research & Development
area for 1-year intensive research on developing a new healthy product. That could
compete with PepsiCo and Cadbury Schweppes PLC.


Coca Cola Company
CHARLIE


Alternative 2: Market Penetration: Existing Business Segment

Coca-Cola Company can penetrate its existing market through intensive promotions
designed to primarily attract the business class segment. The company can do
sponsorship in big events, like big celebrations or parties, for example spring breaks or big
concerts. This may boost the market share for they are a lot of people are coming in these
events.

Internal and External Factor Weight Product
Development
Market
Penetration
Strength AS TAS AS TAS
1. Brand Equity / Image & Recognition 0.08 3.00 0.24 4.00 0.32
2. Product Distribution and worldwide
network
0.10 3.00 0.30 3.00 0.30
3. Solid Financial Performance 0.10 3.00 0.30 4.00 0.40
4. One of the Worlds most recognized
brand
0.12 4.00 0.48 4.00 0.48
5. Product Diversification ( Water,
juices, soft drinks, sports drinks, etc. )
0.08 0.00 2.00 0.16
6. Co-operate identity 0.08 3.00 0.24 0.00
Weaknesses
1. Credit Rating 0.10 1.00 0.10 2.00 0.20
2. Customer Concentration particularly
in the US
0.10 1.00 0.10 2.00 0.00
3. A lot of Loyal Pepsi customer are not
enough loyal Coca Cola customers
0.08 0.00 0.00
4. Does not enjoy the number one
position
0.08 2.00 0.16 0.00
1.00
Opportunities
1. Possible growing demand 0.12 2.00 0.24 0.00
2. Expansion- Reaching all segments 0.06 3.00 0.18 3.00 0.18
3. Globalization 0.11 2.00 0.22 1.00 0.11
4. Catering to Health Consciousness of
People
0.12 0.00 2.00 0.24
5. Bottled Water Growth 0.13 1.00 0.13 1.00 0.13
6. Acquisitions of Smaller players 0.06 1.00 0.06 1.00 0.06
Threats
1. Health Drinks Fruit Juice
Companies
0.12
2. Key Competitors 0.06
3. Commodity price growth 0.12
4. Image Perception in certain parts of
the world
0.05
Coca Cola Company
CHARLIE


5. Smaller, more nimble
operators/players
0.05
TOTAL : 1.00 2.75 2.78

Product Development is one of the strategies fit for a higher demand for healthy
products. It is an opportunity for Coca-Cola Company to use its strength to cope up with this
trend. Through intensive research on developing a product, the companys product may reach
to those who are health conscious. Coca-Colas strong brand name and a wide distribution
channels, it would be easy to introduce new products to the market.
Since Coca-Cola Company is one of the most recognized brands, this status should be
maintained or be improved. Market Penetration comes in to the picture. Promoting products
should have interaction with the market. A strategy that Coca-Cola should use is that they
should go directly to the market and be a part of them. Since its slogan says, Open Happiness,
then for every moment of happiness of its customers, Coca-Cola should be a part of it. One of
the best examples is sponsoring in big events, like spring breaks and concerts.
After evaluation, it has been determined that Alternative 2 received the higher score, 2.78,
thus market penetration was chosen. This strategy will be the focus of the company, however,
the product development can still be carried simultaneously.
D. Recommended Strategies on Alternative Implementation

The chosen solution, Product Development, aims to improve market share and get
more sales. Product Development is Building on existing relationships with consumers and
on a creative ability to develop new products suited to consumer wants. Like for example,
producing a healthier beverage that has less sugar that could affect the customers health.

1. Suggested Vision, Mission, and Objectives

After the analyses of Coca Colas existing mission and vision statements, the
proponents of this group recommend the following mission and vision statements as well
as objectives for the company:

Vision
To refresh the world... To inspire moments of optimism and happiness...To
create value and make a difference.



Coca Cola Company
CHARLIE


Mission

Identify and meet the consumers needs for soft drinks, provide added
values through constant development of our products and services.

Objectives:
1. To exceed customers' expectation
2. To establish a core group of enablers and activists to lead on thedifferent aspects of
this campaign
3. To increase profit


2. Marketing
a. Segmenting, Targeting, and Positioning

Segmenting
Targeting
Positioning

a. Product
Coca-Cola bottles are sold throughout each part of the world. The main product is
the concentrate, produced with a secret recipe. Finished product produced from
concentrate in combination with filtered water and sweeteners. The Coca-Cola Company
also sells concentrate for soda fountains to main cafs and food service providers.
Nowadays their drinks have different type of tastes and variety of bottles used.

b. Price
The price for Coca-Cola product is fluctuating; at the beginning the price wasnt so
high. Nowadays it tends to increase because of tax and peoples income. Also competition
influence on the price strategy, so it can be said that price usually tend to be adapted for
potential customers.

c. Promotion
Coco-Cola is commonly known all over the world because of their great marketing
strategy. It includes variety of methods to present their product:
Uses famous people to advert their product
Advertising in TV and magazines
Sponsorship activity
Coca Cola Company
CHARLIE



d. Place
Coke is multinational company with many sales offices throughout the world. Its
available for everyone in the earth to buy Coca-Cola products. It sold mostly in supermarkets
and local shops. Also it is easy to find their products in cafe, restaurants and gas stations.

3. Management and Human Resource
The Coca Cola Company is the leading beverage companies industry. Coca Cola Company runs
different variety of products such as soft drinks, bottled water, tea, sports juice and etc. Coca cola has a
franchising model for the production and distribution purposes. It is important on the part of
management to organize the activities of human resource and organizing its technology along with the
resources such as physical assets, monetary resources and knowledge of the employees and establish
effective and efficient internal organizational structure of the business
Management at Coca Cola Company is focuses on the acquisitions and retention of highly skilled
and knowledgeable employees so that it can maintain its top position in the market. It treats these
resources as an asset. It provides such conditions of employment and procedures that enables all
employees to develop a sense of unity with the enterprise and to carry out their duties in the most
willing and effective manner.
Coca Cola Organizational Structure













Coca Cola Company
CHARLIE


The figure in the previous page is the suggested organizational structure of Coca Cola
Company. It is headed by the Chief Executive Officer. The organizational structure of the Coca-
Cola company breaks down into several sectors. It focuses on seeing the trends in each country
that the products are sold in and meeting the needs of each area. The organizational structure
focuses on meeting the needs and demands of their customers.
4. Finance
Coca-Cola Company has reached its goal to be the worlds largest beverage company.
Since Coca-Cola distributes products throughout the world, their finance also varies. From the
year 2005 to 2006 the Net Income increased up to 4.2% while in revenues also increased 4.2%.
So, being on the top selling beverage company they must continue to strengthen their strategies
and lean not on the fact that yearly they increased in their sales and profit. For a company, it is
hard to create something different strategies to increase profit and sales and lessen its debt. But
there are expenses that need to be supported, like in the place where coca-cola products were
decreasing in sales. Different places has different needs, do they also have different budget
allocated, so they need to provide higher cost to the declining country. Financial tools can be a
good strategy to be used such Cash Flow to indicate also the movement of cash, from the
operating activities, investing activities and financing activities. To continuously generate income
they must spend its finances wisely and provide proper budget allocation, so that Coca-Cola
Company will last for another 100 years.
5. Operation
Operating such as big company as Coca-Cola isnt that easy. From producing 400
brands and consisting 2,600 beverage products, the operation management gives high standard
to produce quality products. So basically the target market of the company is everyone, so they
want to produce products that suites the taste of different cultures from different countries. Not
all countries do have manufacturing workplace, so this could possible strategy to be enhanced
that they could build manufacturing place to countries that dont have so that the distribution of
the products would be much easy. They can also manufacture eco-bottles to lessen waste
pollution that can help our environment and can lessen the cost for bottling. In addition, the
company can strengthen its ability to work closely with chain retailers and small retailers to help
them reduce costs and improve sales. Through this Coca-Cola Company can improve its
operating system.
Coca Cola Company
CHARLIE


6. Management Information Systems and Research and Development
The company exploring the international market for products that they are already
selling. The company first entered the international market in 1897 when it made Coke available
in Mexican & Canadian shops with soda fountains. This was followed by setting up plants in
China and many other locations around the world. The company has formed alliances and joint
ventures with global companies in the bid to increase its global market share. The company has
been introducing different flavours in order to change the beverage industry .




















Coca Cola Company
CHARLIE


IV. References
External Environment retrieved on May 1, 2014--- http://www.slideshare.net/dgclip1981/the-
coca-cola-company
SWOT retrieved on May 1, 2014--- http://mba-posts.blogspot.com/2012/06/swot-analysis-of-
coca-cola-company.html
Company Background retrieved on May 3, 2014--- https://www.cokecce.com/about-cce/our-
story
Vision and Mission retrieved on May 3, 2014--- http://www.coca-colacompany.com/our-
company/mission-vision-value
















Coca Cola Company
CHARLIE


V. Appendices
A. Coca Cola Financial Ratios (2007)

LIQUIDITY Formula 2006 2005 2004
Comments
Current Ratio CA/CL
0.95x 1.04x 1.10x Weakness
Quick Ratio CA-Inventory/CL
0.60x 0.72x 0.81x Weakness
LEVERAGE RATIOS
Debt-to-Total Assets Total Debt/ TA 43.53% 44.42% 49.13%
Strength
Debt-to-Equity-Ratio
TD
Total Stockholder's Equity 77.07% 79.93% 96.59%
Strength
Long Term Debt-to-Equity-
Ratio
Long-term Debt
Total Stockholder's Equity 7.77% 7.06% 7.26%
Weakness
TIE Ratio EBIT/ Interest Charges
30.90x 28.88x 32.74x Strength
ACTIVITY RATIOS
Inventory Turnover COGS/Average Inventory 5.33x 5.76x 5.38x
Weakness
Fixed Assets Turnover
Sales/Average Fixed
Asset 3.80x 3.89x 3.61x
Weakness
Total Assets Turnover Sales/Average Total Asset 0.81x 0.76x 0.70x
Strength
A/R Turnover
Annual Credit Sales
_______________________
Average AR 9.66x 10.38x 10.12x
Weakness
Average Collection Period
365 days
Receivable Turnover 37.78days 35.16days 36.07days
Weakness
PROFITABILITY RATIOS
Gross Profit Margin Gross Profit/Sales 66.11% 64.53% 65.22%
Strength
Operating Profit Margin EBIT/Sales 28.22% 30% 29.22%
Weakness
Coca Cola Company
CHARLIE


Net Profit Margin Net Income/Sales 21.09% 21.09% 22.07%
Same
Return on Assets Net Income/TA 17.11% 16.04% 15.47%
Strength
Return on Equity
Net Income
Total Stockholder's Equity 30.53% 30.18% 30.42%
Strength
GROWTH RATIOS
Sales
Current Sales Previous
Sales

Previous Sales
4.26 % 5.20% - Weakness
Net Income
Current Net Income
Previous Net Income

Previous Net Income
4.27% 0.52% - Strength

B. Coca-Cola Company Financial Ratios Interpretation

FINANCIAL RATIOS
Liquidity Ratios Coca-Cola Companys current ratio and quick ratio had been
decreasing. 2004 is most liquid compared to 2005 and 2006. Considering its decreasing
assets and increasing inventory, which is considered as a slow-moving asset in terms of
its convertibility into cash, it resulted to a lower liquidity. Due to increasing products of
beverages sold in the market and consumer have more options on which product to buy.
This might be a factor on the increase the inventory of a company.

Leverage Ratios Coca-Cola Companys liabilities continuously decrease. A lower
leverage ratio indicates a low risk capital structure. Coca-Cola Companys leverage
ratios present a low risk in the firm capital structure. This means that they are able to use
the money wisely to improve operations leading to a higher income, and indeed their
income increase as shown in Exhibit 1 of the case study.

Coca Cola Company
CHARLIE


Activity Ratios Coca-Cola Companys activity ratios were slightly decreasing except for
the total asset turnover. It indicates less efficiency on utilizing their assets to generate
revenue.

Profitability Ratios Most of the profitability ratios were increasing. Coca-Cola Company
has the ability to control production/acquisition costs marks ups in the selling of their
products.

Growth Ratios Although Coca-Cola Companys sales decrease from 5.20% to 4.26%,
its net income showed a drastic increase.

C. Coca Cola Value Chain

















Coca Cola Company
CHARLIE