Mission

"We exist to create value for our share owners on a long-term basis by building a business that
enhances The Coca-Cola Company's trademarks. This is also our ultimate commitment. As the
world's largest beverage company, we refresh that world. We do this by developing superior soft
drinks, both carbonated and non-carbonated, and profitable non-alcoholic beverage systems that
create value for our Company, our bottling partners and our customers."
Vision 2020
Our vision is to craft the brands and choice of drinks that people love, to refresh them in body &
spirit. And done in ways that create a more sustainable business and better shared future that
makes a difference in people's lives, communities and our planet.
A Winning Culture
Their Winning Culture defines the attitudes and behaviors that will be required of them to make
their 2020 Vision a reality.

Core Values
These values serve as a compass for actions and describe how to work with the environment and
customers.

Leadership: The courage to shape a better future

Collaboration: Leverage collective genius

Integrity: Be real

Accountability: If it is to be, it's up to me

Passion: Committed in heart and mind

Diversity: As inclusive as our brands

Quality: What we do, we do well

Business Definition
Customer Groups (who)
Coke is for everyone! Children, teenagers, middle-aged and old aged people; everyone is the
target market of Coca Cola company. It is a mass market product sold globally. Though
everyone does drink Coca cola but its major target markets are children and teen-agers.

Customer Function (what)

Coca Cola Company produces a vast range of beverages ranging from sodas to power/energy
drinks to juices, bottled water and ice teas. Thus we can say that its customer function is to
quench thirst.

Alternative Technologies (How)

Focus on the Market

 Focus on needs of their consumers, customers and franchise partners

 Get out into the market and listen, observe and learn
 Possess a world view
 Focus on execution in the marketplace every day
 Be insatiably curious

Work Smart

 Act with urgency

 Remain responsive to change
 Have the courage to change course when needed
 Remain constructively discontent
 Work efficiently

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Act Like Owners

 Be accountable for our actions and inactions

 Steward system assets and focus on building value
 Reward our people for taking risks and finding better ways to solve problems
 Learn from our outcomes -- what worked and what didn’t

Be the Brand
Inspire creativity, passion, optimism and fun

Key Success factors of Coca Cola

1. Coca-Cola is a unique and recognized brand among the most recognized trademarks.
2. Its quality which is consistently offering consumers products of the highest quality
3. Marketing that deliverers creative and innovative marketing programmes worldwide
4. The global availability of Coca-Cola and its products are bottled and distributed
worldwide efficiently.
5. The ongoing innovation that keeps the company continually providing their consumers
with new product offerings such as Diet Coke, Coca-Cola Vanilla, etc.

Environmental Analysis
SWOT
Coca Cola SWOT analysis 2013
Strengths Weaknesses

1. The best global brand in the world 1. Significant focus on carbonated drinks
in terms of value ($77,839 billion) 2. Undiversified product portfolio
2. World’s largest market share in 3. High debt level due to acquisitions
beverage 4. Negative publicity
3. Strong marketing and advertising 5. Brand failures or many brands with
4. Most extensive beverage distribution insignificant amount of revenues
channel
5. Customer loyalty
6. Bargaining power over suppliers
7. Corporate social responsibility
Opportunities Threats

1. Bottled water consumption growth 1. Changes in consumer preferences

2. Increasing demand for healthy food 2. Legal requirements to disclose negative
and beverage information on product labels
3. Growing beverages consumption in 3. Competition from PepsiCo
emerging markets 4. Saturated carbonated drinks market
4. Growth through acquisitions

Strengths
1. The best global brand in the world in terms of value. According to Interbrand, The
Coca Cola Company is the most valued ($77,839 billion) brand in the world.
2. World’s largest market share in beverage. Coca Cola holds the largest beverage
market share in the world (about 40%).
3. Strong marketing and advertising. Coca Cola’ advertising expenses accounted for
more than $3 billion in 2012 and increased firm’s sales and brand recognition.
4. Most extensive beverage distribution channel. Coca Cola serves more than 200
countries and more than 1.7 billion servings a day.

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 5. Customer loyalty. The firm enjoys having one of the most loyal consumer groups.
6. Bargaining power over suppliers. The Coca Cola Company is the largest beverage
producer in the world and exerts significant power over its suppliers to receive the lowest
price available from them.
7. Corporate Social Responsibility (CSR). Coca Cola is increasingly focusing on CSR
programs, such as recycling/packaging, energy conservation/climate change, active
healthy living, water stewardship and many others, which boosts company’ social image
and result in competitive advantage over competitors.
Weaknesses
1. Significant focus on carbonated drinks. The Coca Cola Company is still focusing on
selling Coke, Fanta, Sprite and other carbonated drinks. This strategy works in short term
as consumption of carbonated drinks will grow in emerging economies but it will prove
weak as the world is fighting obesity and is moving towards consuming healthier food
and drinks.
2. Undiversified product portfolio. Unlike most company’s competitors, Coca Cola is still
focusing only on selling beverage, which puts the firm at disadvantage. The overall
consumption of soft drinks is stagnating and Coca Cola Company will find it hard to
penetrate to other markets (selling food or snacks) when it will have to sustain current
level of growth.
3. High debt level due to acquisitions. Nearly $8 billion of debt acquired from CCE’s
acquisition significantly increased Coca Cola's debt level, interest rates and borrowing
costs.
4. Negative publicity. The firm is often criticized for high water consumption in water
scarce regions and using harmful ingredients to produce its drinks.
5. Brand failures or many brands with insignificant amount of revenues. Coca Cola
currently sells more than 500 brands but only few of the brands result in more than $1
billion sales. Plus, the firm’s success of introducing new drinks is weak. Many of its
introduction result in failures, for example, C2 drink.
Opportunities
1. Bottled water consumption growth. Consumption of bottled water is expected to grow
both in US and the rest of the world.
2. Increasing demand for healthy food and beverages. Due to many programs to fight
obesity, demand for healthy food and beverages has increased drastically. The Coca Cola
Company has an opportunity to further expand its product range with drinks that have
low amount of sugar and calories.
3. Growing beverages consumption in emerging markets. Consumption of soft drinks is
still significantly growing in emerging markets, especially BRIC countries, where Coca
Cola could increase and maintain its beverages market share.
4. Growth through acquisitions. Coca Cola will find it hard to keep current growth levels
and will find it hard to penetrate new markets with its existing product portfolio. All this
can be done more easily through acquiring other companies.
Threats
1. Changes in consumer tastes. Consumers around the world become more health
conscious and reduce their consumption of carbonated drinks, drinks that have large
amounts of sugar, calories and fat. This is the most serious threat as Coca Cola is mainly
serving carbonated drinks.
2. Legal requirements to disclose negative information on product labels. Some Coca
Cola’s carbonated drinks have adverse health consequences. For this reason, many
governments consider to pass legislation that requires disclosing such information on
product labels. Products containing such information may be perceived negatively and
lose its customers.
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 3. Competition from PepsiCo. PepsiCo is fiercely competing with Coca Cola over market
share in BRIC countries, especially India.
4. Saturated carbonated drinks market. The company significantly relies on the
carbonated drinks sales, which is a threat for the Coca Cola as the market of carbonated
drinks is not growing or even declining in the world.
Competitor analysis
The top four competitors of Coca Cola Company are listed below:
1. Pepsi Co.
2. Nestle
The major competition is faced by Coca Cola Company is Pepsi company. Pepsi is one of the
world leader brand with approximate revenues of $27billion and over 143,000 employees. Pepsi
products are available in nearly 200 countries (Pepsi Co 2011).
Porter’s Five forces Model
Porter’s five forces model help the companies to evaluate their business strategy. Three out of
five forces talk about the rivalry which is expected from micro-environment, macro-environment
and also some of the internal threats as well.
Threat of new competitors
The soft –drink market is already ruled by big giants like Pepsi and Coca-Cola. A survey done in
2000 which showed that advertisement expenditure is almost about $ 8.3 million of the current
competitors. It is very huge amount for the new player to invest in the marketing from an early
stage.
Also, due to the huge investment in advertisement, Coca-cola and Pepsi have created a strong
brand image and position in the minds of consumers. Customer loyalty has been increased and
they are not ready to leave this product for a new player (IvyThesis , 2009). Moreover the
extended supply chain and bottling networks of Coca-Cola and Pepsi are major threat for the
new players.
Intensity of Competitive Rivalry
The soft-drink industry is dominated by two large players, namely Coca-Cola and Pepsi. This
industry is also known for duopoly created by Pepsi and Coca-cola. These players have the huge
market share and other small players have very less market share (Valuation Academy, 2011).
The bigger giants are mostly competing with each other on the factors of differentiation and
advertisement. The price war hasn’t seen between the two competitors. However, a price war is
experienced in some of the International markets.
Threat of Substitute Products
This beverage industry has a lot of substitutes which are available to the end consumers. Some of
these substitutes include: water, tea, coffees, juices, and beer etc. All of the suppliers of these
substitutes only need a huge advertisement campaign in order to create brand loyalty and
consumer demand (Valuation Academy, 2011). However the switching cost to substitute
products is quite low but consumers prefer differentiation of Coca-cola to the lower prices of
substitute products.
The Bargaining Power of Customers
There are some major buyers of soft-drink industry including fast-food-chains, restaurants,
convenience stores etc. The bargaining power of the buyers depends on the position and potential
market it has. For example: Fast-food chain segment is regarded as the “Paid-Sampling” by the
Coke and PepsiCo due to quite small profit margins. The bargaining power of these buyers is
quite high. Contrary to that, vending machines provide no power to the customers (Valuation
Academy, 2011).
The Bargaining Power of the Suppliers
The raw materials used to manufacture soft-drink or Coca-cola include color, caffeine, flavor,
and sugar etc. the supplier of these products have relatively no power over the price bargaining.
These raw materials can easily available to any of the producer so they don’t need to hire some
specific suppliers. Switching costs to these suppliers is very low because the producers can shift
to other suppliers anytime.

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Environmental Appraisal
PESTEL Analysis
Political Factors
Global Regulatory Compliance: Coca-Cola's expansive global presence necessitates
meticulous adherence to diverse political regulations and policies in each market.
Trade Agreements and Tariffs: International trade dynamics, including tariffs and trade
agreements, can impact Coca-Cola's cost structures and profitability in different regions.
GOVERNMENT STABILITY: Political stability in host countries is crucial for smooth
operations and long-term investments.
Economic Factors
Currency Exchange Rates: Fluctuations in exchange rates can affect Coca-Cola's revenue and
profitability, especially given its extensive international operations.
Consumer Income Levels: Economic conditions and income distribution in target markets
influence consumer purchasing power and demand for Coca-Cola products.
Inflation and Cost of Goods: Economic stability and inflation rates directly impact production
costs, pricing strategies, and profit margins.
Social Factors
Cultural Preferences: Understanding diverse cultural preferences and tastes is essential for
tailoring marketing strategies and product offerings to resonate with local consumers.
Demographic Trends: Changes in population demographics, such as age distribution and
lifestyle choices, influence consumption patterns and market demand.
Health and Wellness Trends: Evolving consumer attitudes towards health and wellness impact
demand for beverage categories, influencing Coca-Cola's product portfolio.
Technological Factors
Innovation and Automation: Embracing technological advancements in manufacturing,
distribution, and marketing allows Coca-Cola to enhance efficiency and maintain
competitiveness.
Digital Transformation: Leveraging digital platforms for marketing, e-commerce, and data
analytics enables Coca-Cola to connect with consumers and gain valuable insights.
Environmental Factors
Sustainable Sourcing and Packaging: Environmental consciousness drives the need for
sustainable sourcing of ingredients and eco-friendly packaging solutions, aligning with consumer
expectations.
Water Management: Given the nature of its products, water availability and conservation
efforts are critical considerations for Coca-Cola's operations.
Legal Factors
Regulatory Compliance: Meeting legal requirements related to product quality, labeling, and
safety standards is fundamental to preserving Coca-Cola's reputation and brand integrity.
b Safeguarding trademarks and patents ensures the exclusivity and integrity of Coca-Cola's
iconic brands and innovations.
Environmental
Environmental analysis includes the close examination of local, international and all world
environmental issues. The companies must respect the environment and must carry out some
projects to reduce the environmental pollution. The basic idea here is that a company must be
environmental-friendly (Goos Kant, 2007). The Coca-Cola Company strictly monitors all the
environmental regulations and laws imposed by the foreign and local governments.
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Environment Opportunity Threat Profile (ETOP) for SAP
Environmental sectors Nature of Impact Impact of each sector
Economic Unfavorable Impact The overall impact of inflation
has effected everyone.
Therefore we can say that
economy has an unfavorable
impact on Coke too as the
prices have raised
considerably in past 10years.
Market Favorable The majority of customers
worldwide have a strong
preference for Coca Cola
instead of its competitor Pepsi.
Also, soft drinks are
something that are consumed
by people of all age groups.
International Favorable It is already a global brand and
has its operations worldwide.
Still the economic trade
groups are increasing
opportunities for Coke to
expand.
Political Neutral Political system usually does
not impact the food and
beverage industry much.
Regulatory Favorable The products are in
accordance to the quality
standards.
Social Less favorable The socio culture trend is that
people are becoming more
health conscious.
Supplier Favorable The supplying system of
Coke is strong worldwide.
Technological Favorable The Coca Cola company is up
to date with technology in
their day to day operations and
activities.

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Organizational Appraisal
Internal Analysis
Porters generic value chain model

As far as coca cola is concerned the cross business strategic fits can exist anywhere along the
value chain of coca cola. We will discuss these value chains one by one and see how coca cola
can strategically fit into these value chains
Support Activities
Firm Infrastructure
Firm has a strong infrastructure as it is shown by its financials. The financial data is readily
available to the management for strategic decision making. Financial data can be extracted
through different networks that are present at the Coca-Cola Company for e.g. they use mySAP
which helps them in forecasting and consolidation of data.
Managerial and administrative support Activities
Coca cola can also diversify because of its managerial and administrative support activities.
Many times most of the businesses require same management, administrative and operating
know how. The products which coca cola is producing are under the control of same
management. This is a huge cost saving benefit for coca cola.
Technology Development
Coca cola can fit into a kind of business where it can utilize its resources of R & D and
technology. As we already know that the R & D and technology of coca cola is very strong. In
the area of technology coca cola is very advance when we see their packaging and bottling
technology. When coca cola will diversify into any other business which is related to its industry
it will obviously have the advantage of its technological expertise. The coca cola company has
always worked for bringing in technological changes to meet the customer needs. These are the
various examples of latest technology adopted by the company
Procurement
Businesses who have supply chain strategic fit can perform better together because of potential
for skills transfer in procurement, greater bargaining power and benefits of collaboration with
common supply chain partners. Coca cola has a strong supply chain network. It makes the syrup
used to make the coke and gives it to its distributors and they make the final good. It also has

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contract with a bottling company which makes bottles for coca cola. So having such a strong
supply chain network it can also diversify into relative business as this will help the company in
reducing costs and increasing efficiency. Coca cola is using the same supply chain for its
diversified products.
Primary Activities
Operations
Coca cola has the World sixth largest production plant. One assembly line can produce 2000
cans in minute. Production line has 25000 bottle storage capacities per minute. So coca cola can
also fit because of its production related activities. Such a strong production capacity will result
in lower costs.
Inbound and Outbound Logistics
Separate contracts (‘‘Bottler’s Agreements’’) exist between Company and each of its bottlers
regarding the manufacture and sale of soft drinks. Subject to specified terms and conditions and
certain variations, the Bottler’s Agreements generally authorize the bottler to prepare particular
designated Company Trademark Beverages, to package the same in particular authorized
containers, and to distribute and sell the same in (but generally only in) an identified territory.
The bottler is obligated to purchase its entire requirement of concentrates or syrups for the
designated Company Trademark Beverages from the Company or Company authorized
suppliers. They typically agree to refrain from selling or distributing or from authorizing
third parties to sell or distribute the designated Company Trademark Beverages throughout the
identified territory in the particular authorized containers; however Coca-Cola typically reserve
for ourselves or our designee the right (1) to prepare and package such beverages in such
container sin the territory for sale outside the territory and (2) to prepare, package, distribute and
sell such beverages in the territory in any other manner or form.
Sales and marketing activities
Many cost saving opportunities arise for coca cola as single sales and marketing activities will be
used to sell the products. There will be a single sales force for the related products. Advertising
of the related products is carried out together. The strong company brand name is also important
in this case. The new product gains attractiveness because of the strong brand name.
VRIO Framework
Resources and Value Rarity Inimitable Organized for
capabilities Usage
Brand (Coca Yes No Yes yes
Cola)

Value: Coke’s main value would be their Brand. Coke is globally recognized.
Rare: This asset is semi-rare. While it is true that few of their competitors have the strength of
brand that Coke has, it is not a resource that is unattainable by other companies.
Inimitable: As we have well established, Cola is easily inimitable. Perhaps the strength of their
brand however, is not as easy to imitate.
Organized: The resource is definitely useable by Coke to drive sales and capture market share

8
Organizational Capability Profile for SAP
Competitive Strengths and
Capability Factor Nature of Impact
weaknesses
Finance Strength
Marketing Neutral There is a strong competition
between Pepsi and Coke going
in the industry. Both try hard
to market their products in
best possible way. Therefore
we can say that Coke has a
secure position in the Industry

Operations Neutral Plant and machinery are

compareable to that of
competitors.

Personnel Strength Really good managers and

workers are present at coke

Information Strength Advanced information systems

are available. Coke website
also has extensive company
information available on it

General Management Strength High quality and experienced

top management available

Organizational Structure
Coca Cola has a very tall and bureaucratic organizational structure. A graphical representation of
its organizational structure is given below:

9
The above graphical representation shows the top functionaries of the company.
Coca Cola International Strategy:
Coca Cola has a global strategy to operate in the 200 countries it is offering its products. This is
because Coca Cola has unique yet consistent recipe/taste of beverages all across the world but
the marketing and sales strategies are localized as per the region’s socio-cultural dimensions.
Considering the corporate and business strategies of Coca Cola mentioned earlier in the report,
we could analyze its organizational structure and see that it is structured in a way to complement
its strategies in the best possible manner.
The reason for the tall structure of the organization is because the corporate headquarters want
full control of its product. Since, the one of the key success factors for the company is the
consistent unique tastes of its beverages; hence the higher ups of Coca Cola don’t want to take
any risks in that matter.
Coca Cola faces some problem in slow process of communication because of tall hierarchy of
the organization but to keep it centralized, this is the cost the company needs to pay. It can
reduce this problem by introducing latest IT solutions to speed up its communications.
Roles and responsibilities of Top Functionaries
Corporate Headquarter:
Corporate headquarters is where all corporate decisions are made. It also keeps an eye over the
different operations across the world. The strategic decisions of innovations, diversification,
introducing new beverages are taken here. Once the decision is taken, then it is communicated to
all the regional offices which further pour it down to the country subsidiaries.
Regional Office:
There are a total of four regional offices of Coca Cola around the world. Regional offices keep a
check of all country subsidiaries coming under its defined boundary. It keeps a track of all the
sales, financials of all the country subsidiaries and then reports them to the corporate
headquarters. Also, any orders from the corporate headquarters for the country subsidiary are
channelized through regional offices.
Country Subsidiary:
The corporate headquarter keeps a watch over the activities of different regional offices located
in every continent where Coca Cola operates. Under a regional office, every country has its own
subsidiary. This subsidiary is responsible for the manufacturing of the beverages from the secret
recipe, distribution of the products and the sales & marketing as well. As mentioned earlier, the
marketing is localized as per the country the product is selling in.

Corporate Strategy & Business Level Strategies

Making the essential moves to different businesses and achieve an appropriate kind and type of
diversification is very important for a business and a key part of Coca Cola’s corporate strategy
is making decisions on how many, what are the types and on which specific line of business the
company should be in. This may involve deciding to increase or decrease the breadth of
diversification. This corporate strategy may involve closing down or opening up of a line of
different other businesses (LOB). Corporate strategies initiate actions to boost the combined
performance of the businesses and the company has diversified into many different businesses by
strongly involving itself into pursuing rapid growth strategies in the most promising LOB's. They
have kept their core businesses healthy; initiating turnaround efforts in weak-performing yet
promising LOB's and dropped the LOB's that are no longer attractive or profitable with respect to
existing structure of the company and market demand. Coca Cola has pursued many ways to
capture valuable cross-business strategic fits and has turned them into competitive advantage.
For example, transferring and sharing related technology, procurement leverage, operating
facilities and distribution channels - All such changes and establishments are a vital part of Coca
Cola’s corporate strategy.
The various strategies pursued by Coca Cola that have been instrumental in making it the
world’s largest brand in the beverage industry are:

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Differentiation Strategy (Business Level)
There are many bases on which a product can be differentiated. However Coke has differentiated
its product on the following base:
1. Product Differentiation: Coke differentiates its product from its competitors on the basis
of brand, quality and taste. Coke does mass production but at the same time has been able
to retain its distinct formula that presently no one has been able to imitate or replicate
fully.
2. Image Differentiation: The Coca Cola logo is a vital too for image differentiation as it
establishes a brand name in the mind of the consumer. It is the brand’s identification,
signature and image.
3. Price Differentiation: Prices are kept competitive with Coke’s biggest rival Pepsi Co.
Therefore, we can say that it has a mix of low cost and differentiation at the same time.
Innovation Strategy
Coca Cola, since its birth, has been as successful as it is today because of its ability to
systematically innovate and deliver new products with respect to the ever changing market. The
trends of the market are not constant; they change every quarter. Keeping that in mind, Coke
moved from a single core product to a comprehensive beverage offering. As of now Coca Cola
offers nearly 400 different products – the reason for it still dominating the beverage industry
around the globe.
Globalization Strategy
Technology is continually changing the way businesses operate. The trends and methodologies
which are responsible for making businesses more feasible and profitable for the purpose of
expansion are given strict emphasis. Presently, Coca-Cola is able to exploit large revenue
opportunities by participating in a global market - Coke products are delivered in 200 countries
around the world.
Related Diversification
Coca Cola started their business from sodas and then went into power drinks, bottled water, and
healthy drinks like Minute Maid and ice teas.
Concentration Strategy
Coke has been able to maintain a consistent formula for its drinks, especially Coke. This
indicates their consideration for their loyal customers who do not want to lose the essence of the
original fizzy taste of Coca Cola.
Cooperation Strategies
Joint Venture:
 Coke joined forces with different suppliers and bottlers such as Femsa’s popular JV.
 Beverage Partners Worldwide: the joint venture partnership between Coca-
Cola and Nestle was created in 2001.
Acquisitions:
 Coca Cola has a long history of acquisitions. For example, the acquisition of Minute
Maid in 1960.
 The Indian cola brand Thums-Up in 1993.
 In 2001 it acquired the Odwalla brand for $181 million.
 In 2007, it acquired Fuze Beverage for an estimated $250 million and etc.
These acquisitions shows Coca Cola’s success in the market because most of them have been
seen successfully adapting with Coke’s business strategies.
Strategic Alliances:
Coca Cola has been extremely active in strategic alliances over the years. - The most noteworthy
alliance being with McDonald’s.
Growth and Expansion Strategies
Direct Exporting
Coca Cola has entered into foreign markets in various ways. Among them, the most common
approaches are Direct Exporting, Licensing and Franchising. Besides beverages and special

11
syrups, Coca Cola also directly exports its merchandise to overseas distributors and companies
which has been an integral part in creating the brand’s global presence successfully.
Licensing:
Coca Cola markets internationally as well by licensing bottlers around the world - supplying
them with the syrup needed to produce the product.
Franchising:
Among the different types of franchising, Coca Cola has been using a manufacturer-sponsored
wholesaler franchise system whereby the finished products are sold to the retailers in the local
market directly.
Channeling:
Coca Cola has managed the company’s marketing and sales strategy within their previously
defined channels. The Company operates three primary delivery systems that are:

 Bulk delivery for large channels such as supermarkets, mass merchandisers and club
stores.
 Advanced sale delivery system for smaller channels like convenience stores, drug stores
etc.
 Full service delivery for their full service vending customers.

Functional Level Strategies and Implementation

Seeing the magnitude of Coke in terms of the size of the company and its presence globally, the
functional level strategies pertaining to this soft drink powerhouse carry vital significance. The
functional strategy relates to the direction a functional area namely Marketing, Human Resource,
Operations Management and Finance would need to adopt to attain Coke’s proposed corporate
and business unit objectives/strategies. Moreover, uniformity with other functional strategies is
also very important - The rule of thumb, always: maximize resources and productivity.
The functional strategies are the measures or ways to implement the tactics of the business. For
example when Coca Cola decides that it is going to add a new product to its portfolio, the
‘functions’ will make strategies in order to make the new product successful and gain market
share – Attain market leadership in a new market to increase global market share or snatch the
market share from the players present in the market in which the new product is being launched.
How will the functions make strategies? This is how it would work with respect to Coke’s
various Corporate and Business-level strategies:
Functional and Operational Level Implementation of Differentiation Strategy
Owing to the fact that Coke differentiates itself on the basis of product, image and price, the
functional strategy is required to back that tactic. In terms of differentiating itself on product,
R&D and market research is of the utmost important. Not only is it important to understand the
changing preferences of their target audience but also their satisfaction with the current offering.
Being proactive is vital. Moreover, the operations and supply chain need to be responsible for the
mass production of the global drink to service the demand created. In terms of image
differentiation, the marketing functional area takes top priority. The marketing efforts, be them
active TVC’s, CSR activities or subtle subliminal indicators, maintaining Coke’s unique brand
elements is of the utmost importance. Since Pepsi has always been a direct rival on Coke’s radar,
managing and matching price with respect to competition is also extremely important. This is
because not all consumers are loyal customers and product switching would be quite easy for the
price-sensitive audience. To ensure this competitive pricing, the Finance function would need to
expertly manage budgets – where to increase investment with respect to supply chain and
marketing and where to cut costs.
Functional and Operational Level Implementation of Innovation Strategy
Since Coke finds itself in the midst of a dynamic and demanding global audience, the need to
innovate is not just a tool for growth but a prerequisite for survival. On a functional level, having
to innovate would require allocation of the right budget to various departments or product lines,
R&D to understand present and future customer preferences, Marketing to create a push or pull
with respect to the market and product offering the operations management to ensure that the
idea is turned into a product and readily available for consumption.

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Functional and Operational Level Implementation of Globalization Strategy
Coca Cola products are delivered and appreciated in 200 countries globally. This not only
requires functional efficiency in terms of finance and operations management, but also
marketing and research to understand various cultural do’s and don’ts along with coming up with
a message that is in line with Coke’s core ideology and relatable to a diverse consumer-base.
Coke’s core message is ‘sharing happiness’ – an emotion or state that is common to all cultures.
The fact that happiness is shared over an aftari table in the sacred month of Ramadan for
Muslims or with a turkey dinner over thanksgiving for a Christian state is something that is
altered with respect to cultural, religious and social variability.
Functional and Operational Level Implementation of Diversification, Expansion and
Growth Strategy
Coca Cola started out as mere black-colored soda in a glass bottle but has expanded into energy
drinks, health-oriented fresh juices, bottled water and culture-specific beverages since. For
example, Coke launching Limca in India was to cater to the local population’s preference and
identification with lemon and soda. The R&D, market efforts, standardization of the formula
needs to be efficiently coordinated. The functional level strategy has to be adventurous enough to
create some ripples in the minds of the local population and yet be disciplined enough to stay
within the limitations of Coke’s core philosophy and global outlook.
Functional and Operational Level Implementation of Concentration Strategy
Coke once tried to alter its original flavor with the excuse of ‘progress and innovation with
respect to changing times’. The opposition from the consumer was quite strong. Since then, Coca
Cola has concentrated on maintaining the sanctity of their primary product. This has required
strict quality checks to ensure consistency with respect to Coke bearing its original sweetness,
carbonation and outlook (the formula behind the shade of Coke’s Red color is just as much a
secret as its constituting ingredients) while ‘Share’ and ‘Happiness’ have been constant and
recurring themes in their marketing campaigns.
Functional and Operational Level Implementation of Cooperation Strategy
Cooperation Strategies regarding coke has seen joint ventures between Coke and various
suppliers along with partnerships with other beverage makers. A cooperation with suppliers
meant coordinating supply chain efforts, creating the right amount that is in line with the
generated demand due to marketing initiatives along with the capacity of bottling units and
supplier’s means of transportation. In this form of strategy, while efficiently and effectively
managing a function is important, it is equally important to coordinate those efforts on a unified
functional front. Acquiring product lines like Minute Maid in 1960 meant creating a right
balance of retaining the essence of the citrus drink along with changing some elements to accent
Coke’s own philosophy. The same consideration is present when opting for a Strategic Alliance.
For example, joining forces with McDonald’s as the official drink to be served with their food. In
such case, the reputation of the ally bears direct correlation to Coke’s brand image in the global
market. Also, visibility of the Coke brand name is a must for the strategic ploy to work. This
includes in-store merchandising and promotional activities like the Coke glass given away with a
McDonald’s meal along with a clear visual demarcation of its logo on the McDonald’s menu.
The visual sync should be in such a way that neither brand is overshadowed or cannibalized by
the other but both coexist in the form of a synergy. On the financial front, allocation of budget to
various departments or product lines along with getting an idea of their respective profitability is
important as it becomes a source of information for the top management to come up with long-
term decisions based on present trends and projected forecasts.
Functional and Operational Level Implementation of Growth and Expansion Strategy
Expanding operations would require getting the right mix of labor and machinery to be able to
learn, execute and sustain in accordance to Coke’s strict evaluation of quality, quantity and
consistency. Direct Exporting puts more pressure on operations as capacity needs to be increased
to satisfy the aggregate demand of the local and foreign audience. Licensing may be a more cost-
saving alternative financially and operationally, but it also makes the company vulnerable as
Coke’s reputation would be in the hands of the licensee. The visibility of Coke’s brand name in
the finished product is also important along with the accurate information on its packaging that
the final product has been due to the result of a license agreement rather than any singular efforts
either way – this is also important for potential legal considerations. As far as franchising is
concerned, Coke uses a manufacturer-sponsored wholesaler franchise system which requires an
efficient distribution and supply chain network to be able to directly sell to the retailer without a
wholesaler in the middle. The bullwhip effect is an important consideration for Coke’s

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operations here as any miscommunication of demand would have a magnified effect on the
supply side which would add to Coke’s inventory costs and reduce the product’s shelf life.
Increased stock with an expiry date around the corner would require trade promotions and
discounts to clear shelf space - denting Coke’s profits had the product been sold sooner but
avoiding the off chance of a sale of an expired product which could potentially erode Coke’s
positive image in the mind of the customer.
Scenario: Coke launching a new product or product line
1. Finance: The finance function will lay out the budgets for the new product. Will give
guidelines on how much is there to spend, when and where it will be spent.
Managing the cash inflows and outflows and help the other functions know how much do
they have in their pockets. For example: Finance department will make periodic reports
to tell whether the marketing department is overspending or not.
2. Marketing: The marketing department will make strategies to create awareness among
the potential customers. Putting out new ads on TV to be top of mind of their target
market.
3. Sales: The sales team will do its best in order to get an upper hand and implement the
marketing strategies. Also the department through its sales force will go all out to achieve
sales targets set for itself by the company.
4. Human Resource: The HR department’s job is to hire right type of people for the
company. Making sure that the personnel hired have their goals aligned with the business
and corporate goals of the company.
The above example for a few functions shows how the strategies at functional level are related to
the business level. Eventually the success at the functional level helps the company attain
success and achieve goals at the business level.
Vertical and Horizontal Fit
Overall the Coca-Cola Company shows a strong vertical fit i.e. the strategy created at the
corporate level is implemented throughout all the levels of hierarchy. Whatever is done at the
functional level is actually in accordance to the goals and objectives of top management.
Similarly, a great level of horizontal fit can also be seen as different departments work together,
wherever needed, in order to achieve the overall goal of the firm.

Performance Measurement:
Performance measurement is the process whereby an organization establishes the parameters
within which programs, investments and acquisitions are reaching the desired results.
Coca Cola links the mission and vision to its operations and functions in a very good way. The
whole performance is managed in a very well manner in order to get best out of it. Managers and
employees are highly involved in the system to take decisions which results in employee loyalty.
Goals of the company are formulated at the higher level, than head of the departments make their
own goals accordingly, and then comes the unit office, then functional heads which generate
reports, in the end supervisors and employees also set their goals. All these incomparable
policies lead to the success of Coca cola globally.
After the goals and strategy has been formulated, performance is measured in order to check the
implementation of strategy and goals. Monthly review is done to check the implementation
results. During review periods no changes in the goals can be changed. During the mid year
stage goals can be further refined or altered and new policies can be designed to achieve the
organizational level goals. At the final stage the performance is matched with the standards and
goals of the organization. If there are positive results with increase in overall productivity, the
individual performance of the employees is evaluated and the rewards are then given on the basis
of performance.

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Critical Success Factors
 Product quality and taste is a key success factor for coca cola. These both attributes are
very important to get high customer base.
 Product Diversity and innovation is one of the most important critical success factors
for coca cola. Changing customer’s needs with time should be recognized by the
company in order to keep its customers satisfied.
 Market share and size of the firm is also a critical success factor. Due to the high
market share coca cola has been able to negotiate with large distributers and thus making
the product available in most of the regions. In order to remain competitive it’s highly
important for the company to maintain effective distribution channel.
 Company image leads to the brand loyalty which is very important for the success.
Brand loyalty in return increases the market share.
 Global expansion plays a very vital role in the company’s success. Brands that are
globally present are usually preferred by the customers.

Balance Scorecard
For performance measurement at smaller units, balanced score card is used by the company.

Perspective Goal Measurement

Firm financial growth in terms Annual sales growth
Financial of profitability Net profitability Improvement
Reduce cost of production

Value creation , satisfaction , High Market share , leading

Customer support position globally
Consistent decrease in cost of
sales
Efficient production with waste Consistent decrease in cost of
Internal Business reduction. production , increased
Brand expansion productivity
Number of new markets
entered

Innovation New products and processes

Learning and growth Employee training and added in the company
satisfaction Reduced rate of employee
turnover

Performance Evaluation and Strategy Success

For a global company like coco-cola, the measures of success are defined in far broader terms
than the economic parameter alone. This is because of the diverse ways in which it affects lives
of the people around the world. Thus, it is only befitting for the company to evaluate its success

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based on social and environment aspects it touches upon internationally apart from the obvious
economic indicator. For this purpose it evaluates its performance based on the Sustainability
Reporting Guidelines1 (G3.1) of Global Reporting Initiative. According to the framework present
in G3.1, the company declared itself to be of grade B+ in its 2010/11 Sustainability Report2.
The above framework is very comprehensive and due to the constraint of time and scope of this
report, we will be only focusing on only the most important points.
Sustainability Reporting Guidelines (G3.1)
The goal of sustainable development is to fulfill the present needs without hampering the ability
of future generations to meet their own needs.
The three factors of economic, social &environment that concern stakeholders according to these
guidelines include: civil society, customers, employees including trade unions, local
communities, shareholders and suppliers.
Economic
Apart from the obvious economic performance indicators, which are present in annual reports,
two other less reported indicators include the company’s market presence & indirect economic
impact that determines the contribution of a company for a larger economic system.

 Economic Performance Indicators: Important elements in this category include direct

economic value generated and distributed, including revenues, operating costs, employee
compensation, donations and other community investments, retained earnings, and
payments to capital providers and governments.
 Market Presence: These include policy, practices, and proportion of spending on locally-
based suppliers at significant locations of operation. Other factors include hiring of senior
management from local community.
 Indirect Economic Impacts: These include development of infra-structure and similar
services for the benefit of the general public.

Social
The social dimension deals with the impact that coca-cola has on the social systems in the places
where it operates. Such social performance indicators define how well the company deals with
issues such as labor practices, human rights and product responsibility (Customer health and
safety, compliance etc.)

Environment
The social aspect of sustainability deals with concern of an organization to living and non-living
life it impacts through its operations. It deals with the aspect of how well a company manages the
waste and emissions that results out from the production of various goods at different sites.

Proposed Strategy
Consumer Engagement
What differentiates Coke from its competitors is the level at which is performs consumer
engagement. Notice the word used here is ‘consumer’ rather than ‘customer’ because Coke’s
direct customers are actually the distributers; however they are wise enough to know that it is the
end customer’s demand and level of satisfaction that truly matters. Due to this they have
formulated many different marketing strategies that help them engage customers, and that is
what customers truly admire and enjoy about Coke. For example: The latest Coke marketing
campaign attempts to unite the people of Pakistan and India by installing a Coke machine which

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allows you to make a friend across the border and you can also play an interactive game with
them on the spot.
Consumers believe Coke to be a full of life and fun brand which has then intrigued and loyal at
all times. This technique gives Coke its competitive edge and it something we propose they
should continue to do in the future too.
Use of Bottlers
Coke should keep on manufacturing and bottling its own products as it is doing in most places.
This ensures good quality and timely delivery. They should definitely follow this whilst in a
country where they face strong competition. Initially upon entering Pakistan they used a local
bottler and many a time a complaint was recorded about insects being found in the bottles. This
deteriorated the image of the brand in the mind of the Pakistani’s and had a role to play in the
dominance of Pepsi over Coke in the country.
Licensing
Coke should refrain from using Licensors in countries with strong competition prevailing in
them. This is because Coke mainly beats its competitors over two things: Taste and Marketing.
The marketing budget of a Licensee can never match that of a Licensor; hence the marketing
campaign created there will not be of the value that Coke is known for. This is why they should
keep the marketing in their own hands.
Africa
Although Coke is present in Africa the research showed that in 2010 the Annual Per capita
consumption of Coke in Kenya was only 39 servings. This was due to the trade barriers and
unfavorable environment present in the area. However, today the wars in Africa are ending and
they are making a conscious effort to reduce trade barriers. Coke should take a quick step
forward and step into the market fully before its competitors have a chance to, because it has
reached maturity or near maturity in many countries, and many growth opportunities are present
in Africa that will increase its global market share.
Contingency plan: Penetrating the impoverish market can be a difficult task. Therefore, Coke
shall use Bottom of the Pyramid strategy when going into the impoverished areas. Coke can
come up with buddy packs and introduce them for the people who cannot afford the big packs.
They will also have to lower their prices in such area. Frequent sales on bulks can also be a good
tact to market product.
Packaging
Packaging plays a large role in the image that is created in the minds of consumers about a
brand. Coke has previously launched limited edition packaged products which has different
names written on the bottles and the slogan was for example: “Share a Coke with Sarah”.
Limited edition packaging makes Coke stand out from its competitors and portrays the image of
it being an exciting product rather than a mundane one. It should continue to launch similar
marketing strategies.
Contingency Plan: People can become reluctant to new packaging style. Therefore heavy
advertising of the new packaging can be done to attract customers.
Pricing
Coke should price its products in such a manner that it is cheaper than water, especially in places
where water itself is a rare commodity. They should create strategies that create the image of
Coke as being a substitute of water in the minds of consumers and thereby increase the intake of
coke, making it higher than the intake of water. For example, till recently Coke was actually
cheaper than water in Saudi Arabia which is why it became the most popular beverage in the
area.
Contingency Plan: Coke has its side effects on health. Day by day, we can see that the benefits
of drinking water are being highlighted on TV and internet. The trend of healthy drinks are
increasing therefore this strategy can backfire. In such a case Coke can introduce their other
brands like Kinley and Minute Maid.
Target Market
Coke should focus their efforts on countries with a growing population thereby increasing the
total beverage consumption of their product. Here the focus is not on per-head consumption but

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on total beverage consumption. This is a strategy that can be focused upon in countries like
India.

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