Coke Version4

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Coca Cola Company

Group 8:1. Johan2. Hazar3. Iylia4. Lilaj

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Purpose:• Sustain company growth.• Should We Enter Snack or Food

Industry?• Strategic Direction for Coca Cola

Company.• Develop 3-Year Strategic Plan.

introduction

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Information Generation

• Porter’s 5 Forces• PESTLE• SWOT

Analysis• BCG• TOWS• Space• Ansoff

Implement• Action Plans• Budgets• Schedules

Evaluation• Strategic

Map• BSC

Strategic process flow

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Porter’s 5 Forces

Pestle

Pestle + porter’s 5 forcesInformation Generation

Political

Economic

Social

Technological

Legal

Environmental

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Porter’s 5 forces

Rivalry among existing competitors - High

• Many competitors.• Financially strong

(Pepsico).• Saturating market

growth.

Bargaining Power of Suppliers – Low• Undifferentiated

input.• Coca Cola is the

largest customer for the suppliers.

Threat of Substitute Product – High

• Milk and alcoholic drinks.

Bargaining Power of Buyers – Low• Low switching cost.•Brand loyalty.•Price sensitive.•Buyer concentration.

Threat of New Entrants – Medium• No switching cost.• Brand loyalty.• Strict Regulation.


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Pestle ANALYSISInformation Generation

Political factors Economic factors Social factors

• Strict manufacturing procedures.

• Country-specific political stability.

• Government’s campaign to create healthier society.

• High commodity food prices and high unemployment rate have forced Coca Cola to offer low prices to cost-conscious consumers.

• Consumers are becoming more health conscious.

• Growingly price sensitive.

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Pestle ANALYSISInformation Generation Technological factors Environmental

factorsLegal factors

• Advance in technology improves manufacturing process.

• Coca Cola tends to use the technology to sell effectively its products (ie.greener bottles and packaging).

• All of the facilities in Coca Cola are strictly monitored according to the environmental laws imposed by the government.

• Coca Cola have made an investment to build the world's largest plastic bottle-to-bottle recycling plant and to support recycling in the U.S.

• Caramel colouring: Law known as Proposition 65, the State of California began requiring warning labels for some products containing 4-MEI above an extremely low level. Coca Cola engage caramel supplier to ensure it is below the level set by California.

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swotStrength:S1. Market leaderS2. Strong Marketing ArmS3. Strong brand imageS4. Strong brand portfolioS5. Strong cash flow

Weakness:W1. Unhealthy brand imageW2. Poor reception in Middle East.W3. Negative publicity.W4. Solely focus on beverage industry.

Opportunity:O1. Technological advancementO2. Growing demand for healthy products.O3. Low switching costO4. Emerging market

Threat:T1. Volatile exchange rates.T2. Growingly intense competition.T3. Uncertain inflation rate.T4. Saturating beverage industry growth in U.S.


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towsSO:S2,S5,O3 – Launch aggressive marketing campaign to grab bigger market share.

WO:W1,O2 – Launch more healthy brands to improve image.

ST:S3,S4,T2 – Strong brand power and diverse product line can deter competition.

S2,S3,S5,T4 – Leverage on Coca Cola strong capabilities and brand to enter newmarket.

WT:W4,T4 – Venture into new industry

Analysis

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Where are we now?Where do we want to go?

bcgAnalysis

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spaceFinancial Position (FP) Stability Position (SP)

Liquidity 5 Technological changes -4

Leverage 4 Price elasticity -4Cash flow 6 Barriers to entry into market -3

Profitability 6 Competitive pressure -5

Earning per share 3 Demand variability -3

Return on investment 4 Risk involved in business -3

Total 27 Total -22Average (FP) 4.67 Average (SP) -3.67

Y-Axis = FP + SP = 4.67 + (-3.67) = 1

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spaceCompetitive Position (CP) Industry Position (IP)

Market share -2 Growth potential 5

Product quality -1 Financial stability 3Brand and image -3 Ease of entry into market 6

Product life-cycle -3 Profit potential 3

Customer loyalty -2 Resource utilization 3

Technology know-how

-4 Productivity utilization 3

Total 15 Total 22Average (FP) -2.50 Average (SP) 3.83

X-Axis = CP + IP = (-2.50) + 3.83 = 1.33

spaceAnalysis

1.00

1.33

FP

SP

CP IP

CONSERVATIVE

DEFENSIVE

AGGRESSIVE

COMPETETIVE

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ansoffTOWS Risk Ansoff

SO: S2,O3 – Launch aggressive marketing campaign to grab bigger market share.

Low Market Penetration

ST: S2,S3,S5,T4 – Leverage on Coca Cola strong capabilities and brand to enter new market.

Moderate Market Development

WO: W1,O2 – Launch more healthy brands to improve image.

Moderate Product Development

WT: W4,T4 – Venture into new industry.

High Diversification

Analysis

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mCkinsey 7s

Factors Issues Risk Alignment Compliance

Structure Coca Cola:Centralise

Kar’s Nut:Decentralise

Communication issues

Rotate managers

Yes, Coca Cola is committed to integrate Kar’s Nut.

Strategy Coca Cola:High advertisement expenses.

Kar’s Nut:Spend more on R&D.

Disagreement in resource allocation

Increase budget for R&D.

Yes, more resources will be utilized for the effort.

Analysis

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System Coca Cola:Uses SAP system.

Kar’s Nut:Uses Pronto system.

Difficulty to centralize information between the two system.

Kar’s Nut to convert to SAP.

Yes, conversion benefits outweigh the initial cost.

Staff Coca cola :Employee enjoys a lot of benefits.

Kar’s Nut:Give little benefits for the employees.

Dissatisfied employees due to unequal treatment.

Increase benefits options to Kar’s Nut employees.

Yes, new benefit options would receive warm welcome among the employees.

AnalysismCkinsey 7S

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Style Coca-colaAllow mistakes to encourage learning.

Kar’s NutsDiscourage mistakes.

Conflicting style.

Change the accepted ways of doing things for Kar’s Nut.

Yes, Coca Cola style has proven to be more effective.

Skills Coca-ColaStaff are regularly trained as new technique or technology appear.

Kart’s NutsStaff are trained once a year and some techniques are inefficient.

Skills imbalance.

Send Kar’s Nuts staff for training and development.

Yes, developing the staff would reap the company higher benefits in the future.

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Factors Issues Risk Alignment ComplianceShared Value

Coca Cola:Encourage diversity with workforce of different races and taps into talents all over the world.

Kar’s Nut:Workforce consist mainly Americans.

Internal conflict between the employees.

Give overseas assignment to Kar’s Nut managers and training.

Yes, the objective is clear

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Info. BCG TOWS Space Ansoff

SWOT:W4:Solely focus on beverage.T4:Saturating beverage industry.

1. Need more brands in Star quadrant.

2. Over reliance on core brand.

WT: Venture into new industry. (W4,T4)

Aggressive Strategies

Diversification to Food industry.

Porter’s 5 Forces:High intensity competition in beverage industry.

recap

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SWOT: S2:Strong Marketing.S3:Strong Brand.T4:Saturating US Market. Need more

brands in Star quadrant.

ST: Leverage on Coca Cola strong capabilities and brand to enter new market.


Market Development to penetrate new market.

Porter’s 5 Forces:High intensity competition in beverage industry.

recap

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SWOT:

W1:Unhealthy brand image.O2: growing demand for healthy products.

1. Need more brands in Star quadrant.

2. Over reliance on core brand.

WO:Launch more

healthy products

to improve image.


Product Development to introduce

more nutritional

brands.PESTLE: P-Government initiatives to promote healthy lifestyle.

recap

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Learning & Growth

PerspectiveMaintain learning

cultureEnable technology Information Capital

Internal Perspective

Innovation Improve Internal Processes Customer Relationship Management

Customer Perspective

Create customer value Branding Availability Social Concern

Financial Perspective Improve profitability Increase Asset Utilisation Expand Revenue

OpportunitiesImprove Cost of

Operations

VISION: To inspire people to be the best they can be and leave positive imprint to the society.MISSION: To refresh the consumers around the world with delicious, convenient, and complementary

food and beverages that inspire moments of wisdom and happiness.

Strategic mapEvaluation

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Balance scorecardEvaluation

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Strategy Goal: Objective: Measures TargetsWhat we want to accomplish How are we going to accomplish goal

Improve internal processes Effective implementation Initiatives delivered on time % of initiatives delivered on time 90%to maximise resources of initiatives. Initiatives delivered within budget % of initiatives delivered 90%and infrastructure. within budget

Initiative meets project goals % of goals met 90%


Promote culture and 1. Increase skills and Provide training. Percent of employees attend 60%working environment knowledge. to the training.that encourages growth 2. Accomplish our goals and Communicate the project status percent of reports delivered 95%and development to meet finish projects. and barriers to decision makers. on time required.individual needs of ouremployees.

Internal Perspective

Learning & Growth Perspective

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Reduce cost of operation. Streamline business process Utilise cost-benefit analysis to Percent of change initiatives 20%to reduce cost. make better decisions. that have cost benefit.


Meet customer's needs 1. Identify change in customer Introduce new brand that fits the Feedback survey. 4.5 score of 5.and build on brand image. preference and implement new taste preference and more

solutions. nutritional content.2. Build brand image. Advertisement campaign. Conduct post-campaign Positive perception with

assessment on perception increase in sales by 10%.and response to sales.

Financial Perspective

Customer Perspective

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Winning strategy

Fit Test:● Strategy that corresponds to industry, competition, market opportunities, and other factors that affects the business.

Competitive Advantage Test:● Achieve sustainable advantage - Well differentiated product line- Build on the brand

Performance Test:● Strategy produces good performance.- Increase revenue potential.- Sustain company’s high growth.

Evaluation

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The End

Thank you

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All Brands

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Appendix

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Appendix

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Appendix

Coke Version4

Documents

Transcript of Coke Version4