Table of Contents Table of Contents D Deessccrriippttiioonn PPaaggeeNNoo.. Industry Profile Industry Profile 33 Company Profile Company Profile 44 Mission Vision Mission Vision 55
Micro Environment & Five Forces Model
Micro Environment & Five Forces Model 66
S!" #nalysis
S!" #nalysis 88
Competitive Profile Matri$
Competitive Profile Matri$ 1313
EFE AND IFE Matrix
EFE AND IFE Matrix 1414
Corporate Strategy
Corporate Strategy 1616
Porter%s eneric Strategies
Porter%s eneric Strategies 1717
Space Matri$
Space Matri$ 1818
rand Strategy Matri$
rand Strategy Matri$ 1919
'C Matri$ 'C Matri$ 22 I(E Matri$ I(E Matri$ 2121 "!S Matri$ "!S Matri$ 2222
)uantitative Strategic Planning Matri$
)uantitative Strategic Planning Matri$ 2525
Implementation Stage
Implementation Stage 2626
Conclusion
A!"no#le$%&ent A!"no#le$%&ent
e
e are are very grateful to #very grateful to #lla* +*o ,lessed us t*e strengt* and courage lla* +*o ,lessed us t*e strengt* and courage to stand ,y t*e difficultiesto stand ,y t*e difficulties t*at came in t*e +ay and +*o ena,led us to complete t*is pro-ect effectively.#s plants cannot t*at came in t*e +ay and +*o ena,led us to complete t*is pro-ect effectively.#s plants cannot gro+ +it*out seeds ,irds cannot fly +it*out +ings.Similarly /no+ledge cannot ,e attained gro+ +it*out seeds ,irds cannot fly +it*out +ings.Similarly /no+ledge cannot ,e attained +it
+it*out *out proproper per dirdirectection ion and and supsuperviervisiosion. n. e e areare t*et*erefreforeore alsalso o t*at*an/fn/ful ul to to our our resrespectpecteded Ma
Ma%%am am )u)urratatululeiein n MuMu0a0arara, , ,e,ecacaususe e of +*of +*osose e gegenenerrouous s coco(o(opeperaratition on anand d *e*ellpp t*e accomplis*ment of t*is Pro-ect ,ecame possi,le.
t*e accomplis*ment of t*is Pro-ect ,ecame possi,le.
Exe!'ti(e )'&&ar* Exe!'ti(e )'&&ar*
In t*is pro-ect +e *ave analy1ed t*e company%s mission and vision and also proposed a ne+ In t*is pro-ect +e *ave analy1ed t*e company%s mission and vision and also proposed a ne+ mission statement for t*e company. !n t*e ,asis of secondary researc* +e *ave identified t*e mission statement for t*e company. !n t*e ,asis of secondary researc* +e *ave identified t*e S!" analysis of t*e company and also prepared t*e five different matrices to identify t*e S!" analysis of t*e company and also prepared t*e five different matrices to identify t*e strategies +*ic* governed ,y coca cola and +e also give some recommendations a,out t*e strategies +*ic* governed ,y coca cola and +e also give some recommendations a,out t*e strategies +*ic* coca cola can use
In$'str* +rofile In$'str* +rofile
"*e ,everage industry in Pa/istan *as gro+n over t*e time. "*e industry produces soft drin/s "*e ,everage industry in Pa/istan *as gro+n over t*e time. "*e industry produces soft drin/s -uices
-uices syrups syrups mil/ mil/ and and s0uas*es. s0uas*es. iit* t* a,out a,out 234 234 units units currently currently in in operation operation t*roug*out t*roug*out t*et*e country ,ot* upstream and do+nstream industries *ave gro+n and are flouris*ing.
country ,ot* upstream and do+nstream industries *ave gro+n and are flouris*ing.
"*ere are 56 ,everage plants in t*e country and t*is is one industry +*ic* is very +ell "*ere are 56 ,everage plants in t*e country and t*is is one industry +*ic* is very +ell organi1ed. 7o, oriented in nature t*e ,everage industry employees over 844444 people directly organi1ed. 7o, oriented in nature t*e ,everage industry employees over 844444 people directly and indirectly and also supports many ot*er up9do+n stream industries suc* as cro+n cor/s and indirectly and also supports many ot*er up9do+n stream industries suc* as cro+n cor/s glass ,ottles plastic s*ells sugar transport advertising and media P.E." ,ottles concentrates glass ,ottles plastic s*ells sugar transport advertising and media P.E." ,ottles concentrates etc. due to t*is industry a *uge num,er of outlets9s*ops are supported to generate +ide(spread etc. due to t*is industry a *uge num,er of outlets9s*ops are supported to generate +ide(spread economic activity in t*e country.
economic activity in t*e country.
Soft drin/s mar/et in Pa/istan is gro+ing rapidly. #nd t*e car,onated category is t*e leader in Soft drin/s mar/et in Pa/istan is gro+ing rapidly. #nd t*e car,onated category is t*e leader in t*e soft drin/ mar/et +it* a s*are of :5.3 ;. "*is reflects suc* a *uge mar/et to cater. "*e t*e soft drin/ mar/et +it* a s*are of :5.3 ;. "*is reflects suc* a *uge mar/et to cater. "*e ,everage industry in Pa/istan
,everage industry in Pa/istan *as a lot of po*as a lot of potential and room for gro+t* tential and room for gro+t* and development. "*ereand development. "*ere e$ist a lot of opportunities for ne+ entrants and local players to e$ploit t*e untapped facets of t*e e$ist a lot of opportunities for ne+ entrants and local players to e$ploit t*e untapped facets of t*e mar/et for instance t*e energy drin/ mar/et or -uices ,y strategically positioning t*eir products mar/et for instance t*e energy drin/ mar/et or -uices ,y strategically positioning t*eir products and ,y resorting to innovative and
and ,y resorting to innovative and effective mar/eting strategies.effective mar/eting strategies.
#ccording to a recent report on Pa/istani Food and 'everage Industry dated 7anuary <4t* <426 #ccording to a recent report on Pa/istani Food and 'everage Industry dated 7anuary <4t* <426 t*e t+o primary t*reats to t*is industry are= political insta,ility and continuous militant activity t*e t+o primary t*reats to t*is industry are= political insta,ility and continuous militant activity +*ic* *ave t*e tendency to o,struct foreign direct investment in t*is industry. C*allenges faced +*ic* *ave t*e tendency to o,struct foreign direct investment in t*is industry. C*allenges faced ,y
,y ,everage ,everage industry industry are are t*e t*e *ig* *ig* prices prices and and unavaila,ility unavaila,ility of of sugar sugar and and also also t*e t*e ta$es ta$es e$cisee$cise duty and sales ta$ at t*e rate of 28 percent on t*e retail price. "*is is t*e reason t*at ,everage duty and sales ta$ at t*e rate of 28 percent on t*e retail price. "*is is t*e reason t*at ,everage industry at t*e moment *as very lo+ per capita consumption of <4 serves +*ereas in ot*er industry at t*e moment *as very lo+ per capita consumption of <4 serves +*ereas in ot*er countries of our region it varies from2<4(<84 on t*e
countries of our region it varies from2<4(<84 on t*e ,asis of single serve of <84 ml.,asis of single serve of <84 ml.
'ased upon t*e aforementioned facts on can conclude t*at t*e ,everage industry is Pa/istan *as 'ased upon t*e aforementioned facts on can conclude t*at t*e ,everage industry is Pa/istan *as gained momentum and is more li/ely to continue t*e gro+t* in coming years as +ell. #lt*oug* gained momentum and is more li/ely to continue t*e gro+t* in coming years as +ell. #lt*oug*
certain macroeconomics factors certainly do *ave t*e potential to corrode t*is industry%s profita,ility
Co&,an* +rofile
T-e Co!a Cola Co&,an*
"*e Coca(Cola Company >"CCC? +as first introduced ,y 7o*n Syt* Pem,erton a p*armacist in t*e year 2@@: in #tlanta eorgia +*en *e concocted caramel(colored syrup in a t*ree(legged ,rass /ettle in *is ,ac/yard. Ae first Bdistri,uted t*e product ,y carrying it in a -ug do+n t*e street to 7aco,%s P*armacy and customers ,oug*t t*e drin/ for five cents at t*e soda fountain. Car,onated +ater +as teamed +it* t*e ne+ syrup +*et*er ,y accident or ot*er+ise producing a drin/ t*at +as proclaimed Bdelicious and refres*ing a t*eme t*at continues to ec*o today +*erever Coca(Cola is en-oyed.
Dr. Pem,erton%s partner and ,oo/(/eeper Fran/ M. o,inson suggested t*e name and penned BCoca(Cola in t*e uni0ue flo+ing script t*at is famous +orld+ide even today.
'y t*e year 2@@: sales of Coca(Cola averaged nine drin/s per day. "*e first year Dr. Pem,erton sold <8 gallons of syrup s*ipped in ,rig*t red +ooden /egs. Candler an entrepreneur from #tlanta. 'y t*e year 2@2 Mr. Candler proceeded to ,uy additional rig*ts and ac0uire complete o+ners*ip and control of t*e Coca(Cola ,usiness. it*in four years *is merc*andising flair *ad *elped e$pand consumption of Coca(Cola to every state and territory after +*ic* *e li0uidate. "*e ,usiness continued to gro+ and in 2@6 t*e first syrup manufacturing plant outside #tlanta +as opened in Dallas "e$as. !t*ers +ere opened in C*icago Illinois and os #ngeles California t*e follo+ing year. In 2@8 t*ree years after "*e Coca(Cola Company%s incorporation Mr. #sa . Candler announced in *is annual report to s*are o+ners t*at BCoca( Cola is no+ drun/ in every state and territory in t*e Gnited States.#s demand for Coca(Cola increased t*e Company 0uic/ly outgre+ its facilities. # ne+ ,uilding erected in 2@@ +as t*e first *ead0uarters ,uilding devoted e$clusively to t*e production of syrup and t*e management of t*e ,usiness. In t*e year 22 t*e Coca(Cola Company +as sold to a group of investors for H<8 million. o,ert . oodruff ,ecame t*e President of t*e
Company in t*e year 2<5 and *is more t*an si$ty years of leaders*ip too/ t*e ,usiness to unsurpassed *eig*ts of commercial success ma/ing Coca(Cola one of t*e most recogni1ed and valued ,rands around t*e orld.
.ision
'e t*e outstanding ,everage company leading t*e mar/et inspiring people adding value t*roug* e$cellence.
Mission
'uild a sustaina,le and profita,le ,usiness t*roug* refres*ing consumers partnering +it* customers delivering superior value to s*are*olders and ,eing trusted ,y communities.
E.A/0ATIN F MI))IN CM+NENT)
Customer No
Product9services No
Mar/et yes
"ec*nology No
Concern for survival No
p*ilosop*y yes
Self concept No
Concern for pu,lic No
Concern for employees No
.al'es
+assion e put our *earts and mind into +*at +e do.
A!!o'ntabilit* e act +it* *ig* sense of responsi,ility and *old ourselves accounta,le. Inte%rit* e are open *onest and et*ical and +e trust and respect eac* ot*er.
Tea&#or" e colla,orate for our collective success.
++)ED MI))IN .I)IN )TATEMENT
!ur mission is to ,ring consumers 0uality refres*ments t*at anticipate and satisfy t*eir desires and needs t*roug* modern tec*nology and inspiring employees to ,e t*e ,est t*at t*ey can continue to provide t*e ,est products on t*e mar/et.
.ision
e are dedicated to up*olding standards +*ile maintaining t*e leaders*ip position in t*e ,everages category +*en delivering superior customer service in a *ig*ly efficient and profita,le
manner. 'r oals
+eo,le an$ r%aniational /ea$ers-i, 'uild a *ig*ly capa,le organi1ation and ,e t*e employer of c*oice.
Co&&er!ial /ea$ers-i, Profita,ly deliver superior value to consumers & customers at t*e optimal cost to serve.
)',,l* C-ain "o ,e t*e ,est in class consumer demand fulfillment organi1ation t*at e$ceeds customer e$pectations *ig*est in 0uality lo+est in cost in a sustaina,le socially responsi,le manner.
,erational Ex!ellen!e Create a culture of !perational E$cellence to support continuous improvement of our ,usiness process and systems.
)'stainabilit* Ensure t*e long term via,ility of our ,usiness ,y ,eing proactive and innovative in protecting t*e environment and ,e recogni1ed as one of t*e most responsi,le corporate citi1ens ,y all sta/e*olders.
Mi!roen(iron&ent
Entry ,arriers are relatively lo+ for ,everage industry t*ere is almost 4 consumer s+itc*ing cost and very lo+ capital re0uirement. "*ere are more and more ne+ ,rands appearing in t*e mar/et +it* usually lo+er price t*an Co/e products. Ao+ever Coca(Cola is seen not only as a ,everage ,ut also as a ,rand. It *as a very significant mar/et s*are for a long time and loyal customers are not very li/ely to try a ne+ ,rand ,everage. "o analy1e t*e micro(environment and its factors +e use t*e PorterJs five forces model to identify t*e e$isting industrial factors +*ic* include t*e follo+ing
2. "*reat of ne+ entrants
<. ivalry among e$isting competitors 5. "*e ,argaining po+er of ,uyers 6. "*e ,argaining po+er of suppliers 8. "*reat of su,stitute product
T-reat of ne# entrants
"*reat of ne+ entrant is t*e result of ne+ competitors -oining in t*e industry causing t*e company to develop competitive advantage and maintain t*e mar/et s*are. Aence competition +it*in t*e industry ,ecomes *ig*er. Ao+ever to reduce t*e t*reat of ne+ entrants Coca(Cola +ould need to create a strong ,rand image. 'y creating ,rand image customers +ould ,e more li/ely to stay +it* t*e product and t*erefore t*e t*reat is reduced.
T-reat of )'bstit'te +ro$'!ts
"*ere are many /inds of energy drin/ and soda products in t*e mar/et. Coca(Cola doesn%t really *ave a special flavor. In a ,lind taste test people couldn%t tell t*e difference ,et+een Coca(Cola co/e and Pepsi cola.
T-e ar%ainin% +o#er of '*ers
• "*e individual ,uyer *as no ,uying pressure on Coca(Cola
• "*e main competitor Pepsi is priced almost t*e same as Coca(Cola.
• Consumer could ,uy t*ose ne+ and less popular ,everages +it* lo+er price ,ut t*e
flavor is different and t*e 0uality is not guaranteed.
• arge retailers Ayper star *ave ,argaining po+er ,ecause of t*e large order 0uantity ,ut
t*e ,argaining po+er is lessened ,ecause of t*e end consumer ,rand loyalty.
• People are getting concerns of negative effects of car,onated ,everages. Increasing
num,er of consumers ,egin to drin/ fruit -uice lemonade and tea instead of soda products.
T-e ar%ainin% +o#er of )',,liers
"*e main ingredients for soft drin/ include car,onated +ater p*osp*oric acid s+eetener and caffeine. #ny supplier +ould not +ant to lose a *uge customer li/e Coca(Cola
i(alr* a&on% Existin% Fir&s
Currently t*e main competitor is Pepsi +*ic* also *as a +ide range of ,everage products under its ,rand. 'ot* Coca(Cola and Pepsi are t*e predominant car,onated ,everages and commit *eavily to sponsoring outdoor festivals and activities. #s Coca(Cola *as a longer *istory it is advertised in a more classical approac* +*ile Pepsi tried to attract younger generation ,y using pop stars as ,rand am,assadors. Currently Coca(Cola slig*tly topped Pepsi as t*e possessor of
)tren%t-s
Finan!iall* stron%
!ne of t*e main strengt*s of CC'P is t*e financial strengt* of t*e company ,ecause it is supported and controlled ,y Coca Cola International. "*erefore unli/e past no+ t*ey can start any long term pro-ect +it*out concerning too muc* a,out finances availa,le. #ccording to Inter,red "*e Coca Cola Company is t*e most valued
>H33@5 ,illion? ,rand in t*e +orld. So t*ere is no issue of finance in CC'P. /o*al C'sto&ers
"*e firm en-oys *aving one of t*e most loyal consumer groups. Coca Cola is en-oying a positive image in t*e minds of t*e consumers. "*ey normally t*in/ t*at it is ,etter in
0uality as compare to ot*er competitors availa,le in t*e mar/et. . Most extensi(e be(era%e $istrib'tion !-annel
Coca Cola serves more t*an <44 countries and more t*an 2.3 ,illion servings a day. CC'P Esta,lis*ed Nation(+ide infrastructure is *elping t*e organi1ation to increase t*e sales volume of t*e company.
:i te!- ',to $ate Te!-nolo%*
CC'P *as up to date tec*nology in its production. #s Coca(Cola company claims t*at t*ey are very sensitive a,out *ygienic conditions so t*at%s +*y t*ey using up to date tec*nology to ac*ieve t*is o,-ective.
)'staine$ ;'alit* ran$ na&e
"*ey *ave sustained )uality assurance of t*e ,rand t*at t*ey are offering to customers. or"in% En(iron&ent
#not*er important strengt* of CC'P is t*e +or/ing environment t*at t*ey are offering to t*eir employees. Due to t*is environment t*e employees t*at are +or/ing *ere are loyal to t*e organi1ation and it is resulting in improving t*e motivation level of t*e employees +*ic* in t*e end results in *ig* productivity and ,etter performance.
ea"nesses
/ess Fo!'s on )&all Cities
"*e ma-or +ea/ness of t*e company is its distri,ution c*annel. It is one of t*e main reasons of its slo+ progress and lo+ mar/et s*are in t*is mar/et as compared to t*e competitor. Due to lac/ of availa,ility of t*e products and less differentiation from competitors it *as ,ecome very difficult to capture a ,ig mar/et s*are. CC'P o+ns ,ig s*ares in ,ig cities of Pa/istan ,ut in rural areas it lac/s ,e*ind a lot.
0tiliation of eso'r!es
"*e company is also lac/ing in utili1ation of t*e resources. People are *aving various facilities ,ut t*ey don%t /no+ t*eir ,est use. For e$ample people +or/ing in fleet department don%t /no+ to ma/e t*e ,est use of Fleet Management System and usually performing tas/s in very difficult manner manually t*at can ,e easily performed ,y using
FMS.
• ran$ fail'res
Plus t*e firm%s success of introducing ne+ drin/s is +ea/. Eit*er t*ey aren%t mar/eted +ell or are not launc* after a proper mar/et survey. Many of its introduction result in failures for e$ample Sprite 5 or Fanta Citrus.
• 0n$i(ersifie$ ,ro$'!t ,ortfolio
Gnli/e most company%s competitors Coca Cola is still focusing only on selling ,everage +*ic* puts t*e firm at disadvantage. "*e overall consumption of soft drin/s is stagnating and Coca Cola Company +ill find it *ard to penetrate to ot*er mar/ets >selling food or snac/s? +*en it +ill *ave to sustain current level of gro+t*.
• )i%nifi!ant fo!'s on !arbonate$ $rin"s
"*e ,usiness is still focusing on selling Co/e Fanta Sprite and ot*er car,onated drin/s. "*is strategy +or/s in s*ort term as consumption of car,onated drin/s +ill gro+ in emerging economies ,ut it +ill prove +ea/ as t*e +orld is fig*ting o,esity and is moving to+ards consuming *ealt*ier food and drin/s.
• ottle$ #ater !ons'&,tion
%ro#t-Consumption of ,ottled +ater is e$pected to gro+ ,ot* in Pa/istan and t*e rest of t*e +orld.
In!reasin% $e&an$ for -ealt-* foo$ an$ be(era%es
Due to many programs to fig*t o,esity demand for *ealt*y food and ,everages *as increased drastically. "*e Coca Cola Company *as an opportunity to furt*er e$pand its product range +it* drin/s t*at *ave lo+ amount of sugar and calories.
Enter into ne# &ar"et
# *uge part of t*e mar/et is still +aiting for first entry. Coca Cola can get t*e advantage of first entry if it focuses on suc* areas.
A(ailabilit* of +ro$'!ts
"*e ,est opportunity for CC'P is to increase mar/et s*are t*roug* increasing t*e availa,ility of t*e products in t*e mar/et.
T-reats
• C-an%es in !ons'&er tastes
Consumers around t*e +orld ,ecome more *ealt* conscious and reduce t*eir consumption of car,onated drin/s drin/s t*at *ave large amounts of sugar calories and fat. "*is is t*e most serious t*reat as Coca Cola is mainly serving car,onated drin/s.
• /e%al re<'ire&ents to $is!lose ne%ati(e infor&ation on ,ro$'!t labels
Some Coca Cola%s car,onated drin/s *ave adverse *ealt* conse0uences. For t*is reason government considers to pass legislation t*at re0uires disclosing suc* information on product la,els. Products containing suc* information may ,e perceived negatively and
lose its customers.
• Co&,etition fro& +e,siCo.
PepsiCo is fiercely competing +it* Coca Cola over mar/et s*are in Pa/istan and neig*,oring Countries. Aig* production capacity of t*e main competitor PepsiCo is a t*reat for Co/e ,ecause t*ey are *aving a ,etter c*ance to increase t*e production and availa,ility of t*e products and furt*er increase t*e mar/et s*are.
• )at'rate$ !arbonate$ $rin"s &ar"et
"*e ,usiness significantly relies on t*e car,onated drin/s sales +*ic* is a t*reat for t*e Coca Cola as t*e mar/et of car,onated drin/s is not gro+ing or even declining in t*e +orld.
"*e local manufacturers can also distur, t*e mar/et s*are due to t*eir lo+ price offerings. For e$ample ourmet
'&ors of Co"e bein% 0n:ealt-*
"*e c*anging *ealt*(consciousness attitude of t*e mar/et could *ave a serious effect on Coca Cola.
C+M = CM+ETITI.E +FI/E MATI>
Co!aCola +e,si
Criti!al )'!!ess Fa!tors
ei%-t atin% ei%-te
$ )!ore atin% ei%-te$ )!ore Mar/et S*are Price Comp Financial Position Product )uality Product ines Customer oyalty Employees Mar/eting "otal 4.28 4.24 4.2< 4.28 4.28 4.28 4.22 4.43 1? 6 4.:4 5 4.54 6 4.6@ 5 4.68 6 4.:4 6 4.:4 5 4.55 5 4.<2 3?71 5 4.68 5 4.54 6 4.6@ 5 4.68 6 4.:4 6 4.:4 5 4.55 5 4.<2 3?56
EFE AND IFE Matrix
De(elo,in% t-e EFE Matrix
)!ore ,,ort'nities
'ottled +ater consumption gro+t* ?1 4 ?4
Increasing demand for *ealt*y food and ,everages
?15 3 ?45
Enter into ne+ mar/et ?1 3 ?3
#vaila,ility of Products ?5 4 ?2
T-reats
C*anges in consumer tastes ?5 4 ?2
egal re0uirements to disclose negative information on product la,els
?1 1 ?1
ocal Manufacturers ?15 3 ?45
umors of Co/e ,eing Gn(Aealt*y ?1 3 ?3
Competition from PepsiCo ?1 4 ?4
Saturated car,onated drin/s mar/et ?1 4 ?4
"otal 1? 3?2
Ex,lanation on !al!'lation
'ased on t*e a,ove calculations it *as ,een concluded t*at t*e company%s "otal eig*ted Score is 5.< +*ic* s*o+s t*at t*e company is *ugely successful in utili1ing its opportunities and minimi1ing t*e t*reats around it
De(elo,in% t-e IFE Matrix
Internal Fa!tor E(al'ation ei%-tin% ate ei%-te$ )!ore
)tren%t-s
Financially strong ?1 4 ?4
oyal Customers ?5 4 ?2
Most e$tensive ,everage distri,ution c*annel
?1 3 ?3
Ai tec* & up(to date "ec*nology ?1 4 ?4
Sustained )uality & 'rand name ?1 4 ?4
ea"nesses
ess Focus on Small Cities ?5 4 ?2
Gtili1ation of esources ?5 4 ?2
Significant focus on car,onated drin/s
?1 3 ?3
Gndiversified product portfolio ?15 3 ?45
'rand failures ?1 3 ?3
"otal 1? 3?55
'ased on t*e a,ove calculations it *as ,een concluded t*at t*e company%s "otal eig*ted Score is 5.88 +*ic* s*o+s t*at t*e company is *ugely successful in utili1ing its strengt* and minimi1ing t*e +ea/ness around it
C+ATE )TATEIE)
.erti!al Inte%ration
Vertical integration is t*e process of com,ining several steps in t*e distri,ution c*ain eit*er t*e inputs or outputs of t*e organi1ational controls.
a!"#ar$ inte%ration
In t*is case Coca(Cola started Coca(Cola Enterprises >CCE? and positioned it as an independent ,ottling su,sidiary of Coca(Cola. "*e parent company +ould ,uy ot*er struggling ,ottlers and
resell t*em to CCE. Di(ersifi!ation )trate%*
Diversification strategy refers to see/ing unfamiliar products or mar/ets to develop and e$ploit. It is a strategy to eliminate t*e potential ris/ of a current product or mar/et orientation does not seem to provide furt*er opportunities for gro+t*.
Coca(Cola uses t*is strategy to e$plore ne+ drin/ categories continuously and it is /eeping t*e tradition of e$panding on t*eir current portfolio of ,rands and products. Coca(Cola *as more t*an 5444 products in over <44 countries of t*e ,everage ,rands +it* core focus on ,rand of Coca(Cola Diet Co/e Co/e Kero Sprite and Fanta.
INTEN)I.E )TATEIE)
Mar"et ,enetration
Co/e see/ing to increased mar/et s*are for t*eir present product in present mar/et t*roug* greater mar/et efforts. Co/e do mar/et penetration t*roug* increase advertisement e$penditures offering sales promotion and also increasing pu,licity. Co/e in <449<424 spent million on its ne+ slogan B!pen Aappiness +*ic* replaced B"*e Co/e Side of ife.
+ro$'!t $e(elo,&ent
Coca(Cola *as long ,een committed to a product development strategy. "*is allo+s Coca(Cola to penetrate e$isting mar/ets +it* ne+ products due to t*eir *ig* ,rand a+areness. "*is strategy capitali1es on Coca(Cola%s favora,le trademar/ reputation
)trate%i! Allian!e
"*e distri,ution of Coca(Cola *as reac*ed all around t*e glo,e= it *as a *uge and +ide customer ,ase. "*erefore Coca(Cola *ig*ly focuses on ena,ling t*eir customers to reac* t*eir products
more regularly. "*us all partners of Coca(Cola +or/ closely +it* customers L for e$ample t*ey *ave strategic alliance +it* McDonald many ot*ers.
lobal )trate%*
lo,ali1ation is t*e /ey concern of Coca(Cola. "*e company *as a total control in cost pressure so t*e cost pressure is lo+. "*erefore Coca(Cola can operate under t*e Multi domestic Strategy. "*us ,y running t*e local responsiveness of Coca(Cola is *ig*.
Ao+ever t*e features of multi domestic strategy for Coca(Cola are t*at t*ey mutually e$tensive customi1e ,ot* t*eir product offering and mar/eting strategies in different place +it* different national conditions. In addition t*ey are operating in seven regional operating groups suc* as Nort* #merica roup atin #merica roup Europe roup Eurasia & #frica roup Pacific roup 'ottling Investments roup and McDonaldJs Division. "*e reason is t*at t*ey are trying to create t*eir value innovation activities ,y doing t*e mar/et and product researc* in different potential national mar/et.
ANA/@E T:E +TEB) ENEIC )TATEIE)
Coca(Cola is seen to *ave employed t*ese t+o competitive strategies Focused o+ Cost and 'road Differentiation.
Fo!'se$ /o# Cost
"*e company *as c*osen to serve t*e consumer drin/ mar/et and ac*ieved cost savings ,y means of
2. #c*ieving economies of scale in t*e mass production of all Coca(Cola products lo+ers its unit cost.
<. ong learning /no+ledge and e$perience in production and process as t*e company e$isted more t*an a century.
5. Efficiency and effectiveness in manufacturing and distri,ution net+or/.
6. S*aring of researc* and development advertising and promotions cost among t*e ,rands carried ,y Coca(Cola *as ena,led to ac*ieve economies of scope.
roa$ Differentiation
2. !ffering of +ide range of its drin/ products are currently ,eing offered in t*e glo,al mar/et.
<. Aig* ,rand image and recognition *ave resulted in superior product perception among consumers.
5. Pac/aging and ,ottling t*e use of contoured s*ape ,ottle and t*e slim curly font *ave made Coca(Cola an easily recogni1ed sym,ol.
FI.E MATICE) F CCA C/A
ANA/@)I) N C MATI> +ro$'!ts e(en'e a%e of e(en'es +rofits a%e of +rofits elati(e Mar"et )-are In$'str* ro#t-atio
Co!a Cola 5 billion 28 &illion ?58 7
NTE
evenues of Pepsi +ere @8 'illion in <425. #nd Pepsi is a mar/et leader in Pa/istan. C MATI>
'y ma/ing t*e
analysis of 'C matri$ +e come to /no+ t*e Coca Cola is t*e star product of t*e Cola industry in car,onated drin/s ,ecause t*ey *ave captured t*e reasona,le mar/et s*are and ma/ing gro+t* ,y utili1ation of resources and ma/ing strategies according to t*e situation. Furt*er Coca Cola can ma/e gro+t* ,ecause t*ere is a potential in t*e mar/et and more gro+t* and mar/et s*are can ,e captured ,y ma/ing furt*er strategies suc* as mar/et penetration.
AND )TATE@ MATI>
#s per t*e figure a,ove Coca Cola comes in t*e first 0uadrant. "*e company must focus on t*e current mar/et and ac*ieve gro+t* ,y adopting product development and mar/et penetration strategies. "*e company *as a,undant resources and competitive advantage t*roug* +*ic* it can ac*ieve gro+t* ,y adopting t*e ,ac/+ard and for+ard integration strategies. Coca Cola can also adopt t*e related diversification strategy to reduce its ris/ +it* ,road portfolio or product line. Coca Cola can afford to ta/e ,enefits of e$ternal opportunities in many areas. It can ta/e
ris/ ,eing aggressive +*en necessary.
#ccording to t*e grap* studied a,ove Coca Cola is lying in t*e 2st cell +*ic* means t*at it is
using t*e ,uild and gro+ strategy in order to ac*ieve t*e ma$imum mar/et s*are and gro+t*. In t*is regard Coca Cola can use t*e certain strategies suc* as product development mar/et penetration and related diversification.
(a$is (2.6 8.4 O 5.: (a$is 8.6 (5.< O <.<= Coordinate >5.: <.<? Ex,lanation
#ccording to t*e grap* a,ove it is noticed t*at company is falling in t*e aggressive 0uadrant of space matri$. It is located at t*e coordinates of 5.: on $(a$is and <.< on t*e y(#$is. It s*o+s t*at company *as admira,le position to use its IS in order to ta/e advantage of e$ternal opportunities overcome +ea/nesses and avoid t*reats. So in t*is position Coca(cola company *as set of possi,le strategies suc* as mar/et penetration product development mar/et penetration for+ard
integration and ,ac/+ard integration *ori1ontal diversification depending upon t*e detailed conditions t*at are faced ,y t*e companies.
TOWS Strategic Alternatives Matri
,,ort'nities
1 ottle$ #ater !ons'&,tion %ro#t-2 In!reasin% $e&an$ for -ealt-* foo$ an$ be(era%es
3 Enter into ne# &ar"et 4 A(ailabilit* of +ro$'!ts T-reats 1 C-an%es in !ons'&er tastes 2 /e%al re<'ire&ents to $is!lose ne%ati(e infor&ation on ,ro$'!t labels 3 Co&,etition fro& +e,siCo? 4 )at'rate$ !arbonate$ $rin"s &ar"et 5 /o!al Man'fa!t'rers 6 '&ors of Co"e bein% 0n:ealt-* )tren%t-s 1 Finan!iall* stron% 2 /o*al C'sto&ers 3 Most extensi(e be(era%e $istrib'tion !-annel
4 :i te!- ',to $ate Te!-nolo%* 5 )'staine$ ;'alit* ran$ na&e 6 or"in% En(iron&ent S! 2.Increasing t*e mar/eting campaigns to capture t*e ma$imum s*are in t*e emerging economies S2!<
<. Ma/ing alliances +it*
emerging fast(food
c*ains S6!<
5. Entering in rural areas +*ic* +ill ensure t*e
availa,ility of t*e
product in t*e +*ole country. S<46
S"
2(Mar/et penetration
t*roug* +*ic* furt*er
efforts +ill ,e made to increase mar/et s*are of products.S2"6
<(Ma/ing t*e unrelated
diversification suc* as
entering in snac/s
division.S2"2
5(Increasing t*e mar/eting ,udget in order to fig*t
+it* competitor. S2"5
6(Introducing re+ard
sc*emes to ma/e furt*er gro+t*.S5"8
ea"nesses
1 /ess Fo!'s on )&all Cities 2 0tiliation of eso'r!es 3 ran$ fail'res 4 0n$i(ersifie$ ,ro$'!t ,ortfolio 5 )i%nifi!ant fo!'s on !arbonate$ $rin"s ! 2. #llocation of ,udget on failed ,rands to cater ne+ mar/ets +5 45 <. Mar/et t*e products to
rural areas in all
countries li/e t*e +ay its mar/eted in Pa/istan +2!6
"
2(Product development ,y
using ,est mar/et
tec*ni0ues in order to cater rumors +6":
<(mar/et penetration in rural areas t*roug* +*ic* loyalty +ill ,e increased in order to ,eat t*e local manufacturers.+2"8
!"antitative Strategic #lanning Matri
"*e strategies +*ic* can ,e used are mar/et penetration or product development )trate%i! Alternati(es
Ge* Internal Fa!tors
ei%-t In!reasin% t-e a$(ertise&ent H Mar"etin% '$%et Intro$'!in% t-e ener%* $rin"s )tren%t-s A) TA) A) TA) 1 Finan!iall* stron% ?1 5 4.5 < 4.< 2 /o*al C'sto&ers ?5 < 4.2 6 4.<
3 Most extensi(e be(era%e $istrib'tion !-annel
?1 < 4.< 5 4.5
4 :i te!- ',to $ate Te!-nolo%* ?1 < 4.< 5 4.5
5 )'staine$ ;'alit* ran$ na&e ?1 5 4.5 < 4.<
6 or"in% En(iron&ent ?1 ((( ((( ((( (((
ea"nesses
1 /ess Fo!'s on )&all Cities ?5 < 4.24 2 4.48
2 0tiliation of eso'r!es ?5 ((( ((( ((( (((
3 ran$ fail'res ?1 ((( ((( ((( (((
4 0n$i(ersifie$ ,ro$'!t ,ortfolio ?15 < 4.5 5 4.68
5 )i%nifi!ant fo!'s on !arbonate$ $rin"s ?1 6 4.6 5 4.5
)0TTA/ 1? 1?9 2
Ge* External Fa!tors
ei%-t In!reasin% t-e a$(ertise&ent H Mar"etin% '$%et Intro$'!in% t-e ener%* $rin"s
,,ort'nities A) TA) A) TA)
2 In!reasin% $e&an$ for -ealt-* foo$ an$ be(era%es
?15 < 4.54 < 4.5
3 Enter into ne# &ar"et ?1 < 4.< 6 4.6
4 A(ailabilit* of +ro$'!ts ?5 6 4.< 5 4.28
T-reats
1 C-an%es in !ons'&er tastes ?5 ((( ((( ((( (((
2 /e%al re<'ire&ents to $is!lose ne%ati(e infor&ation on ,ro$'!t labels
?1 ((( ((( ((( (((
3 Co&,etition fro& +e,siCo? ?15 6 4.: 5 4.68
4 )at'rate$ !arbonate$ $rin"s &ar"et ?1 ((( ((( ((( (((
5 /o!al Man'fa!t'rers ?1 < 4.< 5 4.5
6 '&ors of Co"e bein% 0n:ealt-* ?1 5 4.5 < 4.<
)0 TTA/ 1? 1?8 1?8
)0M TTA/ ATTACTI.ENE)) )CE 3?7 3?8
#s +e loo/ upon t*e results of )SPM +e o,serve t*at t*e strategy +*ic* got *ig*est score is related diversification .+e +ill ,e follo+ing t*is strategy and introducing energy drin/s .for t*is purpose +e +ill do t*e follo+ing.
esear!- an$ $e(elo,&ent
Firstly t*e company *as to do t*e researc* on t*e consumer preferences t*e &D team *ave to find out t*e consumers taste price t*ey are +illing to pay and +*ic* category t*ey prefer in energy drin/s .researc* can include ,ot*
• Secondary researc* • Primary researc*
#fter conducting t*e researc* company +ill come to /no+ t*at +*ic* product t*ey *ave to develop .once t*e product is developed sampling +ill ,e sent to t*e different mar/ets for testation purpose.
Coca(Cola can outsource t*eir researc* team as t*ey *ave no related e$perience in t*is field .so its ,etter off to out source t*is department
#fter t*e researc* *as ,een finali1ed and t*e company /no+s +*at to produce t*ey can ,uild a team +*ic* +ill +or/ on t*is pro-ect. For t*is purpose t*e y can use
Matrix str'!t're
Matri$ structure is said to ,e t*e ,est structure as it *as less disadvantages compare to t*e ot*er structures. Aere Coca(Cola can ,ring toget*er t*e creative *eads to +or/ on t*is pro-ect .people from different department li/e finance department .mar/eting department production department can toget*er to furt*er proceed +it* t*is pro-ect.
#fter t*e team *ave put toget*er +e +ill develop certain o,-ectives +*ic* eac* department *as to follo+ to ac*ieve long term goal.
/on% ter& %oal
"o successfully launc* t*e energy drin/s into mar/et and gain a mar/et s*are 24; at t*e end of financial year.
Company +ill furt*er ,rea/ t*is goal into small c*un/s for eac* department. Finan!e $e,art&ent obe!ti(es
"o generate finance to support t*is pro-ect and to carry on successfully
+ro$'!tion $e,art&ent
"o produce to t*at limit +*ere t*ey can generate t*e revenues to gain s*are in t*e mar/et Mar"etin% $e,art&ent
It is responsi,ility of t*e mar/eting department to sale t*ose product +*ic* are produced ,y t*e production department.
eso'r!e allo!ation
"*ere are four types of recourses • Financial resources • P*ysical resources • Auman resources • "ec*nology resources Exa&,le
For ,ro$'!tion $e,art&ent
It is understood t*at for production department t*ey +ill need ne+ tec*nology in t*e form of ne+ mac*inery as t*ey are moving into ne+ line of energy drin/s.
Con!l'sion
"*e Coca(Cola Company is a very effective company t*at remains loyal to its customers +*ile continuing to meet t*e ultimate goal of every company to ma$imi1e its profits. Coca(Cola could do a ,etter -o, +it* t*e mar/eting tec*ni0ues of its company. #dditionally it can al+ays improve its products to meet t*e demands of more consumers especially in t*e untapped mar/et +*ere tastes vary. "*e target mar/eting and management group could +or/ on satisfying more races cultures age groups and people t*at are in less developed areas. Every company al+ays *as room for improvements ,ut t*e Coca(Cola Company is not far from perfection. "*is empire +ill continue to ,e prosperous as long as it continues to put its customers at t*e top of its priorities list.