Horizontal Expansion Strategy Horizontal Expansion Strategy

Shahnawaz MBA 3rd Semester 1100122143

Adil

ObjectivesObjectives

To understand the concept of Horizontal To understand the concept of Horizontal Expansion with respect to Advance Sales Expansion with respect to Advance Sales and Services Pvt. Ltd.and Services Pvt. Ltd.

Evaluate the existing resources.Evaluate the existing resources. To develop the business , expand market To develop the business , expand market

coverage.coverage. The benefit of Horizontal Expansion for the The benefit of Horizontal Expansion for the

company at retailers end. company at retailers end.

ContentsContents Section 1: Company Profile.Section 1: Company Profile.

Section 2: Profile of Organization imparting Section 2: Profile of Organization imparting

Training Training

Section 3: Conceptual background of topic.Section 3: Conceptual background of topic.

Section 4: Details of work completedSection 4: Details of work completed

Section 5: SWOT AnalysisSection 5: SWOT Analysis

Section 1Section 1

CompanyCompany

ProfileProfile

Past and Present Past and Present

1894 … A modest start for a bold idea1894 … A modest start for a bold ideaA store's owner, Joseph A. Biedenharn, A store's owner, Joseph A. Biedenharn, began began bottling Coca-Cola to sell, using a common bottling Coca-Cola to sell, using a common glass bottle called a Hutchinsonglass bottle called a Hutchinson

1899 … The first bottling agreement1899 … The first bottling agreementIn a meeting with Candler, Benjamin F. Thomas In a meeting with Candler, Benjamin F. Thomas and Joseph B. Whitehead obtained exclusive rights and Joseph B. Whitehead obtained exclusive rights to bottle Coca-Cola across most of the United to bottle Coca-Cola across most of the United States (specifically excluding Vicksburg) -- for the States (specifically excluding Vicksburg) -- for the sum of one dollar. sum of one dollar.

1940s … Post-war growth1940s … Post-war growthDuring the war, 64 bottling plants were set up around During the war, 64 bottling plants were set up around the world to supply the troops. Many of these war-time the world to supply the troops. Many of these war-time plants were later converted to civilian use, plants were later converted to civilian use, permanently enlarging the bottling system and permanently enlarging the bottling system and accelerating the growth of the Company's worldwide accelerating the growth of the Company's worldwide business.business.

1950s … Packaging innovations1950s … Packaging innovationsFor the first time, consumers had choices of Coca-Cola For the first time, consumers had choices of Coca-Cola package size and type -- the traditional 6.5-ounce package size and type -- the traditional 6.5-ounce contour bottle, or larger servings including 10-, 12- and contour bottle, or larger servings including 10-, 12- and 26-ounce versions. Cans were also introduced, 26-ounce versions. Cans were also introduced, becoming generally available in 1960. becoming generally available in 1960.

Past and PresentPast and Present

Past and PresentPast and Present 1960s … New brands introduced1960s … New brands introduced

Following Fanta® in the 1950s, Sprite®, Minute Maid®, Following Fanta® in the 1950s, Sprite®, Minute Maid®,

Fresca® and TaB® joined brand Coca-Cola in the 1960s. Fresca® and TaB® joined brand Coca-Cola in the 1960s.

Mr. Pibb® and Mello Yello® were added in the 1970s. Mr. Pibb® and Mello Yello® were added in the 1970s.

The 1980s brought diet Coke® and Cherry Coke®, The 1980s brought diet Coke® and Cherry Coke®,

followed by POWERADE® and DASANI® in the 1990s. followed by POWERADE® and DASANI® in the 1990s.

1970s and 80s … Consolidation to serve customers1970s and 80s … Consolidation to serve customers

The Company encouraged and invested in a number of The Company encouraged and invested in a number of

bottler consolidations to assure that its largest bottling bottler consolidations to assure that its largest bottling

partners would have capacity to lead the system in partners would have capacity to lead the system in

working with global retailers.working with global retailers.

Past and Present Past and Present 1990s … New and growing markets1990s … New and growing markets

After the fall of the Berlin Wall, the Company After the fall of the Berlin Wall, the Company invested heavily to build plants in Eastern invested heavily to build plants in Eastern Europe. Europe. And as the century closed, more than $1.5 And as the century closed, more than $1.5 billion was committed to new bottling facilities in billion was committed to new bottling facilities in Africa.Africa.

2121stst Century … Century …The Coca-Cola bottling system grew up with roots The Coca-Cola bottling system grew up with roots deeply planted in local communities. This heritage deeply planted in local communities. This heritage serves the Company well today as people seek brands serves the Company well today as people seek brands that that honor local identity and the distinctiveness honor local identity and the distinctiveness of local markets. of local markets.

Coca-Cola in IndiaCoca-Cola in India The Coca-Cola Company entered India in the The Coca-Cola Company entered India in the

early 1950s. It set up four bottling plants at early 1950s. It set up four bottling plants at Bombay, Calcutta, Kanpur and Delhi. Bombay, Calcutta, Kanpur and Delhi.

In 1950 as there were negligible companies in In 1950 as there were negligible companies in Indian market therefore Coca-Cola did not face Indian market therefore Coca-Cola did not face much competition and they were accepted in much competition and they were accepted in Indian market more easily. By the end of 1977 Indian market more easily. By the end of 1977 Coca-Cola had captured more than 45% of Coca-Cola had captured more than 45% of market share in India. Then Coca-Cola left India market share in India. Then Coca-Cola left India following public disputes over share holding following public disputes over share holding structure and import permit. As per FERA structure and import permit. As per FERA REGULATION the company was required to India REGULATION the company was required to India close operation by May 5, 1978 yet strongly close operation by May 5, 1978 yet strongly enough the company’s operation come to end in enough the company’s operation come to end in July 1977.July 1977.

Coca-Cola in IndiaCoca-Cola in India In October 1993, Coca-Cola returned to India after 16 In October 1993, Coca-Cola returned to India after 16

years of absence with the slogan “Old waves have years of absence with the slogan “Old waves have come to India again” first launched in HATHRAS near come to India again” first launched in HATHRAS near AGRA HOME of the famous TAJ MAHAL.AGRA HOME of the famous TAJ MAHAL.

At this time Parle was the leader in soft drink market At this time Parle was the leader in soft drink market and had more than 60% of the total market share in and had more than 60% of the total market share in soft drink Coca-Cola joined hand with Parle and soft drink Coca-Cola joined hand with Parle and strategic alliance with Parle export give the company strategic alliance with Parle export give the company instant ownership of the nation top soft drinks brands instant ownership of the nation top soft drinks brands Thums-Up, Limca, Citra, Gold Spot and Maaza access Thums-Up, Limca, Citra, Gold Spot and Maaza access to Parle’s extensive 62 plant bottling network and a to Parle’s extensive 62 plant bottling network and a base for the rapid introduction of the company’s base for the rapid introduction of the company’s international brand by striking a $40 million deal with international brand by striking a $40 million deal with Parle Coke almost a clear sweep and made it goal as Parle Coke almost a clear sweep and made it goal as “To become an all occasion drink not a special treat “To become an all occasion drink not a special treat beverage”.beverage”.

Section 2Section 2

Profile of OrganizationProfile of Organization

imparting training imparting training

Advance Sales & Advance Sales & Service Pvt. Ltd. is a Service Pvt. Ltd. is a marketing and marketing and distribution, Franchise distribution, Franchise of Brindavan Bottlers of Brindavan Bottlers Pvt. Ltd. Pvt. Ltd.

Lucknow, Barabanki, Lucknow, Barabanki, Lalitpur, Jhansi, Lalitpur, Jhansi, Lakhimpur, Sitapur & Lakhimpur, Sitapur & Faizabad are the Faizabad are the distribution and market distribution and market area for Advane Sales & area for Advane Sales & Service Pvt. Ltd. Service Pvt. Ltd.

Advance Sales & Advance Sales & Service Pvt. Ltd.Service Pvt. Ltd.

Management ProfileManagement Profile General Manager - Sanjeev GargGeneral Manager - Sanjeev Garg Head of Sales(City)- Rajan SharmaHead of Sales(City)- Rajan Sharma Head of Sales(Outer)- B.K. ShrivastavHead of Sales(Outer)- B.K. Shrivastav Marketing Executive Manager Marketing Executive Manager

– Chitresh Tiwari – Chitresh Tiwari HR Head – Manu MehrotraHR Head – Manu Mehrotra HR Executive – Pooja ChandwaniHR Executive – Pooja Chandwani

Sales & Marketing DivisionSales & Marketing Division

Sales HeadSales Head

Area Sales ManagerArea Sales Manager

Sales ExecutiveSales Executive

Team LeaderTeam Leader

Sales Team Sales Team

Distribution & Marketing Distribution & Marketing of Advance Sales & of Advance Sales & Service.Service.

Distributors CriteriaDistributors Criteria

Direct Sales Distributor(DSD)Direct Sales Distributor(DSD) Total company authorised Total company authorised

Indirect Disrtributor(ID)Indirect Disrtributor(ID) By AgentsBy Agents

Distribution & Marketing Distribution & Marketing of Advance Sales & of Advance Sales & Service.Service.

Distributors SegmentDistributors Segment

1. Anchor Distributor1. Anchor Distributor

(Investment 40-50 lakhs)(Investment 40-50 lakhs)

2. General Distributor2. General Distributor

(Investment 10-20 lakhs)(Investment 10-20 lakhs)

3. Spoke(Rural Area)3. Spoke(Rural Area)

(Investment 1-2 lakhs)(Investment 1-2 lakhs)

Distribution & Marketing Distribution & Marketing of Advance Sales & of Advance Sales & Service.Service.

Section 3Section 3

Conceptual Conceptual

Background Background

of Topicof Topic

Expansion of business capacity through the Expansion of business capacity through the absorption of facilities or buildings as well as absorption of facilities or buildings as well as through the acquisition of new equipment to through the acquisition of new equipment to handle an increased volume in sales in which handle an increased volume in sales in which the business is already engaged.the business is already engaged.

In microeconomics and strategic management, In microeconomics and strategic management, the term Horizontal Expansion describes a the term Horizontal Expansion describes a type of ownership and control. It is a strategy type of ownership and control. It is a strategy used by a business or corporation that seeks used by a business or corporation that seeks to sell a type of product in numerous markets. to sell a type of product in numerous markets.

Horizontal ExpansionHorizontal Expansion

→ The ultimate objective of coke is to acquire more The ultimate objective of coke is to acquire more customers and serve them properly. While doing customers and serve them properly. While doing Horizontal Expansion take care to the competitor’s Horizontal Expansion take care to the competitor’s strategy. The main competitor is PEPSI, who has strategy. The main competitor is PEPSI, who has opted Vertical Expansion to generate more sell opted Vertical Expansion to generate more sell however Coke do not believe on Vertical Expansion however Coke do not believe on Vertical Expansion because Vertical Expansion has limited preview so because Vertical Expansion has limited preview so COKE is great believer in Horizontal Expansion and COKE is great believer in Horizontal Expansion and this strategy helped to the company to maintain its this strategy helped to the company to maintain its leadership in the soft drink industry. leadership in the soft drink industry.

Reason for ExpansionReason for Expansion

Provides Incremental Volume & Revenue for Business.Provides Incremental Volume & Revenue for Business.

By horizontal expansion there will be more outlets of our By horizontal expansion there will be more outlets of our product in the market which will sell our product in more product in the market which will sell our product in more quantity. This will generate incremental revenue for the quantity. This will generate incremental revenue for the business.business.

Helps Improve Route ProductivityHelps Improve Route Productivity

Increase market visibility selling at more outlets give Increase market visibility selling at more outlets give more market visibility of the product which gives higher more market visibility of the product which gives higher product recognition and brand value to the products.product recognition and brand value to the products.

Increase in market power over supplier and downstream Increase in market power over supplier and downstream market channels.market channels.

Benefits of Horizontal Benefits of Horizontal ExpansionExpansion

Section 4Section 4

Detail of Detail of

Work completed Work completed

Area of Work Area of Work

1. Vikas Nagar1. Vikas Nagar

2. Kalyanpur 2. Kalyanpur

3. Khurram Nagar3. Khurram Nagar

Profile of subject areaProfile of subject area

Total 65 retailers such as Total 65 retailers such as

FMCG Outlet, Beverage FMCG Outlet, Beverage

and Resturant, Medical and Resturant, Medical

stores Cyber Café, stores Cyber Café,

Communication Stores, Communication Stores,

etc of Vikas etc of Vikas

Nagar,Kalyanpur and Nagar,Kalyanpur and

Khurram Nagar were Khurram Nagar were

considered for the new considered for the new

oultlet opening.oultlet opening.

Number of ClientsNumber of Clients

Section 5Section 5

SWOT SWOT

AnalysisAnalysis

StrengthStrength

Improved quality control.Improved quality control. Latest technology.Latest technology. Heavy investment in both Heavy investment in both

infrastructure and sales infrastructure and sales promotion campaigns.promotion campaigns.

Modified and attractive Modified and attractive packaging.packaging.

Strong advertising network.Strong advertising network.

WeaknessWeakness

Entire infrastructure needs a Entire infrastructure needs a face-lift.face-lift.

Unskilled labor.Unskilled labor. Tight case policy.Tight case policy. Fear of retrenchment among Fear of retrenchment among

the workers.the workers.

OpportunitiesOpportunities

Wide market.Wide market.

Good rural market.Good rural market.

Direct distribution.Direct distribution.

ThreatsThreats

Stiff competition.Stiff competition.

Illegal distribution done by Illegal distribution done by some distributors.some distributors.

Changing of consumer Changing of consumer preference.preference.

ConclusionConclusion As far as journey with the company is concerned, As far as journey with the company is concerned,

I grasped lots of knowledge within two months I grasped lots of knowledge within two months Because many of the company officials has Because many of the company officials has assisted and given me the valuable notes and assisted and given me the valuable notes and experience of their life.experience of their life.

The primary objective of the my research is to The primary objective of the my research is to analyze the horizontal expansion strategy of analyze the horizontal expansion strategy of Coke and at the end of the research I found that Coke and at the end of the research I found that there is requirement of changing the strategy there is requirement of changing the strategy for acquiring new customer for Coke but for acquiring new customer for Coke but company should take care of its existing company should take care of its existing customer because they are the main instrument customer because they are the main instrument of promotion for any company so old customer of promotion for any company so old customer should be fully satisfied with the company.should be fully satisfied with the company.

  

Thank YouThank You