Prepared by:Supervised by : Dr.

History Standing in business environment Brands of coca cola Mission Vision Value Chain Analysis SWOT Analysis Which Differentiation Strategy? Compotator Value Chain Analysis Business Strategy / Corp. Strategy Industry Segmentation References

Coca-Cola® originated as a soda fountain beverage in 1886 selling for five cents a glass. Early growth was impressive, but it was only when a strong bottling system developed that Coca-Cola became the world-famous brand.

1894 – A modest start for a Bold Idea

1899 The first bottling agreement1900-1909 … Rapid growth1916 … Birth of the contour bottle1920s … Bottling overtakes fountain sales 1920s and 30s … International expansion1940s … Post-war growth1950s … Packaging innovations1960s … New brands introduced1970s and 80s … Consolidation to serve customers1990s … New and growing markets

Ranking: We own 4 of the world's top 5 nonalcoholic sparkling beverage brands Associates: 90,500 worldwide Operational Reach: 200 countries Consumer Servings (per day): 1.5 billion Beverage Variety: more than 2,800 products

Energy Drinks

Juices/Juice Drinks

Soft Drinks

Sports Drinks

Tea and Coffee

Water

Other Drinks

Our mission declares our purpose as a company. It serves as the standard against which we weigh our actions and decisions.

- To refresh the world in body, mind and spirit.- To inspire moments of optimism through our brands and

our actions.- To create value and make a difference everywhere we

engage.

Our vision guides every aspect of our business by describing what we need to accomplish in order to continue achieving sustainable growth. People: Being a great place to work where people are inspired to be the best they can be.Portfolio: Bringing to the world a portfolio of quality beverage brands that anticipate and satisfy people's desires and needs. Partners: Nurturing a winning network of customers and suppliers, together we create mutual, enduring value. Planet: Being a responsible citizen that makes a difference by helping build and support sustainable communities. Profit: Maximizing long-term return to share owners while being mindful of our overall responsibilities.

Coca-Cola is guided by shared values that both the employees as individuals and the Company will live by; the values being:LEADERSHIP: The courage to shape a better futurePASSION: Committed in heart and mindINTEGRITY: Be realACCOUNTABILITY: If it is to be, it’s up to meCOLLABORATION: Leverage collective geniusINNOVATION: Seek, imagine, create, delightQUALITY: What we do, we do well

Introducing new products Supplier Operations Distribution

Marketing and Sales

After Sales Services

Gathering new Market requirements Raw Materials Inventory System Receiving Salespersons

Postage

Designing new products Fuel Receiving Plant Layout Website Phone

Production process design Energy Plant Layout Maintenance Internet Internet

Transportation Maintenance Plant Location Publicity Warranty

Truck Drivers Plant Location Computer Promotion

Truck Maintenance Computer R&D AdvertisingComponent Parts R&D Maintenance Transportation

Inspection Cost AccountingFood and Lodging

Storing Warehouse

Prim

ary

activ

ates

Sup

port

ive

activ

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Coca Cola Infrastructure and Management

HR and TrainingFinancials, Legal and Investor relation

Procurement

Innovation and R&D

Ma

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Value Chain Analysis:

A value chain is a model used to disaggregate a firm into its strategically relevant value generating activities, in order to evaluate each activity's contribution to the firm's performance. Through the analysis of this model we can gain insight as to how a firm creates their competitive advantage and shareholder value. The value chain of the nonalcoholic beverage industry contains five main activities. These include inbound logistics (suppliers), operations, outbound logistics (buyers/ customers), marketing and sales

Inbound Logistics (Suppliers):

Some of Coca Cola most notable suppliers include Spherion, Jones Lang LaSalle, IBM, Ogilvy and Mather, IMI Cornelius, and Prudential. These companies provide Coca Cola with materials such as ingredients, packaging and machinery. In order to ensure that these materials are in satisfactory condition, Coca- cola has put certain standards in place which these suppliers must adhere to (The Supplier Guiding Principles).

Inbound Logistics (Suppliers) Cont’d:

These include: compliance with laws and standards, laws and regulations, freedom of association and collective bargaining, forced and child labor, abuse of labor, discrimination, wages and benefits, work hours and overtime, health and safety, environment, and demonstration of compliance. Coca-Cola uses third parties to assess their suppliers by having interviews with employers and contract workers. If a supplier has issues about the supplier guiding principles, they are usually given a certain amount of time to take corrective measures; if not, Coca-Cola has the right to terminate their contract with these suppliers.

Operations:

Coca Cola core operations consist of Company-owned concentrate and syrup production. According to their website, some of the main environmental impacts of their business occur further along the value chain through system's bottling operations, distribution networks, and sales and marketing activities. Management of these operations across the business value chain tends to be more challenging outside of the core operations.

Operations Cont’d: :

According to Coca Cola, they continue to address this by working with their partners to reduce the effects at every level of the manufacturing process by enlarging their comprehension of the complete environmental impact of their business through the entire lifecycle of their products from ingredient procurement to production, delivery, sales and marketing, and post-consumer recycling.

Outbound Logistics (Buyers/ Customers):

The activities required to get finished products to customers include warehousing, order fulfillment , transportation, and distribution management. Coca Cola has the world largest distribution system. They own, lease, and operate in over 800 plants around the world. The 2,400 beverage products which they market reach consumers in more than 200 different geographic locations. Grocery stores such as Sobeys, fast food restaurants such as McDonalds (fountain sodas),and vending machines are just a few of the distribution units used to ultimately reach consumers.

Outbound Logistics (Buyers/ Customers) Cont’d:

Coca Cola has over 300 bottling partners which range from publicly traded businesses to small family owned operations. They have implemented the Coca Cola System in which they work cohesively with their partners in order to develop strategies aimed to meet the needs of all their customers

Marketing and Sales:

Out of approximately 2,400 products, Coca Cola markets four of the worlds top sales drink brands. Although the industry is relatively small and they only directly compete with two companies, creativity is a vital marketing strategy to Coca Cola.

Marketing and Sales Cont’d:

Coca Cola ultimate goal is to deepen their brands connection with consumers. As a result, they have to constantly reinvent their products. The marketing strategy they use is directly linked to the consumer; from advertising, to point of sale, to ultimately opening and consuming a Coca Cola beverage. Techniques which they have used to achieve this include developing new products and brands, changing the design of their packaging, and designing various new advertising campaigns.

Service:

Activities that maintain and enhance a product value include customer support, repair services, installation and training. Coca Cola customers range from large international retailers and restaurants to smaller independent businesses and vendors. As a result, they provide services tailored to meet their customer needs.Coca Cola also supports their customer by providing them with the training necessary to help their businesses become more effective and profitable. They have established customer development and training centers.

STRENGTHS- Brand equity/image & recognition- Product distribution and worldwide network - Solid financial performance - One of the world's most recognized brand.- Product diversification (water, juices, soft drinks, sport drinks, etc) - Co-operate identity.- Innovation

WEAKNESSES - Credit rating - Customer concentration, particularly in the US (Wal-Mart accounts for more than 10% of Coca Cola's business in the US) - A lot of loyal Pepsi customers are not enough loyal Coca Cola customers - Does not enjoy the number one position in India, Pakistan.

OPPORTUNITIES- Possible growing demand.- Expansion – Reaching all segments.- Globalization- Catering to Health Consciousness of People- Bottled water growth - Acquisitions of smaller players.

THREATS - Health Drinks – Fruit Juice Companies- Key competitors (Pepsi, etc) - Commodity prices growth - Image perception in certain parts of the world.- Smaller, more nimble operators/players

Differentiation strategy:A differentiation strategy is the development of a product or service that offers unique and differentiating attributes which are valued by customers and perceive to be better than or different from the products of the competition. • Coca-Cola has unquestionably chosen a differentiation strategy. This has rapidly been its strategy

since the early days of the company’s life.It has thus based its strategy on diversification as its main brand is derived by sub-products maintaining a strong affiliation with Coca Cola: the Diet Coke Cola (Coca Cola light, zero ...), Lemon Coke, Cherry Coke, Vanilla Coke…. it is more about a strategy of concentrating on the main product, in order to increase the volume of sales.• Coca Cola Company spends round about 20% of their total advertisement budget for maintaining

and communicating on its differentiation strategy. • Similarly coca cola has created its differentiation by utilizing soft sell approach. • Company has successfully positioned itself on the following standards: · Corporate reputation for quality and innovation: one of the best places to work. · Successful communication of perceived strengths of the product: Integrated marketing strategy · Symbol of joy and fun

Coke differentiates themselves by using unique marketing and advertising campaigns to entice their customers to stay loyal to their brand by continuing to purchase coca-cola products versus one of the many competitors. • They also have different bottle shapes. Research has been conducted that shows people

feel better about themselves and skinnier if the bottle is shaped like a curvy, but slim body shape.

• Another great differentiation strategy Coke has done, is the Coca-Cola Freestyle machine, This machine allows customers to mix and match their classic Coca-Cola beverages with many different flavors.

• Coke will need to continue to work hard at using the differentiation strategy to keep themselves separated from its competitors. To do this, Coca-Cola will need to keep introducing new beverages that will maintain customers' brand loyalty.

• Another way to differentiate themselves would be to use alcohol drinking culture to their advantage. For example, many drinks are ordered as a "rum and Coke", "Captain and Coke" or "whiskey and Coke". Coca-Cola could collaborate with Captain Morgan or a whiskey company and sell attached 3 ounce bottles of liquor with a Coke bottle.

• Finally, Coca-Cola has a great tasting drink that people have loved for decades and will continue to purchase their product if Coca-Cola works hard to maintain their great Coke taste and innovative ways to present it to their customers.

Strategies for GrowthPepsiCo has several key strategies for long term, sustainable growth, including:‐– Building and extending the company’s global macro snack portfolio – Profitably growing the company’s beverage business worldwide– Building and expanding the company’s nutrition business– Leveraging the company’s unique “Power of One” selling model across foods and beverages– Delivering on environmental sustainability commitments– Ensuring prudent, responsible financial management

In practice, Performance with Purpose means providing a wide range of foods and beveragesfrom treats to healthy eats; finding innovative ways to minimize our impact on the environment and reduce our operating costs; providing a safe and inclusive workplace for our employees globally; and respecting, supporting and investing in the local communities where we operate.

Performance with Purpose underpins our goal to deliver long-term, sustainable financial performance. It guides our strategy and operations, with a focus on 1. Human Sustainability.2. Environmental Sustainability.3. Talent Sustainability.

• The main players of soft drinks industry are Coca (29%) Pepsi (27%) and Dr. Pepper Snapple (9%)

• The product life cycle is similar in the three companies as it moves from Syrup producers, to bottlers, to distributors, to merchants, to final consumers.

• Bottlers are closely linked to locations of strategic raw materials and major population centers.

• The key success factor in this Industry is the control over distribution channels, the advertising and promotions, the contracting agreements, the brand image and the product range.

• Dr. Pepper is very small compared to Pepsi & Coca and its main focus is on the USA and Latin America, so the main competition is between Pepsi & Coca.

• The main advantage of Dr. Pepper is that it is more involved in the whole value chain as it owns most of manufacturing facilities, bottling and the distribution channels. So Dr. Pepper has more control over its value chain.

• The main factor which eases the competition between Pepsi and Coca is the annual growth of this industry and the huge potential in international markets.

• The value chain is closely similar between Pepsi and Coca.• The main difference between Pepsi & Coca is that Coca is

pure beverage company, while Pepsi produces grain-based snacks beside its main business (Beverages).

• The value chain of grain-based snacks is totally different from the value chain of soft drinks except the distribution channels and advertising. So. Pepsi can benefit from decreasing the advertising and distribution cost per unit.

• Inbound logistics: is the same in Pepsi & Coca as they both purchase their raw materials through future contracts to avoid market volatility

• Operations: They produce their concentrates from their own facilities. They have contracts with bottling companies which uses these concentrates with the pre-specified formulas to produce final products.

• The exact mix of ingredients is kept secret, this affects the product image and actually applies a sense of prestige to the Pepsi and Coca

• Outbound Logistics: is similar in the two companies as the two companies are using either their affiliates in distribution or using long term contracts with distribution channels. The two companies have a wide range of global distribution channels.

• Marketing: Marketing and sales of Pepsi and Coca are huge. Coca spent US$ 2.9 billion on sales and marketing in 2010, while Pepsi’s sales and marketing budget for year 2014 is US$ 1.7 billion.

Beverage IndustryIndustrial and commercial buyers• Preparation

machines• Row material

(Syrup , flavors )

• Distribution machines

Customer goods buyers• Demographics.• Lifestyle.• Geographic.• Purchase

occasion.

Product variety• Physical size.• Price level.• Features.• Packaging.• Bundled vs.

unbundled.

Channel Segments• Direct vs.

distributors.• Distributors vs.

brokers.• Types of

distributors or retailers.

Geographic Segments• Localities,

regions, or countries.

• Country groupings.

Energy Drinks

Juices/Juice Drinks

Soft Drinks

Sports Drinks

Tea and Coffee

Water

Other Drinks

• www.coca-cola.com

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