1

The Institute of Management

and Sciences

Lahore Cantt

Marketing Management

: Submitted to :

Mr. Nadeem Aslam

Assignment No. 01

: Submitted by: Muhammad Fahad Ali Mirza (121103)

MBA (3.5 Years)

2

Table of Contents Coca Cola ....................................................................................................................................... 3

History ........................................................................................................................................................................................ 3

Introduction ............................................................................................................................................................................... 4

Cooperate Profile of Coca Cola ................................................................................................................................................ 4

Coca Cola Mission, Vision & Values ........................................................................................................................................ 4

SWOT Analysis (Strengths, Weakness, Opportunity & Threat) ........................................................................................... 6

PEST Analysis of Coca Cola (Political, Economic, Social, Technological) ........................................................................... 8

Coca Cola Marketing Strategy ............................................................................................................................................... 10

Porter's Five Forces Model of Coca Cola .............................................................................................................................. 12

Nestle ........................................................................................................................................................................... 15

History ...................................................................................................................................................................................... 15

Introduction ............................................................................................................................................................................. 15

Cooperate Profile of Nestle ..................................................................................................................................................... 16

Nestle Mission, Vision & Values ............................................................................................................................................. 17

SWOT (Strengths, Weakness, Opportunity & Threats) ...................................................................................................... 17

PEST Analysis of Nestle (Political, Economic, Social & Technological) ............................................................................. 18

Nestle Marketing Strategy ...................................................................................................................................................... 19

Porter’s Five Forces Model of Nestle ..................................................................................................................................... 21

Honda ......................................................................................................................................................................... 23

History ...................................................................................................................................................................................... 23

Introduction ............................................................................................................................................................................. 23

Cooperate Profile of Honda .................................................................................................................................................... 23

Honda Mission, Vision & Values ............................................................................................................................................ 24

SWOT (Strengths, Weakness, Opportunities & Threats) .................................................................................................... 25

PEST Analysis of Honda (Political, Economic, Social & Technological) ............................................................................ 26

Honda Marketing Strategy ..................................................................................................................................................... 27

Porter’s Five Forces Model of Honda .................................................................................................................................... 29

Disney ......................................................................................................................................................................... 31

History ...................................................................................................................................................................................... 31

Introduction ............................................................................................................................................................................. 31

Cooperate Profile of Disney .................................................................................................................................................... 32

Disney Mission, Vision & Values ............................................................................................................................................ 32

SWOT (Strengths, Weakness, Opportunity & Threats) ...................................................................................................... 33

PEST Analysis of Disney (Political, Economic, Social & Technological) ............................................................................ 33

Disney marketing Strategy...................................................................................................................................................... 35

Porter’s Five Forces Model of Disney .................................................................................................................................... 37

References: ................................................................................................................................................................. 38

3

Marketing Strategies

Coca Cola History

Colonel John Pemberton was wounded in the Civil War, became addicted to morphine, and

began a quest to find a substitute to the dangerous opiate. The prototype Coca-Cola recipe was

formulated at Pemberton's Eagle Drug and Chemical House, a drugstore in Columbus, Georgia,

originally as a coca wine. He may have been inspired by the formidable success of Vin Mariani,

a European coca wine.

In 1885, Pemberton registered his French Wine Coca nerve tonic. In 1886, when Atlanta

and Fulton County passed prohibition legislation, Pemberton responded by developing Coca-

Cola, essentially a nonalcoholic version of French Wine Coca. The first sales were at Jacob's

Pharmacy in Atlanta, Georgia, on May 8, 1886. It was initially sold as a patent medicine for

five cents a glass at soda fountains, which were popular in the United States at the time due to

the belief that carbonated water was good for the health. Pemberton claimed Coca-Cola cured

many diseases, including morphine addiction, dyspepsia, neurasthenia, headache, and impotence.

Pemberton ran the first advertisement for the beverage on May 29 of the same year in the Atlanta

Journal.

By 1888, three versions of Coca-Cola – sold by three separate businesses – were on the market.

A copartner ship had been formed on January 14, 1888 between Pemberton and four Atlanta

businessmen: J.C. Mayfield, A.O. Murphey; C.O. Mullahy and E.H. Bloodworth. Not codified

by any signed document, a verbal statement given by Asa Candler years later asserted under

testimony that he had acquired a stake in Pemberton's company as early as 1887.[16]

John

Pemberton declared that the name "Coca-Cola" belonged to his son, Charley, but the other two

manufacturers could continue to use the formula.

Charley Pemberton's record of control over the "Coca-Cola" name was the underlying factor that

allowed for him to participate as a major shareholder in the March 1888 Coca-Cola Company

incorporation filing made in his father's place. Charley's exclusive control over the "Coca Cola"

name became a continual thorn in Asa Candler's side. Candler's oldest son, Charles Howard

Candler, authored a book in 1950 published by Emory University. In this definitive biography

about his father, Candler specifically states: "..., on April 14, 1888, the young druggist [Asa

Griggs Candler] purchased a one-third interest in the formula of an almost completely unknown

proprietary elixir known as Coca-Cola."

The deal was actually between John Pemberton's son Charley and Walker, Candler & Co. - with

John Pemberton acting as cosigner for his son. For $50 down and $500 in 30 days, Walker,

Candler & Co. obtained all of the one-third interest in the Coca-Cola Company that Charley

4

held, all while Charley still held on to the name. After the April 14 deal, on April 17, 1888, one-

half of the Walker/Dozier interest shares were acquired by Candler for an additional $750.

Introduction

Coca-Cola is a carbonated soft drink sold in stores, restaurants, and vending machines

throughout the world. It is produced by The Coca-Cola Company of Atlanta, Georgia, and is

often referred to simply as Coke (a registered trademark of The Coca-Cola Company in the

United States since March 27, 1944). Originally intended as a patent medicine when it was

invented in the late 19th century by John Pemberton, Coca-Cola was bought out by businessman

Asa Griggs Candler, whose marketing tactics led Coke to its dominance of the world soft-drink

market throughout the 20th century.

The company produces concentrate, which is then sold to licensed Coca-Cola bottlers throughout

the world. The bottlers, who hold territorially exclusive contracts with the company, produce

finished product in cans and bottles from the concentrate in combination with filtered water and

sweeteners. The bottlers then sell, distribute and merchandise Coca-Cola to retail stores and

vending machines. The Coca-Cola Company also sells concentrate for soda fountains to major

restaurants and food service distributors.

The Coca-Cola Company has, on occasion, introduced other cola drinks under the Coke brand

name. The most common of these is Diet Coke, with others including Caffeine-Free Coca-Cola,

Diet Coke Caffeine-Free, Coca-Cola Cherry, Coca-Cola Zero, Coca-Cola Vanilla, and special

versions with lemon, lime or coffee. In 2013, Coke products could be found in over 200

countries worldwide, with consumers downing more than 1.8 billion company beverage servings

each day.

Cooperate Profile of Coca Cola

The company sells beverage products in more than 200 countries. The report further states that of

the more than 50 billion beverage servings of all types consumed worldwide every day,

beverages bearing the trademarks owned by or licensed to Coca-Cola account for approximately

1.5 billion. Of these, beverages bearing the trademark "Coca-Cola" or "Coke" accounted for

approximately 78% of the company's total gallon sales.

Also according to the Annual Report, Coca-Cola had gallon sales distributed as follows:

43% in the United States

37% in Mexico, India, Brazil, Japan and the People's Republic of China

20% spread throughout the rest of the world

Coca Cola Mission, Vision & Values

The world is changing all around us. To continue to thrive as a business over the next ten years

and beyond, we must look ahead, understand the trends and forces that will shape our business in

the future and move swiftly to prepare for what's to come. We must get ready for tomorrow

5

today. That's what our 2020 Vision is all about. It creates a long-term destination for our

business and provides us with a "Roadmap" for winning together with our bottling partners.

Our Mission

Our Roadmap starts with our mission, which is enduring. It declares our purpose as a company

and serves as the standard against which we weigh our actions and decisions.

To refresh the world...

To inspire moments of optimism and happiness...

To create value and make a difference.

Our Vision

Our vision serves as the framework for our Roadmap and guides every aspect of our business by

describing what we need to accomplish in order to continue achieving sustainable, quality

growth.

People: Be a great place to work where people are inspired to be the best they can be.

Portfolio: Bring to the world a portfolio of quality beverage brands that anticipate and

satisfy people's desires and needs.

Partners: Nurture a winning network of customers and suppliers, together we create

mutual, enduring value.

Planet: Be a responsible citizen that makes a difference by helping build and support

sustainable communities.

Profit: Maximize long-term return to shareowners while being mindful of our overall

responsibilities.

Productivity: Be a highly effective, lean and fast-moving organization.

Our Winning Culture

Our Winning Culture defines the attitudes and behaviors that will be required of us to make our

2020 Vision a reality.

Live Our Values

Our values serve as a compass for our actions and describe how we behave in the world.

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

6

Focus on the Market

Focus on needs of our 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

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

SWOT Analysis (Strengths, Weakness, Opportunity& Threat)

Strengths

The best global brand in the world in terms of value.

According to Inter brand, The Coca Cola Company is the most valued ($77,839 billion) brand in

the world.

World’s largest market share in beverage. Coca Cola holds the largest beverage market share in the world (about 40%).

Strong marketing and advertising.

Coca Cola‘ advertising expenses accounted for more than $3 billion in 2012 and increased firm‘s

sales and brand recognition.

Most extensive beverage distribution channel.

Coca Cola serves more than 200 countries and more than 1.7 billion servings a day.

Customer loyalty.

The firm enjoys having one of the most loyal consumer groups.

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.

Corporate Social Responsibility (CSR).

7

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‘s social image and result in competitive advantage over competitors.

Weakness

Significant focus on carbonated drinks.

The business 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.

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.

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.

Negative publicity.

The firm is often criticized for high water consumption in water scarce regions and using

harmful ingredients to produce its drinks.

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.

Opportunity

Bottled water consumption growth.

Consumption of bottled water is expected to grow both in US and the rest of the world.

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.

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.

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

Changes in consumer tastes.

8

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.

Water scarcity.

Water is becoming scarcer around the world and increases both in cost and criticism for Coca

Cola over the large amounts of water used in production.

Strong dollar.

More than 60% of The Coca Cola Company income is from outside US. Due to strong dollar

performance against other currencies firm‘s overall income may fall.

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.

Decreasing gross profit and net profit margins.

Coca Cola‘s gross profit and net profit margin was decreasing over the past few years and may

continue to decrease due to higher water and other raw material costs.

Competition from PepsiCo. PepsiCo is fiercely competing with Coca Cola over market share in BRIC countries, especially

India.

Saturated carbonated drinks market.

The business 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.

PEST Analysis of Coca Cola (Political, Economic, Social, Technological)

The PEST Analysis identifies changes in the market caused by: Political, Economic, Social and

Technological factors.

Political

Those Non- Alcoholic Beverages like; Coca-Cola, are within the food category, under the FDA

(Food and Drug Administration). The government has control over the manufacturing procedure

of these products in terms of regulations. Companies who fail to meet the standards of law, are

fined by the government. Following are provided some of the factors that are influencing Coca-

Cola's Operations.

1.Changes in Laws and Regulations like; changes in Accounting Standards, taxation

requirements (tax rate changes, modified tax law interpretations, entrance of new tax laws), and

environmental laws either in domestic or foreign authorities.

2. Changes in Non-Alcoholic business era. These are; competitive product and pricing policy

pressures, ability to maintain or earn share of sales in worldwide market compared to rivals.

3. Political Conditions, specifically in international markets, like; civil conflict, governmental

changes and restrictions concerning the ability to relocate capital across borders.

4. Ability to penetrate emerging and developing markets, that also relies on economic and

political conditions, and also their ability to form effectively strategic business alliances with

9

local bottlers, and to enhance their production amenities, distribution networks, sales equipment,

and technology.

Economical

The change which is economic in nature would be aspects like the change in interest rates which

would lead to business depression and would cause redundant and low levels of spending. Like it

was seen in the US market despite the fact that it was doing very well it did not take too long for

things to take a complete different route as a result of the recession which took place which was

because the Gross Domestic Product had been negative for two consecutive years. The good part

was that it was short lived as a result of the actions taken by the Federal Reserve as well as the

Congress. This helped the economy take a U turn and get back to reflect growth which was

positive. The cutting down of interest rate by the Federal Reserve helped to promote expansion

of companies while increasing the level of debt. As the production and technology costs would

go down the products being offered in the market would be at lower prices thus in turn benefiting

the consumers. The economic condition as seen in the United States was very badly affected as a

result of the September 11 attacks but the economy has recovered now and going back to normal.

Time is the best healer for a situation like this. The industry related to nonalcoholic beverages is

flourishing and growing drastically. Many markets have opened up to for the manufacturers of

soft drinks as the economic condition have improved there and can promote their growth as well.

This growth would be as a result of high level of profitability while sustaining in a stable manner

and also coming up with new and more improved products.

Social

The change which is related to lifestyle as well as attitude would be termed as social change. For

example now that more women were going for work the need related to products for usage at

home which would reduce time usage came up.

One major change socially which has affected Coca cola is the shift to a health

centered lifestyle. Due to this shift the users of soft drinks are shifting to water or

diet drinks and thus the need to adapt and launch products accordingly have come

up.

The aspect related to management of time is also governing the kinds of product

which are required with respect to day to day existence.

The middle aged consumers are getting very nutrition conscious and regarding the

longevity of their life so want to have healthier option availability in terms of

beverages.

The need for diversification is now becoming a constant requirement to get

maximum market positioning and market retention.

Technological

10

Some factors that affect the company's actual results to vary essentially from the expected

results, are the following:

1. The efficiency of company's advertising, marketing and promotional programs, The new

technology advances of television and internet that use incomparable effects for advertising

through the use of media. Those advances make the products seem attractive. This supports the

selling promotion of the products. Coca-Cola in media tends to use this technology so, to sell

effectively its products.

2. Entrance of cans and plastic bottles in the past, have increased sales volume for the company

because they are easier to carry and customers can bind them once they have been used.

3. Since the technology is advancing continuously there has been entrance of new machineries'

equipment all the time. Because of that, Coca-Cola's production volume has increased sharply

compared to few years ago.

4. CCE-Coca-Cola Enterprises have six factories in Britain by using modern technology

equipment so to ensure top product quality and quick delivery. In Wakefield, Yorkshire in 1990,

CCE opened one of the Europe's largest soft drinks factory. That factory has the ability to

produce faster the cans of Coca-Cola even faster than bullets of a machine gun.

Coca Cola Marketing Strategy

Coca-Cola has had a long-standing commitment to responsible marketing for many years.

The Responsible Marketing Charter is a set of principles that guide our entire approach to

marketing and establish firm rules for what we should and shouldn't do. We use independent

auditors to check that we're complying with the principles set out in the charter.

We don't market any drinks to children under 12 because we believe parents should

choose the drinks that are right for their families. We help parents make informed choices

through better consumer information

We will work with an independent consultancy to constantly monitor TV ad placement

We do not have direct commercial agreements with primary schools and are only in

secondary schools by invitation

We will not associate ourselves with cinema films where the core audience is under 12

Online

Online marketing is a fast-growing area at the moment and we want to make sure we're being

responsible here too. With the International Business Leaders Forum we've launched a

Responsible Marketing Network online - a network that brings together marketing practitioners

to share best practice and solve issues

Talking with our consumers

11

We'll also continue to have a dialogue with consumers and other stakeholders on responsible

marketing, to ensure we keep delivering a wide variety of great quality drinks

Coke plans to 'transform' marketing with $1bn investment

The move is an extension to Coca-Cola‘s previously announced productivity and reinvestment

programed and comes as the soft drinks giant reported its global profits fell 4 per cent year on

year to $2.1bn and net revenues dropped 4 per cent to $11.04bn in the three months to 31

December.

For the full year, revenue decreased by 2 per cent to $46.9bn and operating income fell by 5 per

cent to $10.2bn.

In 2014 Coca-Cola says it plans to reinvest savings from global supply chain optimization and

data and IT system standardization into global brand building initiatives, with an emphasis on

increased media spending.

It also plans to make improvements to the effectiveness of its marketing by ―transforming‖ its

marketing and commercial model to make more consumer-facing investments, the company

says.

Muhtar Kent, Coca-Cola chairman and chief executive, says: ―We are committed to accelerating

marketing investments in our brands, further advancing our innovation strategies and

maximizing productivity and reinvestment for growth. All of us at the Coca-Cola Company

remain resolute in our commitment to deliver results in line with our long-term growth model

and 2020 Vision for sustainable value and success.‖

In Europe, Coca-Cola grew revenues by 11 per cent to $1.3bn in the quarter and by 4 per cent to

$5.3bn for the full year. Profit declined 11 per cent in the quarter to $598bn and by 3 per cent to

$5.3bn for the full year.

Coca-Cola said it was impacted by ongoing macroeconomic uncertainty and weak consumer

confidence over the past 12 months.

The company did mark out a strong European performance from Innocent‘s branded smoothie

and juices business, which it took a majority stake in last year. But while the division contributed

―significantly‖ to the group‘s European net revenues in both the quarter and the year, there was

less of a marked impact on profit due to the higher costs involved in selling Innocent products

and Coca-Cola‘s level of investment in the business as the company looks to accelerate its

growth.

Coke to use World Cup marketing to get consumers more active

12

The soft drinks giant kicked off its UK World Cup marketing activity this week with the third

―trophy tour‖, bringing the coveted Jules Rimet prize to the region alongside brand ambassador

and in-form Liverpool FC striker Daniel Sturridge, who attended a press event yesterday (13

March).

The trophy tour will last for 221 days and will visit every country that has ever won the World

Cup, giving people a chance to have their photo taken with the prize. Coca-Cola will also

distribute 1 million samples throughout the tour plus branded footballs to encourage people to

play the sport.

In 2012 Coca-Cola joined other major food and drinks brands such as Kellogg and DANONE in

signing up to the UK Government‘s Public Health Responsibility Deal. By signing up, Coke

committed to nine pledges to encourage people in the UK to live more healthy lifestyles

including using its local marketing presence to encourage people to take part in more physical

activity.

Marketing involves getting the right product to the right place, at the right time, at the right price

and with the most suitable promotional activity. Coca-Cola has always been able to create the

most appropriate marketing mix.

Since its beginnings, Coca-Cola has built its business using a universal strategy based on three

timeless principles:

acceptability - through effective marketing, ensuring Coca-Cola brands are an integral

part of consumers‘ daily lives, making Coca-Cola the preferred beverage everywhere

affordability - Coca-Cola guarantees it offers the best price in terms of value for money

Availability - making sure that Coca-Cola brands are available anywhere people want

refreshment, a pervasive penetration of the marketplace.

Coca-Cola has created an extensive and well-organized global distribution network guaranteeing

the ubiquity of its products. (Ubiquity is the ability to appear to be present everywhere at once.)

Its approach is founded on the belief that Coca-Cola must try to quench the thirst of everyone in

the world - all 5.6 billion of them!

Porter's Five Forces Model of Coca Cola

Bargaining Power of Suppliers

Most of the ingredients needed for beverages and snacks are basic commodities such as potatoes,

flavor, color, caffeine sugar, packaging etc. So the producers of these commodities have no

bargaining power over the pricing for this reason; the suppliers in this industry are weak.

Bargaining Power of Buyers

Buyers in this industry have the bargaining power, because main source of the revenue and

market share in beverage and food industry are fast food fountain, convenience stores food stores

13

vending etc. The profit margins in each of these segments noticeably demonstrate the buyer

power and how special buyers pay diverse prices based on their power to bargain.

Threat of New Entrant

There are many factors that make it hard for new player to enter the beverage industry some of

important factors are brand image and loyalty, advertising expense, bottling network, retail

distribution fear of retaliation and global supply chain.

Brand Image / Loyalty

Pepsi and Coke continuously focusing on increasing their biggest beverage and food products,

they has built some of the globe‘s strongest brands that are loved by consumers throughout the

world. Innovative Marketing has leveraged their worldwide brand-building strength to attach

with consumers in significant ways and impel the growth globally. These all campaign results in

higher amount of loyal customers and strong brand equity throughout the world. In 2011, Coca-

Cola was declared the world‘s most valuable brand according to Interbrand‘s best global brand.

This makes it impossible for new entrance to enter the beverage industry easily.

Advertising Spend

Cock and Pepsi has very effective advertising campaign, their advertising also represent the

cultures of different countries. They also sponsor different games and teams and also featured in

countless television programs and films. The marketing and advertising expense was

approximately $ 15 billion. This makes landscape very harder for new players to succeed.

Bottling Network

Pepsi and Coca cola have live and exclusive contracts with bottler‘s that have privileges in all

over the world. These franchise agreements or contracts forbid bottler‘s from keeping

competitor‘s brands. Coke has the world's largest beverage distribution network; consuming in

more than 200 countries enjoys the Coke‘s beverages at an average of nearly 1.6 billion servings

a day. Coca-Cola is sold in restaurants, vending machine and stores in more than 200 countries.

PepsiCo has adopted the globe‘s most powerful ―go-to-market systems‖, serving more than 10

million outlets a week by operating greater than 100,000 different routes, and producing more

than $300 million in retail sales per day. They have also purchased some of the bottlers, this

makes difficult for new players to get bottler contracts or to build their bottling plants.

Retail Distribution

Coke and Pepsi offers 16 to 21 percent margins to retailers for the space they present. These

margins are substantial for retailers and this makes it very hard for the new player to persuade

retailer‘s to carry their products.

Fear of Retaliation

14

It is very difficult for new player to enter in this industry because; they will be highly retaliating

by local players in local markets and in global scenario they have to face the duopoly of Coke

and Pepsi. This ultimately could result in price war which affects the new player.

Global Supply Chain

Cock Bill & Melinda Gates Foundation and nonprofit Techno Serve initiated a partnership to

facilitate more than 50,000 small fruit farmers in Kenya Uganda to increase their productivity

and double their incomes by 2014. Coke has significant opportunities within global supply chain

to encourage and develop more sustainable practices to benefit consumers, customers

and suppliers. While; it is still in the premature stages of exploring these opportunities and

dedicated to the economic vitality and health of the farming communities our supply chain

engages. Pepsi promotes and support sustainable agriculture not only because it makes good

business sense, it purchase million tons of potatoes and fruits.

Threat of Substitute Products

Large numbers of substitutes are available in the market such as water, tea, juices coffee etc. But

firms counter them with innovative marketing and massive advertising which build growth for

their brands by highlighting their benefits. Players also differentiate themselves by well-known

global trade marks, brand equity and availability of the products which most of the substitute

products cannot contest. To protect themselves from competition players in soft drink industry

offer Diversify products such as such as Pepsi offers soft drinks (Pepsi, Slice, Mountain

Dew), beverages(Tropicana Juices, Dole Juices, Lipton tea, Aquafina bottled water, Sport drinks,

Tropicana Juices), Snacks (Rold Gold pretzels and Frito-Lay). Coke also offers most diversified

range of products such as Cola-Cola Cherry, Coca-Cola Vanilla, Diet Coke, Diet Coke Caffeine-

Free, Caffeine-Free Coca-Cola and range of lime or coffee and lemon.

Competitive Rivalry within an Industry

Beverage industry competition can be classified as a Duopoly with Pepsi and Coca Cola. The

market share of other competitors is too low to encourage any price wars. Cola-Cola gets

competitive advantage through the well-known global trade marks by achieving the premium

prices. It means Cola-Cola have something that their competitors do not have. While Pepsi has

leveraged its worldwide brand-building strength to attach with consumers in significant ways and

impel the growth globally

15

Nestle History

Nestlé's origins date back to 1866, when two separate Swiss enterprises were founded that would

later form the core of Nestlé. In the succeeding decades, the two competing enterprises

aggressively expanded their businesses throughout Europe and the United States.

In August 1867, Charles (US consul in Switzerland) and George Page, two brothers from Lee

County, Illinois, USA, established the Anglo-Swiss Condensed Milk Company in Cham,

Switzerland. Their first British operation was opened at Chippenham, Wiltshire, in 1873.

A 1915 advertisement for "Nestles Food", an early infant formula.

In September 1866, in Vevey, Henri Nestlé developed a milk-based baby food, and soon began

marketing it. The following year saw Daniel Peter begin seven years of work perfecting his

invention, the milk chocolate manufacturing process. Nestlé's was the crucial cooperation that

Peter needed to solve the problem of removing all the water from the milk added to his chocolate

and thus preventing the product from developing mildew. Henri Nestlé retired in 1875 but the

company under new ownership retained his name as Société Farine Lactée Henri Nestlé.

In 1877, Anglo-Swiss added milk-based baby foods to their products and in the following year

the Nestlé Company added condensed so that the firms became direct and fierce rivals.

In 1905, the companies merged to become the Nestlé and Anglo-Swiss Condensed Milk

Company, retaining that name until 1947 when the name Nestlé Alimentana SA was taken as a

result of the acquisition of Fabrique de Products Maggi SA (founded 1884) and its holding

company Alimentana SA of Kempttal, Switzerland. Maggi was a major manufacturer of soup

mixes and related foodstuffs. The company‘s current name was adopted in 1977. By the early

1900s, the company was operating factories in the United States, United Kingdom, Germany,

and Spain. The First World War created demand for dairy products in the form of government

contracts, and, by the end of the war, Nestlé's production had more than doubled.

Introduction

Nestlé S.A. (French pronunciation: [nɛ sle]; English / n̍ɛ sle/, / n̍ɛ sle/) is a Swiss

multinational food and beverage company headquartered in Vevey, Switzerland. It is the largest

food company in the world measured by revenues.

Nestlé's products include baby food, bottled water, breakfast cereals, coffee, confectionery, dairy

products, ice cream, pet foods, and snacks. 29 of Nestlé's brands have annual sales of over 1

billion Swiss francs (about $1.1 billion), including Espresso, Nescafé, Kit Kat, Smarties,

Nesquik, Stouffer's, Vittel, and Maggi. Nestlé has around 450 factories, operates in 86 countries,

and employs around 328,000 people. It is one of the main shareholders of L‘Oreal, the world's

largest cosmetics company.

Nestlé was formed in 1905 by the merger of the Anglo-Swiss Milk Company, established in

1866 by brothers George Page and Charles Page, and Farine Lactée Henri Nestlé, founded in

16

1866 by Henri Nestlé. The company grew significantly during the First World War and again

following the Second World War, expanding its offerings beyond its early condensed milk and

infant formula products. The company has made a number of corporate acquisitions, including

Crosse & Blackwell in 1950, Findus in 1963, Libby's in 1971, Rowntree Mackintosh in 1988,

and Gerber in 2007.

Nestlé has a primary listing on the SIX Swiss Exchange and is a constituent of the Swiss Market

Index. It has a secondary listing on Euronext. In 2011, Nestlé was listed No. 1 in the Fortune

Global 500 as the world's most profitable corporation. With a market capitalization of $233

billion, Nestlé ranked No. 9 in the FT Global 500 2013.

Cooperate Profile of Nestle

Nestlé is the biggest food company in the world, with a market capitalization of roughly 191

billion Swiss francs, which is more than 200 billion U.S. dollars.

Consolidated sales were CHF 107.6 billion and net profit was CHF 10.43 billion. Research and

development investment was CHF 2.02 billion.

Sales by activity breakdown

27% from drinks

26% from dairy and food products

18% from ready-prepared dishes and ready-cooked dishes

12% from chocolate

11% from pet products

6% from pharmaceutical products

2% from baby milks

Sales by geographic area breakdown

32% from Europe

31% from Americas (26% from US)

16% from Asia

21% from rest of the world

Nestlé employs approximately 253,000 people in some 511 factories worldwide. Nestlé is not

only Switzerland's largest industrial company, but also the world's largest food company,

considerably larger of than its nearest rivals Kraft Foods Inc. and Unilever plc. With products

like Perrier and Nescafé, it is the market leader worldwide in coffee and mineral water, the

largest manufacturer of pet food, and is fast increasing its share of the ice cream market.

Nestlé acquired Ralston-Purina, a US pet food company, in 2001. Despite producing pet food

through its subsidiary, Carnation, since 1985, this acquisition now sees it outstrip Mars as the

17

world's largest pet food manufacturer. Not to be outdone by Unilever's acquisition of Ben and

Jerry's, Nestlé's merger with US food corporation Dreyer's to form the Dreyer's Grand Ice Cream

Company in 2003 has given it the number one spot in the US ice-cream market, having already

bagged the Häagen Dazs, Schöller and Mövenpick brands. Globally, Nestlé is now hot on the

heels of Unilever as the number one ice cream seller, a position that it seeks in every market and

category in which it operates around the world.

Nestle Mission, Vision & Values

Mission

Nestléis...

...the world's leading nutrition, health and Wellness Company. Our mission of "Good Food,

Good Life" is to provide consumers with the best tasting, most nutritious choices in a wide range

of food and beverage categories and eating occasions, from morning to night.

Vision & Values

To be a leading, competitive, Nutrition, Health and Wellness Company delivering improved

shareholder value by being a preferred corporate citizen, preferred employer, preferred supplier

selling preferred products.

SWOT (Strengths, Weakness, Opportunity& Threats)

SWOT Analysis

Strength

1. More than 140 years in the industry

2.World biggest brand, top brand in Fortune 500 list

3. Global reach with presence in over 86 countries

4. An employee strength of around 328,000 people worldwide

5. Wide product range including baby food, pet food, dairy products,

confectioneries, pharmaceuticals, beverages, etc.

6. Popular brands owned like Maggi, Haagen-Dazs, Boost, Kit Kat,

Nescafe, etc.

7.Largest R&D network facilitating continuous innovation

8.Strong supply chain network

9. C.S.R. activities for rural development, environment protection,

water conservation,, etc.

10.Mergers and acquisitions and joint ventures to increase market

share

11. Strong marketing and advertising power

12.Strong brand loyalty and brand recall

18

Weakness

1.Being a big global brand, Numerous controversies in different

countries of operation can cause issues

2.Strong competition by other brands

Opportunity

1.Introduce more health based food products to tap the health

consciousness amongst consumers

2.Expand with focus on developing economies

3.Continue with acquisitions and joint ventures to increase its market

share

4.Try to capture the rural markets

Threats

1.Failure of the complex supply chain

2.Economic instability and inflation in most countries

3.EURO zone crisis, as most of its revenue comes from Europe

4.Increase in cost of raw materials

5.Stiff competition in all product segment

PEST Analysis of Nestle (Political, Economic, Social & Technological)

Political

―We have made significant change to improve our products‘ profile to complement the

Government‘s efforts to create a healthier population.‖

Nestle is one of the big companies which is totally supporter of the Government‘s works to

stimulate healthier diets and lifestyles to help problems related with obesity, diabetes, etc.

Economical

Billionaire brands enhance organic growth globally

Nestle is one of the leading companies in fast moving consumption sector in the world

economy.

―We are often the main local tax and job provider; we are often the primary economic outlet for

local suppliers and service providers. This creates an obvious social and economic responsibility

that goes far beyond our employees and their families, and relates to the overall well-being and

prosperity of these communities.‖

―If we are to maintain a strong and healthy future for our Nescafé and Espresso business lines,

we need to ensure the supply of quality coffee now and in the future. We therefore work to

ensure that our work with farmers: to help them for increasing yields utilizing the same amount

19

of land that is under coffee cultivation and to diversify their activities, giving them higher

incomes and improving their living standards.‖

Nestle provides economy with a reliable supply of high-quality raw materials and they bring

sustained growth for the local economy.

They contribute to improvements in agricultural production, the social and economic status of

farmers, rural communities and in production systems to make them more environmentally

sustainable.

Social

Although Nestle is a global brand, Nescafe is locally produced to meet the taste options of local

consumers.

Nestle Company has begun to green wash itself, releasing reports regarding its decreased carbon

emissions and water withdrawal over last decade.

―Our core aim is to enhance the quality of consumers‘ lives every day, everywhere by offering

tastier and healthier food and beverage choices and encouraging a healthy lifestyle.‖ We believe

we can make an important contribution to society, by going a step beyond corporate social

responsibility to create value through our core business both for our shareholders and society.

We prioritize the areas of nutrition, water and rural development to create shared value; this

requires long term thinking―

Peter Brabeck-Letmathe, Chairman, Nestlé

‖Creating Shared Value is built upon fundamental commitments to society, both to achieve the

highest standards of compliance with laws, codes of conduct and our own Nestlé Corporate

Business Principles as well as to protect the environment for future generations.―

Paul Bulcke, CEO, Nestlé

Nestle Company applies their strong values and principles everywhere they operate. Their

overriding target is to ensure that their investments are beneficial, both for their shareholders and

people in the countries where they do business.

Technological

All of Nestle products undergo as extensive R&D process and a strict quality standard before it is

launched.

Nestle benefits from world-class manufacturing facilities, best private R&D capability in food

and nutrition, international quality and safety standards.

Nestle company innovates & renovates nutritious and healthier products using R&D expertise.

Nestle Marketing Strategy

Our objective is to be the leader in Nutrition Health and Wellness, and the industry reference for

financial performance, trusted by all stakeholders.

20

We believe that leadership is not just about size; it is also about behavior. Trust, too, is about

behavior; and we recognize that trust is earned only over a long period of time by consistently

delivering on our promises. These objectives and behaviors are encapsulated in the simple

phrase, ―Good Food, Good Life‖, a phrase that sums up our corporate ambition.

The Nestlé Roadmap is intended to create alignment for our people behind a cohesive set of

strategic priorities that will accelerate the achievement of our objectives. These objectives

demand from our people a blend of long-term inspiration needed to build for the future and

short-term entrepreneurial actions, delivering the necessary level of performance.

Competitive advantages

Unmatched product

and brand portfolio

Unmatched R&D

capability

Unmatched

geographic presence

People, culture,

values and attitude

True competitive advantage comes from a

combination of hard-to-copy advantages throughout

the value chain, built up over decades.

There are inherent links between great products and

strong R&D, between the broadest geographic

presence and an entrepreneurial spirit, between great

people and strong values.

Growth drivers

Nutrition, Health and

Wellness

Emerging markets

and Popularly

Positioned Products

Out-of-home

Premiumisation

These four areas provide particularly exciting

prospects for growth. They are applicable across all

our categories and around the world.

Everything we do is driven by our Nutrition, Health

and Wellness agenda, Good Food, Good Life, which

seeks to offer consumers products with the best

nutritional profile in their categories

Operational pillars

Nestlé must excel at each of these four

inter-related core competences. They

21

Innovation & Renovation

Wherever, whenever, however

Consumer engagement

Operational efficiency

drive product development, renewal and

quality, operational performance,

interactive relationships with consumers

and other stakeholders and

differentiation from our competitors.

If we excel in these areas we will be

consumer-centric, we will accelerate our

performance in all key areas and we will

achieve excellence in execution.

We are seeking to achieve leadership and earn that trust by satisfying the expectations of

consumers, whose daily choices drive our performance, of shareholders, of the communities in

which we operate and of society as a whole. We believe that it is only possible to create long-

term sustainable value for our shareholders if our behavior, strategies and operations are also

creating value for the communities where we operate, for our business partners and, of course,

for our consumers. We call this ―Creating Shared Value‖.

We are investing for the future to ensure the financial and environmental sustainability of our

actions and operations: in capacity, in technologies, in capabilities, in people, in brands, in R&D.

Our aim is to meet today‘s needs without compromising the ability of future generations to meet

their needs, and to do so in a way which will ensure profitable growth year after year and a high

level of returns for our shareholders and society at large over the long-term.

Porter’s Five Forces Model of Nestle

We can further analyze the industry by using Porter‘s five forces model. Porter‘s Five Forces

Model was created to act as a framework for industry analysis and strategy development. This

model consists of five different forces that impact competitive intensity which portrays an image

of the overall attractiveness and profitability of an industry. To get a better understanding of

Nestle status in the industry we can use the Five Forces Model.

Threat of New Entrants

The food processing industry is very large and competitive. As we see in the industry

comparison, firms within the industry do quite well. As a result, many companies enter into the

market every year in an attempt to gain a portion of the profitable market. Nestle has been

around for over a century and has a long history of quality products and consumer satisfaction.

This has allowed the company to obtain a large market share. New entrants into the industry

must attempt to seize a portion of Nestlé‘s market share in order to stay in business. Essentially,

Nestle is constantly a target, and so the threat of new entrants is moderate.

Threat of Substitute Goods

22

Due to the nature of the industry, Nestlé‘s threat of substitute goods is high. From bottled water

to lean pockets, there are arrays of similar products that compete directly with Nestle. It is

important for Nestle to continuously find new ways to improve its products as the competition is

so fierce. In recent years, Nestle has focused on the health and wellness aspects of its products to

maintain its competitive edge in the market.

Bargaining Power of Suppliers

Nestle prides itself on creating and maintaining positive relationships with its suppliers all over

the world. Due to the large purchasing power of Nestle and the fact that the suppliers of

agricultural commodities offer a product that is far from unique, Nestle holds more bargaining

power than its suppliers. Aside from this, Nestle does prefer to create and preserve long term

relationships with its suppliers as this helps to ensure the quality of the raw materials being

purchased. In addition, Nestle also offers useful advice to its suppliers on how to perform more

efficiently to minimize unnecessary costs.

Bargaining Power of Customers

Customers have a very large amount of bargaining power regarding their consumption of Nestle

products. As stated before, there are close substitutes for Nestle products which allows for the

preferences of the customer to be very powerful. Nestle understands the power of the customer

and has taken specific steps to meet the needs of its products consumers. For example, Nestle is

incorporating health and wellness into the creation of its products as society has begun to grown

more health conscious.

Competitive Rivalry within the Industry

Nestle is a powerhouse in the food processing industry but so are PepsiCo, General Mills, and

Mondelez International. These, and other food processing companies, are in a constant battle to

outperform one another. In advertising alone, these companies spend millions of dollars to

appear more desirable than their competition. Rivalry in this industry is very high which benefits

the consumers. As long as these companies continue to improve to obtain competitive advantage,

consumers will continue to enjoy the improved products.

23

Honda History

As a young man, Honda's founder, Soichiro Honda (Honda Sōichirō) (17 November 1906 – 5

August 1991) had an interest in automobiles. He worked as a mechanic at the Art Shokai garage,

where he tuned cars and entered them in races. In 1937, with financing from his acquaintance

Kato Shichirō, Honda founded Tōkai Seiki (Eastern Sea Precision Machine Company) to

makepiston rings working out of the Art Shokai garage. After initial failures, Tōkai Seiki won a

contract to supply piston rings to Toyota, but lost the contract due to the poor quality of their

products. After attending engineering school without graduating, and visiting factories around

Japan to better understand Toyota's quality control processes, by 1941 Honda was able to mass-

produce piston rings acceptable to Toyota, using an automated process that could employ even

unskilled wartime laborers.

Introduction

Honda Motor Co., Ltd. is a Japanese public multinational corporation primarily known as a

manufacturer of automobiles and motorcycles.

Honda has been the world's largest motorcycle manufacturer since 1959, as well as the world's

largest manufacturer of internal combustion engines measured by volume, producing more than

14 million internal combustion engines each year. Honda became the second-largest Japanese

automobile manufacturer in 2001. Honda was the eighth largest automobile manufacturer in the

world behind General Motors, Volkswagen Group, Toyota, Hyundai Motor Group, Ford, Nissan,

and PSA in 2011.

Honda was the first Japanese automobile manufacturer to release a dedicated luxury brand,

Acura, in 1986. Aside from their core automobile and motorcycle businesses, Honda also

manufactures garden equipment, marine engines, personal watercraft and power generators,

amongst others. Since 1986, Honda has been involved with artificial intelligence/robotics

research and released their ASIMO robot in 2000. They have also ventured into aerospace with

the establishment of GE Honda Aero Engines in 2004 and the Honda HA-420 HondaJet, which

began production in 2012. Honda has three joint-ventures in China (Honda China, Dongfeng

Honda, and Guangqi Honda).

In 2013, Honda invests about 5.7% (US$ 6.8 billion) of its revenues in research and

development. Also in 2013, Honda became the first Japanese automaker to be a net exporter

from the United States, exporting 108,705 Honda and Acura models while importing only

88,357.

Cooperate Profile of Honda

Honda is headquartered in Minato, Tokyo, Japan. Their shares trade on the Tokyo Stock

Exchange and the New York Stock Exchange, as well as exchanges in Osaka, Nagoya, Sapporo,

Kyoto, Fukuoka, London, Paris and Switzerland.

24

The company has assembly plants around the globe. These plants are located in China, the

United States, Pakistan, Canada, England, Japan, Belgium, Brazil, México, New Zealand,

Malaysia, Indonesia, India, Thailand, Vietnam, Turkey, Taiwan, Peru and Argentina. As of July

2010, 89 percent of Honda and Acura vehicles sold in the United States were built in North

American plants, up from 82.2 percent a year earlier. This shields profits from the yen's advance

to a 15-year high against the dollar.

Honda's Net Sales and Other Operating Revenue by Geographical Regions

Geographic Region Total revenue (in millions of)

Japan 1,681,190

North America 5,980,876

Europe 1,236,757

Asia 1,283,154

Others 905,163

American Honda Motor Company is based in Torrance, California. Honda Racing

Corporation (HRC) is Honda's motorcycle racing division. Honda Canada Inc. is headquartered

in Markham, Ontario, their manufacturing division, Honda of Canada Manufacturing, is based

in Alliston, Ontario. Honda has also created joint ventures around the world, such as Honda Siel

Cars and Hero Honda Motorcycles in India, Guangzhou Honda and Dong Feng Honda in China,

Boon Siew Honda in Malaysia and Honda Atlas in Pakistan.

Following the Japanese earthquake and tsunami in March 2011 Honda announced plans to halve

production at its UK plants. The decision was made to put staff at the Swindon plant on a 2-day

week until the end of May as the manufacturer struggled to source supplies from Japan. It's

thought around 22,500 cars were produced during this period.

Honda Mission, Vision & Values

The Honda Company Mission Statement is officially referred to as the Company Principle, and it

seemingly is no different that the mission of every company that manufactures and sells cars in

the world. The Honda Company Mission Statement is...

"Maintaining a global viewpoint, we are dedicated to supplying products of the highest

quality, yet at a reasonable price for worldwide customer satisfaction."

Larger than this company principle, Honda is guided by a foundational mission, which it refers

to as its "Basic Principles" which are...

"Respect for the individual. The Three Joys (buying, selling and creating)."

25

And to inspire its management team as they lead the Honda automobile company into the future,

Honda has a clear set of Management Policies, which make its Basic Principles and Mission

Statement a real part of its daily operations...

"

Proceed always with ambition and youthfulness.

Respect sound theory, develop fresh ideas, and make the most effective use of time.

Enjoy work and encourage open communication.

Strive constantly for a harmonious flow of work.

Be ever mindful of the value of research and endeavor."

SWOT (Strengths, Weakness, Opportunities & Threats)

While Honda has abundant backbone to their name, they as well ache from some above

weaknesses. The primary weakness of Honda is oftentimes one of their above strengths as well.

By afraid to their accouterments as the technology innovator aural their industry, Honda divests

abundant of its assets in exploring new methods to enhance their products. However, they

generally conduct analysis and accession in fields that accept no applied appliance until

continued into the approaching (Corporate Info, npg).

Strengths

Exotic interior

Unique aerodynamic shape

Developed afterwards connected R&D with the latest technology

Various models targeting assorted chump segments.

Honda FCX is the aboriginal ammunition corpuscle car in the world

Fuel efficient

Revolutionary engine technology

Comfortable

Road grip

Weaknesses

Use of Cutting bend technology gives acceleration to problems

Interior design

Civic models could cause abashing for the customer

26

Opportunities

There is an advance of absorption in environmentally affable vehicles, and Honda’s

R&D focus agency that it is able-bodied assertive to capitalize on its ability in this

industry. Honda Borough has assorted models that alter in discharge ratings, Honda

borough GX NGV is termed as the Cleanest car on Earth as far as centralized agitation

engines are concerned

In addition, Honda is a above amateur in the arising markets like Pakistan.

Car leasing in Pakistan is an befalling for Honda borough to become added widespread.

Various borough models that ambition altered chump segments.

Threats

Rising oil and raw actual prices in the apple bazaar can advance to decreased appeal for

automotive vehicles. In addition, added costs accept led to decreased customer spending

and the aggressive animosity is actual top in this industry

PEST Analysis of Honda (Political, Economic, Social & Technological)

Political

1. Government proposal to limit number of cars being sold . This would affect the sales of Honda

as they couldn't manufacture at the level they previously could have.

2. The Governments was keen to attract foreign firms to invest . Honda investing in England

(Swindon as well as initial stake in rover)

3. Pressure to produce cars with cleaner emissions. This has meant Honda has had to invest

heavily in R&D to produce cars with cleaner engines e.g. i-vtec

Economical

1. Investing in Europe, Selling in Europe Manufacturing inside of Europe has meant that they

wouldn't have had to add the cost of extra tariff to their cars.

2. Exchange rate - £ to Yen. The weakness of the yen makes Honda's cars expensive in the UK.

3. Income Rising incomes means that people have more to spend, Honda has kept up with this by

introducing newer models, especially the new Honda Civic which is to go on sale this year.

4. Cost of Petrol Honda have had to accommodate for the market by introducing more

economical cars such as the 1.4 Honda Jazz.

Social

1. Language Barriers Honda decided to set-up in Swindon because they preferred to deal in the

English Language.

2. Increased desirability of Personalized Cars. Honda is a leading manufacturer of cars which can

27

be easily modified, stylistically and performance wise. This is perhaps their USP.

3. Desire for City cars. This has meant Honda has had to create smaller and economic cars such

as the Honda Jazz & Honda Beat.

4. Formula1 - Speed! This is an aspect of Honda which is mainly concerned with show-boating

rather than profit. Honda is one of the leading motorbike manufacturers and has a huge R&D

budget devoted to that cause.

Technological

1. Specialization through machinery Machines that specialize at one task ensures that theproduct

is made much quicker and of a higher quality.

2. Safety Requirements Because of Legal & Consumer pressure, car manufacturers have had to

develop cars with significant safety features which Honda would have had to research and test.

This would be at the expense of their R&D Department. This is significantly different from a

decade ago when crash-testing dummies were used.

3. Clever cars have had to include Satellite Navigation systems etc. as standard, Honda has had

to catch this up in their newer models.

4. Environmentally friendly cars Honda developed i-vtec, which is a follow on from their

infamous vtec engines. The vi-Tec engine provides fuel economy, ample torque and clean

emissions.

Honda Marketing Strategy

On some levels Honda takes a slightly different approach to marketing compared to their

competitors. They have a more ‗sit back and let the product speak for itself‘ approach. This is not

to say that they are not aggressive marketers but it means they want to give off a certain persona.

Think about it in terms of a boy chasing a girl. The boy goes through great lengths to be

attractive to girls, but what persona does he show the public. The boy wants to seem calm,

collected and smooth. He seems to be indifferent if the girl notices him or not. Inside it is all a

ploy to actually get attention.

The opposite would be if the boy were actively seeking the girl, constantly calling, approaching

and courting the girl. This comes off as desperate and actually produces unwanted results. The

same thing happens in the car market. One of the most important buying factors is status and

prestige, so why would someone want to buy from a desperate car manufacturer?

Knowing Your Demographic and Creating Status

One of the most obvious pieces of evidence that this is at work is the price of Honda‘s cars.

Honda vehicles are actually one of the most expensive in their market, but yet they are among

the top sellers. Toyota would be there biggest competitors and they seem to take the other road.

Toyota has a cheap, reliable and affordable to own persona. This would suggest they want to

market to the masses. Honda on the other hand tries to show a more prestigious persona. While

they still have reliability and fuel economy they also have a touch of luxury and powerful

engines. Put a larger price tag on this package and all of a sudden the guy who bought the Honda

Accord is snubbing his nose at the guy driving a Toyota Camry.

28

This marketing technique is used in every market, you must decide what road to take and stick

with it. Another huge example of this is the fact that no Honda vehicles are used as Public Utility

Vehicles (PUV‘s). This is another factor in establishing status. Some people do not want to drive

the same car that all the city cabs are made out of.

Toyota chooses to not take this road in exchange of more overall sales. It is all about what you

want your brand to be.

Maslow’s Pyramid of Human Needs

Honda also uses Maslow‘s theory to build the perfect product. Maslow‘s theory suggests we all

need to cover basic needs before we can acquire luxury. So we first need food, shelter and water,

next is safety and security, then we need social acceptance and love, then self-actualization and

spiritual needs etc.

Honda uses this theory in their vehicles. They start with safety and make owners feel safe while

driving. Then they move on to social status and hope to instill a feeling of high class in Honda

owners. Next they address self-esteem needs by using their marketing strategy to make Honda

owners feel confident because they own a Honda.

Next they use their vehicles to create a sense of success in Honda owners. They want Honda

owners to say ‗I am successful in my own right‘. ‗My own right‘ is the key here, if you feel that

you own what you deserve, you will be satisfied.

Maslow‘s theory is very powerful and if you look closely at Hondas products and advertising it

is clear to see that they have used Maslow‘s pyramid for a long time.

Honda is not the only car company that does this, but Honda perfects this strategy for the middle

to upper-middle class. BMW might do it for the lower-upper class but Honda has its

demographic on lock.

29

Porter’s Five Forces Model of Honda

This framework is used to identify whether a product, service, business will be profitable, and

also know the suppliers; power of buyers, substitutes, new entrants and competitors that will face

the firm in order to stay attractive.

Now we will see each force in more detail:

Rivalry

This force shows the competition between existing firms that offer the same product or service,

and even have the same strategy. If there is many competitors, then you should have a little

power over them by adopting a strategy that may be based on price, quality, innovation,

advertisement, like differentiation, cost leadership, or the focus on a narrow segment.

Threat of New Entrant

New firms entering the industry will bring new competition, in order to gain the market, and

decrease profitability for existing firms, above all those firms who have little protection and

barriers to entry, then expecting some firms to exit the market.

Threat of Substitute

The ability of customers to find other alternative ways and products with lower prices and better

quality that must satisfy the same needs. There is a product for product substitute, substitute

needs and also generic substitute that relates to something that people can do without.

Buyers Bargaining Power

Determines the ability of buyers to impose pressure on the firm either by switching to another

company or having other substitutes, or cutting down prices. They can also affect the conditions

under which all the firms operate.

Suppliers Bargaining Power

Determines the ability of suppliers to drive up prices which put pressure on firms if there is a few

number of suppliers, or by the uniqueness of their products and the control they have over firms.

30

31

Disney History

Walter Elias "Walt" Disney (December 5, 1901 – December 15, 1966) was an

American business magnate, animator, cartoonist, producer, director, screenwriter, philanthropist

and voice actor. A major figure within the American animation industry and throughout the

world, he is regarded as an international icon,well known for his influence and contributions to

the field of entertainment during the 20th century. As a Hollywood business mogul, he, along

with his brother Roy O. Disney, co-founded Walt Disney Productions, which later became one of

the best-known motion picture production companies in the world. The corporation is now

known as The Walt Disney Company.

As an animator and entrepreneur, Disney was particularly noted as a film producer and a popular

showman, as well as an innovator in animation and theme park design. He and his staff created

some of the world's most well-known fictional characters including Mickey Mouse, for whom

Disney himself provided the original voice. During his lifetime he received four

honorary Academy Awards and won 22 Academy Awards from a total of 59 nominations,

including a record four in one year, giving him more than any other individual in history. Disney

also won seven Emmy Awards and gave his name to the Disneyland and Walt Disney World

Resort theme parks in the U.S., as well as the international resorts like Tokyo Disney

Resort, Disneyland Paris, and Hong Kong Disneyland.

He died on December 15, 1966, from lung cancer in Burbank, California. A year later,

construction of the Walt Disney World Resort began in Florida. His brother, Roy Disney,

inaugurated the Magic Kingdom on October 1, 1971.

Introduction

The Walt Disney Company, commonly known as Disney, is an American

diversified multinational mass media corporation headquartered in Walt, Burbank, California. It

is the largest media conglomerate in the world in terms of revenue. Disney was founded on

October 16, 1923, by Walt Disney and Roy O. Disney as the Disney Brothers Cartoon Studio,

and established itself as a leader in the American animation industry before diversifying into

live-action film production, television, and theme parks. The company also operated under the

names: Walt Disney Studio and Walt Disney Productions. Taking on its current name in 1986,

it expanded its existing operations and also started divisions focused upon theater, radio, music,

publishing, and online media. In addition, Disney has created new divisions of the company in

order to market more mature content than it typically associates with its flagship family-oriented

brands.

The company is best known for the products of its film studio, the Walt Disney Studios, and

today one of the largest and best-known studios in Hollywood. Disney also owns and operates

the ABC broadcast television network; cable television networks such as Disney

Channel, ESPN,A+E Networks, and ABC Family; publishing, merchandising, and theatre

divisions; and owns and licenses 14 theme parks around the world. It also has a successful music

32

division. The company has been a component of the Dow Jones Industrial Average since May 6,

1991. An early and well-known cartoon creation of the company, Mickey Mouse, is a primary

symbol of The Walt Disney Company.

Cooperate Profile of Disney

The Walt Disney Company operates as five primary units and segments: The Walt Disney

Studios, which includes the company's film, recording label, and theatrical divisions; Parks and

Resorts, featuring the company's theme parks, cruise line, and other travel-related assets; Disney

Consumer Products, which produces toys, clothing, and other merchandising based upon

Disney-owned properties; Media Networks, which includes the company's television properties;

and Disney Interactive, which includes Disney's Internet, mobile, social media, virtual worlds,

and computer games operations.

Its main entertainment features and holdings include Walt Disney Studios, Disney Music

Group, Disney Theatrical Group, Disney-ABC Television Group, Radio Disney, ESPN

Inc., Disney Interactive Media Group, Disney Consumer Products, Disney India Ltd., The

Muppets Studio, Pixar Animation Studios, Marvel Entertainment, UTV Software

Communications, and Lucas film.

Its resorts and diversified holdings include Walt Disney Parks and Resorts, Disneyland

Resort, Walt Disney World Resort, Tokyo Disney Resort, Disneyland Paris, Euro Disney

S.C.A., Hong Kong Disneyland Resort, Disney Vacation Club and Disney Cruise Line.

Disney Mission, Vision & Values

Walt Disney Company Mission Statement

The Walt Disney Company‘s Mission Statement is one likely reason for the company‘s success.

An effective mission statement defines a company‘s current business plan, and the Disney

Company‘s Mission Statement accomplishes that purpose:

The Mission of the Walt Disney Company is to be one of the world‘s leading producers and

providers of entertainment and information. Using our portfolio of brands to differentiate our

content, services and consumer products, we seek to develop the most creative, innovative and

profitable entertainment experiences and related products in the world.

The Walt Disney Vision

A company‘s Vision Statement defines an organization‘s future goals. Thompson, et al.

emphasizes the importance of a company‘s having a ―well-conceived, forcefully communicated

strategic vision,‖ and the Walt Disney Company‘s vision fulfills that role

The Walt Disney Company Vision Statement meets the criteria of an effective vision statement:

―To make people happy‖ (Walt Disney Archives, 2012). This statement is broad, but not too

broad, and represents the overall goal and global direction of the business.

33

Values and Ethics

The values and ethics of the Walt Disney Company are an essential element of the company‘s

culture. Five essential components of the Disney culture are included here. First is innovation.

The company is committed to continued innovation and technology, just as it was when Disney‘s

Mickey Mouse was one of the first cartoon presentations to have sound. Next, the Disney

Company strives toward setting a high standard of excellence and maintaining that high standard.

Third, the Disney Company is committed to positive, inclusive ideas about family, which

provide enjoyment for all ages. Fourth, the Disney Company continues a tradition of timeless

storytelling that delights and inspires, and finally, the company is dedicated to honor and respect

decency in order to inspire trust in the company.

SWOT (Strengths, Weakness, Opportunity & Threats)

PEST Analysis of Disney (Political, Economic, Social & Technological)

Political

• Government stability.

• Freedom of speech, corruption, party in control

34

• Regulation trends.

• Tax policy, and trade controls.

• War

• Government policy

• Elections

• Terrorism

• Likely changes to the political environment.

Economic

• Stage of business cycle.

• Current and projected economic growth

• International trends

• Job growth

• Inflation and interest rates.

• Unemployment and labor supply.

• Levels of disposable income across economy and income distribution.

• Globalization.

• Likely changes to the economic environment.

Social

• Population growth and demographics.

• Health, education and social mobility of the population

• Consumer attitudes

• Advertising and media

• National and regional culture

• Lifestyle choices and attitudes to these.

• Levels of health and education

• Major events

• Socio-cultural changes.

35

Technological

• Impact of new technologies.

• Inventions and innovations

• The internet and how it affects working and business

• Licensing and patents

• Research funding and Development.

Disney marketing Strategy

Four Strategies Disney Uses to Create Freakishly Loyal Customers

You probably think of Disneyland as a tourist trap. Which it is. But unless you‘re part of a

rather…unique…subset of humanity, you likely have no idea that Disneyland‘s main customer

base is actually local — SoCal residents who hold Annual Passes and come several times a year.

What‘s more, although this sounds insane, there are forums full of hardcore Disneyphiles who

visit the park several times a week — sometimes popping in just to sit on a bench in Main Street

and watch people go by.

That‘s loyalty so impressive it may actually deserve another name altogether…especially since

there are plenty of other things to do in California.

Here are four major strategies worth thinking about:

1. All theming, all the time

If you take away the theming, there‘s nothing particularly special about Disneyland‘s rides.

Tame roller coasters, generic log flumes, perfectly ordinary carousels—off-the-shelf mid-range

rides you could go on at any theme park. In fact, several nearby parks have far more extreme and

exciting rides.

The thing is, Disney‘s theming isn‘t just slapping a few cartoon animals on the sides of rides. It‘s

immersive, complete and, in its own cheesier-than-France way, kind of classy.

It makes sure its Fantasyland cast members don‘t wander through Frontier land dressed in

costumes with the wrong theming. It pumps out scents for each ride—brine for Pirates of the

Caribbean, honey for Winnie-the-Pooh, and a cold, musty smell for the Haunted Mansion. The

car parks aren‘t called A, B and C—instead there‘s Pumba Parking, the Mickey and Friends

Parking Structure, and Toy Story Parking.

2. Immersion

In a similar vein, a lot of Disney‘s most loyal customers don‘t show up for the rides themselves.

Not for the mechanics, anyway. Increased G-forces and mild nausea don‘t inspire that kind of

fanaticism—and as I‘ve said, there are more extreme places just around the corner anyway.

36

Rather, fans keep coming back because there‘s always more to see. Disney‘s motto isn‘t ―Lots of

Rides‖—it‘s ―The Happiest Place on Earth‖. And Disney maintains constant interest by making

sure there‘s always something else to notice.

Interesting, interactive queuing areas for the rides.

Sporadic ―spontaneous‖ performances by Mary Poppins or Alice and the Mad Hatter at various

times of day.

Rides like the Jungle Cruise that are strikingly different at night.

Holiday theming. Different fireworks displays. ―Limited-time only‖ eatables.

3.Everyone’s a princess

A number of Disney films are about being a special and unique snowflake. And astonishingly,

despite the positively enormous numbers of people churning through the gates each day, Disney

staff actually do treat their guests like snowflakes.

Cast members give children badges and balloons at random; princesses stop to greet little girls

dressed in princess gear; guests are allowed to ―captain‖ the Jungle Cruise or Mark Twain

Riverboat.

4. Mining the mythos

In general, Disneyland hides its ―seams‖. Trees that need cutting down are switched during the

night with fully-grown replacements from Disney‘s nursery. Cleaners are inconspicuous. Staff

areas are hidden underground or painted ―no-see-um‖ green and shrouded in foliage.

But Disneyland is also very blatant about acknowledging itself and its creator—in a sense,

Disneyland‘s greatest product is its own mythology. The running of the park may be too vulgar

for the public eye, but the story of the park is trumpeted everywhere.

Of course, all Disney parks draw on the enormous popularity of the movies and music. But

Disneyland has more than that. It‘s the original, the ―historical‖ Disney—the only park planned

and lived in by Walt himself. And it blatantly rides on that.

Hordes of guests are guided through Walt Disney‘s hidden Main Street apartment (in which a

light is always kept symbolically burning). The names of the Imaginers are featured on the shop

windows of Main Street. The Lily Belle, a train-car designed for Walt‘s wife, is a major photo-

op attraction; as is the sentimental ―Partners‖ statue of Walt and Mickey.

And Disney never lets anyone forget its past successes. Its parades are a constant triumph of its

classics—in fact, it has reached the point where it can simply manufacture classics, labeling them

as such before they‘ve even come out on DVD. When Tiana and Rapunzel were inaugurated into

Disney‘s official princess lineup, the marketing made it a quasi-historical occasion—and

thousands upon thousands of loyal customers showed up.

37

It works so well that a few years back people were shelling out $150 to have their names

immortalized on a brick paver laid in the ―Walk of Magical Memories‖ between Disneyland and

DCA.

Porter’s Five Forces Model of Disney

Degree of Rivalry

- Direct competition between Pixar / DreamWorks

- Theme parks etc

- Brand must always make animation – foundations

- Disneyland/world unique

- Most famous animation brand

- Exit barriers, cant leave a market without affecting other products

Supplier Power

- Due to high prices charged on merchandise by Disney, suppliers up prices

- Lots of different revenue streams, high cost to switching suppliers

- High amount of merchandising

- Supplies to parks, TV, merchandise, shows etc.

Threat of Substitutes

- Buyer has low differentiation between companies

- Buyers switching to DreamWorks

- Low threat from other film companies – always a market for animation

- TV Channels

Threat of new entrants

- 2 Huge superpowers in the market in Pixar and DreamWorks

- Costs a lot of money to create

- Disney Dominates the Market

- Disney TV

Buyer Power

- Hugely established brand

- Lots of wings of the company, involved in lots of markets

- Lots of revenue

- Household Name

- Lots of Controversy

38

References: http://en.wikipedia.org/wiki/Honda

http://disney.wikia.com/wiki/The_Disney_Wiki

http://en.wikipedia.org/wiki/The_Walt_Disney_Company

http://en.wikipedia.org/wiki/List_of_Walt_Disney_Pictures_films

http://www.marketingweek.co.uk/brands/honda/

http://www.slideshare.net/luisangelo77/10-step-marketing-plan-honda

https://faculty.fuqua.duke.edu/~charlesw/s591/Bocconi-

Duke/Papers/new_C12/perspectivesonstrategy.pdf

http://www.ukessays.com/essays/commerce/porters-five-forces-effecting-honda-motors-

commerce-essay.php

http://uk.reuters.com/article/2014/03/16/uk-honda-motor-technology-

idUKBREA2F00Z20140316

http://www.honda.com/

http://www.nestle.pk/

http://en.wikipedia.org/wiki/Nestl%C3%A9

http://www.nestle.com/

http://www.slideshare.net/sitirizkymardhani/nestles-case-study-19377877

http://en.wikipedia.org/wiki/Coca-Cola

http://us.coca-cola.com/home/

http://www.hindustantimes.com/business-news/coca-cola-to-double-sales-force-in-india-

to-14-000-over-5-years/article1-1195289.aspx

http://www.forbes.com/sites/greatspeculations/2014/03/12/coca-cola-in-brazil-global-

events-and-energy-drinks-could-drive-growth-part-1/