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The Coca- Cola Company is the worlds largest beverage company, manufacturer, distributor, and marketer of non-alcoholic beverage concentrates and syrups, with more than 400 widely recognized beverage brands in its portfolio. 1.1. Company History: The Coca-Cola Company is an American multinational beverage corporation and manufacturer, retailer and marketer of non-alcoholic beverage concentrates and syrups. The company is best known for its flagship product Coca-Cola, invented in 1886 by pharmacist John Stith Pemberton in Columbus. The Coca-Cola formula and brand was bought in 1889 by Asa Candler who incorporated The Coca-Cola Company in 1892. Besides its namesake Coca-Cola beverage, CocaCola currently offers more than 500 brands in over 200 countries or territories and serves over 1.7 billion servings each day. ( The company operates franchised distribution system dating from 1889 where The Coca-Cola Company only produces syrup concentrate which is then sold to various bottlers throughout the world who hold an exclusive territory. The Coca-Cola Company owns its bottler in North America, Coca-Cola Refreshments. Coca-Cola was first introduced by John Syth Pemberton, a pharmacist, in the year 1886 in Atlanta, Georgia when he concocted caramel-colored syrup in a three-legged brass kettle in his backyard. ( He first distributed the product by carrying it in a jug down the street to Jacobs Pharmacy and customers bought the drink for five cents at the soda fountain. Carbonated water was teamed with the new syrup, whether by accident or otherwise, producing a drink that was proclaimed delicious and refreshing, a theme that continues to echo today wherever Coca-Cola is enjoyed. Coca cola in Pakistan: To provide Coca-Cola at arms length The Coca-Cola Company began operating in Pakistan in 1953. Coke, Fanta and Sprite are the brands with whom Coca-Cola is operating in Pakistan. The Coca-Cola System in Pakistan operates through eight bottlers, four of which are majority-owned by Coca-Cola Beverages Pakistan 1

Limited (CCBPL). The CCBPL plants are in Karachi, Hyderabad, Sialkot, Gujranwala, Faisalabad, Rahim Yar Khan, Multan and Lahore. The Coca-Cola System in Pakistan serves 70,000 customers/retail outlets. The Coca-Cola System in Pakistan has nearly 3,000 people working constantly for the company. During the last two years, The Coca-Cola Company in Pakistan has invested over $130 million (U.S) and coke has successfully provided 56 years of dedicated service to its customers in Pakistan. Since the beginning of Coke Company the firm has been continuously changing its slogans and thats a very creative idea to get the attention of the customers. Here we would like to include some of the popular slogans of coke since the coke journey started. 2001 Life is Good 2003 Jo Chaho Ho Jaye Coca Cola Enjoy 2004 Flight Of Delight 2005 Galay Delicious Taste 2006 Thanda matlab coca cola 2007 khaly pily jila coca cola 2008 Aja jashan mena ly ( 1.2 Vision Statement Our vision guides every aspect of our business by describing what we need to accomplish in order to continue achieving sustainable 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. ( 2

1.3 Mission statement The Coca Cola Company creates value by executing business strategy guided by four key beliefs: Customer is king; Customer demand drives everything we do. Brand Coca Cola is the core of our business. We will serve consumers a broad selection of the nonalcoholic ready-to-drink beverages they want to drink throughout the day. We will be the best marketers in the world. ( Everything we do is inspired by our enduring To Refresh the World To Inspire Moments of Optimism To Create Value and Make a Difference 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

Be the Brand Inspire creativity, passion, optimism and fun

1.4. Objectives Coca Colas objectives are: To maintain the quality and taste of the product To increase the sales and market share i.e. to maximize profit To sustain up to the mark standard of Coca Cola in the interest of consumers. To capture greater market share To stay as market leader To earn goodwill and good reputation for the brand. ( 1.5. Goals of Coca Cola All CCBPL plants setup their own goal to achieve the objective. The company goal is To increase sales volume and gain market leadership (

1.6.Organizational hierarchy

2. Industry Features
2.1. Market Size & Growth Rate Today, Coca Cola has a portfolio of more than 3,000 beverages. The market size and growth rate of coke is high and there is a lot of opportunity that coke increase market size and growth rate, because the product line of coke include a different type of beverages and all beverages made by them are in accordance with consumers need. So, lot of chance available for coke that they increase industry growth rate and generate high profit margin. On the other side, coke competitor also introduces different type of beverages but the product line of coke is high, but there is no chance that Pepsi capture coke market. 2.2. Coca Cola Life Cycle Stage

Coca Cola

Coca-cola is in a stage of growth according to a product life cycle analysis. It is recovering its market share very quickly which it had lost in previous years although there is good competition in market but it is still recovering and enjoying healthy profits. There are no barriers for new entrants, and many companies are entering in this industry because of healthy growth. 2.3. Number of Rivals If we talk about the number of rival in the beverages industry so the strong rival of coke is: PepsiCo (direct & strong competitor) nestle (indirect competitor) Gourmet cola (Potential competitor) 6

2.4. Major Customers Need First of all the majority dont care that what they are going to have. In other words, they dont care before drinking that whether it is Pepsi or coke. They dont actually differentiate between these two brands on the basis of their tastes. Consumers basically drink what they get. They believe on What Cold They Sold For this reason, Coca-Cola has provided their coolers and freezers in the market. They have maximum number of coolers and freezers in the market. They provide this infrastructure free of cost just to provide chilled coke to their customer, which they want to purchase. Their salesman and mechanics regularly visit all the shops where coke has its infrastructure to check that either it is in proper condition or not, if not then they immediately change or repair it. 2.5.Production Capacity Of Coca Cola Coca cola production plant is the world sixth largest production plant. They are working in more than 200 countries through FDI, licensing and franchising. So they are heavily investing on their production capacity improvement. In almost every country where they are working they have their own production plants. They are rapidly growing their market in Middle East and central Asian countries. Their fastest production high technology can produce a faster than an eye see. They are continuously improving their production system because for them efficient production at minimum cost is real achievement. They are emphasizing on their bottling plan process for quick filling. Their bottling system is best all over the world. Their one assembly line can produce 2000 cans in minute. From their one production line they have 25000 bottle storage capacities per minute, approximately 250 Lorries leave daily. 2.6. Pace of Technological Change "To continue to provide the highest level of service to The Coca-Cola Company by using technologies to improve efficiency, leverage existing knowledge, and proactively mitigate legal issues by educating clients on key issues affecting the Company, while at the same time recognizing the constraints of cost, supportability, and compatibility with the overall Company's Information Technology strategy."The coca cola company has always worked for bringing in technological changes to meet the customer needs. These are the various examples of latest technology adopted by the company Coca-Cola Seeks Edge With 120-Drink Jet Fountain 7

Interactive Vending Machines Coca-Cola Commits To Climate-Friendly Refrigeration Worldwide MasterCard Acceptance Water Treatment at the Coca Cola Co.

2.7. Vertical Integration Coca cola vertical integration system is one of its major systems that are helping them to achieve the economies of scale. They are using both forward & backward integration. If we talk about backward integration they owned their suppliers of soda, bottling, water filtration. In downward stream they have their distributors, franchisers, and licensees. Why coca cola, channel management is active, & why they purchase their suppliers because they dont want to build the monopoly to any distributor who will influence them later on. In this way they save & secure themselves from their upper & down steam channel members conflict. 2.8. Product Innovation Coca Colas dozens of soft drink brands provide flavor and refreshment in a variety of choices. From the original Coca-Cola to most recent introductions, soft drinks from The Coca-Cola Company are both icons and innovators in the beverage industry. Coca Colas brands also include milk products, soup, and more so you can choose a Coca Cola Company product anytime, anywhere for nutrition, refreshment or other needs. Product innovation is the major driver for soft drink industry because for long term sustainability and to fulfill the consumer demand according to their choices product innovation is the tool that helps the companies in this regard. 2.9. Degree of Product differentiation If we talk about the degree of product differentiation, so coke has a lot of products through which coke easily differentiate their product such as coke beverage Minute Maid. There is no substitute of this product available, so we say that coke has a degree of product differentiation. 2.10. Scope of Competitive Rivalry The Pepsi competitive rivalry scope is high in case of coke and Pepsi because the competitor of coke is strong and there is a chance if coke competitor work fast on their beverage line of product, then may be Pepsi beat coke in case Pepsi introduced new and differentiated product from coke. So we say that the scope of competitive rivalry is high and there is a strong competition

between them because both companies work on international level and every time the struggle of every company is to beat their rivals. 2.11. Advertising The field of advertisement is one area where Coca-Cola has always emphasized. In year 2000 Coca-Cola unveiled the biggest advertising billboards in the history of Pakistan. Each unveiling was marked by entertainment and light shows watched by thousands of people. Similarly in July 2000 Coca-Cola launched its first under the crown promotion by the name of Dream Vacations in which the consumers could collect caps of promotional bottles of Coca-Cola like Sprite,Fanta and Coke.

Advertisement Objective:

Type of advertising with respect to product life cycle that Coca-Cola adopts is reminder type. The reason behind this fact is that coke is such a product that is at the maturity level currently so for such a product companies mostly go for reminder type of advertisement so that they can penetrate more and more and same is the case with Coke. Setting of advertising budget: Coca-Cola sets its advertisement budget on the basis of competitor based budgeting. Major competitor of coke is Pepsi and as coke realizes that Pepsi has increased its advertising budget, straight away Coca-Cola management plans to do the same so that they can compete in advertising department as well. Advertising Strategy: Before creating advertising message the Coca-Cola Company gives lots of time to the factor that the message must gain customer attention. This is basically called Clutter Buster means that only that advertisement will leave impact on customer mind that has some specialty or uniqueness in it. For example in India Coke current slogan Thanda Matlab Coca-Cola has gained reasonable customer attention. Advertisement Media: Coca-Cola Company advertises its products mainly coke through electronic media that includes Television, Radio and Internet as well. Moreover leading newspapers of Pakistan are also the targeted by coke for advertising. So we can say that coke not only uses electronic but print media for advertisement as well. 9

3. Market Share of Coca Cola:

Coca Cola is now one of the largest corporations in the world, with a global workforce of over 90,000 and revenues of $31.9 billion in revenues in 2008. Over the years, the brand equity of the Coca-Cola trademark, as well as that of other Coca Cola-produced brands, has established Coca Cola as a prominent figure in the non-alcoholic beverage industry and allowed the company to keep both revenues and profits high. Sales and Income Data in Millions Net Sales $21,742 $23,104 $24,088 $28,857 $31,944 $36,444 2006 2007 2008 2009 2010 2011

Net Income(Profits) Units sold in Billions

$4,847 19.8

$4,872 20.6

$5,080 21.4

$5,981 22.7

$5,807 23.7

$5,983 24.5

4. Marketing Mix:
Marketing decisions generally fall into the following controllable categories: Product Price Position Place (distribution) Promotion Product Strategy


Product: Anything that can be offered to a market for attention, acquisition, use or consumption that might satisfy a want or need. Level of coke as a product Core Product Core benefit is that it fulfills the thirst. Actual Product Design: Pet bottles, returnable glass bottles, economy packs. Quality: Quality differs with respect to country for example. Coca-Cola Can quality that is available in Middle East is certainly different as compared to Coke Can available in Pakistan. Product Classification Coke is categorized as a convenience product, because the purchasing rate is very high and this is the product that is bought very frequently.

5. Boston Consulting Group (BCG Matrix):

5.1. Stars High Growth, high market share Coke Classic is the basic product through which the Coca Cola Company got the fame. It is one product, which gives the maximum revenue from all over the world. It is one flavor, which has the maximum consumers all over the world. Coke has already worked a lot on it by launching new


flavors in it, but still it is a product they can turn as famous as coke Classic. It is the one which is giving maximum revenues to it by different products in this line. ( Beverages)

5.2. Cash Cows Low growth, High market share Fanta and Sprite are the products, which the Coca Cola Company can never think of stop producing. It is the one which make the coke company a huge success; it was one product which gives billions of dollars as revenue from world over. Whenever the company thinks of launching its product in a country the first product they launch is coke classic as they know that if dont work here then nothing else can. ( Beverages) 5.3. Question Mark High growth, low market share Products that are still not a big hit as they havent consumed much time yet. Sprite 3G,Sprite Zero, Diet Coke and Kinley are the examples of these question marks as the question marks as they have not taken much time yet to get a hold of market & not even the large percentage of the people have tasted it. So it needs time to be fully tested by the company & the company needs to think whether it should continue the production or should divert to something new. ( Beverages) 5.4. Dogs Low growth, low market share A product that has not worked good or a product which has been a source of loss. Flavored Fanta is one product that was not a big hit. Even its not a long period which flavored Fanta has consumed but still there are signs that it wont be a success. So its better for the company to get rid of it. ( Beverages)


6. Competitors Analysis:
The competitors to the products of the company mainly lie in the non-alcoholic beverage industry consisting of juices and soft drinks. The key competitors in the industry are: PepsiCo(direct& strong Competitor) Gourmet Cola(potential competitor) Nestle(indirect competitor) I am comparing some Coca- cola products with Pepsi products Pepsi Coca Cola ranks well ahead of its close competitor, Pepsi, which was ranked 22 with a brand value of $12,888 million. The company's strong brand value facilitates customer recall and allows Coca-Cola to penetrate markets. However, the company is threatened by intense competition, which could have an adverse impact on the company's market share. Coca Cola V/S Pepsi products: Both the companies Coca Cola and Pepsi have a number of products. Many of these products are innovations but there are also many products which are brought out just as a competitive product for other companies. Some of these products that are brought in the market by both the companies to compete against each other are as follows: Coca Cola Products 1.Coca Cola started the rivalry between these Companies. Pepsi Products 1.Pepsi Cola primary competitor to Coke.

The main dark cola drink of the company which Pepsi version of dark cola which is the major


2.Sprite Sprite is a clear, lemon lime flavored, non caffeinated soft drink, produced by Coca Cola Company. 3. Diet Coke Diet Coke or Diet Coca Cola is a sugar-free soft drink produced and distributed by Coca Cola Company, was introduced in U.S. in 1982 4. Kinley water Kinley is a brand of still or carbonated water owned by The Coca Cola Company. 5.Fanta Fanta is a soft drink brand owned by The Coca Cola Company. It is produced and distributed by Coca Cola Companys bottlers.

2. 7 up 7 up is a brand of a lemon-lime flavored soft drink. 3. Diet Pepsi Diet Pepsi is a low calorie carbonated cola. It was introduced in 1964 as a variant of Pepsi Cola with no sugar. 4. Aquafina Aquafina is non carbonated bottled water produced by PepsiCo. 5. Mirinda Mirinda is a brand of soft drink. Mirinda is owned by Pepsi Co.

7. Porters Five Competitive Forces:

Soft drink industry is divided into two segments namely production of soft drink syrup and manufacturing and/or distribution of soft drinks in retail level. Coke chose to concentrate their operation on the first segment while intimately depending on independent bottlers companies. Basically, the company is engaged into blending raw material ingredients (product planning), packaging in plastic canisters (market research) and shipping to bottlers (advertising). 7.1 Bargaining Power of Buyers/Customers:


Bargaining power of buyers affects the industry through their ability to force down prices, bargain for higher quality or more services, and play competitors against each other. Buyers are likely to have power if a buyer purchases a large part of the sellers product, if alternative suppliers are plentiful because the product in undifferentiated, if the buyers earns low profits and is sensitive to cost differences, and if the purchased product is unimportant to the final quality or price of a buyer's product. Bargaining power of buyers depends on the marketing channel used. For Coke, there are five core channels such as food stores, convenient stores, fountain, vending machine and mass merchandisers. The bargaining power of buyer is high for fountain supermarkets and mass merchandising because of the low profitability and strong negotiation power of retail channels but for vending bargaining power is non-existing caused by high profitability. Coca-Cola has three major and large customers in the market, food street 60,000 cerates /year, McDonalds 40,000 cerates/year and Pakistan Railways who buy 50,000 cerates /year. However, these three customers being large and powerful are in an influential and bargaining position they can demand discount or others facilities like (boards sign/freezers/coolers etc.) and impose a threat to switch to their closest rival and competitor Pepsi. 7.2 . Rivalry condition Rivalry condition is concentrated on two main actors Coca-Cola and Pepsi Cola.Rivalry among existing firms is the amount of direct competition in an industry. Industries that have intense competition are characterized by competitors that are roughly equal in size, slow rates of industry growth, and the production of commodities, high fixed costs, and high exit barriers arising from investments in specialized equipment. The direct competitor of Coca-Cola is Pepsi and that of CCBPL is PCI (Pepsi cola international) there is always ongoing tuff competition between these two arch rivals with Pepsi leading with 54% market share and Coke gradually growing and catching up 36% market share in Pakistan. However, on global level the situation is reverse. Both companies often engage in price cut wars, prize scheme wars and sponsorship wars to win over each other customers. 7.3 . Substitute products Existence of substitute products is wide and thick and substitute products for Coke reached the market where Coke has a strong presence. Apart from the primary rival (PepsiCo), the company 15

finds intensified competitions on companies that produce, market and sell tea, beers, milk, coffee,wine, milk, coffee, wine, powered drinks, juice, bottled water, sport drink and other refresh ments causing a significant decline in Coke prices. Nestle products like juices, coffee, mineral water etc. and Shezan juices are substitutes of Coke for health conscious people and other fresh juices. To reduce threats, Coke embraced the idea of bottling and concentrated on product diversification. Penetrating the soft drink industry is hard because of the established name of Coke,hence, new entrants must first overcome the remarkable marketing muscle and marketing pre sence of Coke. 7.4 .Barriers to new entrants Respectively, Coke has long-term relationships with their retailers and distributors making possible the defense of the position by means of discounts and other tactics, and regulation make it impossible for new bottlers to enter areas where an existing bottler operates. Coca-Cola is not afraid of competing .it doesnt fear losing its share to Amrat- Cola or other new entrants. The company management believes that new entrants provoke healthy competition, which will provide Coke with a challenge to hold on to its loyal customers. Besides it will take a lot of effort on the part of new entrants like Amrat- Cola, Pak-cola to fully launch its product in Pakistan and capture or even motivate people to switch on to their new product from Coke. 7.5 . Bargaining power of suppliers Bargaining power of suppliers is low due to two reasons. First, the main inputs are sugar and packaging. Sources of sugar are on the open market which subsequently makes the creation power of suppliers at low levels. There are several suppliers for packaging as well as the abundance in supply of inexpensive aluminum. For example If market has low quality carets of bottles by chance, they call their sales managers to lift up all the stock from the market then inquired from the quality inspector. They take strict notice of that and don not take materials from that company again if that default is due to the ingredient contains by it. ( Beverages)


7.6 Snatching Away Customers: In the market Coke has been able to snatch large customers like Food Street, Pakistan Railways, McDonalds, as well as Sponsorship events (basant, eid, concerts etc.) from Pepsi mainly due to its superiority in the following areas. 7.7 . Assessing the Competitive Strength:


Critical success factor




Coke 1 2 3 Quality Control Low Cost Production Supply chain management 10 10 10

Pepsi 9 8 6

Others 5 5 4 5% 10% 8%

Coke 0.5 1 0.8

Pepsi 0.45 0.8 0.48

Other s

0.25 0.5 0.32

4 5 6 7 8

Clear Advertising Globalization Product Innovation Brand positioning Convenient Location

9 9 9 9 9

9 8 8 7 9

5 2 4 3 3

15% 15% 10% 6% 12%

1.35 1.35 0.9 0.54 1.08

1.35 1.2 0.8 0.42 1.08

0.75 0.3 0.4 0.18 0.36


9 10

Taste Bottle design

9 9

7 8

2 0


15% 4% 100%

1.35 0.36 7.73

1.05 0.32 6.7

0.3 0 2.61

8. Value Chain Analysis:

As far as coca cola is concerned the cross business strategic fits can exist anywhere along the value chain of coca cola. We will discuss these value chains one by one and see how Coca-Cola can strategically fit into these value chains: 8.1 .R & D and technology activities Coca cola can fit into a kind of business where it can utilize its resources of R & D and technology. As we already know that the R & D and technology of coca cola is very strong. In the area of technology coca cola is very advance when we see their packaging and bottling technology. When coca cola will diversify into any other business which is related to its industry it will obviously have the advantage of its technological expertise. The coca cola company has always worked for bringing in technological changes to meet the customer needs. These are the various examples of latest technology adopted by the company Coca-Cola Seeks Edge With 120-Drink Jet Fountain Interactive Vending Machines Coca-Cola Commits To Climate-Friendly Refrigeration Worldwide MasterCard Acceptance Water Treatment at the Coca Cola Co.

For example there are different products which coca cola has introduced which are examples of related diversification like minute maid juice, water, tea and coffee, energy drinks etc. Coca-Cola can use this technology to have a competitive edge in the market and it can reduce its costs at the same time as it already has a strong setup ( Beverages) 8.2 . Supply chain activities Coca cola has a strong supply chain network. It makes the syrup used to make the coke and gives it to its distributors and they make the final good. It also has contract with a bottling company 18

which makes bottles for coca cola. So having such a strong supply chain network it can also diversify into relative business as this will help the company in reducing costs and increasing efficiency. Coca cola is using the same supply chain for its diversified products. ( Beverages) 8.3 . Production related Activities Coca cola has the World sixth largest production plant. One assembly line can produce2000 cans in minute. Production line has 25000 bottle storage capacities per minute. So Coca-Cola can also fit because of its production related activities. Such a strong production capacity will result in lower costs. ( Beverages) 8.4 Distribution related Activities The company operates franchised distribution system dating from 1889 where The Coca-Cola Company only produces syrup concentrate which is then sold to various bottlers throughout the world who hold an exclusive territory. The Coca-Cola Company owns its bottler in North America, Coca-Cola Refreshments. Like all the other fits coca cola can diversify because of its distribution activities. Already having a separate distributor the other products can be similarly distributed to the markets. ( Beverages) 8.5 Sales and marketing activities Many cost saving opportunities will arise for coca cola as single sales and marketing activities will be used to sell the diversified products. There will be a single sales force for the related products. Advertising of the related products will be carried out together. The strong company brand name is also important in this case. The new products will gain attractiveness because of the strong brand name. ( Beverages) 8.6. Managerial and administrative support Activities Coca cola can also diversify because of its managerial and administrative support activities. Many times most of the businesses require same management, administrative and operating know how.


The products which coca cola is producing are under the control of same management. This is a huge cost saving benefit for coca cola. Coca cola itself is a benchmark for many corporations but where it lacks is its distribution capabilities especially in Pakistan. So for this case it should see Benchmark Pepsi as it is also the biggest competitor to it. ( Beverages)

9. SWOTAnalysis:
9.1. Strengths Solid financial performance Product diversification (water, juices, soft drinks, sport drinks, etc) Innovation Leading brand value and a strong brand portfolio Large investments in brand promotions Sells its products in more than 200 countries Large Scale of Operations Leading Market Position Strong cash flow from operations

9.2 .Weaknesses
Coca-Cola has recently reported some "declines in Sales due to reduced consumer purchasing

power. Entire infrastructure needs a face-lift.

Financial market volatility (

9.3 . Opportunities Targeting the ageing customers and the young and more environmental concern people. 20

Expansion Reaching all segments. Booming Global functional drink market e.g. Energy drinks Intense competition
Catering to Health Consciousness of People Bottled water growth

Acquisitions of smaller players ( 9.4. Threats

The threat of substitutes, however, is a very real threat. The soft drink industry is very strong,

but consumers are not necessarily loyal to it. Economic Climate - Consumer buying power also represents a key threat in the industry. Health and wellness concerns Fruit Juice Companies Intense competition (Pepsi, etc) Commodity prices growth Image perception in certain parts of the world. Overdependence on Bottling partners ( 9.5 Tows Analysis TOWS Analysis is an effective way of combining a) internal strengths with external opportunities and threats, and b) internal weaknesses with external opportunities and threats to develop a strategy. Strength Weaknesses Opportunities SO Strategies WO Strategies Strength Weaknesses Threats ST Strategies 21

WT Strategies To carry out a TOWS Analysis, consider the following combinations: Strengths/Opportunities (SO) Consider all strengths one by one listed in the SWOT Analysis with each opportunity to determine how its single internal strength can help it to capitalize on each external opportunity. 1. Growing market for bottle water market, Coca Cola can be a leader in this market by extending its product line and campaign for healthy drink in the industry. 2. Coca Cola has the largest sponsorship in games such as football, Olympic etc, by launching energy of their own brand, it could be the fastest selling product if use some of the famous stars in the game to advertise the product. 3. Can renewed focus on ageing and affluent consumers globally. 4. Diversified in snack market Strengths/threats(ST): Consider all strengths one by one listed in the SWOT Analysis with each threat to determine how each internal strength can help it to avoid every external threat. a. A number of people have limited disposable income; the company can still take advantage through their economy of scale by reducing the price of their product at the current economic climate. b. Do research and know what the consumers want by this they will be able to extend their product line to include sugar free product and by this they will be able to attract new customers. c. Threat of currency devaluations d. New management team-brand consistency. e. Government policies Weaknesses/Opportunities (WO) Consider all weaknesses one by one listed in the SWOT Analysis with each opportunity to determine how each internal weakness can be eliminated by using each external opportunity. a. b. With their experience staff they should be able to make an instead market decision Failing to conduct further market research into new market can give an advantage explore the new market. to competitors by extend to the new market. 22

c. d. e.

Training to unskilled labor Job securities to fear employees improve negative publicity

Weaknesses/Threats (WT) Consider all weaknesses one by one listed in the SWOT Analysis with each threat to determine both can be avoided. a. The company slow in making decision can cost them in terms of their market if the key competitors take the lead in providing what the customers want it will be difficult for Coca Cola to win back the customers. b. If for instance the Coca Cola sugar level exceed the requirement of the health authorities this could lead to fall in sales hence the company will lose market share to the Pepsi. c. New infrastructure for the health related drinks d. Improve performance in certain part of America TOWS Matrix: Strengths brand portfolio 2.Large promotions countries 4.Large Scale of Operations5.Leading Market Position 6.Strong cash flow from operation investments in Weaknesses a face-lift. brand 2.Financial market volatility 3.Negative publicity 1.Leading brand value and a strong 1. Entire infrastructure needs

3.Sells its products in more than200 4.Sluggish performance


Opportunities and the young 2.Expansion 3.Booming Global functional drink market e.g. Energy drinks 4.Intense competition 5.Catering Health Consciousness of People 6.Bottled water growth

SO market (O6 S6) 2.Coca Cola has the

WO staff they should be able to largest explore the new market.

1. Targeting the ageing customers 1.Growing market for bottle water 1. With their experience

sponsorship in games such as football, 2.Failing to Olympic etc, by launching energy of conduct further market their own brand, it could be the fastest research into new market to selling product if use some of the can give an advantage to famous stars in the game to advertise competitors by extend to the the product. (O4 S2) affluent consumers globally.(O1 S3) 4.Diversified in snack market (02 S5) 5. Providing health conscious brand (05 S1) 6.Investment in global market new market 4.Job securities to fear employees 5.Improve negative publicity 3.Can renewed focus on ageing and 3.Training to unskilled labor

Threats 1. The threat of substitutes 2.Economic Climate 4.Intense competition (Pepsi, etc) 5.Commodity prices growth parts of the world. 7.Overdependence on Bottling partners



1. A number of people have limited 1. The company slow in disposable income; the company can making decision can cost take advantage through them in terms of their if the what key the their economy of scale by reducing the market providing

3.Health and wellness concerns still

price of their product at the current competitors take the lead in 2.Do research and know what the customers want. consumers want by this they will be 2. If for instance the Coca able to extend their product line to Cola sugar level exceed the include sugar free product and by this requirement of the health they will be able to attract new authorities this could lead to fall in sales. 3.New infrastructure for the

6. Image perception in certain economic climate.


health related drink

Key Internal factors: Strengths Average customer Weight 0.11 0.05 0.08 0.09 Rating 2 3 1 4 Weight Score 0.22 0.15 0.08 0.36

purchases increased Employee moral Technical support and research efficiency Newspaper advertisement expenditures increased Revenues from other segments Debt to total asset ratio decline Locations in the world Weaknesses Inventory turnover decreased Return on equity down decreased Website Supplier time delivery Total

0.14 0.05 0.15 Weight 0.10 0.11 0.04 0.08 1

4 2 4 Rating 3 1 2 1

0.56 0.10 4 Weight Score 0.30 0.11 0.08 0.08 2.24

Ranked 1 to 4. Low to High respectively. Current Evaluation: 2.24 Less than average of 2.50 Need efficiency in the Management, Marketing, finance, MIS, R & D, and other operations. 25

External Key Factors Opportunities Entering into business (Pepsi Weight snacks earns 0.050 4.00 0.20 0.10 Rating 3.50 Weight Score 0.35

60% from snacks Expansion by taking over Cadbury division or product line Expansionby introducing new etc.) Entering into or ready-to-drink products (tea, coffee,







introducing new sports events (e.g. Formula I) to introduce energy drinks Strong financial and 0.015 1.50 0.02

assets support available worldwide to take financing for expansion Introduce soft drink with focus of "healthy soft drink" - eliminate obesity concept Link with computer internet/network/cell gaming business to focus on youth worldwide - to 26 0.025 2.50 0.13 0.075 3.50 0.26



of 0.430 1.43

technology Total

Threats Hurting products containing sugar & sugar-substitute based drinks (trend towards more healthy eating & drinking) Increase in raw material costs Government policies may hurdle in expansion Competitor may access unreached parts of the world prior to Coca Cola Ban in public schools due to obesity issues Lack in snacks business Salesman not equipped with sales ordering devices Total Grand Total




0.075 0.075

3.50 3.50

0.26 0.26




0.075 0.075 0.015

3.50 3.50 2.00 0.26 0.03

0.570 1.000

1.43 2.86


9.6. Product Life Cycle: The following graph illustrates the four stages of the PLC: Introduction Stage Of Coca Cola: In the Introduction stage, Coca Cola was launched and initially promoted. Efforts were made for creating its awareness in the market, inducing trial of the product and securing space in the outlet shelf. When their costs were high, sales volume were low, and there was no existing demand for Coca Cola in this stage. ( Education MBA) Growth stage Of Coca Cola: In the growth stage Coca Cola experienced rapid increase in sales volume and its competition began to increase. People got more awareness about Coca Cola and the increase in the competition leads it to decrease prices. In this stage the marketing strategies used by Coca Cola were as follows: Product improvement New models were developed It entered new market segments It enlarged its distribution channels. ( Education MBA) Maturity Stage Of Coca Cola: Coca Cola is in the Maturity stage from years now. The marginal costs of Coca Cola are low in this stage, sales volume is at the peak and most of the market is covered. There is increase in competitors which are entering in the market. Coca Colas brand differentiation and features diversification is emphasized to maintain and increase market share. ( Education MBA) Decline Stage of Coca Cola:


This is the stage in which sales of the product begin to fall. Either everyone that wants to, has bought the product or new, more innovative products have been created that replaces that product. The only way to increase sales during this period is to cut the cost of the product. ( Education MBA)

10. SPACE Matrix:

The SPACE Matrix analysis functions upon two internal and two external strategic dimensions in order to determine the organization's strategic posture in the industry. The SPACE matrix is based on four areas of analysis. Internal strategic dimensions: Financial strength (FS) Competitive advantage (CA) Environmental stability (ES) Industry strength (IS)

External strategic dimensions:

There are many SPACE matrix factors under the internal strategic dimension. These factors analyze a business internal strategic position. The financial strength factors often come from company accounting. By definition, the CA and IS values in the SPACE matrix are plotted on the X axis. CA values can range from -1 to -6 IS values can take +1 to +6 ES values can be between -1 and -6 FS values range from +1 to +6

The FS and ES dimensions of the model are plotted on the Y axis




Internal Strength Position Competitive Advantage (Worst-6,best-1) Product Quality Market Share Brand& image Product life cycle Average Score=-1.25 -1 -1 -1 -2 External Strength Position Industry strength (Worst-6, best+6) 5 Barriers to entry Growth potential Access to financing Consolidation Average Score=4.75 Total X-axis Score=3.5 5 4 5

Axis X

Financial Strength Axis Y ROA Leverage Liquidity Cash flow (Worst+6,Best+1) 5 4.5 5 4.5

Environmental Strength (Worst-6, Best-1) Inflation Technology Demand Elasticity Taxation -2.5 -1 -2.5 -4

Average score=4.75

Average Score=-2.5 Total Y-axis=2.25


FS (0, 4.75) Conservative +6 Aggressive

+2.25 CA (-1.25,0) IS (4.75, 0) horizontal company. competitor








ES (0,-2.5)

According to the graph above, we noticed that the Coca-Cola Company falls into the aggressive quadrant of the SPACE matrix. It is located at the coordinates of +3.50 for x-component and a ycomponent of 2.25. It shows that the company has an admirable position to use its IS in order to take advantage of external opportunities, overcome weaknesses, and avoid threats. So, in this position Coca-Cola Company has set of possible strategies such as market development, product development, depending market penetration, on detailed forward integration, that backward face integration, the integration, horizontal diversification, concentric diversification and conglomerate diversification conditions ( This includes focus on Water and Juices products, and catering to health consciousness of people through introduction of different coke flavor and maintaining basic coke flavor. Further company should integrate with other companies, acquisition of potential profitability. businesses, innovation in branding and aggressive marketing strategy can bring long term


Action strategies Coca cola space analysis indicates that it should go for aggressive strategies. In aggressive strategies coca cola inter in to new markets i.e. snacks most probably would be suitable. Diversification strategies Options: 1. Diversify into Related Business Enhance shareholder value by capturing cross business strategic fits: Transfer skills and capabilities from one business to another. Share facilities or resource to reduce cost Leverage use of a common brand name Combine resources to create new strength and capabilities 2. Diversify into Unrelated Business Build shareholder value by doing a superior job of choosing businesses to diversify into and of managing the whole collection of businesses in the company portfolio Diversify into both Related & Unrelated Businesses For Coca Cola Related diversification: Coca cola belongs to the beverages industry. Coca cola has now completed more than 100 years of its business. During these years coca cola has used the diversification strategy many times and in almost all the cases it has opted related diversification strategy. Coca cola being a giant in the industry has a big power to use its resources of technology, R & D, supply chain, manufacturing, sales and marketing, distribution activities and support activities. Here is the list of businesses or products for which coca cola has used related diversification strategy: Energy drinks Juices/juice drinks Water Tea and coffee Soft drinks Sports drinks ( Beverages) 32

11. Growth Strategy:

Ansoffs Matrix Growth is the main objective of every organization. They look forward for expanding & growing in different markets & making a variety in their product line. A company can identify their growth through the product-market expansion grid. The approach is known as ANSOFF.Coca Cola Company can also identify its expansion through the ANSOFF approach. (

11.1. Market Penetration Market Penetration is the strategy, which every company has to opt when it reaches a maximum height of growth. Coca Cola in Pakistan is doing market penetration through the selling its products to the business buyer, who are huge multinational organizations like McDonalds, Subway, Dunkin Donuts and many more. They are also keeping the local market in focus. FriChiks, AFC, PFC are examples of the buyers in the local market. They are selling the Coca Cola as the only beverage in their restaurants. (

11.2. Market Development Market Development is exploring new markets for the products you are already selling. Many flavors of Coca Cola are not being sold in Pakistan. Coca Cola can develop a new market if they 33

introduce those flavors in Pakistan. Many people in Pakistan want a change in the beverage industry, as they are having the same flavors from many years. ( 11.3. Product Development

A company takes a risk when it does Product Development, there is a chance that it loses its customers or there will be a crowd of people demanding their product. Coca Cola Company can do product development by introducing the new flavors in Pakistan which are not sold anywhere in the world by the coke company. The company has to put large effort in that, as it has to conduct all market research & feasibilities for it. But there is also an opportunity for them as they know the market of Pakistan, that what the people here can afford & what taste they want. ( 11.4 . Diversification Strategy

Diversification strategy is one which every company really wants to practice. There are lots of chances of growth but the risk factor is also there. The company can manufacture products, which are not manufactured by it before. Coca Cola is only dealing in beverages but it can also manufacture its own snacks item as the company name is known almost all over the world. So it can cash the name by producing the items, which are eaten with the beverages. (

12. PESTLE Analysis of Coca Cola:

PESTLE stands for Political, Economic, Social, Technological, Legal and Environmental. It is a tool that helps organizations for making strategies and to know the External environment in which the organization is working or going to work in future. ( Business) 12.1. Political factors: Government Regulations


Coke is not usually affected by government regulations & deregulations as no major changes occur in the food laws. It is monitoring the policies and regulations set by the government. There are no political issues in this instance. ( Environment friendly Coke is a very environmental friendly product. From the caps till the labels on the PET bottles, everything is recyclable. Environmental protection laws they somewhat effect the industry of Coke. From last two years Government is going to be really very much conscious about the environment. But after making the adjustments in plants and applying the proper way of wastage the chances of being affected by the protection laws are going to be diminished. So it impact good for the Cokes reputation. ( Currency Devaluation Depreciation of currency generally has no major effects on Coke they really dont do imports& exports on large scale. They try to be local market oriented, they keep at least one company owned plant in a country. ( Foreign Trade regulations Sudden changes in political conditions in a certain country doesnt effect much on Coke, as it is a purely consumer product. Pressure groups tried to de-market Coke in Pakistan by spreading the rumors that the revenue collected from coke goes to the Jewish lobby. The company has no problem from doing business in Pakistan, because of GATT rules and government is also supporting FDI inflow in Pakistan. ( Elections & Military takeover Another political variable which effects Coke is elections & military takeover Because in the days of elections and marshal laws condition the countries production in any field is declined. So it affects slightly the revolution of Coke.So political conditions are over all leave neutral effects on cokes industry ( 35

12.2. Economic factors: These include Interest rates, Taxation changes, Economic growth, Inflation, Exchange rates Inflation Economic factors do affect a company in negative & positive manner. Coke is not an exception here, it is affected if there is inflation in the country & as a result coke increases its prices. Pepsi is always waiting to take a competitive edge. The increased price has a high negative effect on coke. It is a major threat in external environment for Coca cola because due to the instability, shortage of electricity they are not getting economies of scale. All these factors further leads to increase in sales taxes which cause increase in per unit output/ per bottle increase. ( Interest rates Interest rates are the rates imposed on the money borrowed by the company from the government. When there is increase in the interest rate it may stop the company to do further investment as the cost of borrowing is high. Coca cola use derivative financial instruments to cope up with fluctuating interest rates. Inflation and wage rate go hand in hand when there is increase in inflation, the employee demand for higher wage rate to cope up with the cost of living. ( Unemployment Coke has employed 1800 workers in the last two years & huge amount of revenues have been collected from Pakistan. The economy worldwide was disturbed by the incident of September 11th, 2001. ( Disposable income The disposable income of the people of Pakistan is decreasing day by day due to increase in the cost of expenditures such as increase in utility bills, petroleum and oil prices. Coke that was


thought as a luxury good is now becoming a necessity for some people who still have some income. ( 12.3Social factors Coke, a customer oriented company, always take steps for the welfare of its consumers. The recyclable products used in manufacturing coke helps save peoples environment. Coke is also helping the needy & knowledge seeking people with fewer resources by providing them books, scholarships & opportunities to work. Coke has launched a program in Gujranwala, Pakistan where it provides basic education to children. Coke has also launched programs to increase awareness about the conservation of water & natural resources, climate changes, waste environment education & recyclable products. ( 12.4. Technological factors Technology in any field is effecting the development of that industry at a high rate. Beverage industry is also affected by the technological factors but in a positive manner. The new methods of filling the bottles, the refrigeration methods, the disposable bottles, the PET bottles all made so many changes to the Coke which is one of the giants in the beverage industry. Coke is adopting all the new technologies available. Coke is being supplied with the refrigerators, coolers & many more for keeping the bottles chilled, as they claim in the subcontinent "thanda matlab Coca Cola". Cola Company got the technology of dispensers so they give Coke to people that is as fresh from the fountain. Coca Cola Company has chosen the technology for the usage of PET bottles, which are also environmental friendly. Coca Cola Company chose the recycling method to keep its environment clean & also to have the soft corner in people's heart. Coca Cola Company is producing new packaging sizes with differentiated packaging with the help of new technology everyday. In Pakistan, advancements in automation and information technology have posed the challenging situation for the organizations in future. Coca cola is not facing as such tough situation from Pakistan especially in technological environment. Actually coca cola adopt its own technical


knowhow, technical procedures and equipments all over the world for maximum output. The technical progress in Pakistan especially in IT sector would bring positive impact on coca cola. ( 12.5. Legal Factors In recent years, in UK there have been many significant legal changes that have affected organizations behavior. The introduction of age discrimination and disability discrimination legislation, an increase in the minimum wage and greater requirements for firms to recycle are examples of relatively recent laws that affect an organizations actions. Legal changes can affect a firm's costs (e.g. if new systems and procedures have to be developed) and demand (e.g. if the law affects the likelihood of customers buying the good or using the service).They perform thorough study of legal and political problems to decide to enter into any country. They track the previous record of the ruling party and policies. They also keep in mind the attitude of other opposition parties about foreign companies. If any problem arises regarding political or legal issues, they dont sacrifice their policies and secrecies, as we have a case of COKE AND INDIAN GOVERNMENT. When Indian Government asked for formula of concentrate,they deny and left the huge Indian market. ( 12.6. Environmental Factors Environmental factors include the weather and climate change. Changes in temperature can impact on many industries including farming, tourism and insurance. With major climate changes occurring due to global warming and with greater environmental awareness this external factor is becoming a significant issue for firms to consider. The company is in the process of setting specific global targets, in addition. The company has worked hard to advance community recycling programs; they know that public education is a key to preventing litter. Coca Cola system supports numerous litter prevention and community beautification organizations around the world, including Keep Australia Beautiful in Australia, the Tidy Britain Group in Great Britain and Keep America Beautiful in the United States. In2007, the company invested in designing and producing sustainable fashion apparel made from recycled PET bottles. The Tshirts are made from a blend of recycled PET bottles and cotton and feature playful slogans such as Make Your Plastic Fantastic and Rehash Your Trash. Coca-Cola launched their sustainable fashion line of apparel and consumer products at the new World of Coca-Cola in Atlanta, Georgia. 38


13. QSP Matrix Of Coca Cola:

Quantitative Strategic Planning Matrix


Internal External Factor


Introduce New Product


Strength 1. Brand equity/image distribution & and 0.08 0.10 0.10 0.12 0.08 recognition 2. Product

AS 3.00 3.00 3.00 4.00

TAS 0.24 0.30 0.30 0.48 0.00

AS 4.00 3.00 4.00 4.00 2.00

TAS 0.32 0.30 0.40 0.48 0.16

worldwide network 3.Solid Financial performance 4. One of the world's most recognized brand 5. Product diversification (water, juices, soft drinks, sport drinks, etc) 6. Corporate identity Weaknesses 1. Credit rating 2. Customer concentration,





0.10 0.10

1.00 1.00

0.10 0.10

2.00 2.00

0.20 0.20

particularly in the US (Wal-Mart accounts for more than 10% of Coca Cola's business in the US) 3. A lot of loyal Pepsi customers are not enough loyal Coca Cola 0.08 2.00 0.16 0.00 customers 4. Does not enjoy the number one position in India, Pakistan Opportunities 1. Possible growing demand 2. Expansion Reaching all segments. 3. Globalization 4. Catering to Health Consciousness of People 40 5. Bottled water growth 6. Acquisitions of smaller players. 0.12 0.06 0.11 0.12 0.13 0.06 1.00 1.00 2.00 3.00 2.00 0.24 0.18 0.22 0.00 0.13 0.06 3.00 1.00 2.00 1.00 1.00 0.00 0.18 0.11 0.24 0.13 0.06 0.08 0.00 0.00

14. Pricing strategy:

The price of Coca Cola, despite being market leader is the same as that of its competitor Pepsi Cola. Sometimes, Pepsi places its customers into some psychological pricing strategies by reducing a high priced bottle and consumers think that they save a lot of money from this. 14.1. Pricing Strategy Competition Based Coca Cola has intense competition with Pepsi so its pricing cant exceed too much nor decrease too much as compared to the price of Pepsi Cola. If price of the Coca Cola exceed too much from the Pepsi then people will shift to the Pepsi Cola and on the other hand if the price of Coca Cola decreases people might get the impression that its quality is also low. Promotional pricing strategy Coca Cola has offered promotional prices very frequently. Especially on some occasion, Coca Cola reduces its rates like in Ramzan Coca Cola reduces its rate unto 5 Rupees on 1.5 liter bottle. Market pricing policy Prices in beverage industry are determined by the consumer. In an economy like that of Pakistan, consumers tend to switch towards a low priced product. Coca Colas objective is to target every consumer of the country so Coca Cola has to set its prices at such a level which no one can offer to its consumers. That is why Coca Cola charges the same prices as are being charged relatively high price. by its competitors. Otherwise, consumers may go for Pepsi Cola in case of availability of Coca Cola at

15. Conclusion:


The soft drink industry is focused on the battle for supremacy of the two companies. The battle of the two companies gives life to the industry. The goal of Coca Cola is to produce growth for the company. It intends to not only reinvigorate the company but inspire the people working for them. Coca-cola strength is the international popularity it has. I have concluded from this detailed report that despite the fact Coca Cola currently occupies the market leadership position overall but it does not guarantee that the company will sustain its position in the future as well. In Pakistan as compared to Pepsi, Coca-Cola has less number of consumers as Pepsis market share in Pakistan is approximately 54% where as Coke market share is hovering about 36%, hence the conclusion is that Coca-Cola must enhance factors such as relationship marketing, innovation and technology especially in Pakistan to attain market leader position in this region as well. Opportunity for the company is to create products that can give not only satisfaction to clients but health benefits as well. An opportunity for the company is to find out more ways to give a distinctive taste to their product. Lastly an opportunity for the company is to reach newer territories where it can offer its products and services. Coca Colas strength of the company is the strong brand name it has. Furthermore strength of the company is the effective advertising it uses. Lastly, strength of Coca Cola is its website that is easy to use, attractive, and informative. The main weakness of the company is the health issues when as far as their product is concerned. A weakness of the company is its inability to restrict certain age from using their product. Lastly, a weakness of the company is it not being able to separate from other beverage companies. It needs to use its internal strength to develop a market penetration strategy and market development strategy. Further company should integrate with other companies, acquisition of potential profitability. competitor businesses, innovation in branding and aggressive marketing strategy can bring long term

16. Recommendations:

After completing our project I have come up with following recommendations for the coca cola company, which are following. Currently in Pakistan there are only two flavor of coke available, company can extend their portfolio by introducing new flavors. According to the survey, conducted by the international firm Pakistani people like less sweet cola drink. So for this Coca-Cola Company should think about bringing a new product for example new diet flavors, in the market to fulfill the local need. Marketing team should try to increase the availability of Coke in rural areas. Now young generation has a trend to drink coke 2 regular bottles at same time, so providing more satisfaction to them company should introduce liter disposable bottle. Coca Cola Company should think about producing Coke Can locally as well because currently coke Cans are only smuggled from abroad and sold at high price. Company can capitalize on this factor. Currently two plants of coke are being run under private companies; one is in Peshawar and other in Rawalpindi. Company should plan to buy these plants as well so that customers can get equally good quality all over the country. This will help company to maintain quality control. The company to increase profitability and occupancy must first add new methods to advertise itself to people. The company can make additional use of TV and newspaper adv ertisements to showcase its products to people as well as to show the effect of the use of their product to people. The company can also use more internet advertisements. They can collaborate with internet companies and post advertisements and reminders on other companies site. This may cause the company more finances but it may help the company in increasing its profits. The company should also increase its knowledge of communicating with international clients to increase the companys companionship with them. The companys relationship with international clients is important because the international clients are the one that can make the international expansion successful or it can make it fail.


( ( ( Education MBA) ( ( ( ( ( Business) ( ( Beverages) ( QSPM)