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COCA COLA
FINAL
PROJECT OF
STRATEGIC
MANAGEMENT Phase 1 – Introduction, Phase 2 –
External Analysis of Coca Cola Beverages
Pakistan, Phase 3 – Internal Analysis:
Organizational Perspective, Phase 4 – Gap
Analysis & Recommendations
COCA COLA COMPANY
COCA COLA FINAL PROJECT OF STRATEGIC MANAGEMENT
1
Table of Contents
1 Phase 1 – Introduction .................................................................................................. 4
1.1 Introduction of a Company ................................................................................... 4
1.1.1 Brief History .................................................................................................... 4
1.1.2 International / National Introduction ............................................................... 6
1.2 COCA COLA BEVERAGES PAKISTAN LIMITED ......................................... 7
1.2.1 Vision, Mission, Core Values, Goals .............................................................. 9
1.2.2 Nature of Business ........................................................................................ 12
1.2.3 Type of Ownership ........................................................................................ 12
1.2.4 Identify Key Players and Roles ..................................................................... 12
1.2.5 Organizational Hierarchy .............................................................................. 21
1.2.6 Location(s) of Facility ................................................................................... 24
1.2.7 Number of Technical Employees .................................................................. 25
1.2.8 Products / Services (single product) .............................................................. 27
2 Phase 2 – EXTERNAL ANALYSIS OF COCA COLA BEVERAGES PAKISTAN
31
2.1 Natural Environment: .......................................................................................... 31
2.1.1 Natural Resource Coca Cola need ................................................................. 31
2.1.2 Present and Future needs of Natural Resources ............................................ 31
2.1.3 International Arrangement of Water ............................................................. 34
2.1.4 Issues they face during arranging and managing .......................................... 36
2.2 Task Environment: Porter’s 5 Forces Model ...................................................... 38
2.2.1 When (situation), Why (objective / reasons), How (process), who
(participants), Issues faced .................................................................................................... 38
2.2.2 In what format they collected the data of Porter’s Analysis ......................... 38
2.2.3 What benefits they get from conducting PORTER’s Analysis ..................... 38
2.3 Societal Environment: PESTEL Analysis ........................................................... 60
3 Phase 3 – Internal Analysis: Organizational Perspective ........................................... 65
3.1 Vision / Mission / Core Values (discuss separately) ........................................... 65
COCA COLA FINAL PROJECT OF STRATEGIC MANAGEMENT
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3.1.1 Vision ............................................................................................................ 65
3.1.2 Mission .......................................................................................................... 66
3.1.3 Core Values ................................................................................................... 67
3.2 Organizational Policies ....................................................................................... 68
3.2.1 CLIMATE CHANGE POLICY .................................................................... 68
3.2.2 CODE OF BUSINESS CONDUCT(INTEGRITY IN THE COMPANY) ... 69
3.2.3 GUIDANCE FROM CORE COMPLIANCE OFFICER ............................. 70
3.2.4 ENVIRONMENTAL POLICY ..................................................................... 74
3.2.5 HUMAN RIGHTS POLICY ......................................................................... 75
3.2.6 POST-CONSUMER PACKAGING WASTE MANAGEMENT POLICY
STATEMENT ....................................................................................................................... 77
3.3 Organizational Culture ........................................................................................ 78
3.3.1 How Policies and Core Values are helping in developing culture in their
organization (examples) ........................................................................................................ 78
3.3.2 What Factors are Influencing their culture and How .................................... 79
3.3.3 Through what method(s) keep the culture alive ............................................ 81
3.4 Organizational Structure ..................................................................................... 81
3.4.1 Degree to which organizational design elements exit in company structure 81
3.5 Core competencies .............................................................................................. 83
3.5.1 What are the company-wide core competencies ........................................... 83
3.5.2 Which and How capabilities are linked with each core competency ............ 83
3.5.3 Which and How resources are linked with each capabilities ........................ 83
3.5.4 On the basis of market analysis (Phase 2), evaluate each core competency
through 4 Criteria Matrix ...................................................................................................... 84
3.6 Coca - Cola Porter's Value Chain Analysis ......................................................... 85
3.6.1 Inbound Logistics .......................................................................................... 85
3.6.2 Operations ..................................................................................................... 85
3.6.3 Outbound Logistics ....................................................................................... 86
3.6.4 Sales and Marketing ...................................................................................... 86
3.6.5 Service ........................................................................................................... 86
3.7 Strategic Objectives............................................................................................. 87
COCA COLA FINAL PROJECT OF STRATEGIC MANAGEMENT
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3.7.1 WE FOCUSED ON DRIVING REVENUE AND PROFIT GROWTH ...... 89
3.7.2 WE INVESTED IN OUR BRANDS AND BUSINESS ............................... 89
3.7.3 WE BECAME MORE EFFICIENT ............................................................. 90
3.7.4 WE SIMPLIFIED OUR COMPANY ........................................................... 90
3.8 Current Strategies (to achieve above objective) (combination of strategies / single
strategy for each objective) ....................................................................................................... 91
3.8.1 Corporate Level Strategies ............................................................................ 91
3.8.2 Business level strategies ................................................................................ 92
3.8.3 Functional level strategies ............................................................................. 93
3.8.4 Financial Strategies ....................................................................................... 94
3.9 Identify Rival Firms: PepsiCo ............................................................................. 96
3.9.1 PepsiCo’s Strengths (Internal Strategic Factors) .......................................... 96
3.9.2 PepsiCo’s Weaknesses (Internal Strategic Factors) ...................................... 97
3.9.3 Opportunities for PepsiCo (External Strategic Factors) ................................ 97
3.9.4 Threats Facing PepsiCo (External Strategic Factors) ................................... 97
3.9.5 Objectives of PepsiCo ................................................................................... 98
3.9.6 PepsiCo’s Generic Strategies ........................................................................ 98
3.10 SWOT Analysis................................................................................................. 100
4 Phase 4 – Gap Analysis & Recommendations ......................................................... 102
4.1 External Analysis .............................................................................................. 102
4.2 Internal Analysis ............................................................................................... 110
COCA COLA FINAL PROJECT OF STRATEGIC MANAGEMENT
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1 Phase 1 – Introduction
1.1 Introduction of a Company
1.1.1 Brief History
Coca-Cola originated as a soda fountain beverage in 1886 selling for five cents a glass.
Early growth was impressive, but it was only when a strong bottling system developed that
Coca-Cola became the world-famous brand it is today.
As a part of its drive to enhance the quality, availability, and image of Coca-Cola
products, The Coca-Cola Company established a new Company in Pakistan in 1996, by the
name of “Coca-Cola Beverages Pakistan Limited” (CCBPL or Company).
CCBPL is a part of Coca-Cola İçecek which is sixth largest KO bottler in the World. It
has a presence in ten countries including Turkey, Kazakhstan, Kyrgyzstan, Azerbaijan, Jordan,
Iraq, Turkmenistan, Tajikistan, Syria, and Pakistan. CCI has 48% shares of CCBPL with
Management Control.
CCBPL started the process of acquiring and investing in locally franchised bottling
operations. This process was completed in 2006 and, thereafter, all manufacturing and selling
rights of Coca-Cola products are now with CCBPL.
CCBPL has 6 plants and 13 warehouses throughout the country and serves a population
of more than 170 million with a production capacity of 111 million physical cases. CCBPL is
a significant player in the growth of Pakistan’s economy since it is one of the country’s top
foreign direct investments in FMCG (Fast Moving Consumer Goods) business and is one of
the major tax paying beverages companies of Pakistan.
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Type Cola
Manufacturer The Coca-Cola Company
Country of origin United States
Introduced May 8, 1886; 130 years ago,
Color Caramel E-150d
Flavor Cola
Variants
New Coke (discontinued)
Diet Coke
Caffeine-Free
Diet Coke Caffeine-Free
Zero
Cherry
Lemon (discontinued)
Vanilla
Lime
Raspberry (discontinued)
Black Cherry Vanilla (discontinued)
Blāk (discontinued)
Citra
Orange
Life
C2 (discontinued)
Related products
Pepsi
Irn-Bru
RC Cola
Afri-Cola
Postobón
Inca Kola
Kola Real
Cavan Cola
Website www.coca-colacompany.com
COCA COLA FINAL PROJECT OF STRATEGIC MANAGEMENT
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1.1.2 International / National Introduction
Coca-Cola (often referred to simply as Coke) is an American carbonated soft drink
produced by The Coca-Cola Company in Atlanta, Georgia, United States. Originally intended
as a patent medicine, 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 drink's name refers
to two of its original ingredients, which were kola nuts (a source of caffeine) and coca leaves.
The current formula of Coca-Cola remains a trade secret, although a variety of reported recipes
and experimental recreations have been published.
The Coca-Cola Company produces concentrate, which is then sold to licensed Coca-
Cola bottlers throughout the world. The bottlers, who hold exclusive territory contracts with
the company, produce the finished product in cans and bottles from the concentrate, in
combination with filtered water and sweeteners. A typical 12 oz. (355 ml) can contains 38g of
sugar (usually in the form of high fructose corn syrup). The bottlers then sell, distribute and
merchandise Coca-Cola to retail stores, restaurants and vending machines throughout the
world. The Coca-Cola Company also sells concentrate for soda fountains of major restaurants
and food service distributors.
The Coca-Cola Company has on occasion introduced other cola drinks under the Coke
name. The most common of these is Diet Coke, with others including Caffeine-Free, Diet Coke
Caffeine-Free, Cherry, Zero, Vanilla and special versions with lemon, lime and coffee. Based
on Interbrand's best global brand study of 2015, Coca-Cola was the world's third most valuable
brand. In 2013, Coke products were sold in over 200 countries worldwide, with consumers
downing more than 1.8 billion company beverage servings each day.
COCA COLA FINAL PROJECT OF STRATEGIC MANAGEMENT
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1.2 COCA COLA BEVERAGES PAKISTAN LIMITED
Coca-Cola established its facilities in Pakistan in 1953. It operates locally within
Pakistan. Its products are produced locally, thus providing employment to hundreds of
Pakistani residents. The company focuses its marketing and advertising specifically to
Pakistani tastes and cultures. Coca-Cola Beverages Pakistan Limited’s (CCBPL) major
shareholder is Turkey’s Coca-Cola Icecek (CCI). CCI is currently bottling and distributing
alcohol-free beverages in Pakistan along with 9 other countries.
With Coca-Cola’s introduction, the following products of the company came along:
Fanta
1965
Sprite
1972
Diet Coke
2001
Fanta Lemon
2001
Besides these, Sprite Zero, Rani Float and Kinley Bottled water are also in company’s
product portfolio. The company’s bottling plant is located in Pakistan in different regions,
including Karachi and Islamabad. Its local office is also engaged in the marketing and
advertising activities related to its products across Pakistan.
After arriving in Pakistan, Coca-Cola was bottles and distributed via independent
franchisees. In 1996, Coca-Cola took the initiate to consolidate and acquire all the bottling
plants and operate hem under the company’s own supervision. This process of acquisition was
completed in 2006 and CCBPL became the only organisation responsible to bottle and
distribute Coca-Cola products across Pakistan. CCBPL ensures that quality products are
COCA COLA FINAL PROJECT OF STRATEGIC MANAGEMENT
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delivered to its customers. This includes investment in the market, customer development,
timely order and cash collections. By 2013, CCBPL has 6 bottling plants and 13 warehouses
operating across Pakistan thereby serving its 180 million population via its vast distributors
and retailers.
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1.2.1 Vision, Mission, Core Values, Goals
Vision Statement
Be the outstanding beverage company leading the market, inspiring
people, adding value through excellence.
Mission Statement
Build a sustainable and profitable business through refreshing
consumers, partnering with customers, delivering superior value to
shareholders and being trusted by communities.
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Core Values
Our Core Values underlie everything we do. We live by them for two
reasons; they are good and right in themselves, worthy of adherence even at
the risk of loss of profit-making opportunities, and they epitomize our
Company’s integrity, which we believe will produce value for our stakeholders
over the long term.
1. Accountability We act with high sense of responsibility and hold ourselves
accountable.
2. Passion We put our hearts and mind into what we do.
3. Integrity We are open, honest, ethical and we trust and respect each other
4. Teamwork We collaborate for our collective success
COCA COLA FINAL PROJECT OF STRATEGIC MANAGEMENT
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COCA COLA GOALS
1. People and Organizational Leadership
2. Build a highly capable organization and be the employer of choice
3. Commercial Leadership
4. Profitably deliver superior value to consumers & customers at the
optimal cost to serve
5. Supply Chain
6. To be the best in class consumer demand fulfillment organization that
exceeds customer expectations highest in quality, lowest in cost, in a
sustainable, socially responsible manner
7. Operational Excellence
8. Create a culture of Operational Excellence to support continuous
improvement of our business process and systems
9. Sustainability
10. Ensure the long-term viability of our business by being proactive and
innovative in protecting the environment and be recognized as one of
the most responsible corporate citizens by all stakeholders
COCA COLA FINAL PROJECT OF STRATEGIC MANAGEMENT
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1.2.2 Nature of Business
The Coca-Cola Company is an American historical multinational beverage corporation
and manufacturer, retailer, and marketer of nonalcoholic beverage concentrates and syrups,
which is headquartered in Atlanta, Georgia.
1.2.3 Type of Ownership
Coca Cola Operates as PUBLIC LIMITED COMPANY within Pakistan.
1.2.4 Identify Key Players and Roles
1.2.4.1 General Manager
RIZWAN ULLAH KHAN
Pakistan & Afghanistan Region
Rizwan Ullah Khan is currently the General Manager of
The Coca-Cola Export Corporation, Pakistan & Afghanistan, a
position he has held since September 2005. He joined the Company
in 1996 and served in several different business functions during
his early career, including Operations, Marketing, Customer
Services and Public Affairs and Communications (PA&C).
Over the years Mr. Khan has steered the transformation of
Coca-Cola Pakistan into one of the leading socially responsible
organizations in the country, by forging strong partnerships with
local communities, NGOs and government agencies. Under his
leadership, the Company has carried out several successful
interventions in the fields of education, environment preservation and
water stewardship, livelihood creation, women empowerment and youth development.
Rizwan Ullah Khan was a key catalyst in the formation of the American Business Forum,
an association of leading US organizations in Pakistan, which he currently also heads as its
President. Mr. Khan holds a degree in Management from Hiram College, Ohio, USA. He is married
with three children and lives in Lahore with his family.
COCA COLA FINAL PROJECT OF STRATEGIC MANAGEMENT
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1.2.4.2 Director, Public Affairs & Communications
FAHAD QADIR
Pakistan& Afghanistan Region
Fahad Qadir is currently working as Region Public
Affairs & Communications Director for Pakistan &
Afghanistan Region, based at the head office in Lahore.
Pakistan. He has been with the Company for nearly 6 years
and leads stakeholder engagement on an ongoing basis with
the government, media, social groups (NGOs) and others. He
also manages the corporate & brand PR strategy and the
company's CSR programmer.
Before joining Coca-Cola, Fahad was working with the
prestigious Lahore University of Management Sciences
(LUMS) as Senior Marketing Office, primarily looking after
marketing of University programs in Central and South Asian
countries. Earlier to this, he worked with the Din Media Group,
responsible for devising strategies for new products and Group’s communication.
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1.2.4.3 LEGAL COUNSEL
HASAN SHAMEEM
Pakistan & Afghanistan Region
Hasan joined The Coca-Cola Company just recently
this year as the legal counsellor and he is responsible to
maintain Company’s compliance with local and international
laws, policies and to safeguard legal claims made by The
Coca-Cola Company in Pakistan & Afghanistan
region. He graduated from University of Bristol in 2007 after
completion of degree in LLB, and worked as legal counsellor
in food and telecommunications industry for around 7 years.
After his previous experience with the top-notch food
and telecommunications companies, he always wanted to
work for an organisation that could still prove to be a
milestone in my professional career, and Coca-Cola has
proven to be the ideal place to nurture his professional
outlook towards legal affairs. He is as an integral part of The
Company today, considering the extensive and crucial parameters of legal affairs entailed in its
operations. He is the firefighter of The Company. His work needs attention to detail and there is
no room for mistakes. To maintain such a decorum, Hasan makes sure that he doesn't panic and
always think logically to resolve matters.
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1.2.4.4 Region Finance Manager
KALEEM FAZAL
Pakistan & Afghanistan Region
Kaleem Fazal joined the Company in 2003 as a
Financial Analyst for the Pakistan office. Over the course of
11 years, Mr. Fazal has been an instrumental part of the
finance team for the MENA region. He was Budgeting and
Reporting Manager based in Middle East where he was
looking after 24 countries and 25 bottlers.
Kaleem is currently the Region Finance Manager for
Pakistan & Afghanistan. During his career, he has been
involved in multifarious responsibilities principally focusing
on sustainable system profit growth, value chain analysis,
profitability analysis, marketing analysis and development of
new categories (juices and energy).
He has played a pivotal role for tax lobbying which
resulted in system savings of $16m in 2011, $32m in 2012 and
$15m in 2013. Prior to his experience at Coca-Cola, Kaleem worked with Honda Fort and PwC
Pakistan.
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1.2.4.5 Technical Services Manager
QASIM MAHMOOD
Pakistan & Afghanistan Region
Qasim joined the Company in 1999 as
Quality Programs Manager covering Pakistan,
Iran and Turkmenistan and moved to QA
Manager for Southern Eurasia BU and reached
Senior QEOSH Manager for Pakistan&
Afghanistan.
During his QSE career, Qasim was
involved in several other technical functions
because of the job demand. He handled
commercialization, packaging, CDE and
launched OE in Pakistan. He was a leading
member in the team that established the business
in Afghanistan and he contributed a lot to building
the capabilities of toll fillers in Pakistan. He also contributed to starting the HF juice and packaged
water businesses in Pakistan & SE from QSE as well as manufacturing angles.
Prior to his experience at Coca-Cola, Qasim has worked in the industry of pulp & paper,
polyester & soda ash and petroleum& gas sector covering R&D, plant operations and projects.
Qasim holds a double degree in Chemical Engineering & MBA.
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1.2.4.6 Director, Franchise & Commercial & Corporate Leadership
RAZA AHMED
Pakistan & Afghanistan Region
Raza Ahmed has been part of the Coca-Cola
System for more than eleven years. Raza joined as
Business Planning & Treasury Manager, Coca-Cola
Beverage Pakistan Limited (CCBPL) and later was
also overlooking sales.
As a career broadening assignment, Raza was
moved to TCCEC, PAR, where he was primarily
responsible for driving volume and business growth,
developing and leveraging operational capabilities in
Pakistan & Afghanistan, driving commercial and
franchise leadership initiative and supporting
marketing in developing and executing marketing
plans. Raza has played an instrumental role in
driving TCCEC’s volume and sales and managing to
reach 207 MUC in FY 2013.
Raza has a vast experience in marketing, IT and
Engineering. Raza holds a degree from University of New Jersey in Industrial Engineering.
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1.2.4.7 HR-Strategic Business Partner
FAISAL HASHMI
Pakistan & Afghanistan Region
Faisal Hashmi joined Coca-Cola System in 2000, as
Country HRD / IR Manager at CCBPL, he had successfully
managed smooth Employees & Industrial Relations
including close interaction with local unions and IUF as
well.
Currently, as HR-Strategic Business Partner Faisal
looks after the HR function for both TCCEC as well as CPS
and supports Afghanistan bottler’s HR function.
Faisal is playing an integral role in developing KO
associates through various trainings, feedback and
mentoring. He is also responsible of inculcating a great
work environment, during 2013 TCCEC, PB won “4th
Global HR Excellence Award” organized by Global Media
Links, Pakistan.
Under Faisal’s leadership, Pakistan has managed to maintain a consistent EIS Engagement
Score > 80 at TCCEC Region Office and > 95 at CPS Plant. Prior to working with the Coca-Cola
system, Faisal worked with Intercontinental Hotels & Kentucky Fried Chicken. Faisal holds a MS
Degree in Human Resource Management and Commerce Degree major in Finance.
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1.2.4.8 Director Marketing
ALI AKBAR
Pakistan & Afghanistan Region
Syed Ali Akbar joined TCCEC, PAR
in August 2012 as Marketing Director. Ali has
played a pivotal role in thought leadership of
our campaigns. Under his vision, TCCEC, PB
won the Best Show in Class, Marketing
Excellence Award. Ali is primarily responsible
for innovative marketing campaigns, driving
brand love score and launching new beverage
products.
Ali has a vast experience in marketing.
He was the Vice President, Marketing &
Global Business Unit at Engro Foods Limited
and Vice President of Engro Corporation
Limited. Where he was primarily responsible
for marketing and business development aspects of
the Company.
Prior to Engro, Ali has worked with Coca-Cola Company, British American
Tobacco and Unilever Best Foods, on various business development and brand building
assignments.
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1.2.4.9 Senior Quality Environment Occupational Safety & Health (QEOSH) Manager
ATIQUE KHAWAJA
TCCEC Pakistan & Afghanistan in 2014
Atique’s last 3 years’ assignment
as National QA Manger was with our
bottling partner, CCBPL in Pakistan.
Under his leadership and the efforts of
CCBPL Team, the highest ever Product &
Package Q.I. and Lowest Ever Consumer
Complaints in CCBPL history were
achieved. In addition, Atique introduced
to Quality Management of RGB &
Fountain categories in processes and
feedback mechanism.
Before CCBPL; Atique was the factory manager of Najran Mineral Water Co. in
Saudi Arabia for 4 years and ended his job there with a remarkable promotion to General
Manager Position. He built his Saudi success on another 4 years of experience with Nestle
S.A. in Pakistan where he started as Industrial Engineer and was promoted to Industrial
Performance Manager. His Nestle experience involved manufacturing, SAP modules and
staff training.
All the above was built on 11 years of work in QA & SRA with The Coca-Cola
Company, SWA Region. Atique is a qualified TCCC Auditor and has trained over 200
manufacturing & Quality Assurance staff.
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1.2.5 Organizational Hierarchy
1. What type of organizational structure does Coca-Cola have?
The Coca-Cola Company has a Separate International Division Structure
because its international staffs operate separately and in isolation from head office. It
has various divisions in all continents around the world with presidents that control
each continental division. Coca-Cola has 5 continental divisions.
Eurasia & Africa Group
Europe Group
Latin America Group
North America Group
Pacific Group
Each Continental division has vice presidents that control sub-divisions based on regions
or countries. This structure is efficient for Coca-Cola since it is a very large company.
World
Eurasia & Africa
Pakistan
North
America
Europe Pacific Latin America
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2. How do they operate?
Coca-Cola is as an ethnocentric MNC because its domestic operations are very
like its international operations. Regardless of the country or region, Coca-Cola
operates the same way and sells the same brand and type of soft drink. The company
has tight control over its operations from head office.
Country Manager
GM (SBU)
Karachi
Multan
RYK
GM (CBU)
Lahore
Gujranwala
Faisalabad
RawalPindi
Peshawar
COCA COLA FINAL PROJECT OF STRATEGIC MANAGEMENT
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1.2.6 Location(s) of Facility
Want to know more about your local Coca-Cola beverage and service
provider?
COCA COLA FINAL PROJECT OF STRATEGIC MANAGEMENT
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1.2.7 Number of Technical Employees
Employees as of December 31, 2015 and 2014, Coca Cola Company had approximately
123,200 and 129,200 employees, respectively, of which approximately 3,300 and 3,800,
respectively, were employed by consolidated variable interest entities (“VIEs”). The decrease
in the total number of employees in 2015 was primarily due to the refranchising of certain
territories that were previously managed by CCR to certain of the Company’s unconsolidated
bottling partners. As of December 31, 2015, and 2014, Coca Cola Company had approximately
8,000 and 15,000 employees, respectively, located in the Pakistan, of which approximately
500 were employed by consolidated VIEs in both years. Our Company, through its divisions
and subsidiaries, is a party to numerous collective bargaining agreements. As of December 31,
2015, approximately 7,000 employees, excluding seasonal hires, in North America were
covered by collective bargaining agreements. These agreements typically have terms of three
years to five years. We currently expect that we will be able to renegotiate such agreements on
satisfactory terms when they expire. The Company believes that its relations with its
employees are generally satisfactory.
COCA COLA FINAL PROJECT OF STRATEGIC MANAGEMENT
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1.1.1.2 Total Employees (Gender Wise)
1.2.8 Products / Services
(single product)
1.2.8.1 Intro
The Coca-Cola
Company is the world’s largest
beverage company. Coca-Cola Company own or license and market more than 500 non-alcoholic
beverage brands, primarily sparkling beverages but also a variety of still beverages such as waters,
enhanced waters, juices and juice drinks, ready-to-drink teas and coffees, and energy and sports
drinks. Coca-Cola Company own and market four of the world’s top five non-alcoholic sparkling
beverage brands: Coca-Cola, Diet Coke, Fanta and Sprite. Finished beverage products bearing our
trademarks, sold in the United States since 1886, are now sold in more than 200 countries. Coca-
Cola Company make branded beverage products available to consumers throughout the world
through our network of Company-owned or -controlled bottling and distribution operations as well
as independent bottling partners, distributors, wholesalers and retailers — the world’s largest
beverage distribution system. Beverages bearing trademarks owned by or licensed to us account
for more than 1.9 billion of the approximately 58 billion servings of all beverages consumed
worldwide every day. Coca-Cola Company believe their success depends on their ability to
connect with consumers by providing them with a wide variety of options to meet their desires,
needs and lifestyles. Coca-Cola Company success further depends on the ability of their people to
execute effectively, every day. Coca-Cola Company goal is to use their Company’s assets — their
brands, financial strength, unrivalled distribution system, global reach, and the talent and strong
commitment of their management and associates — to become more competitive and to accelerate
growth in a manner that creates value for their shareowners. Coca-Cola Company were
incorporated in September 1919 under the laws of the State of Delaware and succeeded to the
business of a Georgia corporation with the same name that had been organized in 1892.
The company has the widest portfolio in beverage industry comprising of 3300 products.
Beverages are divided into diet category, 100% fruit juices, fruit drinks, water, energy drinks, tea
COCA COLA FINAL PROJECT OF STRATEGIC MANAGEMENT
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and coffee etc. As per Nielson’s data, Coca cola is the No.1 brand in sparkling beverages, juice,
and retail packaged water in 2010. Coca cola has its market presence around 200 countries.
Coca Cola Beverages Pakistan has a very narrow product range. It has the following brands
in Pakistan.
Coca Cola
These products are sold in the market in different sizes of bottles. These sizes are available
for all its products.
250ml
250 ml (Non-Returnable)
300ml
1 liter
5-liter pet
1.2.8.2 Segmentation:
Coca cola servers its products using mass marketing technique, which obviously falls
in undifferentiated marketing, and undifferentiated marketing means no segmentation, but
there are minor factors on which we can say that the coke segments its products and then
targets the customers somehow. These factors are as follows.
1. Geographic Segmentation:
Internationally:
Coke segments its products country wise and region wise, here the most
important thing is the taste and the quality, it varies according to the taste and
the income level of the people in that country, and i.e. Third world counties are
given low quality taste.
Climatic:
In coke marketing, main idea is to serve it cold, so we can say that, they
focus more on hot areas of the world, i.e. middle east etc. and there sale increase
in summer.
Locally:
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In Pakistan the coke segments more in urban and suburban areas as
compare to rural.
2. Demographic Segmentation:
Age:
Internationally coke has segments the small children introducing tastes
like vanilla, lime and cherry, they focus children from 4-12. Coke specifically
target more young people than older.
Family type:
Coke introduces its economy pack, and that’s how they focus family
and groups.
Income:
Coke segments different income levels by packaging. Like for small
income people it has small returnable glass bottle, for middle people it has non-
returnable bottle and for higher income people it has coke tin.
3. Psychographics Segmentation:
All psychographics variables the social class, lifestyle, occupation, level of
education and personality, coke segments everyone, but again it’s there packaging
which is different for different consumers.
4. Behavioral Segmentation
Occasions:
Thanks to the Coca-Cola Company for the warm welcome of Ramadan
that has become an identity of the culture of Pakistan. Over the year the
welcome of Ramadan has taken on mega proportions. Then coca cola has also
made our Eid festivals very special by giving us special discounts on these
prestigious occasions. Coca-Cola has special pricing strategies for thes3e
occasions. They also run special advertising campaigns to make these occasions
more special.
1.2.8.3 Pricing
Due to the availability of wide range products the pricing is done per the market and
geographic segment. Each sub-brand of coca cola has different pricing strategy. Their pricing
strategy is based on the competitors pricing; Pepsi is the direct competitor to coke. Beverage
COCA COLA FINAL PROJECT OF STRATEGIC MANAGEMENT
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market is said to be an oligopoly market (few sellers and large buyers), hence they form into cartel
contract to ensure a mutual balance in pricing between the sellers.
1.2.8.4 Distribution / Retailing
Coca Cola is the world’s most favorite brand and is available all over the world. The
distribution system of coca cola follows the FMCG distribution pattern. The effective distribution
network of coke has almost eroded the small and middle level players in the market. In Pakistan,
they have captured even the rural market by extensive distribution.
1.2.8.5 Marketing
Coca Cola adopts various advertising and promotional strategies to create an increased
demand in the market by associating with life style and behavior and mainly targeting value based
advertising. You are more likely to see a coke ad individualized for a festival or in with a general
positive message.
Coca-Cola uses the concept of aggressive advertising to promote its products. Thus,
advertising is the most important marketing tool for the company as it must cater mass consumer
markets. They mainly do national advertising. Company introduces different themes and
concepts to sell their product and advertises mainly in electronic media and out of home
advertising. These advertisements build brand image and create awareness. Big names of Indian
film industry mainly become the brand ambassadors of the Company. Throughout the years, the
slogans of the Coca-Cola have been memorable. For E.g. Thanda MATLAB Cola-Cola Jo chaho
ho jae Cola-Cola enjoy Coca-Cola-Piyo sir utha ke Brrrrrrr!!!
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2 Phase 2 – EXTERNAL ANALYSIS OF COCA COLA BEVERAGES
PAKISTAN
2.1 Natural Environment:
2.1.1 Natural Resource Coca Cola need
Coca Cola identify WATER and NATURAL AIR as their most used resources in the
production process.
2.1.2 Present and Future needs of Natural Resources
2.1.2.1 Water Stewardship Program National Arrangement & Management of Water
Coca-Cola Pakistan, believe that water is critical not just for survival but for overall
well-being of our global ecosystems and economies. Being a big consumer of water, it is our
duty to protect water resources. Coca-Cola Pakistan maintains a vast Corporate Social
Responsibility Portfolio, with special focus towards community building and water
stewardship, where projects are designed in a way to deliver exponential benefits by integrating
the ‘Me, We, World’ framework; individuals, communities and environment. Therefore, it’s
our mission to give back the equivalent of all the water that we use to communities and nature,
and we will continue to do so after we meet the 100 percent water replenishment goal.
In 2007 The Coca-Cola Company announced its Water Replenishment Goal which
focuses on being water neutral by the year 2020. 209 water stewardship projects were initiated
in a total of 61 countries. Pakistan remains one of these 61 countries, successfully supporting
towards water replenishment goals. The 2020 water replenishment goal involves returning
water to the environment and communities, as per the total volume of water used annually. In
2014 The Coca-Cola system consumed 300 billion liters of water to produce 160 billion liters
of beverages, and we successfully replenished 160 billion liters of water worldwide, based on
our 209 watershed projects. Supporting this goal, Coca-Cola Pakistan has been able to
replenish 782 million liters of groundwater since 2008 just through a single project with WWF
Pakistan in Ayubia National Park. This marks as the epitome of our success towards water
stewardship.
Coca-Cola is able to give back the amount of water equivalent to what it uses in its
finished beverages and their production through replenishment projects, increasing water use
efficiency in its plants, and returning water to watersheds and municipalities through
wastewater treatment. Part of meeting its replenishment goal is engaging in diverse, locally
focused community water projects. Each project works toward set objectives such as providing
or improving access to safe water and sanitation, protecting watersheds, supporting water
conservation and raising awareness on critical local water issues.
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Although Coca-Cola Pakistan serves nationwide, but every project needs a clear target
area and timeframe for specific deliverables. Our water replenishment projects are focused
majorly in provinces of KPK, Sindh and Punjab. Apart from Ayubia National Park, to name
few other projects we are serving in Gilgit, Karachi coastal areas like Kakapir and Soomer
village, and also Lahore Bedian.
To review our water stewardship and agriculture sustainability projects, take a look at
the info graphic:
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2.1.3 International Arrangement of Water
2.1.3.1 Goal
By 2020, improve water efficiency in manufacturing operations by 25 percent
compared with a 2010 baseline.
2.1.3.2 Progress:
On track. In 2015, we improved our water efficiency 2.5 percent, marking the first time
the Coca-Cola system has achieved a water-use ratio less than 2.0. This is a total improvement
of 12 percent since 2010 and 27 percent since 2004 when we started reporting efficiency
progress as a global system.
COCA COLA’s system wide
water efficiency has improved for 13
consecutive years. When they started
this journey in 2004, they were using
2.7 liters of water to make 1 liter of
product. That means that 1 liter of
water is in the product and another
1.7 liters is used in the manufacturing
process, mostly for keeping
equipment clean. Today, they’re
using 1.98 liters of water to make 1
liter of product and we’re working to
reduce it to 1.7 liters of water per liter of product (a 25 percent improvement) by 2020. But
what does that mean?
In 2015, we used about 300.19 billion liters of water to produce approximately 151.1
billion liters of product (e.g., Coca-Cola, Diet Coke and Coke Zero) that we sold to consumers
in more than 200 countries and territories around the world. That means 151.1 billion liters of
water goes into our products and to consumers. And we used 149.09 billion liters of water in
our manufacturing process to make that 151.1 billion liters of product in our operations.1 so,
that’s the definition of water efficiency – how much water it takes to make our product.
Our 2020 goal is aggressive. The good news is that we’re on track to meet our goal,
and in many parts of the world, we’re ahead of schedule. In fact, in the United States, Mexico,
South Pacific, Western Europe, and Turkey, we have bottling plants that are already using 1.7
liters of water, or less, to make a liter of product. Some are operating at as low as 1.4 liters of
water per liter of product. Our progress on water efficiency places us among the leading
companies in the beverage industry according to a recent benchmarking report by the Beverage
Industry Environmental Roundtable.
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2.1.3.3 Understanding Our Water Footprint
The key driver in improving our water efficiency is reducing or removing water use in
our manufacturing processes. Over the years we’ve made significant investments in new
technologies and operating procedures that replace or reduce water use in our manufacturing
operations. In order to expand on such improvements, we need to understand where water is
used and where we have opportunities for improvement.
Water foot printing—an approach to assess the total volume of water used to produce
a product—is helping us extend our view of how we use water across our manufacturing
processes and supply chain. Our studies have shown that around 80 percent of the total water
footprint of our products comes from our agricultural ingredient supply chain. As a founding
partner of the Water Footprint Network, we have worked with WWF, The Nature Conservancy
and others to assess the water embedded in our products, packaging and ingredients so we can
better understand the implications for our business, and work to reduce impacts.
In collaboration with The Nature Conservancy, we issued a report, Product Water
Footprint Assessments: Practical Application in Corporate Water Stewardship, exploring the
utility and practical application of the water footprint methodology for understanding our water
use throughout the value chain, and for identifying the impacts of that use and associated
response actions.
Water footprint studies were conducted related to the following Coca-Cola products
and ingredients:
Coca-Cola in a 0.5-liter PET bottle produced in the Netherlands;
Beet sugar supplied to Coca-Cola Europe’s bottling plants; and
Orange juice produced for the North American market.
The largest portion of the product water footprints assessed as part of these studies
came from the field, not the factory, which demonstrated significant opportunity to engage
more directly with our agricultural ingredient suppliers in advancing sustainable water use.
Guided in part by these assessments, to date, we have focused studies on the “blue,” green”
and “grey” water footprints of sugar beets, orange juice and Coca-Cola to help us pinpoint
potential sustainability impacts in specific growing regions.
Addressing the quantity of water used to grow our product ingredients is not enough,
we also need to address the impact of that use as well. Understanding impact is important,
because large water footprints can be sustainable in water-rich areas, while very small water
footprints might compromise sustainability in places where water is scarce. Gaining a clear
understanding of impacts makes good environmental sense and provides us with better
guidance for prioritizing areas of concern. Coca-Cola Europe has proposed a methodology for
water footprint sustainability assessments that considers impacts as well as water quantity.
Read more about it. Also, please see the section below and refer to the Sustainable Agriculture
section of our Sustainability Report for more details on our efforts with suppliers.
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2.1.4 Issues they face during arranging and managing
Greater efficiency in water use does not mean making less product. To the contrary,
they intend to reduce their water use ratio—the amount of water we use per liter of product
produced—while growing our business. Their goal, set in 2008, was to improve water
efficiency system wide by 20 percent by 2012, compared with a 2004 baseline. Despite an
expanding product portfolio and increased production levels, they have achieved that goal.
In 2011, they used 293.3 billion liters of water to make 135 billion liters of product, giving
them a water use ratio of 2.16 liters per liter of product.
We are not stopping there. We are developing a new goal for further improving our
water efficiency between now and 2020.
Looking across their system, their data show that the highest water use ratios are often
in developing markets, where water risks may be higher. One main reason: In developing
markets, refillable glass bottles make up a large percentage of their unit case volume, and
cleaning returned bottles demands more water. Even in those markets, their bottling plants
typically draw a small percentage of water from local water sources, and each plant’s source
water protection plan helps mitigate any threats to local water supplies.
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2.2 Task Environment: Porter’s 5 Forces Model
2.2.1 When (situation), Why (objective / reasons), How (process), who (participants),
Issues faced
Porter’s Five Forces Analysis was required by Coca Cola Beverages Limited Pakistan
when the company decided to launch 250ml pet bottles instead of the glass bottle for the First Time
in Pakistan. Moreover, coca cola used porter’s analysis before starting their water stewardship
program in order to reduce the water wastage. The Objective of the Porter’s Analysis was to
determine the success of the new Pet bottles. Participants include customers of Coke from different
segments, key players of CCPBL and employees.
2.2.2 In what format they collected the data of Porter’s Analysis
The company collected the data in the form of questionnaires, sampling data and personal
interviews with the customers. The major issues which CCPL faced was related to the high cost of
obtaining the data and of time.
2.2.3 What benefits they get from conducting PORTER’s Analysis
The benefits of Porter are uncertain as yet because Coca Cola is to launch their Pet Bottles
in the Market of Pakistan.
Porters 5
Forces Model
Discuss Effect
Positive Negative
Competitive
Rivalry
Profit Margin:
There is low Profit
margin in the soft drink
industry because the
switching cost is very low.
The customers that are not
too much brand conscious
of coca cola can easily
switch to Pepsi Cola, Al
though the taste of Coca
Cola is Unique but still if
we conduct a blind survey
by presenting the
contestants with a variety
of cola drinks then it is
hardly possible that
As there is
low profit margin
in the beverage
industry, so coca
cola has to focus on
its quality and try
to improve it
further to compete
with other
beverage brands in
the market.
Continuous efforts
are required for the
competition. Due
to low profit
COCA COLA FINAL PROJECT OF STRATEGIC MANAGEMENT
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Industry
growth rate and
potential:
consumers will be able to
differentiate the taste of
coca cola.
Coca Cola has a
vast global presence. It is
easily available in more
than 200 countries.
Because of sound and
consistent growth of Coca
Cola in local industry and
in the international market,
the soft drink industry is
highly attractive for the
investors to invest.
margin new
entrants can easily
enter in the market.
In case of Pakistan,
we see local
beverage brands
appearing in the
market like
Gourmet Cola and
Cola Next
launched by
Meezan Masala,
these local brands
are offering soft
drinks to the
consumers with
similar prices as
Coca Cola.
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Diversity of
competitors:
Fixed Cost:
The major
competitor of coca cola is
Pepsi. Pepsi cola is also
offering a wide range of
beverage products. Coca
Cola always focuses on
promoting its brand by
sponsoring outdoor events
and activities. E.g. coke
studio. There are also
other brands of soft drinks
in the market Like Dr.
Pepper and Starbucks etc.
Coca Cola has a
significant market share.
The fixed costs are a high
proportion of total costs for
a firm in the soft drink
industry. The coca cola has
high fixed cost of
warehouses, labor, the cost
of production and
distribution. It spends too
Due to the
highest Fixed cost
of coca cola and
Economies of
Scale that coca
cola is enjoying,
the new entrants
can’t compete on
prices.
Product
diversification of
Pepsi The close
Competitor of coca
cola i.e. Pepsi also
offers Cheetos,
Kurkure, Wavy
and Lays but coca
cola does not. Coca
cola only offers
soft drinks. Coca
Cola should focus
on its product
diversification.
Also the indirect
competitors of coca
cola are Star
Bucks, Tropicana
and Dr. Pepper etc.
that are offering
coffee, tea, bottled
water, and Vitamin
water and the
health conscious
people in the west
prefer those
products over coca
cola. These indirect
competitors are
stealing the market
share of coca cola
by offering healthy
products to its
customers.
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Close
Competitors:
Existing
brand
identity:
much on its advertising
and promotional activities.
The close
competitor of coca cola is
Pepsi. In fact Pepsi is a
thorn in the flesh of Coca
Cola. Pepsi derives its 70%
revenue from the North
and South America while
the coca cola derives only
30% of its revenue from
America. It indicates that
coca cola has not yet
maximized the potential
revenue outside the
America.
Coca Cola is not a
soft drink it’s a brand. The
brand valuation of coca cola
is $79.2 billion. Inter Brand
i.e. a Global Brand Agency
awarded coca cola with the
highest brand equity award
in the year 2011. Coca Cola
has fantastic market
strategies. Because of the
good taste of coca cola and
Fanta the customers are
loyal and they don’t like to
change their brand easily.
A former
CEO of coca
cola once
declared that “If
every asset we
own, every
building, and
every piece of
equipment were
destroyed in a
terrible natural
disaster, we
would be able to
borrow all the
money to
replace it very
quickly because
of the value of
our brand…
The brand is
more valuable
than the totality
Coca cola
has a sluggish
performance in the
North America
because Pepsi has a
monopoly there.
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Switching
costs:
High are the
exit barriers
Entry barriers are
relatively low for the
beverage industry .There is
no consumer switching
cost and zero capital
requirements. There is an
increasing amount of new
brands appearing in the
market with similar prices
than Coke products.
There is basically
no price war between Pepsi
and Coca Cola because
their prices are almost
same. They basically
compete on advertising
and differentiation. Pepsi
Targets youth and coca
cola is for all ages.
Exit barriers are high for
bottlers with expensive
equipment, moderate for
concentrate producers.
Advertising budgets are
high and customers are
influenced by brand
perceptions.
of all these
assets.”
Coca cola
being an
international
brand can spend a
huge amount of
money on its
advertising but
local brands are
unable to
advertise their soft
drinks to a great
extent as coca cola
does.
Low
switching cost
affects the
customer retention
and customer
loyalty. It also
allows the new
entrants to enter in
the market.
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Porters 5
Forces Model Discuss Effect
Positive Negative
Bargaining
Power of
Suppliers
Substitutes
for your
suppliers’
products
High
switching
cost to use
another
supplier
Low Pressure
The soft drink
products have standard
raw material ingredients
which could not have any
alternative to use as an
actual ingredient. Each
firm has a different
formula, color, and flavor
for their beverage. No two
products are typically
exactly alike.
It is fairly easy for
coca cola to become a
supplier within the
industry and thus it would
not find it difficult if it
wanted to enter. If another
supplier does the same job
but is cheaper, the firm can
switch without much issue.
Coca cola has a capacity
for backward and forward
integration
No, the supplier
has no bargaining power
over price. There is low
switching cost of the raw
material. Raw material is
easily accessible. So the
manufacturer can easily
It will help
the company in
lowering its cost
of production and
it also helps in
improving its
efficiency to a
greater extent.
Improved
efficiency, cost
cutting, time
saving, and
elimination of
intermediaries and
no chances of
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shift from one supplier to
another.
disputes with the
supplier of input.
Porters 5
Forces Model
Discuss Effect
Positive Negative
Threat Of
New Entrants
Loyalty of
the end users
Medium to low
pressure
Coca-Cola and its
rivals do have special
licensing deals, including
having their products sold in
fast food chains and different
distribution deals. Both Pepsi
and Coca-Cola dominate the
beverage industry due to co-
branding it is impossible to
enter in the beverage industry
for a new company.
Coca-Cola enjoys
high customer loyalty,
because of their high brand
equity. Therefore new
competitors find it almost
difficult to counterpart this
loyalty. Coca-Cola is seen not
only as a beverage but also as
This is a
positive effect
because this will
keep the
competition at the
minimum and
ultimately, it will
lead to maintained
profitability.
The loyalty
of the users have
very positive
effect on the sales
of the coca cola the
users are in the
habit of drinking
coke only and they
The
loyalty of the
users cannot have
any negative
effect.
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Difficulty in
switching cost as
customer
Seed capital
to enter this
industry
a brand. It has held a very
significant market share for a
decade of times and loyal
customers are not very likely
to try a new brand.
There is no consumer
switching cost. There is an
increasing amount of brands
appearing in the market
having similar prices than
Coke products. The soft drink
industry is fully saturated.
The seed capital
required to enter this industry
is a huge amount and energy.
To compete with coke and
Pepsi is not an easy task.
Capital requirements for
producing, promoting, and
establishing a new soft drink
traditionally have been
viewed as extremely high.
According to industry experts,
won’t welcome
any new company.
As the
switching cost is
low so users
remains with the
brand they use.
The seed
capital required is
very huge so it is
positive for coke
as the new comers
will hesitate to
start the business
in beverages
industry due to
Due to low
switching cost the
users can switch
to the new brand
or product.
Well for
new comer it has
negative effect
that he/she
requires a huge
amount of capital
to start the
business.
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46
Government
rules
this makes the likelihood of
potential entry by new players
quite low A lot of capital is
needed to enter this industry
and compete with coke
because there are large capital
costs needed for
manufacturing. Bottling,
distribution, and storage could
be contracted out, but it would
likely increase costs in the
long run and weaken the
supply chain.
If we talk about the
government of Pakistan than
they give tax relief and other
facilities to international
brands when they want to
enter Pakistan. So this is
threat for coke. There are
licenses, insurances, and other
difficult qualifications
required in this industry.
Companies must get FDA
approval to sell their product,
have licenses to produce and
large capital
requirement.
The
governmental
rules of Pakistan
are favorable for
coke as well as for
entrants because
Pakistan promotes
the international
brands to invest
In
Pakistan.
The
negative thing is
the licenses etc.
that needs to be
made. And they
are difficult to get.
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Difficulty in
Skill acquiring
distribute internationally, and
insurance to cover potential
lawsuits, accidents, or faulty
product.
There is a substantial
knowledge and skill barrier
in terms of being able to
develop soft drinks that could
successfully compete with
industry leaders such as Coca
Cola. Due to technological
barriers it is almost
impossible for the other
companies to compete
successfully with Coca-Cola
that has vast global presence
New entrants lack in skills as
compared to the established
market leader like Coca-
Cola. For example
GOURMET in Pakistan
launched its gourmet cola to
satisfy the customer needs as
coca cola is the market it
leader in the industry. It has a
large number of loyal
customers that not prefer
gourmet cola, cola next.
Obviously
the positive effect
is this that the new
entrants are not
that powerful and
they also do not
have the required
skills to compete
with coke.
If
competitors do
not have the
potential and
skills then the
coke won’t have
any negative
effect on it.
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Economies
of scale
Strong,
established cost
advantages
Amrat cola and shandy cola
tried to enter in beverage
industry but could not
successful due to coca-colas
international brand image.
Experience in this industry
does help firms to lower costs
and improve performance.
The major brands run on
economies of scale, and have
experienced the highs and
low of the industry and
overcome them. New
entrants can learn from the
first entrant’s history but do
not have firsthand
experience.
Existing firms have
cost and performance
advantage in this industry.
This is because existing firms
have already purchased large
capital expenditures and have
economies of scale. They also
have direct supply and
The coke
has economies of
scale due to their
experience but the
entrant will not
have the
economies of scale
and this is good for
coke.
Coca-Cola
can earn more
profit due to this
advantage and the
new entrants
It has a
negative for the
new entrants only.
It do not
have any negative
effect on the coca
cola.
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49
Strong,
established brands.
distribution channels setup.
But for new entrants it is
difficult as they have no
experience to handle the cost
of production and other
matters as well. Coca-Cola
enjoys strong cost advantages.
Coca-Cola is seen not
only as a beverage but also as
a brand. It has held a very
significant market share for a
long time and loyal customers
are not very likely to try a new
brand. The coca cola is major
soft drink that have well-
known brand identities, with
the exception of generic
brands and this Brand
identities define coca cola‘s
flavor.
The coca cola has
already offered Retailers
cannot avail this
advantage.
Coca cola
has a brand image
and coke enjoys
the benefit of this.
The new
entrants are faced
with this difficulty
as they are do not
have any brand
image and they
are faced with the
price and brand
competition from
the existing firms.
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50
Limited or
restrained access to
distribution
significant margins of 15-
20% on soft drinks for the
shelf space. These margins
are quite significant for their
bottom-line. This makes it
tough for the new entrants to
convince retailers to carry
substitute their new products
for Coke and Pepsi. New
entrants also fear retaliation as
Coca Cola will not allow them
to enter. There is backward
integration in Coca-Cola
therefore new entrants cannot
locate bottlers to distribute
soft drinks. A new comer to
the industry would face
difficulty in assessing
distribution channels. The
coke already control the main
distribution channels, such as
big supermarkets, gas
stations, and restaurants. They
have low costs, competitive
pricing, and strong business
relationships.
The new
entrants are also
faced with limited
access to
distribution the
distributors do not
entertain the
entrants as they are
already doing
work with the
brands like coca
cola.
It only has
the negative effect
on the new
entrants and not
on the existing
ones.
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51
Porters 5
Forces Model
Discuss Effect
Positive Negative
Bargaining
Power of Customer
Moderate pressure
The individual buyer no
pressure on Coca-Cola. Large
retailers, like Wal-Mart, metro,
hyper star have bargaining
power because of the large
order quantity, but the
bargaining power is lessened
because of the end consumer
brand loyalty. The customer
buy from local brands like
gourmet cola due to low price
but there exist a difference in
the quality, taste of these
products. When it comes to the
bottled beverages market,
buyers have a fair amount of
bargaining power, and this
affects Coca-Cola's bottom line
directly. Coca-Cola does not
sell directly to its end users.
They deal with distribution
companies that service fast food
chains, vending machine
companies, college campuses
and grocery stores. Demand
leads the purchases, but coca
cola also has to keep an eye on
what that end price will be.
Coca cola
do not directly
deals with the
individual
customer so in this
scenario it is
positive that it
donor deals with
the bargaining of
the customer.
The
negative is
impact is the
dealing with the
retailers and the
wholesalers as
the have the
bargaining power
and coca cola has
to listen to them
as they are the
people who
delivers the coke
to the customers.
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How large
are your buyers’
company?
How many
companies are there
for the buyer to
choose from?
There is no switching cost
because people also buy from
Pepsi.
The buyers company of
coca cola are large enough. The
big store and different fast food
industries buy from coca cola.
Coca cola’s buyers includes
Hyperstar, Alfatteh, Metro,
Macro and different fast food
companies like McDonald’s,
Hardees etc. coca cola’s
customers include large
international chains of retailers
and restaurants and small
independent businesses.
In Pakistan buyer do not
have much choice to choose.
There are very few brands to
choose. There is Pepsi, Cola
Next and Gourmet cola. Other
The
positive thing is
that coca cola has a
huge amount
customers which
purchases the coke
in bulk and coke
does not need to go
to the individual
customers and they
earn more from
these customers.
As in
Pakistan there are
less number of
brands of colas so
buyers do not have
The
negative effect is
that as coca cola
has these huge
customers if they
blackout and
donor take coke
from Coca-Cola
then coca cola
will face loss.
Like if mc
Donald’s stops
buying from coke
than coca cola
will face loss.
Pepsi is
the strong
competitor for
coca cola and
buyer can shift.
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Are the
buyers buying a
huge volume?
Do you
depend only on a
few buyers to
sustain your sales?
soft drinks are marinda and dew
but they are not colas.
Yes obviously, the
buyers are buying in huge
amounts. The daily sales of Mc
Donald’s on average is 75.21
million per day so they have to
arrange Coca-Cola accordingly
and they buy coca cola in huge
amount. Same is the case with
other buyers.
Coca cola do not depend
on few buyers only. They have
a lot of buyers to sustain their
sales.
many choices. And
in this case the
sales volume of
coca cola rises.
It has the
positive effect as
the buyers buy in
huge amount of
coke.
They have
many buyers so
they want have any
kind of problem
and this is positive.
It has a
negative impact
as there is no
switching costs.
And buyer can
easily shift to the
other product.
But some
wholesalers like
Alfatteh they also
purchases from
competitors.
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How hard is
it for the buyers to
switch and use a
competing product?
Are the
buyers purchasing
from you as well as
your competitors?
There is no switching
cost in the beverage industry
that customer can easily switch.
Coca- Cola does enjoy brand
loyalty, this usually extends to
refusal to drink another cola but
not a refusal to consume another
beverage altogether. The profit
potential to that industry rises
and it makes an industry
attractive in that way. It is not
hard for the buyers to switch to
another brand and it’s not
difficult for the buyers to use
competing products. For
example Al-Fatah store, hyper-
star purchase soft drinks in a
bulk quantity but they also
purchase another brand of soft
drinks like Pepsi , next cola etc.
Yes the buyers’
purchases from Coca-Cola as
well as other brands. For
example retailers Al-Fatah
store, hyper-star purchase soft
drinks in a bulk quantity but
Some
buyers purchases
only from coca cola
like McDonald’s so
it is positive.
Switching
costs are low for
a buyer, then
dissatisfaction of
a product will
lead to loss of
business as the
buyer will be able
to find an
alternate with
minimum hassle
and
inconvenience.
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Do the
buyers have the
capacity to enter
your business and
produce the goods
themselves?
they also purchase another
brand of soft drinks like Pepsi
etc. But in fast food chain
industries, vending machines,
college etc. these buyers only
purchase one brand like in Pizza
hut, KFC, Hardees only
purchase Pepsi in that way they
increases the sales of Pepsi
while McDonalds’ only buy the
Coca-Cola.
Yes the buyers have the
capacity to enter in the business
and produce the goods
themselves like McDonalds’
produces the Coca-Cola itself.
Same in the case of Hardees,
Fat-burger, and Pizza-hut they
can produce Coca-Cola itself in
that way these buyers have the
capacity to enter in the business.
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Porters 5
Forces Model
Discuss Effect
Positive Negative
Threat of
Substitutes
Medium to High
pressure
There are many kinds
of energy drink s/soda/juice
products in the market. Coca-
Cola doesn’t really have an
entirely unique flavor. In a
blind taste test, people can’t
tell the difference between
Coca-Cola and Pepsi. There
is no switching cost in the
beverage industry that
customer can easily switch.
Indirect competitors of coca
cola is star bucks coffee, they
advertise their product as
healthier than the soft drinks.
In developed countries the
health conscious people
prefer the health alternatives
beverages. Fox example Dr
pepper providing the unique
flavors as compared to the
coca cola that provides only
carbonated beverages.
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Close
substitutes
available
Perceived
quality of the
substitutes
As a product, most
people cannot differentiate
the taste from other similar
cola products. So for many, it
is a substitutable product. The
rising awareness of cola
products and their negative
impact on health have led to
other beverages such as water
and juices becoming more
potential in market. Fox
example Dr Pepper providing
the unique flavors as
compared to the coca cola
that provides only carbonated
beverages.
These substitutes
provides the best quality of
their products like star bucks
coffee, water and juices,
increasing number of sports
and health based drinks in
developed countries. The
quality of products improves
through R&D and continuous
quality improvement
programs.
Because of
availability of
close substitutes
of soft drinks in
the market
customer gain
advantage over
Coca-Cola. Other
substitute
provides unique
flavors as well as
quality products.
Proper
quality insurance
programs have a
positive impact on
Coca-Cola
industry. In that
way new
innovations are
required for the
customer
attention.
Availability
of close substitutes
in Coca-Cola
industry affects
their sales volume
and hence the sales
decreases.
According
to perceived
quality of
substitute’s star-
bucks provides the
best quality to their
customers. It has a
negative impact on
Coca-Cola
industry. Sales
decline people
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Buyer
inclination to
substitute
Switching
costs
Availability
of substitute
Customer can easily
switch to other substitute so
in that case buyer propensity
to substitute is high.
There is switching
costs. As health conscious
people switches to another
brands like fresh juices
energy drinks etc.
There are many kinds
of energy drinks/soda/juice
products in the market. Coca-
Cola doesn’t really have an
entirely unique flavor.
Health
conscious people
prefer substitutes
in developed
countries so that it
has a positive
impact on health
rather than
purchasing
carbonated
products.
move from one
brand to another.
Coca-Cola
offer carbonated
beverages that
cause obesity. In
the developed
countries the health
conscious people
prefer substitutes.
It will
decrease the sales
of Coca-Cola.
There are
many substitutes
and health
conscious people
prefers tea and
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Indirect substitutes of coca
cola is star bucks coffee, they
advertise their product as
healthier than the soft drinks.
In developed countries the
health conscious people
prefer the health alternatives
beverages.
coffee more than
coke.
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2.3 Societal Environment: PESTEL Analysis
PESTEL Discuss Effects
Political
Factors
Positive Negative
Political Instability
and Strikes
Consumer Laws
CCBPL claims to have
warehouses that stores cokes
suffice to meet the demand in
case of series of strikes and
political disruption for 1-3
months.
In the early years of the
company, Coca-Cola was
effected by that political
decision in which U.S
Government asked them to
remove one ingredient from
their actual formula.
Coca-Cola has been
also effected in the turkey and
India by political decisions
when Israeli attacks on Gaza in
2014, then Turkey, and more
than 100 hotels in Mumbai,
stop selling products of Coca
Cola Company because these
countries said that the attacks
of Israel on Gaza is because of
its economic power. So they
should stop selling products of
those brands which contribute
to the Israeli economy and
Coca-Cola brand is one of
them who directly contribute to
Israeli economy. So here Coca-
It has
positive effect on
coke because of that
political decision
coke has more
customers because
after removing that
ingredient customer
became more loyal
with coke. Now they
trust on coke and
considered it as
health conscious
beverage.
It has
negative impact
on coke.
It has
negative impact
on coke.
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Cola brand is effected by the
political decisions of Turkey.
PESTEL Discuss Effects
ECONOMIC
FECTORS
Positive Negative
The global economic
and financial crisis of 2007 –
2009 is a relevant example of
an economic factor that greatly
impacted the majority of
businesses around the globe.
However, the crisis has
impacted Coca Cola to a lesser
extent compared to many other
businesses. Its operating
margin remained at industry-
front 22% despite the crisis,
although dividend yield was
reduced to 2.6%
Arguably, fluctuations
in exchange rate is the most
significant economic factor
that has adversely impacted
Coca Cola performance in
recent years. For example, due
to severe currency devaluation
in Venezuela, Coca Cola’s
reported profits in this market
has to be reduced by 55% in the
fourth quarter of 2014 and
there are similar instances in
other parts of the world
No doubt
coke was
effected lesser
by that recession
but it was
effected by
economic factors
in a negative
way.
Change
in exchange rate
effect coke in a
negative way
because of this
change prices of
coke also effects
and this lead to
the decrease in
profitability of
coke.
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PESTEL Discuss Effect
Social
Factors
Positive Negative
1. Healthy Lifestyle
Concerns
Media today, is fostering
interest in healthy lifestyles. That
has strongly influenced the sales
within non-alcoholic beverage
sector as many customers switch to
mineral water bottles and fresh
juices. In this regard, CCBPL has
successfully come up with the
products such as Coca-Cola Light or
Zero that addresses the healthy diet
concerns.
Also, as the baby boomers
are aging, they are getting more
conscious and more concerned about
diet choices that will influence their
life expectancy. This contributes to
the increasing demand for healthier
drinks on the non-alcoholic
beverage sector.
It has a
positive impact
on customers
because
customer known
that this
beverages brand
is health
conscious.
It has a
negative impact
on coke because
the sale of
company is
decreasing so
company should
revise their
policies and
strategies.
2. Adaption and
cultural
borrowing
Adaption plays a significant
role in capturing the international
markets. And willingness to adapt is
a crucial attitude. The company
realizes that these differences exist
and tries to understand and cope with
them in a proper manner. The
advertisement campaigns focus on
relationships, family events and
gatherings, festive occasions like
Eid and music.
I has
positive impact
on customers
because coke
realizes the need
of their
customers on
their religious
and cultural
occasion and it
advertise according
to occasion like on
Eid and 14-Aug.
Pakistan
is an Islamic
country and it has
some religious
believes. In Islam
music is not
allowed so coke is
destroying the
Islamic values of
Pakistan attracting
the youngsters
through its musical
campaigns.
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PESTEL Discuss Effect
Technologic
Factors
Positive Negative
3. Coke’s Marketing,
Advertising, and
Promotional
Programs
The most evolving media
for promoting the company’s
products are through the TV,
websites, and social media.
CCBPL possess mind-blowing
strategy to effectively promote
their products through these
channels that enhances its sales. It
is reported that Coke Studio
Session 8 raised the company’s
sales by 42%.
It has a
positive impact
on coke because
after the Coke
Studio Session 8
raised the
company’s sales
by 42%.
4. Access to the
Internet
With the ease to access
internet, social media has become
a great mean to provide huge
growth in consumer awareness,
brand identity, promotions and
direct-to-consumer
Communication.
I has
positive impact
on customers
because it has
cheapest way of
advertisement
instead of
electronic
media.
It has
on negative
impact on
company
policies because
those people
who are not
using internet
cant aware
brand identity.
5.
Packaging design As the cans and plastic
bottles were introduced, the sales
volume increased with a great
margin for the company because of
the ease in carrying and disposing
the containers.
It has a
positive impact
on customer
because they
design their
bottle according
to situation. E.g.:
On 14
Aug they design
their packaging
according to our
national flag
color.
New
Equipment
Because the technology is
continuously advancing, new
equipment is constantly being
introduced by CCBPL. Because of
these new technologies, Coca-
Cola's production volume has
It has
impact on
customer
because they use
innovative
technology.
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increased sharply compared to that
of a few years ago.
Reduced
Cost of Production
With the up gradation of
technology and high levels of
automation in manufacturing,
volume production is being done
that has reduced the cost of
production.
It has
positive impact
on Coke.
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3 Phase 3 – Internal Analysis: Organizational Perspective
3.1 Vision / Mission / Core Values (discuss separately)
3.1.1 Vision
“To become a market leader in ready to drink segment while
adding best-in-class value to all stakeholders.”
3.1.1.1 When, how (Process), Who (Develop & Participate), Issues faced
The vision of Coca Cola Beverages continuously revises with the achievement of
their vision after 5 to 10 years.
The process of making a vision statement at CCBPL include the following steps
1) The company’s country head and top management meet up as per the
achievement of the previous mission and monitor the internal and external
company’s documentations.
2) After monitoring and evaluating the current company’s documentation, the
top management give their suggestions and feedback on what they have
evaluated from the company’s documentation and each member of the top
management proposes their own vision statement.
3) The company’s officials meet and proposes their own vision statement and
the office staff compile them in the form of minutes of meetings and merge
the document.
4) The company’s officials conduct internal and external analysis to revise
mission and vision statements and with then the consent of all members of the
top management the best mission statement is chosen.
The issues that CCBL faced when devising vision statement often include biases of
data gathering and biases of the data in documentations. The data evaluated is then verified
and then evaluated to account for in the vision statement.
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3.1.2 Mission
“Coca-Cola Pakistan exists to refresh the consumers, inspire
moments of optimism through our brands and actions as well as
benefit all stakeholders, which we will do with highest social
responsibility and with uncompromising commitment towards
quality of our products and integrity in our operations”
3.1.2.1 When, how (Process), Who (Develop & Participate), Issues faced
The same procedure and processes are followed to produce as they are followed for
vision statement. The company considers mission statement as an expansion of vision and
take into consideration certain factors to produce mission which include the following;
1) Technology
2) Brand image
3) Philosophy
4) Ethical and sustainability considerations
5) Customers and External Stakeholders
6) Internal Stakeholders
7) Competitive advantage and core competencies
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3.1.3 Core Values
“Our Core Values underlie everything we do. We live by them
for two reasons; they are good and right in themselves, worthy of
adherence even at the risk of loss of profit-making opportunities, and
they epitomize our Company’s integrity, which we believe will
produce value for our stakeholders over the long term.”
• Accountability: We act with high sense of responsibility
and hold ourselves accountable.
• Integrity: We are open, honest, ethical and we trust and
respect each other
• Teamwork: We collaborate for our collective success
• Passion: We put our hearts and mind into what we do.
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3.1.3.1 How they are aligned (Vision / Mission / Core Values)
As per the company’s officials, the mission is the expansion of the vision after
consider certain factors which are discussed above and core values are based on the original
vision set by the company after every 5 to 10 years. All three of them are completely and
work towards the achievement of same goals and objectives. The Managerial staff at coca
cola as least effected by the mission and vision outlined initially by the coca cola. Based on
the mission statement, coca cola trying to increase the use of technology and reducing the
non-managerial staff. They are also cutting costs by reducing the number of people in the
company, keeping only the specialized staff and by paying more the company gives them
more tasks.
3.2 Organizational Policies
Organizational policies are guidelines that outline and guide actions within a business or
agency. The exact types of policies will vary depending on the nature of the organization and can
include policies such as directions, laws, principles, rules or regulations.A policy is a guiding
principle used to set direction in an organization. A procedure is a series of steps to be followed
as a consistent and repetitive approach to accomplish an end result.
3.2.1 CLIMATE CHANGE POLICY
Climate Change Policy Statement Coca-Cola Hellenic strives to limit its impacts on
climate change and to carry out all its business activities in a sustainable manner. We believe
that industry has a key role to play in finding sustainable solutions to today’s climate
challenges. The direct greenhouse gas emissions from Coca-Cola Hellenic operations result
mostly from the use of energy in bottling plants and fleet. Indirect emissions stem from raw
materials (ingredients and packaging) and cold drink equipment. In accordance with our
Environmental Policy, we will: • Reduce the energy used in our operations. • Implement
alternative or renewable energy technologies such as combined heat and power plants and solar
panels, where practical to provide additional sustainable energy for our facilities. Engage with
stakeholders to combat climate change. Work with suppliers to reduce the carbon embedded
in packaging materials, the carbon footprint of our cold drink equipment and ingredient
suppliers to minimise their carbon impacts. • Set targets to reduce our supply chain carbon
emissions • Report our greenhouse gas emissions, targets, results and activities openly and in
accordance with the Greenhouse Gas Protocol. As Chief Executive Officer I am committed to
this Climate Change Policy Statement which is owned and endorsed by the Corporate Social
Responsibility Committee of the Board of Directors. Responsibility for the successful
implementation of this program belongs with every Coca-Cola Hellenic employee at each level
and function in the organization.
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3.2.2 CODE OF BUSINESS CONDUCT(INTEGRITY IN THE COMPANY)
This Code of Business Conduct is designed to help all of us to live up to the values that
make Coca-Cola Hellenic one of the most successful and respected organizations in the world.
These values include:
• Authenticity
• Performing as one
• Excellence
• Caring for our people
• Learning
• Winning with customers
The Code sets out the Company’s commitment to conducting business in accordance
with our values, all applicable laws and regulations and industry standards. It provides
guidance on what is expected of each of us and references other Company policies and
guidelines. Failure to comply with the Code or any Company policy is treated very seriously
and may result in disciplinary action, up to and including dismissal. Some situations may seem
ambiguous. Exercise caution when you hear yourself or someone else say “It has always been
done this way,” “Everybody does it,” “Maybe just this once,” “No one will ever know” or “It
will not matter in the end.” These are signs to stop, think through the situation and seek
guidance. Most importantly, do not ignore your instincts. Ultimately, you are responsible for
your own actions. If you are still uncertain, ask for guidance. The Code Triesto capture many
of the situations that employees will encounter, but cannot address every circumstance. You
can seek help from your Code Compliance Officers or higher level management. You are also
required to report violations, and suspected violations, of the Code. This include situations
where others ask you to violate the Code. There will never be reprisals for making any reports,
and every effort will be made to maintain confidentiality. Managers must lead by example, and
act as role models for others. As a manager, you should:
• Ensure that the people you supervise understand their responsibilities under the
Code and other Company policies.
• Take opportunities to discuss the Code and reinforce the importance of ethics
and compliance with employees.
• Create an environment where employees feel comfortable raising concerns.
• Consider conduct in relation to the Code and other Company policies when
evaluating employees.
• Never encourage or direct employees to achieve business results at the expense
of ethical conduct or compliance with the Code or the law.
• Always act to stop violations of the Code or the law by those you supervise.
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3.2.3 GUIDANCE FROM CORE COMPLIANCE OFFICER
Country Employees: Your Code Compliance Officers are your General Manager
and your Country Legal Director. However, for questions relating to potential
bribery or corruption, your Code Compliance Officer is your Country Legal
Director only.
Country Function Heads and Regional Managers: Your Code Compliance Officers
are your General Manager and Region Legal Director. However, for questions
relating to potential bribery or corruption, your Code Compliance Officer is your
Region Legal Director only.
General Managers and Group Function Employees: Your Code Compliance Officer
is the Chief Compliance Officer, including for questions relating to potential
bribery or corruption.
Chief Executive Officer: Your Code Compliance Officer is the Audit Committee.
However, for questions relating to potential bribery or corruption, your Code
Compliance Officer is the General Counsel.
Other Operating Committee Members: Your Code Compliance Officers are the
Chief Executive Officer and the General Counsel. However, for questions relating
to potential bribery or corruption, your Code Compliance Officer is the General
Counsel.
If you are uncertain as to who you should contact or are unable to reach your Code
Compliance Officers, you should contact your General Manager or Function Head
for further guidance.
Under the Code, certain actions require prior written approval. Where approval is
required, both Code Compliance Officers must approve (if you have more than one
applicable Code Compliance Officer). For recurring or ongoing actions, this approval
should be renewed annually, or anytime there is a change in either the situation or any of
your Code Compliance Officers. Copies of these approvals should be submitted by each
Code Compliance Officer to and maintained by the appropriate legal department, and made
available to auditors or investigators if required.
You have several options for raising issues and concerns. Whether seeking advice
or speaking out, you can always go to your manager. If you prefer, you can contact any of
the following:
• Your Code Compliance Officers
• Your General Manager
• Your Function Head
• Your Country Legal Director
• Your Region Legal Director
• The Chief Compliance Officer
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• Financial, accounting or auditing matters should be reported to the Head of
Internal Audit or to the Chairman of the Audit Committee.
• Suspected Code violations of a serious nature, such as those involving high levels
of management, significant monies, financial misstatement, or alleged criminal activities
should be reported to the General Counsel, Group CFO or Head of Internal Audit
immediately.
Investigations and Disciplinary Actions the Company takes all reports of possible
misconduct seriously. We will investigate the matter confidentially, make a determination
whether the Code or the law has been violated, and take appropriate corrective action. If
you become involved in a Code investigation, cooperate fully and answer all questions
completely and honestly. For each Code violation, discipline is determined based on the
nature of the violation, mitigating and aggravating factors, and the precedent for discipline
(or range of discipline). Discipline for Code violations has a broad range, including but not
limited to one or any combination of the following: a letter of reprimand, final written
warning, suspension without pay, demotion, loss or reduction of bonus or option awards,
and separation. The Company has a position of zero tolerance for theft of Company assets,
including but not limited to cash, product and time. In addition, we may seek
reimbursement for losses or recovery of damages by a civil suit or refer the matter to local
authorities for criminal procedures. Any disciplinary action will be taken in accordance
with applicable laws and collective bargaining agreements. Violations of this Code are not
the only basis for disciplinary action.
The Company has additional policies and procedures governing conduct that may have
their own disciplinary consequences.
1. No Retaliation
The Company values the help of employees who identify potential problems that
we need to address. Any retaliation against an employee who raises an issue honestly is a
violation of the Code. That an employee has raised a concern honestly, or participated in
an investigation, cannot be the basis for any adverse employment action, including
separation, demotion, , loss of benefits, threats, harassment or discrimination. If you work
with someone who has raised a concern or provided information in an investigation, you
should continue to treat the person with courtesy and respect. If you believe someone has
retaliated against you, report the matter to your Code Compliance Officers or the General
Counsel.
2. Working With Each Other
Within our Company we promote equality of opportunity. Selection and reward are
based on merit without regard to race, color, religion, sex, sexual orientation, citizenship
status, national origin or disability. We will comply with all applicable laws relating to
employment practices and expect all of our employees to treat each other with dignity and
respect.
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3. Product Quality
Our customers choose us because we provide a consistently superior product and
service. Ensuring that our products are of the highest quality is critical to our success. We
must each be aware of and follow Company policies and procedures that protect the quality
of our products. In addition, we expect our suppliers to ensure the quality and safety of the
products and services they provide to us. For this reason, we choose suppliers who share
our values and who deliver superior products and services.
4. Health & Safety
Health and safety is a critical value of the Company. We always comply with
applicable and Safety health and safety rules and regulations. In addition, we consistently
promote safe operating practices and avoid undue risk to our colleagues and our
communities. We require all employees to follow safe work practices in the interest of their
own safety as well as that of fellow employees. Safety is the responsibility of each and
every employee. Employees can prevent injury to themselves and their co-workers by
always following safe work practices and reporting any unsafe conditions you observe.
Many employees go beyond these basic responsibilities by participating on safety
committees, giving management input on safety policies and procedures, helping conduct
safety inspections or assisting with accident investigations.
5. Intellectual Property
Our Company’s intellectual property, whether licensed or owned, is among its most
valuable assets. We therefore must protect our Company’s intellectual property rights.
Intellectual property refers to anything we create on Company time, at the Company’s
expense or within the scope of our job duties. The Company owns the rights to anything
we create through our work with the Company to the full extent permitted by law,
regardless of whether this property is patentable or able to be protected by copyright, trade
secret or trademark. Examples of intellectual property include copyrights, patents,
trademarks, trade secrets, design rights, logos, software programs, business processes and
delivery or production methods.
6. Technology
Company computer systems and equipment are meant for company use, and for
use in accordance with the Company Information Protection Policy. For example, they
should never be used for outside businesses, illegal activities, gambling or pornography.
You may not download or store illegal or inappropriate content or programs from the
Internet on your Company computer. Always use licensed software in accordance with the
terms of the relevant licensing agreement, which is available from your Country BSS
department. Copies of software may be made only as specified in the relevant licensing
agreement. You must not sell, transfer or otherwise make available to any unauthorized
person any software products or related documentation licensed to or owned by the
Company. In addition, lack of diligence by an individual can lead to a breach of our
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information security affecting the whole company. Everyone who uses Company digital
systems – employees, contractors, consultants and other people with temporary access–
must ensure that these resources are used appropriately and in line with the Company’s
Information Protection Policy. You are required to:
• Never share your username or password.
• Ensure you do not access, download, create or forward email, documents or
images that may cause offence or distress to other persons.
• Ensure you do not install or use hardware or software on any Company system
that has not been specifically approved by the information technology team.
• Never send information to anyone who contacts you claiming to be a Company
employee but asks for information to be sent to a non-Coca-Cola Hellenic email address.
You should also notify your information technology team.
• Always save important data on the network-based drives for reasons of data
security and data recovery.
7. Nonpublic Information
Many of us have access to confidential, nonpublic information through the work
we do. Nonpublic information is any information that has not been disclosed or made
available to the general public. It is your obligation to safeguard the Company’s nonpublic
information. Unless it is necessary as part of your work responsibilities, you may not share
this information with anyone outside the Company, including your family members and
friends. This information is Company property and you may not disclose it to others even
after you leave the Company. You should also limit the sharing of Company nonpublic
information within the Company to those of your colleagues who need to know such
information for business purposes. Do not disclose nonpublic information to anyone
outside the Company, except when disclosure is legally mandated or is required for
business purposes and appropriate steps have been taken to prevent misuse of the
information.
• Disclosing nonpublic information to others, including family and friends, is a
violation of the Code and may violate the law.
• Be mindful of unintentional disclosure of nonpublic information through
conversation or use of documents in public places, or the transmission of unencrypted
digital data (USB sticks, CDs/DVDs, email attachments) outside the Company.
• Just as the Company values and protects its own nonpublic information, we
respect the nonpublic information of other companies. Never accept, solicit or divulge
nonpublic information of another company, including customers. See page 33 below under
the heading “Competitive intelligence.” • Records should be retained or discarded in
accordance with the Company’s record retention policies. In the case of actual or
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threatened litigation or governmental investigation, you must consult with the Group Legal
Department for instructions on how to handle any relevant records.
3.2.4 ENVIRONMENTAL POLICY
Coca-Cola Hellenic is committed to conducting all its business activities responsibly
with due regard to environmental impact and sustainable performance. The Company believes
that the environment is everybody’s responsibility and all employees are accountable for
environmental performance. Coca-Cola Hellenic seeks to achieve steady improvement in
meeting its environmental standards while working to minimize any negative impact on the
local and global environment as the Company grows its business. To reach these targets, Coca-
Cola Hellenic:
• Conducts operations in compliance with all applicable laws and regulations and
applies its high internal environmental standards.
• Implements and certifies the internationally recognized environmental
management system, ISO 14001, in all of its operations to ensure accountability
and continuous improvement.
• Includes environmental strategies and objectives in its business planning
process to ensure that management of environmental impact remains an integral
part of its operations.
• Identifies environmental aspects, sets environmental goals, monitors results and
audits processes in order to assess its performance against internal and external
environmental standards.
• Identifies and implements ways to improve the efficiency with which the
Company uses materials and resources, prevents pollution, minimizes
emissions, and recycles waste.
• Commits to conserve watersheds by saving water and treating wastewater.
• Commits to protecting the climate by reducing energy use and coolant
emissions.
• Plays a leading role within the beverage industry in promoting sustainable
packaging by light weighting, recycling beverage containers and using recycled
content in its packages.
• *Encourages and equips its employees to identify and act upon opportunities to
improve environmental performance and waste management in the areas where
they work.
• Partners with stakeholders in seeking and developing solutions to those
environmental problems on which the Company can make an effective and
lasting contribution.
• Communicates its environmental requirements and performance to
stakeholders. The responsibility for overseeing the implementation of this
policy lies with the Corporate Social Responsibility Committee of the Board of
Directors. As Chief Executive Officer I am committed to the Coca-Cola
Hellenic Environmental Policy.
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3.2.5 HUMAN RIGHTS POLICY
Respect for human rights is fundamental to the sustainability of Coca-Cola HBC and
the communities in which we operate. In our Company we are committed to ensuring that
people are treated with dignity and respect. Coca-Cola HBC’s Human Rights Policy is guided
by international human rights principles encompassed in the Universal Declaration of Human
Rights, the International Labor Organization’s Declaration on Fundamental Principles and
Rights at Work, the United Nations Global Compact and the United Nations Guiding Principles
on Business and Human Rights. The Human Rights Policy applies to Coca-Cola HBC, the
entities that it owns, the entities in which it holds a majority interest, and the facilities that it
manages. The Company is committed to upholding the principles in this Policy. Our Supplier
Guiding Principles apply to our suppliers and are aligned with the expectations and
commitments of this Policy.
1. Respect For Human Rights
Coca-Cola HBC respects human rights. We are committed to identifying and
preventing any adverse human rights impacts in relation to our business activities through
human rights due diligence and preventive compliance processes.
2. Community And Stakeholder Engagement
We recognize our impact on the communities in which we operate. We are
committed to engaging with stakeholders in those communities to ensure that we listen to,
learn from and take into account their views as we conduct our business. Where
appropriate, we are committed to engaging in dialogue with stakeholders on human rights
issues related to our business. We believe that local issues are most appropriately addressed
at the local level. We are also committed to creating economic opportunity and fostering
goodwill in the communities in which we operate through locally relevant initiatives.
3. Valuing Diversity
We value the diversity of our people and the contributions they make. We have a
long-standing commitment to equal opportunity and do not accept discrimination and
harassment. We are dedicated to maintaining workplaces that are free from discrimination
or harassment on the basis of race, sex, color, national or social origin, religion, age,
disability, sexual orientation, political opinion or any other status protected by applicable
law. The basis for recruitment, hiring, placement, training, compensation and advancement
at the Company is qualification, performance, skills and experience. Regardless of personal
characteristics or status, the Company does not tolerate disrespectful or inappropriate
behavior, unfair treatment or retaliation of any kind. Harassment is unacceptable in the
workplace and in any work-related circumstance outside the workplace. These principles
apply not only to Company employees but also to the business partners with whom we
work.
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4. Freedom Of Association And Collective Bargaining
We respect our employees’ right to join, form or not to join a labor union without
fear of reprisal, intimidation or harassment. Where employees are represented by a legally
recognized union, we are committed to establishing a constructive dialogue with their
freely chosen representatives. We are committed to bargaining in good faith with such
representatives.
5. Safe And Healthy Workplace
We provide a safe and healthy workplace and comply with applicable safety and
health laws, regulations and internal requirements. We are dedicated to maintaining a
productive workplace by minimizing the risk of accidents, injury and exposure to health
risks. We are committed to engaging with our employees to continually improve health
and safety in our workplaces, including the identification of hazards and remediation of
health and safety issues. We are committed to maintaining a workplace that is free from
violence, harassment, intimidation and other unsafe or disruptive conditions due to internal
and external threats. Security safeguards for employees are provided as needed and will be
maintained with respect for employee privacy and dignity.
6. Forced Labor And Human Trafficking
We prohibit the use of all forms of forced labor, including prison labor, indentured
labor, bonded labor, military labor, slave labor and any form of human trafficking.
7. Child Labor
We prohibit the hiring of individuals that are under 18 years of age for positions in
which hazardous work is required.
8. Work Hours, Wages And Benefits
We compensate employees competitively relative to the industry and local labor
market. We operate in full compliance with applicable wage, work hours, overtime and
benefits laws.
9. Guidance And Reporting For Employees
We are committed to creating workplaces in which open and honest
communications among all employees are valued and respected. Our policy is to follow all
applicable labor and employment laws wherever we operate. If you believe that a conflict
arises between the language of the policy and the laws, customs and practices of the place
where you work, if you have questions about this policy or if you would like to report a
potential violation of this policy, you should raise those questions and concerns through
existing processes, which make every eort to maintain confidentiality. You may ask
questions or report potential violations to local Management, Human Resources, Legal
Department or Business Resilience. Coca-Cola HBC is committed to investigating,
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addressing and responding to the concerns of employees and to taking appropriate
corrective action in response to any violation.
3.2.6 POST-CONSUMER PACKAGING WASTE MANAGEMENT POLICY
STATEMENT
Coca-Cola Hellenic is committed to continually improving its environmental
performance in the area of packaging and packaging waste. All Coca-Cola Hellenic territories
are committed to continuous improvement, which is measured and evaluated for effectiveness.
The Company supports the implementation of post-consumer packaging schemes in all
countries. The objectives are to:
Co-own the country packaging management scheme (recovery organization).
Participate as an active member of the Management Board of Recovery
Organizations with the appropriate participation at a senior level.
Own and take responsibility for collected material as members of authorized
recovery organizations.
Implement efficient recovery organization schemes at the lowest sustainable costs.
Develop and execute Business Plans according to the highest standards. To achieve
these objectives, Coca-Cola Hellenic:
Enhances post-consumer packaging collection schemes and supports the education
and awareness of consumers.
Engages in public awareness campaigns, selective waste collection education and
anti-littering campaigns.
Works with government and industry to create a legal framework in which
economic progress, diversion of material from landfill and emissions reductions
can be achieved simultaneously.
Supports the view that public policy and regulatory interventions must encourage
the development and implementation of appropriate technological solutions and
enable the amendment of market mechanisms.
Promotes the development and expansion of organized collections of post-
consumer packaging materials at public events to avoid littering. • Works to close
the packaging loop in a sustainable manner.
Is committed to invest in Bottle-to-Bottle Recycling Plants in all countries with
sustainable resources, i.e. cost-effective and efficient post-consumer PET
collection schemes.
Includes packaging and packaging waste strategies in the annual business planning
process to ensure that the subject remains an integral part of operations.
Sets annual measurable food safety and quality objectives for all operations, and at
group level, to ensure continuous improvement and compliance with all standards.
Coca-Cola Hellenic will endeavor to:
Influence policy, regulation and innovation by working to develop structured
stakeholder dialogue, supporting the creation of equitable closed-loop packaging
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solutions, encouraging market mechanisms and promoting technological sorting
innovations.
Activate cross-sector packaging associations to support solutions for dealing with
the environmental impact of used packaging and packaging materials.
Ensure Coca-Cola Hellenic consumers enjoy variety and freedom of choice in
products and packaging options. • Enhance the efficiency and effectiveness of
established post-consumer packaging waste management organizations.
Continue to drive light-weighting efforts for primary packaging and encourage the
use of reusable and more efficient packaging design.
Continue to increase the recycled content of beverage packaging with emphasis on
PET beverage bottles. As Chief Executive Officer I am committed to the Post-
Consumer Packaging Waste Management Policy which is owned and endorsed by
the Corporate Social Responsibility Committee of the Board of Directors.
Responsibility for the successful implementation of this program belongs with
every Coca-Cola Hellenic employee at each level and function in the organization.
3.3 Organizational Culture
3.3.1 How Policies and Core Values are helping in developing culture in their
organization (examples)
These are some factors which helps to develop their culture more efficient
3.3.1.1 Board of Directors
The board of directors is elected by their shareowners to oversee their interests in the
long-term health and the overall success of the Company’s business and its financial strength.
It serves as the ultimate decision-making body of the Company, except for those matters
reserved to or shared with the shareowners. The Board fulfills its duties, including
implementation of risk oversight, with the assistance of various appointed Board committee.
The Board also selects and oversees the members of senior management, who are charged
by the Board with conducting the business of the Company.
3.3.1.2 Corporate Responsibility
Corporate responsibility is managed through the Public Policy and Corporate
Reputation Council, a cross-functional group of senior managers from our Company and
bottling partners. The Council identifies risks and opportunities faced by our business and
communities and recommends strategies to address these challenges.
3.3.1.3 Ethics & Compliance
The core of the ethics and compliance program at The Coca-Cola Company is our
The Code guides our business conduct, requiring honesty and integrity in all matters. All of
our associates and directors are required to read and understand the Code and follow its
precepts in the workplace and larger community.
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3.3.1.4 Ethics Line
Our associates, bottling partners, suppliers, customers and consumers can ask
questions about our Code and other ethics and compliance issues, or report potential
violations, through Ethics Line, a global Web and telephone information and reporting
service. Telephone calls are toll-free, and Ethics Line is available 24 hours a day, seven days
a week, with translators available.
More information about our approach to and administration of ethical business
conduct for employees, suppliers, partners, and non-employee directors is detailed in our
Ethical business conduct page to its journey.
3.3.1.5 Public Policy Engagement
We participate in public policy dialogues around the world, particularly in the United
States. Our aim is to use our resources responsibly to advance public policy that supports our
industry and business priorities, our more than 700,000 system associates, our shareowners
and the communities we serve.
The Coca-Cola Company and our affiliated Political Action Committees comply with
U.S. laws and requirements regarding contributions to political organizations; candidates for
federal, state and local public office; ballot measure campaigns; political action committees;
and trade associations. The Public and Diversity Review Committee of our Board of
Directors reviews our advocacy efforts, including political contributions.
3.3.2 What Factors are Influencing their culture and How
3.3.2.1 Demographic Forces
Within Coca Cola several different demographic factors are relevant to their market
sector. Age is a factor that is relevant as the organization has to obey by certain laws and
regulations for example by advertising to children, it is deemed unorthodox and morally
wrong. Coca Cola have stated that they will not advertise their products to children and will
not show them on children TV channels as they contain high quantity of sugar and are
unhealthy.
3.3.2.2 Economic Forces
Inflation increases cost of production. Consequently, Coca Cola have to face the
uncontrollable problem of increasing their pricing. With this increase they risk losing
customers who cannot afford their products because it is a desired product not a necessity.
For example, in 2002, a 2 liter bottle of coca cola was 99p whereas today a 2 liter bottle costs
£1.98. Due to inflation in 11 years the price of an identical bottle of Coca Cola has doubled
in price. Alternatively, Coca Cola could be forced to lower their prices to facilitate an
increase in consumption whilst taking a less favorable profit margin.
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3.3.2.3 Natural Forces
Other ways that Coca Cola are responding to different natural forces is by trying a
more environmentally friendly packaging. Coca Cola say that they are always looking at
ways on how to improve their packaging and use less raw materials when creating them. At
the moment they use raw materials like petroleum and other fossil fuels to create their plastic
bottles. To reduce their use of these fuels they have create a new ‘Plant Bottle’ packaging
which will bring them one step closer in creating a completely petroleum free bottle. They
aim to achieve this goal by 2020.
3.3.2.4 Technological Factors
Coca Cola are breaking into other markets with the help of technology. They have a
partnership with Spotify which are a music service that offers music on demand. Coca Cola
and Spotify have created a service which provides customers with music and helps them
connect with others around the world that love the same type of music. Coca Cola have stated
that they like technological advances and that music has been a big part in their marketing
strategy. This is why they have partnered up with Spotify so they can improve this digital on
demand service and make it available to more people around the world.
3.3.2.5 Political Forces
The political forces that affect Coca Cola are mostly different rules and regulations
the company needs to follow in order to not break the law. Coca Cola promote their product
as a strictly non-alcoholic beverage. Because of this they are constantly monitored by the
government and health authorities on what they put in their drinks. Coca Cola are monitored
by more than 200 governments and health authorities which also includes Muslim countries
where Coca Cola need to include a Halal stamp on their product.
3.3.2.6 Cultural Forces
The rapidly growing population today has meant that more and more companies can
increase their market share and have more business. This is no different for Coca Cola. As
different cultures grow Coca Cola grows with them. This is because there are more people
to buy the products and it rapidly increase Coca Cola’s profit and also their market share.
Coca Cola expect that with a bigger population there will be more people and a greater
demand for products which votes positively for Coca Cola.
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3.3.3 Through what method(s) keep the culture alive
3.3.3.1 Our Winning Culture
Our Winning Culture defines the attitudes and behaviors that will be required of us
to make our 2020 Vision a reality.
3.3.3.2 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
Be the Brand: Inspire creativity, passion, optimism and fun.
3.4 Organizational Structure
3.4.1 Degree to which organizational design elements exit in company structure
3.4.1.1 Designing Organizational Structure: Authority &Control
The Coca-Cola Company currently employs approximately 94,800 employees.
According to general organizational chart obtained from the company’s website, there are
more than 5hierarchical levels at the corporate level. For example: the head of the Canadian
division reports to the president and COO of the North American Group. That president
reports to the CFO, who reports to the Office of the General Counsel. The General Counsel
then reports to the CEO. It is fair to assume that there are at least a few more steps in the
hierarchy at the local level. Due to its tall structure, the organization has experienced
communication problems. One of the problems discovered through a survey, was that the
people and the company lacked clear goals. Tall hierarchies also cause motivation problems,
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which is why the organization is attempting to get employees more engaged. The increased
usefulness of the company’s intranet will greatly increase the communication between every
level of employees, and allow upper management to effectively communicate to the front
line employees. Based on information from Report 2006 this span of control seems somewhat
slim for the CEO of such a large organization. The CEO is also a member of the Senior
Leadership Team. This team consists of each head of the eight operating groups
aforementioned, andalso has other top executives in areas like innovation and technology
and marketing.Although there are only six people that answer directly to the CEO, the CEO
is able to receive input from a wide variety of divisions because of this leadership team. Since
the team is comprised of members from various divisions, the CEO is able to obtain a wide
variety of information. The move to decentralization has caused structural changes for The
Coca-Cola Company .New offices have been opened to facilitate decisions being made closer
to the local markets. The organization has also undergone centralization of some of the
company’s departments. In 2006, the Bottling Investments division was created to “establish
internal organization for our consolidated bottling operations and our unconsolidated bottling
investments.” It appears that the organization is striving for a hybrid structure, which allows
them to have advantagesof both mechanistic and organic structures, while trying to minimize
the negativeconsequences of each. The strategic structural changes that the organization has
gone through in recent years have created a much needed positive impact on the company.
Sales growth increased and employees are much more satisfied. The organization is trying
to create a more innovative culture by pushing towards decentralization.
3.4.1.2 Designing Organizational Structure: Specialization & Coordination
The Coca-Cola Company realizes that a divisional structure gives the organization
the best opportunity to react to the changes in its uncertain environment, but also allow it to
maintain level of stability. The multidivisional structure is beneficial for the organization for
a variety of reasons. The division based on geographic region allows certain aspects of the
company’s operations to be tailored to the individual market. One advertising campaign or
slogan may not be appropriate for another market, so decisions about specific ads are made
closer to the individual markets. Multidivisional structures allow divisional managers to
handle daily operations while corporate managers are free to focus on long-term planning.
There are also problems associated with this type of structure. If the company creates
divisional competition, coordination may decrease because each division wants to have
anadvantage over everyone else. Communication problems may also exist
becauseinformation can become distorted when it has to travel up and down tall hierarchies.
Multidivisional matrix structure may be better suited for The Coca-Cola Company. This
would increase coordination between corporate and divisional levels, and managers at each
level would work together to create solutions to problems. While such a structure may be too
complex for a global organization, the company may want to look into it.
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3.5 Core competencies
3.5.1 What are the company-wide core competencies
Brand Name and Loyalty
Distribution and Manufacturing Networks
3.5.2 Which and How capabilities are linked with each core competency
3.5.2.1 Corporate Function
Multidivisional Coordination
International Management
Financial Control
3.5.2.2 Management Information
Developed, Formal Vertical and Horizontal Structure
3.5.2.3 Research &Development
Market Research
3.5.2.4 Operations
Supplier Relationship
3.5.2.5 Product Design
Suited to consume needs
3.5.2.6 Marketing
Brand management
Reputation for Quality
Market Trends
3.5.2.7 Sales &Distribution
Speed of Distribution
Effective Sales Promotion and Execution
3.5.3 Which and How resources are linked with each capabilities
3.5.3.1 Resources (Tangible)
Property, Plant and Equipment
Buildings and facilities constructed all over the world
Strong Financial Position
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Large positive cash flows
Human Resources
Training and development result in competent and motivated workforce
3.5.3.2 Resources (Intangible)
Technical Expertise
Constant innovation, R&D, new iterations of products to keep up with
market
Intellectual Property Rights
Stymie intense competition with patents and trademarks
Goodwill
High level of brand loyalty and brand visibility
3.5.4 On the basis of market analysis (Phase 2), evaluate each core competency through
4 Criteria Matrix
Core
Competency 4 Criteria Matrix
Brand Name
and Loyalty
Distribution
and
Manufacturin
g Networks
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3.6 Coca - Cola Porter's Value Chain Analysis
3.6.1 Inbound Logistics
1. The Suppliers
The suppliers of Coca-Cola include Ogilvy and Mather, Jones Lang LaSalle,
Spherion, IBM, IMI Cornelius, and Prudential. The above companies supply to Coca
Cola materials like ingredients, packaging, machinery, software etc.
2. The Standards
Coca-Cola has put certain regulations and standards in place which the suppliers
(mentioned above) must adhere to. The company has named these guidelines as The
Supplier Guiding Principles. Some of the guidelines include -
Compliance with laws, standards and regulations
Freedom of association and collective bargaining
Wages and benefits, work hours and overtime, health and safety, environment,
etc.
3. The Assessment
Coca-Cola continually makes efforts to assess their suppliers by the help
of third parties through interviews with contract workers and employers. If the
supplier do not adhere to the supplier guiding principles or has any other issues,
they are given some amount of time to take corrective measures; if not, Coca-
Cola has the right to terminate their contract with these suppliers.
3.6.2 Operations
1. The Secret Formula
Coca Cola's core operation is the concentrate and syrup production. The
company supplies this concentrate to the bottlers where the production of cola
happens. Other activities that impacts Coca Cola's business occurs across the
value chain through system's distribution networks, bottling operations and sales
and marketing activities.
2. The challenges
The company addresses the issues by cohesively working with their
partners (bottlers, suppliers etc.) to reduce the overall effects at each level of the
manufacturing process. They look at the problem from a holistic view by
understanding the overall environmental impact of their business through the
entire lifecycle of their products ranging from raw material procurement to the
production, delivery, sales and marketing of the product.
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3.6.3 Outbound Logistics
1. The Distribution System
Coca Cola has the world's largest distribution system. They operate in
over 800 plants around the world. They operate in more than 200 different
geographic locations and market more than 2,400 beverage products. They have
distribution reach varying from hypermarkets such as Wal-Mart, fast food
restaurants such as McDonalds to small Kirana stores in rural parts of India.
2. The Bottling Partners
Coca Cola has more than 300 bottling partners. These partners range from
small family owned operations to publicly traded businesses. In order to work
cohesively and meet the need of all their customers, Coca Cola has implemented
the Coca Cola System in which they work together with their partners and
develop strategies to benefit the full ecosystem.
3.6.4 Sales and Marketing
1. The Marketing Strategy
Coca Cola is primarily a marketing company. They market more than
2,400 products to the consumers. They market world's top four (by sales)
beverage drink brands. Creativity is a vital strategy for Coca Cola. They work
hard on their marketing strategy in order to deepen their brand connection with
their customers. As a result, innovation plays a very important role in the
company. Their marketing strategy is directly linked to the consumer ranging
from advertising, to point of sale, to ultimately usage of a Coca Cola drink. They
apply innovation is every dimension of the supply chain which includes new
product development, increasing brand equity, packaging and designing various
new advertising campaigns.
3.6.5 Service
1. Servicing their Customers
Activities that maintain and enhance a product value include customer
support, training and development, installation and maintenance. Coca Cola's
customers range from large international retailers like McDonald's, KFC and
restaurants to smaller independent businesses and vendors like Kirana and
regional stores. They provide customized services tailored to meet their
customer's needs.
2. Servicing their Partners
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Coca Cola also supports their retailers by enabling them with the
necessary training to help their businesses become more profitable and effective.
They have set up Customer Development and Training Centers which are
available to more than 21,000 independent retailers. They provide free training
to the retailers in areas such as marketing, finance, operations, general
management and customer service.
3.7 Strategic Objectives
Strategic objectives are long-term organizational goals that help to convert a mission
statement from a broad vision into more specific plans and projects. They set the major
benchmarks for success and are designed to be measurable, specific and realistic translations of
the mission statement that can be used by management to guide decision-making. Strategic
objectives are usually developed as a part of a two- to four-year plan that identifies key strengths
and weaknesses and sets out the specific expectations that will allow the company or
organization to achieve its more broad-based mission or vision statement.
As per Coca-Cola, the company's aims and objectives are to refresh the world, to
inspire moments of optimism and happiness, and to create value and make a difference.
These aims and objectives are centered on a desire to thrive "over the next ten years and
beyond." The Coca-Cola Company is a leader in the beverage industry with a reputable brand
and strong global presence.
According to the Coca-Cola Company’s mission statement and 2020 Vision, some of its
goals include:
• Increase annual operating income by 6-8% in order to double their
revenue by 2020.
• Focus on environment friendly bottling production and enforce
sustainability;
• Increase profit by cutting down costs through productive and
efficient production facilities;
• Continue to diversify its portfolio through innovations and
partnerships, keeping consumer demands in mind;
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1. Competitor Environment
The Coca-Cola Company’s main objective is to maintain its diet carbonated
beverage sales in developed markets. As the demand for carbonated beverages in emerging
markets is increasing, such as markets in Middle East and Africa, may double 2010’s
revenues by 2020 (Euromonitor,2013). Additionally, as the trend of health and wellness is
shaping the soft drink industry, the Coca-Cola Company is trying to increase its non-
carbonated beverages sales in the market by acquiring other drink companies. PepsiCo The
main competitor of the Coca-Cola Company is PepsiCo. PepsiCo is the world’s second
largest food and beverage company and has a presence in over 200 countries. In order to
meet consumers’ health and wellness requirement, PepsiCo has acquired Nutrition Co as a
subsidiary. PepsiCo is temporarily focusing on reshaping its brand image that emphasizes
on healthy food and drinks. Like the Coca-Cola Company, PepsiCo has established well-
known brands including, Pepsi, Gatorade.
2. Main Strategic Challenges
Increasing revenue streams from all fronts In order to achieve its goal of doubling
the revenue in ten years, Coca-Cola needs to sell its products in new geographic areas and
expand its product like that meet the consumers’ changing preference and behaviors.
Maintaining its current market size in the developed market, the company also needs to
increase sales in developing markets. Diversification Carbonated beverages are the
company’s bread and butter business so that the company is heavily relied on their sales.
This implies that the company needs to increase awareness and sales on other drinks, such
as bottled water, juice, ready-to-drink tea, and even Asian specialty drinks since the
consumer preferences are changing. Moreover, in order to maintain their share of sales in
the increasing competitive market, Coca-Cola has to continue to strengthen their brand
loyalty, innovation, and expand into other product categories in the beverage industry. Diet
products cannibalizing standard variants As consumers have growing concerns about their
health, such as obesity issues, which results in a reduce demand of standard cola. Therefore,
the amount of sugar in regular soft drinks needs to be reduced accordingly. Although the
introduction of the diet cola successfully addressed this issue, the increasing demand and
sales of diet drinks cannibalized the sales of standard cola. The company needs to find a
way to sustain their revenues while anticipating consumers’ preference changes.
Acquisition targets in developed markets with the strong penetration power in the mature
soft drinks industry, the Coca-Cola Company’s revenue growth can be generated from
secondary markets or new markets. However, in developed markets, an acquisition option
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is limited because of market consolidation. It is challenging for the company to make large
acquisitions in all markets.
3.7.1 WE FOCUSED ON DRIVING REVENUE AND PROFIT GROWTH
Each of the 200-plus nations we serve plays a critical role in our growth plans.
We used segmented revenue growth strategies across our business in a way that
varied by market type. And we aligned our employee incentives accordingly. In emerging
markets, we focused primarily on increasing volume, keeping our beverages affordable and
strengthening the foundation of our future success. In developing markets, we struck a
balance between volume and pricing. In developed markets, we relied more on price/mix and
improving profitability by offering more small packages and more premium packages like
glass and aluminum bottles.
Creating value for our Company and customers looks different in different countries,
and we did a good job segmenting our markets to drive revenue growth in 2015. While we
still have more to do, we were encouraged by our results. Globally, price/mix rose 2 percent
as did volume, helping increase organic revenue 4 percent. We also gained worldwide value
share in our industry.
3.7.2 WE INVESTED IN OUR BRANDS AND BUSINESS
Healthy businesses require continuous investment. We made a choice to invest in
more and better marketing for our brands, increasing both the quantity and quality of our
advertising. We increased spending on media advertising by more than $250 million, and we
used these funds to share stronger, more impactful ads.
At the same time, we invested across our expansive beverage portfolio. We improved
our position in the energy category with a strategic new partnership with Monster Beverage
Corporation. We invested in brands like Suja, a line of premium organic, cold-pressed juices,
and agreed to buy China Green Culiangwang, a plant-based protein beverage brand. We also
expanded to nationwide the U.S. distribution of fairlife ultra-filtered milk.
In 2015, we developed our first global marketing campaign to support the entire
Coca-Cola Trademark of Coke, Diet Coke, Coke Zero and Coca-Cola Life. Launched in
early 2016, “Taste the Feeling” emphasizes the refreshment, taste, uplift and personal
connections that are all part of enjoying an ice-cold Coca-Cola. With this campaign and our
broader “one brand” strategy, we’re letting consumers know they can enjoy Coca-Cola with
calories, fewer calories or no calories and with or without caffeine. The choice belongs to
each individual, every time he or she reaches for a delicious and refreshing Coca-Cola.
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3.7.3 WE BECAME MORE EFFICIENT
As we took steps to rebuild our growth momentum, we knew we needed to invest in
more and better marketing while also increasing our financial flexibility. To these ends, we
increased our efficiency and productivity while reducing costs.
Part of the solution was “zero-based work”—a way of looking at our business that
starts from the assumption that organizational budgets start at zero and must be justified
annually, not simply carried over at levels established in the previous year. We also cut
spending on non-media marketing like in-store promotions. And we found new savings in
our supply chain around the world.
Overall, we were able to realize more than $600 million in productivity improvement
in 2015, which we used to invest further in our brands and business and also to return to our
shareowners.
For the future, we’re working to drive productivity and continuous savings across our
Company and system. We see productivity not as an event or series of events but as an
ongoing, day-by-day process of becoming stronger, leaner and ultimately better.
3.7.4 WE SIMPLIFIED OUR COMPANY
Few industries have changed more rapidly in recent years than the nonalcoholic
beverage industry. Evolving consumer tastes and preferences, coupled with sweeping
innovations in the retail and supply chain landscapes, have created an environment in which
speed, precision and empowered employees determine who wins in the marketplace.
To seize this opportunity, we took steps to reshape our business. We looked hard at
our operating structure and identified areas where we could be faster, smarter and more
efficient. We removed a layer of functional management and connected our regional business
units directly to headquarters. We streamlined a number of important internal processes and
removed roadblocks and barriers that inhibited us from being as effective and responsive as
we knew we could be.
Most importantly, we began to look at ways to enhance further the employee
experience across our Company with the goal of creating the world’s most exciting, productive,
fun and fulfilling career environment, with workplaces that nourish curiosity, learning,
innovation and growth. While this journey has just begun, our associates have responded with
the resolve, commitment and passion that have been hallmarks of Coca-Cola leadership since
1886. The Coca-Cola Company has always been a creator of refreshing beverage brands.
Today, our expansive portfolio includes more than 500 brands, including sparkling beverages,
juices and juice drinks, coffee, tea, sports drinks, water, value-added dairy, energy and
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enhanced hydration drinks. Among these brands are 20 that generate more than a billion dollars
in annual retail sales. Another core competency has been our ability to lead the world’s most
sophisticated system of independent bottling partners while creating value for our retail and
restaurant customers. Over the years, we’ve acquired and managed a number of Coca-Cola
bottling partners with the aim of improving performance, optimizing manufacturing and
distribution systems, and ultimately refranchising the bottling territories back to independent
status.
3.8 Current Strategies (to achieve above objective) (combination of strategies / single
strategy for each objective)
3.8.1 Corporate Level Strategies
The Coca-Cola Company uses the following corporate level strategies:
3.8.1.1 Growth Strategy:
They follow the growth strategy. The Coca-Cola Company invests a huge amount on
its s expansion projects not in Pakistan but also in all the six operating regions of the world.it
is currently present in more than 200 countries which is a big depiction of its focus on growth
strategies. As it’s the large scale organization, so Coca-Cola has to use different types of
growth strategies in different situations. Like if it aims to target new customers and introduce
new products than it has to use horizontal growth strategy. If it invests in its own supply
chain as a part of cost leadership strategy, it is basically focusing on vertical growth. The
coca cola company has developed its own supply and distribution system in various potential
markets of the world which largely helps it in controlling the heavy manufacturing and
distribution costs.
3.8.1.2 Diversification strategy:
The company has used diversification strategy various times. It was founded as soft
drink manufacturer but with the passage of time, it entered into various related industries like
mineral water, soda, tea, coffee, fruit juices. These diversification strategies have increased
its business portfolio and enabled it to compete with the top brand in all these industries.
3.8.1.3 Stability Strategy:
The company uses this strategy when it feels that growth strategy are not a feasible
choice in the presence of unfavorable economic circumstances or some internal issues.
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Therefore, it either proceeds with an extra care or completely stops at the current position
and focuses on its quality control, marketing efforts, supply chain and R&D.
3.8.1.4 Retrenchment strategy:
The coca cola uses retrenchment strategy in those business units where it observes no
or little growth during a definite period of time. T retrenches these business units in a number
of ways; including budget-cut for production, marketing, R&D in that area, complete
shutdown of operations, selling out the whole unit to private investors.
3.8.2 Business level strategies
The Coca-Cola Company uses the following business level strategies:
3.8.2.1 Differentiation strategy:
The coca cola company has always focused on differentiating its products from those
of its competitors in order to establish a unique position in the global beverages industry. Its
top most brands like coca cola, sprite and Fanta are manufactured under strict quality
standards and by unique formulations. Due to its differentiation strategy the Coca-Cola
Company is able to maintain the top market leadership position. Differentiation is found in
each of its business operation. It uses unique marketing campaigns, labeling, bottle shapes,
and up to dated plant and machinery to manufacture the top quality beverage products.
3.8.2.2 Low cost leadership:
In addition to delivering the top quality products, the company also keeps an eye on
its increasing operational and marketing expenditures. It recognizes the importance of cost
control for gaining competitive advantage in the industry and operating in a more profitable
way. The coca cola company has been pursuing this strategy since its incorporation. It
strongly emphasis on internal efficiency so that its products can be manufactured at the
minimum possible cost.it has maintained a tight control over its manufacturing, overhead,
marketing, and R&D costs.
3.8.2.3 Focus Strategy:
The company also uses focus strategy in both cost and differentiation dimensions.
For its focused low cost strategy, it has defined a specific line of beverage products through
which it can target a specific market and achieve low cost by manufacturing these products
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under highly efficient manufacturing processes. The Coca-Cola is manufactured and
promoted under focused low cost strategy. Coca cola is sold in more than 200 countries of
the world, but has slight variations in its taste, flavor, and ingredients. The company produces
its coke for every target at a large scale in order to achieve low cost leadership in that
market.it keeps that target market under complete focus while designing its marketing
campaigns and selecting distribution networks so that it can serve the potential consumers
from that market in the most effective and efficient way.
3.8.3 Functional level strategies
The Coca-Cola Company uses the following functional level strategies:
3.8.3.1 Marketing Strategies
1. Pricing strategy:
Due to the availability of wide range products the pricing is done according to
the market and geographic segment. Each sub-brand of coca cola has different pricing
strategy. Their pricing strategy is based on the competitors pricing, Pepsi is the direct
competitor to coke. Beverage market is said to be a oligopoly market (few sellers and
large buyers), hence they form into cartel contract to ensure a mutual balance in
pricing between the sellers.
2. Distribution strategy:
The company operates a 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.Hub and
Spoke model for rural distribution channel, in which they divided the different
categories of distributors according to the area they are covering.
Coca Cola Company makes two types of selling:
Direct selling: In direct selling they supply their products in shops by using
their own transports. They have almost 450 vehicles to supply their bottles. In this
type of selling company have more profit margin.
Indirect selling: They have their whole sellers and agencies to cover all area.
Because it is very difficult for them to cover all area of Pakistan by their own so they
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have so many whole sellers and agencies to assure their customers for availability of
coca cola products.
3. Promotion strategy:
Push Strategy: Coca cola is using Push strategy in which they use its sales
force and trade promotion money to induce intermediaries to carry, promote and sell
the product to end users i.e. consumers. • For example-as coca cola is giving free pet
bottles and other trade schemes to distributors, agency owners and retailers.
Pull Strategy: Coca-Cola is also using Pull strategy in which they are using
advertising and promotion to persuade consumers to ask intermediaries for the
company brand product by this way coca cola inducing customer to order it from
shopkeeper.
3.8.4 Financial Strategies
3.8.4.1 Financing and Dividend decisions strategy:
There is a Committee established by the Board to aid the Board in discharging its
responsibilities relating to oversight of the Company's financial affairs.
The Committee consists of no fewer than three members. The members of the
Committee shall be established by the Board and removed by the Board.
The Committee periodically formulate and recommend for approval to the Board the
financial policies of the Company, including management of the financial affairs of the
Company. The Committee have prepared for approval by the Board annual budgets and such
financial estimates as it deems proper; have oversight of the budget and of all the financial
operations of the Company, shall recommend dividend policy to the Board and from time to
time shall report to the Board on the financial condition of the Company. All capital
expenditures of the Company shall be reviewed by the Committee and recommended for
approval to the Board.
3.8.4.2 Working Capital Strategy:
Coca-Cola Enterprise used Economic Value Added (EVA) in the 80’s in order to
hold its profit and loss statement to a higher standard and attract investors. Another way to
evaluate true profit is to calculate the cost of capital which is what EVA attempts to do. By
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managing working capital and the cost of such, a company can stay competitive and liquid.
There are two kinds of capital – that which is borrowed and that which is invested. There is
a cost to both kinds of capital. By using EVA Coca-Cola Enterprise was able to attract
investors which meant a steady stream of working capital with which to run the day to day
business.
3.8.4.3 Financial or revenue/ profit growth strategy:
The company’s strategic objective is to maximize the revenue and profit growth of
the company. And for this purpose coca cola has used segmented revenue growth strategies
across their business in such a way that varied by market type. And they aligned their
employee incentives accordingly. In emerging markets, they focused primarily on increasing
volume, keeping the beverages affordable and strengthening the foundation of their future
success. In developing markets, they struck a balance between volume and pricing. In
developed markets, they relied more on price/mix and improving profitability by offering
more small packages and more premium packages like glass and aluminum bottles.
3.8.4.4 Human Resource Strategies
Human resource management at Coca Cola Company has many advantages as well
as disadvantages. As a global company, it focuses on the acquisition and retention of highly
skilled and knowledgeable employees so that is can maintain its top position in the market.
Coca Cola Company human recourse department check their job decryption and job analysis
in which they get the information about employees work activities, human behavior and other
background check which related to the job position. They use this information for recruiting,
selection, compensation, performance appraisal, training and employee’s relationship
HR department management states that employees are our assets, therefore we care
about their health and benefits.
1. Mentoring programs that provides an opportunity for employees to broaden their
professional network of resources, enhance their overall employment competitiveness
and benefit from learning about multiple areas of the company.
The program includes:
One on one mentoring
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Group mentoring
Self-study mentoring
2. The company encourages also coaching, feedback, exchange of ideas, diverse thinking,
and cross-functional learning.
3. Employees’ relations.
4. Compensation and benefits.
5. Training and Development.
6. Provide employees with solutions to their problems.
7. Look out for the well-being of all employees of the company.
3.9 Identify Rival Firms: PepsiCo
As a main rival in soft drink industry against coke, Pepsi expanded through a franchise
bottling network but with a greater focus on retail sales over fountain( fast foods like taco bell).
Pepsi is second to coke in sales.
3.9.1 PepsiCo’s Strengths (Internal Strategic Factors)
PepsiCo’s continued global growth and prominence reflects the company’s strengths. This
aspect of the SWOT analysis framework outlines internal strategic factors that enable firms to
fulfill their business goals. The following are the most significant strengths of PepsiCo:
3.9.1.1 Strong brand recognition and reputation
PepsiCo owns and markets some of the most recognizable global brands, including Pepsi,
Tropicana, Gatorade, Mountain Dew, Aqua-fina, Lay’s, Doritos, Cheetos and many other popular
brands. According to Interbrand and Forbes, the Pepsi brand is respectively the 24th and 29th most
valuable brand in the world, worth US$19 billion in both rankings lists. Forbes also identified Frito-
Lay as the 38th most valuable brand in the world, worth US$13.1 billion. Except for Coca-Cola
and Sprite, no other non-alcoholic beverage brand besides Pepsi has been recognized as being one
of the top 100 most valuable brands in the world. Euro monitor measured the most popular U.S.
snack brands in 2013 and 6 of the 10 most popular brands were owned by PepsiCo.
3.9.1.2 Broad product mix
In addition, the broad product mix represents PepsiCo’s increasing ability to reach various
markets and segments, such as through Frito-Lay products, Quaker products, and Pepsi products.
3.9.1.3 Extensive global production network
PepsiCo’s extensive global production and distribution networks are strengths that support
the company’s international growth and expansion strategies.
3.9.1.4 Extensive global distribution network
In this aspect of the SWOT analysis, PepsiCo’s strengths are sufficient to support its global
growth strategy.
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3.9.2 PepsiCo’s Weaknesses (Internal Strategic Factors)
PepsiCo suffers from a number of weaknesses that act as barriers to international growth.
The internal strategic factors that limit organizational development are considered in this aspect of
the SWOT analysis framework. The following are PepsiCo’s main weaknesses.
3.9.2.1 Low penetration outside the Americas
PepsiCo derives about 70% of its revenues from markets in North America and South
America. This weakness indicates that the company has not yet maximized potential revenues
outside the Americas.
3.9.2.2 Limited business portfolio
In addition, PepsiCo operates primarily in the food and beverage industry. This is a
weakness because it maximizes the company’s vulnerability to risks in the food-and-beverage
market.
3.9.2.3 Weak marketing to health-conscious consumers
Also, PepsiCo fails to effectively market many of its products to health-conscious
consumers. This aspect of the SWOT analysis highlights weaknesses that PepsiCo must address
through changes in its growth strategy.
3.9.3 Opportunities for PepsiCo (External Strategic Factors)
PepsiCo has opportunities for continued global growth. In this aspect of the SWOT analysis
framework, external strategic factors that provide options for business improvement are identified.
PepsiCo’s opportunities are as follows,
3.9.3.1 Business diversification
PepsiCo has the opportunity to diversify its businesses, such as by acquiring a
complementary firm that is not in the food and beverage industry.
3.9.3.2 Market penetration in developing countries
Another opportunity is for PepsiCo to increase its penetration in developing countries to
generate more revenues from markets outside the Americas.
3.9.3.3 Global alliances with complementary businesses
In addition, PepsiCo can create alliances with complementary business to increase its
market presence. Based on this aspect of the SWOT analysis, PepsiCo has significant opportunities
to strengthen its business resilience.
3.9.4 Threats Facing PepsiCo (External Strategic Factors)
The food and beverage industry experiences a variety of threats. External strategic factors
that could reduce business performance are considered in this aspect of the SWOT analysis
framework. In PepsiCo’s case, the following are the most significant threats:
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3.9.4.1 Aggressive competition
Aggressive competition is a major threat against the company. The influence of the Coca-
Cola Company is especially significant against PepsiCo.
3.9.4.2 Healthy lifestyles trend
In addition, the healthy lifestyles trend is a threat against PepsiCo’s products, many of
which are seen as unhealthful because of their sugar, salt, or fat content.
3.9.4.3 Environmentalism
Also, environmentalism threatens the company in how consumers negatively respond to
product waste and lifecycle issues. This aspect of the SWOT analysis indicates that PepsiCo must
reform its strategies to overcome the threats to business.
3.9.5 Objectives of PepsiCo
3.9.5.1 Detailed company objectives
The main objective of launching PepsiCo was to provide a quality product, product at
affordable price for the masses in addition through an organized and well mannerism. Corporate
social responsibility are also an important part of company objectives because PepsiCo consider
this goal as fundamental for private growth but for environmental growth too.
3.9.5.2 Objectives in term of market share
The objective of the PepsiCo is the “market share growth”. Although organization has
been able to capture a greater percentage of market but still they want to strive for more market
share as well as a quality product and service.
3.9.6 PepsiCo’s Generic Strategies
PepsiCo applies different generic competitive strategies, considering the company’s wide
array of products. However, the main generic strategies that contribute to PepsiCo’s competitive
advantage are as follows,
3.9.6.1 Cost leadership
PepsiCo uses cost leadership as its primary generic competitive strategy. This generic
strategy focuses on cost minimization as a way to improve PepsiCo’s financial performance and
overall competitiveness. For example, to compete against Coca-Cola products, PepsiCo offers low
prices based on low operating costs. The company also sometimes has special promotional offers
with discounted prices. . A strategic objective for the cost leadership generic strategy is to automate
production processes to minimize PepsiCo’s operating costs.
3.9.6.2 Broad differentiation
PepsiCo uses broad differentiation as its secondary generic competitive strategy. This
generic strategy enables business competitive advantage by attracting consumers to some unique
features of the firm’s products. For example, PepsiCo’s Lay’s potato chips are marketed as a
healthful snack product because of reduced saturated fat content. In relation, PepsiCo’s strategic
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objective for the broad differentiation generic strategy is to innovate products to address concerns
about their health effects.
3.9.6.3 Market Penetration
PepsiCo implements market penetration as its primary intensive growth strategy. This
intensive strategy supports business growth through increased sales, such as from a bigger market
share. For example, PepsiCo uses aggressive marketing to attract more consumers. A strategic
objective linked to this intensive growth strategy is to minimize costs and prices to attract more
consumers despite market saturation. As such, PepsiCo’s generic competitive strategy of cost
leadership supports this intensive strategy for growth.
3.9.6.4 Product Development
PepsiCo’s secondary intensive growth strategy is product development. This intensive
strategy requires offering new products to capture more consumers. For example, PepsiCo
continues to develop products or variants of existing ones, such as low-calorie, reduced-salt, or
low-saturated-fat variants of its food and beverage products. A strategic objective linked to this
intensive growth strategy is to boost R&D investments for product innovation. PepsiCo’s generic
competitive strategy of broad differentiation supports this intensive strategy by offering unique or
novel products to attract more consumers and grow the business.
3.9.6.5 Market Development
PepsiCo applies market development as its supporting intensive growth strategy. This
intensive strategy supports business growth by capturing new markets or market segments. For
example, PepsiCo continues to expand its distribution network to reach the last remaining markets
or segments, especially in developing regions. However, market development is only a supporting
intensive growth strategy because PepsiCo already has significant presence in all regional markets
worldwide. A strategic objective for this intensive strategy is to expand PepsiCo’s supply chain to
support the growth of its distribution network.
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3.10 SWOT Analysis
1. It is the number onebeverage in terms ofdistribution and sales andvalue ($77,389 billion).
2. Its portfolio comprises offamous brands like Coca-Cola, Kinley, Fanta, MinuteMaid, Limca, Maaza, etc.
3. Globally present and hasreach in almost 200 countries.
4. It has more than 500 brandsto offer
5. Employees almost morethan 150,000 people globally
6. Coca-Cola carries aneffective and strong supplychains which ensures that itsproducts are delivered andavailable even in the mostremote places.
7. Financially strong
8. Maintains strong brandrecall by associating theirbrands with brandambassadors and celebritiesthrough advertising andmarketing.
9. Socially responsible: TakenCSR initiatives in the avenuesof education, recycling andwater conservation, health,etc.
10. Gives emphasis recyclingand reusing through itsefficient and effectivepackaging and disposingtechniques.
11. The brand has long beenassociated with scholarships,donations and internationalsports.
12. Customer Loyalty
13. Bargaining power oversuppliers
1. Traces of pesticides found in the cola beverages had damaged the image of the brand.
2. PepsiCo is a strong competitor in the aerated drinks industry and thus constant competition runs between them for market share.*
3. Absence in the food and snacks industry.
4. Negative publicity
ST
RE
NG
HT
SW
EA
KN
ES
SS
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1. Takeover and acquire other companies to enter other industries.
2. Reach untapped markets and countries where Coca-Cola has not been introduces yet.
3. Market and promote the less known products of the portfolio.
4. Diversify into other industries like snack market to beat PepsiCo.
5. Lower threat of forward integration due to the strong supply chain network, high-cost manufacturing machineries required.
6. Advance technological progression
1. Health reports claim Coke is harmful to health; Consumers have become health conscious.**
2. Compliance with regulations and laws of various countries in which they operate and distribute.
3. Economic slowdown, inflation, currency instability, etc.
4. Head-to-Head competition with PepsiCo.
OPPORTU
NITIES TH
REATS
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4 Phase 4 – Gap Analysis & Recommendations
Topic Gap Analysis (Issues) Recommendations
4.1 External Analysis
Natural Environment Coca-Cola has been
accused of dehydrating
communities in its pursuit of
water resources to feed its own
plants, drying up farmers'
wells and destroying local
agriculture.
Greater efficiency in
water use does not mean
making less product. To the
contrary, they intend to reduce
their water use ratio—the
amount of water we use per
liter of product produced—
while growing our business.
Looking across their system,
their data show that the highest
water use ratios are often in
developing markets, where
water risks may be higher. One
main reason: In developing
markets, refillable glass bottles
make up a large percentage of
their unit case volume, and
cleaning returned bottles
demands more water. Even in
those markets, their bottling
plants typically draw a small
percentage of water from local
water sources, and each plant’s
source water protection plan
helps mitigate any threats to
local water supplies.
Due to this coca
cola wastage the water
resources and the
community suffers a lot. In
this case they must start up
the program for the
reservation of water so that
the economy prevent from
dehydration.
Societal Environment Political Factors Coca-Cola should
stop to sell the products to
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Coca-Cola has been
also effected in the turkey and
India by political decisions
when Israeli attacks on Gaza in
2014, then Turkey, and more
than 100 hotels in Mumbai,
stop selling products of Coca
Cola Company because these
countries said that the attacks
of Israel on Gaza is because of
its economic power. So they
should stop selling products of
those brands which contribute
to the Israeli economy and
Coca-Cola brand is one of
them who directly contribute
to Israeli economy. So here
Coca-Cola brand is effected by
the political decisions of
Turkey. It has negative impact
on coke.
Economic Fectors
The global economic and
financial crisis of 2007 – 2009
is a relevant example of an
economic factor that greatly
impacted the majority of
businesses around the globe.
However, the crisis has
impacted Coca Cola to a lesser
extent compared to many other
businesses. Its operating
margin remained at industry-
front 22% despite the crisis,
although dividend yield was
reduced to 2.6% .No doubt
coke was effected lesser by
that recession but it was
effected by economic factors
in a negative way.
Israel. Because it impact
the economy. So it is
recommended to stop
selling here.
In this regard coca-
cola must apply some
strategies to improve in the
economy because it will
impact on the brand of
coca-cola. Market share
price must increase in this
regard.
To promote an
advertising system in a
positive way rather than the
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Social Factors
Adaption and cultural
borrowing
To promote an
advertising system in a
positive way rather than the
musical or negative that will
impact society.
Technologic Factors
Access to the Internet
It has on negative impact on
company policies because
those people who are not using
internet cant aware brand
identity.
musical or negative that
will impact society.
Research and
development must be focus
to cater technology.
PESTEL Analysis Someone might be thinking
that what is an
environmental analysis got
to do in the business
perspective? This analysis
is factors or features that do
influence an increase or
decrease in the quality of
strategic decision making
in a business environment.
There are various factors
under this analysis that
could help to attain the
objectives of a company
and as well act as a barrier.
The environmental analysis
can as well be divided into
two parts.
Remote (micro)
environmental factors:
these are the factors that
affect company or the
organisation of which they
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105
do not have control over it.
These factors are;
Political
Social
Economical
Technological
Ecological
Industrial (macro)
environmental factors:
these are factors that the
organisation or the
company has some control
of. It can also be called
'porter's 5 forces'. These
factors are;
Barrier to entry- these has
to be high
Supplier power- these
should be low
Substitute- has to be low as
well
Competitive- has to be low
Buyer power- it must also
be low.
Task Environment WATER STEWARDSHIP
Of the 9.25 million trillion
gallons1 of water on earth, less
than one percent2 are available
to meet the needs of the
planet’s 7 billion-plus3 people.
And stress on the world’s
water supplies—from
population growth,
urbanization, climate change
and more—is increasing.
Preserving and effectively
managing the world’s
available freshwater—
achieving what policymakers
Collaborating to
Replenish the
Water We Use
Improving Water
Efficiency
Wastewater:
Safely Returning
the Water We
Use to Make Our
Beverages
Mitigating Water
Risk for
Communities
Partnering to
Advance Water
Stewardship
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106
call water security—may be
humanity’s most crucial task.
In that sobering reality,
Margaret Catley-Carlson, past
chair of the Global Water
Partnership, sees hope—
provided that all of us are
committed to the stewardship
that water security demands. In
Ms. Catley-Carlson’s words:
"In the clamor of facts, figures
and dramatic predictions, there
is a constant quiet message
about water adequacy: we
probably have enough water,
but not if we use it the way we
do now.
What does that mean, exactly?
Mostly it means that the
growing number of countries,
cities, corporations— and yes,
individuals— experiencing or
threatened with water stress
will have to change the way
they manage and use the water
resources available to them.
Sizeable investments will be
needed in the all-too-many
places where municipal pipes
leak 30 to 60 percent of the
water that is stored, cleaned
and put into the system for
distribution. Industrial, energy
and agricultural processes
must be examined to
understand the potential for
reduction, recycling and re-
Inside the Bottle:
Things You Want
Us to Answer
Around Water
Meet Our Experts
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107
use. Having ‘enough water to
eat’ means optimizing the use
of the 75 percent-plus of all
water used that goes to
agriculture. And it means
changes in how we use water
as individuals, too. Why do we
flush with drinking water?
That improvements are being
made (though not in enough
places) means there are
prototypes and technology
available; the will to make
these more widespread will
have to be cultivated and
encouraged. But it has been
done and can be done, even in
resource-poor areas.
Kudos to companies already
embarked on this process, and
especially to those trying to
extend water-saving practices
up and especially down their
supply chains. Again, it can be
done. It has been done. More
needs to be done.
Since few of these measures
are cost-free, the unwelcome
but essential change almost
everywhere will be that most
of us need to pay more for
water services—sanitation and
wastewater services
included—to protect us and
our water resources. We are
not the only life form that
depends on water for survival,
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108
so we have a high interest in
making sure that the
environmental resources that
sustain us are in turn sustained
by us."
At The Coca-Cola Company,
we are intensely involved in
water stewardship across our
system and in hundreds of
communities throughout the
world. We are working to use
water more efficiently. We are
treating and recycling
wastewater. And we aim to
replenish the amount of water
used in our finished beverages
by 2020. Read about our
progress in the Water
Stewardship section of this
report.
CAPITALISE ON THE
WIDER HEALTH AND
WELLNESS TREND IN
SOFT DRINKS
Areas such as ‘better-for-you’,
‘naturally healthy’ and
‘fortified/functional’ are the
opportunity areas within
existing soft drinks categories.
Coca-Cola already has a wide
range of juice brands and
waters that could prove to be
winners for the company, but it
must continue to develop and
innovate new health and
wellness angles within its
brands. A key growth area
We use evidence-
based science. We are
committed to using
evidence-based
science to guide the
choices we offer and
the way we educate
about those choices.
We innovate. We are
committed to
investing in the
development of
products, sweeteners,
packaging, equipment
and marketing that
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109
could be fortified/functional
drinks and energy drinks,
where opportunities to add
new functional ingredients are
continually being discovered.
How will Coca-Cola expand
its presence in this space? The
company’s Monster Energy
equity investment late last year
was an important step to shore
up market share in the energy
category, but growth rates in
this space show signs of
slowing slightly. What are the
company’s innovation plans in
healthier and functional
beverages.
fosters active, healthy
living
We provide
hydration choices
and educate
consumers about
them. We are
committed to bringing
real choice to
consumers
everywhere and to
educating them on the
role our variety of
beverages can play in
sensible, balanced
diets as well as active,
healthy lifestyles.
We inform with
transparency. We are
committed to
transparency about the
nutritional content of
our products.
We market
responsibly. We are
committed to
responsible marketing
of our products,
honoring the rights of
parents and
caregivers, and
informing and
educating consumers
about the beverages
we provide.
We promote active,
healthy living. We
are committed to
being part of workable
solutions to the
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110
problems facing
society related to
obesity. We seek to do
this by assisting our
associates and their
families, as well as the
communities that we
serve, in promoting
active, healthy living.
4.2 Internal Analysis
Vision / Mission / Core Values The Issue lies in the Mission
Statement of Coca Cola. The
mission Statement of Coca
Cola is,
“Coca-Cola Pakistan
exists to refresh the
consumers, inspire moments
of optimism through our
brands and actions as well as
benefit all stakeholders, which
we will do with highest social
responsibility and with
uncompromising commitment
towards quality of our products
and integrity in our
operations”.
However, the mission
statement of Coca Cola does
not include the 9 components
of a mission statement.
The Core Values which are
listed on their website and in
their documents are not always
implemented inside the
Factory of Coca Cola
Beverages Pakistan Limited
Coca Cola’s
Mission statement does
explicitly have all the 9
components of the good
mission statement. Coca
Cola should more clearly
mention their self-concept
or competitive advantage in
their mission statement.
Customers and target needs
to be a bit clearer in here.
Core values needs
to be implemented properly
inside the domains of the
company. All they need are
the proper implementation.
Organizational Policies Coca Cola’s HRM, and
Financial, policies have
become too rigid and does not
Coca Cola need to adopt to
soft HRM approach to deal
with the employees.
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111
have much flexibility. Hence,
the company is facing the
problem of under-staffing one
employee doing the job of two
employees in a department and
being paid just lesser than 2
employees.
Company should not
maintain adequate staffing
levels in the company
rather than making it an
under-staffed company.
Organizational Culture 1. Diversification is an
issue. It is good to have
diversified workforce
but due to
diversification they
have problem of
communication as
well.
2. Due to the great and
big organization they
are not properly
relating and having
relationship with their
front staff employees.
3. Women in the
organization are less.
There are less women
and the existing one
because of being
minority do not avail
the facilities and
culture is not suitable
and friendly for
them.in Pakistan
females are not let to
come to the upper
management they are
always working in the
lower staff. Same is the
case with coca cola in
Pakistan.
In the organization there are
proper ethical policies to
1. They should do
proper
arrangements to
eliminate this
communication
gap. They should
arrange proper
classes and courses
to learn the
languages.
2. They should make
proper
arrangements for
the employees of
lower level. They
should give them
respect, trust, and
should also involve
them into the
decision making
related to the
culture of
organization. They
should also be
asked about their
problems that they
are facing in the
organization.
3. They should
increase their
female staff. The
ratio of females and
males should be
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112
monitor the employees but still
employees are not following
that especially in Pakistan.
equal. Females
should be given
proper facilities and
power to take
decisions. The
female should be
given chance to
prove their selves.
They should be
given authority and
should hire them on
good and valuable
positions.
4. In spite of ethical
codes the
employees are not
following it. They
should arrange
proper conduct and
policies and should
do surveys to make
sure that all the
rules are obeyed by
the employees.
Every employee
should be asked to
know the problems
that they are facing
in the organization
or due to any
employee. And
proper
investigation
should be there so
no employee gets
issue of job
security.
Organizational Structure The Division of Work &
Grouping within the Coca Cola
Company
• Tall Organizational
Structure:
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The division of labor can be
unique in many organizations.
It has been coined a production
process in which a worker or
group of workers are assigned
a specialized task in order to
increase efficiency. This is the
case for the Coca Cola
Company. Primarily the
company has a very tall
hierarchy in place and
subordinates that are then
divided up by regions. The
Coca Cola Company being a
truly global organization uses
the design of division of work
by location. Each area/region
has a certain amount of
subordinates designated to that
specific area; however, the
number of employees
delegated to one region may be
different to another. By
dividing its employees up
according to geographic
location, the company benefits
on many levels. For example,
being closer to a certain market
allows the teams involved to
work accordingly with regards
to advertising campaigns,
meeting the tastes of
consumers of that region etc.
Each region is then sub divided
e.g. Europe divided up in to
North West and South East,
Nordic and Baltic(The Times
100, 2005).
As mentioned before meeting
the tastes of consumers is met
A clear hierarchy of
authority exists within the
Coca-Cola Company.
However, the chain of
command has numerous
layers as the company has
offices in over 200
countries worldwide
(Coke, 2011). For example:
The UK Division is
accountable to the North-
West Europe Regional
Division. The North-West
Europe Regional Division
is, in turn, accountable to
the Europe, Eurasia and
Middle-East SBU
(Strategic Business Unit).
Finally, the 5 regional
SBU’s, which encompass
the entire globe, are
accountable to Coca-Cola
Head Offices in Atlanta,
Georgia (The Times,
2005). Furthermore,
interior organizational
structure exists within
Head Office, the 5 SBU’s,
the regional divisions and
the country divisions.
• Issues with Layers:
Such “tall”, rigid
management structures can
often lead to employee
frustration and
disgruntlement. The
existence of many layers
can make staff feel like
their opinions are
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more effectively due to the
divisions and sub divisions by
location. The Great Britain
(UK) division would insure all
areas such as marketing would
be covered appropriately. For
example, an advertising slogan
that is appropriate to the UK
and Irish Public may not
necessarily be considered
appropriate in another country.
This is why there are so many
sub divisions within the
company. Each division will
have its own Marketing
manager, Public Affairs
Director, Finance Director and
so on (The Times 100, 2005).
When one of these divisions is
planning a new beverage
launch or perhaps an
advertising campaign, the
division must communicate
respectively with their
superiors. Because the Coca
Cola Company has such a tall
hierarchy, communication
must travel all the way back to
the corporate division in North
America where a 12 Member
executive committee have the
final say on any activities that
the company’s divisions are
considering.
Like many organizations
today, The Coca Cola
Company push elements such
as teamwork amongst its
employees whenever and
wherever possible. Grouping
unimportant and their
contribution is
insignificant. This can lead
to organizational problems
such as absenteeism and
high staff turnover, which
can, in turn, reduce the
efficiency of the business.
According to official
company figures, Coca-
Cola lost 185,608 days of
labor in 2010 (Coke, 2011).
While some lost labor is
due to legitimately sick
employees some
employees may skip work
due to a lack of motivation.
Furthermore, the same
report shows staff turnover
figures were very high in
2010, with some sectors of
the company recording
turnover rates of 20%.
Recommendation #1:
I would recommend that
Coca-Cola implement
flatter management
structures in their regional
and local divisions. It’s
more likely that employees
this far down the chain are
to feel that their opinions
and work goes unnoticed,
as opposed to mid and
high-level managers who
call the shots. Such a
structure would move the
company from a
mechanistic style of
management to a more
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115
takes place on many levels
within the organization
whether it is on the bottling
floor or launching new
products.
For example, the Great Britain
division brings together a
group of employees when
creating new product
development. Included in such
a team will be marketing
specialists who will inform
others of their market research
and testing, food technologists
will clarify whether changes to
a product are feasible,
financial experts will describe
the cost incurred with the
change and other specialists
will also be involved such as
the strategic planning director.
• The effectiveness of
the division of work fostered
by Coca Cola
For an organization as big as
Coca-Cola, it is vital that the
methods they adopt for the
division of work among
members of the organization
are effective and successful.
They have achieved this
through global and local
strategies.
• Global and Local
Strategy
Coca-Cola concentrates
certain functions for global
strategy in a corporate
organic approach. This
style could potentially
serve to engage and
motivate employees, which
should give the firm a
competitive advantage.
Furthermore, the
introduction of this policy
should decrease staff
turnover, which will cut
down on the costs of hiring
and training new staff.
• Centralized Power
Structure:
At present, the Coca-Cola
Company is managed using
elements centralization and
decentralization. However,
the decentralized power
held by the SBU’s (and
their subdivisions) is often
limited to the advertising
and market research side of
business. On the other
hand, the centralized
power, which operates in
Atlanta, has substantial
power over the firm’s
“bigger” decisions.
According to the Times
document, Head Offices
are “responsible for giving
the Company an overall
direction and providing
support to the regional
structure”.
• Issues with
Centralized Power
Structures:
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116
segment, while having
geographic segments dealing
with local strategy. They
divide the functions,
responsibilities and work to
avoid overlap and waste while
concentrating on the optimum
business structure to achieve
its goals.
• Global: The Corporate
Segment
As aforementioned, the
corporate segment consists of
an executive committee of 12
company officers. This head
office for Coca-Cola is used to
give directions to the
organization and make key
decisions for the brand. One
member acts as the CEO, the
figurehead of the company.
Other executive members have
other responsibilities e.g.
Senior Business Executives,
Chief Financial Officer, etc.
(The Times 100, 2005).
Having a strong corporate
segment has proven to be
effective for Cola-Cola,
bringing confidence and order
to the whole company.
• Global: In detail
The head offices of Coca-Cola
have control over the
company’s recipe
(technology). They monitor
the production of the syrups
and concentrates that are then
mixed with water at specific
Due to the sheer size of the
company, elements of
corporate power are needed
to govern regional offices
(Johnson, 1946). I would
argue that too much
decision making power lies
in the hands of corporate
office of Coca-Cola, while
regional offices lack
decision making power in
terms of finance,
innovation and
strategizing. One major
problem with centralized
organizational structures is
that they often ensure that
changes within the
organization take longer to
be implemented. Often the
benefits of centralization
are outweighed by its
limiting effect on regional
divisions. Campbell also
suggests that it can distract
and de-motivate regional
workers. Some authors
even argue that
centralization can lead to a
lack of innovation in the
workplace. This could
point to the reason why one
article suggests that Coca-
Cola has lost its innovative
roots and is starting to “lose
its fizz” due to a recent lack
of creative flair
Recommendation #2:
Decentralizing some
aspects of the
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117
bottlers. There are 30 company
owned and operated
manufacturing plants around
the world that produce the
syrups and concentrates
(Richard Girard, 2005).
They’re also in charge of
setting up the different
production plants around the
world and deal with all legal
and financial issues that affect
the organization as a whole.
They have experienced many
issues in the countries they
produce in. For example, in
India, they experienced
problems involving
environmental pollution and
finding high levels of
pesticides in their products in
2002 (Richard Girard, 2005).
The corporate segment was
needed to keep the consumer’s
trust in the brand and to deal
with all these issues
effectively.
Local: Strategic Business
Units
Coca-Cola has achieved a
status of being a global product
by operating in local
environments all over the
world. By dividing the
organization among different
countries, Coca-Cola can meet
the needs and requirements for
different countries (The Times
100, 2005).
organizational structure
could yield improved
organizational
performance. It would
allow the SBU’s, divisions
and sub-divisions to make
quick changes that are
relevant to their workers
and to their specific
geographical locations. In
addition to that,
decentralizing the
organizational structure
would place more creative
power in the hands of
regional and national
divisions. This freedom to
experiment would more
than likely motivate and
engage the workforce in a
way that would be
impossible under
centralized restraints. Thus,
it would serve to positively
affect organizational
performance.
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118
SBUs are very effective for
they allow Coca-Cola to
recognize that tastes, lifestyles,
income and consumption
patterns vary from region to
region. Coca-Cola can now
price, distribute and innovate
their products to best suit the
needs and circumstances of the
global market. The SBUs are
also in charge of conducting
market researches for their
regions and promoting the
brand through local
advertisements using the
native languages (The Times
100, 2005).
• Local: In detail
The SBU’s are sub-divided
into divisions. This allows for
the further spreading of Coca-
Cola departments and
production plants around
different regions The UK
division (located in the North
West Europe division) is an
example of a Coca-Cola
company that uses a more local
level of management
compared to the global
positions in the corporate
segment. As mentioned before,
the company consists of
different departments that
specialize in different tasks. A
president overlooks and
represents the entire company
(The Times 100, 2005). This
use of specialization allows for
the company to be run
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119
efficiently. The company
provides for their division by
dealing with public affairs and
maximizing the satisfaction of
its customers.
Core competencies Coke enjoys distinctive
capabilities that enable it to
carry out business better than
its competitors, e.g.
Innovation, reputation and
architecture [bottlers]. Coke
need to invest on its
concentrate-formulae aiming
to retain its market buy gaining
targeted consumers, diet-coke
for older-people, caffeine-free
for health-conscious. Quality
and sponsorship is associated
with its brand-value, coke need
to invest towards this to avoid
any negative publicity or
probable ban from any region
originating from chemical-
contamination, shortening of
ground-water and other
health/environmental issues.
Coke need to nurture its
relationship with bottlers
by enhancing the equity
investments in bottling-
operations to maximize the
strength and efficiency of
its production,
distribution/marketing
capabilities globally. Coke
should focus towards
creating new brands with
less sugar and calorie and
newer brands to attract the
young generation. Coke
also need to invest on the
sponsorship [of sports or
cultural events] on the
emerging markets to
sustain its market
advantage.
Strategic Objectives 1. Monopolization
In 2000, a United States
federal judge dismissed an
antitrust lawsuit filed by
PepsiCo Inc. accusing Coca-
Cola Co. of monopolizing the
market for fountain-dispensed
soft drinks in the United States.
In June 2005, Coca-Cola in
Europe formally agreed to end
deals with shops and bars to
stock its drinks exclusively
after a European Union
investigation found its
1. Target disciplined
brand and growth
investments
In 2015, Coke announced
that it would increase its
annual marketing costs by
$800 million to $1 billion,
in part to kick-start sales of
its CSD (carbonated soft
drink) portfolio, which is
generally referred to as the
"sparkling" side of Coke's
business. To translate the
corporate speak in the
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120
business methods stifled
competition.
In November 2005, Coca-
Cola's Mexican unit - Coca-
Cola Export Corporation - and
a number of its distributors and
bottlers were fined $68 million
for unfair commercial
practices. Coca-Cola is
appealing the case.
2. "Channel stuffing"
settlement
On July 7, 2008, Coca-Cola Co
compromised to pay $137.5
million to settle an October
2000 shareholder lawsuit.
Coca-Cola was charged in a
U.S. District Court for the
Northern District of Georgia,
with "forcing some bottlers to
purchase hundreds of millions
of dollars of unnecessary
beverage concentrate to make
its sales seem higher."
Institutional investors, led by
Carpenters Health & Welfare
Fund of Philadelphia &
Vicinity, accused Coca-Cola
of "channel stuffing," or
artificial inflation of Coca-
Cola's results which gave
investors a false picture of the
company's health. The
settlement applies to Coca-
Cola common stock owners
from October 21, 1999 to
March 6, 2000.
Investments and operations in
apartheid South Africa[edit]
quote above, Coca-Cola's
CEO Kent points out that
the increased media spends
have enabled the company
to grow sparkling sales
profitably -- with price
increases rather than
volume increases.
What specifically are
"disciplined brand and
growth investments?"
Over the last few years, a
disciplined brand
investment for Coke
means taking a small brand
with potential and scaling
it through Coke's global
distribution system, with a
significant boost from the
marketing dollars as
discussed above. Take
Fuze Tea, for instance,
which Coke now sells in
over 40 countries, and is
one of the fastest growing
brands ever in Coke's
stable to reach the billion
dollar mark, having done
so in just three years.
2. Drive revenue and
profit growth with
clear portfolio
roles across our
markets
Coca-Cola is playing for
the long-term as it
balances opportunities for
higher pricing with the
always present need to
increase market share. The
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121
Coca-Cola entered South
Africa in 1938 and, after the
beginning of the official white
South African government's
policy of apartheid or
"separate development"
beginning in 1948, the
company grew rapidly. By the
1980s at the height of racial
oppression, with 90% of the
market, Coke dominated the
soft-drink industry with sales
in the hundreds of millions of
dollars, accounting for 5% of
the parent company's global
market. Coke employed 4,500
workers, operating under the
racially segregated housing,
workplace, and wages, and
was one of the largest
employers in the country.
In 1982 in South Africa, black
workers asked the community
to boycott Coke and called two
work stoppages until the
company agreed to recognize
and bargain with their union,
raise its workers' low wages
significantly, and share
information on who controls
their pension fund.
As a result of Coke's economic
support of white South Africa
and its apartheid system, in the
1980s, it became a major target
of organizers across the
country against U.S. and
corporate economic support
for apartheid in the U.S.
Boycotts then spread across
idea of "clear portfolio
roles" reflects Coke's
growing realization that
these often competing
priorities of price and
volume are best handled
by assigning either one or
the other to specific
geographical markets.
For example, as
developing economies
have revised their GDP
growth expectations
downward in the last year,
thus thinning out consumer
wallets, Coke appears to
be more focused on
gaining market share
through volume in markets
like China and India.
Take the company's
"Coca-Cola Splash Bar"
experiment in rural India.
This program is meant to
extend opportunities to
entrepreneurs, especially
women, in under-served
communities. The Splash
Bar is a bare-bones
refreshment stall from
which the proprietor can
dispense roughly 5 ounces
of a soft drink for 5 rupees,
or about 8 cents.
Coke's assistance to small
business owners on the
margins of developing
economies is laudable.
However, through the
Splash Bar's extremely low
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122
the country to many
universities including
Tennessee State, Penn State,
and Compton College in
California, which established a
"Coke Free Campus."
Demonstrations were held by
the Georgia Coalition and the
AFSC at Coca-Cola's Atlanta
headquarters.
In South Africa, in 1986, the
Coca-Cola response was to
donate US$10 million to a
fund to support improvements
of housing and education for
black South Africans and to
announce "...plans to sell its
30% share of a major bottler
and a 55% share of a canning
operation within six to nine
months." (The company's
assets there were estimated at
US$60 million, their annual
sales were circa US$260
million, and with 4,300
workers one of the largest U.S.
employers in South Africa.)
However, the movement in the
U.S. demanded full divestiture
and did not accept the
company's offer to sell a major
portion of the holdings to a
South African firm.[29]
After democratic elections that
produced Mandela's majority
rule government, Pepsi sought
to re-enter the South African
market. In fact, "Coke never
truly left the country, leading
to overwhelming dominance
price points, Coca-Cola
also wants to engage a
wide future customer base.
It doesn't hurt that millions
upon millions of these
rural customers will see
increased income and
migrate to cities as the
years go by. Coke hopes
that they'll bring a taste for
Coke, Fanta, and localized
Coke brands such as
"Thums Up" with them.
3. Refocus on our
core business
model
While Coca-Cola benefits
from its massive bottling
and distribution system,
the company believes that
owning as little of its
bottling operations as
possible will allow it to
realize higher net profits
over the long-term. In fact,
Kent defines Coca-Cola's
prime competencies not as
bottling and distribution,
but as "marketing
innovation and franchise
leadership." This is a way
of saying that Coca-Cola
should focus on marketing
its brands and let others
worry over the ultimate
production and
distribution.
To this end, Coke intends
to refranchise, or sell off,
nearly all of its North
COCA COLA FINAL PROJECT OF STRATEGIC MANAGEMENT
123
through the rest of the 20th
century. Pepsi adhered to
different social imperatives
and suffered exceptionally low
market shares as a result."
Indeed, in the late 2000s,
Coke's market share of the soft
drink market in South Africa
was estimated at 95% and
Pepsi's at 2%.
3. Marketing Issue
On August 9, 2015 the New
York Times published an
article that revealed that Coca-
Cola had made a large
investment to the non-profit
called the Global Energy
Balance Network, which
promoted a scientific solution
to the obesity crisis, which was
that more exercise rather than
cutting back on calories was
the way to maintain a healthy
weight. Health experts stated
that the non-profit's message
was misleading and part of
Coke to deflect criticism about
the role the company played on
the spread of obesity and Type
2 diabetes.
American bottling
operations by 2020. But
this doesn't mean that the
company will become
disengaged from the
bottling and distribution
processes, which are vital
to Coke's survival and
success.
Instead, the soft drink
conglomerate will continue
to work closely with its
bottlers, and, where
appropriate, form new
joint ventures, such as the
recently announced "Coca-
Cola Beverages Africa."
This bottler will exist as a
joint venture between
Coca-Cola, SABMiller,
and the South African
Gutsche Family
Investments. Coca-Cola
Beverages Africa will
serve twelve African
countries and handle
roughly 40% of Coca-
Cola's global African
beverage volume.
It's hard to argue with
Coke's logic in this
business model tweak.
While "Bottling
Investments" as a segment
contributed 15.2% of the
company's overall revenue
last year, its operating
margin was essentially flat,
at 0.1%. The bottling
segment showed operating
COCA COLA FINAL PROJECT OF STRATEGIC MANAGEMENT
124
income of only about 1.5%
in the two preceding years
as well.
4. Aggressively
expand our
productivity
program
This quote actually comes
not from the earnings call
but from a December
financial modeling call
with analysts, in which
Chief Financial Officer
Kathy Waller gave, among
other things, a detailed
overview of Coca-Cola's
productivity plan. The
company initially set a
productivity target of $1
billion in early 2014,
which was increased
during the year to $3
billion, with all cost
savings to be realized by
2019.
Productivity measures and
associated cost-cutting can
serve as a type of
insurance for the
management team. Should
declining carbonated soft
drink sales continue to
mute gains in other parts
of Coke's beverage
portfolio, management can
point to bottom-line profits
in order to appease
investors.
COCA COLA FINAL PROJECT OF STRATEGIC MANAGEMENT
125
5. Streamline and
simplify our
operating model
One of Coca-Cola's actions
to streamline its business
has been to reduce
"functional layers."
Reducing hierarchy at the
corporate level can lead to
faster, decentralized
decision-making -- a type
of trimming an
organization KO's size can
usually benefit from. The
company announced in
January that it would cut
1,600 to 1,800 positions
globally this year, with up
to 500 employees to be
released at its Atlanta
headquarters.
Like the efforts aimed at
productivity discussed
above, there's another
rationale for pruning
personnel in a drive toward
simplification. Coca-Cola
wants to be seen by the
markets as in touch with
the urgency of its situation
and sensitive to the shelf
life of investors' patience
as it tries to ignite high
single digit earnings-per-
share growth. Workforce
reduction is a tried and
true method CEOs of
public companies have
used to send the right
signal to Wall Street,
COCA COLA FINAL PROJECT OF STRATEGIC MANAGEMENT
126
however bloodthirsty the
method may same.
Current Strategies Majorly, the issues lie in Coca
Cola beverages Pakistan’s
current functional strategies of
Human Resource. A single
employee in one department is
working as much as 2
employees and being lesser
than the salaries of 2
employees.
Coca Cola need to adapt a
slightly less rigid HRM
strategy. Coca Cola should
maintain adequate number
of people inside the
company in order to raise
the morale of the
employees in Coca Cola.
Apart from this Coca Cola
is doing a fantastic job in
other strategies.
SWOT Analysis Strengths and Weaknesses are
one of the most critical aspects
of a business. Identification of
Strength and Weaknesses are
extremely vital in determining
the performance and SWOT is
in fact an aesthetic tool for
measuring the performance of
the business.
Unfortunately, there are no
forms or documentations that
are available in Coca Cola
Pakistan to formally conduct
SWOT. Personnel and
Managers working inside Coca
Cola however, do determine
the strengths or weaknesses
but with a different
perspective. Departments such
as finance department headed
by the CFO and finance
managers determines the
financial strengths,
weaknesses, opportunities and
threat but no formal meets are
held or it is extremely less
How to solve Issues with
SWOT
Coca Cola should establish
a new department or form
a competent committee
which must be responsible
for gathering facts and
figures, analysis, inquiries,
issues faced, reports, and
all other relevant
documentations in order to
determine Coca Cola
competencies, competitive
advantages, absolute
advantages, the benefits
Coca Cola is enjoying
from all of its resources, its
internal weakness and
disadvantageous factors
within the company,
external opportunities
available to the company
and threats for the
company. After, gathering
such data the authenticity
of the data gathered needs
COCA COLA FINAL PROJECT OF STRATEGIC MANAGEMENT
127
likely that meetings are
formally held at corporate or
business level to devise
strategies at functional levels
to formally increasing the
strength of the business,
minimize weaknesses,
maximizing the benefits
gained from the opportunities
and reducing minimizing the
risk from threats.
to the monitored. Once,
such audit has been
performed, the committee
should make an annual or
master report for the
company in which it
should specify the ways or
strategies that Coca Cola
must adopt in order to
consolidate and cement its
strengths, minimize or
fight with internal
weaknesses, increasing the
benefit derived from the
opportunities and reduce
the risk from threats.