Strategic Management
1
Table of Contents
Description Page No.
Industry Profile 3
Company Profile 4
Mission Vision 5
Micro Environment & Five Forces Model 6
SWOT Analysis 8
Competitive Profile Matrix 13
EFE AND IFE Matrix 14
Corporate Strategy 16
Porter’s Generic Strategies 17
Space Matrix 18
Grand Strategy Matrix 19
BCG Matrix 20
I-E Matrix 21
TOWS Matrix 22
Quantitative Strategic Planning Matrix 25
Implementation Stage 26
Conclusion 27
Strategic Management
2
Acknowledgment
We are very grateful to Allah who blessed us the strength and courage to stand by the
difficulties that came in the way and who enabled us to complete this project effectively.As
plants cannot grow without seeds, birds cannot fly without wings.Similarly knowledge cannot be
attained without proper direction and supervision. We are, therefore, also thankful to our
respected Ma’am Quratulein Muqarab, because of whose generous co-operation and help,
the accomplishment of this Project became possible.
Executive Summary
In this project we have analyzed the company’s mission and vision and also proposed a new
mission statement for the company. On the basis of secondary research we have identified the
SWOT analysis of the company and also prepared the five different matrices to identify the
strategies which governed by coca cola and we also give some recommendations about the
strategies which coca cola can use in order to compete in the market.
Strategic Management
3
Industry Profile
The beverage industry in Pakistan has grown over the time. The industry produces soft drinks,
juices, syrups, milk, and squashes. With about 170 units currently in operation throughout the
country, both upstream and downstream industries have grown and are flourishing.
There are 34 beverage plants in the country and this is one industry, which is very well
organized. Job oriented in nature, the beverage industry employees over 500,000 people directly
and indirectly and also supports many other up/down stream industries such as crown corks,
glass bottles, plastic shells, sugar, transport, advertising and media, P.E.T bottles, concentrates
etc. due to this industry a huge number of outlets/shops are supported to generate wide-spread
economic activity in the country.
Soft drinks market in Pakistan is growing rapidly. And the carbonated category is the leader in
the soft drink market with a share of 63.7 %. This reflects such a huge market to cater. The
beverage industry in Pakistan has a lot of potential and room for growth and development. There
exist a lot of opportunities for new entrants and local players to exploit the untapped facets of the
market, for instance the energy drink market or juices, by strategically positioning their products
and by resorting to innovative and effective marketing strategies.
According to a recent report on Pakistani Food and Beverage Industry, dated January 20th 2014,
the two primary threats to this industry are; political instability and continuous militant activity,
which have the tendency to obstruct foreign direct investment in this industry. Challenges faced
by beverage industry are the high prices and unavailability of sugar and also the taxes, excise
duty, and sales tax at the rate of 15 percent on the retail price. This is the reason that beverage
industry at the moment has very low per capita consumption of 20 serves whereas in other
countries of our region it varies from120-250 on the basis of single serve of 250 ml.
Based upon the aforementioned facts, on can conclude that the beverage industry is Pakistan has
gained momentum and is more likely to continue the growth in coming years as well. Although,
Strategic Management
4
certain macroeconomics factors certainly do have the potential to corrode this industry’s
profitability
Company Profile
The Coca Cola Company
The Coca-Cola Company (TCCC) was first introduced by John Syth Pemberton, a pharmacist, in
the year 1886 in Atlanta, Georgia when he concocted caramel-colored syrup in a three-legged
brass kettle in his backyard. He first “distributed” the product by carrying it in a jug down the
street to Jacob’s Pharmacy and customers bought the drink for five cents at the soda fountain.
Carbonated water was teamed with the new syrup, whether by accident or otherwise, producing a
drink that was proclaimed “delicious and refreshing”, a theme that continues to echo today
wherever Coca-Cola is enjoyed.
Dr. Pemberton’s partner and book-keeper, Frank M. Robinson, suggested the name and penned
“Coca-Cola” in the unique flowing script that is famous worldwide even today.
By the year 1886, sales of Coca-Cola averaged nine drinks per day. The first year, Dr. Pemberton
sold 25 gallons of syrup, shipped in bright red wooden kegs. Candler, an entrepreneur from
Atlanta. By the year 1891, Mr. Candler proceeded to buy additional rights and acquire complete
ownership and control of the Coca-Cola business. Within four years, his merchandising flair had
helped expand consumption of Coca-Cola to every state and territory after which he liquidate.
The business continued to grow, and in 1894, the first syrup manufacturing plant outside Atlanta
was opened in Dallas, Texas. Others were opened in Chicago, Illinois, and Los Angeles,
California, the following year. In 1895, three years after The Coca-Cola Company’s
incorporation, Mr. Asa G. Candler announced in his annual report to share owners that “Coca-
Cola is now drunk in every state and territory in the United States.”As demand for Coca-Cola
increased, the Company quickly outgrew its facilities. A new building erected in 1898 was the
first headquarters building devoted exclusively to the production of syrup and the management
of the business. In the year 1919, the Coca-Cola Company was sold to a group of investors for
$25 million. Robert W. Woodruff became the President of the
Strategic Management
5
Company in the year 1923 and his more than sixty years of leadership took the business to
unsurpassed heights of commercial success, making Coca-Cola one of the most recognized and
valued brands around the World.
Vision
Be the outstanding beverage company leading the market, inspiring people, adding value
through excellence.
Mission
Build a sustainable and profitable business through refreshing consumers, partnering with
customers, delivering superior value to shareholders and being trusted by communities.
EVALUATION OF MISSION COMPONENTS
Customer No
Product/services No
Market yes
Technology No
Concern for survival No
philosophy yes
Self concept No
Concern for public No
Concern for employees No
Values
Passion: We put our hearts and mind into what we do.
Accountability: We act with high sense of responsibility and hold ourselves accountable.
Integrity: We are open, honest, and ethical and we trust and respect each other.
Teamwork: We collaborate for our collective success.
PROPOSED MISSION & VISION STATEMENT
Mission:
Strategic Management
6
Our mission is to bring consumers quality refreshments that anticipate and satisfy their desires
and needs through modern technology and inspiring employees to be the best that they can
continue to provide the best products on the market.
Vision:
We are dedicated to upholding standards, while maintaining the leadership position in the
beverages category when delivering superior customer service in a highly efficient and profitable
manner.
Our Goals
People and Organizational Leadership: Build a highly capable organization and be the
employer of choice.
Commercial Leadership: Profitably deliver superior value to consumers & customers at
the optimal cost to serve.
Supply Chain: 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.
Operational Excellence: Create a culture of Operational Excellence to support
continuous improvement of our business process and systems.
Sustainability: 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.
Micro-environment
Entry barriers are relatively low for beverage industry: there is almost 0 consumer switching cost
and very low capital requirement. There are more and more new brands appearing in the market
with usually lower price than Coke products. However Coca-Cola is seen not only as a beverage
but also as a brand. It has a very significant market share for a long time and loyal customers are
not very likely to try a new brand beverage. To analyze the micro-environment and its factors,
we use the Porter's five forces model to identify the existing industrial factors, which include the
following:
Strategic Management
7
1. Threat of new entrants
2. Rivalry among existing competitors
3. The bargaining power of buyers
4. The bargaining power of suppliers
5. Threat of substitute product
Threat of new entrants
Threat of new entrant is the result of new competitors joining in the industry, causing the
company to develop competitive advantage and maintain the market share. Hence, competition
within the industry becomes higher. However, to reduce the threat of new entrants, Coca-Cola
would need to create a strong brand image. By creating brand image, customers would be more
likely to stay with the product and therefore the threat is reduced.
Threat of Substitute Products:
There are many kinds of energy drink and soda products in the market. Coca-Cola doesn’t really
have a special flavor. In a blind taste test, people couldn’t tell the difference between Coca-Cola
coke and Pepsi cola.
The Bargaining Power of Buyers:
The individual buyer has no buying pressure on Coca-Cola
The main competitor, Pepsi is priced almost the same as Coca-Cola.
Consumer could buy those new and less popular beverages with lower price but the
flavor is different and the quality is not guaranteed.
Large retailers, Hyper star have bargaining power because of the large order quantity, but
the bargaining power is lessened because of the end consumer brand loyalty.
People are getting concerns of negative effects of carbonated beverages. Increasing
number of consumers begin to drink fruit juice, lemonade and tea instead of soda
products.
Strategic Management
8
The Bargaining Power of Suppliers:
The main ingredients for soft drink include carbonated water, phosphoric acid, sweetener, and
caffeine. Any supplier would not want to lose a huge customer like Coca-Cola
Rivalry among Existing Firms:
Currently, the main competitor is Pepsi which also has a wide range of beverage products under
its brand. Both Coca-Cola and Pepsi are the predominant carbonated beverages and commit
heavily to sponsoring outdoor festivals and activities. As Coca-Cola has a longer history, it is
advertised in a more classical approach while Pepsi tried to attract younger generation by using
pop stars as brand ambassadors. Currently Coca-Cola slightly topped Pepsi as the possessor of
the most U.S market share.
Strategic Management
9
SWOT analysis
Strenghts
1: Financially strong
2: Loyal Customers
3: Most extensive beverage distribution channel
4: Hi tech & up-to date Technology
5: Sustained Quality & Brand name
6: Working Environment
Weaknesses
1: Less Focus on Small Cities
2: Utilization of Resources
3: Brand failures
4: Undiversified product portfolio
5: Significant focus on carbonated drinks
Opportunities
1: Bottled water consumption growth
2: Increasing demand for healthy food and beverages
3: Enter into new market
4: Availability of Products
Threats
1: Changes in consumer tastes
2: Legal requirements to disclose negative information on product labels
3: Competition from PepsiCo.
4: Saturated carbonated drinks market
5: Local Manufacturers
6: Rumors of Coke being Un-Healthy
Strategic Management
10
Strengths
Financially strong
One of the main strengths of CCBPL is the financial strength of the company because it
is supported and controlled by Coca Cola International. Therefore, unlike past, now they
can start any long term project without concerning too much about finances available.
According to Interbred, The Coca Cola Company is the most valued
($77,839 billion) brand in the world. So, there is no issue of finance in CCBPL.
Loyal Customers
The firm enjoys having one of the most loyal consumer groups. Coca Cola is enjoying a
positive image in the minds of the consumers. They normally think that it is better in
quality as compare to other competitors available in the market. .
Most extensive beverage distribution channel
Coca Cola serves more than 200 countries and more than 1.7 billion servings a day.
CCBPL Established Nation-wide infrastructure is helping the organization to increase the
sales volume of the company.
Hi tech & up-to date Technology
CCBPL has up to date technology in its production. As Coca-Cola company claims that
they are very sensitive about hygienic conditions, so that’s why they using up to date
technology to achieve this objective.
Sustained Quality & Brand name
They have sustained Quality assurance of the brand that they are offering to customers.
Working Environment
Another important strength of CCBPL is the working environment that they are offering
to their employees. Due to this environment, the employees that are working here are
Strategic Management
11
loyal to the organization and it is resulting in improving the motivation level of the
employees, which in the end results in high productivity and better performance.
Weaknesses
Less Focus on Small Cities
The major weakness of the company is its distribution channel. It is one of the main
reasons of its slow progress and low market share in this market as compared to the
competitor. Due to lack of availability of the products and less differentiation from
competitors, it has become very difficult to capture a big market share. CCBPL owns big
shares in big cities of Pakistan but in rural areas it lacks behind a lot.
Utilization of Resources
The company is also lacking in utilization of the resources. People are having various
facilities but they don’t know their best use. For example, people working in fleet
department don’t know to make the best use of Fleet Management System and usually
performing tasks in very difficult manner manually that can be easily performed by using
FMS.
Brand failures
Plus, the firm’s success of introducing new drinks is weak. Either they aren’t marketed
well or are not launch after a proper market survey. Many of its introduction result in
failures, for example, Sprite 3G or Fanta Citrus.
Undiversified product portfolio
Unlike most company’s competitors, Coca Cola is still focusing only on selling beverage,
which puts the firm at disadvantage. The overall consumption of soft drinks is stagnating
and Coca Cola Company will find it hard to penetrate to other markets (selling food or
snacks) when it will have to sustain current level of growth.
Significant focus on carbonated drinks
The business is still focusing on selling Coke, Fanta, Sprite and other carbonated drinks.
This strategy works in short term as consumption of carbonated drinks will grow in
Strategic Management
12
emerging economies but it will prove weak as the world is fighting obesity and is moving
towards consuming healthier food and drinks.
Opportunities
Bottled water consumption growth
Consumption of bottled water is expected to grow both in Pakistan and the rest of the
world.
Increasing demand for healthy food and beverages
Due to many programs to fight obesity, demand for healthy food and beverages has
increased drastically. The Coca Cola Company has an opportunity to further expand its
product range with drinks that have low amount of sugar and calories.
Enter into new market
A huge part of the market is still waiting for first entry. Coca Cola can get the advantage
of first entry if it focuses on such areas.
Availability of Products
The best opportunity for CCBPL is to increase market share through increasing the
availability of the products in the market.
Threats
Changes in consumer tastes
Consumers around the world become more health conscious and reduce their
consumption of carbonated drinks, drinks that have large amounts of sugar, calories and
fat. This is the most serious threat as Coca Cola is mainly serving carbonated drinks.
Legal requirements to disclose negative information on product labels
Some Coca Cola’s carbonated drinks have adverse health consequences. For this reason,
government considers to pass legislation that requires disclosing such information on
product labels. Products containing such information may be perceived negatively and
lose its customers.
Competition from PepsiCo.
Strategic Management
13
PepsiCo is fiercely competing with Coca Cola over market share in Pakistan and
neighboring Countries. High production capacity of the main competitor PepsiCo is a
threat for Coke, because they are having a better chance to increase the production and
availability of the products and further increase the market share.
Saturated carbonated drinks market
The business significantly relies on the carbonated drinks sales, which is a threat for the
Coca Cola as the market of carbonated drinks is not growing or even declining in the
world.
Local Manufacturers
The local manufacturers can also disturb the market share due to their low price
offerings. For example Gourmet
Rumors of Coke being Un-Healthy
The changing health-consciousness attitude of the market could have a serious effect on
Coca Cola.
CPM – COMPETITIVE PROFILE MATRIX
Coca-Cola Pepsi
Critical
Success
Factors
Weight Rating Weighte
d Score
Rating Weighted
Score
Market Share
Price Comp
Financial Position
Product Quality
Product Lines
Customer Loyalty
Employees
Marketing
Total
0.15
0.10
0.12
0.15
0.15
0.15
0.11
0.07
1.00
4 0.60
3 0.30
4 0.48
3 0.45
4 0.60
4 0.60
3 0.33
3 0.21
3.71
3 0.45
3 0.30
4 0.48
3 0.45
4 0.60
4 0.60
3 0.33
3 0.21
3.56
Strategic Management
14
EFE AND IFE Matrix
Developing the EFE Matrix
External Factor Evaluation Weighting Rate Weighted
Score
Opportunities
Bottled water consumption growth 0.1 4 0.4
Increasing demand for healthy food and
beverages
0.15 3 0.45
Enter into new market 0.10 3 0.3
Availability of Products 0.05 4 0.2
Threats
Changes in consumer tastes 0.05 4 0.2
Legal requirements to disclose negative
information on product labels
0.10 1 0.1
Local Manufacturers
0.15 3 0.45
Rumors of Coke being Un-Healthy 0.10 3 0.3
Competition from PepsiCo 0.1 4 0.4
Saturated carbonated drinks market 0.10 4 0.4
Strategic Management
15
Total 1.00 3.2
Explanation on calculation
Based on the above calculations it has been concluded that the company’s Total Weighted Score
is 3.2 which shows that the company is hugely successful in utilizing its opportunities and
minimizing the threats around it
Developing the IFE Matrix
Internal Factor Evaluation Weighting Rate Weighted Score
Strengths
Financially strong
0.1 4 0.4
Loyal Customers 0.05 4 0.2
Most extensive beverage distribution
channel
0.1 3 0.3
Hi tech & up-to date Technology 0.1 4 0.4
Sustained Quality & Brand name 0.10 4 0.4
Working Environment 0.1 4 0.4
Weaknesses
Less Focus on Small Cities 0.05 4 0.2
Utilization of Resources 0.05 4 0.2
Significant focus on carbonated
drinks
0.1 3 0.3
Undiversified product portfolio 0.15 3 0.45
Brand failures 0.1 3 0.3
Total 1.00 3.55
Strategic Management
16
Based on the above calculations it has been concluded that the company’s Total Weighted Score
is 3.55 which shows that the company is hugely successful in utilizing its strength and
minimizing the weakness around it
CORPORATE STRATEGIES
Vertical Integration
Vertical integration is the process of combining several steps in the distribution chain either the
inputs or outputs of the organizational controls.
Backward integration
In this case, Coca-Cola started Coca-Cola Enterprises (CCE) and positioned it as an independent
bottling subsidiary of Coca-Cola. The parent company would buy other struggling bottlers and
resell them to CCE.
Diversification Strategy
Diversification strategy refers to seeking unfamiliar products or markets to develop and exploit.
It is a strategy to eliminate the potential risk of a current product or market orientation does not
seem to provide further opportunities for growth.
Related diversification
Coca-Cola uses this strategy to explore new drink categories continuously, and it is keeping the
tradition of expanding on their current portfolio of brands and products. Coca-Cola has more
than 3000 products in over 200 countries of the beverage brands with core focus on brand of
Coca-Cola, Diet Coke, Coke Zero, Sprite and Fanta.
INTENSIVE STRATEGIES
Market penetration:
Strategic Management
17
Coke seeking to increased market share for their present product in present market through
greater market efforts. Coke do market penetration through increase advertisement expenditures,
offering sales promotion and also increasing publicity. Coke in 2009/2010 spent million on its
new slogan “Open Happiness”, which replaced “The Coke Side of Life.
Product development
Coca-Cola has long been committed to a product development strategy. This allows Coca-Cola
to penetrate existing markets with new products due to their high brand awareness. This strategy
capitalizes on Coca-Cola’s favorable trademark reputation
Strategic Alliance
The distribution of Coca-Cola has reached all around the globe; it has a huge and wide customer
base. Therefore, Coca-Cola highly focuses on enabling their customers to reach their products
more regularly. Thus, all partners of Coca-Cola work closely with customers – for example they
have strategic alliance with McDonald many others.
Global Strategy
Globalization is the key concern of Coca-Cola. The company has a total control in cost pressure,
so the cost pressure is low. Therefore, Coca-Cola can operate under the Multi domestic Strategy.
Thus, by running the local responsiveness of Coca-Cola is high.
However, the features of multi domestic strategy for Coca-Cola are that they mutually extensive
customize both their product offering and marketing strategies in different place with different
national conditions. In addition, they are operating in seven regional operating groups such as,
North America Group, Latin America Group, Europe Group, Eurasia & Africa Group, Pacific
Group, Bottling Investments Group and McDonald's Division. The reason is that they are trying
to create their value innovation activities by doing the market and product research in different
potential national market.
Strategic Management
18
ANALYZE THE PORTER’S GENERIC STRATEGIES
Coca-Cola is seen to have employed these two competitive strategies: Focused Low Cost and
Broad Differentiation.
Focused Low Cost
The company has chosen to serve the consumer drink market and achieved cost savings by
means of:
1. Achieving economies of scale in the mass production of all Coca-Cola products
lowers its unit cost.
2. Long learning, knowledge and experience in production and process, as the company
existed more than a century.
3. Efficiency and effectiveness in manufacturing and distribution network.
4. Sharing of research and development, advertising and promotions cost among the
brands carried by Coca-Cola has enabled to achieve economies of scope.
Broad Differentiation
Coca-Cola uses Broad Differentiation strategy on the basis of:
1. Offering of wide range of its drink products are currently being offered in the global
market.
2. High brand image and recognition have resulted in superior product perception among
consumers.
3. Packaging and bottling, the use of contoured shape bottle and the slim curly font have
made Coca-Cola an easily recognized symbol.
Strategic Management
19
FIVE MATRICES OF COCA COLA
ANALYSIS ON BCG MATRIX
Products Revenue
$
%age of
Revenues
Profits
$
%age of
Profits
Relative
Market
Share
Industry
Growth
Ratio
Coca Cola 50 billion --- 280 million --- 0.58 7%
NOTE:
Revenues of Pepsi were 85 Billion in 2013. And Pepsi is a market leader in Pakistan.
BCG MATRIX
By making the analysis of BCG matrix we come to know the Coca Cola is the star product of the
Cola industry in carbonated drinks because they have captured the reasonable market share and
making growth by utilization of resources and making strategies according to the situation.
Coca Cola
Strategic Management
20
Further Coca Cola can make growth because there is a potential in the market and more growth
and market share can be captured by making further strategies such as market penetration.
GRAND STRATEGY MATRIX
As per the figure above Coca Cola comes in the first quadrant. The company must focus on the current market and
achieve growth by adopting product development and market penetration strategies. The company has abundant
resources and competitive advantage through which it can achieve growth by adopting the backward and forward
integration strategies. Coca Cola can also adopt the related diversification strategy to reduce its risk with broad
portfolio or product line. Coca Cola can afford to take benefits of external opportunities in many areas. It can take
risk being aggressive when necessary.
Rapid Market Growth
Quadrant II Quadrant I
Strong
Competitive
Position
Slow Market Growth
Weak
Competitive
Position
Quadrant III Quadrant IV
Strategic Management
21
The Internal-External (IE) Matrix
According to the graph studied above Coca Cola is lying in the 1st cell which means that it is
using the build and grow strategy in order to achieve the maximum market share and growth. In
this regard Coca Cola can use the certain strategies such as product development, market
penetration and related diversification.
Strategic Management
22
SPACE Matrix
6
5
4
3
2
1
-6 -5 -4 -3 -2 -1 1 2 3 4 5 6
-1
-2
-3
-4
-5
-6
Competitive
IS
ES
CA
FSConservative Aggressive
Defensive
Strategic Management
23
X-axis: -1.4 + 5.0 = 3.6
Y-axis: 5.4 + -3.2 = 2.2;
Coordinate: (3.6, 2.2)
Explanation
According to the graph above, it is noticed that company is falling in the aggressive quadrant of
space matrix. It is located at the coordinates of 3.6 on x-axis and 2.2 on the y-Axis. It shows that
company has admirable position to use its IS in order to take advantage of external opportunities,
overcome weaknesses and avoid threats. So, in this position Coca-cola company has set of
possible strategies such as market penetration, product development, market penetration, forward
integration and backward integration, horizontal diversification depending upon the detailed
conditions that are faced by the companies.
Return on Assets (ROA) 6 Rate of Inflation -3
Leverage 6 Technological Changes -2
Net Income 6 Price Elasticity of Demand -2
Income/Employee 6 Competitive Pressure -6
Inventory Turnover 3 Barriers to Entry into Market -3
5.4 -3.2Environmental Stability (ES) Average Financial Strength (FS) Average
Environmental Stability (ES)Financial Strength (FS)
Market Share -1 Growth Potential 5
Product Quality -1 Financial Stability 6
Customer Loyalty -1 Ease of Entry into Market 4
Technological know-how -2 Resource Utilization 5
Control over Suppliers and Distributors -2 Profit Potential 5
-1.4 5.0Competitive Advantage (CA) Average Industry Strength (IS) Average
Competitive Advantage (CA) Industry Strength (IS)
Strategic Management
24
TOWS Strategic Alternatives Matrix
Opportunities
1: Bottled water
consumption growth
2: Increasing demand
for healthy food and
beverages
3: Enter into new
market
4: Availability of
Products
Threats
1: Changes in consumer
tastes
2: Legal requirements to
disclose negative
information on product
labels
3: Competition from
PepsiCo.
4: Saturated carbonated
drinks market
5: Local Manufacturers
6: Rumors of Coke being
Un-Healthy
Strengths
1: Financially strong
2: Loyal Customers
3: Most extensive
beverage distribution
channel
4: Hi tech & up-to date
Technology
5: Sustained Quality &
Brand name
6: Working
Environment
SO
1.Increasing the
marketing campaigns to
capture the maximum
share in the emerging
economies S1,O2
2. Making alliances with
emerging fast-food
chains S4,O2
3. Entering in rural areas
which will ensure the
availability of the
product in the whole
country. S2,04
ST
1-Market penetration
through which further
efforts will be made to
increase market share of
products.S1,T4
2-Making the unrelated
diversification such as
entering in snacks
division.S1T1
3-Increasing the marketing
budget in order to fight
with competitor. S1,T3
4-Introducing reward
schemes to make further
growth.S3,T5
Weaknesses
1: Less Focus on Small
Cities
2: Utilization of
Resources
3: Brand failures
4: Undiversified
product portfolio
5: Significant focus on
carbonated drinks
WO
1. Allocation of budget
on failed brands to cater
new markets w3, 03
2. Market the products to
rural areas in all
countries like the way its
marketed in Pakistan
w1,O4
WT
1-Product development by
using best market
techniques in order to cater
rumors w4,T6
2-market penetration in
rural areas through which
loyalty will be increased in
order to beat the local
manufacturers.w1,T5
Strategic Management
25
Quantitative Strategic Planning Matrix
The strategies which can be used are market penetration or product development
Strategic Alternatives
Key Internal Factors
Weight
Increasing the
advertisement /
Marketing Budget
Introducing the
energy drinks
Strengths AS
TAS AS TAS
1: Financially strong 0.1 3 0.3 2 0.2
2: Loyal Customers 0.05 2 0.1 4 0.2
3: Most extensive beverage distribution
channel
0.1 2 0.2 3 0.3
4: Hi tech & up-to date Technology 0.1 2 0.2 3 0.3
5: Sustained Quality & Brand name 0.1 3 0.3 2 0.2
6: Working Environment 0.1 --- --- --- ---
Weaknesses
1: Less Focus on Small Cities 0.05 2 0.10 1 0.05
2: Utilization of Resources 0.05 --- --- --- ---
3: Brand failures 0.1 --- --- --- ---
4: Undiversified product portfolio 0.15 2 0.3 3 0.45
5: Significant focus on carbonated drinks 0.1 4 0.4 3 0.3
SUBTOTAL 1.00 1.9 2
Strategic Management
26
Key External Factors
Weight
Increasing the
advertisement /
Marketing
Budget
Introducing the
energy drinks
Opportunities AS TAS AS TAS
1: Bottled water consumption growth 0.1 --- --- --- ---
2: Increasing demand for healthy food and
beverages
0.15 2 0.30 2 0.3
3: Enter into new market 0.10 2 0.2 4 0.4
4: Availability of Products 0.05 4 0.2 3 0.15
Threats
1: Changes in consumer tastes 0.05 --- --- --- ---
2: Legal requirements to disclose negative
information on product labels
0.10 --- --- --- ---
3: Competition from PepsiCo. 0.15 4 0.6 3 0.45
4: Saturated carbonated drinks market 0.10 --- --- --- ---
5: Local Manufacturers 0.1 2 0.2 3 0.3
6: Rumors of Coke being Un-Healthy 0.10 3 0.3 2 0.2
SUB TOTAL 1.00 1.8 1.8
SUM TOTAL ATTRACTIVENESS SCORE 3.7 3.8
As we look upon the results of QSPM we observe that the strategy which got highest score is
related diversification .we will be following this strategy and introducing energy drinks .for this
purpose we will do the following.
Research and development
Firstly the company has to do the research on the consumer preferences the R&D team have to
find out the consumers taste, price they are willing to pay and which category they prefer in
energy drinks .research can include both
Strategic Management
27
Secondary research
Primary research
After conducting the research company will come to know that which product they have to
develop .once the product is developed sampling will be sent to the different markets for
testation purpose.
Coca-Cola can outsource their research team as they have no related experience in this field .so
its better off to out source this department
After the research has been finalized and the company knows what to produce they can build a
team which will work on this project. For this purpose the y can use
Matrix structure
Matrix structure is said to be the best structure as it has less disadvantages compare to the other
structures. Here Coca-Cola can bring together the creative heads to work on this project .people
from different department like finance department .marketing department, production department
can together to further proceed with this project.
After the team have put together we will develop certain objectives which each department has
to follow to achieve long term goal.
Long term goal
To successfully launch the energy drinks into market and gain a market share 10% at the end of
financial year.
Company will further break this goal into small chunks for each department.
Finance department objectives
To generate finance to support this project and to carry on successfully
Strategic Management
28
Production department
To produce to that limit where they can generate the revenues to gain share in the market
Marketing department
It is responsibility of the marketing department to sale those product which are produced by the
production department.
Resource allocation
Recourses are to be allocated according to priorities established by annual objective.
There are four types of recourses
Financial resources
Physical resources
Human resources
Technology resources
Example
For production department
It is understood that for production department they will need new technology in the form of new
machinery as they are moving into new line of energy drinks.
Conclusion
The Coca-Cola Company is a very effective company that remains loyal to its customers, while
continuing to meet the ultimate goal of every company, to maximize its profits. Coca-Cola could
do a better job with the marketing techniques of its company. Additionally, it can always
improve its products to meet the demands of more consumers, especially in the untapped market
where tastes vary. The target marketing and management group could work on satisfying more
races, cultures, age groups, and people that are in less developed areas. Every company always
Strategic Management
29
has room for improvements, but the Coca-Cola Company is not far from perfection. This empire
will continue to be prosperous as long as it continues to put its customers at the top of its
priorities list.
