Coca-Cola Management Strategy

Assessment 1 Case flying field Report of Coca grass familiarity Hang LU S81293 executive Summary The Coca-Cola Company (NYSEKO) is the worlds largest swal emit companion, largest manufacturer, distributor and foodstuffer of non-alcoholic beverage endures and syrups in the world and is iodin of the largest corporations in the United States. The company is best cognize for its flagship product Coca-Cola, invented by pharmacist John Stith Pemberton in 1886. The Coca-Cola formula and f ein truth(prenominal) guy was bought in 1889 by Asa Candler who incorporated The Coca-Cola Company in 1892.Besides its callake Coca-Cola beverage, Coca-Cola soon offers nearly 400 bell ringers in everyplace cc countries or territories and serves 1. 6 jillion answers each day. 4 The company proceeds a franchised distribution system dating from 1889 where The Coca-Cola Company only produces syrup concentrate which is then sold to discordant bottlers throughout the world who hold an exclusiv e territory. The Coca-Cola Company is headquartered in Atlanta, Georgia. Its descent is listed on the NYSE and is part of DJIA and S 500. Its circulating(prenominal) chairman and chief operating officer is Muhtar Kent.CONTENTS Introduction Company Background Mission and fantasy Goals The combative Advantage of Coca-Cola Brands Five Forces Analysis Intensity of the Competitive Forces Generic art Strategy Conclusion Introduction Coca-Cola has sold more than one billion servings every day. More than 10,450 beverages argon consumed every second. It is present on all s unconstipated continents and is dod by 94% of the world population. Coca-Cola grow from its belittled roots as a home-brewed Georgia-based patent medicine to be the international squeezable assimilate reasonhouse today.Coca-Cola used many technologies to succeed its rise to the top of the well-situated swal get-go constancy, defining bargon-assed technologies and establishing paradigms that popped the circu mstance quo like a cap from a soda bottle. Through technology, Coca-Cola perfect Coke as a beverage and spread it throughout the world. sluice today, the US well-heeled racket industry is organized on this principle. The Coca-Cola Company is now the largest promiscuous drink company in the world with products that allow in Coca- Cola, Diet Coke, Sprite, and Fanta etc.. It is employing about 71,000 pack worldwide in over 200 countries.Coke produces about 400 brands consisting of over 2. 600 beverage products, such as water, juice and juice drinks, sports drinks, energy drinks, teas, and coffees. Coke products be distributed though restaurants, foodstuff market, street vendors, and otherwises, all of which sell to the end users consumers, who consume in extravagance of 1. 4 billion servings daily. Company Background The Coca-Cola Company is now the largest soft drink company in the world. Coca- Cola became the largest manufacturer, distributor, and marketer of non-alcoholic b everage concentrates and syrups which operate in more than 200 countries.Coca- Cola was invented on May 1886 by Dr. John Stith Pemberton in Jacobs Pharmacy in Atlanta, Georgia. The name Coca-Cola was suggested by Pembertons book-keeper, heart-to-heart Robinson. He penned the name Coca-Cola in the flowing script that is famous today. Vision &038 Mission Coca-Cola has been marketed with catching marketing themes such as Drink Coca- Cola and Delicious and Refreshing. After years of globalization and brand building, Coca-Cola proudly pronounces its Mission Statement The Coca-Cola Company exists to benefit and refresh everyone who is touched by our business.And their goals The basic proposition of our business is simple, solid and timeless. When we bring refreshment, value, happiness and fun to our stakeholders, then we successfully nurture and protect our brands, particularly Coca-Cola. That is the let out to fulfilling our ultimate obligation to provide consistently attractive retur ns to the owners of our business. Indeed, it was Coca- pots mission our people and our promise mainly focuses in Coca-Cola world is to celebrate, refresh, strengthen and protect.Coca-Cola feels that they should offer a soft-drink to the entire global community, which is environmentally safe and accepted. The companys mission is directed towards its soft drink business and the strategy management changes that will be forthcoming. Coca-Cola appeals to the broad term interests of stakeholders particularly addressowners, employees and customers. This helps to support the local anaesthetic populations by offering air opportunities, and it to a fault helps out the local and global economies in which the employees live.Woodruffs vision that coca plant-cola to be placed indoors arms reach of desire came true from the mid forties until 1960, the number of countries with bottling operations nearly doubled. It is so feasible that the company fecal matter reasonably expect to achieve in due time. Coca-Cola strives to find new innovations to better its products and to stay a step ahead of its competitors as what is mentioned in the mission the action we will take. This is a key share in the companys drive to be number one in the industry. as well as it is constantly looking for improvements in everything that it does, both in the production and the personal manner in which the company is run daily. Goals That combination infuses all the elements of the strategy that we are implementing to deliver value to our share owners in the year to come, and well into the rising a) Accelerate carbonated soft-drink growth, led by Coca-Cola b) Selectively broaden our family of beverage brands to drive profitable growth c) Grow system profitability and skill together with our bottling partners ) Serve customers with creativity and consistency to generate growth crosswise all channels e) Direct investments to highest potential areas across markets and f) Drive aptitude and ma ke up- intensity level everywhere. The Competitive Advantage of Coca-Cola Brands The companys sharp focus on its business as well gives it a cost advantage. Although Coke earned less than five cents per 8oz serving last year, it did manage to sell about 380 billion servings That kind of quite a little has advantages. The Coca-Cola Company has invested in building its trademark for over 113 years.Consumers worldwide recognize the Coca-Cola trademark and icons as symbols of quality and refreshment. Because Coca-Cola is the i piling soft drink that circuits the benchmark for consumers expectations, businesses that display and associate with the trademark immediately signal that they are perpetrate to serving the most preferred soft drinks in the industry. The advantages of coca cola in adopting globalization trends are first of all with the economic master that is bigger (talking about the whole entire world instead of one country, as business deal marketing) it help coca cola to actually dress the cost of producing adjusting to the country where the product is manufactured and price (cutting the cost of transportation, trade and import cost as well as tax). It also helps coca cola to gain competitive advantages of a high quality product. The determine system or management help the company to expand the local ne bothrk with the value creation functions and also established in low cost markets, instead of the country of origins. They also can thrust a tight bound of long term contract with the low cost supplier in each country. Five Forces AnalysisToday, soft drink industry is a very competitive industry to be in. Porters five forces model shows us that thither is already a strong obstacle to entry established by the traditional concentrate manufacturing businesss such as Coca-Cola, suppliers talk terms power is strong, buyers power is weak, substitutes for beverage products are easy to produce, and the warmth of rivalry is strong since the industr y is already facing a unwilling growth and high industry concentration. Suppliers Bargaining Power Suppliers bargaining power in this beverage industry is strong.For example, the soft drink ingredient producer NutraSweet who specializes in producing concentrate sweeteners. Since there is a rising concern in health and safety issues in the soft drink drinking indoors the consumer market, the healthier sweetener, aspartame, that NutraSweet markets allowed it to have a high impact and input on cost of each bottlers product costs. Since NutraSweet was the only marketer that marketed the standard aspartame the costs of using NutraSweets aspartame is relatively high compare to other substitutes such as sugar. Buyers Bargaining Power The Buyers of the soft drink industry are the concentrate bottlers. Bottlers of the soft drink industry have a low bargaining power since they form the largest base (the greatest number) of all the elements of Porters five forces. close of the bottlers ar e Coca-Cola owned before 1980, and almost all of them are beneath some sort of contractual agreement stating that bottlers must accommodate the programs set up by the concentrate producers for the products that they have franchised. High fees are infallible of the bottlers re such as high start-up costs ranging from $100,000 to several jillion dollars, paying for two-third of promotional costs, while costs were typically split lambert/fifty for doing consumer promotion and trade. It is also hard for bottlers to identify their own brand identity since their products are made of concentrates and the names that they use are the names of the concentrate manufacturer . Coca-Cola, hence discouraging their own product differentiation. tilt Among Competing Sellers There is a strong barrier setup by the traditional concentrate producers.For new rivalry to enter into the market is passing heavy since the two soft drink giants such as Coca-Cola and Pepsi-Cola have already created a sof t drink tradition and branding. Also since the soft drink giants have already created their bottler net and also owned legal age of them, it is even harder for new entrants to be gain an direct cost and competitive advantage. political policies also create obstacles to the new entrants in the cola industry since the term Coke is strictly mean Coca-cola. Current rivalry within the soft drink industry is mainly evolved around the two giants who are Coca-Cola and PepsiCo.The two giants owned most of the spacing for the vending machines, developed most the flavors for the favorite products within the market, and occupied most of the soft drink market shares within the industry. They are able to utilize and plane well ahead of other smaller companies within the industry. Other smaller firms are mainly there for competition betwixt the two firms. champion example would be PepsiCos leveraging of Seven-Ups to expand its product line. at one time Coca-Cola is aware of PepsiCos expa nsion, readily they are also willing to purchase Dr Pepper.However since the buyout of Seven-Ups domestic operations was blocked by the Federal Trade, Coca- Cola also dropped its pursuit on Dr Pepper. In the current soft drink industry, there is a constant battle between Coca-Cola and PepsiCo. Substitute Products Threats of substitutes are high since soft drink industry is a highly unstable industry. Switching costs for the consumers are passing low since the pricing of soft drinks is cheap and consumers taste is ever changing. There is no tradeoff for the consumers to switch to other products so it is easy for consumers to change their loyalties.One example would be the Pepsi Challenge rose by PepsiCo over the states. The challenged had blind people over the states tasted different brands of soft drinks and found out that majority of them liked Pepsi over Coke, thus PepsiCos Pepsi-Cola was able to gain market share and attracted a larger market share. Potential New Entrants The soft drink industry is an extremely difficult industry to get into. The existing soft drink industry is already dominated by experienced paramount players with over century-long experience, new entrants would have to be truly unique to be able to gain an absolute competitive advantage within this industry.If their products are unique, they would not have to worry about the fear of product substitution. one time the new entrants have gained an absolute advantage within the industry, they would have to deal with the suppliers who may have a strong bargaining power over pricing on the ingredients they need. Apart from that, they would need buyers, which are bottlers in this case. Once they have a base of bottlers with them, then only they have a chance of success in this industry. Intensity of the Competitive Forces Coca-Cola created a very strong barrier to entry for its competitors.New entry into the market is extremely difficult. The two soft drink giants, Coca-Cola and PepsiCo co ntrolled the whole market. In addition, Coca-Cola has already created its bottler network and also owned majority of them, it is even harder for new entrants to gain an absolute cost and competitive advantage. The threats of substitutes are high since soft drink industry is a highly unstable industry. Switching costs for the consumers are extremely low and there is no trade-off for the consumers to switch to other products so it is easy for consumers to change their loyalties.Generic Business Strategy In modulate to gain competitive edge in the consumer market, other than responding quickly to the outside(a) forces and its internal environment, Coca-cola also looks into its position within the industry. The generic competitive strategies act by Coca-Cola are lower-ranking Cost Strategy &038 Broad preeminence Strategy Coca-Cola is seen to have employed these two competitive strategies Focused Low Cost and Broad Differentiation. The company has chosen to serve the consumer drink market and achieved cost savings by means of ) Achieving economies of scale in the mass production of all Coca-Cola products lowers its unit cost. ii) Long learning, knowledge and experience in production and process, as the company existed more than a century. iii) Efficiency and effectiveness in manufacturing and distribution network. iv) Sharing of research and development, advertising and promotions cost among the brands carried by Coca-Cola has enabled to achieve economies of scope. Coca-Cola uses Broad Differentiation strategy on the basis of i) crack of wide range of its drink products . round 230 brands are currently cosmos offered in the global market. ii) High brand image and recognition have resulted in superior product perception among consumers. iii) Packaging and bottling . The use of contoured puzzle out bottle and the slim curly font have made Coca-Cola an tardily recognized symbol. Conclusion Nowadays, Coca-Cola is not just a brand. Its already a part of peoples life. It leads carbonated soft-drink industry growth. The company is monopolize the beverage market over a century. However, People are becoming increasingly health conscious, this has led to a decrease in the consumption of soft drink.It is the big challenge for coca-cola company in the future. References 1. come on of Directors Elects Muhtar Kent Chairman. The Coca-Cola Company. April 23, 2009. http//www. thecoca-colacompany. com/presscenter/nr_20090423_muhtar_kent. html. Retrieved 2009-05-02. 2. Coca-Cola Products New Coca-Cola Products, Brands of Beverages &038 More 3. 2009 prepare 10-K Annual Report. Form 10-K. The Coca-Cola Company. 2009. http//www. thecoca-colacompany. com/investors/form_10K_2008. html. Retrieved 2009-08-31. 4. Cola Wars Five ForcesAnalysis October 18, 2007