Coca-Cola Analysis The Coca-Cola Company is currently the worlds largest beverage Company.

They manufacture beverages including sparkling sodas, juices, and sports drinks and operate in more than 200 countries across the globe. Examples of well-known brands they own include Coke, Sprite, Fanta, Vitamin Water, Minute Maid, Bonaqua and Powerade. With all those general information in mind, lets take a closer look at the renowned Coca-Cola Company. Mission The world is changing all around us. To continue to thrive as a business over the next ten years and beyond, we must look ahead, understand the trends and forces that will shape our business in the future and move swiftly to prepare for what's to come. We must get ready for tomorrow today. That's what our 2020 Vision is all about. It creates a long-term destination for our business and provides us with a "Roadmap" for winning together with our bottling partners. (The Coca-Cola Company, 2013). Coca-Colas Roadmap starts with their mission, which is enduring. It declares their purpose as a Company and serves as the standard against which they weigh their actions and decisions.

To refresh the world in body, mind and spirit To inspire moments of optimism through our brands and our actions To create value and make a difference everywhere we engage

Vision Coca-Colas vision serves as the framework for their Roadmap and guides every aspect of their business by describing what they need to accomplish in order to continue achieving sustainable, quality growth.

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

Portfolio: Bring to the world a portfolio of quality beverage brands that anticipate and satisfy people's desires and needs.

Partners: Nurture a winning network of customers and suppliers, together we create mutual, enduring value.

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

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

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

Objectives The main objectives for the Coca-Cola Company are to be globally known as a business that conducts business responsibility and ethically and to accelerate sustainable growth to operate in tomorrows world. By having these objectives, it forms the foundation for companies in the decision making process. Strategies The Coca-Cola Company aims to be globally known, they do this by targeting different areas across the globe with different products, gaining their brand name and popularity. All the bottling partners work closely with their customers such as convenience stores, grocery stores, movie theaters and street vendors to create and use localized strategies developed in partnership with the Company. Their competition with other beverage companies are also narrowed down as they own various brands that could be possible competition. For example, the Company sells Coke without the competition of other popular soft drink brands like Sprite and Fanta because the Company owns those brands as well. The Company often reviews and evaluates their business plans and performance to improve their earnings and analyze their competitive position

in the market. They make decisions in realigning their business models to match the objectives of the Company by using strategies and tactics in the analysis of their performance. Mission and Vision Statements The main difference between mission and vision statements are the mission statements communicate where a Company is now while vision statements communicate where it wishes to be in the future. Vision statements are often more abstract and less direct than a mission statements and mission statements can vary from being very simple to very complex. Mission: To refresh the world To inspire moments of happiness and optimism To create value and make a difference

Vision: People: Be a great place to work where people are inspired to be the best they can be Portfolio: Bring to the world a portfolio of quality beverage brands that anticipate and satisfy peoples desires and needs. Partners: Nurture a winning network of customers and suppliers, together we create mutual, enduring value. Planet: Be a responsible citizen that makes a difference by helping build and support sustainable communities. Profit: Maximize long-term return to shareowners while being mindful of our overall responsibilities. Productivity: Be a highly effective, lean and fast-moving organization.

We thought that the vision statement points were more in depth and details in comparison to their mission statement points when it shouldve been the other way around. The mission statement was more abstract and broad whereas the vision statement was more clear and direct. Both

statements somewhat communicated what their goal is for the future and where the Company is at now and we thought that both statements together did portray what the Company was trying to achieve. Opportunities It is highly difficult for the new entrants to enter in the soft drink industry because of some factors such as brand image and loyalty, bottling network, advertising expense, retail distribution and fear of retaliation. Coke has significant opportunities within global supply chain to encourage and develop more sustainable practices to benefit consumers, customers and suppliers. While; it is still in the premature stages of exploring these opportunities and dedicated to the economic vitality and health of the farming communities our supply chain engages. Coke can diminish the fear of substitute by diversifying (related or unrelated) by offering substitute products. Focusing on its advertising and differentiation can increase its profits. Coke promotes and support sustainable agriculture not only because it makes good business sense. World population is expected to grow at 8 billion 2025, and 9.2 billion by 2050. Nearly 99% growth will take place in developing countries. Changing consumer lifestyle; by becoming health conscious and preferring substitute products. Coke can relatively diversify and offering health conscious products. Bottled water consumption in increasing day by day, 11 percent growth is reported. Threats Pepsi is the major and primary rival of the Coca-Cola in the soft drink industry, Pepsi is 2nd in revenue behind the Coca-Cola, and also hit Coca-Cola in some markets. Its primary competitor PepsiCo is highly diversified by providing big range of food products. Coca-Cola also faces the tough competition from local brands in all over world such as in Central and South America Kola Real also known as Big Cola in Mexico is giving tough competition to Coca-Cola etc.

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

Coca-Cola is facing different regulations and policies set by government in different countries. Low growth rate in carbonated drinks, which is recorded less than one percent in primary market of Coca-Cola. Changing consumer lifestyle; by becoming health conscious and preferring substitute products. Different studies has been conducted and found other drinks and Coke harmful if consumed excessively. Competitive Profile Matrix (CPM) A competitive profile matrix (CPM) categorizes a firms main rivals and its particular strengths and weaknesses in relation to a design firms strategic position. In CPM, an organization assess itself as well its rivals by giving rating and weights to the critical/key success factors. It then recognizes its strategic competitive place with its major rivals. A firm which obtains superior weighted points would have the stronger competitive place than its rivals. We will be using weighted rating system for the construction of CPM. Some of the important steps involved in the construction of CPM are given below: 1. In the first column, list down all the key success factors of Coca-Cola (usually from 6 to 10). 2. In the second column, assign weights to each factor ranging from 0.0 (not important) to 1 (most important). Greater weights should be given to those factors which have greater influence on the organizational performance. The sum of all weights must equal 1. 3. Now rate each factor ranging from 1 to 4 for all the firms in analysis. Here, rating 1 represents major weakness, rating 2 shows minor weakness. Similarly, rating 3 indicates minor strength whereas rating 4 shows major strength. It means that weakness must receive 1 or 2 rating while strength must get 3 or 4 rating. 4. Calculate weighted score by multiplying each factors score by its rating.

5. Find the total weighted score of all the firms by adding the weighted scores for each variable. Competitive Profile Matrix of Coca-Cola Company

The competitiveness of a Company can be assessed on the basis of its general strength rating. If the dissimilarity among firms overall rating and the points of lower-rated rivals is greater than the firm has greater net competitive advantage Alternatively, if the dissimilarity among a firms overall rating and the points of higher-rated rivals is larger than the Company has net competitive advantage. Conclusion: In the above matrix, it demonstrates that Coca-Cola is the market leader and dominates its rivals with highest points of 3.74. Pepsi is the runner up with 3.42 points and Cadbury Schweppes is the weakest rival among these three with the score of 2.80. This Matrix also shows that Coca-Cola is strong in all the aspects of rivalry and has strong position in the market place. External Factor Evaluation (EFE) Matrix External Factor Evaluation (EFE) Matrix is a strategic-management device which is frequently use for evaluation of current business environment. The EFE Matrix is a superior instrument to

prioritize and visualize the opportunities and threats that a Company is facing. An external factor in the EFE Matrix comes from social, political, legal, economic and other external forces.

The EFE Matrix can be developed in some steps:

1. In the first column, lists down all the opportunities and threats. EFE matrix should include 10 to 20 key external factors. 2. In the second column assign weights to each factor that ranges from 0.0 (not important) to 1 (most important). The total weights must sum up to 1.00 (It should be noted that the importance of weights depend upon the probable impact of factors on the strategic position of the Company). 3. In the column three, rate each factor (ranging from 1 to 4) on the basis of Companys response to that factor. (Here, 1 shows poor response, 2 shows average response, 3 shows above average response and 4 shows superior response). 4. In the column four, calculate the weighted score by multiplying the each factors weight by its rating. 5. Find the total weighted score by adding the weighted score for each variable.

External Factor Evaluation Matrix of Coca-Cola Company

By adding the weighted score of various opportunities and threats of Coca-Cola Company, we get the total weighted score of 3.05. Here it should be noted that the highest possible total weighted score of a firm is 4 whereas the lowest possible total weighted score is 1. The total weighted score remains in the limit of 1 to 4 regardless of the total number of opportunities and threats. Similarly, the average total weighted score is 2.5. If the total weighted score of a Company is 4, it means that the Company is effectively taking advantage of existing

opportunities and is also able to minimize the risk. On the other hand, the total weighted score of 1 show that firm is not able to take advantage of current opportunities or avoid external threats.

Conclusion: In the case of Coca-Cola Company, the total weighted score is above average, which means that the Coca-Cola Company strategies are effective and the Company is taking advantage of existing opportunities along with minimizing the potential adverse effects of external threats. Strengths and Weaknesses All organizations have strengths and weaknesses in the functional areas of business. No enterprise is equally strong or weak in all areas. To determine a firms strengths and weaknesses requires gathering and assimilating information about the firms management, marketing, finance/accounting, production/operations, research and development (R&D), and management information systems operations.
FINANCIAL STATEMENT Period Ending

Dec.31,2006 $ (in thousands) Percent % 100.0% 33.9% 39.9% 0.9% 6.2% 21.1% 21.1% 8.1% 0.5% 9.0% 5.5%

Dec.31,2005 $ (in thousands) 23,104 8,195 8,824 240 1,818 4,872 4,872 4,701 66 2,281 1,424 Percent % 100.0% 35.5% 38.2% 1.0% 7.9% 21.1% 21.1% 16.0% 0.2% 7.8% 4.8%

Dec.31,2004 $ (in thousands) 21,962 7,638 8,626 196 1,375 4,847 4,847 6,707 61 2,171 1,420 Percent % 100.0% 34.8% 39.3% 0.9% 6.3% 22.1% 22.1% 21.4% 0.2% 6.9% 4.5%

Income statement Revenue Cost of goods sold Operating expenses Interest Expense Tax expense Income from cont. operations Net income Balance sheet Cash Short term investments Accounts receivables Inventory

24,088 8,164 9,616 220 1,498 5,080 5,080 2,440 150 2,704 1,641

Current Assets Long term investments Net fixed assets Other assets Total assets Current Liabilities Total liabilities Stockholder's equity Cash flow Cash flow from operations Dividends paid Interest paid Per share Market price at year end Earnings per share - basic

8,441 6,783 6,903 7,668 29,963 8,890 13,043 16,920 5,957 2,912 220 48.25 2.16

28.2% 22.6% 23.0% 25.6% 100.0% 29.7% 43.5% 56.5%

10,250 6,922 5,786 6,469 29,427 9,836 13,072 16,335 6,423 2,679 240 40.31 2.04

34.8% 23.5% 19.7% 22.0% 100.0% 33.4% 44.4% 55.5%

12,094 6,252 6,091 6,890 31,327 10,971 15,392 15,935 5,968 2,390 196

38.6% 20.0% 19.4% 22.0% 100.0% 35.0% 49.1% 50.9%

RATIO ANALYSIS Growth ratios Sales growth Income growth Activity ratios Receivable turnover Inventory turnover Profits ratios Profit margin Return on assets Return on Equity Dividend Payout ratio Price earnings ratio Liquidity ratios Current ratios 21.10% 17.10% 30.50% 57.30% 22.30 0.95 0.60 21.10% 16.00% 59.60% 55.00% 19.80 1.04 0.72 9.70% 5.30% 10.40% 5.80% 4.30% 4.30% 5.20% 0.50%

Strengths: 1. The Coca-Cola Company operates in over 200 countries and product line has over 400 brands is the worlds largest beverage Company. 2. Long history has built excellent brand recognition.

3. Partnership longevity with established sporting events including the Olympics. 4. Industry leader in market capitalization with $112 billion. 5. Return on Equity yielded 30 percent in 2006. 6. Leader of dividend yields of 2.6 percent. The Company has had 43 consecutive years of an annual dividend increase. 7. Joint venture between The Coca-Cola Company and Nestle has resulted in the establishment of Beverage Partners Worldwide (BPW). 8. Coca-Cola has formed a strong partnership with McDonalds, with McDonalds becoming their largest customer. Weaknesses: 1. Product line is limited to beverages. 2. A failed $16 billion acquisition of Quaker Oats hinders long-term growth. 3. Negative publicity in India because of water issues has led to poor brand image and hindered growth there. 4. Lack of management willingness to place foreign products into American markets. 5. Marketing deficiencies due to turnover in leadership and a 16 percent decrease in advertising spending. 6. Coca-Colas inventory turnover is only 5.4 compared to PepsiCos 8.0. Internal Factor Evaluation (IFE) Matrix

Internal Factor Evaluation (IFE) Matrix is a strategic management instrument for assessing main strengths and weaknesses in useful areas of a Company. IFE matrix also gives a foundation for recognizing and assessing associations among those parts. The IFE matrix is utilized in strategy formulation. Steps in the construction of IFE Matrix are given below:

1. In the first column, lists down all the strengths and weaknesses. IFE matrix should include 10 to 20 key internal factors.

2. In the second column, assign weights to each factor ranging from 0.0 (not important) to 1 (most important). Greater weights should be given to those internal factors which gave greater influence on the organizational performance. The sum of all weights must equal 1 3. In the third column, rate each factor ranging from 1 to 4. Here, rating 1 represents major weakness, rating 2 shows minor weakness. Similarly, rating 3 indicates minor strength whereas rating 4 shows major strength. It means that weakness must receive 1 or 2 rating while strength must get 3 or 4 rating. 4. In the fourth column, calculate weighted score by multiplying each factors score by its rating. 5. Find the total weighted score by adding the weighted scores for each variable. Internal Factor Evaluation Matrix of Coca-Cola Company

The total weighted score ranges from 1 to 4 (where 1 is low, 4 is high and 2.5 is average) regardless of the total number of internal factors used in the analysis. If the total weighted score is less than 2.5 it indicates that the organization is weak internally. On the other hand, the scores above 2.5 show strong internal position. An internal factor could be included twice in the IFE matrix if the factor is both strength and weakness. Conclusion: In case of Coca-Cola Company, the total weighted score is above than average, it means that the Company is strong internally. Strengths-Weaknesses-Opportunities-Threats (SWOT) Matrix Business owner's challenge is to create products and services the customer values and the means to produce and deliver those products and services in ways that are exceptional compared to the competition. To address these challenges, a company must define business objectives and address operational issues based on its current situation and the factors that impact its financial and operational goals. Such decision-making processes are frequently supported by structured brainstorming, which, in turn, can be supported by a Strengths, Weaknesses, Opportunities and Threats (SWOT) Matrix. Advantages The advantages of the SWOT methodology, such as its appropriateness to address a variety of business issues, make it a desirable tool to support some brainstorming sessions. Disadvantages However, to significantly impact company performance, business decisions must be based on reliable, relevant and comparable data. SWOT data collection and analysis entail a subjective process that reflects the bias of the individuals who collect the data and participate in the brainstorming session. In addition, the data input to the SWOT analysis can become outdated fairly quickly.

SWOT Matrix of Coca-Cola Strengths - Popularity - Well known - Branding obvious and easily recognized - A lot of finance - Customer loyalty - International Trade Weaknesses - Word of mouth - Lack of popularity of many CocaColas brands - Most unknown and rarely seen - Result of low profile or non-existent advertising - Health issues Opportunities - Many successful brands to pursue - Advertise its less popular products - Buy-out competition. - More Brand recognition

Internal

Threats External - Changing health-consciousness attitude - Legal issues - Health ministers - Competition (Pepsi)

Strengths: Coca-Cola is an extremely recognizable Company. Popularity is one of its superior strengths that is virtually incomparable. Coca-Cola is known very well worldwide. It's branding is obvious and easily recognized. Things like, logos and promos shown on t-shirts, hats, and collectible memorabilia. Without a doubt, no beverage Company compares to Coca-Cola's social popularity status. Some people buy coke, not only because of its taste, but because it is widely accepted and they feel like they are part of something so big and unifying. At the other end of the spectrum, certain individuals choose not to drink coke, based solely on rebelling from the world's idea that coke is something of such great power. Overwhelming is the best word to describe Coca-Cola's popularity. It is scary to think that its popularity has been constantly growing over the years and the possibility that there is still room to grow. If you speak the words Coca-Cola, it would definitely be recognized all around the world. Money is another thing that is a strength of the Company. Coca-Cola deals with massive amounts of money all year. Like all businesses, they have had their ups and downs financially, but they have done well in this compartment and will continue to do well and improve. The money they are earning is substantially better than most beverage companies, and with that money, they put

back into their own Company so that they can improve. Another strength that is very important to Coca-Cola is customer loyalty. The 80/20 rule comes into effect in this situation. Eighty percent of their profit comes from 20% of their loyal customers. Many people/families are extremely loyal to Coca-Cola. It would not be rare to constantly find bottles and cases of a product such as coke in a house. It seems that some people would drink coke religiously like some people would drink water and milk. This is an improbable feat. Customers will continually purchase these products, and will probably do so for a very long time. If two parents were avid Coca-Cola drinkers, this will be passed down do their children as they grow loyal to the Company. With Coca-Colas ability to sell their product all over the world, customers will continue to buy what they know and what they likeCoca-Cola products. Weaknesses: Coca-Cola is a very successful Company, with limited weaknesses. However they do have a variety of weaknesses that need to be addressed if they want to rise to the next level. Word of mouth is probably a strength and weakness of every Company. While many people have good things to say, there are many individuals who are against Coca-Cola as a Company, and the products in which they produce. Word of mouth unfortunately is something that is very hard to control. While people will have their opinions, you have to try to sway their negative views. If bad comments and views are put out to people who have yet to try Coca-Cola products, then that could produce a lost customer which shows why word of mouth is a weakness. Another aspect that could be viewed as a weakness is the lack of popularity of many of Coca-Colas drinks. Many drinks that they produce are extremely popular such as Coke and Sprite but this Company has approximately 400 different drink types. Most are unknown and rarely seen for available purchase. These drinks do not probably taste bad, but are rather a result of low profile or non-existent advertising. This is a weakness that needs to be looked at when analyzing their Company. Another weakness that has been greatly publicized is the health issues that surround some of their products. It is known that a popular product like coke is not

very beneficial to your body and your health. With todays constant shift to health products, some products could possibly loose customers. This new focus on weight and health could be a problem for the product that are labeled detrimental to your health. Opportunities: Coca-Cola has a few opportunities in its business. It has many successful brands that it should continue to exploit and pursue. Coca-Cola also has the opportunity to advertise its less popular products. With a large income it has the available money to put some of these other beverages on the market. This could be very beneficial to the Company if they could start selling these other products to the same extent that they do with their main products. Another opportunity that we have seen being put to use before is the ability for Coca-Cola to buy out their competition. This opportunity rarely presents itself in the world of business. However, with Coca-Colas power and success, such a task is not impossible. Coca-Cola has bought out a countless number of drink brands. An easy way to turn their profit into your profit is too buy out their Company. Even though this may cost a vast amount of money initially, in the long run, if all goes to plan, it results in a large profit. Also, the Company will no longer need to worry about this product being part of the competition. Brand recognition is the significant factor affecting Cokes competitive position. Coca-Cola is known well throughout 90% of the world population today. Now Coca-Cola wants to get there brand name known even better and possibly get closer and closer to 100%. It is an opportunity that most companies will ever dream of, and would be a supreme accomplishment. Coca-Cola has an opportunity to continue to widen the gap between them and their competitors. Threats: Despite the fact that Coca-Cola dominates its market, it still has to deal with many threats. Even though Coca-Cola and Pepsi control nearly 40% of the entire beverage market, the changing health-consciousness attitude of the market could have a serious effect on Coca-Cola. This definitely needs to be viewed as a dominant threat. In todays world, people are constantly trying to change their eating and drinking habits. This could directly affect the sale of Coca-

Colas products. Another possible issue is the legal side of things. There are always issues with a Company of such supreme wealth and popularity. Somebody is always trying to find fault with the best and take them down. Coca-Cola has to be careful with lawsuits. Health minister could also be looked at as a threat. Again, some people may try to exploit the unhealthy side of Coca-Colas products and could threaten the status and success of sales. Other threats are of course the competition. Coca-Colas main competition being Pepsi, sells a very similar drink. Coca-Cola needs to be careful that Pepsi does not grow to be a more successful drink. Other product such as juices, coffee, and milk are threats. These other beverage options could take precedent in some peoples minds over Coca-Colas beverages and this could threaten the potential success it presents again. Strategic Position and Action Evaluation (SPACE) Matrix The Strategic Position and Action Evaluation (SPACE) Matrix is one of the important tools to assess the company and its environment. Advantages It is relatively easy to understand and use method as a decision aid. It has four quadrants and each quadrant indicates which strategy a firm should adopt i.e. competitive, aggressive, conservative, or defensive in a current position. These four dimensions are the most important determinants of a firms overall strategic position. Each dimension holds many factors from EFE, IFE, and SWOT Analysis etc. Disadvantages However, as pointed out by Radder and Loew, there are some drawbacks in the method. For example: While the method is applied, the factors included in each dimension are considered of equal importance. Whilst the factors may be considered of equal importance (as a hypothesis) one has to take into consideration the fact that most of the time, the factors under each dimension does not have equal weights. Hence, the final result may show some differences and

this will affect the outcome of the method, i.e. the appropriate strategy of the company under evaluation. Strategic Position and Action Evaluation Matrix of Coca-Cola

SPACE Matrix calculations ES Average Score = -1.83 + Average FS Score (+5.00) = +3.17 CA Average Score = -1.50 + Average IS Score (+5.00) = +3.50

According to the graph above, we noticed that the Coca-Cola Company falls into the aggressive quadrant of the SPACE matrix. It is located at the coordinates of +3.50 for x-component and a y-component of +3.17. It shows that the company has an admirable position to use its IS in order to take advantage of external opportunities, overcome weaknesses, and avoid threats. Conclusion: In this position Coca-Cola has set of possible strategies such as market development, product development, market penetration, forward integration, backward integration, horizontal integration, horizontal diversification, concentric diversification and conglomerate diversification depending on detailed conditions that face the company. Grand Strategy Matrix (GSM) Grad Strategy Matrix is famous tool for alternative strategies in addition to SPACE Matrix, and SWOT Matrix. All the firms can fall one of the GSMs four strategy quadrants. GSM evaluation is based on two dimensions i.e. market growth and competitive position. Each quadrant provides the set of possible strategies in which company falls such as quadrant 2 contains market development, market penetration, horizontal integration, divestiture, and liquidation strategies. Quadrant 3 contains the set of retrenchment, related diversification, divestiture, unrelated diversification and liquidation strategies. Quadrant 4 contains the set of diversification, joint ventures and unrelated diversification strategies. Advantages The model allows better implementation of strategy because of the intensified focus and objectivity. It conveys a lot of information about corporate plans in a simplified format. Disadvantages However, it may not be as simple as it seems, upon application to real life due to the unforeseen factors and also complications in the business world. In addition, the relationship between market share and profitability differs in different industries. Another issue about this model is that, the grand strategy options are mostly concern on cash

related issues but not values of the firm. Grand Strategy Matrix of Coca-Cola

Conclusion: As figure identify that Coca-Cola comes in the 1st quadrant. The company management must focus on current market and achieve growth by adopting product development, market 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 benefit of external opportunities in many areas. It can also take risks being aggressive when necessary.

Long-term objectives

Sustainability is an integral part of Coca-Colas 2020 Vision, their roadmap for winning together with their bottlers. We have recommended long-term goals as below:

Water Goal: To safely return to communities and nature an amount of water equivalent to what used in all beverages and production. Packaging Goal: To advance a packaging framework in which packaging is no longer seen as waste, but as a valuable resource for future use. Climate Goal: To use the best possible mix of energy sources while improving energy efficiency of manufacturing and distribution processes.