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ENTREPRENEURSHIP
1. Business Plan
y What is a business plan? y Do I Need a Business Plan? y Who Needs a Business Plan? y How Will You Use Your Plan? y The Different Types of Business Plans y Example Of A Business Plan
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You need a business plan if you re working with partners. The business plan defines agreements between partners about what s going to happen. You need a business plan to communicate with a management team. The day-to-day business routine is distracting, problems come up, opportunities appear, and commitments should be followed and tracked. How do you know where you are in business without establishing where you started and where you intended to go? How can people commit to a plan they can t see? You need a business plan to sell a business, or to set a value on a business for tax or other purposes such as estate planning, or divorce.
sheet, cash flow, and probably a few other tables. The plan starts with an executive summary and ends with appendices showing monthly projections for the first year. Internal plans are not intended for outside investors, banks, or other third parties. They might not include detailed description of company or management team. They may or may not include detailed financial projections that become forecasts and budgets. They may cover main points as bullet points in slides (such as PowerPoint slides) rather than detailed texts. An operations plan is normally an internal plan, and it might also be called an internal plan or an annual plan. It would normally be more detailed on specific implementation milestones, dates, deadlines, and responsibilities of teams and managers. A strategic plan is usually also an internal plan, but it focuses more on high-level options and setting main priorities than on the detailed dates and specific responsibilities. Like most internal plans, it wouldn t include descriptions of the company or the management team. It might also leave out some of the detailed financial projections. It might be more bullet points and slides than text. A growth plan or expansion plan or new product plan will sometimes focus on a specific area of business, or a subset of the business. These plans could be internal plans or not, depending on whether or not they are being linked to loan applications or new investment. For example, an expansion plan requiring new investment would include full company descriptions and background on the management team, as much as a start-up plan for investors. Loan applications will require this much detail as well. However, an internal plan, used to set the steps for growth or expansion funded internally, might skip these descriptions. It might not include detailed financial projections for the whole company, but it should at least include detailed forecasts of sales and expenses for the new venture. A feasibility plan is a very simple start-up plan that includes a summary, mission statement, keys to success, basic market analysis, and preliminary analysis of costs, pricing, and probable expenses. This kind of plan is good for deciding whether or not to proceed with a plan, to tell if there is a business worth pursuing.
Strategy and Implementation: Be specific. Include management responsibilities with dates and budgets. Make sure you can track results. Web Plan Summary: For e-commerce, include discussion of website, development costs, operations, sales and marketing strategies. Management Team: Describe the organization and the key management team members. Financial Analysis: Make sure to include at the very least your projected Profit and Loss and Cash Flow tables. Build your plan, then organize it. I don t recommend developing the plan in the same order you present it as a finished document. For example, although the Executive Summary obviously comes as the first section of a business plan, I recommend writing it after everything else is done. It will appear first, but you write it last. Standard Tables and Charts here are also some business tables and charts that are normally expected in a standard business plan. Cash flow is the single most important numerical analysis in a plan, and should never be missing. Most plans will also have Sales Forecast and Profit and Loss statements. I believe they should also have separate Personnel listings, projected Balance Sheet, projected Business Ratios, and Market Analysis tables. I also believe that every plan should include bar charts and pie charts to illustrate the numbers. Expanded business plan outline Here s an expanded full business plan outline, with details you might want to include in your own business plan. 1.0 Executive Summary 1.1 Objectives 1.2 Mission 1.3 Keys to Success 2.0 Company Summary 2.1 Company Ownership 2.2 Company History (for ongoing companies) or Start-up Plan (for new companies) 2.3 Company Locations and Facilities
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3.0 Products and Services 3.1 Product and Service Description 3.2 Competitive Comparison 3.3 Sales Literature 3.4 Sourcing and Fulfillment 3.5 Technology 3.6 Future Products and Services 4.0 Market Analysis Summary 4.1 Market Segmentation 4.2 Target Market Segment Strategy 4.2.1 Market Needs 4.2.2 Market Trends 4.2.3 Market Growth 4.3 Industry Analysis 4.3.1 Industry Participants 4.3.2 Distribution Patterns 4.3.3 Competition and Buying Patterns 4.3.4 Main Competitors 5.0 Strategy and Implementation Summary 5.1 Strategy Pyramids 5.2 Value Proposition 5.3 Competitive Edge 5.4 Marketing Strategy 5.4.1 Positioning Statements 5.4.2 Pricing Strategy 5.4.3 Promotion Strategy 5.4.4 Distribution Patterns 5.4.5 Marketing Programs 5.5 Sales Strategy 5.5.1 Sales Forecast 5.5.2 Sales Programs 5.6 Strategic Alliances 5.7 Milestones 6.0 Web Plan Summary 6.1 Website Marketing Strategy 6.2 Development Requirements
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7.0 Management Summary 7.1 Organizational Structure 7.2 Management Team 7.3 Management Team Gaps 7.4 Personnel Plan 8.0 Financial Plan 8.1 Important Assumptions 8.2 Key Financial Indicators 8.3 Break-even Analysis 8.4 Projected Profit and Loss 8.5 Projected Cash Flow 8.6 Projected Balance Sheet 8.7 Business Ratios 8.8 Long-term Plan
Business plan outline advice Size your business plan to fit your business. Remember that your business plan should be only as big as what you need to run your business. While everybody should have planning to help run a business, not everyone needs to develop a complete formal business plan suitable for submitting to a potential investor, or bank, or venture contest. So don t include outline points just because they are on a big list somewhere, or on this list, unless you re developing a standard business plan that you ll be showing to somebody else who expects a standard business plan. Consider plan-as-you-go business planning. I ve done a lot of work on this idea lately, resulting in my new Plan As You Go business planning, which is a now a book published by Entrepreneur Press, available through Amazon.com, Barnes and Noble, and Borders, and bundled as an eBook with Business Plan Pro and Live Plan.
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determines the impact level of a product on the environment and certifies Super GP to products in particular that have made dramatic progress in environmental performance and create a new trend for actualization of a sustainable society, Castro explained.
Why Go Green?
The go green bandwagon is not going away and is sure to stay. However, trends and opportunities for greener and environmentally friendly products and services are definitely hot. The most obvious reason for a business to go green is to safeguard and protect the environment and its natural resources. Other go green green business ideas to improve your carbon footprint are: To set a positive example for employees that increases employee loyalty and retention. To gain a competitive advantage by differentiating the business as an environmentally friendly business. To provide a pure, clean and healthy environment. To improve efficiency. To lower operating costs. To get tax benefits. This article puts together a list of five go green business ideas that entrepreneurs can exploit.
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Thus, to help consumers make smart and green shopping decisions, pertinent green information on labels is needed. Labeling with a carbon footprint percentage has covered many products in the United Kingdom and is sure to spread in United States as well. The go green business ideas associated with low carbon, local and organic groceries includes creation of low carbon products and brands, importing products from Third World Countries with a smaller carbon print, producing local organic foods and products on a small or large scale or researching the field so as to incorporate those ideas into established businesses in the United States. Another opportunity associated to this business line is to provide an auditing and tracking facility for carbon footprints of these products. Various websites on the Internet explore the opportunities of this transition. 2. Green Shopping Bags or Reusable Bag Production: The aim of these businesses would be to replace the disposable plastic shopping bags with reusable and renewable bags to carry groceries and other shopping items. According to Greenwire Environment and Energy Publishing, shoppers worldwide are using 500 billion to 1 trillion plastic bags every year which means 150 plastic bags a year per person. Plastic bags are made of polyethylene, which comes from non-renewable sources like petroleum. Thus, these bags cannot be reused. Also plastic bags are indestructible and take over hundreds of years to break down in the environment. Additionally, fine particles of plastic are finding their way into the food chain through fish and sea food which is consumed by humans. Society today is learning about the disadvantageous impact of plastic bags and is adopting more eco-friendly alternatives like reusable bags which are made out of natural fibers like jute, cotton, canvas and hemp. Many stores are increasing their brand recognition by giving away trendy green bags and building up customer loyalty. One could opt to produce low cost green shopping bags or create reusable fold-up logo bags that are easy to carry. Additionally, entrepreneurs can also think of designing trendy green bags which are acceptable to all ages and tastes of people.
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Coca-Cola to do business overseas. Woodruff s vision that Coca-Cola be placed within "arm's reach of desire," was coming true -- from the mid-1940s until 1960, the number of countries with bottling operations nearly doubled. Post-war America was alive with optimism and prosperity. Coca-Cola was part of a fun, carefree American lifestyle, and the imagery of its advertising -- happy couples at the drivein, carefree moms driving big yellow convertibles -- reflected the spirit of the times.
returned to the market as Coca-Cola classic, and the product began to increase its lead over the competition -- a lead that continues to this day.
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HISTORY OF BOTTLING:
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. 1894 A modest start for a bold idea In a candy store in Vicksburg, Mississippi, brisk sales of the new fountain beverage called CocaCola impressed the store's owner, Joseph A. Biedenharn. He began bottling Coca-Cola to sell, using a common glass bottle called a Hutchinson. Biedenharn sent a case to Asa Griggs Candler, who owned the Company. Candler thanked him but took no action. One of his nephews already had urged that Coca-Cola be bottled, but Candler focused on fountain sales. 1899 The first bottling agreement Two young attorneys from Chattanooga, Tennessee believed they could build a business around bottling Coca-Cola. In a meeting with Candler, Benjamin F. Thomas and Joseph B. Whitehead obtained exclusive rights to bottle Coca-Cola across most of the United States (specifically excluding Vicksburg) -- for the sum of one dollar. A third Chattanooga lawyer, John T. Lupton, soon joined their venture.
1900-1909 Rapid growth
The three pioneer bottlers divided the country into territories and sold bottling rights to local entrepreneurs. Their efforts were boosted by major progress in bottling technology, which improved efficiency and product quality. By 1909, nearly 400 Coca-Cola bottling plants were operating, most of them family-owned businesses. Some were open only during hot-weather months when demand was high.
1916 Birth of the contour bottle
Bottlers worried that the straight-sided bottle for Coca-Cola was easily confused with imitators. A group representing the Company and bottlers asked glass manufacturers to offer ideas for a distinctive bottle. A design from the Root Glass Company of Terre Haute, Indiana won enthusiastic approval in 1915 and was introduced in 1916. The contour bottle became one of the few packages ever granted trademark status by the U.S. Patent Office. Today, it's one of the most recognized icons in the world - even in the dark!
920s Bottling overtakes fountain sales
As the 1920s dawned, more than 1,000 Coca-Cola bottlers were operating in the U.S. Their ideas and zeal fueled steady growth. Six-bottle cartons were a huge hit after their 1923 introduction. A few years later, open-top metal coolers became the forerunners of automated vending machines. By the end of the 1920s, bottle sales of Coca-Cola exceeded fountain sales.
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International expansion
Led by longtime Company leader Robert W. Woodruff, chief executive officer and chairman of the Board, the Company began a major push to establish bottling operations outside the U.S. Plants were opened in France, Guatemala, Honduras, Mexico, Belgium, Italy, Peru, Spain, Australia and South Africa. By the time World War II began, Coca-Cola was being bottled in 44 countries.
1940s Post-war growth
During the war, 64 bottling plants were set up around the world to supply the troops. This followed an urgent request for bottling equipment and materials from General Eisenhower's base in North Africa. Many of these war-time plants were later converted to civilian use, permanently enlarging the bottling system and accelerating the growth of the Company's worldwide business.
1950s Packaging innovations
For the first time, consumers had choices of Coca-Cola package size and type -- the traditional 6.5-ounce contour bottle, or larger servings including 10-, 12- and 26-ounce versions. Cans were also introduced, becoming generally available in 1960.
1960s New brands introduced
Following Fanta in the 1950s, Sprite, Minute Maid, Fresca and TaB joined brand CocaCola in the 1960s. Mr. Pibb and Mello Yello were added in the 1970s. The 1980s brought diet Coke and Cherry Coke, followed by POWERADE and DASANI in the 1990s. Today hundreds of other brands are offered to meet consumer preferences in local markets around the world. 1970s and 80s Consolidation to serve customers As technology led to a global economy, the retailers who sold Coca-Cola merged and evolved into international mega-chains. Such customers required a new approach. In response, many small and medium-size bottlers consolidated to better serve giant international customers. The Company encouraged and invested in a number of bottler consolidations to assure that its largest bottling partners would have capacity to lead the system in working with global retailers. 1990s New and growing markets Political and economic changes opened vast markets that were closed or underdeveloped for decades. After the fall of the Berlin Wall, the Company invested heavily to build plants in Eastern Europe. And as the century closed, more than $1.5 billion was committed to new bottling facilities in Africa. 21st Century The Coca-Cola bottling system grew up with roots deeply planted in local communities. This heritage serves the Company well today as people seek brands that honor local identity and the distinctiveness of local markets. As was true a century ago, strong locally based relationships between Coca-Cola bottlers, customers and communities are the foundation on which the entire business grows.
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Alexander B. Cummings
Mr. Alexander B. Cummings is Executive Vice President and Chief administrative Officer (CAO) of The Coca-Cola Company. The CAO structure consolidates key global corporate functions in a
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purposeful approach to effectively support the business operations of The Coca-Cola Company. Key global corporate functions reporting to the CAO include Legal, People Function, Global Community Connections, Strategic Planning, Information Technology, Sustainability, Strategic Security and Aviation, and the Technical organization comprising of: Research & Development, Science, Global Quality and Product Integrity, Supply Chain, and Procurement. These functions support our five operating groups with presence in over 200 countries. Born in Liberia, West Africa, Mr. Cummings joined The Coca-Cola Company in 1997 as Region Manager, Nigeria. In 2000, he was named President of the Company's North & West Africa Division. In March 2001, he became President and Chief Operating Officer of the Africa Group, responsible for the Company's operations in Africa, encompassing a total of 56 countries and territories across the continent. Prior to joining the Company, Mr. Cummings held several positions with The Pillsbury Company in the U.S. In his last role as Vice President of Finance for Pillsbury International, he had financial responsibility for a growing $1.2 billion international branded food business with operating companies in 16 countries. Mr. Cummings currently serves on the boards of C.A.R.E. and Clark Atlanta University. Mr. Cummings also is a board member of Coca-Cola Bottling Co. Consolidated, a publicly traded bottler of The Coca-Cola Company (NASDAQ). He is a member of the Executive Leadership Council. In addition, Mr. Cummings has previously served on the Advisory Board of The African Presidential Archives & Research Center, The Corporate Council on Africa, The African-America Institute, Africare, The Center for Global Development's Commission on U.S. Policy toward LowIncome Poorly Performing States (LIPPS), and the following bottling partner entities of The Coca-Cola Company: Coca-Cola Hellenic Bottling Company , Coca-Cola Sabco (Pty.) Ltd., Equatorial Coca-Cola Bottling Company, and The Coca-Cola Bottling Company of Egypt. Mr. Cummings holds a B.S. degree in Finance and Economics from Northern Illinois University and an MBA in Finance from Atlanta University.
Steve Cahillane
Steve Cahillane is President and Chief Executive Officer of Coca-Cola Refreshments USA (CCR), The Coca-Cola Company. Prior to this appointment, he was President of the North American Business Unit for Coca-Cola Enterprises (CCE). Mr. Cahillane leads CCR, which encompasses Commercial Leadership, National, Region and Local Sales for the Foodservice and Retail businesses and all Product Supply operations.
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Mr. Cahillane has more than 20 years of successful international beverage sales, marketing and distribution experience. He joined CCE in 2007 after serving in leadership roles at several other leading beverage companies.
Wendy Clark
Wendy Clark joined The Coca-Cola Company in September 2008 as senior vice president, integrated marketing communications and capabilities. In her role, Clark oversees global design, marketing communications, media, sponsorships, interactive marketing and marketing of the Company's Live Positively sustainability platform. Under Wendy's guidance, her team has achieved a great deal during her time at the Company, including the successful global launch of the Coca-Cola "Open Happiness" campaign, now deployed in markets representing 100% of Coca-Cola's volume. Her team is levering the power and impact of holistic design, working to align and focus our ad agencies under a new value-based compensation model and driving great adoption and understanding of digital media with a "fans-first" mentality. During Wendy's tenure, The Coca-Cola Company launched its first-ever global mobile marketing campaign and is currently executing the 2010 FIFA World Cup program which is The Coca-Cola System's largest-ever marketing activation. In November 2009, FORTUNE featured Wendy in its "40 Under 40" issue, and she also was named one of four "Women to Watch" by FORTUNE. Prior to joining The Coca-Coca Company, Clark was senior vice president, advertising for AT&T, the world's largest telecommunications company. From delivering the AT&T "globe" logo into the 21st Century to making the "Your World. Delivered." tagline synonymous with AT&T, Clark was at the helm of the company's most ambitious and aggressive re-branding and advertising campaigns in its history. Wendy's efforts were recognized in November 2007, upon her induction into the American Advertising Federation's (AAF) "Advertising Hall of Achievement." In addition, AdAge magazine cited Clark as "one of the most important women in marketing" in its "Women to Watch" 2007 issue. Prior to joining AT&T in 2004, Clark served as the senior vice president and director of client service at GSD&M, a nationally acclaimed advertising agency based in Austin, Texas and held a variety of field and corporate positions in advertising and marketing for BellSouth Mobility. Clark is a board member of the Association of National Advertisers, on the advisory board of Canoe Ventures and is a board director for The Jack & Jill Late Stage Cancer Foundation. She holds a BA/ English from Florida State University and lives in Atlanta with her husband and three children.
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Sandy Douglas
J. Alexander M. Douglas, Jr. ("Sandy") is President of the Coca-Cola North America, The CocaCola Company. Prior to this appointment, he was Senior Vice President and Chief Customer Officer of The Coca-Cola Company. He was named Vice President in 1994, assuming leadership of the CCE Sales & Marketing Group. In June 1998, his responsibilities were increased to include the entire North American Field Sales & Marketing Groups. He was appointed President of the North American Division in 2000. After graduating from the University of Virginia in 1983, Mr. Douglas began his career at The Procter & Gamble Company working in a variety of sales and sales management positions. Mr. Douglas joined The Coca-Cola Company in January 1988 as a District Sales Manager in CocaCola Fountain, USA. He held a variety of positions with increasing responsibility both in CCUSA Fountain and Operations. Mr. Douglas serves on the boards of Radiant Systems, GS1 US, American Beverage Association, Grocery Manufacturers Association, East Lake Foundation, Morehouse College and Students in Free Enterprise.
Rick Frazier
Rick Frazier is Vice President, Supply Chain, The Coca-Cola Company. Mr. Frazier has leadership accountability for The Coca-Cola Company's global Procurement, Commercial Products Supply, Supply Chain Development, Quality and Environment & Water functions. From November 2005 through October 2008, Mr. Frazier served as Senior Vice President of Technical Stewardship. Under his leadership, the Company's Global Quality, Scientific & Regulatory Affairs, and Environment & Water Resources functions drove sustainable growth by reducing quality, environmental and regulatory risk, adding to the Company's bottom line through global productivity efforts, and building upon the Company's reputational equity. Prior to joining Company as Vice President of Global Quality and Chief Quality Officer in 2004, Mr. Frazier held a number of supply chain and quality leadership positions for Coca-Cola Enterprises, the Gatorade Division of The Quaker Oats Company and with The Pillsbury Company. He started his career at the Continental Grain Company managing grain facilities and trading commodities. Mr. Frazier earned a bachelor's degree in business administration from the University of Illinois in Urbana.
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He is a member of the Executive Leadership Council, Link Unlimited, Georgia Tech Industry Advisory Board, 100 Black Men of Atlanta, Inc., The Grocery Manufacturers/Food Products Association Science Institute Council, International Food and Agribusiness Management Association (IAMA), Fernbank Museum of Natural History. He is a board member of the Executive Leadership Foundation, and a Board Trustee of The Keystone Center.
Carletta Ooton
Ms. Carletta Ooton is Vice President and Chief Quality and Product Integrity Officer for The Coca-Cola Company. She has overarching accountability for the policies and standards, audits, analytical services, food safety, customer quality, performance measures and operations support delivered by the Global Quality organization. Ms. Ooton joined The Coca-Cola Company in 2006 and has over 20 years of quality and operational experience. Prior to joining the Company, she worked for Cott Beverages, Bath & Body Works, Unilever and Tate and Lyle. Ms.Ooton holds dual Bachelor of Science degrees in biological sciences and chemistry, as well as a Master of Science degree in microbiology from Southern Illinois University.
Dominique Reiniche
Based in Paris, France, Dominique Reiniche has been President of the Europe Group of The Coca-Cola Company since May 2005. The Europe Group comprises 38 countries, including the Member States of the European Union, the European Free Trade Association countries and the Balkans. Ms. Reiniche has spent 15 years with Coca-Cola in France and Europe, holding various marketing, sales and general management positions. She was appointed General Manager, France, in 1998 and President of Coca-Cola Enterprises Europe in 2003. Prior to joining The Coca-Cola Company, was Director of Marketing and Strategy with Kraft Jacobs-Suchard. She spent the first eight years of her career with Procter & Gamble. From May 2005 until May 2007, Dominique Reiniche was President of UNESDA (European NonAlcoholic Beverage Industry), during which she led the industry to liaise more with the EU authorities, to communicate more broadly the choice of drinks it offers, and to adopt a selfregulatory code on not marketing to children and not selling in primary schools. She sits on the Board of ECR Europe and the Board of CIAA (Confederation of the Food and Drink Industries of the EU). Ms. Reiniche is a graduate from ESSEC (MBA), Paris, France.
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Joseph V. Tripodi
Joseph V. Tripodi is Executive Vice President and Chief Marketing & Commercial Officer of The Coca-Cola Company. Mr. Tripodi leads the global Marketing, Customer Management and Commercial Leadership efforts of the Company to develop and leverage its capabilities, brands and properties to meet the needs of consumers and customers worldwide to drive profitable growth. Mr. Tripodi brings 25 years of diverse global marketing and business knowledge and experience to The Coca-Cola Company. Prior to joining the Company in 2007, he was the Senior Vice President and Chief Marketing Officer for Allstate Insurance Company. In this position, he was responsible for all marketing activities across the company, including brand strategy and identity, advertising, customer experience, promotions, sponsorships, direct marketing, internet marketing, consumer insight and measurement, regional marketing management and all acquisition, cross-sell and retention activities. Among his achievements there was the development and launch of Allstate's "Your Choice Auto and Home," the industry's first product innovation in decades. Mr. Tripodi was previously Chief Marketing Officer for The Bank of New York. Prior to that he served as Chief Marketing Officer for Seagram Spirits & Wine from 1999 to 2002. From 1989 to 1998, Mr. Tripodi was the Executive Vice President for global marketing for MasterCard International. He held positions of increasing responsibility for Mobil Oil from 1981 to 1988. Mr. Tripodi began his marketing career in 1977 working for IBM. During his career, Mr. Tripodi worked extensively overseas including assignments in Paris, Hong Kong and the Philippines/Guam/Micronesia. Mr. Tripodi is currently a member of the board of the Ad Council and serves as a Trustee of The Field Museum in Chicago. He is past chairman of the Association of National Advertisers. Mr. Tripodi received his Masters of Science in Management from the London School of Economics in 1981 and his Bachelor of Arts in Economics with honors from Harvard College in 1977.
Jerry S. Wilson
Jerry S. Wilson is Chief Customer and Commercial Officer and Senior Vice President, The CocaCola Company, responsible for crafting and executing our global customer and commercial leadership strategy and agenda. He and his team lead our system in building collaborative customer relationships across all key channels, with a focus on best-in-class innovation, retail execution, shopper marketing and revenue growth management. Mr. Wilson joined The Coca-Cola Company in 1988, from Volkswagen of America, Inc., where he was USA Brand Manager. He has held a variety of positions of increasing responsibility at the Company in general management, consumer marketing and strategic planning, serving as
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Western Area Vice President, Director of Strategic Marketing, and Director of Sales Operations within the Coca-Cola USA Foodservice division. Prior to his current role, Mr. Wilson served as President of the McDonald's Division, where he led our worldwide organization responsible for growing this important business alliance in 118 countries and over 31,000 restaurants. Mr. Wilson received his Masters Degree in Marketing from Mercer University and his Bachelors Degree in Economics from the University of Georgia.
STRENGTHS
y y y World s Leading Brand Large Scale of Operation Robust Revenue Growth Segment y y y
WEAKNESSES
Negative Publicity Sluggish Performance in North America Decline in Cash From Operation Activities
in
Three
OPPOTUNITIES
y y y Acquisitions Intense Competition Growing Bottled Water Market Growing Hispanic Population is US y y y
THREATS
Intense Competition Dependence on bottling partners Sluggish Growth Carbonated Beverages
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Strengths:
y Worlds leading brand
Coca-Cola has strong brand recognition across the globe. The company has a leading brand value and a strong brand portfolio. Business-Week and Interbrand, a branding consultancy, recognize. Coca-Cola as one of the leading brands in their top 100 global brands ranking in 2006.The Business Week-Interbrand valued Coca-Cola at $67,000 million in 2006. Coca-Cola ranks well ahead of its close competitor Pepsi which has a ranking of 22 having a brand value of $12,690 million Furthermore, Coca-Cola owns a large portfolio of product brands. The company owns four of the top five soft drink brands in the world: Coca-Cola, Diet Coke, Sprite and Fanta. Strong brands allow the company to introduce brand extensions such as Vanilla Coke, Cherry Coke and Coke with Lemon. Over the years, the company has made large investments in brand promotions. Consequently, Coca-cola is one of the best recognized global brands. The company s strong brand value facilitates customer recall and allows Coca-Cola to penetrate new markets and consolidate existing ones.
the bottling investments segment by 19.9%. Together, the three segments of Latin America, East, South Asia, and Pacific Rim and bottling investments, accounted for 34.8% of total revenues during fiscal 2006. Robust revenues growth rates in these segments contributed to top-line growth for Coca-Cola during 2006.
Weaknesses:
y Negative publicity
The company received negative publicity in India during September 2006.The company was accused by the Center for Science and Environment (CSE) of selling products containing pesticide residues. Coca-Cola products sold in and around the Indian national capital region contained a hazardous pesticide residue. These pesticides included chemicals which could cause cancers, damage the nervous and reproductive systems and reduce bone mineral density. Such negative publicity could adversely impact the company s brand image and the demand for Coca-Cola products. This could also have an adverse impact on the company s growth prospects in the international markets.
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Decline in cash from operating activities reduces availability of funds for the company s investing and financing activities, which, in turn, increases the company s exposure to debt markets and fluctuating interest rates
Opportunities:
y Acquisitions
For the last one year, Coca-Cola has been aggressively adopting the inorganic growth path. During 2006, its acquisitions included Kerry Beverages, (KBL), which was subsequently, reappointed Coca-Cola China Industries (CCCIL). Coca-Cola acquired a controlling shareholding in KBL, its bottling joint venture with the Kerry Group, in Hong Kong. The acquisition extended Coca-Cola s control over manufacturing and distribution joint ventures in nine Chinese provinces. In Germany the company acquired Apollinaris which sells sparkling and still mineral water in Germany. Coca-Cola has also acquired a 100% interest in TJC Holdings, a bottling company in South Africa. Coca-Cola also made acquisitions in Australia and New Zealand during 2006. These acquisitions strengthened Coca-Cola s international operations. These also give Coca- Cola an opportunity for growth, through new product launch or greater penetration of existing markets. Stronger international operations increase the company s capacity to penetrate international markets and also gives it an opportunity to diversity its revenue stream.
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Hispanics are growing rapidly both in number and economic power. As a result, they have become more important to marketers than ever before. In 2006, about 11.6 million US households were estimated to be Hispanic. This translates into a Hispanic population of about 42 million. The US Census estimates that by 2020, the Hispanic population will reach 60 million or almost 18% of the total US population. The economic influence of Hispanics is growing even faster than their population. Nielsen Media Research estimates that the buying power of Hispanics will exceed $1 trillion by 2008- a 55% increase over 2003 levels. Coca-Cola has extensive operations and an extensive product portfolio in the US. The company can benefit from an expanding Hispanic population in the US, which would translate into higher consumption of Coca-Cola products and higher revenues for the company.
Threats:
y Intense competition
Coca-Cola competes in the nonalcoholic beverages segment of the commercial beverages industry. The company faces intense competition in various markets from regional as well as global players. Also, the company faces competition from various nonalcoholic sparkling beverages including juices and nectars and fruit drinks. In many of the countries in which CocaCola operates, including the US, PepsiCo is one of the company s primary competitors. Other significant competitors include Nestle, Cadbury Schweppes, Groupe DANONE and Kraft Foods. Competitive factors impacting the company s business include pricing, advertising, sales promotion programs, product innovation, and brand and trademark development and protection. Intense competition could impact Coca-Cola s market share and revenue growth rates.
an adverse effect on Coca-Cola s profitability. In addition, loss of one or more of its major customers by any one of its major bottling partners could indirectly affect Coca-Cola s business results. Such dependence on third parties is a weak link in Coca-Cola s operations and increases the company s business risks.
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