Background

Coca-Cola in Brazil

If there is ever a brand or corporate brand that easily recognizable all over the world then it should be the Coca-cola soda brand. Whether you go to India, the headquarters in Atlanta, Nairobi or London there will be no substantial change in the marketing strategy. The brand recognition is clearly evident from the packaging. This can perhaps be attributed to a strong push for brand recognition in the market thus a lot of money is spend on marketing on a daily basis regardless of the market. Perhaps it is never a bed of roses as they say, exemplified by whatever Coke has gone through in the expansive South American region and on a specific scale, the regions power house, Brazil. This was a market that was third in might in the companys stable only competing with Mexico to meet the USA until environmental challenges forced the tubainas to encroach in to Cokes market in the mid 1990s onwards. The company has tried so hard to arm twist the region to gain control but rather in vain. Coca-Colas Brazilian division comprises Coca-Cola Indstrias Ltda., Recofarma Indstrias do Amazonas Ltda., and 39 bottling plants operated by 16 independently managed companies. Coca-Colas Brazilian division employed 25,000 people and generated another 250,000 indirect jobs. The companys products were available at nearly one million points of sale. The largest commercial fleet in the country, comprised of 9,000 vehicles, supplied these outlets. As of 2003, the Coca-Coca brand (regular and diet) was the leader in the Brazilian soft drink market with 35.6% of market share. The cola flavor accounted for 45% of the Brazilian soft-drink market. Another Coca-Cola company brand, Fanta, available in Brazil in several flavors, was ranked third in the Brazilian soft drink market, with 7.1% market share. Although CocaColas sales steadily grew in Brazil, the brands market share decreased after 1996 due to the competition from AmBev products and from the hundreds of low-priced tubanas.

Economic stabilization plan Plano Real

In the mid-1990s, after a long period of high inflation and economic stagnation, the successful Brazilian economic stabilization plan, known as Plano Real, restored the purchasing power of the low-income segment of the population. Therefore, economic stabilization and consumer behavior in Brazil allowed many Brazilians to purchase consumer goods formerly inaccessible to them, such as cookies, yogurt, snacks, cereals, and personal care products. Brazil, like all South American countries have certain sectors or neighborhoods that divide the social class. Since living in the city is very expensive, the families that live there are considered to be middle to high class. Hence, people living in the suburbs or farms are categories as low middle or low class. Brazil is the most unequal distributor of income in the nation except for South Africa. The income a wealthy person receives is three times more than the income of a poor person. This is a big problem in Brazil because the richer keeps getting richer and the poor keeps getting poorer. Brazil also has social welfare but it doesnt help the lower class people enough, because of the increasing population and low circulation of money. Brazil has social differences, but its people are still energetic, outgoing, spontaneous, and liberal. Social classes are problems that every country has, one more noticeable than others. The educational levels previously presented support the level of submission among the five different classes. This employment relationship is presented as:

Class A: composed by bankers, investors, business owners, major landowners and people with extraordinary skills for the industry they operate in. Class B: composed by directors and managers, politicians, judges, justices, prosecutors, well graduated professors, doctors, well qualified engineers and lawyers, etc. Class C: composed by those who provide services directly to the wealthier groups, such as teachers, managers, mechanics, electricians, nurses, etc. Class D: composed by people who provide services to Class C, such as housemaids, bartenders, bricklayers, people who work for the civil construction companies, small stores sellers, low-paid drivers, etc.

Class E: composed by people who earn minimum salaries, such as cleaners, street sweepers, and also by unemployed people.

Geographic Location
In some regions there is a strong predominance of classes D and E, which is the case of North, Northeast and Central-West regions (with the exception of Braslia). However, it is in the larger cities that social differences are most visible. A city like So Paulo, for example, has people from all five social classes. Sometimes this inequality can be observed in the same neighborhood, where an upscale building is located right next to a shantytown. The same applies to Brasilia, Brazil's capital and one of the cities that, along with So Paulo, present the highest levels of inequality. This inequality occurs due to an intense migration movement that results on a significant population increase, decreasing job opportunities and salaries.

Competitive Brazilian Soft Drink Market

Brazil is an old hand at economic crisis, having experienced more than its fair share of instability over the past two decades. It is waning consumer confidence that can be so damaging to soft drinks demand, both in on- and off-trade channels. But because of past experience Brazilians tend to be savvier about such downturns than their developed world counterparts and, in turn, less susceptible to a sudden and dramatic dip in confidence. In Brazil, soft drinks were sold in variety of containerscontainers made of glass, PET, and aluminum, with capacities that varied from 200 ml to 2.5 liters. There were more than 3,500 brands of soft drinks in Brazil, manufactured in more than 700 plants, according to ABIR, The Brazilian Association of Soft Drink and Non-Alcoholic Beverages Manufacturers, an entity that represented producers of soft drinks, bottled water, juices, teas, and sport drinks. Nonalcoholic drink sales in Brazil underwent intensive growth for over two decades. In 1986, the size of the Brazilian market was slightly below 4.9

billion liters. In 1994, Brazilians consumed an estimated 6.44 billion liters of nonalcoholic drinks. Ten years later, in 2003, nonalcoholic drink consumption leaped up to 11.6 billion liters. Brazilian per capita soft drink consumption was 82.8 liters in 1998 and grew to 95.3 liters in 2003. Per capita consumption was forecasted to grow to 104.9 liters by 2008. Cola was the Brazilians favorite flavor (41.8% in 2003), followed directly by guaran (23.9%) and orange (11.4%). Supermarkets, which were the primary distribution channel for sodas in most countries, accounted for only a quarter of the category sales in Brazil. Additionally, nearly half of the soft drink volume was sold refrigerated and was consumed at or near the point of sale. Soft drink vending machines were not widely available in Brazil up to 2004.

Backbreaking competitive rivalry with Ambev

In a market where the product and tastes remained virtually indistinguishable and fairly constant, brand recognition was a crucial factor for the cola companies. The quest for better brand recognition was the guiding force for Coke and Pepsi to a large extent. Colorful images, lively words, beautiful people and places, interesting storylines, innovative/attractive packaging and catchy jingles have made sure that the cola wars, though often scoffed at, rarely go unnoticed. And that's what it has all been about till now. The management of both the companies had to constantly adapt to the changing attitudes and demands of their consumers or lose market share. Coca-Colas main Brazilian competitor was AmBev, Companhia de Bebidas das Americas (American Beverage CompanyNYSE: ABV and Aback). The company was formed from a merger in July 1999 of Brahma and Antarctica, two leading Brazilian beer and soft drink manufacturers. With the merger, AmBev became the fifth largest beer manufacturer, 29 the seventh largest world beverage manufacturer, and Latin Americas largest beverage company. AmBev held nearly 70% of the Brazilian beer market and 17% of the Brazilian soft drink market. AmBevs assets included 49 facilities, located both in Brazil and overseas. AmBev had 18,000 employees. The company owned numerous bottling facilities, malt production factories, concentrate plants, and a guaran farm. The companys product mix comprised various brands of beers, soft drinks,

bottled water, iced tea, and isotonic beverages. Some of AmBevs most popular brands were Brahma, Antarctica, Skol, and Bohemia. AmBev was the second largest company in the Brazilian soft drink market. The company bottled and distributed numerous brands of bottled water, isotonic drinks, and sodas. The companys Guaran Antarctica brand was second to Coca-Cola in the Brazilian soft drink market. Guaran Antarctica was exported to several countries, and in 2002, it began production and distribution in Europe.

The Tubanas Militant Pressure

The tubainas are the local sweeter soft drinks that are very popular with the locals. The Cola war never made things better as the company has had to contend with a shrunk market due to competition from Pepsi especially on the production Pepsi Twist in 2003 and its alliance with AmBev, a local manufacturer. About twenty independent manufacturers of tubanas were members of ABIR, the Brazilian Association of Soft Drink Manufacturers. However, it was believed that there were more than seven hundred manufacturers of tubanas in Brazil. This universe spanned from very small manufacturers, who did not have a legal business nor paid taxes, to quite structured companies with regional coverage, considerable revenues, and sizable market shares. Despite the fact that some tubanas manufacturers had been in business for nearly seventy years, market reports ignored their existence until the early 1990s. This situation radically changed in the following years. Still, no individual tubana had more than 1.5% of the total Brazilian soft drink market.

By 2004, some tubanas manufacturers owned modern plants and had adopted the latest bottling technologies. While, in the past, most tubanas were primarily distributed through small points of sales in poor neighborhoods, several brands were now available in the leading supermarket chains, located in the largest Brazilian metropolitan areas. The aforementioned products are largely not taxed yet they are produced en masse across the country with some even being sold regionally. This has

hence been the toughest battle partly due to non-regulation of the sector although the government and trade unions feel that regulation will only stifle the growth of local industries and benefit foreign multinationals, with Coke being one of them. The rural and local economies are great beneficiaries of this war as the company has been unable to penetrate into the interior as from the start of this century and its market share has shrunk to an unimaginable levels.

Continuous threat from the leading tubanas manufacturers

Xereta: Some tubanas manufacturers became quite successful business cases. For example, Refrigerantes Xereta, a company located in Tiet, So Paulo, in southeastern Brazil, was in the market for more than thirty years. To avoid the price war in the two-liter PET segment, the company introduced its soft drink, Xereta, in aluminum cans, and launched Xeretinha (Little Xereta), in 250 ml PET containers.

Distribuidora Guararapes de Bebidas: It is leading distributor of beer and sodas in the northeast of Brazil, lost the rights to distribute Brahmas products (AmBevs brand). Thus, the company decided to develop its own line of soft drinks, Frevo, named after a traditional pop rhythm mainly played and danced during Carnaval. Frevo sodas were lower priced than traditional competitors. This rather sweet beverage was available in four flavors: guaran, orange, lemon, and cola. The advertising promoted the slogan, Taste ours, it is better. After only two years in the market, Frevo gained 25% of market share in Recife, Pernambuco state, one of Brazils largest metropolitan areas. Production increased from 1.1 million liters to 21.4 million. Frevo distributed in seven of the nine states of the northeast region. DGBs revenue quadrupled compared to its distribution days for Brahma.

B Brands in Brazil

B brands attacked established brands in territory they had ruled for ages. Like guerrillas, these brands were fast, flexible, and fought the enemy in diverse and inhospitable battlefields. They had very lean operations, allowing them to offer products for about half the price of their traditional competitors. A major problem for established brands in Brazil was the unfair competition from companies that had no legal existence and from those who were legally registered but did not pay taxes. Marco Aurlio Eboli, a vice president of the Brazilian Coca-Cola bottler Spal, estimated that in Brazil, 90% of the 750 regional brands of soft drinks did not pay the taxes they ought. Another important issue in the competitive Brazilian market that seemed to impact the share of traditional brands regarded the relative use of promotional tools. To fight price competition, several leading brands increased their trade promotional activities. According to the top Brazilian advertising agency, Talent, investments in media were reduced in roughly two-thirds of the product categories during the 1990s. Some argued that during that time, traditional brands should have invested to stay at the forefront of consumers tastes.

Coca-cola vs. Tubanas- The belligerent argument

The Coca-Cola Companys Brazilian subsidiary claimed to be deeply harmed by tubanas unfair competition. It advocated that the price advantage held by tubanas was only possible through tax evasion practices, overlooked by the Brazilian authorities.

In August 2003, Coca-Colas role in the tubanas war switched from victim to villain as Coca-Cola was accused of economic abuse and unfair business practices, the same criticism the company had always held against emergent soft drink brands. The Coca-Cola Company promptly distributed a press release refuting all the allegations, affirming that all were entirely false, and totally inconsistent with Coca-Colas ethical behavior.

Reappearance of the returnable bottles

The real problem for Coka-Cola in Brazil is that even though it is a premium product, it is still competing with products like tubainas which are selling for half the price. It has become an issue in Brazil as big brands like Coke, PepsiCo. , and Guaran Antarctica, a favorite Brazilian pop, are competing with so called tubanas; low-cost sodas made by local companies. Competitors say these upstarts keep prices low by evading taxes. With the end of high inflation in the mid-1990s, soft drink sales took off, growing by 60% from 1994 to 1999. The low-priced tubanas did best, capturing a third of the market. Coke's initial response to the tubanas' assault was to cut prices. But that didn't help it win back market share, and profits were eroded. They had a struggle with profitability and it did not match up to their position with respect to volume. As a result, Coca-Cola reintroduced returnable glass bottles in its distribution scheme in order to lower costs and compete better on price against the tubanas. However, compared to the same period in 2002, while sales of the Coca-Cola Companys Brazilian subsidiary fell 6% in the first half of 2003, sales of soft drinks in returnable bottles went up 10%. Coca-Cola returnable bottles were priced closer to tubanas, and, therefore, appealed and became accessible to Class C and D consumers.

The Future Assumption

Brazilian consumers were the ones who benefited the most from the tubanas war. In the Brazilian market, sodas were offered in a much broader range of flavors, packaging, and price than prior to 2003. By the end of 2003, CocaCola showed encouraging signs. In a partnership with Norsa, a company owned by Tasso Jereissati, a nationally known businessman and state governor, Coca-Cola regained control of distribution in several northeastern states, such as Cear, Bahia, Piau, and Rio Grande do Norte. As a result, Coca Colas market share reached 44.5% in November 2003, up from 42% in November 2002, which led the operational profit to grow by 40%.

The market became even more competitive in 2003 with the entry of RC Cola into Brazil. Real Bebidas, based in the state of Minas Gerais, signed a master franchise agreement to produce and distribute RC for twenty years, extendable for another ten years. The group responsible for launching RC Cola in Brazil hired Renato Barcellos, a Brazilian engineer who served the Coca-Cola Companys business in the northeast region. In blind tests conducted in the U.S. with RC Cola, Coca-Cola, and Pepsi-Cola, a larger number of consumers preferred the taste of RC Cola. Based on that, one of the strategies to be adopted to promote RC Cola in Brazil was to offer sampling of the product in supermarkets. However the best way to encourage growth is to ensure there is a level playing field for both foreign and local owned enterprises in a country so that only market forces determine who survives. With this, there will be more development and even more competition leading to better returns for all, including the government in form of taxes, employment for its people and general human and capital investment injection into an economy.

Problem Identification
1. Coke sale in Brazil in going down slowly but the profitability margin going down rapidly. 2. Tubainas brands are rising up to take larger market. 3. Old nemesis like pepsi is joined forces with Ambev now giving them a better supply chain advantage. 4. Royal crown invaded in to Brazilian cola market with cost leadership strategy. 5. The price going in the industry making it very hostile while the profit margin becomes more and more narrow. 6. Coke faces guerilla attack from different regions, all the regional competitor having their own unique advantages.

7. Even-though coke has the biggest supply chain fleet in Brazil but still they are very much in accessible in many Brazilian regions. 8. The advantage in TAX evasion done by the tubainas gives them very good financial advantages.

Main Issue
With continuous guerilla attack form the tubaninas, old enemies like Pepsi & Ambev joining together as one force and new invasion from Royal Crown, what strategies should Coca-Cola take to sustain its number one position in Brazilian soft drink industry?

SWOT Analysis
Strength

Coca-cola is the worldwide recognized brand that customers can rely on

Brands are more than just names, colors or logos. Coca Cola has a strong brand identity in the global market and is one of most respected brands in the world. I think that Coca Cola is making a great effort to hit the world. They seem to have advertising in every possible outlet. In efforts to grow to become the largest beverage in every possible country I think that they are on their way to that. I think that this is possible because of how many outlets they have and how many people they are hitting in each and every outlet. These outlets include the Winter Olympics (which is broadcasted worldwide),

Television, Facebook, Twitter, Flickr, multiple interactive web sites, an even wider amount of things that I cannot even think of. Coca Cola is constantly around you, whether you are at the store, in a restaurant, at a bar, at a basketball game, you cannot escape the Coca Cola Brand and this is somewhat of what makes it so successful.

In terms of the manufacturer, distributor and marketer, CocaCola is the largest nonalcoholic beverage concentrates and syrups business in the world.
The Coca-Cola Company is the worlds largest beverage company and exists to benefit and refresh everyone it touches. Along with Coca-Cola, the worlds best-known brand, The Coca-Cola Company markets four of the worlds topfive soft drink brands, including Diet Coke, Fanta and Sprite. Our beverage products encompass nearly 400 brands including noncarbonated beverages such as waters, juices, sports drinks, teas and coffees.

As a corporate giant throughout the world, Coca-Cola has got groovy financial flexibility.
Coca-Cola has established themselves as one of the most successful companies all around the world because of their achievements. Therefore, it helped them to grow and enhance their profitability margin. As a result, the demand of their product always remained high and thus they managed to grow faster in every year which helped to heighten their financial background.

Coca-Cola has got a wide range of product line in Brazil.

The Brazilian subsidiary of the Coca-Cola Company owned and distributed a broad product mix in Brazil. Product lines included bottled water, iced tea, juices, and energy drinks. Another Coca-Cola company brand, Fanta, available in Brazil in several flavors, was ranked third in the Brazilian soft drink market, with 7.1% market share.

Coca-Cola has got strong distribution channel in southern zone which helped them to maintain highest market share in Brazil.
Coca-Cola has got a strong distribution channel in southern zone where majority of the population falls under category A & B. This part of the Brazil is comparatively wealthy and it allowed them to ensure maximum of sale of their product as the Coca-Cola brand recognition played a significant role. A strong distribution channel helped them to scatter their products in such a manner that everyone can reach at their product anytime they want. It helped them to earn some brand loyalty which helped them to enhance their brand reputation as well.

Weakness

Few penetrations to rural areas, where the major potential markets are.
Though Coca-Cola is operating in Brazil for quite a long period of time, still they could not manage to reach distinct areas specially the Northern areas. They have not yet set any distribution channel so that they can grab the elusive market share of the Northern side. Therefore, one of the biggest population areas where near about 28% population live is totally unacquainted by the Coca-Cola.

Strict profitability demands, constrains the sales volume.

As the majority of the profitability of Coca-Colas operation in Brazil depends on the sales in Southern part, it creates constraint for the total sales volume

as the risk factors are higher. Therefore, the profitability is quite rigid as it totally depends on the sale volume towards the category A & B people.

Profit margin cannot be enhanced because of the continuous fall of selling price of the product.
Because of the continuous pressure from the competitors, the selling price of the products had been fallen significantly though the demand of the products has not been decreased. Additionally, the authority will not be able to decrease the operational expense further more and as a result, it is impossible to reduce the selling price any more.

Because of the rigid marketing policy, Coca-Cola had been struggling in order to enhance their market growth in Brazil.
Increasing sales in an existing market is one of the easiest ways to grow your business. The key to successfully increasing your sales in an existing market is to know the customers buying histories, both generally and individually. The goal, of course, is to get the existing customers to buy more. Therefore, an effective marketing strategy would help Coca-Cola to expand their business and capture more market share. Focusing on increasing your sales in existing markets is well worth the effort, because its a business growth strategy that will grow with your business. And as we all know, one regular customer is worth ten one-time buyers or more.

Opportunity

Economical Growth of Brazil and purchasing capability of the buyer.

The successful Brazilian economic stabilization plan, known as Plano Real, restored the purchasing power of the low-income segment of the population. This upturn allowed many Brazilians to purchase consumer goods formerly inaccessible to them, such as cookies, yogurt, snacks, cereals, and personal care products. Therefore, the economic growth of Brazil had enhanced the purchasing power of the buyers and as a result, it could turn out to be a great opportunity for Coca-Cola to gain more profitability.

Consumer behavior towards soft drink industry had been impressive.

Consumer behavior towards the soft drink industry of Brazil had been impressive due to the fascinating demand of soft drinks all across the country. People are obsessed towards soft drinks and per capita consumption of soda shot up 60% between 1994 and 1999. Even though the soft drink industry has got immense competition among them, the consumer behavior towards soft drink industry had been lucrative.

To endorse and sponsor more social events and contribute to the society.
As Brazil is one of those countries who have got great dedication towards sports and where people are totally crazy for sports, it can be a great opportunity for Coca-Cola to invest into some sponsorship which will allow them for vast promotional activity. Many companies make investment to sponsor the big sports events such as Olympic, World Cup and popular sports games. Although being official sponsor requires a huge amount of financial resource, it is expected to create more favorable outcomes including profit increase, improved stock returns, and positive advertising effect.

Developing a distribution channel in order to print the footsteps in the untouched regions of Brazil.
The Northern part of Brazil was still untouched by Coca-Cola and that was the second largest populated area where they can easily target the category C segment. Therefore, developing a distribution channel would certainly help Coca-Cola to capture the market share of the Northern region.

Threat

The threat of new entrants is unthinkably huge.

As the Brazilian soft drink industry is more or less profitable, it will attract more competitors looking to achieve profits. If it is easy for these new entrants to enter the market if entry barriers are low this poses a threat to the firms already competing in that market. More competition or increased production capacity without concurrent increase in consumer demand means less profit to go around. According to Porters 5 forces, threat of new entrants is one of the forces that shape the competitive structure of an industry. Porters threat of new entrants definition revolutionized the way people look at competition in an industry.

Confront competitions from each side of markets in Brazil.

Brazilian soft drink industry is very competitive and the companies here literally facing a war against each other. The international giant like Coca-Cola had to fight with tiny local tubainas manufacturer in order to maintain a healthy market share.

B brands had very lean operations.

B brands attacked established brands in territory they had ruled for ages. Like guerrillas, these brands were fast, flexible, and fought the enemy in diverse and inhospitable battlefields. They had very lean operations, allowing them to offer products for about half the price of their traditional competitors.

Tax evasion helped Tubainas to maintain low-prices.

A major problem for established brands in Brazil was the unfair competition from companies that had no legal existence and from those who were legally registered but did not pay taxes. This unfair tax evasion helped tubainas manufacturer to grow and captive this advantage.

Class C consumers who accounted for 28% of national consumption valued lower priced quality products over branded ones.
Class C consumers are the majority one who lives into the Northern region where Coca-Cola had not yet reached. Besides, this category people are more price sensitive than brand loyal and as a result, the low priced tubainas manufacturer got the competitive edge over the giant like Coca-Cola in order to enhance market growth.

Ambev and Pepsi partnership increased the distribution network for Pepsi, another major competitor of Coca-Cola
The partnership between Ambev and Pepsi had been a huge threat for CocaCola as this partnership will help them grow even faster and as a result, it might affect the market growth of Coca-Cola in Brazil. Moreover, because of

this joint venture Coca-Cola was facing continuous pressure and struggling to get hold of its market share.

Functional Analysis

Porters Five Forces Analysis

Porter's 5 forces analysis is a framework for industry analysis and business strategy development. It uses concepts developed in Industrial Organization economics to derive five forces that determine the competitive intensity and therefore attractiveness of a market. Porter referred to these forces as the microenvironment, to contrast it with the more general term macro environment.

Bargaining power of customers (HIGH) Competitive rivalry within an industry ( VERY HIGH) Threat of new entrants (HIGH) Threat of substitute products (HIGH)

Threat of New Entrants: HIGH

In theory, any firm should be able to enter and exit a market, and if free entry and exit exists, then profits always should be nominal. In reality, however, industries possess characteristics that protect the high profit levels of firms in the market and inhibit additional rivals from entering the market. These are threat of new entrants. In the case of Coke the Chances of new entrants were founded as high because of the following factors which jointly made up this part of the porters five forces model: Government Policy & Rules: Government has never maintained a rigid environment in terms of new investment in the industrial sector. Investments from local and international firms are very welcoming in terms of getting financial support. Government also gives lucrative loan offer for the investors. Also the security market is not very strong in terms of financing the new entrants. All these elements present in the external environment made it favorable.

This favorable government policy and rules are great threat for Coke as the policies and rules are very lucrative for a firm which is planning to enter. So that is a threat for Coke.

Customer switching costs: The product line of Coke is greatly differentiated, as it varies with degrees of taste, preference, product outlook (packaging), and finally consumer acceptance. The leverage gain from not having a high degree differentiation made within the products of

the entire beverage both alcoholic and non alcoholic manufacturers in the industry enables the established firms to earn economy of scale and have an efficient production process, this in turn enables the beverage manufacturers to maintain efficient production facilities, along with low cost of production which automatically encourages to enter. So its easy for a customer to switch one firm to another firm. That is why customer switching cost is found Low.

This high threat of customer switching cost is the highest threat for Coke. Patents and proprietary knowledge: Law and order system does not provide enough security to the firms operating in the country for their goods or technologies used in making the drinks. That means copy cats are very easily possible in the country which shows the patents and proprietary knowledge is restricted in a Low manner.

Patents and proprietary knowledge security is very low in the country which is benefit for competitors in the market but not for coke.

Tax Evasion Practices: The Coca-Cola Companys Brazilian subsidiary claimed to be deeply harmed by tubanas unfair competition. It advocated that the price advantage held by tubanas was only possible through tax evasion practices, overlooked by the Brazilian authorities. In 1998, a two-liter bottle of tubanas could be bought for as low as fifty cents, compared to as much as one dollar and fifty cents for the same volume of Coca-Cola. As other multinational companies that operated in the Brazilian market did, CocaCola lobbied to persuade state and federal lawmakers and tax agencies to exert a more rigid control over its competitors but it dint work. So risks from tax evasion practices are High. Coke is not having this tax evasion advantage as it had entered in the country with lots of diversified product which had impact on the local peoples consumption and the government as it had entered in the market after there were some competitors already present.

 Asset specificity inhibits entry into an industry: Some industry uses assets like technologies or raw materials which are very much specific to the industry. Means no other modification of that technology or raw materials used in the production process is possible to produce any other product or to use in any other industry. That is why we found asset specificity very Low.

As the asset specificity is low in the market this means Coke doesnt have the opportunity to get asset advantage.

Possibility of merger and joint venture: It is seen previously that not only present rivals that pose a threat to firms in an industry; the possibility that new firms or a merger along with joint venture as we know from the case that Pepsi and Amveb have gone into merger for the Brazilian market. New entrants bring a desire to gain market share and often have significant resources. The Tubanians can get into the market any time they want. There are example of the case where the owner stared another beverage with-in days.. Analyzing the threat of new entrants involves examining the barriers to entry and the expected reactions of existing firms to a new competitor. The companies in industry has restricted from merger and joint venture. So the entry of FDI is quite restricted which means the FDIs possibility is HIGH. This possibility of merger and joint venture is a very HIGH threat for Coke as new entrants can easily grave some market share.

The Bargaining Power of Buyers: High

In general, when buyer power is strong, the relationship to the producing industry is near to what an economist terms a monophony. Thus the bargaining power of buyers is one of the most volatile factors in the porters five forces model. In the case of Coca-Cola the Bargaining Power of Buyers within industry was founded as High because of the following factors which jointly made up this part of the porters five forces model:

 Buyer Concentration: In the growing markets beverage manufacturers for both alcoholic and non alcoholic beverages enter with its goal to attain the potential for high profits induce new firms to enter and incumbent firms to increase production. A point is reached where the industry becomes crowded with competitors, and demand cannot support the new entrants and the resulting increased supply. The industry may become crowded if its growth rate slows and the market becomes saturated, creating a situation of excess capacity with too many goods chasing too few buyers. A shakeout ensues, with intense competition, price wars, and company failures. This factor is vital for any industry to boom. This has established a huge customer base. This buyer concentration is very high. This trend shows the High buyers power on the manufacturer companies. Coca-Cola might face difficulty regarding this buyer power but it can handle it as the company is operating in this industry for a long time. But the company may need to keep on investing on product innovation and customers preference search.

Switching costs: As customers from different regions has multiple options to choose from the present products of same quality, price and features offered by different companies, there is high possibility that they would not bother of buying from a single company, which means switching cost for customers is Low.

Coca-Cola might face difficulty in retaining customers and make them loyal. Also the company could not be able to create brand value for its name.

Bargaining Leverage: Competitors had very close position and they can graft market. Coca-Cola is operating in manufacture oriented business; it offers standardized beverages for both its alcohol consuming consumers along with non alcohol consuming customers, so there no roam for bargaining in their business operations. If barriers to entry are high, then there are fewer competitors in the industry and consequently, profitability is higher. Ideas and knowledge that provide competitive advantages are treated as private property when patented, and prevents others from using

the knowledge and thus creates a barrier to entry. Since there are no adjustment or process to patent in this industry and so profitability is still High. Coca-Cola had huge number of buyers. But competitors had very close position and they can graft market if Coca-Cola made any mistake.

The Bargaining Power of Supplier: Moderate

Suppliers, if powerful, can exert an influence on the producing industry, such as selling raw materials at a high price to capture some of the industry's profits. The following tables outline some factors that determine supplier power. In the case of Coca-Cola Bargaining Power of Supplier within industry was founded as Low because of the following factors which jointly made up this part of the porters five forces model:

Suppliers Concentration: As with any commodity suppliers, the bargaining power of suppliers with Coca-Cola would be exerted by either threatening to raise the price of the raw materials needed or by a threat of reduction in the quality or quantity of the raw materials. The suppliers of the raw materials needed in the production process of producing CocaColas products were mostly supplied by individual farms. The bargaining power of suppliers seems negligible due to the small purchasing volume each individual had to offer the specialty beverage industry. However, as the industry has grown it is found from the case that many of the farmers who sell to Coca-Cola may unit to increase the price of the raw materials. This initiative would be designed in expectation to ensure that the raw materials the farmers provide would be compensated fairly for their crops, which is the basic raw material for Coca-Colas products.

 Coca-Cola might face difficulty as they need to buy some of their raw materials from the local suppliers and Moderate concentration means Coca-Cola has option to choose from abroad suppliers. Dependency on suppliers: Technology based firms are fully dependent on their customers as quality of the products produced greatly depend on the suppliers ability to supply quality raw materials and at desired amount. So the dependence is High.

Coca-Cola has a great opportunity which might destroy if not supported well by the suppliers by providing quality raw materials at right amount and at right time.

Credible threat of forward integration: Suppliers cannot do forward integration. This initiative by Coca-Colas supplier would disrupt the positive externality through increasing their ability to exert bargaining power over their buyers. This action to increase the bargaining power of the raw materials which the farmers provide to Coca-Cola would be a constant threat to look out for. Beverage industry both alcoholic and non alcoholic beverage manufacturers like Coca-Cola generally requires minimum infrastructure and industry are highly dependent on usage of natural resources such as labor and land, thereby Coca-Cola is highly dependent on its suppliers. Hence, the existing sellers cannot assume any eminence as would be the case in a service oriented company. Since they are a manufacture-oriented organization, they are dependent on sellers to buy their product but due to the bulk purchasing Coca-Cola has managed to keep the price demanded by the suppliers low. This threat is at low risk.

Coca-Cola may not lose their brand image and market share. It revenue may also reduce significantly.

Threat of Substitute Products: High

In the case of Coca-Cola Threat of Substitute Products were founded as High because of the following factors which jointly made up this part of the porters five forces model:

 Entry Barrier: Entry barriers are quite high in the country for the new entrants. So it moderately high. Switching costs: Switching cost of the products provided in the industry is very low. Consumers can Switch between the brands very easily.

Competitive Rivalry within the Industry: Very High

Economists measure rivalry by indicators of industry concentration. The Concentration Ratio (CR) is one such measure. A high concentration ratio indicates that a high concentration of market share is held by the largest firms - the industry is concentrated and vice-versa. In the case of Coca-Cola the Competitive Rivalry within industry was founded as High because of the following factors which jointly made up this part of the porters five forces model: A larger number of firms: The industry shows a great future with potential growth opportunity. This positive signs of the industry has attracted and is attracting companies from all over the world. Firms are trying their best to attract customers and to still customers. They use price and other possible ways to do this. That is why this factor is High.

The huge number of customers present in the Brazil retail industry show intensive competition for Coca-Cola and its making the firms job tough.

High fixed costs: Industry needs huge infrastructure needs investment ate the initial level. And to become competitive a company has to invest in the infrastructure and a country where the people like to hang around in the shops so the sizes should be big. For covering the huge fixed cost the firms want to grab the biggest portion of a market, which boasts up the rivalry among the competitors. Thats why we have found the fixed cost very High.

 As Coca-Cola and other firms have already invested in the market and has established its plants, it has become very risky for these firms to cover the huge fixed cost, thus boasting the rivalry. It is not desired for any company.

High exit barriers: The firms operating has to bear huge fixed cost in technology, infrastructure and building distribution network which are dedicated to that industry thus made it very tough for those discount retailing firms to exit from this industry. So we have found the barriers of exit barrier High.

Coca-Cola has invested a lot in different beverage related industry and is planning to invest more as it has expanding outside the country. So the exit barrier for the company is high.

Industry Competitive Structure: The competitive structure of an industry to the number and size distribution of companies in it, something that strategic managers determine at the beginning of an industry analysis. It is High.

Coca-Cola has been fighting well in the rural area like monopoly but in the metropolitan cities the completion was very tight. So the industry competitive structure is very high.

Product Differentiation: Beverage firms use almost the similar kind of technologies in their production system which means the features and usage of their produced products are very much similar. But they have around 16 types of flavor going running to the market. In some regions different types Flavor are preferred so this means the product differentiation is HIGH.

 This similarity in usage and features are threats for Coca-Cola customers may buy products from the new entrants or from other companies.

Industry Demand: The demand for beverage firms is simple enormous all over the world. This demand for high end products is High in the country as the business sector is expanding and the government has re-designed the whole setup of its administration and is encouraging to expand even in the rural area.

This demand is encouraging Coca-Colas expansions plan in the country as well the demand also increasing the rivalry among CocaCola and its competitors. And as we know rivalry can take nasty form, Coca-Cola would face great difficulty.

Companys Life Cycle

Company
Coca-Cola is currently going through the maturity stage. This maturity stage lasts longer than all other stages. Management has to pay special attention to products during this stage of the product life-cycle. Since its beginning in the spring of 1886 Coca-Cola has become the most popular and biggest-selling soft drink in history, as well as the best-known product in the world. Created in Atlanta, Georgia by Dr. John S. Pemberton, Coca-Cola was first offered as a fountain beverage by mixing Coca-Cola syrup with carbonated water. The Coca-Cola Company is the world's leading manufacturer, marketer, and distributor of non-alcoholic beverages in the world. During the maturity stage, products usually go through a slowdown in sales growth. According to Coca-Cola's 2001 annual report, sales have increased by 1.02% compared to last year. This percentage has no comparison to the high level of growth Coca-Cola enjoyed during its growth stage. Indeed, whilst Coca-Cola manages to increase global sales through entry into additional markets, many of its core products have remained the same over significant periods; it has just been their branding that has changed. Ultimately, the maturity stage becomes the key turning point for companies because at some point during this period, sales will start to decrease and potentially never experience positive growth again

Product

Coca-Cola along with all the product lines in Brazil is in the growth stage of the product life cycle which is known as a period of rapid revenue growth. As the product awareness increases, customers are more likely to purchase the item and sales increase. The success of a product in one area can lead to the product being introduced into other market segments. Continuing increase in sales can lead to additional demand and further sales. During the growth stage, competing products may be introduced by other companies. This can lead to price competition and additional costs in advertising to maintain the demand for the product at the expense of the competition.

Industry
The Soft drink industry in Brazil is in its maturity stage as the demand is still high and market is still not saturated. As a result, the profitability of the soft drink industry is still increasing; but they do not match the growth in sales. During this period of high sales growth, many competitors may choose to enter the market, reducing the company's relative market share and, in the process, its profitability. So an intensive pressure of competition among the competitors is being seen followed by high level of rivalry. Competition will be very high among them as they instantly copied the product. Now they have to come up with expansion of their business through creating more awareness with outlets in order to bid the problem of getting stabilized of profits.

Fragmentation Stage Fragmentation is the first stage of the new industry. This is the stage when the new industry develops the business. At this stage, the new industry normally arises when an entrepreneur overcomes the twin problems of innovation and

invention, and works out how to bring the new products or services into the market.

Shake-out Shake-out is the second stage of the industry lifecycle. It is the stage at which a new industry emerges. During the shake-out stage, competitors start to realize business opportunities in the emerging industry. The value of the industry also quickly rises. Maturity Maturity is the third stage in the industry lifecycle. Maturity is a stage at which the efficiencies of the dominant business model give these organizations competitive advantage over competition. The competition in the industry is rather aggressive because there are many competitors and product substitutes. Price, competition, and cooperation take on a complex form. Some companies may shift some of the production overseas in order to gain competitive advantage. Decline In the stage of decline, some companies may leave the industry if there is no demand for the products or services they provide, or they may develop new products or services that meet the demand in the market. In such cases, this will create a new industry. Here are some of the reasons why we said that this industry is in the Maturity stage. The industry was generating huge revenue and was attracting investment from private and government sectors. A huge number of companies already had invested in this industry. Required levels of skilled people were locally vastly available. Infrastructure was already established although not of the global standard. All areas of this industry had targeted market present locally and those markets were showing huge demand.

The industry was generating huge revenue and was attracting investment from private and government sectors. Targeted customers are showing positive attitudes towards the new innovations introduced by the companies in the industry.

Financial Analysis
There is not enough data provided in the case for the financial analysis.

HR Model
HR Planning Model

Forecasting Demand
Demand refers to the number and characteristics (skills, characteristics, abilities and pay level) of people needed for particular jobs at a given point in time and at particular place. In fact, demand forecasting determines how many people need to be working and in what jobs to implement organizational strategies and attain firm objective.

CONSIDERATIONS
PRODUCT/SERVICE DEMAND Every human being takes the decision to buy or purchase a product/service after feeling the demand for that in his/her mind. Demand levels vary along a continuum from negative demand that leads to avoidance to excess demand that outpaces supply. According to economic expression demand can be explained in a different manner. Here, demand is the desire and ability to pay for goods and services. In a word, the essence of demand is the willingness to exchange value goods or services. Creation of demand for any particular need is totally psychological. Status: There is high demand for coke is product in Brazil. Coke sale almost 50% sales of the total industry. In different part of the region people prefer different types of flour. But there is high demand for cokes products.

TECHNOLOGY In general technology is the relationship that society has with its tools and crafts, and to what extent society can control its environment. It is the practical application of knowledge especially in a particular area as well as a capability given by the practical application of knowledge. At the center of technology lies design. It assists in the design of any product or even human resource in any organization. The motivating factor behind all technological activity is the desire to fulfill a need. For this reason all designs should be made or realized

- whether that is through prototype, batch or mass production or some form of three-dimensional or computer model. Status: there is little information about the technology that are used in this industry like Ambevs The company owned numerous bottling facilities, malt production factories, concentrate plants, and a guaran farm. The companys product mix comprised various brands of beers, soft drinks, bottled water, iced tea, and isotonic beverages. Some of AmBevs most popular brands were Brahma,Antarctica, Skol, and Bohemia

FINANCIAL RESOURCE

Financial resource is the monetary support required to launch a business as well as to maintain all the operations of a company. Financial resource is the only driving force for any corporation. This world is competitive and in order to survive here nothing is more important than the financial backup. A major portion of this resource is expensed for the purpose of paying bills and compensation of human resource employed in the organization. There are various sources of financial resources but indiscriminate choosing of these resources may bring devastating result for the company. Status: In our analysis we did not fine sufficient information about it.

ABSENTEEISM Absenteeism is the term generally used to refer to unscheduled employee absences from the workplace. To be precise when the employees absence forms a pattern this suggests that s/he is dissatisfied with their work or that their absence could have been avoided. If such absences become excessive, they can have a seriously adverse impact on a business's operations and ultimately its profitability. To address absenteeism a company should take some steps. At first, the organization should find out whether the absent employee missed work willingly or involuntarily. Then it should decide whether the absenteeism is excessive or minor and take action accordingly. Status: In our analysis we did not fine sufficient information about it.

ORGANIZATIONAL GROWTH

Organizations value growth. However, liberalized global environment requires organizations to plan and ensure growth for their very survival. The organizational growth requires adoption, change and innovation. Environmental sensitivity, organizational learning, leadership and people processes play a significant role in planning and managing organizational growth. The top management of a company is expected to proactively scan the environment and provide leadership for planning & managing organizational growth. Human resource systems & processes are expected to enhance the effectiveness of organizational learning process and develop leadership pipeline. Status: There is some information regarding organizational growth.

MANAGEMENT PHILOSOPHY Management philosophy means the options (judgments) of the top executive as well as the bottom line executive and other knowledgeable persons about the organizations overall strategy. It is the inner emotion and standard that the management holds in its mind while operating activities. It can be compared to the beliefs that people believe by heart as well as try to apply in situation where problem solving is required. Having a wide spread management philosophy is very important for an organization as it gives employees the overall idea about how to control various firm operations and how to treat competition as well as competitors. Status: According to our analysis there is no information on these criteria.

TECHNIQUES
TREND ANALYSIS It tries to predict the future movement of a variable based on the past data. On the basis of the observation of past happenings, the future is predicted under this tool. To be technically correct, trend analysis uses a technique called least squares to fit a trend line to a set of time series data and then project the line into the future for a forecast. It is a special case of regression analysis where the dependent variable is the variable to be forecasted and the independent variable is time. It is very simple to use provided the appropriate software is available. Status: In our analysis we have some information regarding trend of the industry as well as about the company. There are trends regarding the product, preferences of the flavor & most importantly the trend of the consumers.

MANAGERIAL ESTIMATES The name itself clarifies the main thought of this technique. Here on the basis of managerial expertise and skills managers make fruitful estimation. It is not that difficult task for managers. Its because they usually are always aware of the market and hence know about the labor demand situation. This estimation capability sometimes helps the manager to predict future profit potential as well as future loss prospect. Status: According to our analysis there is no information on these criteria

DELPHI TECHNIQUE Delphi is based on the principle that forecasts from a structured group of experts are more accurate than those from unstructured groups or individuals. Here in this technique carefully selected experts answer questionnaires in two or more rounds. After each round, a facilitator provides an anonymous summary of the experts forecasts from the previous round as well as the reasons they provided for their judgments. Thus, participants are encouraged to revise their earlier answers in light of the replies of other members of the group. Status: According to our analysis there is no information on these criteria

Forecasting Supply

Supply forecast can be derived from both internal and external sources of information. However, internal sources are most available and more crucial. Present performance level, ages and information about the loyalty of current employees can be used to predict future vacancies caused by raids of top talent, involuntary turnover, retirement and employee initiated job changes. The accuracy of statistical techniques for forecasting future supply levels depends entirely on the accuracy of the user supplied figures about how employees are likely to flow through the organization.

TECHNIQUES
STAFFING TABLES Table is the coherent and systematic presentation of data and information combined with textual descriptions for the purpose of making people understand particular findings. But staffing table is somewhat different than the traditional idea of tables. In the staffing table graphic representation of organizational jobs along with the number of employees currently occupying those jobs and the need for future employment requirement are shown. On the basis of the staffing table it becomes very convenient for the management to forecast human resource supply. Status: According to our analysis there is no information on these criteria

MARKOV ANALYSIS Markov analysis is a statistical technique used in forecasting the future behavior of a variable or system whose current state or behavior does not depend on its state or behavior at any time in the past. In other words, it is random. In marketing, it is used in modeling future brand loyalty of consumers based on their current rate of purchases and repurchases. In quality control, Markov analysis is applicable to common-cause problems and other sequence dependent events, and can handle system degradation. Status: According to our analysis there is no information on these criteria

SKILL INVENTORIES

Managing employee skills and competencies lays the foundation of any organization. A skills inventory is essentially a checklist or database of organizational capabilities, that can help a company determine whether it can deliver a particular product on time or service the client efficiently. The difference between the existing and expected conditions determines the skills gap. It is the responsibility of line managers and the HR department to analyze the skills gap and provide the necessary training. Status: According to our analysis there is no information on these criteria

MANAGEMENT INVENTORIES Management inventories mean the collective administrative heads of an organization. These are the people who remain responsible for conducting the different administrative and supervising operational affairs of the company in an effort to meet its objectives. In order to ensure profitability as well as continued growth, existence of such inventories play a pioneering role. Its because it helps the company to take opinions from different expert heads which bring numerous alternatives to reach goals in the best possible ways. Many organizations recently have started viewing this as an essential element which leads to the door of success. Status: According to our analysis there is no information on these criteria

REPLACEMENT CHARTS Replacement chart is the listing of current jobholders and persons who are potential replacements if an opening occurs. This replacement chart usually determines the way of filling job vacancies. Whether the vacant position is going to be filled up by internal employees or external candidates are going to be holding that position, are all determined precisely by the replacement chart. Charts make it easier to understand the relationship among different job positions. As the replacement charts can be read more quickly than the raw data, busy executives and top management often prefer it over many other clumsy options. Status: According to our analysis there is no information on these criteria

SUCCESSION PLANNING

Succession planning is a process whereby an organization ensures that employees are recruited and developed to fill each key role within the company. Through the succession planning process an organization retains superior employees because they appreciate the time, attention, and development that the company is investing in them. Any organization trying to effectively design a succession planning must identify its long term goals first. Alongside this, the company needs to identify and understand the developmental desires of its employees. The firm must ensure that all key employees understand their career paths and the roles they are being developed to fill. Status: According to our analysis there is no information on these criteria

EXTERNAL CONSIDERATIONS
DEMOGRAPHIC CHANGES Demographics refer to selected population characteristics. To be technically precise, it is the study of populations, of population size, of population composition by age, sex, marital status and of future trends. It uses the statistical information supplied by censuses and vital statistics supplemented by surveys. It describes the movement of the population (nationality, mortality, migrations) and it establishes population projections or prospects for the future. Demographers compile and analyze data that are useful in understanding various social systems as well as in establishing policies in areas like housing, education, and unemployment. Status: There is sufficient information on this topic. The case provides us with very high information about the demographic changes about the consumer as well as workforce such as In the mid-1990s, after a long period of high inflation and economic stagnation, the successful Brazilian economic stabilization plan, known as Plano Real, restored the purchasing power of the low-income segment of the population. This upturn allowed many Brazilians to purchase consumer goods formerly inaccessible to them, such as cookies, yogurt, snacks, cereals, and personal care products. As a result, during the second half of the 1990s, numerous segments of the economy underwent

tremendous prosperity. Several product categories experienced fantastic sales growth. For example, per capita consumption of soda shot up 60% between 1994 and 1999.

EDUCATION OF THE WORKFORCE Education encompasses both the teaching and learning of knowledge, proper conduct, and technical competency. It thus focuses on the cultivation of skills, trades or professions, as well as mental, moral & aesthetic development. Formal education consists of systematic instruction, teaching and training by professional teachers. In a liberal education tradition, teachers draw on many different disciplines for their lessons. Though there are also many means to be informally educated, organizations running in the global arena and willing to ensure continued growth always long for employees who are highly educated in formal education. Status: In our analysis we found did not find any information about these criteria.

LABOR MOBILITY Labor mobility consists of changes in the location of workers both across physical space (geographic mobility) and across a set of jobs (occupational mobility). At the aggregate level, labor mobility conveys important economic benefits. The reallocation of workers across regions permits the exploitation of complementary resources as they are discovered in new places, while reallocation across sectors makes possible the use of new technologies and the growth of new industries. At the individual level, mobility allows for improvements in the economic circumstances of those whose skills or aspirations are a poor match for the job or location in which they find themselves. Status: According to our analysis there is no information on these criteria.

GOVERNMENT POLICIES Government policy is a deliberate plan of action to guide decisions and achieve rational outcome. Government policies differ from rules or law. While law can compel or prohibit behaviors policy merely guides actions toward

those that are most likely to achieve a desired outcome. Government policy usually influences important organizational decisions, including the identification of different alternatives such as programs or spending priorities, and choosing among them on the basis of the impact they will have on the nation or to its public. Status: In our analysis we found sufficient information about this topic. In the case we know that the government is not at all helpful to big companies. Small companies are evading taxes which give them extra margin of profit. They didnt do anything regarding this problem. UNEMPLOYMENT RATE In economics, one who is willing and able to work for pay yet unable to find employment is considered to be unemployed. Unemployment rate means the percentage of the total labor force that is jobless but actively seeking employment and is willing to work. Side by side with the number of unemployed people, the unemployment rate is affected by the number of people entering the workforce. The unemployment rate is found through dividing the number of unemployed workers by the total civilian labor force. Though it is a simple math, it may contribute greatly in forecasting labor supply precisely. Status: According to our analysis there is no information on these criteria

Porters Diamond Model

The Diamond model of Michael Porter for the Competitive Advantage of Nations offers a model that can help understand the competitive position of a nation in global competition. This model can also be used for other major geographic regions.

As relevant information is not clearly available in the case about the country BRAZIL we have analyzed the countrys scenario at that time in terms of the Beverage Industry of BRAZIL at that time of acquisition. There is clue in this case of Coca-Cola and an international acquisition was about to take place so in this segment we will be describing in depth analysis for Coca-Cola, so that the international expansion become successful.

Factor Conditions

Factor conditions are now considered as specialized factors and they are not inherited, rather they are created. The key factors of production or specialized

Natural Resources Climate Basic Factors Location Demographics Factor Condition Communication Infrastructure Skilled Labor Advanced Factors Research Facilities Technological Know-how

Factors are created, not inherited.

1. Basic Factors: Information about basic factors is not sufficient according to the case. 2. Advanced Factors: Communication Infrastructure: In BRAZIL the communication infrastructure is not very good. General people, business firm and different government and non-government agencies have their own communication procedures. In some part of te brazil specially in the southern region the accessibility towards population is very limited. As Coca-Cola is planning for acquiring , which is in the Beverage Industry, would have a huge plus pint in terms of doing the marketing efforts. As we know Beverage business needs lots of exposure to targeted customers for success and very strong communication network of BRAZIL simple fulfill that need. Skilled labor: There is no sufficient information about this topic in the case. Research facilities: There is no sufficient information about this topic in the case. Technological know-how: There is no sufficient information about this topic in the case.

Related Supporting Industries

Related supporting industries involve in the representation positioning that spatial proximity of upstream or downstream industries facilitates the exchange of information and promotes a continuous exchange of ideas and innovations. In the case there was clear indication that related and supportive industries were present very strongly in BRAZIL. The growth of Beverage Industry is the evident of the well managed and well established supporting industries. So we

can assume that there are strong supportive industries like other raw material suppliers, distributors who directly supply to the companys present in the Beverage Industry.

Demand Condition

Demand condition states that the more demanding the customers in an economy, the greater the pressure facing firms to constantly improve their competitiveness via innovative products, through high quality, The sales of Non-alcoholic drinks are having a bumpy growth. It is shown in the chart below.

Firms Structure, Strategy & Rivalry

1. Structure: No information is provided in the case on this topic. 2. Strategy: Coca-Cola have a strong foot hold on its prime business. There are lots of high quality flavored drinks. Coca-Cola is focused to build its own line of distribution channel for distributing and promoting its products. Coca-Cola is the strongest contender in the industry. However, such successes do not come without hurdles. Coca-Cola is over ambitious because it was running to fast to become a big size business firm in the Beverage Industry. Coca-Cola is a company with active approach, as they are ready to take any type of steps to cut competition and regain their lost market share. The top management tried to make good relations and offered bribe to the government.

3. Rivalry: Coca-Cola will face intense competition from Pepsi, Ambev and several other small local companies.

Other Factors

Government
The role of government in Porter's Diamond Model is acting as a catalyst and challenger; it is to encourage or even push the companies to raise their aspirations and move to higher levels of competitive performance. They must encourage companies to raise their performance, stimulate early demand for advanced products in new regions, focusing on specialized factor creation and to stabilize local rivalry by limiting direct cooperation and enforcing antitrust regulations. In this case of Coca-Cola and we do not find any kind of governmental intervention in terms of excessive regulation or over monitoring.

Chance

After analyzing the elements of Porters Diamond model we can say that if Coca-Cola goes for the acqusition of a new Tubainas brand then the firm would face intese pressue from the competitors. These would be the most vital influencial factor in case of making decision, taking strategic steps, making investment or looking for new segment. Other than this factor we found other elements of the Porters Diamond model are quite welcoming for Coca-Cola to acquire . The continuos up growing demand from the customers for beverage items, growing expenditure, customers easy access to substitutes, skilled labors, infrastructue, industrys growth, opportunity to have more business are the main attractive and reliable factors for Coca-Cola to go for the acqusition process and enter in the ever growing Beverage Industry of BRAZIL through acquring one of the most prospective company in the beverage business.

Country Risk Analysis

Although this case talks about fierce rivalry and tough competition faced by an American company Coca-Cola, the market leader, through losing market share to their competitors in Brazil, the case have presented with information on Brazil to do the country risk analysis on behalf of Coca-Cola but its not necessary as their operation is not related to any international expansion. However we have done a country risk analysis on Brazil based on knowledge and data we have collected from different sources. Here we have analyzed the country, Brazil, as a highly growing and attractive beverage industry.

Transfer Risk

Procedural risk

Exchange Risk

Country Risk Analysis

Technological risk Neighbor hood Risk

Political Risk

Social risk

As the case is nothing related to international expansion or acquisition but rivalry and completion among competitors and risk from new entrants within Brazil, country risk analysis is not necessary here.

Alternatives

Alternative no 1
Do nothing.
If Coca-cola decides to do nothing they would be opting for a hold and maintain strategy. This strategy will require the company to just follow on its previous footsteps. Their main objective would be concentrating on their distilleries and other subsidiaries like, and others. Following this strategy would mean that they are giving preference to their liquor brands all over and ignore whatever advantages that the possible acquire will be bringing into Coca-cola. Financial Insight: Financial analysis is favorable for Coca-cola Coca-cola is a well functioning and profitable company. All their brands are functioning well too. So at this point, even if they dont do anything and concentrate only on their current strategy and be happy with what they have got, they can still be going on and have a positive growth for itself. So with generating profit all over, they do have the opportunity for just sit and enjoy the current scenario.

Marketing Insight: Innovation and growth may drive the currently high brand equity much higher The Brand equity of Coca-cola was high in the market and this was a great strategic tool for them. Even after successive venture mishaps, they continued to maintain significant brand equity. Another lucrative opportunity was presented to them after they were ventures with as now the brand equity of the Coca-cola would comprise of both the

parties combined together. In such a critical stage of business the company must make sure that they channel the newly generated energy directly to the clients to maintain their positioning rather that allowing the energy to take whatever shape it can on its own.

Advantages

1.

Coca-cola can save time, effort, and cost.

Any new activity or strategy needs a huge amount of time and effort to be implemented successfully. Giving effort to design new strategy Coca-cola should spend more time to check their current strategy. They were present in the liquor and distillery market for a long time and their experience is nothing less than any other brands. Thus if they do nothing and sit back, they save enough time and effort that would have been spent behind designing and implementing a new strategy. 2. Coca-cola can grab more market by concentrating more on their existing strategies. Coca-cola has undertaken some strategies to counter the problems it was facing. Every strategy requires some handsome amount of time for it to be successful to show the desired results. Therefore, if they use the strategy of doing nothing, it would rather simply provide the time to the present strategies to be effective and bring in the actual results. Thus if they sticks to their current strategy and gives it enough time to gain maturity they can reap some real benefit out of it. 3. Coca-cola can keep the level of risk of failure in a new line of business minimal. Since Coca-cola is primarily a beverage company. The company thus has to highly depend on the skills and expertise of the management of beverage industry. Its minimal understanding in this particular line of business will reduce its say in the company decision although they are the owners of it.

Thereby the success of would entirely lie on the hand of its people and it may not end up with successful outcomes all the time.

4. Concentrating more on their current customers could be profitable for them. They are currently having four basic types of portfolio, which shows that how effectively they are arranging to their customers and are able to keep them satisfied, thus doing nothing Coca-cola can concentrate more on their existing customers. The customers have been supporting Coca-cola for many years. They have been buying from them and helping the company run. By moving into new markets the existing customers of Coca-cola may leave them. Coca-cola should focus on their sales in their existing market. If Coca-cola enters the near markets and consumer markets it will spread its capability over more multiple markets this will make them inefficient in a particular segment. Focusing on too many areas may result in lost sales in their existing market. Thus if they do nothing they can concentrate more on their current customers.

Disadvantages

1. No precaution could be taken against any sudden economic downturn. After Coca-cola is now more open to the economy and is not protected by the government. Furthermore, it is being expected that there might be an economic downturn anytime at any place. Therefore, if Coca-cola is not having sufficient fund resulting from their strategy of doing nothing, they would be more prone to economic fluctuations. That is they do not have any precaution against the economic downturn that is likely to take place. 2. If Coca-cola always sticks to their current status their employees would not be able to respond to changes quickly.

Every person is forced to work according to the way s/he is habituated. So if Coca-cola employees get used to follow the same policies for a long time, they would lose their ability to respond to changes quickly alike the other competitors. As a result, they would take more time to adjust themselves with the new environment. Therefore, the company needs to change its philosophies over time, but not frequently. Sometimes, not to change is better for some companies. 3. Low entry barrier might cause them big problems The entry barriers to the industry are very low primarily due to the very high growth of the economy .Therefore as a new entrant, a company may only have some advantage in the industry if it merges or buys out a major stake in an already existing firm with its infrastructure and resources. 4. The potential future growth will be reduced for Coca-cola. The market segment in which Coca-cola is operating does not have a promising future. The market is expected to face a decline in the near future, so they have to shift to other alternatives that they have in their hand to come up with demanding change. Coca-cola will not be able to react to the changes if they follow the do nothing strategy. They would not be able to satisfy a whole new segment of their customers and thus the future growth of Coca-cola will be under threat. 5. The Competitors will be having an Edge

The competitors of Coca-cola will obviously be taking some steps to the changing economic condition. The competitors in that case may also take an aggressive strategy to expand their business by targeting new segment of the market. In a sense, Coca-Colas competitors will be having an edge over the competitors.

6. If Coca-cola not does anything it will de-motivate existing stakeholders.

If Coca-cola does not do anything, the stakeholders will be de-motivated. If the company does not expand the stakeholders may consider the company to be unprofitable in the long run. The employees are currently working in Coca-cola would be de-motivated and would be even frustrated, because actually they will face the problems. If the company did not do anything the stakeholders may become dissatisfied if the firms future was threatened by lack of response to the decline in other activity. If Coca-cola did not enter new segments the profitability of the company would be depleted in the future.

Alternative no 2

Coca-cola should Acquire DGB (Distribuidora Guararapes de Bebidas), and use FANATA to fight The Tubanas
Coca-cola could acquire the company name DGB. DGB (Distribuidora Guararapes de Bebidas), a leading distributor of beer and sodas in the northeast of Brazil, lost the rights to distribute Brahmas products (AmBevs brand). Thus, the company decided to develop its own line of soft drinks, Frevo, named after a traditional pop rhythm mainly played and danced during Carnaval. Frevo sodas were lower priced than traditional competitors. This rather sweet beverage was available in four flavors: guaran, orange, lemon, and cola. The advertising promoted the slogan, Taste ours, it is better. After only two years in the market, Frevo gained 25% of market share in Recife, Pernambuco state, one of Brazils largest metropolitan areas. Production increased from 1.1 million liters to 21.4 million. Frevo distributed in seven of the nine states of the northeast region. DGBs revenue quadrupled compared to its distribution days for Brahma If Coca-cola sells off its biggest conglomerate, but they do not have good distribution channel over northern Brazil. They will rebrand the drink FREVO as FANTA. Since FANTA is known brand they will not find trouble doing it so. This provide them to fight against the tubanians with full-power

Financial Insight: Financial analysis is favorable for Coca-cola Not all the Portfolios are performing in the same manner after making the alliance. None company was showing any growth. Other than this other hand all other portfolios were having a massive downturn. So, if Coca-cola were to go with the alternative 1, then they would be ignoring the whole aspect of reviving their sinking products and cause their customers to lose faith in their business. Marketing Insight: Innovation and growth may drive the currently high brand equity much higher The Brand equity of Coca-cola was high in the market and this was a great strategic tool for them. Even after successive venture mishaps, they continued

to maintain significant brand equity. In such a critical stage of business the company must make sure that they channel the newly generated energy directly to the clients to maintain their positioning rather that allowing the energy to take whatever shape it can on its own. Human resource Insight: Building employee ownership and sense of belongingness through this. As Coca-cola grows, it will grow in every sector, and with its growth, it will be hiring lots of employees all over their set up points. Deal with this gigantic number of employees and make them happy is not an easy task. Moreover, getting the full loyalty and sense of belongingness and through that, the ultimate competitive advantage will be done by giving them ownership rights and let them partnering in the management.

Advantages

1. There is a opportunity for Coca-cola to fully exploit the growing Industry. The liquor and distillery industry is one of the world's largest and most rapidly growing industries. It is a business where the leading brands have unusually high profit potential. The entry barriers to the industry are very high due to its high capital requirements. With Coca-cola already having an established business in this arena and being one of the major players in the industry, Coca-cola would be able to further diversify its business line and reap the benefits of this highly potential growing market. Coca-cola will have two engines of growth; beverages and distillery, which share a common focus on consumers, brands and the talents of their employees.

2. Coca-cola could establishing more market share, asset & content: Coca-cola is a premier distillery and liquor company with some of the bestknown brands in the world. With, Coca-cola will be buying almost nothing but content. The firms assets include which has produced a string of chemicals

and has a large product line. Coca-cola also owns a premium orange juice. It has a huge market demand. So Coca-cola could highly focus on these and gain more market share by newer marketing strategy, build asset through proper financial estimation and customer values.

Disadvantages

1. There could be a loss of Steady Income and dividends from shares. If Coca-cola sells, it will be deprive of the huge profit yield of it. Since equity income from these shares are equal to more than forty percent of Coca-Colas sale of shares could result in an adverse reaction from Coca-cola shareholders. 2. There is a huge possibility of declining in Coca-colas profit margin in the short-run. The decision of using FANTA which generated steady income and dividends may not be welcomed or seen positively by the investors. If investors lose confidence in Coca-cola due to this decision, they might end up selling their shares in the market which will lower the stock prices of Coca-cola. Not only this decline in stock prices reduces the capital of the company but will demotivate other investors from investing into the companys stock.

3. By doing this Coca-cola can make an open door for Criticism. Since the shares are open to public a strict evaluation of these strategies should be maintained otherwise people can criticize certain activities which will lower down the impact of selling shares.

Alternative no 3

Coca-cola should join with small Tubanas so that they can fight with the smaller brands.
Coca-cola can join with small firms so that they can understand the market well. They should help each other. By this coca-cola can create a gap between the higher level products and their own level of products. On the other hand Coca-cola acquired the shares for $3.28 billion, which currently is evaluated to be $9.8 billion. Since the issue of having a manage control is at stake, which Coca-cola cannot enjoy with its shares, Coca-cola would look forward to sale for $3 billion along with shares worth $ 3.26 billion of to acquire 51% shake of worth $4.59 where Coca-cola could enjoy the managed control and have their management voice. Financial Insight: Financial analysis is favorable for Coca-cola Coca-cola will look for only majority share that is 51% of it. To finance this, they have sufficient options in their hand. They can easily sell of a portion of which has a good market value, which has the same high amount of value in market. So they will get the sufficient finance with that. Marketing Insight: The brand names will create a positive response as they both are successful and renowned brand. The Brand equity of both Coca-cola and was high in the market and this was a great strategic tool for them. Even after successive venture mishaps, they continued to maintain significant brand equity. This is a lucrative opportunity for Coca-cola as now the brand equity of the would comprise of both the parties combined together. In such a critical stage of business the company must make sure that they channel the newly generated energy directly to the clients to maintain their positioning rather that allowing the energy to take whatever shape it can on its own. Human resource Insight: By providing more compensation and benefits package for getting more employee retaining. Mergering would be like a perfect marriage only if employees from both companies readily accept each other without any hassle, doubt or confusion.

If the COCA-COLA does not make an effort to make the newly merger employees of COCA-COLA fell like at home, they would become stagnant, pushing the company more into a quicksand stage.

Advantages

1. Joint venture will have lower Acquisition Cost. If Coca-cola purchases partial shares of they will have a lower capital cost and the company might easily finance it. The partial share purchase will not only make Coca-cola the driving force of but it will also ensure that the company has a favorable share holding in the future and makes a positive return.

2. Coca-cola will enjoy the full management control. They will get full Control by purchasing the majority. We suggest that the company purchases the majority of the shares to remain in the driving seat of the company. They can include themselves as majority shareholders and help to retain the business in the future of tough competition and market domination.

3. Coca-cola will have better diversification strategy. Retaining the total control of the business is a profitable diversification strategy which will help to retain its shares and help them to expand the market even better. They are entering in a very lucrative market where they can exploit the opportunities and remain competent in the market.

Disadvantages

1. There is a possibility of conflict between shareholders and company. Shareholders might and interferes in the company decisions and create problem for Coca-cola. This is because they are going for too much diversification and the general shareholders might not understand the value of it or get the message. So, there is a huge threat of creating a conflict between the shareholders and the company. 2. Competitors could have the access of company accounts:

The accounts of the company have to be published in the books which might facilitate competitors to get access to the accounts. And that will be the last thing that any organization wants to do. Coca-cola is a growing company and it has a string market in the world, so it is not good for them to get any new competitor or let them know what they are up to. 3. Coca-cola will enjoy the full management control. They will get full Control by purchasing the majority. We suggest that the company purchases the majority of the shares to remain in the driving seat of the company. They can include themselves as majority shareholders and help to retain the business in the future of tough competition and market domination.

Recommendations
Reasons behind Rejecting First Alternative
After Coca-cola is now more open to the economy and is not protected by the government. Furthermore, it is being expected that there might be an

economic downturn anytime at any place. Therefore, if Coca-cola is not having sufficient fund resulting from their strategy of doing nothing, they would be more prone to economic fluctuations. That is they do not have any precaution against the economic downturn that is likely to take place. The competitors of Coca-cola will obviously be taking some steps to the changing economic condition. The competitors in that case may also take an aggressive strategy to expand their business by targeting new segment of the market. In a sense, the Coca-Colas competitors will be having an edge over the competitors.

Reasons behind Rejecting Third Alternative

If Coca-cola goes for joint-venture it might cause bad effects for Coca-Colas brand image. Its might not be well decision for that. Coca-cola is a big company having their own supply chain. If the tubainas intent to use the jointventure for their own good, the strategy might be back-fired. The decision of going into joint-venture which generated steady income and dividends may not be welcomed or seen positively by the investors. If investors lose confidence in Coca-cola due to this decision, they might end up buying their shares in the market which will lower the stock prices of Cocacola. Not only this decline in stock prices reduces the capital of the company but will de-motivate other investors from investing into the companys stock.

Mother company might and interferes in the company decisions and create problem for Coca-cola. Since the shares are open to public a strict evaluation of these strategies should be maintained otherwise people can criticize certain activities which will lower down the impact of buying shares.

Reasons behind Accepting Third Alternative

Coca-Cola could handle the COCA-COLA and FANTA at the same time. They are doing very good with it.

COCA-COLA is a prominent company with many potential in the Beverage industry. The existing expertise of COCA-COLA will be taken over by Cocacola which will be giving them a head start ahead of the competitors. COCACOLA is renowned to all directors and actors; this is an important exposure for Coca-cola once they try to enter the market of tough competition. In order to stay ahead of this competition Coca-cola will need the manpower and the right contact, COCA-COLA has both of these and thus it will be a double benefit if Coca-cola purchases COCA-COLA. Thus adding COCA-COLA will be a good decision for Coca-cola.

Getting decision making ability in a diversified industry:

COCA-COLA they will have a lower capital cost and the company might easily finance it. The partial share purchase will not only make Coca-cola the driving force of COCA-COLA but it will also ensure that the company has a favorable share holding in the future and makes a positive return. We suggest that the company purchases the majority of the shares to remain in the driving seat of the company. They can include themselves as majority shareholders and help to retain the business in the future of tough competition and market domination The remaining shares of COCA-COLA might go for a public investment or joint investment and the company can enjoy a certain amount of specialization from the other counterpart. Since the market is highly competitive the company might ensure a profitable venture.

Opportunity to retain back the investment through stock is there:

This will help the company to retain back its share value and they might even increase the value which will help Coca-cola to re-call and sell the shares at a premium. Retaining the total control of the business is a profitable diversification strategy which will help COCA-COLA to retain its shares and help them to expand the market even better. They are entering in a very lucrative market where they can exploit the opportunities and remain competent in the market

Chance to add to the market share, assets and content:

COCA-COLA is a premier Beverage/communications company with some of the best-known brands in the world. With COCA-COLA, Coca-cola will be buying almost nothing but content. The firms assets include Universal Pictures, which has produced a string of major hits and has a movie library that is among the largest in the world. COCA-COLA also owns several music companies including COCA-COLA Records, Geffen Records and Uptown. It has a television production unit -Murder, She Wrote, Northern Exposure, a book publisher, theme parks and a video distributor. It also has a major interest in Cineplex Odeon Corp., the Toronto-based theatre chain, along with part-owner Charles Bronfman, Edgar Jr.s uncle and a co-owner of Coca-cola.

So, after detailed and brief analysis, we can sum up to the decision that buying a portion of and full of Tropicana would be the best alternative for Coca-cola to consider. Although this alternative has some pitfalls, other alternatives are not that much feasible or profitable or of any use like this alternative to acquire majority shares of COCA-COLA with still in hand.

Implementation

Coca-cola should Acquire DGB (Distribuidora Guararapes de Bebidas), and use FANATA to fight The Tubanas

General Implementation
Coca-Colas phenomenal growth is attributed to its continued focus on customer needs and reducing costs. The company had faced a few critics in its journey towards success. More over after competitor focus towards rural area bring them in a vulnerable condition.

So to ensure the winning with this Strategy Coke should use FANTA. But before they should do it they will do some analysis which flavor to use in which region. FANTA comes with many flavors. Coke should use that advantage and Acquisition of DGB to get the job done. They must be aware that the FANTA will be fighting with the Tubaninas. Their strategy regarding the the ignition should be accurate and lethal. All the plan elements have to be made consistent with each other and they have to work out the issues using similar values. Each of the functional areas will be view in light of the new decision in hand and must be synergistically designed to produce a full-proof system. The functional departments have to work harmoniously to turn the caterpillar into a butterfly. A well-crafted strategy has no value without a good implementation.

For total success and maintain industry leader position Coca-cola have to achieved through a coordinated system of the value chain. For this recommendation to work, Coca-cola need: A perfect collaboration with all related parties of this acquisition so along with consult with senior executives of was mandatory. To fine tune the companys attempts to manage competition and other corporate level strategies. A sound marketing plan to bring about the image shift by communicating the companys actions with the customers. To fine tune and update the supply chain standards. It is the heart of Coca-Colas success in terms of operational excellence and cost leadership. A strong CSR plan, to establish a better image. A sound HR policy to realize all that are would be discussed in the implementation phase.

A logical financial plan to allocate resources in the right direction so that the recommended strategy is achieved efficiently. So, company need to concentrate more on their operational activity to maintain attractive performance for both investors and companys profitability.

Key Strategies The strategy of companys overall strategy will be followed in 3 stages for next 5 years. These stages will have specific duration and each stage will contain different activity and objectives, keeping consistency with main goal of the firm. They are: Acquisition & initialization Development Growth Finally promotion and controlling should be applied and executed in such a manner that the potential customers can recall Coca-Colas brand name among many alternatives at the time of going retailing store and the whole process is not facing any kind of problem for the company in achieving its organizational goal To make the acquisition process successful Coca-cola can use the mass media to reach the mass people effectively and efficiently. Controlling or monitoring is an ongoing process. The whole system started with production to distribution and finally delivering to the ultimate user has to be under close monitoring of the company. These monitoring would be basis for fine tuning.

Coca-cola need to settle the alliance problems with . As Coca-cola is at stake with the put option and the problems of not having any strategic plan, so, to create an appropriate strategic plan for Coca-cola to recover their lost market share and to make the company internally consistent they need to follow some guidelines. Through the below diagram Coca-cola can formulate their strategic plan -

Strategic thinking drives the process Strategic-planning process

Strategic analysis informs the process

Operational planning

Evaluation & control

Implementation

Strategic management
Fig: Development of strategic management

Then to do strategic planning or taking the strategies need to know what the current situation is and where they want to reach. Between these they have to consider the gap and according to the gap they have to identify the strategic issues and alternatives. After then, they have to choose appropriate strategy and decide the short-term and long term goals and how to achieve those goals. Strategic issues can be determined from the external review or form internal review. And in internal review they may consider the issues like competition in Beverage business where they never exist but now willing to go, the industry trend, market trends. Here they also find out their internal shortcomings, which actually let not the company to become stronger as a brand.

When they are agree about the issues which need to consider for the shortterm and long term growth of the company, they will consider the below issues because these will strategies will ensure the future consistency of the company.

Marketing Implementation
General Marketing Strategy
Our recommendation was directed towards creating a newer and better image to its customers and this requires effective communication. Creating a newer and better image to its customers and this requires effective communication to them stating the purpose that Coca-cola wants to serve, benefiting them. This portion of the report discusses the main marketing communication strategies on how to shift their image to a more customer oriented marketing concept of the business from that more like a selling concept.

Integrated Marketing Communication

Five Elements of Marketing Strategy

Staging

Medium

Economic Differentiator s

Arenas

Staging This element of strategy states what will be the firms speed and sequence of moves. As Coca-cola is a new company in the Beverage Industry chooses to go at a steady pace and try to achieve a sustainable growth in profitability and market share. The top management has decided to grow the firms profitability

by certain margin in each year for a long period as the Beverage market is already partly saturated.

Medium People know Coca-cola as a liquor company it is unknown in Beverage world so this element of strategy describes how the firm will get there. It means the mode of entry such as-FDI, merger, acquisition, new venture. As Coca-cola is a global company that is going to operate in the global market its mode of entry is new venture. The top management has decided that the owners are going to provide the equity to the firm and rest of the required fund will be borrowed from different sources. Arenas This element of strategy refers to the area the firm is going to be active or going to operate. COCA-COLA is going to serve the regionalmarket in the initial period. The firm planned to cover all regional areas by establishing a chain distribution channel. Differentiator This element of strategy is most important as this provide the reason for the sustainability of the firm as well as the chance of making profits. This element refers to the key competencies of the firm that it is going to use to win the market as well as the customer loyalty. The differentiators of Coca-cola product, distribution channel, technology and its marketing and customer service. The product FANTA itself is differentiators as such products are not available in the market and only product that is available in the market is imported and highly priced. Economic Logic This is the core of all element of strategy. It provides the reckoning how the firm is going to obtain its returns. As, Coca-cola has competitors in the market and it is priced according to the purchasing power of the middle class people it has a good chance of making profit. Another thing to be considered here

that is the raw material is locally available and cheaper so that will allow the firm to reduce its cost and generate more profits.

Coca-cola initiates promotion of strong brand awareness Coca-cola has been performing in the market for many years and now they must start building a strong brand for long term perspectives. That would ensure more brand knowledge in the target Coca-cola and help the company with tangible and intangible benefits. Coca-cola needs to do promote at this regards. Below, it is showed how Coca-cola can create strong brand image towards consumers.

To build a strong brand the following chart must be followed:

Strong brand: Much brand knowledge in the target audience

Brand awareness:
High

Brand association:

Strong Relevant Unique

Coca-cola must follow the four steps of brand building which are stated below Ensure identification of the brand in consumers mind Establish the totality of brand meaning in the minds of consumers Elicit the proper customer responses to the brand identification and meaning Convert brand response to create an intense, active loyalty relationship

Competitive Strategies
Coca-cola is way ahead of its competition this time. Yet, competition is one of the major threats that Coca-cola needs to take care of. Target poses potential threat to the company. Coca-cola needs to incorporate the image shift into its ways of handling competition. It is time for Coca-cola to rethink and fine tune their competitive strategies that are more acceptable to the society and admired by the world. Coca-cola has achieved operational excellence and executes its means to achieve cost leadership by religion. The image shift recommended for the company requires the company to handle competition and maintain its competitive status in a better perceived way making use of its available strengths. Coca-Colas current competitive strengths in hand are its supply chain, market leadership in the retailer market, cost leadership and operational excellence. In order to smoothen the image shift transition, managing future competition will be made based on use of these strengths effectively and making certain adjustments to benefit the company in the long run.

Strategies: Upgrading Customer Intimacy Their policies have not been updated to meet the new needs of these set of customers. People nowadays not only think about lower prices, they also want quality; they are more environment conscious, and seek preferred brands. Customers may be willing to pay more elsewhere if their needs are betters and more satisfactorily met. Achieving a greater level of customer intimacy does not require much additional research. The new trends are already apparent from the actions of the competitors who have done their homework on researching about deeper customer insights. It is otherwise, at least from an economic point of view, obvious why the competitors are able to maintain their market share despite Coca-cola offering better and cheaper offers.

These extra value additions are the market opportunities that are left wide open for the competitors. Coca-cola has to fine tune their policies to bring them a step closer to their customers and enhance the brand image, and in turn brand equity of their company. Focus to Operational Excellence Coca-cola provides superior value to its customers and leads the industry in terms of price and convenience. It has extensively reduced its cost and created a lean and efficient value-delivery system. Achieving both operational excellence and customer intimacy would not only enrich the brand value of the company but also deter future opportunity seek to enter the industry or attack Coca-cola.

Market Leader Strategy Coca-cola is the strongest contender in the industry. However, such successes do not come without critics. Coca-cola is said to kill competition which is totally discouraged by law and it may pose future threats for the company in attempts to deviate its focus from maintaining its success in the industry. It needs to modify its strategies and progress in a more sensible manner. The following strategies are available for the market leader to exercise expand total market, defend market share and expand market share. The company also needs a well formulated full-frontal attack to fight competition in the long run. Expand Total Market New customers may be gained through new market segment strategy and through geographical expansion strategy. Also promotional offers could be made for increasing customer frequency of making a trip to Coca-cola stores. Defend and Expand Market Share The existing market share has to be defended from attack. Target, currently, is a strong competitor that poses threat to Coca-cola. The following implementation on handling the companys business portfolio is available.

Coca-cola must build and/or maintain its competency over the following factors. Lowest prices compared in relativity to every competitor Superior customer services (that are valued by the customers) Guarantees and warrantees on product offerings Flexible supply chain to meet customers demands on time Strategies against Direct Competition When it comes to dealing with competition, Coca-cola needs to expand its share. The following action plans are available to the company. Full frontal attack strategy: This attempt would be Coca-colas last resort or trump card when the competitor is not willing to give and is repeatedly attacking with full force. Attempts may also be taken to raise the cost incurred by the competitor. This may be achieved through the following. Dominance over distribution channels Supply chain flexibility Counteroffensive strategy: Indirect attacks and defensive tactics would prove to be fruitful. Flank strategy: to lower the value of competitors offering: Make special offering by a competitor or better offerings available in Cocacola stores also. Challenging their point-of-difference, making it a point of parity. This would act as me too offerings to lower the perceived value of the competitors offerings. Guerrilla warfare: Attack the competitor at sectors where it lacks focus or has a weaker hold in the market. Proactive defense against guerrilla warfare: Manage the companys resources in such a way to establish a 360 degree defense. These resources may be shared by the departments and be steered to whatever direction needed.

Cost Leadership Exercising the above strategies would enable the company to maintain its cost leadership position. Coca-cola must have enough control over its business and the environment to make sure that its core values and competency is sustained in the long-run. In recommended Coca-cola for an image shift, this is directed towards tackling the companys possible threats. Strong precautions has to be taken not lose out on cost leadership status, for it is the sole reason customers more subconsciously drawn towards the stores.

HR Implementation
Creating a HRS Strategic Architecture at Coca-cola & .

The function HR professionals with strategic competencies

The system

Employee

High performance strategically aligned

Behavior strategically focused

Fig: HRS Strategic Architecture

As the major problem Coca-cola may have to solve after acquiring DGB was related with HR issues so human resources are now must viewed as a source of competitive advantage. There is greater recognition that distinctive competencies are obtained through highly developed employee skills, distinctive organizational cultures, management processes and systems. This is in contrast to the traditional emphasis on transferable resources such as liquor.

 HR department should be implemented according to Strategic framework named strategic HRM framework. Strategic Human Resource Management FrameworkResponsive and safe employment conditions Continuous Improvement

A planned work force

Quality Staffing

Planned Human Resource Development

Proper Career Planning

Protection of Merit & Equity

Monitoring & Reporting

As Coca-cola was going to acquire which was already suffering from major problem related with HR so in todays intensely competitive and global marketplace, maintaining a competitive advantage by becoming a low cost leader or a differentiator puts a heavy premium on having a highly committed or competent workforce. Competitive advantage lies not just in differentiating a product or service or in becoming the low cost leader but in also being able to tap the Coca-colas special skills or core competencies and rapidly respond to customers needs and competitors moves. In other words competitive advantage lies in managements ability to consolidate corporate-wide technologies and production skills into competencies that empower individual businesses to adapt quickly to changing opportunities. There is greater recognition that distinctive competencies are obtained through highly developed employee skills, distinctive organizational cultures, management processes and systems in Coca-cola and Inc. The new HR role is to be viewed from the strategic perspective wherein HR plays an important and vital role whilst designing and delivering the HR strategy for the organization. The approach of HR planning activity is no more in isolation but very much aligned to the strategy of the organization as a whole Delivering a strategic impact, the HR strategy needs to be in sync with the business objectives and the systems and processes incorporated must also support demonstrating the required results. Some of the successful models/strategies used by the corporations are Generalist Strategy, Personnel Strategy, e-HR strategy, Performance culture etc.

Career Planning Coca-cola would help the new employed employees in career planning in the organization that would include: Career Identification It is very important to identify the career of the employees at the beginning day of the job. For this employees needs to focus on Career counseling Career specific information Employment opportunities

Conduct a Organizational Strategic Analysis - Clearly Defining Business Strategy As Coca-cola and are two totally different organizations which are going to be together so business strategy exists and that it can be clearly described and communicated to the entire organization. The goal of the HRM Plan is to support and reinforce the department's objectives and programs. The first step in developing the Plan is to obtain a clear understanding of the department's objectives, programs and key challenges. This understanding can be obtained by conducting a strategic analysis. Conduct a strategic review of the department including strategic objectives, direction and critical success factors. Strategic objectives are departmental objectives, which are usually articulated through the vision, mission, values, corporate business plans and strategic programs.

If the department's vision, mission and values have not been articulated, it is recommended that the opportunity be taken to articulate them as seen in the Drainage Services Department case. Strategic direction is where the department, and the services it plans to provide in the future, is heading.

Critical success factors are the factors that will determine whether the strategic objectives will be achieved, e.g. if customer satisfaction is an objective, then delivering services that meet customer expectations is a critical success factor. Identify strategic challenges. Strategic challenges consist of both internal challenges such as internal organizational issues and external challenges such as responding to changing public expectations

Building a Strategy Map Describing the CaBrazill Flow of Strategy Implementation A strategy map takes what tends to be an externally focused vision in and links it to an internal roadmap that show(s) how an organization plans to convert various assets into desired outcomes. It is an essential part of managing HR as a strategic asset because it provides the basis of aligning the HR Architecture with the firms strategic drivers. It provides the organizational logic that transforms HR from a transaction and operationally oriented function to an organizational asset with strategic impact.

In addition to the strategic HR issues identified in the previous step, the department's key ongoing HR issues (general HR issues not linked to specific strategic objectives or issues) must be identified. The HRM Plan must address the key ongoing HR issues of Inc; otherwise these issues may eventually escalate, impacting the morale and effectiveness of the acquisition.

Building a Business Case for Why and How HR Matters for Strategy Implementation

HR will only become a strategic asset for and Coca-cola when both line managers and HR professionals assume a shared responsibility for implementing strategy. For this to happen, both parties need to have a common understanding that HRs strategic value is linked to the extent to which it directly contributes to better strategy execution. Once a clear understanding of the both Coca-cola and 's objectives, direction and key challenges is established, the next step in formulating the HRM Plan is to identify the department's strategic HR issues. These are the key HR issues that will affect the department's ability to achieve its strategic objectives. The HRM Plan will need to address how to manage these issues. Assess the HR implications of the findings of the strategic analysis. Identify the department's strategic HR issues. Review the findings of the strategic analysis and list out potential HR implications. (Some of the key HR issues will naturally become apparent during the strategic analysis.) Review the following checklist to determine if there are any additional HR issues tied to the department's strategic objectives, direction and challenges

Linking HR Architecture to Strategy Map This may be the most important step in transforming HR to a strategic asset. The term HR Deliverable is just a shorthand term for the outcomes of the HR Architecture that directly drive successful strategy implementation. The focus is where in the HR Architecture to locate the HR Deliverables Coca-cola should focus on employee performance and behaviors, or the drivers of those behaviors. should hold a firm belief that those HR Deliverables should focus on employee performance behaviors because they most directly influence the strategic goals of line managers.

Up to this point, the strategic and ongoing HR issues facing the department have been compiled. Not all the issues will be of equal importance or urgency. They need to be prioritized with the input of the top management team. Prioritizing the issues helps ensure that the HRM Plan focuses on the department's most critical issues. Involve the department's top management team in confirming and prioritizing the issues compiled to date. The top management team should also give input on the actions that should be taken to address the key issues. Top management involvement in prioritizing HR issues and identifying actions is critical. Reinforces the line management role in human resource management.

Helps ensure that HRM recommendations are actionable within the constraints of the department.

Develops top management commitment to and ownership for the HRM Plan implementation.

Collate the research findings up to this point. Analyze them critically with a view to articulating the strategic objectives and direction, critical success factors and strategic challenges.

Compile a preliminary list of the HR issues identified and group according to logical categories, e.g. training, recruitment.

Conduct a top management strategic HRM workshop.

Financial Strategy

Assessing Financial Capabilities and Conditions

Coca-cola must analyze the financial resources and ability to explore the Coca-cola new diversified to enter and operate the new market all by itself. They must assess the costs associated with the research and development department, conducting market research, and come up with new flavors, brands and effective promotional campaign through appointing band managers and for proper logistic supports to implement the recommendation. To assess the costs of planning, they may do feasibility analysis or may take help from the consultants. Through this way, Coca-cola can assess their financial capabilities and conditions. In this way, their brand awareness will be increased and more customers will be interested to be loyal to them for having quality services from such a successful company. Though they are running their business quite well independently, taking account new initiatives can change their fate. To bring the change this systematic approach will be done by the research and development department and marketing department with the combined support of Finance and Human resource department and full logistic support. At first Coca-cola would have to take research and development strategy to come up with diversified different segment. Thus Coca-cola is hereby improving the logistic systems and then their marketing, financial, competitive and human resource strategy to support their financial plan.

Desired source of funds

Coca-cola would require a moderate amount of cash for buying shares. Cocacola would also require money to conduct the research activities for identifying the scope of cost reduction, in the side with the improvement of logistic systems for reducing operational costs, restructuring the whole operational plan.

Improving logistic system

For reducing the selling and distribution costs Coca-cola will improve its logistics, since they will be operating in a new industry where operates. Improving in-house logistic system for Coca-cola would be right solution because so far most of the cases the company had majority ownership. They also need money to develop less expensive but strong distribution system they also need money to reduce their excessive costing of Coca-cola and other subsidiaries. Moreover, to install the proper path for distribution to the consumers, they will need huge amount of money.

Restructure the compensation plan

To motivate the employees Coca-cola needs to restructure the compensation plan in such a way that will maintain the gap and motivate them at a time. This will actually help to increase performance level of the employees significantly. The cost of the restructuring compensation plan would be higher because it needs to be communicating with the top to bottom level employees at a time.

Promotional activities
To do the most necessary promotional campaign for the price offering of the Coca-cola, they will need huge amount of money. At first Coca-cola need to have a target budget and resources assigned to each element of the plan. For the newspaper ads, event organization and personal selling, they will need additional amount of money for the execution of this plan. So promotional tools need and incorporates with high and moderate costs.

Source of Fund
Coca-cola is a profit seeking company. Coca-cola would require a large amount of financial resource to do research and development, and marketing campaign. These entire things are needed to be done from their own fates; there is huge cash out flow in the starting of the plan.

Use Own Money

The first source of money is obviously its internally generated fund. Coca-cola has enough money so they can budget their expenses from their own money. Though they are affected in terms of their operational cost control, but they are very successful in making their profit in most of its subsidiaries. They need to figure out how much they can pay for the project and then go for other sources of funding.

Capital Structure Budget

A Capital Structure budget can be developed which will help to plan the Capital Structure program for Coca-cola. This budget in turn will be a part of the capital budget techniques in the Coca-Colas current capital budgeting. The Capital Structure budget will contain a breakdown of the capital expenses in the firm of issuing cost, which would be allocated in the committed to the shareholders and this plan would provide the guideline for the entire Capital Structure activity of the business for a particular year. Over the year end the budgeted figures would be compared with the actual figures and the variances which would be constantly evaluated. This would help and ensure the control of the future Capital Structure programs so that any unnecessary costs could easily be avoided through an efficient cost controlled Capital Structure program. The whole point of constructing a Capital Structure budget would be to loosen its importance while it becomes a mere formality to construct such budgeting techniques. In addition Coca-cola has also as to focus on the underestimate importance of such activities while preparing the budget there might a clash of ideas as finance manger storm in their financial tools.

Resource Management
It is evident from the ratios that the company is doing an excellent job on controlling the companys resources. The high growth of sales and assets has caused favorable impacts over the companys ratios. The company has done well to manage its project and maintain a low cost of capital. The regulation of its financial resources have also allowed Coca-cola to increase its efficiencies in achieve success in projects. By keeping up its

sound plan would ensure long run sustenance. Despite that, the following recommendations are provided to allow for a smoother financial resource management.

Shareholders Model
A big threat of implementing this strategy for Coca-cola would stand as the incursion of higher suck financing to already poor performing Fiat. Therefore to overcome this problem Coca-cola would require financing such project which maintains lower the profitability of the business. If profit goes down one the biggest problem will be loss of interest of the Shareholders. They invested with expectation of higher dividend or for capital gain and when they see that such social activities are financed at the cost of their profit they might not like the idea and can create internal problem for the company.

Communicate
In order to curtail such action the management must undertake certain precautionary measures. At first they might communicate with the stock holders and make them understand the importance of these activities. Provided that these activities becomes popular and the value of shares might go up which will provide the shareholders a higher amount of capital gain.

Right Share Issues

When issuing new shares the company might go for rights issue. This will help company to retain its existing shareholders especially the employees will enjoy purchasing the Stock at a discounted price. Retaining old shareholders will help to maintain a better understanding with the stockholders and the threat of facing take over might be eliminated.

Issue of New Shares

In order to facilitate investment the company can issue shares on a pro-rata or call basis. This will help the shareholders to purchase shares on installment.

Thus people who are afraid of lump sum investment might take up this option and boost up their share portfolio with future larger investment. By undertaking all these activities will ensure a strong shareholders interests. Thus selling shares will become a large source of finance for the companies future business activity including their Capital Structure program. However, if the variance is large for the Capital Structure programs then it might be motivated to the employees. The whole point of constructing a Capital Structure budget will lose its importance and it will become a mere formality to construct such budgets. In addition while preparing the budget there might a clash of ideas as finance manger storm in their financial tools they might underestimate the importance of such activities. Thus a clear channel of communication must be maintained which will help the managers to evaluate the options and carry down their work properly.

Keys to Successful Expansion for Coca-cola Pro-active strategy and business plan Management Country and competitor research

Due diligence on potential partners Trademarks to protect brands Sales and distribution, warehouse

Competing internationally and transforming a business into a global player is a substantial challenge and the ultimate opportunity to grow. We have designed a model for implementation of the international business strategy for Coca-cola. Our model consists of five different features: business analysis, business valuation, implementation of the internationalization, creation of foreign partnerships, and assistance in continual innovation in new technology.

An exit strategy of a business unit can also be examined, as is can provide an option to generate funds and focus on core competencies to ensure a frictionless internationalization process.

Risk management program for Coca-cola From the country risk analysis segment we have clearly identified the risk associated to the external environment for Coca-cola. The risk is Political risk, Social risk, Technological risk, Exchange risk and procedural risk.

Risk Identification

Risk Assessment and prioritization

Risk Treatment

Here we have developed a risk management model for Cocacola so that it can handle the risk of the external environment and do business efficiently and effectively. Risk Identification This part has been done in the country risk analysis part. Risk Assessment and Prioritization

Monitopr and review

After assessing the risk Coca-cola should make a priority list by putting the most risky and most influential factor first in the list. Risk Treatment After the assessment and prioritization are completed Coca-cola need to treat the risk. In this matter Coca-cola might take help of specialists or hire consultants. Monitor and review This part is very important for the company. The top management of Cocacola needs to look very carefully to the situation and evaluate the measures that have been taken by the consultants and the specialists. If any measure is not working properly then that measure should be replaced within time.

1. Business Analysis

To fully exploit growth potential, Coca-cola needs to evaluate its current position. We professionals develop a profile of your company which will be key for Coca-cola management to:

Perform better decisions-making Discover areas for improvement Exploit well and poor managed departments Benchmark internally and against other firms and best practices Identify operations appropriate for outsourcing Optimize and streamline business processes Discover new growth potential Locate requirements necessary to internationalize Find international markets that suit the profile Establish a realistic roadmap Design a long-term strategy blueprint Develop a sustainable, balanced, long-term strategy to increase customer satisfaction nationally and internationally.

Under business analysis the areas covered would include

 Identify its market:

Coca-cola must analyze and identify market they want to do business in. This would involve a detailed market research to assess the potential of the markets, the strength, weakness, opportunities and threats. This is extremely important as a first phase to clearly embark on a future strategy with a mix of domestic and international strategy.

Identify products:

After market identification, Coca-cola must address its product according to geographical needs, culture, climate, potential to spend etc.

Location of businesses

As competition is becoming very intense in Brazil each aspect needs to be given proper attention, location is such an aspect.

Effective management to co-ordinate worldwide activities

As the trend of globalization continues, effective and efficient global management of multiple offices, factories and stores in various countries will become the key to successful organizations and the failures. This is where true strategy implementation is involved as companies have to evolve methods to implement global goals with local management.

2. Business Valuation

Evaluating a firm and its different business units provides critical insights for business navigation and financing activities. This analysis describes the very essence of business and its stability. So in the case of Coca-cola in addition to the four standard financial statements, we can establish interim statements to follow trends improve forecasts and adapt the business to the market.

To paint a complete picture of the business value, it is also important to consider the relationship network and others types of intangible value created, such as through non-compete agreements and other contracts.

Business Analysis

Exit strategy

Technology innovation

Business Valuation

Intermediary service

Implementation Serrvice

3. Implementation Service

Implementing changes within a company or a global approach is one of the major challenges. A professional implementation needs to be sequential, executed milestone by milestone, done at the right pace and constantly reviewed, adopted and optimized. We can suggest Coca-cola through the implementation process keeping a steady eye on these critical issues to guarantee an implementation strategy that works for Coca-cola in BRAZIL.

4. Intermediary Service:

Strong business relationships with the right suppliers, management and customers are vital for sustainable business. We suggest Coca-cola to connect with suppliers that fulfill its needs in the key areas of quality and cost of supplies, delivery time, supply network coordination, management of assets and inventory and supplier relationship conditions that improve Coca-Colas business in BRAZIL.

In the global business environment, local management in a foreign country can be crucial. We would suggest Coca-cola to arrange a large range of requirements of management to fulfill the crucial demand. The foreign management will provide Coca-cola with the insight to enter this foreign market, avoiding expensive mistakes, boosting your sales, and minimizing failures in local management.

5. Technology innovation

Innovating new technology is a key success factor of major businesses and a necessity for rapid growth. We know practices and techniques to effectively manage innovation. With managed innovation, companies are able to reinvent their products, add new features to them and discover new product ideas.

So it would be beneficiary for Coca-cola to invest in technology which would cut the time to market its products to profit from sales earlier and to be ahead of competition.

Exit Strategy
To transform a business, it is essential to focus on core competencies. Some business units might have to be streamlined away from the product portfolio, so an effective strategy is needed to exit while minimizing tangible and intangible costs. That is we have made an effective exit plan which has a range of advantages:

Avoiding damage to reputation Utilizing the generated cash to finance core activities and innovation Repaying debt Increasing the return on investment Cutting fixed costs and overhead Receiving the true value Utilizing the new capacity effectively

Beside these we can also suggest Coca-cola the following approaches of international implementation which could be implemented through a body of consultants Curriculum Research and Development Detailed analysis of and research into industry and community needs in order to ensure that curriculum and resources are targeted to needs, and are world's best practice. Product Development and Production Curriculum and teaching/learning resources aligned to national standards frameworks and recognized as among the best in the world.

Analysis of Client Training Needs Development of customized training and other services to meet CocaColas clients needs. Tax and Accounting Issues Consider Management or Services Agreement with fees Consider Trademark or other IP royalty payments Availability, use and timing of tax credit strategies. Timing of repatriation of income Tax laws local registrations; VAT, GST, PST, etc. Any VAT not creditable Incentive tax credits and tax free zones Transfer pricing Research requirements for favorable tax treatment Revenue-specific requirements In-country employee requirements Length of stay in the country Make sure other tax requirements do not offset the favorable treatment Employment related taxes

Prevention strategies: Prevention strategies are those implemented to avert a risk. Mitigation strategies: Mitigation strategies focus on reducing the risk Coping strategies: Coping strategies are designed to relieve the impact of the risk event once it has occurred.

Production Management Strategy

Supply Chain Management Strategy

Coca-cola is able to provide a vast range of products at the lowest costs in the shortest possible time. This is made possible because of two main factors Coca-Colas distribution management systems and inventory management systems.

External Review Industry Analysis Competitive Analysis Market Analysis Environmental Analysis Internal Review Financial Analysis Strengths & Weaknesses Opportunities & Threats

Strategic Issues

Short-Term Plans Goals & Objectives Strategic Intent Programs Contingencies

Identifying Strategic Alternatives Long-Term Plans Goals & Objectives Strategic Intent Programs Contingencies

Arguing For and Choosing a Preferred Strategy

1. What is the current situation?

Supplier Relations

2. Where do we want to go?

3. How can we get there?

As s supply chain will be totally different from Coca-cola so maintaining two different supplies chain will help Coca-cola so the suppliers of Coca-cola have to help achieve the following: Integration of supply chain to achieve operational excellence. As discussed earlier, transparency of the vendors supply chain would allow more favorable negotiations for both the companies.

Flexibility in delivery and actions. The supply has to be very prompt in its services. Delays may result in lost sales and customer dissatisfaction. This is both unfavorable for Coca-cola and the supplier. Maintaining warm relationship with suppliers with arranging meeting and by offering other incentives for timely delivery.

Managing Channel Members Supply Chain Coca-cola always emphasized the need to reduce its purchasing costs and offer the best price to its customers. The company procures goods directly from the manufacturers, bypassing all intermediaries. Coca-cola is a tough negotiator on prices and finalizes a purchase deal only when it is fully confident that the products bought are not available elsewhere at a lower price.

Management of Inventories of Coca-cola in Store and of in appropriate place Coca-cola may approach to vendor for warehouse inventory management of those stocks of inventories supplied by them. It would therefore be more effective and economical if the vendors sent their representative to manage their own products and regulate restocking and product portfolio management of Coca-cola. It is therefore, recommended that Coca-cola take actions to stimulate its vendors supply chain and accounts that may mutually reinforce both the companys survival and interest. Coca-colas supply chain may be further fine tuned to achieve to following goals: Reduction of lead time Faster inventory turnover Accurate forecasting of inventory levels Increased warehouse space Reduction in safety stock Better working capital utilization Minimize extra training costs and errors of personnel Efficiency in operations

Better customer service Accurate distribution of goods Lower handling costs Achieving these goals will allow the company to make its supply chain more resilient to competition and the environment.

Logistic Strategy
Logistics strategy is very important for a business. As Coca-cola is a giant company having business al over the world so it has to face lots of problems regarding logistics for its distribution network. And it is the best way to cut the cost way by applying effective logistic system. When assessing what sort of logistics system would be more preferable for the company; only one option remains available for the company. When assessing what sort of logistics system would be more preferable for the company, only one option remains available for the company. Seeking a competent partner and being a partnership leader would be too risky for the company when leaving a part of the companys process in the hand of another party. Outsourcing would prove to be expensive and may not work as desired. Thus, it is best for the company to stick to its in-house logistics. This would enable it to maximize control over its transportation and handling mechanisms so that the cost structure may be brought down at will when required.

Seek a competent partner

Perform Logistics activities inhouse

Outsource

Be a partnership leader

But there is no mention about companys own vehicles so Coca-cola needs drivers who are committed and dedicated to customer service. The company should hire experienced drivers who have driven more than good range of accident free miles, with no major traffic violation.

Channel Relationships Supplier relationships have to be kept different from simple purchasing transactions in several ways. First, there can be a sense of commitment to the supplier. Another element of these supplier relationships is advanced planning. Coca-cola shouldn't just communicate with suppliers when a procurement need arises; they also contact them in order to discuss their future needs and to determine how best to satisfy those needs by working together. While both of those distinguishing features are easy to spot, a third element is also important. The company's attitude and view of its suppliers matters a lot for business success. Companies that forge supplier relationships think of these vendors as partners and not just simple commodity providers.

This difference in orientation can have a profound effect on the way an organization communicates and works with its suppliers. This in turn affects efficiency and profitability. This is very import, when establishing the image shift within its internal processes as well.

Integration
Board of Directors (Seagram)
Human Resource Department

Board of Director (MCA Inc.)

Creative Division HR Division Finance Division Marketing Division Logistic Division

Production & logistic Department Finance Department

Marketing Department

Promotion & Advertisement Division

Customer Relationship Division

Brand Management Division

In the integration part we will be focusing on how to effectively and efficiently coordinate the Marketing department, the Human Resource department, the Finance department and the Production & Logistics department to achieve the suggested alternative, thus creating a strong value chain. This would bring bright future for Coca-cola in BRAZIL market through this alternative demands high level of integration. That is why we will be designing the integration phase in such a way that every departments works would be done by aligning with other departments.

Once the management consents on the plan implementation, they need to focus on the development process. The high costs are needed to be cut down to meet the required operational efficiency and thus increase their profitability. Coca-cola needs to ensure the development phase of implementation of plan effectively. Through the development process model Coca-cola can ensure their situation and activities for Inc.

Need Assessment Knowledge Assessment Professional Development Implementation

Fig: Development process

Besides, Coca-cola aggressively has been involved in competitive market ventures within shorter time period. Because such big companies, always face major financial problem once they go through such trauma. Therefore, implementing this plan will not be very difficult for Coca-cola. The time required for this implementation is supposed to be taken for two-three months in first phase, that is retaliation and closing the alliance and the n around one and half year for production of cars and flowing strategies logistics improvement will require comparatively more time than other activities. The more efficient they are in operating, the less time it would take to capture the market and increasing their brand image.

Strong Value Chain

Organization as sequential process of activities creates value or adds value to its service pr product. This value creation comes through a chain which is build with the strong bonding of each and every department of Coca-cola.

Interrelationships of the value chain Interrelationships exist among value chain activities within and across organizations Interrelationships with the firm Relationships among activities within the firm and with other organizations (e.g., customers and suppliers) that are part of the firms expanded value chain

Value chain primary objective for Coca-cola:

Along with low cost focusing on quality as well

Planning the utilization of Results

The company wants to maintain an employee pool for its different departments. So these below mentioned things are important for the integration:

Restructuring strategies of Coca-cola Emphasis on applicant fit with the corporate culture Training and Development Succession planning

Integrating Marketing

Integrating marketing efforts with the finance, production & logistics department is very important for a firm like Coca-cola. Mainly the marketing efforts that are going to be taken in different media and the communication line used in those ad media would be integrated.

Integrated all Marketing strategies

Coca-cola has been performing in the market for many years and now they must start building a strong brand for long term perspectives. That would ensure more brand knowledge in the target Coca-cola and help the company with tangible and intangible benefits. Coca-cola needs to do promote at this regards. Below, it is showed how Coca-cola can create strong brand image towards consumers.

Integration of all marketing communication tools, avenues, functions and sources within a company into a seamless program that maximizes the impact on consumers and other end users at a minimal cost. It aims to ensure consistency of message and the complementary use of media. The concept includes online and offline marketing channels.

Online marketing channels include any e-marketing campaigns or programs, from search engine optimization (SEO), pay-per-click, affiliate, email, banner to latest web related channels for webinar, blog, micro-blogging, RSS, podcast, Internet Radio and Internet TV. Offline marketing channels are traditional print (newspaper, magazine), mail order, public relations, industry relations, billboard, traditional radio, and television. A company develops its integrated marketing communication program using all the elements of the marketing mix (product, price, place, promotion and public relations).

Coca-cola should integrate the ads it is planning to publish on different media so that those ads are caring the true image of integration.

Integrating Human Resource Department

Integrating Human Resource department is the most important job for a company, because the companies have identified the importance of retaining a highly skilled employee or selecting and recruiting a huge number of employees. The companies have seen that in todays highly competitive business environment a firm can only achieve and sustain a competitive advantage. And to achieve it all the departments of a company have to work closely with HR and the integration level has to be very exclusive.

The things a firm has to take care of for creating a value chain through integration are:

Recruiting, hiring, training, development, and compensation of all types of personnel Supports both individual primary and support activities and entire value chain Properly implement succession planning to focus more on high level position

Integrating Finance

Coca-cola would require an exclusive integration with the human resource department, marketing department and the production department so that that the finance department could have more effect on sales and operations and work with more efficiency.

Sales and Operations Planning (S&OP) has become a more prominent process employed by world class organizations to drive improved collaboration, strategic decision making and bottom-line results. Establishing collaboration between Sales and Operations is no easy task. Functional objectives differ and incentives often pit functional leaders against one another. Sales strive to maximize revenue. Operations seek to minimize costs and maximize production output.

What about Coca-Colas Finance department? Finance should be a key player in the S&OP process. Some suggest that the name S&OP ought to be changed to Integrated Business Planning to underscore the fact that S&OP is not limited to two functional groups. Whatever name you choose, Finance should participate. Finance brings these critical inputs to the process: 1. Revenue Projections: Unit projections must be converted to revenue projections. Finance is in the best position to apply a reasonableness check on Sales and Operations plans. 2. Cash Flow: Demand and supply plans have a direct impact on cash flow. Inventory, research and development, facilities and human resource plans will impact cash flow as well. Finance must weigh-in on the impact of demand and supply plans. 3. Cost and Margin Analysis: Strategic decisions depend on quality information. Finance should question assumptions for all major expenditures including raw material spend, human resources and facilities. Pricing and promotions need not be exclusive to Marketing and Sales. Finance should evaluate assumptions and risk. Such inputs afford Finance a position of great influence into the S&OP decision making process. 4. Budget Planning: Too often annual operating plans are disconnected from the S&OP process. Times are changing. Increasingly, Finance participates within the S&OP process to produce an organizations annual budget. The benefits are increased accuracy, alignment within functional areas and buy-in across company leadership.

Integrating Production & Logistic

This department has to be integrated with the other departments so that they can ultimately utilize the resources it has and also can contribute to the ultimate position the company is trying for to be there. Integrating Production would mean changing the business environment such that there is less time loss and full utilization. Two of the most desirable features in integrating production order scheduling and production activity control are sustaining a finite work centre capacity assumption for accurate production order scheduling and efficiency performing a whatif sensitivity analysis to handle the dynamic uncertainties in production analysis. Under JIT process the production facility would be integrated in such a way that the production always be on time and any service s hold be provided as the customer need it. Coca-cola would have this result if the production system is coordinated:

Ensure a better Customer Relation through Distribution channel Full frontal attack strategy Counter offensive strategy

Even Coca-cola need to co-ordinate and integrate its logistics. Integrating its logistics with the marketing department would guarantee the firms quick expansion.