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Marketing strategies of Coke, Disney, Honda & Nestle

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Marketing Strategies of the Different companies with respect to the competition prevailing in the market and there Strengths.... …

Marketing Strategies of the Different companies with respect to the competition prevailing in the market and there Strengths....
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  • 1. 1 The Institute of Management and Sciences Lahore Cantt Marketing Management : Submitted to : Mr. Nadeem Aslam Assignment No. 01 : Submitted by: Muhammad Fahad Ali Mirza (121103) MBA (3.5 Years)
  • 2. 2 Table of Contents Coca Cola....................................................................................................................................... 3 History........................................................................................................................................................................................ 3 Introduction ............................................................................................................................................................................... 4 Cooperate Profile of Coca Cola................................................................................................................................................ 4 Coca Cola Mission, Vision & Values........................................................................................................................................ 4 SWOT Analysis (Strengths, Weakness, Opportunity & Threat)........................................................................................... 6 PEST Analysis of Coca Cola (Political, Economic, Social, Technological) ........................................................................... 8 Coca Cola Marketing Strategy ............................................................................................................................................... 10 Porter's Five Forces Model of Coca Cola .............................................................................................................................. 12 Nestle...........................................................................................................................................................................15 History...................................................................................................................................................................................... 15 Introduction ............................................................................................................................................................................. 15 Cooperate Profile of Nestle ..................................................................................................................................................... 16 Nestle Mission, Vision & Values............................................................................................................................................. 17 SWOT (Strengths, Weakness, Opportunity & Threats) ...................................................................................................... 17 PEST Analysis of Nestle (Political, Economic, Social & Technological) ............................................................................. 18 Nestle Marketing Strategy ...................................................................................................................................................... 19 Porter’s Five Forces Model of Nestle ..................................................................................................................................... 21 Honda .........................................................................................................................................................................23 History...................................................................................................................................................................................... 23 Introduction ............................................................................................................................................................................. 23 Cooperate Profile of Honda .................................................................................................................................................... 23 Honda Mission, Vision & Values............................................................................................................................................ 24 SWOT (Strengths, Weakness, Opportunities & Threats) .................................................................................................... 25 PEST Analysis of Honda (Political, Economic, Social & Technological) ............................................................................ 26 Honda Marketing Strategy ..................................................................................................................................................... 27 Porter’s Five Forces Model of Honda .................................................................................................................................... 29 Disney .........................................................................................................................................................................31 History...................................................................................................................................................................................... 31 Introduction ............................................................................................................................................................................. 31 Cooperate Profile of Disney .................................................................................................................................................... 32 Disney Mission, Vision & Values............................................................................................................................................ 32 SWOT (Strengths, Weakness, Opportunity & Threats) ...................................................................................................... 33 PEST Analysis of Disney (Political, Economic, Social & Technological) ............................................................................ 33 Disney marketing Strategy...................................................................................................................................................... 35 Porter’s Five Forces Model of Disney .................................................................................................................................... 37 References: .................................................................................................................................................................38
  • 3. 3 Marketing Strategies Coca Cola History Colonel John Pemberton was wounded in the Civil War, became addicted to morphine, and began a quest to find a substitute to the dangerous opiate. The prototype Coca-Cola recipe was formulated at Pemberton's Eagle Drug and Chemical House, a drugstore in Columbus, Georgia, originally as a coca wine. He may have been inspired by the formidable success of Vin Mariani, a European coca wine. In 1885, Pemberton registered his French Wine Coca nerve tonic. In 1886, when Atlanta and Fulton County passed prohibition legislation, Pemberton responded by developing Coca- Cola, essentially a nonalcoholic version of French Wine Coca. The first sales were at Jacob's Pharmacy in Atlanta, Georgia, on May 8, 1886. It was initially sold as a patent medicine for five cents a glass at soda fountains, which were popular in the United States at the time due to the belief that carbonated water was good for the health. Pemberton claimed Coca-Cola cured many diseases, including morphine addiction, dyspepsia, neurasthenia, headache, and impotence. Pemberton ran the first advertisement for the beverage on May 29 of the same year in the Atlanta Journal. By 1888, three versions of Coca-Cola – sold by three separate businesses – were on the market. A copartner ship had been formed on January 14, 1888 between Pemberton and four Atlanta businessmen: J.C. Mayfield, A.O. Murphey; C.O. Mullahy and E.H. Bloodworth. Not codified by any signed document, a verbal statement given by Asa Candler years later asserted under testimony that he had acquired a stake in Pemberton's company as early as 1887.[16] John Pemberton declared that the name "Coca-Cola" belonged to his son, Charley, but the other two manufacturers could continue to use the formula. Charley Pemberton's record of control over the "Coca-Cola" name was the underlying factor that allowed for him to participate as a major shareholder in the March 1888 Coca-Cola Company incorporation filing made in his father's place. Charley's exclusive control over the "Coca Cola" name became a continual thorn in Asa Candler's side. Candler's oldest son, Charles Howard Candler, authored a book in 1950 published by Emory University. In this definitive biography about his father, Candler specifically states: "..., on April 14, 1888, the young druggist [Asa Griggs Candler] purchased a one-third interest in the formula of an almost completely unknown proprietary elixir known as Coca-Cola." The deal was actually between John Pemberton's son Charley and Walker, Candler & Co. - with John Pemberton acting as cosigner for his son. For $50 down and $500 in 30 days, Walker, Candler & Co. obtained all of the one-third interest in the Coca-Cola Company that Charley
  • 4. 4 held, all while Charley still held on to the name. After the April 14 deal, on April 17, 1888, one- half of the Walker/Dozier interest shares were acquired by Candler for an additional $750. Introduction Coca-Cola is a carbonated soft drink sold in stores, restaurants, and vending machines throughout the world. It is produced by The Coca-Cola Company of Atlanta, Georgia, and is often referred to simply as Coke (a registered trademark of The Coca-Cola Company in the United States since March 27, 1944). Originally intended as a patent medicine when it was invented in the late 19th century by John Pemberton, Coca-Cola was bought out by businessman Asa Griggs Candler, whose marketing tactics led Coke to its dominance of the world soft-drink market throughout the 20th century. The company produces concentrate, which is then sold to licensed Coca-Cola bottlers throughout the world. The bottlers, who hold territorially exclusive contracts with the company, produce finished product in cans and bottles from the concentrate in combination with filtered water and sweeteners. The bottlers then sell, distribute and merchandise Coca-Cola to retail stores and vending machines. The Coca-Cola Company also sells concentrate for soda fountains to major restaurants and food service distributors. The Coca-Cola Company has, on occasion, introduced other cola drinks under the Coke brand name. The most common of these is Diet Coke, with others including Caffeine-Free Coca-Cola, Diet Coke Caffeine-Free, Coca-Cola Cherry, Coca-Cola Zero, Coca-Cola Vanilla, and special versions with lemon, lime or coffee. In 2013, Coke products could be found in over 200 countries worldwide, with consumers downing more than 1.8 billion company beverage servings each day. Cooperate Profile of Coca Cola The company sells beverage products in more than 200 countries. The report further states that of the more than 50 billion beverage servings of all types consumed worldwide every day, beverages bearing the trademarks owned by or licensed to Coca-Cola account for approximately 1.5 billion. Of these, beverages bearing the trademark "Coca-Cola" or "Coke" accounted for approximately 78% of the company's total gallon sales. Also according to the Annual Report, Coca-Cola had gallon sales distributed as follows: 43% in the United States 37% in Mexico, India, Brazil, Japan and the People's Republic of China 20% spread throughout the rest of the world Coca Cola Mission, Vision & Values The world is changing all around us. To continue to thrive as a business over the next ten years and beyond, we must look ahead, understand the trends and forces that will shape our business in the future and move swiftly to prepare for what's to come. We must get ready for tomorrow
  • 5. 5 today. That's what our 2020 Vision is all about. It creates a long-term destination for our business and provides us with a "Roadmap" for winning together with our bottling partners. Our Mission Our Roadmap starts with our mission, which is enduring. It declares our purpose as a company and serves as the standard against which we weigh our actions and decisions. To refresh the world... To inspire moments of optimism and happiness... To create value and make a difference. Our Vision Our vision serves as the framework for our Roadmap and guides every aspect of our business by describing what we need to accomplish in order to continue achieving sustainable, quality growth. People: Be a great place to work where people are inspired to be the best they can be. Portfolio: Bring to the world a portfolio of quality beverage brands that anticipate and satisfy people's desires and needs. Partners: Nurture a winning network of customers and suppliers, together we create mutual, enduring value. Planet: Be a responsible citizen that makes a difference by helping build and support sustainable communities. Profit: Maximize long-term return to shareowners while being mindful of our overall responsibilities. Productivity: Be a highly effective, lean and fast-moving organization. Our Winning Culture Our Winning Culture defines the attitudes and behaviors that will be required of us to make our 2020 Vision a reality. Live Our Values Our values serve as a compass for our actions and describe how we behave in the world. Leadership: The courage to shape a better future Collaboration: Leverage collective genius Integrity: Be real Accountability: If it is to be, it's up to me Passion: Committed in heart and mind Diversity: As inclusive as our brands Quality: What we do, we do well
  • 6. 6 Focus on the Market Focus on needs of our consumers, customers and franchise partners Get out into the market and listen, observe and learn Possess a world view Focus on execution in the marketplace every day Be insatiably curious Work Smart Act with urgency Remain responsive to change Have the courage to change course when needed Remain constructively discontent Work efficiently Act like Owners Be accountable for our actions and inactions Steward system assets and focus on building value Reward our people for taking risks and finding better ways to solve problems Learn from our outcomes -- what worked and what didn‘t Be the Brand Inspire creativity, passion, optimism and fun SWOT Analysis (Strengths, Weakness, Opportunity& Threat) Strengths The best global brand in the world in terms of value. According to Inter brand, The Coca Cola Company is the most valued ($77,839 billion) brand in the world. World’s largest market share in beverage. Coca Cola holds the largest beverage market share in the world (about 40%). Strong marketing and advertising. Coca Cola‘ advertising expenses accounted for more than $3 billion in 2012 and increased firm‘s sales and brand recognition. Most extensive beverage distribution channel. Coca Cola serves more than 200 countries and more than 1.7 billion servings a day. Customer loyalty. The firm enjoys having one of the most loyal consumer groups. Bargaining power over suppliers. The Coca Cola Company is the largest beverage producer in the world and exerts significant power over its suppliers to receive the lowest price available from them. Corporate Social Responsibility (CSR).
  • 7. 7 Coca Cola is increasingly focusing on CSR programs, such as recycling/packaging, energy conservation/climate change, active healthy living, water stewardship and many others, which boosts company‘s social image and result in competitive advantage over competitors. Weakness Significant focus on carbonated drinks. The business is still focusing on selling Coke, Fanta, Sprite and other carbonated drinks. This strategy works in short term as consumption of carbonated drinks will grow in emerging economies but it will prove weak as the world is fighting obesity and is moving towards consuming healthier food and drinks. Undiversified product portfolio. Unlike most company‘s competitors, Coca Cola is still focusing only on selling beverage, which puts the firm at disadvantage. The overall consumption of soft drinks is stagnating and Coca Cola Company will find it hard to penetrate to other markets (selling food or snacks) when it will have to sustain current level of growth. High debt level due to acquisitions. Nearly $8 billion of debt acquired from CCE‘s acquisition significantly increased Coca Cola's debt level, interest rates and borrowing costs. Negative publicity. The firm is often criticized for high water consumption in water scarce regions and using harmful ingredients to produce its drinks. Brand failures or many brands with insignificant amount of revenues. Coca Cola currently sells more than 500 brands but only few of the brands result in more than $1 billion sales. Plus, the firm‘s success of introducing new drinks is weak. Many of its introduction result in failures, for example, C2 drink. Opportunity Bottled water consumption growth. Consumption of bottled water is expected to grow both in US and the rest of the world. Increasing demand for healthy food and beverages. Due to many programs to fight obesity, demand for healthy food and beverages has increased drastically. The Coca Cola Company has an opportunity to further expand its product range with drinks that have low amount of sugar and calories. Growing beverages consumption in emerging markets. Consumption of soft drinks is still significantly growing in emerging markets, especially BRIC countries, where Coca Cola could increase and maintain its beverages market share. Growth through acquisitions. Coca Cola will find it hard to keep current growth levels and will find it hard to penetrate new markets with its existing product portfolio. All this can be done more easily through acquiring other companies. Threats Changes in consumer tastes.
  • 8. 8 Consumers around the world become more health conscious and reduce their consumption of carbonated drinks, drinks that have large amounts of sugar, calories and fat. This is the most serious threat as Coca Cola is mainly serving carbonated drinks. Water scarcity. Water is becoming scarcer around the world and increases both in cost and criticism for Coca Cola over the large amounts of water used in production. Strong dollar. More than 60% of The Coca Cola Company income is from outside US. Due to strong dollar performance against other currencies firm‘s overall income may fall. Legal requirements to disclose negative information on product labels. Some Coca Cola‘s carbonated drinks have adverse health consequences. For this reason, many governments consider to pass legislation that requires disclosing such information on product labels. Products containing such information may be perceived negatively and lose its customers. Decreasing gross profit and net profit margins. Coca Cola‘s gross profit and net profit margin was decreasing over the past few years and may continue to decrease due to higher water and other raw material costs. Competition from PepsiCo. PepsiCo is fiercely competing with Coca Cola over market share in BRIC countries, especially India. Saturated carbonated drinks market. The business significantly relies on the carbonated drinks sales, which is a threat for the Coca Cola as the market of carbonated drinks is not growing or even declining in the world. PEST Analysis of Coca Cola (Political, Economic, Social, Technological) The PEST Analysis identifies changes in the market caused by: Political, Economic, Social and Technological factors. Political Those Non- Alcoholic Beverages like; Coca-Cola, are within the food category, under the FDA (Food and Drug Administration). The government has control over the manufacturing procedure of these products in terms of regulations. Companies who fail to meet the standards of law, are fined by the government. Following are provided some of the factors that are influencing Coca- Cola's Operations. 1.Changes in Laws and Regulations like; changes in Accounting Standards, taxation requirements (tax rate changes, modified tax law interpretations, entrance of new tax laws), and environmental laws either in domestic or foreign authorities. 2. Changes in Non-Alcoholic business era. These are; competitive product and pricing policy pressures, ability to maintain or earn share of sales in worldwide market compared to rivals. 3. Political Conditions, specifically in international markets, like; civil conflict, governmental changes and restrictions concerning the ability to relocate capital across borders. 4. Ability to penetrate emerging and developing markets, that also relies on economic and political conditions, and also their ability to form effectively strategic business alliances with
  • 9. 9 local bottlers, and to enhance their production amenities, distribution networks, sales equipment, and technology. Economical The change which is economic in nature would be aspects like the change in interest rates which would lead to business depression and would cause redundant and low levels of spending. Like it was seen in the US market despite the fact that it was doing very well it did not take too long for things to take a complete different route as a result of the recession which took place which was because the Gross Domestic Product had been negative for two consecutive years. The good part was that it was short lived as a result of the actions taken by the Federal Reserve as well as the Congress. This helped the economy take a U turn and get back to reflect growth which was positive. The cutting down of interest rate by the Federal Reserve helped to promote expansion of companies while increasing the level of debt. As the production and technology costs would go down the products being offered in the market would be at lower prices thus in turn benefiting the consumers. The economic condition as seen in the United States was very badly affected as a result of the September 11 attacks but the economy has recovered now and going back to normal. Time is the best healer for a situation like this. The industry related to nonalcoholic beverages is flourishing and growing drastically. Many markets have opened up to for the manufacturers of soft drinks as the economic condition have improved there and can promote their growth as well. This growth would be as a result of high level of profitability while sustaining in a stable manner and also coming up with new and more improved products. Social The change which is related to lifestyle as well as attitude would be termed as social change. For example now that more women were going for work the need related to products for usage at home which would reduce time usage came up. One major change socially which has affected Coca cola is the shift to a health centered lifestyle. Due to this shift the users of soft drinks are shifting to water or diet drinks and thus the need to adapt and launch products accordingly have come up. The aspect related to management of time is also governing the kinds of product which are required with respect to day to day existence. The middle aged consumers are getting very nutrition conscious and regarding the longevity of their life so want to have healthier option availability in terms of beverages. The need for diversification is now becoming a constant requirement to get maximum market positioning and market retention. Technological
  • 10. 10 Some factors that affect the company's actual results to vary essentially from the expected results, are the following: 1. The efficiency of company's advertising, marketing and promotional programs, The new technology advances of television and internet that use incomparable effects for advertising through the use of media. Those advances make the products seem attractive. This supports the selling promotion of the products. Coca-Cola in media tends to use this technology so, to sell effectively its products. 2. Entrance of cans and plastic bottles in the past, have increased sales volume for the company because they are easier to carry and customers can bind them once they have been used. 3. Since the technology is advancing continuously there has been entrance of new machineries' equipment all the time. Because of that, Coca-Cola's production volume has increased sharply compared to few years ago. 4. CCE-Coca-Cola Enterprises have six factories in Britain by using modern technology equipment so to ensure top product quality and quick delivery. In Wakefield, Yorkshire in 1990, CCE opened one of the Europe's largest soft drinks factory. That factory has the ability to produce faster the cans of Coca-Cola even faster than bullets of a machine gun. Coca Cola Marketing Strategy Coca-Cola has had a long-standing commitment to responsible marketing for many years. The Responsible Marketing Charter is a set of principles that guide our entire approach to marketing and establish firm rules for what we should and shouldn't do. We use independent auditors to check that we're complying with the principles set out in the charter. We don't market any drinks to children under 12 because we believe parents should choose the drinks that are right for their families. We help parents make informed choices through better consumer information We will work with an independent consultancy to constantly monitor TV ad placement We do not have direct commercial agreements with primary schools and are only in secondary schools by invitation We will not associate ourselves with cinema films where the core audience is under 12 Online Online marketing is a fast-growing area at the moment and we want to make sure we're being responsible here too. With the International Business Leaders Forum we've launched a Responsible Marketing Network online - a network that brings together marketing practitioners to share best practice and solve issues Talking with our consumers
  • 11. 11 We'll also continue to have a dialogue with consumers and other stakeholders on responsible marketing, to ensure we keep delivering a wide variety of great quality drinks Coke plans to 'transform' marketing with $1bn investment The move is an extension to Coca-Cola‘s previously announced productivity and reinvestment programed and comes as the soft drinks giant reported its global profits fell 4 per cent year on year to $2.1bn and net revenues dropped 4 per cent to $11.04bn in the three months to 31 December. For the full year, revenue decreased by 2 per cent to $46.9bn and operating income fell by 5 per cent to $10.2bn. In 2014 Coca-Cola says it plans to reinvest savings from global supply chain optimization and data and IT system standardization into global brand building initiatives, with an emphasis on increased media spending. It also plans to make improvements to the effectiveness of its marketing by ―transforming‖ its marketing and commercial model to make more consumer-facing investments, the company says. Muhtar Kent, Coca-Cola chairman and chief executive, says: ―We are committed to accelerating marketing investments in our brands, further advancing our innovation strategies and maximizing productivity and reinvestment for growth. All of us at the Coca-Cola Company remain resolute in our commitment to deliver results in line with our long-term growth model and 2020 Vision for sustainable value and success.‖ In Europe, Coca-Cola grew revenues by 11 per cent to $1.3bn in the quarter and by 4 per cent to $5.3bn for the full year. Profit declined 11 per cent in the quarter to $598bn and by 3 per cent to $5.3bn for the full year. Coca-Cola said it was impacted by ongoing macroeconomic uncertainty and weak consumer confidence over the past 12 months. The company did mark out a strong European performance from Innocent‘s branded smoothie and juices business, which it took a majority stake in last year. But while the division contributed ―significantly‖ to the group‘s European net revenues in both the quarter and the year, there was less of a marked impact on profit due to the higher costs involved in selling Innocent products and Coca-Cola‘s level of investment in the business as the company looks to accelerate its growth. Coke to use World Cup marketing to get consumers more active
  • 12. 12 The soft drinks giant kicked off its UK World Cup marketing activity this week with the third ―trophy tour‖, bringing the coveted Jules Rimet prize to the region alongside brand ambassador and in-form Liverpool FC striker Daniel Sturridge, who attended a press event yesterday (13 March). The trophy tour will last for 221 days and will visit every country that has ever won the World Cup, giving people a chance to have their photo taken with the prize. Coca-Cola will also distribute 1 million samples throughout the tour plus branded footballs to encourage people to play the sport. In 2012 Coca-Cola joined other major food and drinks brands such as Kellogg and DANONE in signing up to the UK Government‘s Public Health Responsibility Deal. By signing up, Coke committed to nine pledges to encourage people in the UK to live more healthy lifestyles including using its local marketing presence to encourage people to take part in more physical activity. Marketing involves getting the right product to the right place, at the right time, at the right price and with the most suitable promotional activity. Coca-Cola has always been able to create the most appropriate marketing mix. Since its beginnings, Coca-Cola has built its business using a universal strategy based on three timeless principles: acceptability - through effective marketing, ensuring Coca-Cola brands are an integral part of consumers‘ daily lives, making Coca-Cola the preferred beverage everywhere affordability - Coca-Cola guarantees it offers the best price in terms of value for money Availability - making sure that Coca-Cola brands are available anywhere people want refreshment, a pervasive penetration of the marketplace. Coca-Cola has created an extensive and well-organized global distribution network guaranteeing the ubiquity of its products. (Ubiquity is the ability to appear to be present everywhere at once.) Its approach is founded on the belief that Coca-Cola must try to quench the thirst of everyone in the world - all 5.6 billion of them! Porter's Five Forces Model of Coca Cola Bargaining Power of Suppliers Most of the ingredients needed for beverages and snacks are basic commodities such as potatoes, flavor, color, caffeine sugar, packaging etc. So the producers of these commodities have no bargaining power over the pricing for this reason; the suppliers in this industry are weak. Bargaining Power of Buyers Buyers in this industry have the bargaining power, because main source of the revenue and market share in beverage and food industry are fast food fountain, convenience stores food stores
  • 13. 13 vending etc. The profit margins in each of these segments noticeably demonstrate the buyer power and how special buyers pay diverse prices based on their power to bargain. Threat of New Entrant There are many factors that make it hard for new player to enter the beverage industry some of important factors are brand image and loyalty, advertising expense, bottling network, retail distribution fear of retaliation and global supply chain. Brand Image / Loyalty Pepsi and Coke continuously focusing on increasing their biggest beverage and food products, they has built some of the globe‘s strongest brands that are loved by consumers throughout the world. Innovative Marketing has leveraged their worldwide brand-building strength to attach with consumers in significant ways and impel the growth globally. These all campaign results in higher amount of loyal customers and strong brand equity throughout the world. In 2011, Coca- Cola was declared the world‘s most valuable brand according to Interbrand‘s best global brand. This makes it impossible for new entrance to enter the beverage industry easily. Advertising Spend Cock and Pepsi has very effective advertising campaign, their advertising also represent the cultures of different countries. They also sponsor different games and teams and also featured in countless television programs and films. The marketing and advertising expense was approximately $ 15 billion. This makes landscape very harder for new players to succeed. Bottling Network Pepsi and Coca cola have live and exclusive contracts with bottler‘s that have privileges in all over the world. These franchise agreements or contracts forbid bottler‘s from keeping competitor‘s brands. Coke has the world's largest beverage distribution network; consuming in more than 200 countries enjoys the Coke‘s beverages at an average of nearly 1.6 billion servings a day. Coca-Cola is sold in restaurants, vending machine and stores in more than 200 countries. PepsiCo has adopted the globe‘s most powerful ―go-to-market systems‖, serving more than 10 million outlets a week by operating greater than 100,000 different routes, and producing more than $300 million in retail sales per day. They have also purchased some of the bottlers, this makes difficult for new players to get bottler contracts or to build their bottling plants. Retail Distribution Coke and Pepsi offers 16 to 21 percent margins to retailers for the space they present. These margins are substantial for retailers and this makes it very hard for the new player to persuade retailer‘s to carry their products. Fear of Retaliation
  • 14. 14 It is very difficult for new player to enter in this industry because; they will be highly retaliating by local players in local markets and in global scenario they have to face the duopoly of Coke and Pepsi. This ultimately could result in price war which affects the new player. Global Supply Chain Cock Bill & Melinda Gates Foundation and nonprofit Techno Serve initiated a partnership to facilitate more than 50,000 small fruit farmers in Kenya Uganda to increase their productivity and double their incomes by 2014. Coke has significant opportunities within global supply chain to encourage and develop more sustainable practices to benefit consumers, customers and suppliers. While; it is still in the premature stages of exploring these opportunities and dedicated to the economic vitality and health of the farming communities our supply chain engages. Pepsi promotes and support sustainable agriculture not only because it makes good business sense, it purchase million tons of potatoes and fruits. Threat of Substitute Products Large numbers of substitutes are available in the market such as water, tea, juices coffee etc. But firms counter them with innovative marketing and massive advertising which build growth for their brands by highlighting their benefits. Players also differentiate themselves by well-known global trade marks, brand equity and availability of the products which most of the substitute products cannot contest. To protect themselves from competition players in soft drink industry offer Diversify products such as such as Pepsi offers soft drinks (Pepsi, Slice, Mountain Dew), beverages(Tropicana Juices, Dole Juices, Lipton tea, Aquafina bottled water, Sport drinks, Tropicana Juices), Snacks (Rold Gold pretzels and Frito-Lay). Coke also offers most diversified range of products such as Cola-Cola Cherry, Coca-Cola Vanilla, Diet Coke, Diet Coke Caffeine- Free, Caffeine-Free Coca-Cola and range of lime or coffee and lemon. Competitive Rivalry within an Industry Beverage industry competition can be classified as a Duopoly with Pepsi and Coca Cola. The market share of other competitors is too low to encourage any price wars. Cola-Cola gets competitive advantage through the well-known global trade marks by achieving the premium prices. It means Cola-Cola have something that their competitors do not have. While Pepsi has leveraged its worldwide brand-building strength to attach with consumers in significant ways and impel the growth globally
  • 15. 15 Nestle History Nestlé's origins date back to 1866, when two separate Swiss enterprises were founded that would later form the core of Nestlé. In the succeeding decades, the two competing enterprises aggressively expanded their businesses throughout Europe and the United States. In August 1867, Charles (US consul in Switzerland) and George Page, two brothers from Lee County, Illinois, USA, established the Anglo-Swiss Condensed Milk Company in Cham, Switzerland. Their first British operation was opened at Chippenham, Wiltshire, in 1873. A 1915 advertisement for "Nestles Food", an early infant formula. In September 1866, in Vevey, Henri Nestlé developed a milk-based baby food, and soon began marketing it. The following year saw Daniel Peter begin seven years of work perfecting his invention, the milk chocolate manufacturing process. Nestlé's was the crucial cooperation that Peter needed to solve the problem of removing all the water from the milk added to his chocolate and thus preventing the product from developing mildew. Henri Nestlé retired in 1875 but the company under new ownership retained his name as Société Farine Lactée Henri Nestlé. In 1877, Anglo-Swiss added milk-based baby foods to their products and in the following year the Nestlé Company added condensed so that the firms became direct and fierce rivals. In 1905, the companies merged to become the Nestlé and Anglo-Swiss Condensed Milk Company, retaining that name until 1947 when the name Nestlé Alimentana SA was taken as a result of the acquisition of Fabrique de Products Maggi SA (founded 1884) and its holding company Alimentana SA of Kempttal, Switzerland. Maggi was a major manufacturer of soup mixes and related foodstuffs. The company‘s current name was adopted in 1977. By the early 1900s, the company was operating factories in the United States, United Kingdom, Germany, and Spain. The First World War created demand for dairy products in the form of government contracts, and, by the end of the war, Nestlé's production had more than doubled. Introduction Nestlé S.A. (French pronunciation: [nɛ sle]; English /ˈnɛ sle/, /ˈnɛ sle/) is a Swiss multinational food and beverage company headquartered in Vevey, Switzerland. It is the largest food company in the world measured by revenues. Nestlé's products include baby food, bottled water, breakfast cereals, coffee, confectionery, dairy products, ice cream, pet foods, and snacks. 29 of Nestlé's brands have annual sales of over 1 billion Swiss francs (about $1.1 billion), including Espresso, Nescafé, Kit Kat, Smarties, Nesquik, Stouffer's, Vittel, and Maggi. Nestlé has around 450 factories, operates in 86 countries, and employs around 328,000 people. It is one of the main shareholders of L‘Oreal, the world's largest cosmetics company. Nestlé was formed in 1905 by the merger of the Anglo-Swiss Milk Company, established in 1866 by brothers George Page and Charles Page, and Farine Lactée Henri Nestlé, founded in
  • 16. 16 1866 by Henri Nestlé. The company grew significantly during the First World War and again following the Second World War, expanding its offerings beyond its early condensed milk and infant formula products. The company has made a number of corporate acquisitions, including Crosse & Blackwell in 1950, Findus in 1963, Libby's in 1971, Rowntree Mackintosh in 1988, and Gerber in 2007. Nestlé has a primary listing on the SIX Swiss Exchange and is a constituent of the Swiss Market Index. It has a secondary listing on Euronext. In 2011, Nestlé was listed No. 1 in the Fortune Global 500 as the world's most profitable corporation. With a market capitalization of $233 billion, Nestlé ranked No. 9 in the FT Global 500 2013. Cooperate Profile of Nestle Nestlé is the biggest food company in the world, with a market capitalization of roughly 191 billion Swiss francs, which is more than 200 billion U.S. dollars. Consolidated sales were CHF 107.6 billion and net profit was CHF 10.43 billion. Research and development investment was CHF 2.02 billion. Sales by activity breakdown 27% from drinks 26% from dairy and food products 18% from ready-prepared dishes and ready-cooked dishes 12% from chocolate 11% from pet products 6% from pharmaceutical products 2% from baby milks Sales by geographic area breakdown 32% from Europe 31% from Americas (26% from US) 16% from Asia 21% from rest of the world Nestlé employs approximately 253,000 people in some 511 factories worldwide. Nestlé is not only Switzerland's largest industrial company, but also the world's largest food company, considerably larger of than its nearest rivals Kraft Foods Inc. and Unilever plc. With products like Perrier and Nescafé, it is the market leader worldwide in coffee and mineral water, the largest manufacturer of pet food, and is fast increasing its share of the ice cream market. Nestlé acquired Ralston-Purina, a US pet food company, in 2001. Despite producing pet food through its subsidiary, Carnation, since 1985, this acquisition now sees it outstrip Mars as the
  • 17. 17 world's largest pet food manufacturer. Not to be outdone by Unilever's acquisition of Ben and Jerry's, Nestlé's merger with US food corporation Dreyer's to form the Dreyer's Grand Ice Cream Company in 2003 has given it the number one spot in the US ice-cream market, having already bagged the Häagen Dazs, Schöller and Mövenpick brands. Globally, Nestlé is now hot on the heels of Unilever as the number one ice cream seller, a position that it seeks in every market and category in which it operates around the world. Nestle Mission, Vision & Values Mission Nestléis... ...the world's leading nutrition, health and Wellness Company. Our mission of "Good Food, Good Life" is to provide consumers with the best tasting, most nutritious choices in a wide range of food and beverage categories and eating occasions, from morning to night. Vision & Values To be a leading, competitive, Nutrition, Health and Wellness Company delivering improved shareholder value by being a preferred corporate citizen, preferred employer, preferred supplier selling preferred products. SWOT (Strengths, Weakness, Opportunity& Threats) SWOT Analysis Strength 1. More than 140 years in the industry 2.World biggest brand, top brand in Fortune 500 list 3. Global reach with presence in over 86 countries 4. An employee strength of around 328,000 people worldwide 5. Wide product range including baby food, pet food, dairy products, confectioneries, pharmaceuticals, beverages, etc. 6. Popular brands owned like Maggi, Haagen-Dazs, Boost, Kit Kat, Nescafe, etc. 7.Largest R&D network facilitating continuous innovation 8.Strong supply chain network 9. C.S.R. activities for rural development, environment protection, water conservation,, etc. 10.Mergers and acquisitions and joint ventures to increase market share 11. Strong marketing and advertising power 12.Strong brand loyalty and brand recall
  • 18. 18 Weakness 1.Being a big global brand, Numerous controversies in different countries of operation can cause issues 2.Strong competition by other brands Opportunity 1.Introduce more health based food products to tap the health consciousness amongst consumers 2.Expand with focus on developing economies 3.Continue with acquisitions and joint ventures to increase its market share 4.Try to capture the rural markets Threats 1.Failure of the complex supply chain 2.Economic instability and inflation in most countries 3.EURO zone crisis, as most of its revenue comes from Europe 4.Increase in cost of raw materials 5.Stiff competition in all product segment PEST Analysis of Nestle (Political, Economic, Social & Technological) Political ―We have made significant change to improve our products‘ profile to complement the Government‘s efforts to create a healthier population.‖ Nestle is one of the big companies which is totally supporter of the Government‘s works to stimulate healthier diets and lifestyles to help problems related with obesity, diabetes, etc. Economical Billionaire brands enhance organic growth globally Nestle is one of the leading companies in fast moving consumption sector in the world economy. ―We are often the main local tax and job provider; we are often the primary economic outlet for local suppliers and service providers. This creates an obvious social and economic responsibility that goes far beyond our employees and their families, and relates to the overall well-being and prosperity of these communities.‖ ―If we are to maintain a strong and healthy future for our Nescafé and Espresso business lines, we need to ensure the supply of quality coffee now and in the future. We therefore work to ensure that our work with farmers: to help them for increasing yields utilizing the same amount
  • 19. 19 of land that is under coffee cultivation and to diversify their activities, giving them higher incomes and improving their living standards.‖ Nestle provides economy with a reliable supply of high-quality raw materials and they bring sustained growth for the local economy. They contribute to improvements in agricultural production, the social and economic status of farmers, rural communities and in production systems to make them more environmentally sustainable. Social Although Nestle is a global brand, Nescafe is locally produced to meet the taste options of local consumers. Nestle Company has begun to green wash itself, releasing reports regarding its decreased carbon emissions and water withdrawal over last decade. ―Our core aim is to enhance the quality of consumers‘ lives every day, everywhere by offering tastier and healthier food and beverage choices and encouraging a healthy lifestyle.‖ We believe we can make an important contribution to society, by going a step beyond corporate social responsibility to create value through our core business both for our shareholders and society. We prioritize the areas of nutrition, water and rural development to create shared value; this requires long term thinking― Peter Brabeck-Letmathe, Chairman, Nestlé ‖Creating Shared Value is built upon fundamental commitments to society, both to achieve the highest standards of compliance with laws, codes of conduct and our own Nestlé Corporate Business Principles as well as to protect the environment for future generations.― Paul Bulcke, CEO, Nestlé Nestle Company applies their strong values and principles everywhere they operate. Their overriding target is to ensure that their investments are beneficial, both for their shareholders and people in the countries where they do business. Technological All of Nestle products undergo as extensive R&D process and a strict quality standard before it is launched. Nestle benefits from world-class manufacturing facilities, best private R&D capability in food and nutrition, international quality and safety standards. Nestle company innovates & renovates nutritious and healthier products using R&D expertise. Nestle Marketing Strategy Our objective is to be the leader in Nutrition Health and Wellness, and the industry reference for financial performance, trusted by all stakeholders.
  • 20. 20 We believe that leadership is not just about size; it is also about behavior. Trust, too, is about behavior; and we recognize that trust is earned only over a long period of time by consistently delivering on our promises. These objectives and behaviors are encapsulated in the simple phrase, ―Good Food, Good Life‖, a phrase that sums up our corporate ambition. The Nestlé Roadmap is intended to create alignment for our people behind a cohesive set of strategic priorities that will accelerate the achievement of our objectives. These objectives demand from our people a blend of long-term inspiration needed to build for the future and short-term entrepreneurial actions, delivering the necessary level of performance. Competitive advantages Unmatched product and brand portfolio Unmatched R&D capability Unmatched geographic presence People, culture, values and attitude True competitive advantage comes from a combination of hard-to-copy advantages throughout the value chain, built up over decades. There are inherent links between great products and strong R&D, between the broadest geographic presence and an entrepreneurial spirit, between great people and strong values. Growth drivers Nutrition, Health and Wellness Emerging markets and Popularly Positioned Products Out-of-home Premiumisation These four areas provide particularly exciting prospects for growth. They are applicable across all our categories and around the world. Everything we do is driven by our Nutrition, Health and Wellness agenda, Good Food, Good Life, which seeks to offer consumers products with the best nutritional profile in their categories Operational pillars Nestlé must excel at each of these four inter-related core competences. They
  • 21. 21 Innovation & Renovation Wherever, whenever, however Consumer engagement Operational efficiency drive product development, renewal and quality, operational performance, interactive relationships with consumers and other stakeholders and differentiation from our competitors. If we excel in these areas we will be consumer-centric, we will accelerate our performance in all key areas and we will achieve excellence in execution. We are seeking to achieve leadership and earn that trust by satisfying the expectations of consumers, whose daily choices drive our performance, of shareholders, of the communities in which we operate and of society as a whole. We believe that it is only possible to create long- term sustainable value for our shareholders if our behavior, strategies and operations are also creating value for the communities where we operate, for our business partners and, of course, for our consumers. We call this ―Creating Shared Value‖. We are investing for the future to ensure the financial and environmental sustainability of our actions and operations: in capacity, in technologies, in capabilities, in people, in brands, in R&D. Our aim is to meet today‘s needs without compromising the ability of future generations to meet their needs, and to do so in a way which will ensure profitable growth year after year and a high level of returns for our shareholders and society at large over the long-term. Porter’s Five Forces Model of Nestle We can further analyze the industry by using Porter‘s five forces model. Porter‘s Five Forces Model was created to act as a framework for industry analysis and strategy development. This model consists of five different forces that impact competitive intensity which portrays an image of the overall attractiveness and profitability of an industry. To get a better understanding of Nestle status in the industry we can use the Five Forces Model. Threat of New Entrants The food processing industry is very large and competitive. As we see in the industry comparison, firms within the industry do quite well. As a result, many companies enter into the market every year in an attempt to gain a portion of the profitable market. Nestle has been around for over a century and has a long history of quality products and consumer satisfaction. This has allowed the company to obtain a large market share. New entrants into the industry must attempt to seize a portion of Nestlé‘s market share in order to stay in business. Essentially, Nestle is constantly a target, and so the threat of new entrants is moderate. Threat of Substitute Goods
  • 22. 22 Due to the nature of the industry, Nestlé‘s threat of substitute goods is high. From bottled water to lean pockets, there are arrays of similar products that compete directly with Nestle. It is important for Nestle to continuously find new ways to improve its products as the competition is so fierce. In recent years, Nestle has focused on the health and wellness aspects of its products to maintain its competitive edge in the market. Bargaining Power of Suppliers Nestle prides itself on creating and maintaining positive relationships with its suppliers all over the world. Due to the large purchasing power of Nestle and the fact that the suppliers of agricultural commodities offer a product that is far from unique, Nestle holds more bargaining power than its suppliers. Aside from this, Nestle does prefer to create and preserve long term relationships with its suppliers as this helps to ensure the quality of the raw materials being purchased. In addition, Nestle also offers useful advice to its suppliers on how to perform more efficiently to minimize unnecessary costs. Bargaining Power of Customers Customers have a very large amount of bargaining power regarding their consumption of Nestle products. As stated before, there are close substitutes for Nestle products which allows for the preferences of the customer to be very powerful. Nestle understands the power of the customer and has taken specific steps to meet the needs of its products consumers. For example, Nestle is incorporating health and wellness into the creation of its products as society has begun to grown more health conscious. Competitive Rivalry within the Industry Nestle is a powerhouse in the food processing industry but so are PepsiCo, General Mills, and Mondelez International. These, and other food processing companies, are in a constant battle to outperform one another. In advertising alone, these companies spend millions of dollars to appear more desirable than their competition. Rivalry in this industry is very high which benefits the consumers. As long as these companies continue to improve to obtain competitive advantage, consumers will continue to enjoy the improved products.
  • 23. 23 Honda History As a young man, Honda's founder, Soichiro Honda (Honda Sōichirō) (17 November 1906 – 5 August 1991) had an interest in automobiles. He worked as a mechanic at the Art Shokai garage, where he tuned cars and entered them in races. In 1937, with financing from his acquaintance Kato Shichirō, Honda founded Tōkai Seiki (Eastern Sea Precision Machine Company) to makepiston rings working out of the Art Shokai garage. After initial failures, Tōkai Seiki won a contract to supply piston rings to Toyota, but lost the contract due to the poor quality of their products. After attending engineering school without graduating, and visiting factories around Japan to better understand Toyota's quality control processes, by 1941 Honda was able to mass- produce piston rings acceptable to Toyota, using an automated process that could employ even unskilled wartime laborers. Introduction Honda Motor Co., Ltd. is a Japanese public multinational corporation primarily known as a manufacturer of automobiles and motorcycles. Honda has been the world's largest motorcycle manufacturer since 1959, as well as the world's largest manufacturer of internal combustion engines measured by volume, producing more than 14 million internal combustion engines each year. Honda became the second-largest Japanese automobile manufacturer in 2001. Honda was the eighth largest automobile manufacturer in the world behind General Motors, Volkswagen Group, Toyota, Hyundai Motor Group, Ford, Nissan, and PSA in 2011. Honda was the first Japanese automobile manufacturer to release a dedicated luxury brand, Acura, in 1986. Aside from their core automobile and motorcycle businesses, Honda also manufactures garden equipment, marine engines, personal watercraft and power generators, amongst others. Since 1986, Honda has been involved with artificial intelligence/robotics research and released their ASIMO robot in 2000. They have also ventured into aerospace with the establishment of GE Honda Aero Engines in 2004 and the Honda HA-420 HondaJet, which began production in 2012. Honda has three joint-ventures in China (Honda China, Dongfeng Honda, and Guangqi Honda). In 2013, Honda invests about 5.7% (US$ 6.8 billion) of its revenues in research and development. Also in 2013, Honda became the first Japanese automaker to be a net exporter from the United States, exporting 108,705 Honda and Acura models while importing only 88,357. Cooperate Profile of Honda Honda is headquartered in Minato, Tokyo, Japan. Their shares trade on the Tokyo Stock Exchange and the New York Stock Exchange, as well as exchanges in Osaka, Nagoya, Sapporo, Kyoto, Fukuoka, London, Paris and Switzerland.
  • 24. 24 The company has assembly plants around the globe. These plants are located in China, the United States, Pakistan, Canada, England, Japan, Belgium, Brazil, México, New Zealand, Malaysia, Indonesia, India, Thailand, Vietnam, Turkey, Taiwan, Peru and Argentina. As of July 2010, 89 percent of Honda and Acura vehicles sold in the United States were built in North American plants, up from 82.2 percent a year earlier. This shields profits from the yen's advance to a 15-year high against the dollar. Honda's Net Sales and Other Operating Revenue by Geographical Regions Geographic Region Total revenue (in millions of) Japan 1,681,190 North America 5,980,876 Europe 1,236,757 Asia 1,283,154 Others 905,163 American Honda Motor Company is based in Torrance, California. Honda Racing Corporation (HRC) is Honda's motorcycle racing division. Honda Canada Inc. is headquartered in Markham, Ontario, their manufacturing division, Honda of Canada Manufacturing, is based in Alliston, Ontario. Honda has also created joint ventures around the world, such as Honda Siel Cars and Hero Honda Motorcycles in India, Guangzhou Honda and Dong Feng Honda in China, Boon Siew Honda in Malaysia and Honda Atlas in Pakistan. Following the Japanese earthquake and tsunami in March 2011 Honda announced plans to halve production at its UK plants. The decision was made to put staff at the Swindon plant on a 2-day week until the end of May as the manufacturer struggled to source supplies from Japan. It's thought around 22,500 cars were produced during this period. Honda Mission, Vision & Values The Honda Company Mission Statement is officially referred to as the Company Principle, and it seemingly is no different that the mission of every company that manufactures and sells cars in the world. The Honda Company Mission Statement is... "Maintaining a global viewpoint, we are dedicated to supplying products of the highest quality, yet at a reasonable price for worldwide customer satisfaction." Larger than this company principle, Honda is guided by a foundational mission, which it refers to as its "Basic Principles" which are... "Respect for the individual. The Three Joys (buying, selling and creating)."
  • 25. 25 And to inspire its management team as they lead the Honda automobile company into the future, Honda has a clear set of Management Policies, which make its Basic Principles and Mission Statement a real part of its daily operations... " Proceed always with ambition and youthfulness. Respect sound theory, develop fresh ideas, and make the most effective use of time. Enjoy work and encourage open communication. Strive constantly for a harmonious flow of work. Be ever mindful of the value of research and endeavor." SWOT (Strengths, Weakness, Opportunities & Threats) While Honda has abundant backbone to their name, they as well ache from some above weaknesses. The primary weakness of Honda is oftentimes one of their above strengths as well. By afraid to their accouterments as the technology innovator aural their industry, Honda divests abundant of its assets in exploring new methods to enhance their products. However, they generally conduct analysis and accession in fields that accept no applied appliance until continued into the approaching (Corporate Info, npg). Strengths Exotic interior Unique aerodynamic shape Developed afterwards connected R&D with the latest technology Various models targeting assorted chump segments. Honda FCX is the aboriginal ammunition corpuscle car in the world Fuel efficient Revolutionary engine technology Comfortable Road grip Weaknesses Use of Cutting bend technology gives acceleration to problems Interior design Civic models could cause abashing for the customer
  • 26. 26 Opportunities There is an advance of absorption in environmentally affable vehicles, and Honda’s R&D focus agency that it is able-bodied assertive to capitalize on its ability in this industry. Honda Borough has assorted models that alter in discharge ratings, Honda borough GX NGV is termed as the Cleanest car on Earth as far as centralized agitation engines are concerned In addition, Honda is a above amateur in the arising markets like Pakistan. Car leasing in Pakistan is an befalling for Honda borough to become added widespread. Various borough models that ambition altered chump segments. Threats Rising oil and raw actual prices in the apple bazaar can advance to decreased appeal for automotive vehicles. In addition, added costs accept led to decreased customer spending and the aggressive animosity is actual top in this industry PEST Analysis of Honda (Political, Economic, Social & Technological) Political 1. Government proposal to limit number of cars being sold . This would affect the sales of Honda as they couldn't manufacture at the level they previously could have. 2. The Governments was keen to attract foreign firms to invest . Honda investing in England (Swindon as well as initial stake in rover) 3. Pressure to produce cars with cleaner emissions. This has meant Honda has had to invest heavily in R&D to produce cars with cleaner engines e.g. i-vtec Economical 1. Investing in Europe, Selling in Europe Manufacturing inside of Europe has meant that they wouldn't have had to add the cost of extra tariff to their cars. 2. Exchange rate - £ to Yen. The weakness of the yen makes Honda's cars expensive in the UK. 3. Income Rising incomes means that people have more to spend, Honda has kept up with this by introducing newer models, especially the new Honda Civic which is to go on sale this year. 4. Cost of Petrol Honda have had to accommodate for the market by introducing more economical cars such as the 1.4 Honda Jazz. Social 1. Language Barriers Honda decided to set-up in Swindon because they preferred to deal in the English Language. 2. Increased desirability of Personalized Cars. Honda is a leading manufacturer of cars which can
  • 27. 27 be easily modified, stylistically and performance wise. This is perhaps their USP. 3. Desire for City cars. This has meant Honda has had to create smaller and economic cars such as the Honda Jazz & Honda Beat. 4. Formula1 - Speed! This is an aspect of Honda which is mainly concerned with show-boating rather than profit. Honda is one of the leading motorbike manufacturers and has a huge R&D budget devoted to that cause. Technological 1. Specialization through machinery Machines that specialize at one task ensures that theproduct is made much quicker and of a higher quality. 2. Safety Requirements Because of Legal & Consumer pressure, car manufacturers have had to develop cars with significant safety features which Honda would have had to research and test. This would be at the expense of their R&D Department. This is significantly different from a decade ago when crash-testing dummies were used. 3. Clever cars have had to include Satellite Navigation systems etc. as standard, Honda has had to catch this up in their newer models. 4. Environmentally friendly cars Honda developed i-vtec, which is a follow on from their infamous vtec engines. The vi-Tec engine provides fuel economy, ample torque and clean emissions. Honda Marketing Strategy On some levels Honda takes a slightly different approach to marketing compared to their competitors. They have a more ‗sit back and let the product speak for itself‘ approach. This is not to say that they are not aggressive marketers but it means they want to give off a certain persona. Think about it in terms of a boy chasing a girl. The boy goes through great lengths to be attractive to girls, but what persona does he show the public. The boy wants to seem calm, collected and smooth. He seems to be indifferent if the girl notices him or not. Inside it is all a ploy to actually get attention. The opposite would be if the boy were actively seeking the girl, constantly calling, approaching and courting the girl. This comes off as desperate and actually produces unwanted results. The same thing happens in the car market. One of the most important buying factors is status and prestige, so why would someone want to buy from a desperate car manufacturer? Knowing Your Demographic and Creating Status One of the most obvious pieces of evidence that this is at work is the price of Honda‘s cars. Honda vehicles are actually one of the most expensive in their market, but yet they are among the top sellers. Toyota would be there biggest competitors and they seem to take the other road. Toyota has a cheap, reliable and affordable to own persona. This would suggest they want to market to the masses. Honda on the other hand tries to show a more prestigious persona. While they still have reliability and fuel economy they also have a touch of luxury and powerful engines. Put a larger price tag on this package and all of a sudden the guy who bought the Honda Accord is snubbing his nose at the guy driving a Toyota Camry.
  • 28. 28 This marketing technique is used in every market, you must decide what road to take and stick with it. Another huge example of this is the fact that no Honda vehicles are used as Public Utility Vehicles (PUV‘s). This is another factor in establishing status. Some people do not want to drive the same car that all the city cabs are made out of. Toyota chooses to not take this road in exchange of more overall sales. It is all about what you want your brand to be. Maslow’s Pyramid of Human Needs Honda also uses Maslow‘s theory to build the perfect product. Maslow‘s theory suggests we all need to cover basic needs before we can acquire luxury. So we first need food, shelter and water, next is safety and security, then we need social acceptance and love, then self-actualization and spiritual needs etc. Honda uses this theory in their vehicles. They start with safety and make owners feel safe while driving. Then they move on to social status and hope to instill a feeling of high class in Honda owners. Next they address self-esteem needs by using their marketing strategy to make Honda owners feel confident because they own a Honda. Next they use their vehicles to create a sense of success in Honda owners. They want Honda owners to say ‗I am successful in my own right‘. ‗My own right‘ is the key here, if you feel that you own what you deserve, you will be satisfied. Maslow‘s theory is very powerful and if you look closely at Hondas products and advertising it is clear to see that they have used Maslow‘s pyramid for a long time. Honda is not the only car company that does this, but Honda perfects this strategy for the middle to upper-middle class. BMW might do it for the lower-upper class but Honda has its demographic on lock.
  • 29. 29 Porter’s Five Forces Model of Honda This framework is used to identify whether a product, service, business will be profitable, and also know the suppliers; power of buyers, substitutes, new entrants and competitors that will face the firm in order to stay attractive. Now we will see each force in more detail: Rivalry This force shows the competition between existing firms that offer the same product or service, and even have the same strategy. If there is many competitors, then you should have a little power over them by adopting a strategy that may be based on price, quality, innovation, advertisement, like differentiation, cost leadership, or the focus on a narrow segment. Threat of New Entrant New firms entering the industry will bring new competition, in order to gain the market, and decrease profitability for existing firms, above all those firms who have little protection and barriers to entry, then expecting some firms to exit the market. Threat of Substitute The ability of customers to find other alternative ways and products with lower prices and better quality that must satisfy the same needs. There is a product for product substitute, substitute needs and also generic substitute that relates to something that people can do without. Buyers Bargaining Power Determines the ability of buyers to impose pressure on the firm either by switching to another company or having other substitutes, or cutting down prices. They can also affect the conditions under which all the firms operate. Suppliers Bargaining Power Determines the ability of suppliers to drive up prices which put pressure on firms if there is a few number of suppliers, or by the uniqueness of their products and the control they have over firms.
  • 30. 30
  • 31. 31 Disney History Walter Elias "Walt" Disney (December 5, 1901 – December 15, 1966) was an American business magnate, animator, cartoonist, producer, director, screenwriter, philanthropist and voice actor. A major figure within the American animation industry and throughout the world, he is regarded as an international icon,well known for his influence and contributions to the field of entertainment during the 20th century. As a Hollywood business mogul, he, along with his brother Roy O. Disney, co-founded Walt Disney Productions, which later became one of the best-known motion picture production companies in the world. The corporation is now known as The Walt Disney Company. As an animator and entrepreneur, Disney was particularly noted as a film producer and a popular showman, as well as an innovator in animation and theme park design. He and his staff created some of the world's most well-known fictional characters including Mickey Mouse, for whom Disney himself provided the original voice. During his lifetime he received four honorary Academy Awards and won 22 Academy Awards from a total of 59 nominations, including a record four in one year, giving him more than any other individual in history. Disney also won seven Emmy Awards and gave his name to the Disneyland and Walt Disney World Resort theme parks in the U.S., as well as the international resorts like Tokyo Disney Resort, Disneyland Paris, and Hong Kong Disneyland. He died on December 15, 1966, from lung cancer in Burbank, California. A year later, construction of the Walt Disney World Resort began in Florida. His brother, Roy Disney, inaugurated the Magic Kingdom on October 1, 1971. Introduction The Walt Disney Company, commonly known as Disney, is an American diversified multinational mass media corporation headquartered in Walt, Burbank, California. It is the largest media conglomerate in the world in terms of revenue. Disney was founded on October 16, 1923, by Walt Disney and Roy O. Disney as the Disney Brothers Cartoon Studio, and established itself as a leader in the American animation industry before diversifying into live-action film production, television, and theme parks. The company also operated under the names: Walt Disney Studio and Walt Disney Productions. Taking on its current name in 1986, it expanded its existing operations and also started divisions focused upon theater, radio, music, publishing, and online media. In addition, Disney has created new divisions of the company in order to market more mature content than it typically associates with its flagship family-oriented brands. The company is best known for the products of its film studio, the Walt Disney Studios, and today one of the largest and best-known studios in Hollywood. Disney also owns and operates the ABC broadcast television network; cable television networks such as Disney Channel, ESPN,A+E Networks, and ABC Family; publishing, merchandising, and theatre divisions; and owns and licenses 14 theme parks around the world. It also has a successful music
  • 32. 32 division. The company has been a component of the Dow Jones Industrial Average since May 6, 1991. An early and well-known cartoon creation of the company, Mickey Mouse, is a primary symbol of The Walt Disney Company. Cooperate Profile of Disney The Walt Disney Company operates as five primary units and segments: The Walt Disney Studios, which includes the company's film, recording label, and theatrical divisions; Parks and Resorts, featuring the company's theme parks, cruise line, and other travel-related assets; Disney Consumer Products, which produces toys, clothing, and other merchandising based upon Disney-owned properties; Media Networks, which includes the company's television properties; and Disney Interactive, which includes Disney's Internet, mobile, social media, virtual worlds, and computer games operations. Its main entertainment features and holdings include Walt Disney Studios, Disney Music Group, Disney Theatrical Group, Disney-ABC Television Group, Radio Disney, ESPN Inc., Disney Interactive Media Group, Disney Consumer Products, Disney India Ltd., The Muppets Studio, Pixar Animation Studios, Marvel Entertainment, UTV Software Communications, and Lucas film. Its resorts and diversified holdings include Walt Disney Parks and Resorts, Disneyland Resort, Walt Disney World Resort, Tokyo Disney Resort, Disneyland Paris, Euro Disney S.C.A., Hong Kong Disneyland Resort, Disney Vacation Club and Disney Cruise Line. Disney Mission, Vision & Values Walt Disney Company Mission Statement The Walt Disney Company‘s Mission Statement is one likely reason for the company‘s success. An effective mission statement defines a company‘s current business plan, and the Disney Company‘s Mission Statement accomplishes that purpose: The Mission of the Walt Disney Company is to be one of the world‘s leading producers and providers of entertainment and information. Using our portfolio of brands to differentiate our content, services and consumer products, we seek to develop the most creative, innovative and profitable entertainment experiences and related products in the world. The Walt Disney Vision A company‘s Vision Statement defines an organization‘s future goals. Thompson, et al. emphasizes the importance of a company‘s having a ―well-conceived, forcefully communicated strategic vision,‖ and the Walt Disney Company‘s vision fulfills that role The Walt Disney Company Vision Statement meets the criteria of an effective vision statement: ―To make people happy‖ (Walt Disney Archives, 2012). This statement is broad, but not too broad, and represents the overall goal and global direction of the business.
  • 33. 33 Values and Ethics The values and ethics of the Walt Disney Company are an essential element of the company‘s culture. Five essential components of the Disney culture are included here. First is innovation. The company is committed to continued innovation and technology, just as it was when Disney‘s Mickey Mouse was one of the first cartoon presentations to have sound. Next, the Disney Company strives toward setting a high standard of excellence and maintaining that high standard. Third, the Disney Company is committed to positive, inclusive ideas about family, which provide enjoyment for all ages. Fourth, the Disney Company continues a tradition of timeless storytelling that delights and inspires, and finally, the company is dedicated to honor and respect decency in order to inspire trust in the company. SWOT (Strengths, Weakness, Opportunity & Threats) PEST Analysis of Disney (Political, Economic, Social & Technological) Political • Government stability. • Freedom of speech, corruption, party in control
  • 34. 34 • Regulation trends. • Tax policy, and trade controls. • War • Government policy • Elections • Terrorism • Likely changes to the political environment. Economic • Stage of business cycle. • Current and projected economic growth • International trends • Job growth • Inflation and interest rates. • Unemployment and labor supply. • Levels of disposable income across economy and income distribution. • Globalization. • Likely changes to the economic environment. Social • Population growth and demographics. • Health, education and social mobility of the population • Consumer attitudes • Advertising and media • National and regional culture • Lifestyle choices and attitudes to these. • Levels of health and education • Major events • Socio-cultural changes.
  • 35. 35 Technological • Impact of new technologies. • Inventions and innovations • The internet and how it affects working and business • Licensing and patents • Research funding and Development. Disney marketing Strategy Four Strategies Disney Uses to Create Freakishly Loyal Customers You probably think of Disneyland as a tourist trap. Which it is. But unless you‘re part of a rather…unique…subset of humanity, you likely have no idea that Disneyland‘s main customer base is actually local — SoCal residents who hold Annual Passes and come several times a year. What‘s more, although this sounds insane, there are forums full of hardcore Disneyphiles who visit the park several times a week — sometimes popping in just to sit on a bench in Main Street and watch people go by. That‘s loyalty so impressive it may actually deserve another name altogether…especially since there are plenty of other things to do in California. Here are four major strategies worth thinking about: 1. All theming, all the time If you take away the theming, there‘s nothing particularly special about Disneyland‘s rides. Tame roller coasters, generic log flumes, perfectly ordinary carousels—off-the-shelf mid-range rides you could go on at any theme park. In fact, several nearby parks have far more extreme and exciting rides. The thing is, Disney‘s theming isn‘t just slapping a few cartoon animals on the sides of rides. It‘s immersive, complete and, in its own cheesier-than-France way, kind of classy. It makes sure its Fantasyland cast members don‘t wander through Frontier land dressed in costumes with the wrong theming. It pumps out scents for each ride—brine for Pirates of the Caribbean, honey for Winnie-the-Pooh, and a cold, musty smell for the Haunted Mansion. The car parks aren‘t called A, B and C—instead there‘s Pumba Parking, the Mickey and Friends Parking Structure, and Toy Story Parking. 2. Immersion In a similar vein, a lot of Disney‘s most loyal customers don‘t show up for the rides themselves. Not for the mechanics, anyway. Increased G-forces and mild nausea don‘t inspire that kind of fanaticism—and as I‘ve said, there are more extreme places just around the corner anyway.
  • 36. 36 Rather, fans keep coming back because there‘s always more to see. Disney‘s motto isn‘t ―Lots of Rides‖—it‘s ―The Happiest Place on Earth‖. And Disney maintains constant interest by making sure there‘s always something else to notice. Interesting, interactive queuing areas for the rides. Sporadic ―spontaneous‖ performances by Mary Poppins or Alice and the Mad Hatter at various times of day. Rides like the Jungle Cruise that are strikingly different at night. Holiday theming. Different fireworks displays. ―Limited-time only‖ eatables. 3.Everyone’s a princess A number of Disney films are about being a special and unique snowflake. And astonishingly, despite the positively enormous numbers of people churning through the gates each day, Disney staff actually do treat their guests like snowflakes. Cast members give children badges and balloons at random; princesses stop to greet little girls dressed in princess gear; guests are allowed to ―captain‖ the Jungle Cruise or Mark Twain Riverboat. 4. Mining the mythos In general, Disneyland hides its ―seams‖. Trees that need cutting down are switched during the night with fully-grown replacements from Disney‘s nursery. Cleaners are inconspicuous. Staff areas are hidden underground or painted ―no-see-um‖ green and shrouded in foliage. But Disneyland is also very blatant about acknowledging itself and its creator—in a sense, Disneyland‘s greatest product is its own mythology. The running of the park may be too vulgar for the public eye, but the story of the park is trumpeted everywhere. Of course, all Disney parks draw on the enormous popularity of the movies and music. But Disneyland has more than that. It‘s the original, the ―historical‖ Disney—the only park planned and lived in by Walt himself. And it blatantly rides on that. Hordes of guests are guided through Walt Disney‘s hidden Main Street apartment (in which a light is always kept symbolically burning). The names of the Imaginers are featured on the shop windows of Main Street. The Lily Belle, a train-car designed for Walt‘s wife, is a major photo- op attraction; as is the sentimental ―Partners‖ statue of Walt and Mickey. And Disney never lets anyone forget its past successes. Its parades are a constant triumph of its classics—in fact, it has reached the point where it can simply manufacture classics, labeling them as such before they‘ve even come out on DVD. When Tiana and Rapunzel were inaugurated into Disney‘s official princess lineup, the marketing made it a quasi-historical occasion—and thousands upon thousands of loyal customers showed up.
  • 37. 37 It works so well that a few years back people were shelling out $150 to have their names immortalized on a brick paver laid in the ―Walk of Magical Memories‖ between Disneyland and DCA. Porter’s Five Forces Model of Disney Degree of Rivalry - Direct competition between Pixar / DreamWorks - Theme parks etc - Brand must always make animation – foundations - Disneyland/world unique - Most famous animation brand - Exit barriers, cant leave a market without affecting other products Supplier Power - Due to high prices charged on merchandise by Disney, suppliers up prices - Lots of different revenue streams, high cost to switching suppliers - High amount of merchandising - Supplies to parks, TV, merchandise, shows etc. Threat of Substitutes - Buyer has low differentiation between companies - Buyers switching to DreamWorks - Low threat from other film companies – always a market for animation - TV Channels Threat of new entrants - 2 Huge superpowers in the market in Pixar and DreamWorks - Costs a lot of money to create - Disney Dominates the Market - Disney TV Buyer Power - Hugely established brand - Lots of wings of the company, involved in lots of markets - Lots of revenue - Household Name - Lots of Controversy
  • 38. 38 References: http://en.wikipedia.org/wiki/Honda http://disney.wikia.com/wiki/The_Disney_Wiki http://en.wikipedia.org/wiki/The_Walt_Disney_Company http://en.wikipedia.org/wiki/List_of_Walt_Disney_Pictures_films http://www.marketingweek.co.uk/brands/honda/ http://www.slideshare.net/luisangelo77/10-step-marketing-plan-honda https://faculty.fuqua.duke.edu/~charlesw/s591/Bocconi- Duke/Papers/new_C12/perspectivesonstrategy.pdf http://www.ukessays.com/essays/commerce/porters-five-forces-effecting-honda-motors- commerce-essay.php http://uk.reuters.com/article/2014/03/16/uk-honda-motor-technology- idUKBREA2F00Z20140316 http://www.honda.com/ http://www.nestle.pk/ http://en.wikipedia.org/wiki/Nestl%C3%A9 http://www.nestle.com/ http://www.slideshare.net/sitirizkymardhani/nestles-case-study-19377877 http://en.wikipedia.org/wiki/Coca-Cola http://us.coca-cola.com/home/ http://www.hindustantimes.com/business-news/coca-cola-to-double-sales-force-in-india- to-14-000-over-5-years/article1-1195289.aspx http://www.forbes.com/sites/greatspeculations/2014/03/12/coca-cola-in-brazil-global- events-and-energy-drinks-could-drive-growth-part-1/