Coca Cola Executive Summary
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Coca Cola Executive Summary

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This is an External Analysis from my Management Analysis and Consult 492 class on The Coca Cola Company.

This is an External Analysis from my Management Analysis and Consult 492 class on The Coca Cola Company.

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Coca Cola Executive Summary Presentation Transcript

  • 1. By: Team Awesome-Michelle-Astha-Lauren-John
  • 2.  New products produced almost daily Factors influencing consumer consumption:  Weather  Consumer taste  Demographics  Lifestyles Coca-Cola is the worlds largest manufacture, distributor and marketer of non-alcoholic beverages  Carry over 3500 different products
  • 3.  Coca Cola markets more than 3500 nonalcoholic beverage brands worldwide:  Sparkling and still beverages  Waters  Juices and juice drinks  Read-to-drink teas and coffees  Energy and sport drinks  Beverage Concentrates  Bases  Syrups  Fountain syrups Coke for the last 5 years (from February 2007 to February 2012) has held a 45.84% of the nonalcoholic beverage market size. Full list of beverages:  http://www.thecoca- colacompany.com/brands/brandlist.html
  • 4.  Coke’s rivals on a national scale:  Degree of product  Pepsi Co differentiation:  Nestle  Low prices  Dr. Pepper Snapple  Product Innovation  Groupe Danone  Brand and trademark  Kraft Foods Inc development and Learning and Experience protection Curve:  In 2011 the distribution  Introduction to new of white Christmas coke packaging to promote cans resulted  Sales promotion in angry tweets from programs caring consumers getting confused with the Diet  Advertising Coke cans.  Increased efficiency  In 1985 unsuccessfully tried to change the in production original formula. techniques  New vending and dispensing equipment
  • 5. Other firms offering substitute products: • Pepsi Co– Pepsi, Mountain Dew, Sierra •Hansen Natural- Sky Blue • Dr. Pepper Snapple- 9 different flavors •Red Bull- Red bull and sugar free RB • Cott Corp- Vess and Stars and Strips •Big Red- Big Red Soda • National Beverage- RipIt, Ritz, & Crystal •Rockstars- Energy drinks Bay Rivalry among competing sellers: Suppliers: Buyers:• NutraSweet (2011 Revenue) Company and Ajinomoto Co., • Eurasia & Inc.- Aspartame Africa 7%• Nutrinova • Europe 12.9% Nutrition Specialties & • Latin America Food Ingredients 12.5% GmbH- Acesulfame • North America Potassium New Entrants: 53%• Tate and Lyle- • Pacific 14.6% Sucralose • NourishCo Beverages Ltd
  • 6.  Pepsi promotes healthy beverages brands such as Gatorade, Tropicana and Tata Water Plus  How do they do this?  Pepsi is promoting a new beverage called “Tata Water Plus” which is now available in India, one of Pepsi’s top 5 targeted markets. Dr. Pepper is marketing a new product targeted for men, the Dr. Pepper Ten  How do they do this:  Fashion the packaging in grey gunmetal and silver bullets.  Marketing the new product by creating a Dr. Pepper Ten Facebook page also designed only for men. Nestlé is expanding their beverage market by including teas, lemonades and juices  How do they do this:  Acquiring the Sweet Leaf Tea Company, including its brands (Sweet Leaf and Tradewinds)
  • 7.  Influences of  Influences of Buyers Suppliers  Buyer Independence  Switching Cost  Buyer size  Importance of  Price Sensitivity quality/cost  Product Dispensability  Supplier Size  Backwards integration  Player independence  Undifferentiated  Player dispensability product  Oligopoly threat  Tendency to switch  No substitute inputs  Oligopoly threat  Differentiated input  Low-cost switching  Forward integration  Financial muscle
  • 8.  Weak to Normal likelihood of New Entrants  Needs of new entrants  Unique Production Method or nutritional benefits  Fairly LARGE amount of capital  Find new niche -- market research Tata Global Beverages and PepsiCo have joint venture under NourishCo Beverages selling a new nutrient beverage in India as of February 9th 2012 called Tata Water Plus.  Referring to NourishCo’s “Nutrient Water,” TGB’s Vice Chairman R. K. Krishna Kumar stated on February 9th sales may rise 7% to 8% ending March 2012 creating a 3.5% increase from the year before; however, due to the joint venture, the company will not see real impact until 2014.
  • 9.  A 5 year competition pressure graph between Coke (blue), Pepsi (green), and Dr. Pepper (orange) compared with the Dow (red). Our company Coca Cola is leading the Economic Dow
  • 10.  Overall average strength of competitive forces in the US, China and Europe – NEED TO CHANGE ONCE DONE  Suppliers = Moderate  Buyers= Weak to Moderate  Substitute products= Moderate  Potential new entrants = Weak to Moderate  Rivalry= Moderate Collective Strength  By looking at the 5 Forces Model, our company is moderately sensitive to their suppliers, buyers, substitute products, rivalry with the other companies and potential new entrants.  Coke’s competitive environment is neither ideal nor unattractive because  rivalry is vigorous  entry barriers are low but entry is likely  competition from competitors is on average moderate from our sample  the suppliers and customers have considerable bargaining power  Good substitutes do exist
  • 11.  Product and Technology Innovation  PlantBottle – 100% plant based materials  Freestyle drink dispensers were introduced to the market in 2010.  New calorie-burning tea introduced in 2006  Productivity and Reinvestment Program  Cutting cost and investing in brand redevelopment and offset of increasing cost of commodities  Globalization of Industry  The change in the price of money from other countries converting to the US dollar  Coke tries to globalize its products into China, Asia and beyond; however, global differences affect countries’ acceptance to Coke products such as China and Iran  Societal Values  Promoting a healthier environment with the new PlantBottle that will allow Coke to quit using materials made from fossil fuels and non-renewable resources.  Improving water efficiency and reducing carbon emissions from its operations through its partnership with the World Wildlife Fund will reduce emissions by 27.4% in 2015 These driving forces originate from the outer ring of the macro environment model
  • 12.  Soft Drinks in China  Groupe Danone at…………………………20.3%  Tingyi Holding Corp at………………….15.5%  Coca-Cola Company at………………….10.7%  Others at……………………………………….53.6% Soft Drinks in Europe  Coca Cola at………………………………….16.5%  PepsiCo, Inc at…………………………….….6.6%  Nestle S.A. at……………………………….…6.2%  Others at……………………………………….70.8% Soft Drinks in USA  Coca Cola at………………………………...27.7%  PepsiCo, Inc at……………………………..24.4%  Nestle S.A. at………………………………...8.4%  Others at……………………………………….39.4%
  • 13.  Pepsi Co  By joining forces with Tata Global Beverages to produce a nutritious drink for their buyers, NourishCO will observe their revenues over the next few years to see if joining forces was a financially smart and competitive move in the market Dr. Pepper Snapple  Slimming Down Project  Last month Dr. Pepper started testing 5 of their other products to follow Dr. Pepper Ten in hopes of continuing promising sales
  • 14.  Powerful Brands  Taste test example Worldwide network of bottlers and distributors of Company products Sophisticated Marketing capabilities  Except in Cuba, Sudan, Iran, Burma and North Korea Talented group of dedicated employees  Money is not the key to success; people are a company’s assets to achieve success
  • 15.  The soft drink industry has a large growth potential as the market moves towards healthier new beverages. PepsiCo and Nestlé are constantly keeping Coke on its toes to stay ahead of the game Coke recognizes the potential risks and vulnerabilities that could hurt their business (ex: obesity, changes in laws and regulations, and unfavorable economic and political circumstances in the international markets)
  • 16. We believe that The Coca-ColaCompany is moderately sensitiveto the market. Based on thecompetitive analysis of marketpositions, the Five Forces Modeland the NYSE anything is possiblebut since TCCC is a largeestablished and vastly locatedaround the world, it would bepretty hard to knock down thisbully without a strategic plan.