Coca-Cola Case Study Presentation
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Coca-Cola Case Study Presentation

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This is a case study in my senior seminar class at Hood College. It is on Coca-Cola in China and discussed their success story/market entry strategies.

This is a case study in my senior seminar class at Hood College. It is on Coca-Cola in China and discussed their success story/market entry strategies.

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Coca-Cola Case Study Presentation Coca-Cola Case Study Presentation Presentation Transcript

  • By: Holly Green, Ashley Parker and Sasiya Supprakit
  • History of Coca-Cola
  • History of Coca-Cola Coca-Cola distributed over 5 billion bottles of Coca-Cola to American troops
  • Case Introduction
    • “ Putting cold bottles on shelves is the best marketing we can do, we don’t have to ask ourselves if our product will sell, only, how do we get it to the consumer?”
  • Case Introduction
    • Entered China in 1920
    • Exited China in 1948
    • Re-Entered 1979 with the
    • “ Open Door Policy”
  • Case preview
    • Re-Enter or Not
    • that is the question?
    • PESTELI Analysis
    • Five-Forces Model
    External Environmental Analysis
    • 1. Political
      • Communist government forbade FDI
      • Bottling plants were nationalized
      • 1978, “Open Door” policy
    • 2. Economic
      • China is a large market for long-term investment
      • Coca-Cola agreed to build bottling plants and be taken over by the government
    PESTELI Analysis
    • 3. Sociocultural
      • Localization
      • Language barriers and cultural differences
      • Red-canned Dragon for the Chinese New Year
    • 4.Technological
      • Importing supplies and built bottling plants
    PESTELI Analysis
  • PESTELI Analysis
    • 5. Environmental
      • Bottling plants created pollution to the environment
    • 6. Legal
      • Correlated with political system
      • Restricted policies on foreign companies
    • 7. International
      • Aggressive in expanding globally
      • Plants in Japan, India, Thailand, etc.
  • Five-Forces Model
    • 1. Power of Buyers
      • Chinese consumers prefer non-carbonated beverages
      • Strong power of buyers
    • 2. Power of Suppliers
      • Attempted to get local suppliers
      • Trained Chong Fu Industrial Group
    • 3. Rivalry
      • Few rivals due to the restricted policies
  • Five-Forces Model
    • 4. Threats of New Entrants
      • High legal requirements for new entrants
      • Takes time to build connection with the government
    • 5. Substitutes
      • No substitute in the Chinese market during that time
    • 6. Complementary
      • Music, art, sports are together with Coca-Cola
      • Sponsored first Asian Cup and FIFA
  • Internal Environmental Analysis
    • Internal Factors
    • VRINE Analysis
    • Michael Porter’s VCA
  • Internal Environmental Factors
    • Exclusive Contracts
    • Financial Resources
    • Market Share
    • Brand Awareness
    • Operational Efficiency
    • Access to resources
    • Position on the experience curve
  • VRINE Analysis
    • Is it valuable?
      • Allows for product differentiation
    • Is it rare?
      • Resources are not accessible to competitors
    • Is it inimitable?
      • Is not easily copied or replicated
    • Is it non-substitutable?
      • Equivalent resources are not readily available to competitors
    • Is it exploitable?
      • Aids in creating a competitive advantage
  • Value Chain Analysis
    • Primary Key Activities
      • Research & Development
        • Alternative non-carbonated beverages
      • Production/Operations/Manufacturing
        • High technology process
      • Marketing & Sales
        • Advertised before introducing products
      • Post-Sales & Service
        • Created relationships with the people
  • Value Chain Analysis
    • Secondary Key Activities
      • Management Infrastructure
        • High quality management
      • Human Resource Management
        • Best suppliers
      • Information Technology and Information Systems
        • Utilized technology in bottling plants
      • Materials Management
        • Inbound logistics, purchasing function, and outbound logistics in sync
  • Strategies
    • Corporate Strategy
      • Localization
    • Business Strategy
      • High effectiveness and competitive position
    • Functional Strategy
      • New brand to support product development
  • Strengths
    • Equity and recognition-logo is recognized worldwide
    • Image-dragon advertisements
    • Product Diversification-soft drinks, non carbonated drinks, water, juices, and sport drinks
    • Not only sold in grocery stores, but food retailers-increase market equity
  • Weaknesses
    • Credit rating
    • Customer concentration-weak in China
      • potential customers are located in the West where Coca-Cola has yet to reach because of the failing infrastructure of rural China
  • Opportunities
    • Expanding the non-carbonated and bottled water industries-gain larger profits
    • Importance of health
    • Finding a way to expanding westward
  • Threats
    • Commodity price growth-prices are increasing, Coca-Cola is not a necessity
    • Image perception- not always positive
    • Domestic issue for local businesses-worry the Chinese government
    • Chinese government- unstable environment
      • threat that they will change their mind about foreign companies and remove Coca-Cola from their country
  • Problems and Issues
    • Chinese Government
    • Culture
    • Suppliers
    • Infrastructure
  • Problem Identification
    • Chinese Government
      • Closed borders in 1948
        • Remained closed until 1978
      • Many rules and regulations
    • Culture
      • Chinese preferred non-carbonated beverages
      • Language
        • Needed to keep identity
          • Coca Cola cannot be translated
  • Problem Identification
    • Suppliers
      • Did not meet company standards
    • Infrastructure
      • Difficult to distribute outside major cities
      • Especially in the west
  • Discussion of Solutions
    • Chinese Government
      • Follow the rules
        • Waited until the borders reopened
        • Did everything the government asked
    • Culture
      • Created “Tian Yu Di”
        • Fruit juices, ready-to-drink teas
      • Settled on K’o K’ou K’o Le^
        • “ to permit the mouth to be able to rejoice”
  • Discussion of Solutions
    • Suppliers
      • Gave technical training to local companies
    • Infrastructure
      • Created new distribution system specially for China
  • What would we have done differently?
    • Coca-Cola only had two choices
      • Wait until government reopened borders
      • Not re-enter China at all
    • Made the right decision
      • In 2008, China had 2 nd highest unit case volume for the past five years (19%)
  • Learning Insights
    • Specializing Marketing
  • Moral
    • Patience
      • Cooperate with the Chinese Government
      • Waiting to Re-opening
      • Dealing with poor info structure from developing country
  • Update
    • Main sponsor
    • 2008 Olympics
    • Moved into
    • Western China
    • More than 30% of Coca-Cola’s sales
    • are in China
  • Update
    • 27% of Coca-Cola workforce and bottling investments are in the Pacific.
    • simple vs. complex industry
  • Update
    • More 30% Coca-Cola’s sales in China
    • 2006 2008