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Coca Cola Company Strategic Management Project ( A Comprehensive Analysis on Strategic Management )

In this report we will discuss about Phase– Introduction, Introduction of a Company, Brief History, International / National Introduction, Vision, Mission, Core Values, Goals, Nature of Business, Type of Ownership, Identify Key Players and Roles, Organizational Hierarchy, Location(s) of Facility, Number of Technical Employees, Products / Services (single product), Phase– EXTERNAL ANALYSIS, Natural Environment:, Natural Resource Coca Cola need, Present and Future needs of Natural Resources, International Arrangement of Water, Issues they face during arranging and managing, Task Environment: Porter’sForces Model, When (situation), Why (objective / reasons), How (process), who (participants), Issues faced, In what format they collected the data of Porter’s Analysis, What benefits they get from conducting PORTER’s Analysis, Societal Environment: PESTEL Analysis, Phase– Internal Analysis: Organizational Perspective, Vision / Mission / Core Values (discuss separately), Vision, Mission, Core Values, Organizational Policies, CLIMATE CHANGE POLICY, CODE OF BUSINESS CONDUCT(INTEGRITY IN THE COMPANY), GUIDANCE FROM CORE COMPLIANCE OFFICER, ENVIRONMENTAL POLICY, HUMAN RIGHTS POLICY, POST-CONSUMER PACKAGING WASTE MANAGEMENT POLICY STATEMENT, Organizational Culture, How Policies and Core Values are helping in developing culture in their organization (examples), What Factors are Influencing their culture and How, Through what method(s) keep the culture alive, Organizational Structure, Degree to which organizational design elements exit in company structure , Core competencies, What are the company-wide core competencies, Which and How capabilities are linked with each core competency, Which and How resources are linked with each capabilities, On the basis of market analysis (Phase ), evaluate each core competency through Criteria Matrix, Coca - Cola Porter's Value Chain Analysis, Inbound Logistics, Operations, Outbound Logistics, Sales and Marketing, Service, Strategic Objectives, WE FOCUSED ON DRIVING REVENUE AND PROFIT GROWTH, WE INVESTED IN OUR BRANDS AND BUSINESS, WE BECAME MORE EFFICIENT, WE SIMPLIFIED OUR COMPANY, Current Strategies (to achieve above objective) (combination of strategies / single strategy for each objective), Corporate Level Strategies, Business level strategies, Functional level strategies, Financial Strategies, Identify Rival Firms: PepsiCo, PepsiCo’s Strengths (Internal Strategic Factors), PepsiCo’s Weaknesses (Internal Strategic Factors), Opportunities for PepsiCo (External Strategic Factors), Threats Facing PepsiCo (External Strategic Factors), Objectives of PepsiCo, PepsiCo’s Generic Strategies, SWOT Analysis , Phase– Gap Analysis & Recommendations, External Analysis, Internal Analysis

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Coca Cola Company Strategic Management Project ( A Comprehensive Analysis on Strategic Management )

  1. 1. COCA COLA FINAL PROJECT OF STRATEGIC MANAGEMENT Phase 1 – Introduction, Phase 2 – External Analysis of Coca Cola Beverages Pakistan, Phase 3 – Internal Analysis: Organizational Perspective, Phase 4 – Gap Analysis & Recommendations COCA COLA COMPANY
  2. 2. COCA COLA FINAL PROJECT OF STRATEGIC MANAGEMENT 1 Table of Contents 1 Phase 1 – Introduction .................................................................................................. 4 1.1 Introduction of a Company ................................................................................... 4 1.1.1 Brief History.................................................................................................... 4 1.1.2 International / National Introduction............................................................... 6 1.2 COCA COLA BEVERAGES PAKISTAN LIMITED ......................................... 7 1.2.1 Vision, Mission, Core Values, Goals.............................................................. 9 1.2.2 Nature of Business ........................................................................................ 12 1.2.3 Type of Ownership........................................................................................ 12 1.2.4 Identify Key Players and Roles..................................................................... 12 1.2.5 Organizational Hierarchy.............................................................................. 21 1.2.6 Location(s) of Facility................................................................................... 24 1.2.7 Number of Technical Employees.................................................................. 25 1.2.8 Products / Services (single product).............................................................. 27 2 Phase 2 – EXTERNAL ANALYSIS OF COCA COLA BEVERAGES PAKISTAN 31 2.1 Natural Environment:.......................................................................................... 31 2.1.1 Natural Resource Coca Cola need................................................................. 31 2.1.2 Present and Future needs of Natural Resources............................................ 31 2.1.3 International Arrangement of Water ............................................................. 34 2.1.4 Issues they face during arranging and managing .......................................... 36 2.2 Task Environment: Porter’s 5 Forces Model ...................................................... 38 2.2.1 When (situation), Why (objective / reasons), How (process), who (participants), Issues faced.................................................................................................... 38 2.2.2 In what format they collected the data of Porter’s Analysis ......................... 38 2.2.3 What benefits they get from conducting PORTER’s Analysis..................... 38 2.3 Societal Environment: PESTEL Analysis........................................................... 60 3 Phase 3 – Internal Analysis: Organizational Perspective ........................................... 65 3.1 Vision / Mission / Core Values (discuss separately)........................................... 65
  3. 3. COCA COLA FINAL PROJECT OF STRATEGIC MANAGEMENT 2 3.1.1 Vision ............................................................................................................ 65 3.1.2 Mission.......................................................................................................... 66 3.1.3 Core Values................................................................................................... 67 3.2 Organizational Policies ....................................................................................... 68 3.2.1 CLIMATE CHANGE POLICY.................................................................... 68 3.2.2 CODE OF BUSINESS CONDUCT(INTEGRITY IN THE COMPANY)... 69 3.2.3 GUIDANCE FROM CORE COMPLIANCE OFFICER ............................. 70 3.2.4 ENVIRONMENTAL POLICY..................................................................... 74 3.2.5 HUMAN RIGHTS POLICY......................................................................... 75 3.2.6 POST-CONSUMER PACKAGING WASTE MANAGEMENT POLICY STATEMENT....................................................................................................................... 77 3.3 Organizational Culture........................................................................................ 78 3.3.1 How Policies and Core Values are helping in developing culture in their organization (examples)........................................................................................................ 78 3.3.2 What Factors are Influencing their culture and How.................................... 79 3.3.3 Through what method(s) keep the culture alive............................................ 81 3.4 Organizational Structure ..................................................................................... 81 3.4.1 Degree to which organizational design elements exit in company structure 81 3.5 Core competencies .............................................................................................. 83 3.5.1 What are the company-wide core competencies........................................... 83 3.5.2 Which and How capabilities are linked with each core competency............ 83 3.5.3 Which and How resources are linked with each capabilities........................ 83 3.5.4 On the basis of market analysis (Phase 2), evaluate each core competency through 4 Criteria Matrix...................................................................................................... 84 3.6 Coca - Cola Porter's Value Chain Analysis......................................................... 85 3.6.1 Inbound Logistics.......................................................................................... 85 3.6.2 Operations ..................................................................................................... 85 3.6.3 Outbound Logistics ....................................................................................... 86 3.6.4 Sales and Marketing...................................................................................... 86 3.6.5 Service........................................................................................................... 86 3.7 Strategic Objectives............................................................................................. 87
  4. 4. COCA COLA FINAL PROJECT OF STRATEGIC MANAGEMENT 3 3.7.1 WE FOCUSED ON DRIVING REVENUE AND PROFIT GROWTH ...... 89 3.7.2 WE INVESTED IN OUR BRANDS AND BUSINESS............................... 89 3.7.3 WE BECAME MORE EFFICIENT ............................................................. 90 3.7.4 WE SIMPLIFIED OUR COMPANY ........................................................... 90 3.8 Current Strategies (to achieve above objective) (combination of strategies / single strategy for each objective)....................................................................................................... 91 3.8.1 Corporate Level Strategies............................................................................ 91 3.8.2 Business level strategies................................................................................ 92 3.8.3 Functional level strategies............................................................................. 93 3.8.4 Financial Strategies ....................................................................................... 94 3.9 Identify Rival Firms: PepsiCo............................................................................. 96 3.9.1 PepsiCo’s Strengths (Internal Strategic Factors) .......................................... 96 3.9.2 PepsiCo’s Weaknesses (Internal Strategic Factors)...................................... 97 3.9.3 Opportunities for PepsiCo (External Strategic Factors)................................ 97 3.9.4 Threats Facing PepsiCo (External Strategic Factors) ................................... 97 3.9.5 Objectives of PepsiCo................................................................................... 98 3.9.6 PepsiCo’s Generic Strategies ........................................................................ 98 3.10 SWOT Analysis................................................................................................. 100 4 Phase 4 – Gap Analysis & Recommendations ......................................................... 102 4.1 External Analysis.............................................................................................. 102 4.2 Internal Analysis............................................................................................... 110
  5. 5. COCA COLA FINAL PROJECT OF STRATEGIC MANAGEMENT 4 1 Phase 1 – Introduction 1.1 Introduction of a Company 1.1.1 Brief History Coca-Cola originated as a soda fountain beverage in 1886 selling for five cents a glass. Early growth was impressive, but it was only when a strong bottling system developed that Coca-Cola became the world-famous brand it is today. As a part of its drive to enhance the quality, availability, and image of Coca-Cola products, The Coca-Cola Company established a new Company in Pakistan in 1996, by the name of “Coca-Cola Beverages Pakistan Limited” (CCBPL or Company). CCBPL is a part of Coca-Cola İçecek which is sixth largest KO bottler in the World. It has a presence in ten countries including Turkey, Kazakhstan, Kyrgyzstan, Azerbaijan, Jordan, Iraq, Turkmenistan, Tajikistan, Syria, and Pakistan. CCI has 48% shares of CCBPL with Management Control. CCBPL started the process of acquiring and investing in locally franchised bottling operations. This process was completed in 2006 and, thereafter, all manufacturing and selling rights of Coca-Cola products are now with CCBPL. CCBPL has 6 plants and 13 warehouses throughout the country and serves a population of more than 170 million with a production capacity of 111 million physical cases. CCBPL is a significant player in the growth of Pakistan’s economy since it is one of the country’s top foreign direct investments in FMCG (Fast Moving Consumer Goods) business and is one of the major tax paying beverages companies of Pakistan.
  6. 6. COCA COLA FINAL PROJECT OF STRATEGIC MANAGEMENT 5 Type Cola Manufacturer The Coca-Cola Company Country of origin United States Introduced May 8, 1886; 130 years ago, Color Caramel E-150d Flavor Cola Variants New Coke (discontinued) Diet Coke Caffeine-Free Diet Coke Caffeine-Free Zero Cherry Lemon (discontinued) Vanilla Lime Raspberry (discontinued) Black Cherry Vanilla (discontinued) Blāk (discontinued) Citra Orange Life C2 (discontinued) Related products Pepsi Irn-Bru RC Cola Afri-Cola Postobón Inca Kola Kola Real Cavan Cola Website www.coca-colacompany.com
  7. 7. COCA COLA FINAL PROJECT OF STRATEGIC MANAGEMENT 6 1.1.2 International / National Introduction Coca-Cola (often referred to simply as Coke) is an American carbonated soft drink produced by The Coca-Cola Company in Atlanta, Georgia, United States. Originally intended as a patent medicine, 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 drink's name refers to two of its original ingredients, which were kola nuts (a source of caffeine) and coca leaves. The current formula of Coca-Cola remains a trade secret, although a variety of reported recipes and experimental recreations have been published. The Coca-Cola Company produces concentrate, which is then sold to licensed Coca- Cola bottlers throughout the world. The bottlers, who hold exclusive territory contracts with the company, produce the finished product in cans and bottles from the concentrate, in combination with filtered water and sweeteners. A typical 12 oz. (355 ml) can contains 38g of sugar (usually in the form of high fructose corn syrup). The bottlers then sell, distribute and merchandise Coca-Cola to retail stores, restaurants and vending machines throughout the world. The Coca-Cola Company also sells concentrate for soda fountains of major restaurants and food service distributors. The Coca-Cola Company has on occasion introduced other cola drinks under the Coke name. The most common of these is Diet Coke, with others including Caffeine-Free, Diet Coke Caffeine-Free, Cherry, Zero, Vanilla and special versions with lemon, lime and coffee. Based on Interbrand's best global brand study of 2015, Coca-Cola was the world's third most valuable brand. In 2013, Coke products were sold in over 200 countries worldwide, with consumers downing more than 1.8 billion company beverage servings each day.
  8. 8. COCA COLA FINAL PROJECT OF STRATEGIC MANAGEMENT 7 1.2 COCA COLA BEVERAGES PAKISTAN LIMITED Coca-Cola established its facilities in Pakistan in 1953. It operates locally within Pakistan. Its products are produced locally, thus providing employment to hundreds of Pakistani residents. The company focuses its marketing and advertising specifically to Pakistani tastes and cultures. Coca-Cola Beverages Pakistan Limited’s (CCBPL) major shareholder is Turkey’s Coca-Cola Icecek (CCI). CCI is currently bottling and distributing alcohol-free beverages in Pakistan along with 9 other countries. With Coca-Cola’s introduction, the following products of the company came along: Fanta 1965 Sprite 1972 Diet Coke 2001 Fanta Lemon 2001 Besides these, Sprite Zero, Rani Float and Kinley Bottled water are also in company’s product portfolio. The company’s bottling plant is located in Pakistan in different regions, including Karachi and Islamabad. Its local office is also engaged in the marketing and advertising activities related to its products across Pakistan. After arriving in Pakistan, Coca-Cola was bottles and distributed via independent franchisees. In 1996, Coca-Cola took the initiate to consolidate and acquire all the bottling plants and operate hem under the company’s own supervision. This process of acquisition was completed in 2006 and CCBPL became the only organisation responsible to bottle and distribute Coca-Cola products across Pakistan. CCBPL ensures that quality products are
  9. 9. COCA COLA FINAL PROJECT OF STRATEGIC MANAGEMENT 8 delivered to its customers. This includes investment in the market, customer development, timely order and cash collections. By 2013, CCBPL has 6 bottling plants and 13 warehouses operating across Pakistan thereby serving its 180 million population via its vast distributors and retailers.
  10. 10. COCA COLA FINAL PROJECT OF STRATEGIC MANAGEMENT 9 1.2.1 Vision, Mission, Core Values, Goals Vision Statement Be the outstanding beverage company leading the market, inspiring people, adding value through excellence. Mission Statement Build a sustainable and profitable business through refreshing consumers, partnering with customers, delivering superior value to shareholders and being trusted by communities.
  11. 11. COCA COLA FINAL PROJECT OF STRATEGIC MANAGEMENT 10 Core Values Our Core Values underlie everything we do. We live by them for two reasons; they are good and right in themselves, worthy of adherence even at the risk of loss of profit-making opportunities, and they epitomize our Company’s integrity, which we believe will produce value for our stakeholders over the long term. 1. Accountability We act with high sense of responsibility and hold ourselves accountable. 2. Passion We put our hearts and mind into what we do. 3. Integrity We are open, honest, ethical and we trust and respect each other 4. Teamwork We collaborate for our collective success
  12. 12. COCA COLA FINAL PROJECT OF STRATEGIC MANAGEMENT 11 COCA COLA GOALS 1. People and Organizational Leadership 2. Build a highly capable organization and be the employer of choice 3. Commercial Leadership 4. Profitably deliver superior value to consumers & customers at the optimal cost to serve 5. Supply Chain 6. To be the best in class consumer demand fulfillment organization that exceeds customer expectations highest in quality, lowest in cost, in a sustainable, socially responsible manner 7. Operational Excellence 8. Create a culture of Operational Excellence to support continuous improvement of our business process and systems 9. Sustainability 10. Ensure the long-term viability of our business by being proactive and innovative in protecting the environment and be recognized as one of the most responsible corporate citizens by all stakeholders
  13. 13. COCA COLA FINAL PROJECT OF STRATEGIC MANAGEMENT 12 1.2.2 Nature of Business The Coca-Cola Company is an American historical multinational beverage corporation and manufacturer, retailer, and marketer of nonalcoholic beverage concentrates and syrups, which is headquartered in Atlanta, Georgia. 1.2.3 Type of Ownership Coca Cola Operates as PUBLIC LIMITED COMPANY within Pakistan. 1.2.4 Identify Key Players and Roles 1.2.4.1General Manager RIZWAN ULLAH KHAN Pakistan & Afghanistan Region Rizwan Ullah Khan is currently the General Manager of The Coca-Cola Export Corporation, Pakistan & Afghanistan, a position he has held since September 2005. He joined the Company in 1996 and served in several different business functions during his early career, including Operations, Marketing, Customer Services and Public Affairs and Communications (PA&C). Over the years Mr. Khan has steered the transformation of Coca-Cola Pakistan into one of the leading socially responsible organizations in the country, by forging strong partnerships with local communities, NGOs and government agencies. Under his leadership, the Company has carried out several successful interventions in the fields of education, environment preservation and water stewardship, livelihood creation, women empowerment and youth development. Rizwan Ullah Khan was a key catalyst in the formation of the American Business Forum, an association of leading US organizations in Pakistan, which he currently also heads as its President. Mr. Khan holds a degree in Management from Hiram College, Ohio, USA. He is married with three children and lives in Lahore with his family.
  14. 14. COCA COLA FINAL PROJECT OF STRATEGIC MANAGEMENT 13 1.2.4.2Director, Public Affairs & Communications FAHAD QADIR Pakistan& Afghanistan Region Fahad Qadir is currently working as Region Public Affairs & Communications Director for Pakistan & Afghanistan Region, based at the head office in Lahore. Pakistan. He has been with the Company for nearly 6 years and leads stakeholder engagement on an ongoing basis with the government, media, social groups (NGOs) and others. He also manages the corporate & brand PR strategy and the company's CSR programmer. Before joining Coca-Cola, Fahad was working with the prestigious Lahore University of Management Sciences (LUMS) as Senior Marketing Office, primarily looking after marketing of University programs in Central and South Asian countries. Earlier to this, he worked with the Din Media Group, responsible for devising strategies for new products and Group’s communication.
  15. 15. COCA COLA FINAL PROJECT OF STRATEGIC MANAGEMENT 14 1.2.4.3LEGAL COUNSEL HASAN SHAMEEM Pakistan & Afghanistan Region Hasan joined The Coca-Cola Company just recently this year as the legal counsellor and he is responsible to maintain Company’s compliance with local and international laws, policies and to safeguard legal claims made by The Coca-Cola Company in Pakistan & Afghanistan region. He graduated from University of Bristol in 2007 after completion of degree in LLB, and worked as legal counsellor in food and telecommunications industry for around 7 years. After his previous experience with the top-notch food and telecommunications companies, he always wanted to work for an organisation that could still prove to be a milestone in my professional career, and Coca-Cola has proven to be the ideal place to nurture his professional outlook towards legal affairs. He is as an integral part of The Company today, considering the extensive and crucial parameters of legal affairs entailed in its operations. He is the firefighter of The Company. His work needs attention to detail and there is no room for mistakes. To maintain such a decorum, Hasan makes sure that he doesn't panic and always think logically to resolve matters.
  16. 16. COCA COLA FINAL PROJECT OF STRATEGIC MANAGEMENT 15 1.2.4.4Region Finance Manager KALEEM FAZAL Pakistan & Afghanistan Region Kaleem Fazal joined the Company in 2003 as a Financial Analyst for the Pakistan office. Over the course of 11 years, Mr. Fazal has been an instrumental part of the finance team for the MENA region. He was Budgeting and Reporting Manager based in Middle East where he was looking after 24 countries and 25 bottlers. Kaleem is currently the Region Finance Manager for Pakistan & Afghanistan. During his career, he has been involved in multifarious responsibilities principally focusing on sustainable system profit growth, value chain analysis, profitability analysis, marketing analysis and development of new categories (juices and energy). He has played a pivotal role for tax lobbying which resulted in system savings of $16m in 2011, $32m in 2012 and $15m in 2013. Prior to his experience at Coca-Cola, Kaleem worked with Honda Fort and PwC Pakistan.
  17. 17. COCA COLA FINAL PROJECT OF STRATEGIC MANAGEMENT 16 1.2.4.5Technical Services Manager QASIM MAHMOOD Pakistan & Afghanistan Region Qasim joined the Company in 1999 as Quality Programs Manager covering Pakistan, Iran and Turkmenistan and moved to QA Manager for Southern Eurasia BU and reached Senior QEOSH Manager for Pakistan& Afghanistan. During his QSE career, Qasim was involved in several other technical functions because of the job demand. He handled commercialization, packaging, CDE and launched OE in Pakistan. He was a leading member in the team that established the business in Afghanistan and he contributed a lot to building the capabilities of toll fillers in Pakistan. He also contributed to starting the HF juice and packaged water businesses in Pakistan & SE from QSE as well as manufacturing angles. Prior to his experience at Coca-Cola, Qasim has worked in the industry of pulp & paper, polyester & soda ash and petroleum& gas sector covering R&D, plant operations and projects. Qasim holds a double degree in Chemical Engineering & MBA.
  18. 18. COCA COLA FINAL PROJECT OF STRATEGIC MANAGEMENT 17 1.2.4.6Director, Franchise & Commercial & Corporate Leadership RAZA AHMED Pakistan & Afghanistan Region Raza Ahmed has been part of the Coca-Cola System for more than eleven years. Raza joined as Business Planning & Treasury Manager, Coca-Cola Beverage Pakistan Limited (CCBPL) and later was also overlooking sales. As a career broadening assignment, Raza was moved to TCCEC, PAR, where he was primarily responsible for driving volume and business growth, developing and leveraging operational capabilities in Pakistan & Afghanistan, driving commercial and franchise leadership initiative and supporting marketing in developing and executing marketing plans. Raza has played an instrumental role in driving TCCEC’s volume and sales and managing to reach 207 MUC in FY 2013. Raza has a vast experience in marketing, IT and Engineering. Raza holds a degree from University of New Jersey in Industrial Engineering.
  19. 19. COCA COLA FINAL PROJECT OF STRATEGIC MANAGEMENT 18 1.2.4.7HR-Strategic Business Partner FAISAL HASHMI Pakistan & Afghanistan Region Faisal Hashmi joined Coca-Cola System in 2000, as Country HRD / IR Manager at CCBPL, he had successfully managed smooth Employees & Industrial Relations including close interaction with local unions and IUF as well. Currently, as HR-Strategic Business Partner Faisal looks after the HR function for both TCCEC as well as CPS and supports Afghanistan bottler’s HR function. Faisal is playing an integral role in developing KO associates through various trainings, feedback and mentoring. He is also responsible of inculcating a great work environment, during 2013 TCCEC, PB won “4th Global HR Excellence Award” organized by Global Media Links, Pakistan. Under Faisal’s leadership, Pakistan has managed to maintain a consistent EIS Engagement Score > 80 at TCCEC Region Office and > 95 at CPS Plant. Prior to working with the Coca-Cola system, Faisal worked with Intercontinental Hotels & Kentucky Fried Chicken. Faisal holds a MS Degree in Human Resource Management and Commerce Degree major in Finance.
  20. 20. COCA COLA FINAL PROJECT OF STRATEGIC MANAGEMENT 19 1.2.4.8Director Marketing ALI AKBAR Pakistan & Afghanistan Region Syed Ali Akbar joined TCCEC, PAR in August 2012 as Marketing Director. Ali has played a pivotal role in thought leadership of our campaigns. Under his vision, TCCEC, PB won the Best Show in Class, Marketing Excellence Award. Ali is primarily responsible for innovative marketing campaigns, driving brand love score and launching new beverage products. Ali has a vast experience in marketing. He was the Vice President, Marketing & Global Business Unit at Engro Foods Limited and Vice President of Engro Corporation Limited. Where he was primarily responsible for marketing and business development aspects of the Company. Prior to Engro, Ali has worked with Coca-Cola Company, British American Tobacco and Unilever Best Foods, on various business development and brand building assignments.
  21. 21. COCA COLA FINAL PROJECT OF STRATEGIC MANAGEMENT 20 1.2.4.9Senior Quality Environment Occupational Safety & Health (QEOSH) Manager ATIQUE KHAWAJA TCCEC Pakistan & Afghanistan in 2014 Atique’s last 3 years’ assignment as National QA Manger was with our bottling partner, CCBPL in Pakistan. Under his leadership and the efforts of CCBPL Team, the highest ever Product & Package Q.I. and Lowest Ever Consumer Complaints in CCBPL history were achieved. In addition, Atique introduced to Quality Management of RGB & Fountain categories in processes and feedback mechanism. Before CCBPL; Atique was the factory manager of Najran Mineral Water Co. in Saudi Arabia for 4 years and ended his job there with a remarkable promotion to General Manager Position. He built his Saudi success on another 4 years of experience with Nestle S.A. in Pakistan where he started as Industrial Engineer and was promoted to Industrial Performance Manager. His Nestle experience involved manufacturing, SAP modules and staff training. All the above was built on 11 years of work in QA & SRA with The Coca-Cola Company, SWA Region. Atique is a qualified TCCC Auditor and has trained over 200 manufacturing & Quality Assurance staff.
  22. 22. COCA COLA FINAL PROJECT OF STRATEGIC MANAGEMENT 21 1.2.5 Organizational Hierarchy 1. What type of organizational structure does Coca-Cola have? The Coca-Cola Company has a Separate International Division Structure because its international staffs operate separately and in isolation from head office. It has various divisions in all continents around the world with presidents that control each continental division. Coca-Cola has 5 continental divisions.  Eurasia & Africa Group  Europe Group  Latin America Group  North America Group  Pacific Group Each Continental division has vice presidents that control sub-divisions based on regions or countries. This structure is efficient for Coca-Cola since it is a very large company. World Eurasia & Africa Pakistan North America Europe Pacific Latin America
  23. 23. COCA COLA FINAL PROJECT OF STRATEGIC MANAGEMENT 22
  24. 24. COCA COLA FINAL PROJECT OF STRATEGIC MANAGEMENT 23 2. How do they operate? Coca-Cola is as an ethnocentric MNC because its domestic operations are very like its international operations. Regardless of the country or region, Coca-Cola operates the same way and sells the same brand and type of soft drink. The company has tight control over its operations from head office. Country Manager GM (SBU) Karachi Multan RYK GM (CBU) Lahore Gujranwala Faisalabad RawalPindi Peshawar
  25. 25. COCA COLA FINAL PROJECT OF STRATEGIC MANAGEMENT 24 1.2.6 Location(s) of Facility Want to know more about your local Coca-Cola beverage and service provider?
  26. 26. COCA COLA FINAL PROJECT OF STRATEGIC MANAGEMENT 25 1.2.7 Number of Technical Employees Employees as of December 31, 2015 and 2014, Coca Cola Company had approximately 123,200 and 129,200 employees, respectively, of which approximately 3,300 and 3,800, respectively, were employed by consolidated variable interest entities (“VIEs”). The decrease in the total number of employees in 2015 was primarily due to the refranchising of certain territories that were previously managed by CCR to certain of the Company’s unconsolidated bottling partners. As of December 31, 2015, and 2014, Coca Cola Company had approximately 8,000 and 15,000 employees, respectively, located in the Pakistan, of which approximately 500 were employed by consolidated VIEs in both years. Our Company, through its divisions and subsidiaries, is a party to numerous collective bargaining agreements. As of December 31, 2015, approximately 7,000 employees, excluding seasonal hires, in North America were covered by collective bargaining agreements. These agreements typically have terms of three years to five years. We currently expect that we will be able to renegotiate such agreements on satisfactory terms when they expire. The Company believes that its relations with its employees are generally satisfactory.
  27. 27. COCA COLA FINAL PROJECT OF STRATEGIC MANAGEMENT 26 1.1.1.1 Department Wise
  28. 28. COCA COLA FINAL PROJECT OF STRATEGIC MANAGEMENT 27 1.1.1.2 Total Employees (Gender Wise) 1.2.8 Products / Services (single product) 1.2.8.1Intro The Coca-Cola Company is the world’s largest beverage company. Coca-Cola Company own or license and market more than 500 non-alcoholic beverage brands, primarily sparkling beverages but also a variety of still beverages such as waters, enhanced waters, juices and juice drinks, ready-to-drink teas and coffees, and energy and sports drinks. Coca-Cola Company own and market four of the world’s top five non-alcoholic sparkling beverage brands: Coca-Cola, Diet Coke, Fanta and Sprite. Finished beverage products bearing our trademarks, sold in the United States since 1886, are now sold in more than 200 countries. Coca- Cola Company make branded beverage products available to consumers throughout the world through our network of Company-owned or -controlled bottling and distribution operations as well as independent bottling partners, distributors, wholesalers and retailers — the world’s largest beverage distribution system. Beverages bearing trademarks owned by or licensed to us account for more than 1.9 billion of the approximately 58 billion servings of all beverages consumed worldwide every day. Coca-Cola Company believe their success depends on their ability to connect with consumers by providing them with a wide variety of options to meet their desires, needs and lifestyles. Coca-Cola Company success further depends on the ability of their people to execute effectively, every day. Coca-Cola Company goal is to use their Company’s assets — their brands, financial strength, unrivalled distribution system, global reach, and the talent and strong commitment of their management and associates — to become more competitive and to accelerate growth in a manner that creates value for their shareowners. Coca-Cola Company were incorporated in September 1919 under the laws of the State of Delaware and succeeded to the business of a Georgia corporation with the same name that had been organized in 1892. The company has the widest portfolio in beverage industry comprising of 3300 products. Beverages are divided into diet category, 100% fruit juices, fruit drinks, water, energy drinks, tea
  29. 29. COCA COLA FINAL PROJECT OF STRATEGIC MANAGEMENT 28 and coffee etc. As per Nielson’s data, Coca cola is the No.1 brand in sparkling beverages, juice, and retail packaged water in 2010. Coca cola has its market presence around 200 countries. Coca Cola Beverages Pakistan has a very narrow product range. It has the following brands in Pakistan.  Coca Cola These products are sold in the market in different sizes of bottles. These sizes are available for all its products.  250ml  250 ml (Non-Returnable)  300ml  1 liter  5-liter pet 1.2.8.2Segmentation: Coca cola servers its products using mass marketing technique, which obviously falls in undifferentiated marketing, and undifferentiated marketing means no segmentation, but there are minor factors on which we can say that the coke segments its products and then targets the customers somehow. These factors are as follows. 1. Geographic Segmentation:  Internationally: Coke segments its products country wise and region wise, here the most important thing is the taste and the quality, it varies according to the taste and the income level of the people in that country, and i.e. Third world counties are given low quality taste.  Climatic: In coke marketing, main idea is to serve it cold, so we can say that, they focus more on hot areas of the world, i.e. middle east etc. and there sale increase in summer.  Locally:
  30. 30. COCA COLA FINAL PROJECT OF STRATEGIC MANAGEMENT 29 In Pakistan the coke segments more in urban and suburban areas as compare to rural. 2. Demographic Segmentation:  Age: Internationally coke has segments the small children introducing tastes like vanilla, lime and cherry, they focus children from 4-12. Coke specifically target more young people than older.  Family type: Coke introduces its economy pack, and that’s how they focus family and groups.  Income: Coke segments different income levels by packaging. Like for small income people it has small returnable glass bottle, for middle people it has non- returnable bottle and for higher income people it has coke tin. 3. Psychographics Segmentation: All psychographics variables the social class, lifestyle, occupation, level of education and personality, coke segments everyone, but again it’s there packaging which is different for different consumers. 4. Behavioral Segmentation  Occasions: Thanks to the Coca-Cola Company for the warm welcome of Ramadan that has become an identity of the culture of Pakistan. Over the year the welcome of Ramadan has taken on mega proportions. Then coca cola has also made our Eid festivals very special by giving us special discounts on these prestigious occasions. Coca-Cola has special pricing strategies for thes3e occasions. They also run special advertising campaigns to make these occasions more special. 1.2.8.3Pricing Due to the availability of wide range products the pricing is done per the market and geographic segment. Each sub-brand of coca cola has different pricing strategy. Their pricing strategy is based on the competitors pricing; Pepsi is the direct competitor to coke. Beverage
  31. 31. COCA COLA FINAL PROJECT OF STRATEGIC MANAGEMENT 30 market is said to be an oligopoly market (few sellers and large buyers), hence they form into cartel contract to ensure a mutual balance in pricing between the sellers. 1.2.8.4Distribution / Retailing Coca Cola is the world’s most favorite brand and is available all over the world. The distribution system of coca cola follows the FMCG distribution pattern. The effective distribution network of coke has almost eroded the small and middle level players in the market. In Pakistan, they have captured even the rural market by extensive distribution. 1.2.8.5Marketing Coca Cola adopts various advertising and promotional strategies to create an increased demand in the market by associating with life style and behavior and mainly targeting value based advertising. You are more likely to see a coke ad individualized for a festival or in with a general positive message. Coca-Cola uses the concept of aggressive advertising to promote its products. Thus, advertising is the most important marketing tool for the company as it must cater mass consumer markets. They mainly do national advertising. Company introduces different themes and concepts to sell their product and advertises mainly in electronic media and out of home advertising. These advertisements build brand image and create awareness. Big names of Indian film industry mainly become the brand ambassadors of the Company. Throughout the years, the slogans of the Coca-Cola have been memorable. For E.g. Thanda MATLAB Cola-Cola Jo chaho ho jae Cola-Cola enjoy Coca-Cola-Piyo sir utha ke Brrrrrrr!!!
  32. 32. COCA COLA FINAL PROJECT OF STRATEGIC MANAGEMENT 31 2 Phase 2 – EXTERNAL ANALYSIS OF COCA COLA BEVERAGES PAKISTAN 2.1 Natural Environment: 2.1.1 Natural Resource Coca Cola need Coca Cola identify WATER and NATURAL AIR as their most used resources in the production process. 2.1.2 Present and Future needs of Natural Resources 2.1.2.1Water Stewardship Program National Arrangement & Management of Water Coca-Cola Pakistan, believe that water is critical not just for survival but for overall well-being of our global ecosystems and economies. Being a big consumer of water, it is our duty to protect water resources. Coca-Cola Pakistan maintains a vast Corporate Social Responsibility Portfolio, with special focus towards community building and water stewardship, where projects are designed in a way to deliver exponential benefits by integrating the ‘Me, We, World’ framework; individuals, communities and environment. Therefore, it’s our mission to give back the equivalent of all the water that we use to communities and nature, and we will continue to do so after we meet the 100 percent water replenishment goal. In 2007 The Coca-Cola Company announced its Water Replenishment Goal which focuses on being water neutral by the year 2020. 209 water stewardship projects were initiated in a total of 61 countries. Pakistan remains one of these 61 countries, successfully supporting towards water replenishment goals. The 2020 water replenishment goal involves returning water to the environment and communities, as per the total volume of water used annually. In 2014 The Coca-Cola system consumed 300 billion liters of water to produce 160 billion liters of beverages, and we successfully replenished 160 billion liters of water worldwide, based on our 209 watershed projects. Supporting this goal, Coca-Cola Pakistan has been able to replenish 782 million liters of groundwater since 2008 just through a single project with WWF Pakistan in Ayubia National Park. This marks as the epitome of our success towards water stewardship. Coca-Cola is able to give back the amount of water equivalent to what it uses in its finished beverages and their production through replenishment projects, increasing water use efficiency in its plants, and returning water to watersheds and municipalities through wastewater treatment. Part of meeting its replenishment goal is engaging in diverse, locally focused community water projects. Each project works toward set objectives such as providing or improving access to safe water and sanitation, protecting watersheds, supporting water conservation and raising awareness on critical local water issues.
  33. 33. COCA COLA FINAL PROJECT OF STRATEGIC MANAGEMENT 32 Although Coca-Cola Pakistan serves nationwide, but every project needs a clear target area and timeframe for specific deliverables. Our water replenishment projects are focused majorly in provinces of KPK, Sindh and Punjab. Apart from Ayubia National Park, to name few other projects we are serving in Gilgit, Karachi coastal areas like Kakapir and Soomer village, and also Lahore Bedian. To review our water stewardship and agriculture sustainability projects, take a look at the info graphic:
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  35. 35. COCA COLA FINAL PROJECT OF STRATEGIC MANAGEMENT 34 2.1.3 International Arrangement of Water 2.1.3.1Goal By 2020, improve water efficiency in manufacturing operations by 25 percent compared with a 2010 baseline. 2.1.3.2Progress: On track. In 2015, we improved our water efficiency 2.5 percent, marking the first time the Coca-Cola system has achieved a water-use ratio less than 2.0. This is a total improvement of 12 percent since 2010 and 27 percent since 2004 when we started reporting efficiency progress as a global system. COCA COLA’s system wide water efficiency has improved for 13 consecutive years. When they started this journey in 2004, they were using 2.7 liters of water to make 1 liter of product. That means that 1 liter of water is in the product and another 1.7 liters is used in the manufacturing process, mostly for keeping equipment clean. Today, they’re using 1.98 liters of water to make 1 liter of product and we’re working to reduce it to 1.7 liters of water per liter of product (a 25 percent improvement) by 2020. But what does that mean? In 2015, we used about 300.19 billion liters of water to produce approximately 151.1 billion liters of product (e.g., Coca-Cola, Diet Coke and Coke Zero) that we sold to consumers in more than 200 countries and territories around the world. That means 151.1 billion liters of water goes into our products and to consumers. And we used 149.09 billion liters of water in our manufacturing process to make that 151.1 billion liters of product in our operations.1 so, that’s the definition of water efficiency – how much water it takes to make our product. Our 2020 goal is aggressive. The good news is that we’re on track to meet our goal, and in many parts of the world, we’re ahead of schedule. In fact, in the United States, Mexico, South Pacific, Western Europe, and Turkey, we have bottling plants that are already using 1.7 liters of water, or less, to make a liter of product. Some are operating at as low as 1.4 liters of water per liter of product. Our progress on water efficiency places us among the leading companies in the beverage industry according to a recent benchmarking report by the Beverage Industry Environmental Roundtable.
  36. 36. COCA COLA FINAL PROJECT OF STRATEGIC MANAGEMENT 35 2.1.3.3Understanding Our Water Footprint The key driver in improving our water efficiency is reducing or removing water use in our manufacturing processes. Over the years we’ve made significant investments in new technologies and operating procedures that replace or reduce water use in our manufacturing operations. In order to expand on such improvements, we need to understand where water is used and where we have opportunities for improvement. Water foot printing—an approach to assess the total volume of water used to produce a product—is helping us extend our view of how we use water across our manufacturing processes and supply chain. Our studies have shown that around 80 percent of the total water footprint of our products comes from our agricultural ingredient supply chain. As a founding partner of the Water Footprint Network, we have worked with WWF, The Nature Conservancy and others to assess the water embedded in our products, packaging and ingredients so we can better understand the implications for our business, and work to reduce impacts. In collaboration with The Nature Conservancy, we issued a report, Product Water Footprint Assessments: Practical Application in Corporate Water Stewardship, exploring the utility and practical application of the water footprint methodology for understanding our water use throughout the value chain, and for identifying the impacts of that use and associated response actions. Water footprint studies were conducted related to the following Coca-Cola products and ingredients: Coca-Cola in a 0.5-liter PET bottle produced in the Netherlands; Beet sugar supplied to Coca-Cola Europe’s bottling plants; and Orange juice produced for the North American market. The largest portion of the product water footprints assessed as part of these studies came from the field, not the factory, which demonstrated significant opportunity to engage more directly with our agricultural ingredient suppliers in advancing sustainable water use. Guided in part by these assessments, to date, we have focused studies on the “blue,” green” and “grey” water footprints of sugar beets, orange juice and Coca-Cola to help us pinpoint potential sustainability impacts in specific growing regions. Addressing the quantity of water used to grow our product ingredients is not enough, we also need to address the impact of that use as well. Understanding impact is important, because large water footprints can be sustainable in water-rich areas, while very small water footprints might compromise sustainability in places where water is scarce. Gaining a clear understanding of impacts makes good environmental sense and provides us with better guidance for prioritizing areas of concern. Coca-Cola Europe has proposed a methodology for water footprint sustainability assessments that considers impacts as well as water quantity. Read more about it. Also, please see the section below and refer to the Sustainable Agriculture section of our Sustainability Report for more details on our efforts with suppliers.
  37. 37. COCA COLA FINAL PROJECT OF STRATEGIC MANAGEMENT 36 2.1.4 Issues they face during arranging and managing Greater efficiency in water use does not mean making less product. To the contrary, they intend to reduce their water use ratio—the amount of water we use per liter of product produced—while growing our business. Their goal, set in 2008, was to improve water efficiency system wide by 20 percent by 2012, compared with a 2004 baseline. Despite an expanding product portfolio and increased production levels, they have achieved that goal. In 2011, they used 293.3 billion liters of water to make 135 billion liters of product, giving them a water use ratio of 2.16 liters per liter of product. We are not stopping there. We are developing a new goal for further improving our water efficiency between now and 2020. Looking across their system, their data show that the highest water use ratios are often in developing markets, where water risks may be higher. One main reason: In developing markets, refillable glass bottles make up a large percentage of their unit case volume, and cleaning returned bottles demands more water. Even in those markets, their bottling plants typically draw a small percentage of water from local water sources, and each plant’s source water protection plan helps mitigate any threats to local water supplies.
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  39. 39. COCA COLA FINAL PROJECT OF STRATEGIC MANAGEMENT 38 2.2 Task Environment: Porter’s 5 Forces Model 2.2.1 When (situation), Why (objective / reasons), How (process), who (participants), Issues faced Porter’s Five Forces Analysis was required by Coca Cola Beverages Limited Pakistan when the company decided to launch 250ml pet bottles instead of the glass bottle for the First Time in Pakistan. Moreover, coca cola used porter’s analysis before starting their water stewardship program in order to reduce the water wastage. The Objective of the Porter’s Analysis was to determine the success of the new Pet bottles. Participants include customers of Coke from different segments, key players of CCPBL and employees. 2.2.2 In what format they collected the data of Porter’s Analysis The company collected the data in the form of questionnaires, sampling data and personal interviews with the customers. The major issues which CCPL faced was related to the high cost of obtaining the data and of time. 2.2.3 What benefits they get from conducting PORTER’s Analysis The benefits of Porter are uncertain as yet because Coca Cola is to launch their Pet Bottles in the Market of Pakistan. Porters 5 Forces Model Discuss Effect Positive Negative Competitive Rivalry Profit Margin: There is low Profit margin in the soft drink industry because the switching cost is very low. The customers that are not too much brand conscious of coca cola can easily switch to Pepsi Cola, Al though the taste of Coca Cola is Unique but still if we conduct a blind survey by presenting the contestants with a variety of cola drinks then it is hardly possible that As there is low profit margin in the beverage industry, so coca cola has to focus on its quality and try to improve it further to compete with other beverage brands in the market. Continuous efforts are required for the competition. Due to low profit
  40. 40. COCA COLA FINAL PROJECT OF STRATEGIC MANAGEMENT 39 Industry growth rate and potential: consumers will be able to differentiate the taste of coca cola. Coca Cola has a vast global presence. It is easily available in more than 200 countries. Because of sound and consistent growth of Coca Cola in local industry and in the international market, the soft drink industry is highly attractive for the investors to invest. margin new entrants can easily enter in the market. In case of Pakistan, we see local beverage brands appearing in the market like Gourmet Cola and Cola Next launched by Meezan Masala, these local brands are offering soft drinks to the consumers with similar prices as Coca Cola.
  41. 41. COCA COLA FINAL PROJECT OF STRATEGIC MANAGEMENT 40 Diversity of competitors: Fixed Cost: The major competitor of coca cola is Pepsi. Pepsi cola is also offering a wide range of beverage products. Coca Cola always focuses on promoting its brand by sponsoring outdoor events and activities. E.g. coke studio. There are also other brands of soft drinks in the market Like Dr. Pepper and Starbucks etc. Coca Cola has a significant market share. The fixed costs are a high proportion of total costs for a firm in the soft drink industry. The coca cola has high fixed cost of warehouses, labor, the cost of production and distribution. It spends too Due to the highest Fixed cost of coca cola and Economies of Scale that coca cola is enjoying, the new entrants can’t compete on prices. Product diversification of Pepsi The close Competitor of coca cola i.e. Pepsi also offers Cheetos, Kurkure, Wavy and Lays but coca cola does not. Coca cola only offers soft drinks. Coca Cola should focus on its product diversification. Also the indirect competitors of coca cola are Star Bucks, Tropicana and Dr. Pepper etc. that are offering coffee, tea, bottled water, and Vitamin water and the health conscious people in the west prefer those products over coca cola. These indirect competitors are stealing the market share of coca cola by offering healthy products to its customers.
  42. 42. COCA COLA FINAL PROJECT OF STRATEGIC MANAGEMENT 41 Close Competitors: Existing brand identity: much on its advertising and promotional activities. The close competitor of coca cola is Pepsi. In fact Pepsi is a thorn in the flesh of Coca Cola. Pepsi derives its 70% revenue from the North and South America while the coca cola derives only 30% of its revenue from America. It indicates that coca cola has not yet maximized the potential revenue outside the America. Coca Cola is not a soft drink it’s a brand. The brand valuation of coca cola is $79.2 billion. Inter Brand i.e. a Global Brand Agency awarded coca cola with the highest brand equity award in the year 2011. Coca Cola has fantastic market strategies. Because of the good taste of coca cola and Fanta the customers are loyal and they don’t like to change their brand easily. A former CEO of coca cola once declared that “If every asset we own, every building, and every piece of equipment were destroyed in a terrible natural disaster, we would be able to borrow all the money to replace it very quickly because of the value of our brand… The brand is more valuable than the totality Coca cola has a sluggish performance in the North America because Pepsi has a monopoly there.
  43. 43. COCA COLA FINAL PROJECT OF STRATEGIC MANAGEMENT 42 Switching costs: High are the exit barriers Entry barriers are relatively low for the beverage industry .There is no consumer switching cost and zero capital requirements. There is an increasing amount of new brands appearing in the market with similar prices than Coke products. There is basically no price war between Pepsi and Coca Cola because their prices are almost same. They basically compete on advertising and differentiation. Pepsi Targets youth and coca cola is for all ages. Exit barriers are high for bottlers with expensive equipment, moderate for concentrate producers. Advertising budgets are high and customers are influenced by brand perceptions. of all these assets.” Coca cola being an international brand can spend a huge amount of money on its advertising but local brands are unable to advertise their soft drinks to a great extent as coca cola does. Low switching cost affects the customer retention and customer loyalty. It also allows the new entrants to enter in the market.
  44. 44. COCA COLA FINAL PROJECT OF STRATEGIC MANAGEMENT 43 Porters 5 Forces Model Discuss Effect Positive Negative Bargaining Power of Suppliers Substitutes for your suppliers’ products High switching cost to use another supplier Low Pressure The soft drink products have standard raw material ingredients which could not have any alternative to use as an actual ingredient. Each firm has a different formula, color, and flavor for their beverage. No two products are typically exactly alike. It is fairly easy for coca cola to become a supplier within the industry and thus it would not find it difficult if it wanted to enter. If another supplier does the same job but is cheaper, the firm can switch without much issue. Coca cola has a capacity for backward and forward integration No, the supplier has no bargaining power over price. There is low switching cost of the raw material. Raw material is easily accessible. So the manufacturer can easily It will help the company in lowering its cost of production and it also helps in improving its efficiency to a greater extent. Improved efficiency, cost cutting, time saving, and elimination of intermediaries and no chances of
  45. 45. COCA COLA FINAL PROJECT OF STRATEGIC MANAGEMENT 44 shift from one supplier to another. disputes with the supplier of input. Porters 5 Forces Model Discuss Effect Positive Negative Threat Of New Entrants Loyalty of the end users Medium to low pressure Coca-Cola and its rivals do have special licensing deals, including having their products sold in fast food chains and different distribution deals. Both Pepsi and Coca-Cola dominate the beverage industry due to co- branding it is impossible to enter in the beverage industry for a new company. Coca-Cola enjoys high customer loyalty, because of their high brand equity. Therefore new competitors find it almost difficult to counterpart this loyalty. Coca-Cola is seen not only as a beverage but also as This is a positive effect because this will keep the competition at the minimum and ultimately, it will lead to maintained profitability. The loyalty of the users have very positive effect on the sales of the coca cola the users are in the habit of drinking coke only and they The loyalty of the users cannot have any negative effect.
  46. 46. COCA COLA FINAL PROJECT OF STRATEGIC MANAGEMENT 45 Difficulty in switching cost as customer Seed capital to enter this industry a brand. It has held a very significant market share for a decade of times and loyal customers are not very likely to try a new brand. There is no consumer switching cost. There is an increasing amount of brands appearing in the market having similar prices than Coke products. The soft drink industry is fully saturated. The seed capital required to enter this industry is a huge amount and energy. To compete with coke and Pepsi is not an easy task. Capital requirements for producing, promoting, and establishing a new soft drink traditionally have been viewed as extremely high. According to industry experts, won’t welcome any new company. As the switching cost is low so users remains with the brand they use. The seed capital required is very huge so it is positive for coke as the new comers will hesitate to start the business in beverages industry due to Due to low switching cost the users can switch to the new brand or product. Well for new comer it has negative effect that he/she requires a huge amount of capital to start the business.
  47. 47. COCA COLA FINAL PROJECT OF STRATEGIC MANAGEMENT 46 Government rules this makes the likelihood of potential entry by new players quite low A lot of capital is needed to enter this industry and compete with coke because there are large capital costs needed for manufacturing. Bottling, distribution, and storage could be contracted out, but it would likely increase costs in the long run and weaken the supply chain. If we talk about the government of Pakistan than they give tax relief and other facilities to international brands when they want to enter Pakistan. So this is threat for coke. There are licenses, insurances, and other difficult qualifications required in this industry. Companies must get FDA approval to sell their product, have licenses to produce and large capital requirement. The governmental rules of Pakistan are favorable for coke as well as for entrants because Pakistan promotes the international brands to invest In Pakistan. The negative thing is the licenses etc. that needs to be made. And they are difficult to get.
  48. 48. COCA COLA FINAL PROJECT OF STRATEGIC MANAGEMENT 47 Difficulty in Skill acquiring distribute internationally, and insurance to cover potential lawsuits, accidents, or faulty product. There is a substantial knowledge and skill barrier in terms of being able to develop soft drinks that could successfully compete with industry leaders such as Coca Cola. Due to technological barriers it is almost impossible for the other companies to compete successfully with Coca-Cola that has vast global presence New entrants lack in skills as compared to the established market leader like Coca- Cola. For example GOURMET in Pakistan launched its gourmet cola to satisfy the customer needs as coca cola is the market it leader in the industry. It has a large number of loyal customers that not prefer gourmet cola, cola next. Obviously the positive effect is this that the new entrants are not that powerful and they also do not have the required skills to compete with coke. If competitors do not have the potential and skills then the coke won’t have any negative effect on it.
  49. 49. COCA COLA FINAL PROJECT OF STRATEGIC MANAGEMENT 48 Economies of scale Strong, established cost advantages Amrat cola and shandy cola tried to enter in beverage industry but could not successful due to coca-colas international brand image. Experience in this industry does help firms to lower costs and improve performance. The major brands run on economies of scale, and have experienced the highs and low of the industry and overcome them. New entrants can learn from the first entrant’s history but do not have firsthand experience. Existing firms have cost and performance advantage in this industry. This is because existing firms have already purchased large capital expenditures and have economies of scale. They also have direct supply and The coke has economies of scale due to their experience but the entrant will not have the economies of scale and this is good for coke. Coca-Cola can earn more profit due to this advantage and the new entrants It has a negative for the new entrants only. It do not have any negative effect on the coca cola.
  50. 50. COCA COLA FINAL PROJECT OF STRATEGIC MANAGEMENT 49 Strong, established brands. distribution channels setup. But for new entrants it is difficult as they have no experience to handle the cost of production and other matters as well. Coca-Cola enjoys strong cost advantages. Coca-Cola is seen not only as a beverage but also as a brand. It has held a very significant market share for a long time and loyal customers are not very likely to try a new brand. The coca cola is major soft drink that have well- known brand identities, with the exception of generic brands and this Brand identities define coca cola‘s flavor. The coca cola has already offered Retailers cannot avail this advantage. Coca cola has a brand image and coke enjoys the benefit of this. The new entrants are faced with this difficulty as they are do not have any brand image and they are faced with the price and brand competition from the existing firms.
  51. 51. COCA COLA FINAL PROJECT OF STRATEGIC MANAGEMENT 50 Limited or restrained access to distribution significant margins of 15- 20% on soft drinks for the shelf space. These margins are quite significant for their bottom-line. This makes it tough for the new entrants to convince retailers to carry substitute their new products for Coke and Pepsi. New entrants also fear retaliation as Coca Cola will not allow them to enter. There is backward integration in Coca-Cola therefore new entrants cannot locate bottlers to distribute soft drinks. A new comer to the industry would face difficulty in assessing distribution channels. The coke already control the main distribution channels, such as big supermarkets, gas stations, and restaurants. They have low costs, competitive pricing, and strong business relationships. The new entrants are also faced with limited access to distribution the distributors do not entertain the entrants as they are already doing work with the brands like coca cola. It only has the negative effect on the new entrants and not on the existing ones.
  52. 52. COCA COLA FINAL PROJECT OF STRATEGIC MANAGEMENT 51 Porters 5 Forces Model Discuss Effect Positive Negative Bargaining Power of Customer Moderate pressure The individual buyer no pressure on Coca-Cola. Large retailers, like Wal-Mart, metro, hyper star have bargaining power because of the large order quantity, but the bargaining power is lessened because of the end consumer brand loyalty. The customer buy from local brands like gourmet cola due to low price but there exist a difference in the quality, taste of these products. When it comes to the bottled beverages market, buyers have a fair amount of bargaining power, and this affects Coca-Cola's bottom line directly. Coca-Cola does not sell directly to its end users. They deal with distribution companies that service fast food chains, vending machine companies, college campuses and grocery stores. Demand leads the purchases, but coca cola also has to keep an eye on what that end price will be. Coca cola do not directly deals with the individual customer so in this scenario it is positive that it donor deals with the bargaining of the customer. The negative is impact is the dealing with the retailers and the wholesalers as the have the bargaining power and coca cola has to listen to them as they are the people who delivers the coke to the customers.
  53. 53. COCA COLA FINAL PROJECT OF STRATEGIC MANAGEMENT 52 How large are your buyers’ company? How many companies are there for the buyer to choose from? There is no switching cost because people also buy from Pepsi. The buyers company of coca cola are large enough. The big store and different fast food industries buy from coca cola. Coca cola’s buyers includes Hyperstar, Alfatteh, Metro, Macro and different fast food companies like McDonald’s, Hardees etc. coca cola’s customers include large international chains of retailers and restaurants and small independent businesses. In Pakistan buyer do not have much choice to choose. There are very few brands to choose. There is Pepsi, Cola Next and Gourmet cola. Other The positive thing is that coca cola has a huge amount customers which purchases the coke in bulk and coke does not need to go to the individual customers and they earn more from these customers. As in Pakistan there are less number of brands of colas so buyers do not have The negative effect is that as coca cola has these huge customers if they blackout and donor take coke from Coca-Cola then coca cola will face loss. Like if mc Donald’s stops buying from coke than coca cola will face loss. Pepsi is the strong competitor for coca cola and buyer can shift.
  54. 54. COCA COLA FINAL PROJECT OF STRATEGIC MANAGEMENT 53 Are the buyers buying a huge volume? Do you depend only on a few buyers to sustain your sales? soft drinks are marinda and dew but they are not colas. Yes obviously, the buyers are buying in huge amounts. The daily sales of Mc Donald’s on average is 75.21 million per day so they have to arrange Coca-Cola accordingly and they buy coca cola in huge amount. Same is the case with other buyers. Coca cola do not depend on few buyers only. They have a lot of buyers to sustain their sales. many choices. And in this case the sales volume of coca cola rises. It has the positive effect as the buyers buy in huge amount of coke. They have many buyers so they want have any kind of problem and this is positive. It has a negative impact as there is no switching costs. And buyer can easily shift to the other product. But some wholesalers like Alfatteh they also purchases from competitors.
  55. 55. COCA COLA FINAL PROJECT OF STRATEGIC MANAGEMENT 54 How hard is it for the buyers to switch and use a competing product? Are the buyers purchasing from you as well as your competitors? There is no switching cost in the beverage industry that customer can easily switch. Coca- Cola does enjoy brand loyalty, this usually extends to refusal to drink another cola but not a refusal to consume another beverage altogether. The profit potential to that industry rises and it makes an industry attractive in that way. It is not hard for the buyers to switch to another brand and it’s not difficult for the buyers to use competing products. For example Al-Fatah store, hyper- star purchase soft drinks in a bulk quantity but they also purchase another brand of soft drinks like Pepsi , next cola etc. Yes the buyers’ purchases from Coca-Cola as well as other brands. For example retailers Al-Fatah store, hyper-star purchase soft drinks in a bulk quantity but Some buyers purchases only from coca cola like McDonald’s so it is positive. Switching costs are low for a buyer, then dissatisfaction of a product will lead to loss of business as the buyer will be able to find an alternate with minimum hassle and inconvenience.
  56. 56. COCA COLA FINAL PROJECT OF STRATEGIC MANAGEMENT 55 Do the buyers have the capacity to enter your business and produce the goods themselves? they also purchase another brand of soft drinks like Pepsi etc. But in fast food chain industries, vending machines, college etc. these buyers only purchase one brand like in Pizza hut, KFC, Hardees only purchase Pepsi in that way they increases the sales of Pepsi while McDonalds’ only buy the Coca-Cola. Yes the buyers have the capacity to enter in the business and produce the goods themselves like McDonalds’ produces the Coca-Cola itself. Same in the case of Hardees, Fat-burger, and Pizza-hut they can produce Coca-Cola itself in that way these buyers have the capacity to enter in the business.
  57. 57. COCA COLA FINAL PROJECT OF STRATEGIC MANAGEMENT 56 Porters 5 Forces Model Discuss Effect Positive Negative Threat of Substitutes Medium to High pressure There are many kinds of energy drink s/soda/juice products in the market. Coca- Cola doesn’t really have an entirely unique flavor. In a blind taste test, people can’t tell the difference between Coca-Cola and Pepsi. There is no switching cost in the beverage industry that customer can easily switch. Indirect competitors of coca cola is star bucks coffee, they advertise their product as healthier than the soft drinks. In developed countries the health conscious people prefer the health alternatives beverages. Fox example Dr pepper providing the unique flavors as compared to the coca cola that provides only carbonated beverages.
  58. 58. COCA COLA FINAL PROJECT OF STRATEGIC MANAGEMENT 57 Close substitutes available Perceived quality of the substitutes As a product, most people cannot differentiate the taste from other similar cola products. So for many, it is a substitutable product. The rising awareness of cola products and their negative impact on health have led to other beverages such as water and juices becoming more potential in market. Fox example Dr Pepper providing the unique flavors as compared to the coca cola that provides only carbonated beverages. These substitutes provides the best quality of their products like star bucks coffee, water and juices, increasing number of sports and health based drinks in developed countries. The quality of products improves through R&D and continuous quality improvement programs. Because of availability of close substitutes of soft drinks in the market customer gain advantage over Coca-Cola. Other substitute provides unique flavors as well as quality products. Proper quality insurance programs have a positive impact on Coca-Cola industry. In that way new innovations are required for the customer attention. Availability of close substitutes in Coca-Cola industry affects their sales volume and hence the sales decreases. According to perceived quality of substitute’s star- bucks provides the best quality to their customers. It has a negative impact on Coca-Cola industry. Sales decline people
  59. 59. COCA COLA FINAL PROJECT OF STRATEGIC MANAGEMENT 58 Buyer inclination to substitute Switching costs Availability of substitute Customer can easily switch to other substitute so in that case buyer propensity to substitute is high. There is switching costs. As health conscious people switches to another brands like fresh juices energy drinks etc. There are many kinds of energy drinks/soda/juice products in the market. Coca- Cola doesn’t really have an entirely unique flavor. Health conscious people prefer substitutes in developed countries so that it has a positive impact on health rather than purchasing carbonated products. move from one brand to another. Coca-Cola offer carbonated beverages that cause obesity. In the developed countries the health conscious people prefer substitutes. It will decrease the sales of Coca-Cola. There are many substitutes and health conscious people prefers tea and
  60. 60. COCA COLA FINAL PROJECT OF STRATEGIC MANAGEMENT 59 Indirect substitutes of coca cola is star bucks coffee, they advertise their product as healthier than the soft drinks. In developed countries the health conscious people prefer the health alternatives beverages. coffee more than coke.
  61. 61. COCA COLA FINAL PROJECT OF STRATEGIC MANAGEMENT 60 2.3 Societal Environment: PESTEL Analysis PESTEL Discuss Effects Political Factors Positive Negative Political Instability and Strikes Consumer Laws CCBPL claims to have warehouses that stores cokes suffice to meet the demand in case of series of strikes and political disruption for 1-3 months. In the early years of the company, Coca-Cola was effected by that political decision in which U.S Government asked them to remove one ingredient from their actual formula. Coca-Cola has been also effected in the turkey and India by political decisions when Israeli attacks on Gaza in 2014, then Turkey, and more than 100 hotels in Mumbai, stop selling products of Coca Cola Company because these countries said that the attacks of Israel on Gaza is because of its economic power. So they should stop selling products of those brands which contribute to the Israeli economy and Coca-Cola brand is one of them who directly contribute to Israeli economy. So here Coca- It has positive effect on coke because of that political decision coke has more customers because after removing that ingredient customer became more loyal with coke. Now they trust on coke and considered it as health conscious beverage. It has negative impact on coke. It has negative impact on coke.
  62. 62. COCA COLA FINAL PROJECT OF STRATEGIC MANAGEMENT 61 Cola brand is effected by the political decisions of Turkey. PESTEL Discuss Effects ECONOMIC FECTORS Positive Negative The global economic and financial crisis of 2007 – 2009 is a relevant example of an economic factor that greatly impacted the majority of businesses around the globe. However, the crisis has impacted Coca Cola to a lesser extent compared to many other businesses. Its operating margin remained at industry- front 22% despite the crisis, although dividend yield was reduced to 2.6% Arguably, fluctuations in exchange rate is the most significant economic factor that has adversely impacted Coca Cola performance in recent years. For example, due to severe currency devaluation in Venezuela, Coca Cola’s reported profits in this market has to be reduced by 55% in the fourth quarter of 2014 and there are similar instances in other parts of the world No doubt coke was effected lesser by that recession but it was effected by economic factors in a negative way. Change in exchange rate effect coke in a negative way because of this change prices of coke also effects and this lead to the decrease in profitability of coke.
  63. 63. COCA COLA FINAL PROJECT OF STRATEGIC MANAGEMENT 62 PESTEL Discuss Effect Social Factors Positive Negative 1. Healthy Lifestyle Concerns Media today, is fostering interest in healthy lifestyles. That has strongly influenced the sales within non-alcoholic beverage sector as many customers switch to mineral water bottles and fresh juices. In this regard, CCBPL has successfully come up with the products such as Coca-Cola Light or Zero that addresses the healthy diet concerns. Also, as the baby boomers are aging, they are getting more conscious and more concerned about diet choices that will influence their life expectancy. This contributes to the increasing demand for healthier drinks on the non-alcoholic beverage sector. It has a positive impact on customers because customer known that this beverages brand is health conscious. It has a negative impact on coke because the sale of company is decreasing so company should revise their policies and strategies. 2. Adaption and cultural borrowing Adaption plays a significant role in capturing the international markets. And willingness to adapt is a crucial attitude. The company realizes that these differences exist and tries to understand and cope with them in a proper manner. The advertisement campaigns focus on relationships, family events and gatherings, festive occasions like Eid and music. I has positive impact on customers because coke realizes the need of their customers on their religious and cultural occasion and it advertise according to occasion like on Eid and 14-Aug. Pakistan is an Islamic country and it has some religious believes. In Islam music is not allowed so coke is destroying the Islamic values of Pakistan attracting the youngsters through its musical campaigns.
  64. 64. COCA COLA FINAL PROJECT OF STRATEGIC MANAGEMENT 63 PESTEL Discuss Effect Technologic Factors Positive Negative 3. Coke’s Marketing, Advertising, and Promotional Programs The most evolving media for promoting the company’s products are through the TV, websites, and social media. CCBPL possess mind-blowing strategy to effectively promote their products through these channels that enhances its sales. It is reported that Coke Studio Session 8 raised the company’s sales by 42%. It has a positive impact on coke because after the Coke Studio Session 8 raised the company’s sales by 42%. 4. Access to the Internet With the ease to access internet, social media has become a great mean to provide huge growth in consumer awareness, brand identity, promotions and direct-to-consumer Communication. I has positive impact on customers because it has cheapest way of advertisement instead of electronic media. It has on negative impact on company policies because those people who are not using internet cant aware brand identity. 5. Packaging design As the cans and plastic bottles were introduced, the sales volume increased with a great margin for the company because of the ease in carrying and disposing the containers. It has a positive impact on customer because they design their bottle according to situation. E.g.: On 14 Aug they design their packaging according to our national flag color. New Equipment Because the technology is continuously advancing, new equipment is constantly being introduced by CCBPL. Because of these new technologies, Coca- Cola's production volume has It has impact on customer because they use innovative technology.
  65. 65. COCA COLA FINAL PROJECT OF STRATEGIC MANAGEMENT 64 increased sharply compared to that of a few years ago. Reduced Cost of Production With the up gradation of technology and high levels of automation in manufacturing, volume production is being done that has reduced the cost of production. It has positive impact on Coke.
  66. 66. COCA COLA FINAL PROJECT OF STRATEGIC MANAGEMENT 65 3 Phase 3 – Internal Analysis: Organizational Perspective 3.1 Vision / Mission / Core Values (discuss separately) 3.1.1 Vision “To become a market leader in ready to drink segment while adding best-in-class value to all stakeholders.” 3.1.1.1When, how (Process), Who (Develop & Participate), Issues faced The vision of Coca Cola Beverages continuously revises with the achievement of their vision after 5 to 10 years. The process of making a vision statement at CCBPL include the following steps 1) The company’s country head and top management meet up as per the achievement of the previous mission and monitor the internal and external company’s documentations. 2) After monitoring and evaluating the current company’s documentation, the top management give their suggestions and feedback on what they have evaluated from the company’s documentation and each member of the top management proposes their own vision statement. 3) The company’s officials meet and proposes their own vision statement and the office staff compile them in the form of minutes of meetings and merge the document. 4) The company’s officials conduct internal and external analysis to revise mission and vision statements and with then the consent of all members of the top management the best mission statement is chosen. The issues that CCBL faced when devising vision statement often include biases of data gathering and biases of the data in documentations. The data evaluated is then verified and then evaluated to account for in the vision statement.
  67. 67. COCA COLA FINAL PROJECT OF STRATEGIC MANAGEMENT 66 3.1.2 Mission “Coca-Cola Pakistan exists to refresh the consumers, inspire moments of optimism through our brands and actions as well as benefit all stakeholders, which we will do with highest social responsibility and with uncompromising commitment towards quality of our products and integrity in our operations” 3.1.2.1When, how (Process), Who (Develop & Participate), Issues faced The same procedure and processes are followed to produce as they are followed for vision statement. The company considers mission statement as an expansion of vision and take into consideration certain factors to produce mission which include the following; 1) Technology 2) Brand image 3) Philosophy 4) Ethical and sustainability considerations 5) Customers and External Stakeholders 6) Internal Stakeholders 7) Competitive advantage and core competencies
  68. 68. COCA COLA FINAL PROJECT OF STRATEGIC MANAGEMENT 67 3.1.3 Core Values “Our Core Values underlie everything we do. We live by them for two reasons; they are good and right in themselves, worthy of adherence even at the risk of loss of profit-making opportunities, and they epitomize our Company’s integrity, which we believe will produce value for our stakeholders over the long term.” • Accountability: We act with high sense of responsibility and hold ourselves accountable. • Integrity: We are open, honest, ethical and we trust and respect each other • Teamwork: We collaborate for our collective success • Passion: We put our hearts and mind into what we do.
  69. 69. COCA COLA FINAL PROJECT OF STRATEGIC MANAGEMENT 68 3.1.3.1How they are aligned (Vision / Mission / Core Values) As per the company’s officials, the mission is the expansion of the vision after consider certain factors which are discussed above and core values are based on the original vision set by the company after every 5 to 10 years. All three of them are completely and work towards the achievement of same goals and objectives. The Managerial staff at coca cola as least effected by the mission and vision outlined initially by the coca cola. Based on the mission statement, coca cola trying to increase the use of technology and reducing the non-managerial staff. They are also cutting costs by reducing the number of people in the company, keeping only the specialized staff and by paying more the company gives them more tasks. 3.2 Organizational Policies Organizational policies are guidelines that outline and guide actions within a business or agency. The exact types of policies will vary depending on the nature of the organization and can include policies such as directions, laws, principles, rules or regulations.A policy is a guiding principle used to set direction in an organization. A procedure is a series of steps to be followed as a consistent and repetitive approach to accomplish an end result. 3.2.1 CLIMATE CHANGE POLICY Climate Change Policy Statement Coca-Cola Hellenic strives to limit its impacts on climate change and to carry out all its business activities in a sustainable manner. We believe that industry has a key role to play in finding sustainable solutions to today’s climate challenges. The direct greenhouse gas emissions from Coca-Cola Hellenic operations result mostly from the use of energy in bottling plants and fleet. Indirect emissions stem from raw materials (ingredients and packaging) and cold drink equipment. In accordance with our Environmental Policy, we will: • Reduce the energy used in our operations. • Implement alternative or renewable energy technologies such as combined heat and power plants and solar panels, where practical to provide additional sustainable energy for our facilities. Engage with stakeholders to combat climate change. Work with suppliers to reduce the carbon embedded in packaging materials, the carbon footprint of our cold drink equipment and ingredient suppliers to minimise their carbon impacts. • Set targets to reduce our supply chain carbon emissions • Report our greenhouse gas emissions, targets, results and activities openly and in accordance with the Greenhouse Gas Protocol. As Chief Executive Officer I am committed to this Climate Change Policy Statement which is owned and endorsed by the Corporate Social Responsibility Committee of the Board of Directors. Responsibility for the successful implementation of this program belongs with every Coca-Cola Hellenic employee at each level and function in the organization.
  70. 70. COCA COLA FINAL PROJECT OF STRATEGIC MANAGEMENT 69 3.2.2 CODE OF BUSINESS CONDUCT(INTEGRITY IN THE COMPANY) This Code of Business Conduct is designed to help all of us to live up to the values that make Coca-Cola Hellenic one of the most successful and respected organizations in the world. These values include: • Authenticity • Performing as one • Excellence • Caring for our people • Learning • Winning with customers The Code sets out the Company’s commitment to conducting business in accordance with our values, all applicable laws and regulations and industry standards. It provides guidance on what is expected of each of us and references other Company policies and guidelines. Failure to comply with the Code or any Company policy is treated very seriously and may result in disciplinary action, up to and including dismissal. Some situations may seem ambiguous. Exercise caution when you hear yourself or someone else say “It has always been done this way,” “Everybody does it,” “Maybe just this once,” “No one will ever know” or “It will not matter in the end.” These are signs to stop, think through the situation and seek guidance. Most importantly, do not ignore your instincts. Ultimately, you are responsible for your own actions. If you are still uncertain, ask for guidance. The Code Triesto capture many of the situations that employees will encounter, but cannot address every circumstance. You can seek help from your Code Compliance Officers or higher level management. You are also required to report violations, and suspected violations, of the Code. This include situations where others ask you to violate the Code. There will never be reprisals for making any reports, and every effort will be made to maintain confidentiality. Managers must lead by example, and act as role models for others. As a manager, you should: • Ensure that the people you supervise understand their responsibilities under the Code and other Company policies. • Take opportunities to discuss the Code and reinforce the importance of ethics and compliance with employees. • Create an environment where employees feel comfortable raising concerns. • Consider conduct in relation to the Code and other Company policies when evaluating employees. • Never encourage or direct employees to achieve business results at the expense of ethical conduct or compliance with the Code or the law. • Always act to stop violations of the Code or the law by those you supervise.
  71. 71. COCA COLA FINAL PROJECT OF STRATEGIC MANAGEMENT 70 3.2.3 GUIDANCE FROM CORE COMPLIANCE OFFICER  Country Employees: Your Code Compliance Officers are your General Manager and your Country Legal Director. However, for questions relating to potential bribery or corruption, your Code Compliance Officer is your Country Legal Director only.  Country Function Heads and Regional Managers: Your Code Compliance Officers are your General Manager and Region Legal Director. However, for questions relating to potential bribery or corruption, your Code Compliance Officer is your Region Legal Director only.  General Managers and Group Function Employees: Your Code Compliance Officer is the Chief Compliance Officer, including for questions relating to potential bribery or corruption.  Chief Executive Officer: Your Code Compliance Officer is the Audit Committee. However, for questions relating to potential bribery or corruption, your Code Compliance Officer is the General Counsel.  Other Operating Committee Members: Your Code Compliance Officers are the Chief Executive Officer and the General Counsel. However, for questions relating to potential bribery or corruption, your Code Compliance Officer is the General Counsel.  If you are uncertain as to who you should contact or are unable to reach your Code Compliance Officers, you should contact your General Manager or Function Head for further guidance. Under the Code, certain actions require prior written approval. Where approval is required, both Code Compliance Officers must approve (if you have more than one applicable Code Compliance Officer). For recurring or ongoing actions, this approval should be renewed annually, or anytime there is a change in either the situation or any of your Code Compliance Officers. Copies of these approvals should be submitted by each Code Compliance Officer to and maintained by the appropriate legal department, and made available to auditors or investigators if required. You have several options for raising issues and concerns. Whether seeking advice or speaking out, you can always go to your manager. If you prefer, you can contact any of the following: • Your Code Compliance Officers • Your General Manager • Your Function Head • Your Country Legal Director • Your Region Legal Director • The Chief Compliance Officer
  72. 72. COCA COLA FINAL PROJECT OF STRATEGIC MANAGEMENT 71 • Financial, accounting or auditing matters should be reported to the Head of Internal Audit or to the Chairman of the Audit Committee. • Suspected Code violations of a serious nature, such as those involving high levels of management, significant monies, financial misstatement, or alleged criminal activities should be reported to the General Counsel, Group CFO or Head of Internal Audit immediately. Investigations and Disciplinary Actions the Company takes all reports of possible misconduct seriously. We will investigate the matter confidentially, make a determination whether the Code or the law has been violated, and take appropriate corrective action. If you become involved in a Code investigation, cooperate fully and answer all questions completely and honestly. For each Code violation, discipline is determined based on the nature of the violation, mitigating and aggravating factors, and the precedent for discipline (or range of discipline). Discipline for Code violations has a broad range, including but not limited to one or any combination of the following: a letter of reprimand, final written warning, suspension without pay, demotion, loss or reduction of bonus or option awards, and separation. The Company has a position of zero tolerance for theft of Company assets, including but not limited to cash, product and time. In addition, we may seek reimbursement for losses or recovery of damages by a civil suit or refer the matter to local authorities for criminal procedures. Any disciplinary action will be taken in accordance with applicable laws and collective bargaining agreements. Violations of this Code are not the only basis for disciplinary action. The Company has additional policies and procedures governing conduct that may have their own disciplinary consequences. 1. No Retaliation The Company values the help of employees who identify potential problems that we need to address. Any retaliation against an employee who raises an issue honestly is a violation of the Code. That an employee has raised a concern honestly, or participated in an investigation, cannot be the basis for any adverse employment action, including separation, demotion, , loss of benefits, threats, harassment or discrimination. If you work with someone who has raised a concern or provided information in an investigation, you should continue to treat the person with courtesy and respect. If you believe someone has retaliated against you, report the matter to your Code Compliance Officers or the General Counsel. 2. Working With Each Other Within our Company we promote equality of opportunity. Selection and reward are based on merit without regard to race, color, religion, sex, sexual orientation, citizenship status, national origin or disability. We will comply with all applicable laws relating to employment practices and expect all of our employees to treat each other with dignity and respect.
  73. 73. COCA COLA FINAL PROJECT OF STRATEGIC MANAGEMENT 72 3. Product Quality Our customers choose us because we provide a consistently superior product and service. Ensuring that our products are of the highest quality is critical to our success. We must each be aware of and follow Company policies and procedures that protect the quality of our products. In addition, we expect our suppliers to ensure the quality and safety of the products and services they provide to us. For this reason, we choose suppliers who share our values and who deliver superior products and services. 4. Health & Safety Health and safety is a critical value of the Company. We always comply with applicable and Safety health and safety rules and regulations. In addition, we consistently promote safe operating practices and avoid undue risk to our colleagues and our communities. We require all employees to follow safe work practices in the interest of their own safety as well as that of fellow employees. Safety is the responsibility of each and every employee. Employees can prevent injury to themselves and their co-workers by always following safe work practices and reporting any unsafe conditions you observe. Many employees go beyond these basic responsibilities by participating on safety committees, giving management input on safety policies and procedures, helping conduct safety inspections or assisting with accident investigations. 5. Intellectual Property Our Company’s intellectual property, whether licensed or owned, is among its most valuable assets. We therefore must protect our Company’s intellectual property rights. Intellectual property refers to anything we create on Company time, at the Company’s expense or within the scope of our job duties. The Company owns the rights to anything we create through our work with the Company to the full extent permitted by law, regardless of whether this property is patentable or able to be protected by copyright, trade secret or trademark. Examples of intellectual property include copyrights, patents, trademarks, trade secrets, design rights, logos, software programs, business processes and delivery or production methods. 6. Technology Company computer systems and equipment are meant for company use, and for use in accordance with the Company Information Protection Policy. For example, they should never be used for outside businesses, illegal activities, gambling or pornography. You may not download or store illegal or inappropriate content or programs from the Internet on your Company computer. Always use licensed software in accordance with the terms of the relevant licensing agreement, which is available from your Country BSS department. Copies of software may be made only as specified in the relevant licensing agreement. You must not sell, transfer or otherwise make available to any unauthorized person any software products or related documentation licensed to or owned by the Company. In addition, lack of diligence by an individual can lead to a breach of our
  74. 74. COCA COLA FINAL PROJECT OF STRATEGIC MANAGEMENT 73 information security affecting the whole company. Everyone who uses Company digital systems – employees, contractors, consultants and other people with temporary access– must ensure that these resources are used appropriately and in line with the Company’s Information Protection Policy. You are required to: • Never share your username or password. • Ensure you do not access, download, create or forward email, documents or images that may cause offence or distress to other persons. • Ensure you do not install or use hardware or software on any Company system that has not been specifically approved by the information technology team. • Never send information to anyone who contacts you claiming to be a Company employee but asks for information to be sent to a non-Coca-Cola Hellenic email address. You should also notify your information technology team. • Always save important data on the network-based drives for reasons of data security and data recovery. 7. Nonpublic Information Many of us have access to confidential, nonpublic information through the work we do. Nonpublic information is any information that has not been disclosed or made available to the general public. It is your obligation to safeguard the Company’s nonpublic information. Unless it is necessary as part of your work responsibilities, you may not share this information with anyone outside the Company, including your family members and friends. This information is Company property and you may not disclose it to others even after you leave the Company. You should also limit the sharing of Company nonpublic information within the Company to those of your colleagues who need to know such information for business purposes. Do not disclose nonpublic information to anyone outside the Company, except when disclosure is legally mandated or is required for business purposes and appropriate steps have been taken to prevent misuse of the information. • Disclosing nonpublic information to others, including family and friends, is a violation of the Code and may violate the law. • Be mindful of unintentional disclosure of nonpublic information through conversation or use of documents in public places, or the transmission of unencrypted digital data (USB sticks, CDs/DVDs, email attachments) outside the Company. • Just as the Company values and protects its own nonpublic information, we respect the nonpublic information of other companies. Never accept, solicit or divulge nonpublic information of another company, including customers. See page 33 below under the heading “Competitive intelligence.” • Records should be retained or discarded in accordance with the Company’s record retention policies. In the case of actual or
  75. 75. COCA COLA FINAL PROJECT OF STRATEGIC MANAGEMENT 74 threatened litigation or governmental investigation, you must consult with the Group Legal Department for instructions on how to handle any relevant records. 3.2.4 ENVIRONMENTAL POLICY Coca-Cola Hellenic is committed to conducting all its business activities responsibly with due regard to environmental impact and sustainable performance. The Company believes that the environment is everybody’s responsibility and all employees are accountable for environmental performance. Coca-Cola Hellenic seeks to achieve steady improvement in meeting its environmental standards while working to minimize any negative impact on the local and global environment as the Company grows its business. To reach these targets, Coca- Cola Hellenic: • Conducts operations in compliance with all applicable laws and regulations and applies its high internal environmental standards. • Implements and certifies the internationally recognized environmental management system, ISO 14001, in all of its operations to ensure accountability and continuous improvement. • Includes environmental strategies and objectives in its business planning process to ensure that management of environmental impact remains an integral part of its operations. • Identifies environmental aspects, sets environmental goals, monitors results and audits processes in order to assess its performance against internal and external environmental standards. • Identifies and implements ways to improve the efficiency with which the Company uses materials and resources, prevents pollution, minimizes emissions, and recycles waste. • Commits to conserve watersheds by saving water and treating wastewater. • Commits to protecting the climate by reducing energy use and coolant emissions. • Plays a leading role within the beverage industry in promoting sustainable packaging by light weighting, recycling beverage containers and using recycled content in its packages. • *Encourages and equips its employees to identify and act upon opportunities to improve environmental performance and waste management in the areas where they work. • Partners with stakeholders in seeking and developing solutions to those environmental problems on which the Company can make an effective and lasting contribution. • Communicates its environmental requirements and performance to stakeholders. The responsibility for overseeing the implementation of this policy lies with the Corporate Social Responsibility Committee of the Board of Directors. As Chief Executive Officer I am committed to the Coca-Cola Hellenic Environmental Policy.

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