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Application of Consulting Tools on Coca Cola
1. INTRODUCTION
The Coca-Cola Company
The Coca-Cola Company (NYSE: KO) is the world's largest beverage company, refreshing
consumers with more than 500 sparkling and still brands and more than 3,800 beverage choices.
Led by Coca-Cola, one of the world's most valuable and recognizable brands, the company’s
portfolio features 20 billion-dollar brands, 18 of which are available in reduced-, low- or no-calorie
options. The billion-dollar brands include Diet Coke, Coca-Cola Zero, Fanta, Sprite, Dasani,
vitaminwater, Powerade, Minute Maid, Simply, Del Valle, Georgia and Gold Peak.
Through the world's largest beverage distribution system, Coca-Cola is the No. 1 provider of both
sparkling and still beverages. More than 1.9 billion servings of its beverages are enjoyed by
consumers in more than 200 countries each day.
Coca-Cola India
Over the last 23 years, ever since its re-entry in 1993, the company has gone on to establish an
unmatched portfolio of
beverages; refreshing
consumers with its leading
beverage brands like Coca-
Cola, Coca-Cola Zero, Diet
Coke, Thums Up, Fanta, Fanta
Green Mango, Limca, Sprite,
Sprite Zero, VIO Flavored Milk,
Maaza, Minute Maid range of
juices, Georgia and Georgia
Gold range of hot and cold tea
and coffee options, Kinley and
Bonaqua packaged drinking
water, Kinley Club Soda and
BURN energy drink.
The Company along with its
bottling partners, through a strong network of over 2.6 million retail outlets, touches the lives of
millions of consumers. Its brands are some of the most preferred and most sold beverages in the
country.
THE PRODUCT PORTFOLIO
BCG Matrix Analysis for Coca-Cola India
We use the BCG Matrix to analyse the product portfolio of Coca-Cola India, with an underlying
assumption that there will be high-growth products in need of cash inputs and low-growth products
that generate excess cash to ensure long-term success.
The illustration below will help us recognise the profit and growth potential of some products of the
company:
2. Cash
Cows
These
are
products that are extremely profitable and require no extra effort or investment to maintain the
status quo.
KINLEY
In 1999, the total annual bottled water consumption in the country was 1.5 billion litres
and the market was growing at compound annual growth rate (CAGR) of 25%. Coca-
Cola entered this market with its purified mineral water ‘Kinley’ in August 2000. Kinley
was introduced at a time when the generic name for bottled water was ‘Bisleri’
The industry will be worth approximately INR 160bn (~USD 2.67billion) by FY 2018,
growing at CAGR of ~22%. Kinley holds a strong position, and is the second strongest
player with a market share of 25%.
MAAZA
Introduced in 1970s, Maaza has today come to symbolize the very spirit of mangoes.
Universally loved for its taste, color, thickness and wholesome properties, Maaza is
the mango lover's first choice.
The industry has a CAGR of 15% and Maaza dominates the market as seen below:
Stars
These are
products that
CASH COW
KINLEY
MAAZA
STAR
MINUTE MAID
DOG
FUZE
QUESTION MARK
VIO
Brand Market Share
Maaza 37.9%
Frooti 33.0%
MARKETSHARE
LARGE
SMALL
MARKET GROWTH HIGHLOW
3. enjoy a
relatively high
market share
in a strongly
growing
market. They are profitable and may grow further and hence it is advisable to
invest in these products.
MINUTE MAID
Minute Maid – one of the world's largest juice and juice drink
brands. The history of the Minute Maid brand goes as far
back as 1945 when the Florida Food Cooperation developed
orange juice powder. The positioning is that of a juice brand,
and at INR 10.90 bn, the market is stipulated to grow at a
CAGR of 17%. However Minute Maid has a lot of market
potential to capture as the size of the unorganised juice
market stands at 75%.
Dog
FUZE
Growing urbanisation coupled with rising disposable incomes continued to pave the way for strong
growth in RTD tea during 2015. However, the popularity of RTD tea remains restricted primarily to
young urban consumers who are looking for a healthier alternative to carbonated
beverages. RTD tea continued to struggle to gain attention among Indian
consumers over the review period.
Hindustan Unilever Ltd continued to lead RTD tea in 2015 with a retail value share
of 80%. The company continues to enjoy first-mover advantage for its Lipton Ice
Tea brand. Hindustan Unilever commenced distribution of Lipton Ice Tea by
extending its international alliance with PepsiCo into India in 2004. There is not
much competition in the category and this enabled the company to maintain its
dominant value share.
Consumers who are willing to experiment with new flavours and look for alternatives
to carbonated drinks are the most likely to try out RTD tea. However, the popularity of RTD tea in
India is likely to remain restricted to consumers residing in urban centres such as Delhi, Bangalore,
and Mumbai during the forecast period due to the limited distribution and low awareness of RTD
tea as a product.
Question Mark
Slice 10.1%
Minute Maid 7.4%
Others 11.6%
50
%37
%
5%8%
Organised Juice
Market
Real Tropicana
Minute Maid Others
4. Are products that have high growth but small market share, and so their growth rate is uncertain.
Investments to generate further growth may or may not yield big results in the future. Additional
investigation into how and where to invest is advised.
VIO
VIO marks Coca-Cola India’s entry into the value added dairy category. It is the
1st ready-to-drink flavored milk product launched by the Company in India.
The flavoured milk market in India is expected to grow at a rate of 21-26% and
is currently estimated to be at INR 500 mn. The major player with over 80%
market share is Amul, others include- Mother Dairy, Vadilal and so on.
Vio is available in select locations across India and must find a marketing &
distribution strategy that will enable it to penetrate this market.