coca cola company strategic management project ( a comprehensive analysis on strategic management )

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

COCA COLA FINAL PROJECT OF STRATEGIC MANAGEMENT

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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


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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


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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


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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.


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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

https://en.wikipedia.org/wiki/Cola

https://en.wikipedia.org/wiki/The_Coca-Cola_Company

https://en.wikipedia.org/wiki/Caramel_color

https://en.wikipedia.org/wiki/New_Coke

https://en.wikipedia.org/wiki/Diet_Coke

https://en.wikipedia.org/wiki/Caffeine-Free_Coca-Cola

https://en.wikipedia.org/wiki/Diet_Coke_Caffeine-Free

https://en.wikipedia.org/wiki/Coca-Cola_Zero

https://en.wikipedia.org/wiki/Coca-Cola_Cherry

https://en.wikipedia.org/wiki/Coca-Cola_with_Lemon

https://en.wikipedia.org/wiki/Coca-Cola_Vanilla

https://en.wikipedia.org/wiki/Coca-Cola_with_Lime

https://en.wikipedia.org/wiki/Coca-Cola_Raspberry

https://en.wikipedia.org/wiki/Coca-Cola_Black_Cherry_Vanilla

https://en.wikipedia.org/wiki/Coca-Cola_Bl%C4%81k

https://en.wikipedia.org/wiki/Coca-Cola_Citra

https://en.wikipedia.org/wiki/Coca-Cola_Orange

https://en.wikipedia.org/wiki/Coca-Cola_Life

https://en.wikipedia.org/wiki/Coca_Cola_C2

https://en.wikipedia.org/wiki/Pepsi

https://en.wikipedia.org/wiki/Irn-Bru

https://en.wikipedia.org/wiki/RC_Cola

https://en.wikipedia.org/wiki/Afri-Cola

https://en.wikipedia.org/wiki/Postob%C3%B3n

https://en.wikipedia.org/wiki/Inca_Kola

https://en.wikipedia.org/wiki/Kola_Real

https://en.wikipedia.org/wiki/Cavan_Cola

http://www.coca-colacompany.com/


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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.


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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


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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.


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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.


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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


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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


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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

1.2.4.1 General 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.


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1.2.4.2 Director, 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.


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1.2.4.3 LEGAL COUNSEL

HASAN SHAMEEM


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.


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1.2.4.4 Region Finance Manager

KALEEM FAZAL


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.


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1.2.4.5 Technical Services Manager

QASIM MAHMOOD


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.


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1.2.4.6 Director, Franchise & Commercial & Corporate Leadership

RAZA AHMED


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.


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1.2.4.7 HR-Strategic Business Partner

FAISAL HASHMI


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.


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1.2.4.8 Director Marketing

ALI AKBAR


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.


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1.2.4.9 Senior 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.


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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


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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


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1.2.6 Location(s) of Facility

Want to know more about your local Coca-Cola beverage and service

provider?

http://cocacolaunited.com/wp-content/uploads/2012/03/map11-1.jpg


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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.


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1.1.1.1 Department Wise


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1.1.1.2 Total Employees (Gender Wise)

1.2.8 Products / Services

(single product)

1.2.8.1 Intro

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


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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

1.2.8.2 Segmentation:

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:


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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.

1.2.8.3 Pricing

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


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.

1.2.8.4 Distribution / 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.

1.2.8.5 Marketing

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!!!


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

2.1.2.1 Water 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.


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:


33


34

2.1.3 International Arrangement of Water

2.1.3.1 Goal

By 2020, improve water efficiency in manufacturing operations by 25 percent

compared with a 2010 baseline.

2.1.3.2 Progress:

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.


35

2.1.3.3 Understanding 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.


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.


37


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


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.


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.


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.


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.


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


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.


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.


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.


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.


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.


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.


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.


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.


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.


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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.


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.


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.


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.


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


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


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.


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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.


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.


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.


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.


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.


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.”

3.1.1.1 When, 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.


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”

3.1.2.1 When, 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


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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.


68

3.1.3.1 How 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.


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.


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


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• 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.


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


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


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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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3.2.5 HUMAN RIGHTS POLICY

Respect for human rights is fundamental to the sustainability of Coca-Cola HBC and

the communities in which we operate. In our Company we are committed to ensuring that

people are treated with dignity and respect. Coca-Cola HBC’s Human Rights Policy is guided

by international human rights principles encompassed in the Universal Declaration of Human

Rights, the International Labor Organization’s Declaration on Fundamental Principles and

Rights at Work, the United Nations Global Compact and the United Nations Guiding Principles

on Business and Human Rights. The Human Rights Policy applies to Coca-Cola HBC, the

entities that it owns, the entities in which it holds a majority interest, and the facilities that it

manages. The Company is committed to upholding the principles in this Policy. Our Supplier

Guiding Principles apply to our suppliers and are aligned with the expectations and

commitments of this Policy.

1. Respect For Human Rights

Coca-Cola HBC respects human rights. We are committed to identifying and

preventing any adverse human rights impacts in relation to our business activities through

human rights due diligence and preventive compliance processes.

2. Community And Stakeholder Engagement

We recognize our impact on the communities in which we operate. We are

committed to engaging with stakeholders in those communities to ensure that we listen to,

learn from and take into account their views as we conduct our business. Where

appropriate, we are committed to engaging in dialogue with stakeholders on human rights

issues related to our business. We believe that local issues are most appropriately addressed

at the local level. We are also committed to creating economic opportunity and fostering

goodwill in the communities in which we operate through locally relevant initiatives.

3. Valuing Diversity

We value the diversity of our people and the contributions they make. We have a

long-standing commitment to equal opportunity and do not accept discrimination and

harassment. We are dedicated to maintaining workplaces that are free from discrimination

or harassment on the basis of race, sex, color, national or social origin, religion, age,

disability, sexual orientation, political opinion or any other status protected by applicable

law. The basis for recruitment, hiring, placement, training, compensation and advancement

at the Company is qualification, performance, skills and experience. Regardless of personal

characteristics or status, the Company does not tolerate disrespectful or inappropriate

behavior, unfair treatment or retaliation of any kind. Harassment is unacceptable in the

workplace and in any work-related circumstance outside the workplace. These principles

apply not only to Company employees but also to the business partners with whom we

work.


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4. Freedom Of Association And Collective Bargaining

We respect our employees’ right to join, form or not to join a labor union without

fear of reprisal, intimidation or harassment. Where employees are represented by a legally

recognized union, we are committed to establishing a constructive dialogue with their

freely chosen representatives. We are committed to bargaining in good faith with such

representatives.

5. Safe And Healthy Workplace

We provide a safe and healthy workplace and comply with applicable safety and

health laws, regulations and internal requirements. We are dedicated to maintaining a

productive workplace by minimizing the risk of accidents, injury and exposure to health

risks. We are committed to engaging with our employees to continually improve health

and safety in our workplaces, including the identification of hazards and remediation of

health and safety issues. We are committed to maintaining a workplace that is free from

violence, harassment, intimidation and other unsafe or disruptive conditions due to internal

and external threats. Security safeguards for employees are provided as needed and will be

maintained with respect for employee privacy and dignity.

6. Forced Labor And Human Trafficking

We prohibit the use of all forms of forced labor, including prison labor, indentured

labor, bonded labor, military labor, slave labor and any form of human trafficking.

7. Child Labor

We prohibit the hiring of individuals that are under 18 years of age for positions in

which hazardous work is required.

8. Work Hours, Wages And Benefits

We compensate employees competitively relative to the industry and local labor

market. We operate in full compliance with applicable wage, work hours, overtime and

benefits laws.

9. Guidance And Reporting For Employees

We are committed to creating workplaces in which open and honest

communications among all employees are valued and respected. Our policy is to follow all

applicable labor and employment laws wherever we operate. If you believe that a conflict

arises between the language of the policy and the laws, customs and practices of the place

where you work, if you have questions about this policy or if you would like to report a

potential violation of this policy, you should raise those questions and concerns through

existing processes, which make every eort to maintain confidentiality. You may ask

questions or report potential violations to local Management, Human Resources, Legal

Department or Business Resilience. Coca-Cola HBC is committed to investigating,


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addressing and responding to the concerns of employees and to taking appropriate

corrective action in response to any violation.

3.2.6 POST-CONSUMER PACKAGING WASTE MANAGEMENT POLICY

STATEMENT

Coca-Cola Hellenic is committed to continually improving its environmental

performance in the area of packaging and packaging waste. All Coca-Cola Hellenic territories

are committed to continuous improvement, which is measured and evaluated for effectiveness.

The Company supports the implementation of post-consumer packaging schemes in all

countries. The objectives are to:

Co-own the country packaging management scheme (recovery organization).

Participate as an active member of the Management Board of Recovery

Organizations with the appropriate participation at a senior level.

Own and take responsibility for collected material as members of authorized

recovery organizations.

Implement efficient recovery organization schemes at the lowest sustainable costs.

Develop and execute Business Plans according to the highest standards. To achieve

these objectives, Coca-Cola Hellenic:

Enhances post-consumer packaging collection schemes and supports the education

and awareness of consumers.

Engages in public awareness campaigns, selective waste collection education and

anti-littering campaigns.

Works with government and industry to create a legal framework in which

economic progress, diversion of material from landfill and emissions reductions

can be achieved simultaneously.

Supports the view that public policy and regulatory interventions must encourage

the development and implementation of appropriate technological solutions and

enable the amendment of market mechanisms.

Promotes the development and expansion of organized collections of post-

consumer packaging materials at public events to avoid littering. • Works to close

the packaging loop in a sustainable manner.

Is committed to invest in Bottle-to-Bottle Recycling Plants in all countries with

sustainable resources, i.e. cost-effective and efficient post-consumer PET

collection schemes.

Includes packaging and packaging waste strategies in the annual business planning

process to ensure that the subject remains an integral part of operations.

Sets annual measurable food safety and quality objectives for all operations, and at

group level, to ensure continuous improvement and compliance with all standards.

Coca-Cola Hellenic will endeavor to:

Influence policy, regulation and innovation by working to develop structured

stakeholder dialogue, supporting the creation of equitable closed-loop packaging


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solutions, encouraging market mechanisms and promoting technological sorting

innovations.

Activate cross-sector packaging associations to support solutions for dealing with

the environmental impact of used packaging and packaging materials.

Ensure Coca-Cola Hellenic consumers enjoy variety and freedom of choice in

products and packaging options. • Enhance the efficiency and effectiveness of

established post-consumer packaging waste management organizations.

Continue to drive light-weighting efforts for primary packaging and encourage the

use of reusable and more efficient packaging design.

Continue to increase the recycled content of beverage packaging with emphasis on

PET beverage bottles. As Chief Executive Officer I am committed to the Post-

Consumer Packaging Waste Management Policy 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.

3.3 Organizational Culture

3.3.1 How Policies and Core Values are helping in developing culture in their

organization (examples)

These are some factors which helps to develop their culture more efficient

3.3.1.1 Board of Directors

The board of directors is elected by their shareowners to oversee their interests in the

long-term health and the overall success of the Company’s business and its financial strength.

It serves as the ultimate decision-making body of the Company, except for those matters

reserved to or shared with the shareowners. The Board fulfills its duties, including

implementation of risk oversight, with the assistance of various appointed Board committee.

The Board also selects and oversees the members of senior management, who are charged

by the Board with conducting the business of the Company.

3.3.1.2 Corporate Responsibility

Corporate responsibility is managed through the Public Policy and Corporate

Reputation Council, a cross-functional group of senior managers from our Company and

bottling partners. The Council identifies risks and opportunities faced by our business and

communities and recommends strategies to address these challenges.

3.3.1.3 Ethics & Compliance

The core of the ethics and compliance program at The Coca-Cola Company is our

The Code guides our business conduct, requiring honesty and integrity in all matters. All of

our associates and directors are required to read and understand the Code and follow its

precepts in the workplace and larger community.


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3.3.1.4 Ethics Line

Our associates, bottling partners, suppliers, customers and consumers can ask

questions about our Code and other ethics and compliance issues, or report potential

violations, through Ethics Line, a global Web and telephone information and reporting

service. Telephone calls are toll-free, and Ethics Line is available 24 hours a day, seven days

a week, with translators available.

More information about our approach to and administration of ethical business

conduct for employees, suppliers, partners, and non-employee directors is detailed in our

Ethical business conduct page to its journey.

3.3.1.5 Public Policy Engagement

We participate in public policy dialogues around the world, particularly in the United

States. Our aim is to use our resources responsibly to advance public policy that supports our

industry and business priorities, our more than 700,000 system associates, our shareowners

and the communities we serve.

The Coca-Cola Company and our affiliated Political Action Committees comply with

U.S. laws and requirements regarding contributions to political organizations; candidates for

federal, state and local public office; ballot measure campaigns; political action committees;

and trade associations. The Public and Diversity Review Committee of our Board of

Directors reviews our advocacy efforts, including political contributions.

3.3.2 What Factors are Influencing their culture and How

3.3.2.1 Demographic Forces

Within Coca Cola several different demographic factors are relevant to their market

sector. Age is a factor that is relevant as the organization has to obey by certain laws and

regulations for example by advertising to children, it is deemed unorthodox and morally

wrong. Coca Cola have stated that they will not advertise their products to children and will

not show them on children TV channels as they contain high quantity of sugar and are

unhealthy.

3.3.2.2 Economic Forces

Inflation increases cost of production. Consequently, Coca Cola have to face the

uncontrollable problem of increasing their pricing. With this increase they risk losing

customers who cannot afford their products because it is a desired product not a necessity.

For example, in 2002, a 2 liter bottle of coca cola was 99p whereas today a 2 liter bottle costs

£1.98. Due to inflation in 11 years the price of an identical bottle of Coca Cola has doubled

in price. Alternatively, Coca Cola could be forced to lower their prices to facilitate an

increase in consumption whilst taking a less favorable profit margin.


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3.3.2.3 Natural Forces

Other ways that Coca Cola are responding to different natural forces is by trying a

more environmentally friendly packaging. Coca Cola say that they are always looking at

ways on how to improve their packaging and use less raw materials when creating them. At

the moment they use raw materials like petroleum and other fossil fuels to create their plastic

bottles. To reduce their use of these fuels they have create a new ‘Plant Bottle’ packaging

which will bring them one step closer in creating a completely petroleum free bottle. They

aim to achieve this goal by 2020.

3.3.2.4 Technological Factors

Coca Cola are breaking into other markets with the help of technology. They have a

partnership with Spotify which are a music service that offers music on demand. Coca Cola

and Spotify have created a service which provides customers with music and helps them

connect with others around the world that love the same type of music. Coca Cola have stated

that they like technological advances and that music has been a big part in their marketing

strategy. This is why they have partnered up with Spotify so they can improve this digital on

demand service and make it available to more people around the world.

3.3.2.5 Political Forces

The political forces that affect Coca Cola are mostly different rules and regulations

the company needs to follow in order to not break the law. Coca Cola promote their product

as a strictly non-alcoholic beverage. Because of this they are constantly monitored by the

government and health authorities on what they put in their drinks. Coca Cola are monitored

by more than 200 governments and health authorities which also includes Muslim countries

where Coca Cola need to include a Halal stamp on their product.

3.3.2.6 Cultural Forces

The rapidly growing population today has meant that more and more companies can

increase their market share and have more business. This is no different for Coca Cola. As

different cultures grow Coca Cola grows with them. This is because there are more people

to buy the products and it rapidly increase Coca Cola’s profit and also their market share.

Coca Cola expect that with a bigger population there will be more people and a greater

demand for products which votes positively for Coca Cola.


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3.3.3 Through what method(s) keep the culture alive

3.3.3.1 Our Winning Culture

Our Winning Culture defines the attitudes and behaviors that will be required of us

to make our 2020 Vision a reality.

3.3.3.2 Live Our Values

Our values serve as a compass for our actions and describe how we behave in the world.

Leadership: The courage to shape a better future

Collaboration: Leverage collective genius

Integrity: Be real

Accountability: If it is to be, it's up to me

Passion: Committed in heart and mind

Diversity: As inclusive as our brands

Quality: What we do, we do well

Be the Brand: Inspire creativity, passion, optimism and fun.

3.4 Organizational Structure

3.4.1 Degree to which organizational design elements exit in company structure

3.4.1.1 Designing Organizational Structure: Authority &Control

The Coca-Cola Company currently employs approximately 94,800 employees.

According to general organizational chart obtained from the company’s website, there are

more than 5hierarchical levels at the corporate level. For example: the head of the Canadian

division reports to the president and COO of the North American Group. That president

reports to the CFO, who reports to the Office of the General Counsel. The General Counsel

then reports to the CEO. It is fair to assume that there are at least a few more steps in the

hierarchy at the local level. Due to its tall structure, the organization has experienced

communication problems. One of the problems discovered through a survey, was that the

people and the company lacked clear goals. Tall hierarchies also cause motivation problems,


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which is why the organization is attempting to get employees more engaged. The increased

usefulness of the company’s intranet will greatly increase the communication between every

level of employees, and allow upper management to effectively communicate to the front

line employees. Based on information from Report 2006 this span of control seems somewhat

slim for the CEO of such a large organization. The CEO is also a member of the Senior

Leadership Team. This team consists of each head of the eight operating groups

aforementioned, andalso has other top executives in areas like innovation and technology

and marketing.Although there are only six people that answer directly to the CEO, the CEO

is able to receive input from a wide variety of divisions because of this leadership team. Since

the team is comprised of members from various divisions, the CEO is able to obtain a wide

variety of information. The move to decentralization has caused structural changes for The

Coca-Cola Company .New offices have been opened to facilitate decisions being made closer

to the local markets. The organization has also undergone centralization of some of the

company’s departments. In 2006, the Bottling Investments division was created to “establish

internal organization for our consolidated bottling operations and our unconsolidated bottling

investments.” It appears that the organization is striving for a hybrid structure, which allows

them to have advantagesof both mechanistic and organic structures, while trying to minimize

the negativeconsequences of each. The strategic structural changes that the organization has

gone through in recent years have created a much needed positive impact on the company.

Sales growth increased and employees are much more satisfied. The organization is trying

to create a more innovative culture by pushing towards decentralization.

3.4.1.2 Designing Organizational Structure: Specialization & Coordination

The Coca-Cola Company realizes that a divisional structure gives the organization

the best opportunity to react to the changes in its uncertain environment, but also allow it to

maintain level of stability. The multidivisional structure is beneficial for the organization for

a variety of reasons. The division based on geographic region allows certain aspects of the

company’s operations to be tailored to the individual market. One advertising campaign or

slogan may not be appropriate for another market, so decisions about specific ads are made

closer to the individual markets. Multidivisional structures allow divisional managers to

handle daily operations while corporate managers are free to focus on long-term planning.

There are also problems associated with this type of structure. If the company creates

divisional competition, coordination may decrease because each division wants to have

anadvantage over everyone else. Communication problems may also exist

becauseinformation can become distorted when it has to travel up and down tall hierarchies.

Multidivisional matrix structure may be better suited for The Coca-Cola Company. This

would increase coordination between corporate and divisional levels, and managers at each

level would work together to create solutions to problems. While such a structure may be too

complex for a global organization, the company may want to look into it.


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3.5 Core competencies

3.5.1 What are the company-wide core competencies

Brand Name and Loyalty

Distribution and Manufacturing Networks

3.5.2 Which and How capabilities are linked with each core competency

3.5.2.1 Corporate Function

Multidivisional Coordination

International Management

Financial Control

3.5.2.2 Management Information

Developed, Formal Vertical and Horizontal Structure

3.5.2.3 Research &Development

Market Research

3.5.2.4 Operations

Supplier Relationship

3.5.2.5 Product Design

Suited to consume needs

3.5.2.6 Marketing

Brand management

Reputation for Quality

Market Trends

3.5.2.7 Sales &Distribution

Speed of Distribution

Effective Sales Promotion and Execution

3.5.3 Which and How resources are linked with each capabilities

3.5.3.1 Resources (Tangible)

Property, Plant and Equipment

Buildings and facilities constructed all over the world

Strong Financial Position


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Large positive cash flows

Human Resources

Training and development result in competent and motivated workforce

3.5.3.2 Resources (Intangible)

Technical Expertise

Constant innovation, R&D, new iterations of products to keep up with

market

Intellectual Property Rights

Stymie intense competition with patents and trademarks

Goodwill

High level of brand loyalty and brand visibility

3.5.4 On the basis of market analysis (Phase 2), evaluate each core competency through

4 Criteria Matrix

Core

Competency 4 Criteria Matrix

Brand Name

and Loyalty

Distribution

and

Manufacturin

g Networks


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3.6 Coca - Cola Porter's Value Chain Analysis

3.6.1 Inbound Logistics

1. The Suppliers

The suppliers of Coca-Cola include Ogilvy and Mather, Jones Lang LaSalle,

Spherion, IBM, IMI Cornelius, and Prudential. The above companies supply to Coca

Cola materials like ingredients, packaging, machinery, software etc.

2. The Standards

Coca-Cola has put certain regulations and standards in place which the suppliers

(mentioned above) must adhere to. The company has named these guidelines as The

Supplier Guiding Principles. Some of the guidelines include -

Compliance with laws, standards and regulations

Freedom of association and collective bargaining

Wages and benefits, work hours and overtime, health and safety, environment,

etc.

3. The Assessment

Coca-Cola continually makes efforts to assess their suppliers by the help

of third parties through interviews with contract workers and employers. If the

supplier do not adhere to the supplier guiding principles or has any other issues,

they are given some amount of time to take corrective measures; if not, Coca-

Cola has the right to terminate their contract with these suppliers.

3.6.2 Operations

1. The Secret Formula

Coca Cola's core operation is the concentrate and syrup production. The

company supplies this concentrate to the bottlers where the production of cola

happens. Other activities that impacts Coca Cola's business occurs across the

value chain through system's distribution networks, bottling operations and sales

and marketing activities.

2. The challenges

The company addresses the issues by cohesively working with their

partners (bottlers, suppliers etc.) to reduce the overall effects at each level of the

manufacturing process. They look at the problem from a holistic view by

understanding the overall environmental impact of their business through the

entire lifecycle of their products ranging from raw material procurement to the

production, delivery, sales and marketing of the product.


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3.6.3 Outbound Logistics

1. The Distribution System

Coca Cola has the world's largest distribution system. They operate in

over 800 plants around the world. They operate in more than 200 different

geographic locations and market more than 2,400 beverage products. They have

distribution reach varying from hypermarkets such as Wal-Mart, fast food

restaurants such as McDonalds to small Kirana stores in rural parts of India.

2. The Bottling Partners

Coca Cola has more than 300 bottling partners. These partners range from

small family owned operations to publicly traded businesses. In order to work

cohesively and meet the need of all their customers, Coca Cola has implemented

the Coca Cola System in which they work together with their partners and

develop strategies to benefit the full ecosystem.

3.6.4 Sales and Marketing

1. The Marketing Strategy

Coca Cola is primarily a marketing company. They market more than

2,400 products to the consumers. They market world's top four (by sales)

beverage drink brands. Creativity is a vital strategy for Coca Cola. They work

hard on their marketing strategy in order to deepen their brand connection with

their customers. As a result, innovation plays a very important role in the

company. Their marketing strategy is directly linked to the consumer ranging

from advertising, to point of sale, to ultimately usage of a Coca Cola drink. They

apply innovation is every dimension of the supply chain which includes new

product development, increasing brand equity, packaging and designing various

new advertising campaigns.

3.6.5 Service

1. Servicing their Customers

Activities that maintain and enhance a product value include customer

support, training and development, installation and maintenance. Coca Cola's

customers range from large international retailers like McDonald's, KFC and

restaurants to smaller independent businesses and vendors like Kirana and

regional stores. They provide customized services tailored to meet their

customer's needs.

2. Servicing their Partners


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Coca Cola also supports their retailers by enabling them with the

necessary training to help their businesses become more profitable and effective.

They have set up Customer Development and Training Centers which are

available to more than 21,000 independent retailers. They provide free training

to the retailers in areas such as marketing, finance, operations, general

management and customer service.

3.7 Strategic Objectives

Strategic objectives are long-term organizational goals that help to convert a mission

statement from a broad vision into more specific plans and projects. They set the major

benchmarks for success and are designed to be measurable, specific and realistic translations of

the mission statement that can be used by management to guide decision-making. Strategic

objectives are usually developed as a part of a two- to four-year plan that identifies key strengths

and weaknesses and sets out the specific expectations that will allow the company or

organization to achieve its more broad-based mission or vision statement.

As per Coca-Cola, the company's aims and objectives are to refresh the world, to

inspire moments of optimism and happiness, and to create value and make a difference.

These aims and objectives are centered on a desire to thrive "over the next ten years and

beyond." The Coca-Cola Company is a leader in the beverage industry with a reputable brand

and strong global presence.

According to the Coca-Cola Company’s mission statement and 2020 Vision, some of its

goals include:

• Increase annual operating income by 6-8% in order to double their

revenue by 2020.

• Focus on environment friendly bottling production and enforce

sustainability;

• Increase profit by cutting down costs through productive and

efficient production facilities;

• Continue to diversify its portfolio through innovations and

partnerships, keeping consumer demands in mind;


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1. Competitor Environment

The Coca-Cola Company’s main objective is to maintain its diet carbonated

beverage sales in developed markets. As the demand for carbonated beverages in emerging

markets is increasing, such as markets in Middle East and Africa, may double 2010’s

revenues by 2020 (Euromonitor,2013). Additionally, as the trend of health and wellness is

shaping the soft drink industry, the Coca-Cola Company is trying to increase its non-

carbonated beverages sales in the market by acquiring other drink companies. PepsiCo The

main competitor of the Coca-Cola Company is PepsiCo. PepsiCo is the world’s second

largest food and beverage company and has a presence in over 200 countries. In order to

meet consumers’ health and wellness requirement, PepsiCo has acquired Nutrition Co as a

subsidiary. PepsiCo is temporarily focusing on reshaping its brand image that emphasizes

on healthy food and drinks. Like the Coca-Cola Company, PepsiCo has established well-

known brands including, Pepsi, Gatorade.

2. Main Strategic Challenges

Increasing revenue streams from all fronts In order to achieve its goal of doubling

the revenue in ten years, Coca-Cola needs to sell its products in new geographic areas and

expand its product like that meet the consumers’ changing preference and behaviors.

Maintaining its current market size in the developed market, the company also needs to

increase sales in developing markets. Diversification Carbonated beverages are the

company’s bread and butter business so that the company is heavily relied on their sales.

This implies that the company needs to increase awareness and sales on other drinks, such

as bottled water, juice, ready-to-drink tea, and even Asian specialty drinks since the

consumer preferences are changing. Moreover, in order to maintain their share of sales in

the increasing competitive market, Coca-Cola has to continue to strengthen their brand

loyalty, innovation, and expand into other product categories in the beverage industry. Diet

products cannibalizing standard variants As consumers have growing concerns about their

health, such as obesity issues, which results in a reduce demand of standard cola. Therefore,

the amount of sugar in regular soft drinks needs to be reduced accordingly. Although the

introduction of the diet cola successfully addressed this issue, the increasing demand and

sales of diet drinks cannibalized the sales of standard cola. The company needs to find a

way to sustain their revenues while anticipating consumers’ preference changes.

Acquisition targets in developed markets with the strong penetration power in the mature

soft drinks industry, the Coca-Cola Company’s revenue growth can be generated from

secondary markets or new markets. However, in developed markets, an acquisition option


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is limited because of market consolidation. It is challenging for the company to make large

acquisitions in all markets.

3.7.1 WE FOCUSED ON DRIVING REVENUE AND PROFIT GROWTH

Each of the 200-plus nations we serve plays a critical role in our growth plans.

We used segmented revenue growth strategies across our business in a way that

varied by market type. And we aligned our employee incentives accordingly. In emerging

markets, we focused primarily on increasing volume, keeping our beverages affordable and

strengthening the foundation of our future success. In developing markets, we struck a

balance between volume and pricing. In developed markets, we relied more on price/mix and

improving profitability by offering more small packages and more premium packages like

glass and aluminum bottles.

Creating value for our Company and customers looks different in different countries,

and we did a good job segmenting our markets to drive revenue growth in 2015. While we

still have more to do, we were encouraged by our results. Globally, price/mix rose 2 percent

as did volume, helping increase organic revenue 4 percent. We also gained worldwide value

share in our industry.

3.7.2 WE INVESTED IN OUR BRANDS AND BUSINESS

Healthy businesses require continuous investment. We made a choice to invest in

more and better marketing for our brands, increasing both the quantity and quality of our

advertising. We increased spending on media advertising by more than $250 million, and we

used these funds to share stronger, more impactful ads.

At the same time, we invested across our expansive beverage portfolio. We improved

our position in the energy category with a strategic new partnership with Monster Beverage

Corporation. We invested in brands like Suja, a line of premium organic, cold-pressed juices,

and agreed to buy China Green Culiangwang, a plant-based protein beverage brand. We also

expanded to nationwide the U.S. distribution of fairlife ultra-filtered milk.

In 2015, we developed our first global marketing campaign to support the entire

Coca-Cola Trademark of Coke, Diet Coke, Coke Zero and Coca-Cola Life. Launched in

early 2016, “Taste the Feeling” emphasizes the refreshment, taste, uplift and personal

connections that are all part of enjoying an ice-cold Coca-Cola. With this campaign and our

broader “one brand” strategy, we’re letting consumers know they can enjoy Coca-Cola with

calories, fewer calories or no calories and with or without caffeine. The choice belongs to

each individual, every time he or she reaches for a delicious and refreshing Coca-Cola.


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3.7.3 WE BECAME MORE EFFICIENT

As we took steps to rebuild our growth momentum, we knew we needed to invest in

more and better marketing while also increasing our financial flexibility. To these ends, we

increased our efficiency and productivity while reducing costs.

Part of the solution was “zero-based work”—a way of looking at our business that

starts from the assumption that organizational budgets start at zero and must be justified

annually, not simply carried over at levels established in the previous year. We also cut

spending on non-media marketing like in-store promotions. And we found new savings in

our supply chain around the world.

Overall, we were able to realize more than $600 million in productivity improvement

in 2015, which we used to invest further in our brands and business and also to return to our

shareowners.

For the future, we’re working to drive productivity and continuous savings across our

Company and system. We see productivity not as an event or series of events but as an

ongoing, day-by-day process of becoming stronger, leaner and ultimately better.

3.7.4 WE SIMPLIFIED OUR COMPANY

Few industries have changed more rapidly in recent years than the nonalcoholic

beverage industry. Evolving consumer tastes and preferences, coupled with sweeping

innovations in the retail and supply chain landscapes, have created an environment in which

speed, precision and empowered employees determine who wins in the marketplace.

To seize this opportunity, we took steps to reshape our business. We looked hard at

our operating structure and identified areas where we could be faster, smarter and more

efficient. We removed a layer of functional management and connected our regional business

units directly to headquarters. We streamlined a number of important internal processes and

removed roadblocks and barriers that inhibited us from being as effective and responsive as

we knew we could be.

Most importantly, we began to look at ways to enhance further the employee

experience across our Company with the goal of creating the world’s most exciting, productive,

fun and fulfilling career environment, with workplaces that nourish curiosity, learning,

innovation and growth. While this journey has just begun, our associates have responded with

the resolve, commitment and passion that have been hallmarks of Coca-Cola leadership since

1886. The Coca-Cola Company has always been a creator of refreshing beverage brands.

Today, our expansive portfolio includes more than 500 brands, including sparkling beverages,

juices and juice drinks, coffee, tea, sports drinks, water, value-added dairy, energy and


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enhanced hydration drinks. Among these brands are 20 that generate more than a billion dollars

in annual retail sales. Another core competency has been our ability to lead the world’s most

sophisticated system of independent bottling partners while creating value for our retail and

restaurant customers. Over the years, we’ve acquired and managed a number of Coca-Cola

bottling partners with the aim of improving performance, optimizing manufacturing and

distribution systems, and ultimately refranchising the bottling territories back to independent

status.

3.8 Current Strategies (to achieve above objective) (combination of strategies / single

strategy for each objective)

3.8.1 Corporate Level Strategies

The Coca-Cola Company uses the following corporate level strategies:

3.8.1.1 Growth Strategy:

They follow the growth strategy. The Coca-Cola Company invests a huge amount on

its s expansion projects not in Pakistan but also in all the six operating regions of the world.it

is currently present in more than 200 countries which is a big depiction of its focus on growth

strategies. As it’s the large scale organization, so Coca-Cola has to use different types of

growth strategies in different situations. Like if it aims to target new customers and introduce

new products than it has to use horizontal growth strategy. If it invests in its own supply

chain as a part of cost leadership strategy, it is basically focusing on vertical growth. The

coca cola company has developed its own supply and distribution system in various potential

markets of the world which largely helps it in controlling the heavy manufacturing and

distribution costs.

3.8.1.2 Diversification strategy:

The company has used diversification strategy various times. It was founded as soft

drink manufacturer but with the passage of time, it entered into various related industries like

mineral water, soda, tea, coffee, fruit juices. These diversification strategies have increased

its business portfolio and enabled it to compete with the top brand in all these industries.

3.8.1.3 Stability Strategy:

The company uses this strategy when it feels that growth strategy are not a feasible

choice in the presence of unfavorable economic circumstances or some internal issues.


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Therefore, it either proceeds with an extra care or completely stops at the current position

and focuses on its quality control, marketing efforts, supply chain and R&D.

3.8.1.4 Retrenchment strategy:

The coca cola uses retrenchment strategy in those business units where it observes no

or little growth during a definite period of time. T retrenches these business units in a number

of ways; including budget-cut for production, marketing, R&D in that area, complete

shutdown of operations, selling out the whole unit to private investors.

3.8.2 Business level strategies

The Coca-Cola Company uses the following business level strategies:

3.8.2.1 Differentiation strategy:

The coca cola company has always focused on differentiating its products from those

of its competitors in order to establish a unique position in the global beverages industry. Its

top most brands like coca cola, sprite and Fanta are manufactured under strict quality

standards and by unique formulations. Due to its differentiation strategy the Coca-Cola

Company is able to maintain the top market leadership position. Differentiation is found in

each of its business operation. It uses unique marketing campaigns, labeling, bottle shapes,

and up to dated plant and machinery to manufacture the top quality beverage products.

3.8.2.2 Low cost leadership:

In addition to delivering the top quality products, the company also keeps an eye on

its increasing operational and marketing expenditures. It recognizes the importance of cost

control for gaining competitive advantage in the industry and operating in a more profitable

way. The coca cola company has been pursuing this strategy since its incorporation. It

strongly emphasis on internal efficiency so that its products can be manufactured at the

minimum possible cost.it has maintained a tight control over its manufacturing, overhead,

marketing, and R&D costs.

3.8.2.3 Focus Strategy:

The company also uses focus strategy in both cost and differentiation dimensions.

For its focused low cost strategy, it has defined a specific line of beverage products through

which it can target a specific market and achieve low cost by manufacturing these products


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under highly efficient manufacturing processes. The Coca-Cola is manufactured and

promoted under focused low cost strategy. Coca cola is sold in more than 200 countries of

the world, but has slight variations in its taste, flavor, and ingredients. The company produces

its coke for every target at a large scale in order to achieve low cost leadership in that

market.it keeps that target market under complete focus while designing its marketing

campaigns and selecting distribution networks so that it can serve the potential consumers

from that market in the most effective and efficient way.

3.8.3 Functional level strategies

The Coca-Cola Company uses the following functional level strategies:

3.8.3.1 Marketing Strategies

1. Pricing strategy:

Due to the availability of wide range products the pricing is done according to

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 market is said to be a oligopoly market (few sellers and

large buyers), hence they form into cartel contract to ensure a mutual balance in

pricing between the sellers.

2. Distribution strategy:

The company operates a franchised distribution system dating from 1889

where The Coca-Cola Company only produces syrup concentrate which is then sold

to various bottlers throughout the world who hold an exclusive territory.Hub and

Spoke model for rural distribution channel, in which they divided the different

categories of distributors according to the area they are covering.

Coca Cola Company makes two types of selling:

Direct selling: In direct selling they supply their products in shops by using

their own transports. They have almost 450 vehicles to supply their bottles. In this

type of selling company have more profit margin.

Indirect selling: They have their whole sellers and agencies to cover all area.

Because it is very difficult for them to cover all area of Pakistan by their own so they


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have so many whole sellers and agencies to assure their customers for availability of

coca cola products.

3. Promotion strategy:

Push Strategy: Coca cola is using Push strategy in which they use its sales

force and trade promotion money to induce intermediaries to carry, promote and sell

the product to end users i.e. consumers. • For example-as coca cola is giving free pet

bottles and other trade schemes to distributors, agency owners and retailers.

Pull Strategy: Coca-Cola is also using Pull strategy in which they are using

advertising and promotion to persuade consumers to ask intermediaries for the

company brand product by this way coca cola inducing customer to order it from

shopkeeper.

3.8.4 Financial Strategies

3.8.4.1 Financing and Dividend decisions strategy:

There is a Committee established by the Board to aid the Board in discharging its

responsibilities relating to oversight of the Company's financial affairs.

The Committee consists of no fewer than three members. The members of the

Committee shall be established by the Board and removed by the Board.

The Committee periodically formulate and recommend for approval to the Board the

financial policies of the Company, including management of the financial affairs of the

Company. The Committee have prepared for approval by the Board annual budgets and such

financial estimates as it deems proper; have oversight of the budget and of all the financial

operations of the Company, shall recommend dividend policy to the Board and from time to

time shall report to the Board on the financial condition of the Company. All capital

expenditures of the Company shall be reviewed by the Committee and recommended for

approval to the Board.

3.8.4.2 Working Capital Strategy:

Coca-Cola Enterprise used Economic Value Added (EVA) in the 80’s in order to

hold its profit and loss statement to a higher standard and attract investors. Another way to

evaluate true profit is to calculate the cost of capital which is what EVA attempts to do. By


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managing working capital and the cost of such, a company can stay competitive and liquid.

There are two kinds of capital – that which is borrowed and that which is invested. There is

a cost to both kinds of capital. By using EVA Coca-Cola Enterprise was able to attract

investors which meant a steady stream of working capital with which to run the day to day

business.

3.8.4.3 Financial or revenue/ profit growth strategy:

The company’s strategic objective is to maximize the revenue and profit growth of

the company. And for this purpose coca cola has used segmented revenue growth strategies

across their business in such a way that varied by market type. And they aligned their

employee incentives accordingly. In emerging markets, they focused primarily on increasing

volume, keeping the beverages affordable and strengthening the foundation of their future

success. In developing markets, they struck a balance between volume and pricing. In

developed markets, they relied more on price/mix and improving profitability by offering

more small packages and more premium packages like glass and aluminum bottles.

3.8.4.4 Human Resource Strategies

Human resource management at Coca Cola Company has many advantages as well

as disadvantages. As a global company, it focuses on the acquisition and retention of highly

skilled and knowledgeable employees so that is can maintain its top position in the market.

Coca Cola Company human recourse department check their job decryption and job analysis

in which they get the information about employees work activities, human behavior and other

background check which related to the job position. They use this information for recruiting,

selection, compensation, performance appraisal, training and employee’s relationship

HR department management states that employees are our assets, therefore we care

about their health and benefits.

1. Mentoring programs that provides an opportunity for employees to broaden their

professional network of resources, enhance their overall employment competitiveness

and benefit from learning about multiple areas of the company.

The program includes:

One on one mentoring


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Group mentoring

Self-study mentoring

2. The company encourages also coaching, feedback, exchange of ideas, diverse thinking,

and cross-functional learning.

3. Employees’ relations.

4. Compensation and benefits.

5. Training and Development.

6. Provide employees with solutions to their problems.

7. Look out for the well-being of all employees of the company.

3.9 Identify Rival Firms: PepsiCo

As a main rival in soft drink industry against coke, Pepsi expanded through a franchise

bottling network but with a greater focus on retail sales over fountain( fast foods like taco bell).

Pepsi is second to coke in sales.

3.9.1 PepsiCo’s Strengths (Internal Strategic Factors)

PepsiCo’s continued global growth and prominence reflects the company’s strengths. This

aspect of the SWOT analysis framework outlines internal strategic factors that enable firms to

fulfill their business goals. The following are the most significant strengths of PepsiCo:

3.9.1.1 Strong brand recognition and reputation

PepsiCo owns and markets some of the most recognizable global brands, including Pepsi,

Tropicana, Gatorade, Mountain Dew, Aqua-fina, Lay’s, Doritos, Cheetos and many other popular

brands. According to Interbrand and Forbes, the Pepsi brand is respectively the 24th and 29th most

valuable brand in the world, worth US$19 billion in both rankings lists. Forbes also identified Frito-

Lay as the 38th most valuable brand in the world, worth US$13.1 billion. Except for Coca-Cola

and Sprite, no other non-alcoholic beverage brand besides Pepsi has been recognized as being one

of the top 100 most valuable brands in the world. Euro monitor measured the most popular U.S.

snack brands in 2013 and 6 of the 10 most popular brands were owned by PepsiCo.

3.9.1.2 Broad product mix

In addition, the broad product mix represents PepsiCo’s increasing ability to reach various

markets and segments, such as through Frito-Lay products, Quaker products, and Pepsi products.

3.9.1.3 Extensive global production network

PepsiCo’s extensive global production and distribution networks are strengths that support

the company’s international growth and expansion strategies.

3.9.1.4 Extensive global distribution network

In this aspect of the SWOT analysis, PepsiCo’s strengths are sufficient to support its global

growth strategy.


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3.9.2 PepsiCo’s Weaknesses (Internal Strategic Factors)

PepsiCo suffers from a number of weaknesses that act as barriers to international growth.

The internal strategic factors that limit organizational development are considered in this aspect of

the SWOT analysis framework. The following are PepsiCo’s main weaknesses.

3.9.2.1 Low penetration outside the Americas

PepsiCo derives about 70% of its revenues from markets in North America and South

America. This weakness indicates that the company has not yet maximized potential revenues

outside the Americas.

3.9.2.2 Limited business portfolio

In addition, PepsiCo operates primarily in the food and beverage industry. This is a

weakness because it maximizes the company’s vulnerability to risks in the food-and-beverage

market.

3.9.2.3 Weak marketing to health-conscious consumers

Also, PepsiCo fails to effectively market many of its products to health-conscious

consumers. This aspect of the SWOT analysis highlights weaknesses that PepsiCo must address

through changes in its growth strategy.

3.9.3 Opportunities for PepsiCo (External Strategic Factors)

PepsiCo has opportunities for continued global growth. In this aspect of the SWOT analysis

framework, external strategic factors that provide options for business improvement are identified.

PepsiCo’s opportunities are as follows,

3.9.3.1 Business diversification

PepsiCo has the opportunity to diversify its businesses, such as by acquiring a

complementary firm that is not in the food and beverage industry.

3.9.3.2 Market penetration in developing countries

Another opportunity is for PepsiCo to increase its penetration in developing countries to

generate more revenues from markets outside the Americas.

3.9.3.3 Global alliances with complementary businesses

In addition, PepsiCo can create alliances with complementary business to increase its

market presence. Based on this aspect of the SWOT analysis, PepsiCo has significant opportunities

to strengthen its business resilience.

3.9.4 Threats Facing PepsiCo (External Strategic Factors)

The food and beverage industry experiences a variety of threats. External strategic factors

that could reduce business performance are considered in this aspect of the SWOT analysis

framework. In PepsiCo’s case, the following are the most significant threats:


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3.9.4.1 Aggressive competition

Aggressive competition is a major threat against the company. The influence of the Coca-

Cola Company is especially significant against PepsiCo.

3.9.4.2 Healthy lifestyles trend

In addition, the healthy lifestyles trend is a threat against PepsiCo’s products, many of

which are seen as unhealthful because of their sugar, salt, or fat content.

3.9.4.3 Environmentalism

Also, environmentalism threatens the company in how consumers negatively respond to

product waste and lifecycle issues. This aspect of the SWOT analysis indicates that PepsiCo must

reform its strategies to overcome the threats to business.

3.9.5 Objectives of PepsiCo

3.9.5.1 Detailed company objectives

The main objective of launching PepsiCo was to provide a quality product, product at

affordable price for the masses in addition through an organized and well mannerism. Corporate

social responsibility are also an important part of company objectives because PepsiCo consider

this goal as fundamental for private growth but for environmental growth too.

3.9.5.2 Objectives in term of market share

The objective of the PepsiCo is the “market share growth”. Although organization has

been able to capture a greater percentage of market but still they want to strive for more market

share as well as a quality product and service.

3.9.6 PepsiCo’s Generic Strategies

PepsiCo applies different generic competitive strategies, considering the company’s wide

array of products. However, the main generic strategies that contribute to PepsiCo’s competitive

advantage are as follows,

3.9.6.1 Cost leadership

PepsiCo uses cost leadership as its primary generic competitive strategy. This generic

strategy focuses on cost minimization as a way to improve PepsiCo’s financial performance and

overall competitiveness. For example, to compete against Coca-Cola products, PepsiCo offers low

prices based on low operating costs. The company also sometimes has special promotional offers

with discounted prices. . A strategic objective for the cost leadership generic strategy is to automate

production processes to minimize PepsiCo’s operating costs.

3.9.6.2 Broad differentiation

PepsiCo uses broad differentiation as its secondary generic competitive strategy. This

generic strategy enables business competitive advantage by attracting consumers to some unique

features of the firm’s products. For example, PepsiCo’s Lay’s potato chips are marketed as a

healthful snack product because of reduced saturated fat content. In relation, PepsiCo’s strategic


99

objective for the broad differentiation generic strategy is to innovate products to address concerns

about their health effects.

3.9.6.3 Market Penetration

PepsiCo implements market penetration as its primary intensive growth strategy. This

intensive strategy supports business growth through increased sales, such as from a bigger market

share. For example, PepsiCo uses aggressive marketing to attract more consumers. A strategic

objective linked to this intensive growth strategy is to minimize costs and prices to attract more

consumers despite market saturation. As such, PepsiCo’s generic competitive strategy of cost

leadership supports this intensive strategy for growth.

3.9.6.4 Product Development

PepsiCo’s secondary intensive growth strategy is product development. This intensive

strategy requires offering new products to capture more consumers. For example, PepsiCo

continues to develop products or variants of existing ones, such as low-calorie, reduced-salt, or

low-saturated-fat variants of its food and beverage products. A strategic objective linked to this

intensive growth strategy is to boost R&D investments for product innovation. PepsiCo’s generic

competitive strategy of broad differentiation supports this intensive strategy by offering unique or

novel products to attract more consumers and grow the business.

3.9.6.5 Market Development

PepsiCo applies market development as its supporting intensive growth strategy. This

intensive strategy supports business growth by capturing new markets or market segments. For

example, PepsiCo continues to expand its distribution network to reach the last remaining markets

or segments, especially in developing regions. However, market development is only a supporting

intensive growth strategy because PepsiCo already has significant presence in all regional markets

worldwide. A strategic objective for this intensive strategy is to expand PepsiCo’s supply chain to

support the growth of its distribution network.


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3.10 SWOT Analysis

1. It is the number onebeverage in terms ofdistribution and sales andvalue ($77,389 billion).

2. Its portfolio comprises offamous brands like Coca-Cola, Kinley, Fanta, MinuteMaid, Limca, Maaza, etc.

3. Globally present and hasreach in almost 200 countries.

4. It has more than 500 brandsto offer

5. Employees almost morethan 150,000 people globally

6. Coca-Cola carries aneffective and strong supplychains which ensures that itsproducts are delivered andavailable even in the mostremote places.

7. Financially strong

8. Maintains strong brandrecall by associating theirbrands with brandambassadors and celebritiesthrough advertising andmarketing.

9. Socially responsible: TakenCSR initiatives in the avenuesof education, recycling andwater conservation, health,etc.

10. Gives emphasis recyclingand reusing through itsefficient and effectivepackaging and disposingtechniques.

11. The brand has long beenassociated with scholarships,donations and internationalsports.

12. Customer Loyalty

13. Bargaining power oversuppliers

1. Traces of pesticides found in the cola beverages had damaged the image of the brand.

2. PepsiCo is a strong competitor in the aerated drinks industry and thus constant competition runs between them for market share.*

3. Absence in the food and snacks industry.

4. Negative publicity

ST

RE

NG

HT

SW

EA

KN

ES

SS


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1. Takeover and acquire other companies to enter other industries.

2. Reach untapped markets and countries where Coca-Cola has not been introduces yet.

3. Market and promote the less known products of the portfolio.

4. Diversify into other industries like snack market to beat PepsiCo.

5. Lower threat of forward integration due to the strong supply chain network, high-cost manufacturing machineries required.

6. Advance technological progression

1. Health reports claim Coke is harmful to health; Consumers have become health conscious.**

2. Compliance with regulations and laws of various countries in which they operate and distribute.

3. Economic slowdown, inflation, currency instability, etc.

4. Head-to-Head competition with PepsiCo.

OPPORTU

NITIES TH

REATS


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4 Phase 4 – Gap Analysis & Recommendations

Topic Gap Analysis (Issues) Recommendations

4.1 External Analysis

Natural Environment Coca-Cola has been

accused of dehydrating

communities in its pursuit of

water resources to feed its own

plants, drying up farmers'

wells and destroying local

agriculture.

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.

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.

Due to this coca

cola wastage the water

resources and the

community suffers a lot. In

this case they must start up

the program for the

reservation of water so that

the economy prevent from

dehydration.

Societal Environment Political Factors Coca-Cola should

stop to sell the products to


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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-Cola brand is effected by

the political decisions of

Turkey. It has negative impact

on coke.

Economic Fectors

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% .No doubt

coke was effected lesser by

that recession but it was

effected by economic factors

in a negative way.

Israel. Because it impact

the economy. So it is

recommended to stop

selling here.

In this regard coca-

cola must apply some

strategies to improve in the

economy because it will

impact on the brand of

coca-cola. Market share

price must increase in this

regard.

To promote an

advertising system in a

positive way rather than the


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Social Factors

Adaption and cultural

borrowing

To promote an

advertising system in a

positive way rather than the

musical or negative that will

impact society.

Technologic Factors

Access to the Internet

It has on negative impact on

company policies because

those people who are not using

internet cant aware brand

identity.

musical or negative that

will impact society.

Research and

development must be focus

to cater technology.

PESTEL Analysis Someone might be thinking

that what is an

environmental analysis got

to do in the business

perspective? This analysis

is factors or features that do

influence an increase or

decrease in the quality of

strategic decision making

in a business environment.

There are various factors

under this analysis that

could help to attain the

objectives of a company

and as well act as a barrier.

The environmental analysis

can as well be divided into

two parts.

Remote (micro)

environmental factors:

these are the factors that

affect company or the

organisation of which they


105

do not have control over it.

These factors are;

Political

Social

Economical

Technological

Ecological

Industrial (macro)

environmental factors:

these are factors that the

organisation or the

company has some control

of. It can also be called

'porter's 5 forces'. These

factors are;

Barrier to entry- these has

to be high

Supplier power- these

should be low

Substitute- has to be low as

well

Competitive- has to be low

Buyer power- it must also

be low.

Task Environment WATER STEWARDSHIP

Of the 9.25 million trillion

gallons1 of water on earth, less

than one percent2 are available

to meet the needs of the

planet’s 7 billion-plus3 people.

And stress on the world’s

water supplies—from

population growth,

urbanization, climate change

and more—is increasing.

Preserving and effectively

managing the world’s

available freshwater—

achieving what policymakers

Collaborating to

Replenish the

Water We Use

Improving Water

Efficiency

Wastewater:

Safely Returning

the Water We

Use to Make Our

Beverages

Mitigating Water

Risk for

Communities

Partnering to

Advance Water

Stewardship

http://www.coca-colacompany.com/water-stewardship-replenish-report/setting-a-new-goal-for-water-efficiency/

http://www.coca-colacompany.com/water-stewardship-replenish-report/setting-a-new-goal-for-water-efficiency/

http://www.coca-colacompany.com/water-stewardship-replenish-report/treating-and-recycling-wastewater/





http://www.coca-colacompany.com/packages/water-stewardship-replenish-report/mitigating-water-risk-for-communities-and-for-our-system/



http://www.coca-colacompany.com/water-stewardship-replenish-report/our-partners/




106

call water security—may be

humanity’s most crucial task.

In that sobering reality,

Margaret Catley-Carlson, past

chair of the Global Water

Partnership, sees hope—

provided that all of us are

committed to the stewardship

that water security demands. In

Ms. Catley-Carlson’s words:

"In the clamor of facts, figures

and dramatic predictions, there

is a constant quiet message

about water adequacy: we

probably have enough water,

but not if we use it the way we

do now.

What does that mean, exactly?

Mostly it means that the

growing number of countries,

cities, corporations— and yes,

individuals— experiencing or

threatened with water stress

will have to change the way

they manage and use the water

resources available to them.

Sizeable investments will be

needed in the all-too-many

places where municipal pipes

leak 30 to 60 percent of the

water that is stored, cleaned

and put into the system for

distribution. Industrial, energy

and agricultural processes

must be examined to

understand the potential for

reduction, recycling and re-

Inside the Bottle:

Things You Want

Us to Answer

Around Water

Meet Our Experts

http://www.coca-colacompany.com/water-stewardship-replenish-report/inside-the-bottle-answers-from-bea/




http://www.coca-colacompany.com/water-stewardship-replenish-report/meet-our-experts/


107

use. Having ‘enough water to

eat’ means optimizing the use

of the 75 percent-plus of all

water used that goes to

agriculture. And it means

changes in how we use water

as individuals, too. Why do we

flush with drinking water?

That improvements are being

made (though not in enough

places) means there are

prototypes and technology

available; the will to make

these more widespread will

have to be cultivated and

encouraged. But it has been

done and can be done, even in

resource-poor areas.

Kudos to companies already

embarked on this process, and

especially to those trying to

extend water-saving practices

up and especially down their

supply chains. Again, it can be

done. It has been done. More

needs to be done.

Since few of these measures

are cost-free, the unwelcome

but essential change almost

everywhere will be that most

of us need to pay more for

water services—sanitation and

wastewater services

included—to protect us and

our water resources. We are

not the only life form that

depends on water for survival,


108

so we have a high interest in

making sure that the

environmental resources that

sustain us are in turn sustained

by us."

At The Coca-Cola Company,

we are intensely involved in

water stewardship across our

system and in hundreds of

communities throughout the

world. We are working to use

water more efficiently. We are

treating and recycling

wastewater. And we aim to

replenish the amount of water

used in our finished beverages

by 2020. Read about our

progress in the Water

Stewardship section of this

report.

CAPITALISE ON THE

WIDER HEALTH AND

WELLNESS TREND IN

SOFT DRINKS

Areas such as ‘better-for-you’,

‘naturally healthy’ and

‘fortified/functional’ are the

opportunity areas within

existing soft drinks categories.

Coca-Cola already has a wide

range of juice brands and

waters that could prove to be

winners for the company, but it

must continue to develop and

innovate new health and

wellness angles within its

brands. A key growth area

We use evidence-

based science. We are

committed to using

evidence-based

science to guide the

choices we offer and

the way we educate

about those choices.

We innovate. We are

committed to

investing in the

development of

products, sweeteners,

packaging, equipment

and marketing that


109

could be fortified/functional

drinks and energy drinks,

where opportunities to add

new functional ingredients are

continually being discovered.

How will Coca-Cola expand

its presence in this space? The

company’s Monster Energy

equity investment late last year

was an important step to shore

up market share in the energy

category, but growth rates in

this space show signs of

slowing slightly. What are the

company’s innovation plans in

healthier and functional

beverages.

fosters active, healthy

living

We provide

hydration choices

and educate

consumers about

them. We are

committed to bringing

real choice to

consumers

everywhere and to

educating them on the

role our variety of

beverages can play in

sensible, balanced

diets as well as active,

healthy lifestyles.

We inform with

transparency. We are

committed to

transparency about the

nutritional content of

our products.

We market

responsibly. We are

committed to

responsible marketing

of our products,

honoring the rights of

parents and

caregivers, and

informing and

educating consumers

about the beverages

we provide.

We promote active,

healthy living. We

are committed to

being part of workable

solutions to the


110

problems facing

society related to

obesity. We seek to do

this by assisting our

associates and their

families, as well as the

communities that we

serve, in promoting

active, healthy living.

4.2 Internal Analysis

Vision / Mission / Core Values The Issue lies in the Mission

Statement of Coca Cola. The

mission Statement of Coca

Cola is,

“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”.

However, the mission

statement of Coca Cola does

not include the 9 components

of a mission statement.

The Core Values which are

listed on their website and in

their documents are not always

implemented inside the

Factory of Coca Cola

Beverages Pakistan Limited

Coca Cola’s

Mission statement does

explicitly have all the 9

components of the good

mission statement. Coca

Cola should more clearly

mention their self-concept

or competitive advantage in

their mission statement.

Customers and target needs

to be a bit clearer in here.

Core values needs

to be implemented properly

inside the domains of the

company. All they need are

the proper implementation.

Organizational Policies Coca Cola’s HRM, and

Financial, policies have

become too rigid and does not

Coca Cola need to adopt to

soft HRM approach to deal

with the employees.


111

have much flexibility. Hence,

the company is facing the

problem of under-staffing one

employee doing the job of two

employees in a department and

being paid just lesser than 2

employees.

Company should not

maintain adequate staffing

levels in the company

rather than making it an

under-staffed company.

Organizational Culture 1. Diversification is an

issue. It is good to have

diversified workforce

but due to

diversification they

have problem of

communication as

well.

2. Due to the great and

big organization they

are not properly

relating and having

relationship with their

front staff employees.

3. Women in the

organization are less.

There are less women

and the existing one

because of being

minority do not avail

the facilities and

culture is not suitable

and friendly for

them.in Pakistan

females are not let to

come to the upper

management they are

always working in the

lower staff. Same is the

case with coca cola in

Pakistan.

In the organization there are

proper ethical policies to

1. They should do

proper

arrangements to

eliminate this

communication

gap. They should

arrange proper

classes and courses

to learn the

languages.

2. They should make

proper

arrangements for

the employees of

lower level. They

should give them

respect, trust, and

should also involve

them into the

decision making

related to the

culture of

organization. They

should also be

asked about their

problems that they

are facing in the

organization.

3. They should

increase their

female staff. The

ratio of females and

males should be


112

monitor the employees but still

employees are not following

that especially in Pakistan.

equal. Females

should be given

proper facilities and

power to take

decisions. The

female should be

given chance to

prove their selves.

They should be

given authority and

should hire them on

good and valuable

positions.

4. In spite of ethical

codes the

employees are not

following it. They

should arrange

proper conduct and

policies and should

do surveys to make

sure that all the

rules are obeyed by

the employees.

Every employee

should be asked to

know the problems

that they are facing

in the organization

or due to any

employee. And

proper

investigation

should be there so

no employee gets

issue of job

security.

Organizational Structure The Division of Work &

Grouping within the Coca Cola

Company

• Tall Organizational

Structure:


113

The division of labor can be

unique in many organizations.

It has been coined a production

process in which a worker or

group of workers are assigned

a specialized task in order to

increase efficiency. This is the

case for the Coca Cola

Company. Primarily the

company has a very tall

hierarchy in place and

subordinates that are then

divided up by regions. The

Coca Cola Company being a

truly global organization uses

the design of division of work

by location. Each area/region

has a certain amount of

subordinates designated to that

specific area; however, the

number of employees

delegated to one region may be

different to another. By

dividing its employees up

according to geographic

location, the company benefits

on many levels. For example,

being closer to a certain market

allows the teams involved to

work accordingly with regards

to advertising campaigns,

meeting the tastes of

consumers of that region etc.

Each region is then sub divided

e.g. Europe divided up in to

North West and South East,

Nordic and Baltic(The Times

100, 2005).

As mentioned before meeting

the tastes of consumers is met

A clear hierarchy of

authority exists within the

Coca-Cola Company.

However, the chain of

command has numerous

layers as the company has

offices in over 200

countries worldwide

(Coke, 2011). For example:

The UK Division is

accountable to the North-

West Europe Regional

Division. The North-West

Europe Regional Division

is, in turn, accountable to

the Europe, Eurasia and

Middle-East SBU

(Strategic Business Unit).

Finally, the 5 regional

SBU’s, which encompass

the entire globe, are

accountable to Coca-Cola

Head Offices in Atlanta,

Georgia (The Times,

2005). Furthermore,

interior organizational

structure exists within

Head Office, the 5 SBU’s,

the regional divisions and

the country divisions.

• Issues with Layers:

Such “tall”, rigid

management structures can

often lead to employee

frustration and

disgruntlement. The

existence of many layers

can make staff feel like

their opinions are


114

more effectively due to the

divisions and sub divisions by

location. The Great Britain

(UK) division would insure all

areas such as marketing would

be covered appropriately. For

example, an advertising slogan

that is appropriate to the UK

and Irish Public may not

necessarily be considered

appropriate in another country.

This is why there are so many

sub divisions within the

company. Each division will

have its own Marketing

manager, Public Affairs

Director, Finance Director and

so on (The Times 100, 2005).

When one of these divisions is

planning a new beverage

launch or perhaps an

advertising campaign, the

division must communicate

respectively with their

superiors. Because the Coca

Cola Company has such a tall

hierarchy, communication

must travel all the way back to

the corporate division in North

America where a 12 Member

executive committee have the

final say on any activities that

the company’s divisions are

considering.

Like many organizations

today, The Coca Cola

Company push elements such

as teamwork amongst its

employees whenever and

wherever possible. Grouping

unimportant and their

contribution is

insignificant. This can lead

to organizational problems

such as absenteeism and

high staff turnover, which

can, in turn, reduce the

efficiency of the business.

According to official

company figures, Coca-

Cola lost 185,608 days of

labor in 2010 (Coke, 2011).

While some lost labor is

due to legitimately sick

employees some

employees may skip work

due to a lack of motivation.

Furthermore, the same

report shows staff turnover

figures were very high in

2010, with some sectors of

the company recording

turnover rates of 20%.

Recommendation #1:

I would recommend that

Coca-Cola implement

flatter management

structures in their regional

and local divisions. It’s

more likely that employees

this far down the chain are

to feel that their opinions

and work goes unnoticed,

as opposed to mid and

high-level managers who

call the shots. Such a

structure would move the

company from a

mechanistic style of

management to a more


115

takes place on many levels

within the organization

whether it is on the bottling

floor or launching new

products.

For example, the Great Britain

division brings together a

group of employees when

creating new product

development. Included in such

a team will be marketing

specialists who will inform

others of their market research

and testing, food technologists

will clarify whether changes to

a product are feasible,

financial experts will describe

the cost incurred with the

change and other specialists

will also be involved such as

the strategic planning director.

• The effectiveness of

the division of work fostered

by Coca Cola

For an organization as big as

Coca-Cola, it is vital that the

methods they adopt for the

division of work among

members of the organization

are effective and successful.

They have achieved this

through global and local

strategies.

• Global and Local

Strategy

Coca-Cola concentrates

certain functions for global

strategy in a corporate

organic approach. This

style could potentially

serve to engage and

motivate employees, which

should give the firm a

competitive advantage.

Furthermore, the

introduction of this policy

should decrease staff

turnover, which will cut

down on the costs of hiring

and training new staff.

• Centralized Power

Structure:

At present, the Coca-Cola

Company is managed using

elements centralization and

decentralization. However,

the decentralized power

held by the SBU’s (and

their subdivisions) is often

limited to the advertising

and market research side of

business. On the other

hand, the centralized

power, which operates in

Atlanta, has substantial

power over the firm’s

“bigger” decisions.

According to the Times

document, Head Offices

are “responsible for giving

the Company an overall

direction and providing

support to the regional

structure”.

• Issues with

Centralized Power

Structures:


116

segment, while having

geographic segments dealing

with local strategy. They

divide the functions,

responsibilities and work to

avoid overlap and waste while

concentrating on the optimum

business structure to achieve

its goals.

• Global: The Corporate

Segment

As aforementioned, the

corporate segment consists of

an executive committee of 12

company officers. This head

office for Coca-Cola is used to

give directions to the

organization and make key

decisions for the brand. One

member acts as the CEO, the

figurehead of the company.

Other executive members have

other responsibilities e.g.

Senior Business Executives,

Chief Financial Officer, etc.

(The Times 100, 2005).

Having a strong corporate

segment has proven to be

effective for Cola-Cola,

bringing confidence and order

to the whole company.

• Global: In detail

The head offices of Coca-Cola

have control over the

company’s recipe

(technology). They monitor

the production of the syrups

and concentrates that are then

mixed with water at specific

Due to the sheer size of the

company, elements of

corporate power are needed

to govern regional offices

(Johnson, 1946). I would

argue that too much

decision making power lies

in the hands of corporate

office of Coca-Cola, while

regional offices lack

decision making power in

terms of finance,

innovation and

strategizing. One major

problem with centralized

organizational structures is

that they often ensure that

changes within the

organization take longer to

be implemented. Often the

benefits of centralization

are outweighed by its

limiting effect on regional

divisions. Campbell also

suggests that it can distract

and de-motivate regional

workers. Some authors

even argue that

centralization can lead to a

lack of innovation in the

workplace. This could

point to the reason why one

article suggests that Coca-

Cola has lost its innovative

roots and is starting to “lose

its fizz” due to a recent lack

of creative flair

Recommendation #2:

Decentralizing some

aspects of the


117

bottlers. There are 30 company

owned and operated

manufacturing plants around

the world that produce the

syrups and concentrates

(Richard Girard, 2005).

They’re also in charge of

setting up the different

production plants around the

world and deal with all legal

and financial issues that affect

the organization as a whole.

They have experienced many

issues in the countries they

produce in. For example, in

India, they experienced

problems involving

environmental pollution and

finding high levels of

pesticides in their products in

2002 (Richard Girard, 2005).

The corporate segment was

needed to keep the consumer’s

trust in the brand and to deal

with all these issues

effectively.

Local: Strategic Business

Units

Coca-Cola has achieved a

status of being a global product

by operating in local

environments all over the

world. By dividing the

organization among different

countries, Coca-Cola can meet

the needs and requirements for

different countries (The Times

100, 2005).

organizational structure

could yield improved

organizational

performance. It would

allow the SBU’s, divisions

and sub-divisions to make

quick changes that are

relevant to their workers

and to their specific

geographical locations. In

addition to that,

decentralizing the

organizational structure

would place more creative

power in the hands of

regional and national

divisions. This freedom to

experiment would more

than likely motivate and

engage the workforce in a

way that would be

impossible under

centralized restraints. Thus,

it would serve to positively

affect organizational

performance.


118

SBUs are very effective for

they allow Coca-Cola to

recognize that tastes, lifestyles,

income and consumption

patterns vary from region to

region. Coca-Cola can now

price, distribute and innovate

their products to best suit the

needs and circumstances of the

global market. The SBUs are

also in charge of conducting

market researches for their

regions and promoting the

brand through local

advertisements using the

native languages (The Times

100, 2005).

• Local: In detail

The SBU’s are sub-divided

into divisions. This allows for

the further spreading of Coca-

Cola departments and

production plants around

different regions The UK

division (located in the North

West Europe division) is an

example of a Coca-Cola

company that uses a more local

level of management

compared to the global

positions in the corporate

segment. As mentioned before,

the company consists of

different departments that

specialize in different tasks. A

president overlooks and

represents the entire company

(The Times 100, 2005). This

use of specialization allows for

the company to be run


119

efficiently. The company

provides for their division by

dealing with public affairs and

maximizing the satisfaction of

its customers.

Core competencies Coke enjoys distinctive

capabilities that enable it to

carry out business better than

its competitors, e.g.

Innovation, reputation and

architecture [bottlers]. Coke

need to invest on its

concentrate-formulae aiming

to retain its market buy gaining

targeted consumers, diet-coke

for older-people, caffeine-free

for health-conscious. Quality

and sponsorship is associated

with its brand-value, coke need

to invest towards this to avoid

any negative publicity or

probable ban from any region

originating from chemical-

contamination, shortening of

ground-water and other

health/environmental issues.

Coke need to nurture its

relationship with bottlers

by enhancing the equity

investments in bottling-

operations to maximize the

strength and efficiency of

its production,

distribution/marketing

capabilities globally. Coke

should focus towards

creating new brands with

less sugar and calorie and

newer brands to attract the

young generation. Coke

also need to invest on the

sponsorship [of sports or

cultural events] on the

emerging markets to

sustain its market

advantage.

Strategic Objectives 1. Monopolization

In 2000, a United States

federal judge dismissed an

antitrust lawsuit filed by

PepsiCo Inc. accusing Coca-

Cola Co. of monopolizing the

market for fountain-dispensed

soft drinks in the United States.

In June 2005, Coca-Cola in

Europe formally agreed to end

deals with shops and bars to

stock its drinks exclusively

after a European Union

investigation found its

1. Target disciplined

brand and growth

investments

In 2015, Coke announced

that it would increase its

annual marketing costs by

$800 million to $1 billion,

in part to kick-start sales of

its CSD (carbonated soft

drink) portfolio, which is

generally referred to as the

"sparkling" side of Coke's

business. To translate the

corporate speak in the


120

business methods stifled

competition.

In November 2005, Coca-

Cola's Mexican unit - Coca-

Cola Export Corporation - and

a number of its distributors and

bottlers were fined $68 million

for unfair commercial

practices. Coca-Cola is

appealing the case.

2. "Channel stuffing"

settlement

On July 7, 2008, Coca-Cola Co

compromised to pay $137.5

million to settle an October

2000 shareholder lawsuit.

Coca-Cola was charged in a

U.S. District Court for the

Northern District of Georgia,

with "forcing some bottlers to

purchase hundreds of millions

of dollars of unnecessary

beverage concentrate to make

its sales seem higher."

Institutional investors, led by

Carpenters Health & Welfare

Fund of Philadelphia &

Vicinity, accused Coca-Cola

of "channel stuffing," or

artificial inflation of Coca-

Cola's results which gave

investors a false picture of the

company's health. The

settlement applies to Coca-

Cola common stock owners

from October 21, 1999 to

March 6, 2000.

Investments and operations in

apartheid South Africa[edit]

quote above, Coca-Cola's

CEO Kent points out that

the increased media spends

have enabled the company

to grow sparkling sales

profitably -- with price

increases rather than

volume increases.

What specifically are

"disciplined brand and

growth investments?"

Over the last few years, a

disciplined brand

investment for Coke

means taking a small brand

with potential and scaling

it through Coke's global

distribution system, with a

significant boost from the

marketing dollars as

discussed above. Take

Fuze Tea, for instance,

which Coke now sells in

over 40 countries, and is

one of the fastest growing

brands ever in Coke's

stable to reach the billion

dollar mark, having done

so in just three years.

2. Drive revenue and

profit growth with

clear portfolio

roles across our

markets

Coca-Cola is playing for

the long-term as it

balances opportunities for

higher pricing with the

always present need to

increase market share. The


121

Coca-Cola entered South

Africa in 1938 and, after the

beginning of the official white

South African government's

policy of apartheid or

"separate development"

beginning in 1948, the

company grew rapidly. By the

1980s at the height of racial

oppression, with 90% of the

market, Coke dominated the

soft-drink industry with sales

in the hundreds of millions of

dollars, accounting for 5% of

the parent company's global

market. Coke employed 4,500

workers, operating under the

racially segregated housing,

workplace, and wages, and

was one of the largest

employers in the country.

In 1982 in South Africa, black

workers asked the community

to boycott Coke and called two

work stoppages until the

company agreed to recognize

and bargain with their union,

raise its workers' low wages

significantly, and share

information on who controls

their pension fund.

As a result of Coke's economic

support of white South Africa

and its apartheid system, in the

1980s, it became a major target

of organizers across the

country against U.S. and

corporate economic support

for apartheid in the U.S.

Boycotts then spread across

idea of "clear portfolio

roles" reflects Coke's

growing realization that

these often competing

priorities of price and

volume are best handled

by assigning either one or

the other to specific

geographical markets.

For example, as

developing economies

have revised their GDP

growth expectations

downward in the last year,

thus thinning out consumer

wallets, Coke appears to

be more focused on

gaining market share

through volume in markets

like China and India.

Take the company's

"Coca-Cola Splash Bar"

experiment in rural India.

This program is meant to

extend opportunities to

entrepreneurs, especially

women, in under-served

communities. The Splash

Bar is a bare-bones

refreshment stall from

which the proprietor can

dispense roughly 5 ounces

of a soft drink for 5 rupees,

or about 8 cents.

Coke's assistance to small

business owners on the

margins of developing

economies is laudable.

However, through the

Splash Bar's extremely low


122

the country to many

universities including

Tennessee State, Penn State,

and Compton College in

California, which established a

"Coke Free Campus."

Demonstrations were held by

the Georgia Coalition and the

AFSC at Coca-Cola's Atlanta

headquarters.

In South Africa, in 1986, the

Coca-Cola response was to

donate US$10 million to a

fund to support improvements

of housing and education for

black South Africans and to

announce "...plans to sell its

30% share of a major bottler

and a 55% share of a canning

operation within six to nine

months." (The company's

assets there were estimated at

US$60 million, their annual

sales were circa US$260

million, and with 4,300

workers one of the largest U.S.

employers in South Africa.)

However, the movement in the

U.S. demanded full divestiture

and did not accept the

company's offer to sell a major

portion of the holdings to a

South African firm.[29]

After democratic elections that

produced Mandela's majority

rule government, Pepsi sought

to re-enter the South African

market. In fact, "Coke never

truly left the country, leading

to overwhelming dominance

price points, Coca-Cola

also wants to engage a

wide future customer base.

It doesn't hurt that millions

upon millions of these

rural customers will see

increased income and

migrate to cities as the

years go by. Coke hopes

that they'll bring a taste for

Coke, Fanta, and localized

Coke brands such as

"Thums Up" with them.

3. Refocus on our

core business

model

While Coca-Cola benefits

from its massive bottling

and distribution system,

the company believes that

owning as little of its

bottling operations as

possible will allow it to

realize higher net profits

over the long-term. In fact,

Kent defines Coca-Cola's

prime competencies not as

bottling and distribution,

but as "marketing

innovation and franchise

leadership." This is a way

of saying that Coca-Cola

should focus on marketing

its brands and let others

worry over the ultimate

production and

distribution.

To this end, Coke intends

to refranchise, or sell off,

nearly all of its North


123

through the rest of the 20th

century. Pepsi adhered to

different social imperatives

and suffered exceptionally low

market shares as a result."

Indeed, in the late 2000s,

Coke's market share of the soft

drink market in South Africa

was estimated at 95% and

Pepsi's at 2%.

3. Marketing Issue

On August 9, 2015 the New

York Times published an

article that revealed that Coca-

Cola had made a large

investment to the non-profit

called the Global Energy

Balance Network, which

promoted a scientific solution

to the obesity crisis, which was

that more exercise rather than

cutting back on calories was

the way to maintain a healthy

weight. Health experts stated

that the non-profit's message

was misleading and part of

Coke to deflect criticism about

the role the company played on

the spread of obesity and Type

2 diabetes.

American bottling

operations by 2020. But

this doesn't mean that the

company will become

disengaged from the

bottling and distribution

processes, which are vital

to Coke's survival and

success.

Instead, the soft drink

conglomerate will continue

to work closely with its

bottlers, and, where

appropriate, form new

joint ventures, such as the

recently announced "Coca-

Cola Beverages Africa."

This bottler will exist as a

joint venture between

Coca-Cola, SABMiller,

and the South African

Gutsche Family

Investments. Coca-Cola

Beverages Africa will

serve twelve African

countries and handle

roughly 40% of Coca-

Cola's global African

beverage volume.

It's hard to argue with

Coke's logic in this

business model tweak.

While "Bottling

Investments" as a segment

contributed 15.2% of the

company's overall revenue

last year, its operating

margin was essentially flat,

at 0.1%. The bottling

segment showed operating


124

income of only about 1.5%

in the two preceding years

as well.

4. Aggressively

expand our

productivity

program

This quote actually comes

not from the earnings call

but from a December

financial modeling call

with analysts, in which

Chief Financial Officer

Kathy Waller gave, among

other things, a detailed

overview of Coca-Cola's

productivity plan. The

company initially set a

productivity target of $1

billion in early 2014,

which was increased

during the year to $3

billion, with all cost

savings to be realized by

2019.

Productivity measures and

associated cost-cutting can

serve as a type of

insurance for the

management team. Should

declining carbonated soft

drink sales continue to

mute gains in other parts

of Coke's beverage

portfolio, management can

point to bottom-line profits

in order to appease

investors.


125

5. Streamline and

simplify our

operating model

One of Coca-Cola's actions

to streamline its business

has been to reduce

"functional layers."

Reducing hierarchy at the

corporate level can lead to

faster, decentralized

decision-making -- a type

of trimming an

organization KO's size can

usually benefit from. The

company announced in

January that it would cut

1,600 to 1,800 positions

globally this year, with up

to 500 employees to be

released at its Atlanta

headquarters.

Like the efforts aimed at

productivity discussed

above, there's another

rationale for pruning

personnel in a drive toward

simplification. Coca-Cola

wants to be seen by the

markets as in touch with

the urgency of its situation

and sensitive to the shelf

life of investors' patience

as it tries to ignite high

single digit earnings-per-

share growth. Workforce

reduction is a tried and

true method CEOs of

public companies have

used to send the right

signal to Wall Street,


126

however bloodthirsty the

method may same.

Current Strategies Majorly, the issues lie in Coca

Cola beverages Pakistan’s

current functional strategies of

Human Resource. A single

employee in one department is

working as much as 2

employees and being lesser

than the salaries of 2

employees.

Coca Cola need to adapt a

slightly less rigid HRM

strategy. Coca Cola should

maintain adequate number

of people inside the

company in order to raise

the morale of the

employees in Coca Cola.

Apart from this Coca Cola

is doing a fantastic job in

other strategies.

SWOT Analysis Strengths and Weaknesses are

one of the most critical aspects

of a business. Identification of

Strength and Weaknesses are

extremely vital in determining

the performance and SWOT is

in fact an aesthetic tool for

measuring the performance of

the business.

Unfortunately, there are no

forms or documentations that

are available in Coca Cola

Pakistan to formally conduct

SWOT. Personnel and

Managers working inside Coca

Cola however, do determine

the strengths or weaknesses

but with a different

perspective. Departments such

as finance department headed

by the CFO and finance

managers determines the

financial strengths,

weaknesses, opportunities and

threat but no formal meets are

held or it is extremely less

How to solve Issues with

SWOT

Coca Cola should establish

a new department or form

a competent committee

which must be responsible

for gathering facts and

figures, analysis, inquiries,

issues faced, reports, and

all other relevant

documentations in order to

determine Coca Cola

competencies, competitive

advantages, absolute

advantages, the benefits

Coca Cola is enjoying

from all of its resources, its

internal weakness and

disadvantageous factors

within the company,

external opportunities

available to the company

and threats for the

company. After, gathering

such data the authenticity

of the data gathered needs


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likely that meetings are

formally held at corporate or

business level to devise

strategies at functional levels

to formally increasing the

strength of the business,

minimize weaknesses,

maximizing the benefits

gained from the opportunities

and reducing minimizing the

risk from threats.

to the monitored. Once,

such audit has been

performed, the committee

should make an annual or

master report for the

company in which it

should specify the ways or

strategies that Coca Cola

must adopt in order to

consolidate and cement its

strengths, minimize or

fight with internal

weaknesses, increasing the

benefit derived from the

opportunities and reduce

the risk from threats.