Strategic Management Examination Case (November 2012) Company: The Coca-Cola Company Competitive Environment: Soft Drinks 1. Why the selection? a. We can all associate with Soft Drinks and many of us...

Executive Summary
The paper analyzed the RTD brand Nestea and develops the CEO strategy based on the
analysis. The paper studies the past trend of the company and the brand and designs the future
strategies for the company. Coca-Cola has been the most popular as well as the highest-selling
soft drink in beverage industry history, also being one of the best-known products globally.
The demographics of the beverage powerhouse is shifting a nowadays. The paper has
been an initiative for understanding the critical shifting pattern and reasons for such shift. More
and more health conscious people are moving towards non carbonated drinks.
Based on the analysis of the company and its brand Nestea it can be notified that the
company is looking towards solidifying its position as one of the top US manufacturer of soft
drinks through broadening its entire portfolio of the non-carbonates offerings especially coke
with the help of various deals like the purchasing of VitaminWater maker Glacéau in the year
2007, a minority stake in ZICO, a coconut water company in the 2009 as well as the completion
of its major acquisition of Honest Tea in the year 2011. Coca-Cola has also been revitalizing on
its flagging carbonates brands with the help of its low-calorie brands like Coke Zero, as well as
the new sweeteners like Stevia. In 2011, global soft drinks sales reached 609 billion RTD litres,
up by 4% over the previous year, continuing a steady upward climb.
As the consumers is become more health conscious and more awareness is generated
every other day about the harmful effects of the cola and beverage segment, companies should be
focusing more on the health drinks. Pepsi has already made a huge jump with juices in its basket
of goods. This will really help them establish as a socially conscious brand. Coca-Cola should
also find ways to enter into this segment and compete with Pepsi which has already established a
huge customer base in the Non-Carbonated beverages segment.
Today, the market value of the beverage industry would be nearly 7,400 billion and in
terms of the value beverages market may have CSDs commanding approximately 85 % share,
but the fact is that the non carbonated segment had currently clocked a very impressive 35%
growth (year-on-year) considering the data for past few years compared to nearly 7% to 8 %
growth by this entire segment. This change has been attributed towards the rapid shift of the
United States from colas towards the non-carbonated drinks. Also to compete with the plethora
of the brands towards the non-carbonated space of the juices, water as well as niche drinks, the
companies like Coca-Cola and Pepsico needed to be nimble. They were required towards having
a faster go-towards-market with the new brands within the non-carbonated drinks space.
(Non101, 2009)
Table of Contents
Executive Summary ........................................................................................................................ 1
Introduction of Coca Cola Company .............................................................................................. 4
Coca Cola Company’s Mission & Vision ....................................................................................... 5
Overview of Soft Drink & Beverages Industry .............................................................................. 6
Coco Cola Company – Anchor Bottlers ......................................................................................... 7
Product Expansion and Merger & Acquisition Opportunities ........................................................ 8
Ready to Drink Tea Product Analysis and Opportunities in USA & Globally…………………...7
Poter’s Five Forces Model Analysis of RTD Tea Brand of Coca Cola Company………………..9
Suggested Strategy for Coca Cola Company in the RTD product Category……………………12
Coca Cola Company Financial Statement Review ..................................................................... 133
Coca Cola Globally ..................................................................................................................... 144
Suggestion ................................................................................................................................... 155
Conclusion .................................................................................................................................. 156
References ................................................................................................................................... 167
Introduction of Coca Cola Company
Coca-Cola has been the most popular as well as the highest-selling soft drink in beverage
industry history, also being one of the best-known products globally. Created in Atlanta, Georgia
by Dr. John S Pemberton, Coca Cola had been first offered as the fountain beverage by creating
the mix of Coca-Cola syrup along with the carbonated water. Coca-Cola was then registered as
the trademark in year 1887 and by the year 1899 it was being sold in each and every state as well
as territory in the US. In 1899, the company had moved towards franchised bottling operations in
the US. Today, we can find Coca-Cola in virtually every part of the world.
Let’s see the company in terms of its number; Coca Cola has 3500 products worldwide
and it is growing on regularly, it’s existed for 126 years and gives joys to 200+ countries through
its products. Coca Cola socially also has huge popularity, it has over 55 millions likes on its
Facebook page, over 53 thousand followers on twitters & around 2 million views on Youtube.
This all tells the popularity of the Brand in the people around the Globe.
As of 2011, the Coca Cola Company has net sales of over $46 billion and net profit $28
billion. It has total employee base of around 67,400 in 2011 in US only. Coca Cola is global
leader in terms of manufacturing, marketing and distribution of soft drinks. It has many product
range which includes water, enhanced water, juices & juices drinks ready-to-drink teas and
coffees, and energy and sport drinks (Coca-Cola Co, The In Soft Drinks - USA, Euromonitor
International, 2012). Though there are issues of marketing; positioning and pricing that have to
be tackled, as fruit based juices are more expensive than carbonated drinks. Also, distributions of
fruit juices and non-carbonated drinks have to be addressed, so that a wider distribution is made
possible. In spite of the initial obstacles, marketers agree that consumers are taking to non-
carbonated drinks faster today. Coke’s effectiveness was primarily the result of the synergistic fit
within its structural as well as contextual dimensions.
Coca Cola Company’s Mission & Vision
As the world is changing fast, Coca Cola Company is also changing itself fast and
adapting to the trends changes to thrive its business for the coming years. Company has been
actively tracking the changes in the trends in the world over and has prepared a 2020 vision
which is also accompanied with a roadmap for winning and continue thriving the business for
longer period of time.
Mission: “Our Roadmap starts with our mission, which is enduring. It declares our
purpose as a company and serves as the standard against which we weigh our actions and
decisions. a) to refresh the world, b) to inspire moments of optimism and happiness & c) to
create value and make a difference.” (Source: IBM http://www.coca-colacompany.com/our-
company/mission-vision-values)
Vision: “Our vision serves as the framework for our Roadmap and guides every aspect of our
business by describing what we need to accomplish in order to continue achieving sustainable,
quality growth.
 People: Be a great place to work where people are inspired to be the best they can be.
 Portfolio: Bring to the world a portfolio of quality beverage brands that...