Prepared by:

Supervised by : Dr.

Agenda

History
Standing in business environment
Brands of coca cola
Mission
Vision
Value Chain Analysis
SWOT Analysis
Which Differentiation Strategy?
Compotator Value Chain Analysis
Business Strategy / Corp. Strategy
Industry Segmentation
References

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.
1894 A modest start for a Bold Idea
1899 The first bottling agreement
1900-1909 Rapid growth
1916 Birth of the contour bottle
1920s Bottling overtakes fountain sales
1920s and 30s International expansion
1940s Post-war growth
1950s Packaging innovations
1960s New brands introduced
1970s and 80s Consolidation to serve customers
1990s New and growing markets

Standing in the business environment

Ranking: We own 4 of the world's top 5 nonalcoholic
sparkling beverage brands
Associates: 90,500 worldwide
Operational Reach: 200 countries
Consumer Servings (per day): 1.5 billion
Beverage Variety: more than 2,800 products

BRANDS OF COCA COLA

Energy Drinks

Juices/Juice Drinks

Soft Drinks

Sports Drinks

Tea and Coffee

Water

Other Drinks

MISSION

Our mission declares our purpose as a company. It serves

as the standard against which we weigh our actions and
decisions.
- To refresh the world in body, mind and spirit.
- To inspire moments of optimism through our brands and
our actions.
- To create value and make a difference everywhere we
engage.

VISION
Our vision guides every aspect of our business by describing what
we need to accomplish in order to continue achieving sustainable
growth.
People: Being a great place to work where people are inspired to
be the best they can be.
Portfolio: Bringing to the world a portfolio of quality beverage
brands that anticipate and satisfy people's desires and needs.
Partners: Nurturing a winning network of customers and
suppliers, together we create mutual, enduring value.
Planet: Being a responsible citizen that makes a difference by
helping build and support sustainable communities.
Profit: Maximizing long-term return to share owners while being
mindful of our overall responsibilities.

VALUES
Coca-Cola is guided by shared values that both the employees
as individuals and the Company will live by; the values being:
LEADERSHIP: The courage to shape a better future
PASSION: Committed in heart and mind
INTEGRITY: Be real
ACCOUNTABILITY: If it is to be, its up to me
COLLABORATION: Leverage collective genius
INNOVATION: Seek, imagine, create, delight
QUALITY: What we do, we do well

VALUE CHAIN ANALYSIS FOR COCA COLA

VALUE CHAIN ANALYSIS FOR COCA COLA

Value Chain Analysis:
A value chain is a model used to disaggregate a
firm into its strategically relevant value
generating activities, in order to evaluate each
activity's contribution to the firm's performance.
Through the analysis of this model we can gain
insight as to how a firm creates their competitive
advantage and shareholder value. The value
chain of the nonalcoholic beverage industry
contains five main activities. These include
inbound logistics (suppliers), operations,
outbound logistics (buyers/ customers), marketing
and sales

VALUE CHAIN ANALYSIS FOR COCA COLA

Inbound Logistics (Suppliers):
Some of Coca Cola most notable suppliers include
Spherion, Jones Lang LaSalle, IBM, Ogilvy and
Mather, IMI Cornelius, and Prudential. These
companies provide Coca Cola with materials such
as ingredients, packaging and machinery. In order
to ensure that these materials are in satisfactory
condition, Coca- cola has put certain standards in
place which these suppliers must adhere to(The
Supplier Guiding Principles).

VALUE CHAIN ANALYSIS FOR COCA COLA

Inbound Logistics (Suppliers) Contd:
These include: compliance with laws and
standards, laws and regulations, freedom
ofassociation and collective bargaining, forced
and child labor, abuse of labor, discrimination,
wages and benefits, work hours and overtime,
health
and
safety,
environment,
and
demonstration of compliance.
Coca-Cola uses third parties to assess their
suppliers by having interviews with employers
and contract workers. If a supplier has issues
about thesupplier guiding principles, they are
usually given a certain amount of time to take

VALUE CHAIN ANALYSIS FOR COCA COLA

Operations:
Coca Cola core operations consist of Companyowned concentrate and syrup production.
According to their website, some of the main
environmental impacts of their business occur
further along the value chain through system's
bottling operations, distribution networks, and
sales and marketing activities.
Management of these operations acrossthe
business value chain tends to be more
challengingoutside of the core operations.

VALUE CHAIN ANALYSIS FOR COCA COLA

Operations Contd: :
According to Coca Cola, theycontinue to address
this by working with their partners to reduce the
effects at every level of the manufacturing
process by enlarging their comprehension of the
complete environmental impact of their business
through the entire lifecycle of their products from
ingredient procurement to production, delivery,
sales
and
marketing,
and
post-consumer
recycling.

VALUE CHAIN ANALYSIS FOR COCA COLA

Outbound Logistics (Buyers/ Customers):
The activities required to get finished products to
customers include warehousing, order fulfillment ,
transportation, and distribution management.
Coca Cola has the world largest distribution
system. They own, lease, and operate in over
800plants around the world. The 2,400beverage
products which they market reach consumers in
morethan 200 different geographic locations.
Grocery stores such as Sobeys, fast food
restaurants
such
as
McDonalds
(fountain
sodas),and vending machines are just a few of the
distribution units used to ultimately reach

VALUE CHAIN ANALYSIS FOR COCA COLA

Outbound Logistics (Buyers/ Customers) Contd:
Coca Cola has over 300 bottling partners which
range from publicly traded businesses to small
family owned operations. They have implemented
the Coca Cola System in which they work
cohesively with their partners in order to develop
strategies aimed to meet the needs of all their
customers

VALUE CHAIN ANALYSIS FOR COCA COLA

Marketing and Sales:
Out of approximately 2,400 products, Coca Cola
markets four of the worlds top sales drink brands.
Although the industry is relatively small and they
only directly compete with two companies,
creativity is a vital marketing strategy to Coca
Cola.

VALUE CHAIN ANALYSIS FOR COCA COLA

Marketing and Sales Contd:
Coca Cola ultimate goal is to deepen their brands
connection with consumers. As a result, they have
to constantly reinvent their products. The
marketing strategy they use is directly linked to
the consumer; from advertising, to point of sale,
to ultimately opening and consuming a Coca Cola
beverage. Techniques which they have used to
achieve this include developing new products and
brands, changing the design of their packaging,
and
designing
various
new
advertising
campaigns.

VALUE CHAIN ANALYSIS FOR COCA COLA

Service:
Activities that maintain and enhance a product
value include customer support, repair services,
installation and training. Coca Cola customers
range from large international retailers and
restaurants to smaller independent businesses
and vendors. As a result, they provide services
tailored to meet their customer needs.
Coca Cola also supports their customer by
providing them with the training necessary to
help their businesses become more effective and
profitable. They have established customer
development and training centers.

SWOT
STRENGTHS
- Brand equity/image & recognition
- Product distribution and worldwide network
- Solid financial performance
- One of the world's most recognized brand.
- Product diversification (water, juices, soft drinks,
sport drinks, etc)
- Co-operate identity.
- Innovation

SWOT

WEAKNESSES
- Credit rating
- Customer concentration, particularly in the US (Wal-Mart
accounts for more than 10% of Coca Cola's business in the US)
- A lot of loyal Pepsi customers are not enough loyal Coca Cola
customers
- Does not enjoy the number one position in India, Pakistan.

SWOT
OPPORTUNITIES
- Possible growing demand.
- Expansion Reaching all segments.
- Globalization
- Catering to Health Consciousness of People
- Bottled water growth
- Acquisitions of smaller players.
THREATS
- Health Drinks Fruit Juice Companies
- Key competitors (Pepsi, etc)
- Commodity prices growth
- Image perception in certain parts of the world.
- Smaller, more nimble operators/players

Which Differentiation Strategy?

Differentiation strategy:
A differentiation strategy is the development of a product or service that offers
unique and differentiating attributes which are valued by customers and perceive to
be better than or different from the products of the competition.
Coca-Cola has unquestionably chosen a differentiation strategy. This has rapidly
been its strategy since the early days of the companys life.
It has thus based its strategy on diversification asits main brandisderived by subproducts maintaining a strong affiliation with Coca Cola: the Diet Coke Cola (Coca
Cola light, zero...), Lemon Coke,Cherry Coke, Vanilla Coke. it is more about a
strategy of concentrating on the main product,in orderto increase the volume of
sales.
Coca Cola Company spends round about 20% of their total advertisement budget
for maintaining and communicating on its differentiation strategy.
Similarly coca cola has created its differentiation by utilizing soft sell approach.
Company has successfully positioned itself on the following standards:
Corporate reputation for quality and innovation: one of the best places to
work.
Successful communication of perceived strengths of the product:
Integrated marketingstrategy
Symbol of joy and fun

Which Differentiation Strategy?

Coke differentiates themselves by using unique marketing and
advertising campaigns to entice their customers to stay loyal to their
brand by continuing to purchase coca-cola products versus one of the many
competitors.
They also have different bottle shapes. Research has been conducted
that shows people feel better about themselves and skinnier if the bottle
is shaped like a curvy, but slim body shape.
Another great differentiation strategy Coke has done, is the Coca-Cola
Freestyle machine, This machine allows customers to mix and match
their classic Coca-Cola beverages with many different flavors.
Coke will need to continue to work hard at using the differentiation
strategy to keep themselves separated from its competitors. To do this,
Coca-Cola will need to keep introducing new beverages that will maintain
customers' brand loyalty.
Another way to differentiate themselves would be to use alcohol drinking
culture to their advantage. For example, many drinks are ordered as a
"rum and Coke", "Captain and Coke" or "whiskey and Coke". Coca-Cola
could collaborate with Captain Morgan or a whiskey company and sell
attached 3 ounce bottles of liquor with a Coke bottle.
Finally, Coca-Cola has a great tasting drink that people have loved for

PepsiCo Value Chain Model

Corporate Strategy
Strategies for Growth
PepsiCo has several key strategies for longterm, sustainable growth,
including:
Building and extending the companys global macro snack portfolio
Profitably growing the companys beverage business worldwide
Building and expanding the companys nutrition business
Leveraging the companys unique Power of One selling model across
foods and beverages
Delivering on environmental sustainability commitments
Ensuring prudent, responsible financial management

Performance with Purpose

In practice, Performance with Purpose means providing a wide range of
foods and beverages
from treats to healthy eats; finding innovative ways to minimize our impact
on the environment and reduce our operating costs; providing a safe and
inclusive workplace for our employees globally; and respecting, supporting
and investing in the local communities where we operate.
Performance with Purpose underpins our goal to deliver long-term,
sustainable financial performance. It guides our strategy and operations,
with a focus on
1. Human Sustainability.
2. Environmental Sustainability.
3. Talent Sustainability.

Pepsico Portfolio
22 Billion $ Brands

Product life cycle

Value chain comparison across soft drinks Industry

The main players of soft drinks industry are
Coca (29%) Pepsi (27%) and Dr. Pepper
Snapple (9%)
The product life cycle is similar in the three
companies as it moves from Syrup producers,
to bottlers, to distributors, to merchants, to
final consumers.
Bottlers are closely linked to locations of
strategic raw materials and major population
centers.
The key success factor in this Industry is the
control
over
distribution
channels,
the
advertising and promotions, the contracting
agreements, the brand image and the product
range.

Value chain comparison across soft drinks Industry (Contd)

Dr. Pepper is very small compared to Pepsi &
Coca and its main focus is on the USA and Latin
America, so the main competition is between
Pepsi & Coca.
The main advantage of Dr. Pepper is that it is
more involved in the whole value chain as it
owns most of manufacturing facilities, bottling
and the distribution channels. So Dr. Pepper
has more control over its value chain.
The main factor which eases the competition
between Pepsi and Coca is the annual growth
of this industry and the huge potential in
international markets.

Value chain comparison across soft drinks Industry (Contd)

The value chain is closely similar between
Pepsi and Coca.
The main difference between Pepsi & Coca is
that Coca is pure beverage company, while
Pepsi produces grain-based snacks beside its
main business (Beverages).
The value chain of grain-based snacks is totally
different from the value chain of soft drinks
except
the
distribution
channels
and
advertising. So. Pepsi can benefit from
decreasing the advertising and distribution cost
per unit.

Value chain comparison across soft drinks Industry (Contd)

Inbound logistics: is the same in Pepsi & Coca
as they both purchase their raw materials
through future contracts to avoid market
volatility
Operations: They produce their concentrates
from their own facilities. They have contracts
with bottling companies which uses these
concentrates with the pre-specified formulas to
produce final products.
The exact mix of ingredients is kept secret, this
affects the product image and actually applies
a sense of prestige to the Pepsi and Coca

Value chain comparison across soft drinks Industry (Contd)

Outbound Logistics: is similar in the two
companies as the two companies are using
either their affiliates in distribution or using
long term contracts with distribution channels.
The two companies have a wide range of global
distribution channels.
Marketing: Marketing and sales of Pepsi and
Coca are huge. Coca spent US$ 2.9 billion on
sales and marketing in 2010, while Pepsis
sales and marketing budget for year 2014 is
US$ 1.7 billion.

Industry Segmentation

Beverage Industry
Industrial
and
commercia
l buyers
Preparation
machines
Row
material
(Syrup ,
flavors )
Distribution
machines

Customer
goods
buyers
Demographi
cs.
Lifestyle.
Geographic.
Purchase
occasion.

Product
variety

Channel
Segments

Physical
size.
Price level.
Features.
Packaging.
Bundled vs.
unbundled.

Direct vs.
distributors.
Distributors
vs. brokers.
Types of
distributors
or retailers.

Geographi
c
Segments
Localities,
regions, or
countries.
Country
groupings.

BRANDS OF COCA COLA

Energy Drinks

Juices/Juice Drinks

Soft Drinks

Sports Drinks

Tea and Coffee

Water

Other Drinks

egory

y segm

y seg

y seg

References

www.coca-cola.com

Thank you