University of the Philippines Cebu Management Division

CASE NO.

TITLE

Submitted toProf. Yvonne Gomos, 2015

de Asis, Rose Camille O.Pingoy, Valeriza Joy D.Velasco, Alisa Marie G.

EXECUTIVE SUMMARY STATEMENTFor over a century, Coca-cola has become a dominant brand in the beverage industry worldwide. It offers hundreds of brands and continuously operates in the seven geographical regions to suit the varying customer preferences and changes within the environment that it is operating. Coca-cola has various great distribution network, possess and excellent brand reputation and good marketing campaigns that allows it to leverage and differentiate itself from its competitors. Several external and internal occurrences such as the weakening dollar, fast-paced technology changes, varying tastes of customers have changed the course of Coca-colas operations and business processes. In order for it to remain competitive within the industry, Coca-cola must pursue a market penetration strategy.Market penetration aims to increase market share through intensive marketing campaigns such as tapping sport persons and athletes to serve as brand ambassadors of the companys carbonated and healthy beverages. As mentioned earlier, the company possesses the existing facilities, resources and expertise that could aid in marketing and providing availability for their products. Promotional campaigns and features that shows the benefits of Coca-colas products that are developed through an appropriate mix of pricing and quality concerns could contribute in improving market share because the customers are perceiving that Coca-cola is also a company that offers healthy products and would go away with the common perception that only PepsiCo provides healthy beverages to the market.

1.0 STATEMENT of the PROBLEM/ IDENTIFICATION of KEY PROBLEM(S) AND STRATEGIC ISSUES

2.0 VISION and MISSION STATEMENT2.1. Existing Mission StatementCoca-Cola Companys current vision statement is a three-fold, and as follows: To refresh the world in body, mind and spirit. To inspire moments of optimism and happiness through our brands and our actions. To create value and make a difference everywhere we engage.

2.2 Existing Vision StatementOur 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 anticipate and satisfy people's desires and needs. Partners: Nurture a winning network of customers and suppliers, together we create mutual, enduring value. Planet: Be a responsible citizen that makes a difference by helping build and support sustainable communities. Profit: Maximize long-term return to shareowners while being mindful of our overall responsibilities. Productivity: Be a highly effective, lean and fast-moving organization.

2.3 Evaluation of the Existing Vision and Mission StatementsMission Statement EvaluationA mission statement defines what an organization is, why it exists, and its reason for being. To evaluate the existing mission statement of Coca-Cola, the nine (9) components should be considered whether they were stated in the companys existing mission statement or not. An effective mission statement will include all 9 components being illustrated in the companys mission statement. The nine components are as follows:Customers. Coca-Cola offers its products to more than 200 countries around the world. And it is evident in the companys mission statement that its customers are everyone all across the globe, as represented by the term world.Products or services. Coca-Cola used the term refresh which vaguely meant drinks. The company envisioned that they were to bring happiness to the consumers through its different brands.Markets. As previously mentioned, Coca-Colas customers are the people across the world. Having this being said, the companys market(s) is the world.Technology. It was not illustrated in the companys mission statement with regards to how they are doing with their technology or of being technologically innovative.Concern for survival, growth and profitability. The company aspires to create value and make a difference everywhere it engages. Creating value would translate into the company growing and being profitable. If the company is able to satisfy its consumers, refreshing them with the different brands it offers, then it would translate to an increase in the companys sales thus improving the status of the company as a whole.Philosophy. Among the companys beliefs are the creating value and making a difference. Also, the company firmly stands that it will be inspiring moments of optimism and happiness.Self-concept. Coca-Cola has not named what its distinctive competence or major competitive advantage is. It is important that the company would include this characteristic in its mission statement because it would guide them in their operations in order to perform better and be the market leader.Concern for public image. How the company responds to the varying social and environmental concerns was no explicitly illustrated in the mission statement. The companys concern for public image is answered by the optimism and happiness that it inspires the public, and the value and difference that it brings in everywhere it engages. Its obligation and contribution to the society should be stated.Concern for employees. The company gave much importance to its employees, regarding them as valuable assets. Although this is the case, Coca-Cola has not illustrated in its mission statement how it gives value to its employees.

The Coca-Cola Companys has mentioned that it hopes to refresh the world, to inspire moments of optimism and happiness, and to create value and make a difference. The companys mission statement is clear enough for the readers to understand. After evaluating its mission statement using the 9 components, the group found that Coca-Colas mission statement lacks some of the components.

Vision Statement EvaluationThe vision statement identifies what the company would like to achieve or accomplish in the long run. As what could be observed in the companys vision statement, -----. To evaluate the vision statement, the group used the nine components used to evaluate the mission statement.Customers. The companys existing vision statement identified its customers being one of its partners whom the company creates value with.Products or services. The vision statement mentioned that the company has a portfolio of quality beverage brands. These brands of beverages sought to satisfy the needs and desires of the customers.Markets. As what could be observed in the Portfolio section of Coca-Colas vision statement, the market was identified to be the world.Technology. The company envisioned to be a highly-effective, lean and fast-growing organization. This is especially important in a highly modernized and globalized economy that we have now since being technologically innovative would help the company stay competitive.Concern for survival, growth and profitability. Coca-Colas commitment to growth and financial soundness is demonstrated in its vision for its profit. The company has recognized that it should be maximizing long-term return for its shareowners. Also, it is gearing towards being a fast-moving organization.Philosophy. The company believes in inspiring its employees to be the best they can be. Also, the company has taken much emphasis on the value that they create with their network of customers and suppliers. Self-concept. The company excels in its advertising and marketing campaigns that are tailored for the countries that they are operating. Coca-cola invests heavily on its marketing strategies to further improve their market share. Concern for public image. Coca-Colas vision statement shows that it has concern for the environment, as suggested by their vision for the planet. The company aims at being mindful of its responsibilities not just to its shareowners but also to the planet.Concern for employees. The company gave much value to its employees and so it aspires to provide employees a place that is great to work at and where these employees would be inspired to be the best they can be.Generally, Coca-Colas existing vision statement is very thorough and has included what it wants to achieve in the long run for the organization and for different sectors be it for the employees, the products, the society, and shareowners among others. 2.4 Proposed Vision and Mission StatementsAlthough the company operates and engages itself in a fast-changing environment with a lot of rivals operating in the different parts of the world that offers beverage products, the companys current Vision and Mission statements are still applicable for them in the long run because of it reflects their commitment to their stakeholders, customers, employees and managements and other publics.

3.0 STATEMENT of OBJECTIVES

4.0 ANALYSIS of the EXTERNAL ENVIRONMENT4.1 Assessment of the Firms Opportunities and Threats 4.1.1 Social, Economic, Political and Ecological Factors (VAL)Coca-Cola Company is a multinational company based in the Atlanta, Georgia, producing and distributing beverage products in several countries all across the globe. The company, operating not just in the US, is faced by various factors domestically and internationally that may leave major impacts to the company.There has been a growing trend of consumers preferring and purchasing more healthy drinks and snacks. Parents want to maintain a healthy lifestyle for their children. Because of this, parents have increased their spending for more naturally healthy and organic foods. The company is threatened by this trend since it produces traditional sugar and sugar-substitute-based drinks. However, this trend also serves as an opportunity for the company. More healthy products or drinks could be produced by Coca-Cola in order to capitalize on this opportunity. An example would be one of Coca-Colas brands, Minute-Maid, which uses high-quality fruits and fruit juices. Urban consumers have also increased their health consciousness in order to cope better with their busy lifestyle. Coke has introduced new products in order to address this issue and that is through Diet Coke, which contains lesser calories than the ordinary Coca-Cola drink. Generally, this trend on healthier eating and drinking has been responsible for Coca-Colas shifting focus from carbonated drinks to fruit drinks or juices and bottled water.In addition to the growing trend towards healthier eating and drinking, the United States has taken into consideration the fact that more and more children are becoming obese. CDC (2013) defined childhood obesity as the result of eating too many calories and not getting enough physical activity. Because of the growing problem of child obesity, many states in the United States have implemented federal regulations banning the selling of some soft drink brands in public schools. School beverage guidelines were implemented in order to control the shipment of beverages, especially full-calorie soft drinks, to schools (ABA, 2015). Because of such regulation, beverage mix in schools have resulted to a continued shift to waters, portion-controlled sports drinks, diet drinks, and 100 percent juices (ABA, 2015).One ecological factor that may affect the operation of Coca-Cola is the problem on the limitation of water. Water is a limited resource and it is especially true in many parts of the world. The problem with water supply is a big challenge for Coca-Cola most especially since water is known to be the main substance in the manufacturing of soft drinks. This serves as a threat to the company since costs in manufacturing the products increases. However, at present, many major multinational companies are addressing this issue and are actively working to improve water availability, quality and sustainability, for both continuing their operations and for the benefit of the communities where they operate (Biswas & Bozer, 2015). Another ecological factor that is a threat to the company is in terms of the natural disasters that seem inevitable. These disasters are not under the companys control and they bring great damage to the company. One natural disaster for example that had struck the company is the Hurricane that took place in Florida in 2006. Coca-Cola acquires their supply for oranges, to be used in the production of fruit juices or drinks, in the said state. The hurricane left a huge damage, destroying the orange plantations, and leaving the companys production to a halt.Coca-Cola has also been involved in issues regarding environmental pollution. In India, the company has earned the reputation toxic-cola because of the atrocious activities its been practicing which involves polluting the people, the water and the land (Srivastava, 2006). Coca-Cola threw its wastes in surrounding areas causing land pollution and also affecting the groundwater thereby making it unfit for human consumption. The pollution that the company have caused brought with it the effect of having its sales in the region decreased. Issues and scrutinies such as this one are very harmful for any company because not only will it affect the company financially, but it will also result to a tarnishing of the companys reputation to its consumers and the general public.An economic factor that brings a major threat to Coca-Cola is that the dollar has weakened compared to other countries currencies. The company draws approximately 72 percent of their revenues outside the United States. Foreign exchange rates play a huge part in the process. This foreign exchange is the value of one currency relative to another countrys currency. When the economy of lets say the Philippines is doing well, the PHP appreciates and the USD depreciates. When this happens, it would mean that it would take Coca-Cola

4.1.2 Product/Service and Technological Factors The trend towards a healthy lifestyle dictates the needs for products that have high nutritional content and veer away from those sugar-based ones. Due to this drift in the consumers taste, Coke fears declining sales from their traditional sugar and sugar-substitute-based drinks. However, to continue satisfying Cokes consumers, the company is gearing towards drinks with high nutritional values such as Minute Maid Forte in Mexico, flavored water in Colombia, and 100% Cepita juice in Argentina. Moreover, Coke is trying to outsmart PepsiCo by trying to foray the brewable coffee industry through their dispensing technology via the Far Coast brand. Coke is doing test marketing efforts for this huge plan. This technology that Coke will be using enables astounding speed in the process of preparing brewed coffee for customers from establishments like restaurants, cafes, and kiosks (Rubner, 2006). This venture towards the coffee industry entails an advantage since the markets overall consumption of coffee is increasing while the sales in carbonated soft drinks is dropping in some certain areas (Rubner, 2006).The Coca-Cola Company offers several refreshment products yet the company is known for its carbonated drinks. In the production of these drinks, ingredients include water, sugar, carbon dioxide, and their secret concentrate labeled as the merchandise 7X. With the increase in manufacturing costs per unit of water in areas where water is limited, Coca-Cola aims to enhance the manufacturing process of water so as to lessen costs. This new technology, labeled as the new water recovery system, is expected to solve Coca-Colas dilemma with the rising water costs because this advancement could turn wastewater into water that is suitable for drinking (Clancy, 2012). According to Heather Clancy, a journalist specializing in transformative technology and innovation, The giant beverage company figures it could save close to 26.4 billion gallons of water annually across its global bottling operations (Clancy, 2012). Sugar is another main ingredient in the production of Coca-Colas products and the most controversial one due to health concerns. In the latest discovery, a shrub that is used as sweetener in South America could reduce this health concerns. Stevia is a natural sweetener, 200 times sweeter than sugar and is considered friendly to those people with diabetes since it does not raise blood sugar levels in the body (Hagan, 2014). 4.1.3 Industry and Competitive Factors (CAMILLE)RivalsThe soft drink industry is made up primarily of Coca-cola and Pepsi because they hold majority of the market share of this industry. Competition is fierce as evidenced by the intense advertising campaigns rather than by engaging in price competition to allow their brands to differentiate from one another and gain additional market share. Both Coca-cola and Pepsi offer a wide range of beverage products such as bottled water, juices and carbonated drinks. Major activities and sports events were also sponsored by these soft drink giants with Coca-cola sponsoring NBA, NCAA and the Olympic Games while Pepsi focused its efforts on the National Football League and the International Cricket Council. Compared to Coca-cola, PepsiCo positioned itself in the minds of health-conscious consumers because of their better for you products. These large companies are expanding into every niche of the market by adding new products and to take away market share from competitors to grow. Other soft drink companies operating in other places of the world are becoming increasingly popular such as the Cadbury Schweppes PLC which possess strong regional presence in the America and Australia regions.Bargaining power of suppliersThe bargaining power of suppliers towards Coca-cola is low because the company operates in a large scale basis. Although the company interacts with various bottling equipment manufacturers and secondary packaging suppliers, Coca-cola owns about 36% of the Coca-cola Enterprises, the largest Coke bottler in the world. Moreover, the companys suppliers offer the same and readily available products therefore Coca-cola, when suppliers decide to exert some influence over the company, Coca-cola could easily switch to another supplier.Threat of Substitute productsThe drinking industry has shifted because health-conscious customers are now patronizing bottled water, juices and sports drinks. The increasing varieties of water and sports drinks also appeal to the different tastes of the consumers. Caffeine, which is found in soft drinks could also be obtained from coffee and tea. In particular, a lot of tea shops and blend coffee stores are sprouting all over the world. It is relatively cheap for customers to switch to these substitutes coffee and tea because these items are priced lower or at par with the soft drink products. In addition, these beverages are available in ready-to-drink packages, which made them easily accessible and convenient to the buyers. Bargaining Power of BuyersThe bargaining power of bulk buyers is high while for individual purchasers is low. The frequent buyers of Coca-cola are the large grocery stores and restaurants who purchase Coca-cola products in large volumes so they could ask for bulk discounts. Individual buyers are also becoming health-conscious nowadays that is why they are purchasing and consuming less soft drinks. The bargaining power of these customers could increase due to the decreasing demand for soda products. Since soft drinks are not that important for survival, customers who are sensitive of the price are willing to change brand preference if its product becomes more expensive. Meanwhile, in a research done in America last 2013, an average American drinks over 38.6 gallons of soda each year yet, since the average price of a soft drink is under $ 2.00, making individual purchase relatively insignificant. Threat of New EntrantsBrand Loyalty. Coca-cola and Pepsi are the dominant players in the soft drink industry. These companies have been offering soda drinks to the world for decades and they are considered established companies with famous brand names, thus entering the industry would be difficult. High capital investments. In order for new companies to engage themselves in operating in the soft drink industry, they must High fixed costs for warehouses, trucks, labor and economies of scale; difficult to compete in price without the economies of scaleSetup. Apart from the fixed investments, new entrants must consider supplier relationships to ensure the timely and quality supply of raw materials. Further, distribution channels should also be laid well so that the customers could easily access or purchase their products. Absolute cost advantages. A lot of companies such as Coca-cola, are starting to locate their plants and factories in Asian countries like China and India to exploit cost and performance advantages.New offerings. New entrants must offer differentiated products or invest heavily in marketing in order to effectively promote, position their products and obtain a part of the established brands market share. In addition, because of the heavy fundings of the existing established companies in their R & D and commitment to product innovation, Coca-cola and Pepsi still continuously bring out new products to the market.

4.2 The External Factor Evaluation (EFE) Matrix

4.3. The Competitive Profile Matrix (CPM)

5.0 ANALYSIS of the INTERNAL ENVIRONMENT5.1 Profile of Current Strategy5.1.1 Concept of Business (VAL)What customer functions does it provide?Coca-Cola is the worlds largest beverage company, with more than 500 sparkling and still brands at present. The company provides various non-alcoholic beverages such as carbonated drinks, sports drinks, ready-to-drink coffees, juices and juice drinks, and bottled water. Cokes products are positioned relatively high in the market compared to the products of competing companies as suggested by their market share being the largest in the beverage industry. The companys advertising campaigns pretty much captivated the attention of viewers and these have brought positive feedbacks to the company. Coca-Cola (2012) provide beverages that offer hydration, refreshment, and moments of affordable happiness for people worldwide. The companys products quenches the thirst of consumers and thus the consumption of the companys products are higher during the summer season, wherein the climate is hot. Generally, the Coca-Cola products aims to provide beverages that satisfy the needs of the consumers. The company recognizes the different needs of the consumers and produces the products that could satisfy these consumers.What customer segments does it serve?The company is a multinational beverage company. Coca-Cola produces non-alcoholic products and basically everyone can drink its beverages. However, having market segments helps the company improve with its products and services. The company has been innovative with the different products that they offer. There are drinks which targets different age groups, lifestyles, etc. Take for example Diet Coke, Coke Zero, among others. Because people are now more health conscious, they have taken their concern into great consideration such that they really keep an eye on the ingredients of different snacks and drinks. Trends such as this one has influenced Coke to produce healthier products. Another example is Coca-Colas sports drink brand, Powerade. This drink targets athletes or consumers with an active lifestyle, specifically. The various Coca-Cola products are sold all around the world, to people of diverse population.What is the degree of vertical integration?The consumption rate of Coca-Cola beverages across more than 200 countries is at 1.4 billion servings a day. With this in mind, the company produces its products at a large volume every day. The company operates in multiple channels. The company has various suppliers providing the company with the ingredients for the beverages, materials for packaging and machinery among others. In addition to this, Coca-Cola operates as manufacturers of concentrates, beverage bases and syrups and the company sells these to bottling investments. The Coca-Cola System, as mentioned by Coca-Cola (2015), owns the various brands and is responsible for consumer brand marketing initiatives. Because the company has various bottling investments, they have no doubt not much of a problem regarding the manufacturing of the beverages. The bottling investments of the company has the responsibility of manufacturing, packaging, merchandising and distributing the final branded beverages to the companies retailers, vending partners and customers. Coke is known to have the largest beverage distribution system in the world, with more than 900 bottling and manufacturing facilities at present. This being the case, Coca-Cola is able to distribute its products to more geographic locations, reaching its customers in different areas. The company is pretty much vertically integrated as suggested by the number of value chain stages that its operating in.With what technology does the organization perform its customer functions?Coca-Cola reaches out to its consumers through media. The company makes use of advertising campaigns which attracts a huge amount of buzz from the public. Among the companys most recent digital campaign is Share a Coke which gives people the chance to order personalised Coke bottles. This campaign brought a massive success on social network causing an increased by 870% traffic on the Coke Facebook site (Moth, 2013). The companys website is up-to-date, providing recent updates about their company. Information becomes readily available in the process. Another program launched by Coke is the My Coke Rewards which started in 2006. This program was developed by Coca-Cola in order to reward its consumers for picking Coca-Cola beverages.In order to effectively pursue the different campaigns and programs that Coca-Cola have for its consumers, it is important that the products are readily available to the end users. As earlier mentioned, the company has the worlds largest distribution system thus it is able to distribute its products to more geographic locations. Because of this, Coke products could be bought and enjoyed by consumers with convenience. Beverages of Coke are distributed to grocery stores, retailers, street vendors, and restaurants making it more accessible for consumers to enjoy the drink. Vending machines are also effective means in making Coke beverages more available.

5.1.2 Concept of Competition (CAMILLE)Coca-cola operates in a highly competitive business environment that offers more or less the same products with the same price that caters to the same needs of the consumers. As mentioned in the case however, sales in India and Philippines dropped in 2006 because of affordability issues. In 2006, the percentage of Filipinos who are living below the poverty line is 28.8 percent and if a family needs to support basic needs such as food and water (Rappler, 2013), purchasing a product that is not essential for survival like Coke which costs about P20 is not part of the daily budget. Therefore, Coke needs to maintain or offer budget-priced items such as Coke Sakto in countries like the Philippines to remain competitive. Such endeavor would require strict adherence to quality control measures, efficient systems processes and affordable yet quality raw materials to lessen costs.However, in order to maintain and improve further the companys market share, the company needs to differentiate itself from its competitors. Since Coke is a well-renowned brand, it is perceived to be of superior quality coupled with its high brand image and recognition. Moreover, the Coca-cola bottle has become an international symbol that is recognizable worldwide due to the companys intensive promotion and packaging strategies. In 2010 alone, Coca-cola spent $2.9 billion on advertising, which is much more compared to Microsoft with $1.6 billion and Apple with $ 691 million combined on the same year (Bhasin, 2011). Intended competitive positionThese key success factors that would enable a company operating in the soft drink industry to succeed are possessed by Coca-cola Company, which makes them undeniably the market leader in this industry.Product Innovation. This term is defined that could be the changes in the design of existing products, the use of new materials or ingredients or the development of entirely new products. The changing customers wants, demands and preferences including other external factors paved the way for soft drink industry players to improved and maintain their position by varying their product tastes, ingredients used and product storage. Coca-cola recently launched Coca-cola Life, by offering the first-ever reduced-calorie sparkling cola that is sweetened by cane sugar and stevia leaf extract. According to the company page, this beverage is said to have 35 percent fewer calories than other colas (Journey Staff, 2014). To further cater to the increasingly health conscious trend and prevent wastage, Coca-cola started introducing smaller portion packages such as 7.5 oz. mini cans and 8 oz. glass bottles (Coca-cola Ambassador, 2013).Strong global presence. Although the United States remains to be a top consumer for soft drinks and other carbonated drinks, In order for soft drink companies to access an extensive global reach, they have utilized various ways and selling points such as vending machines, stores, restaurants and eateries. The United States market for soft drinks is becoming saturated, that is why these companies are pursuing global expansion. For Coca-cola, its products are patronized worldwide as evidence by this percentage of market share - Coca-cola (50%), PepsiCo (21%), Cadbury Schweppes at 7%. Accordingly Coke products are not available in the countries of Cuba and North Korea.Size of the organization. The organization size is also critical in bringing success because large organizations produce more products and possess connections such as large distributors that would also be establishing relationships to schools, stadiums, groceries and restaurants.Ability to manage external contracts. Companies should also consider and effectively manage outsourcing non-core functions to lower costs and this would allow them to focus on what they do best such as product innovation and advertising. Coca-cola relied on its contracts with various independent companies the Mosanto Chemical Company, Hershey Chocolate Company and others that obtain, processes and refine the critical materials used in creating the carbonated drinks. This is also a beneficial strategy for Coca-cola because the company could now focus on performing what they do best, which is the manufacture of the syrups and advertising which entails low cost and high efficiency for their part.Price. Consumers who dont have a strong brand preference will purchase the product with the most competitive price and the company offers products that are more or less the same price with their competitors which is evident by the low switching cost from one brand to another or one beverage to another.Marketing and Differentiation. The soft drink industry is characterized by its tough competition, therefore, the major players are investing heavily on their advertising and research and development to drive demand for their products. According to Quester (1998), an important and effective marketing practice used by the players in the soft drink industry would include the corporate sponsorship in sports and other activities because of the extensive television press coverage that appeals to everyone from different countries and relates universal messages of hope, pain or victory (as cited in Saeidinia, et. al, 2012). Coca-cola is one of the official sponsors of the 2014 Sochi Winter Olympics and it contributed in generating an 11% growth in the Russian unit case volume in 2014 (Bailey, 2014). In addition, in a study done with reference to the Pepsi Challenge organized by PepsiCo in 1979, it was concluded the possibility that the respondents preferred Pepsi over Coke during the blind test because of its sweeter taste. However, the case would be entirely different if the respondents were allowed to see the name of the brand they are trying because ad campaigns could override the impact of the taste buds.Brand Loyalty. It is defined to be a form of repeating purchasing behavior caused by a positive attitude and conscious decision to continue buying the same brand (Solomon, et al., 2007). This brand loyalty is evident when the PepsiCo is gaining its market share from Coca-colas and the company resorted to introducing a New Coke. However, the customers prefer the classic one and instead of purchasing Pepsi products, the people instead intensified their call in bringing back Cokes original recipe which after a while, the company decided to give in to their demands.Market Share. It is important for companies to be mindful of the market share because it is the percentage of an industry or markets total sales that is earned by a company over a particular period (Investopedia, 2014). Market share shows more or less an idea regarding the size of the company relative to its market and competitors. According to Beverage Digest (2013), Coca-cola comprises 34.2% share of the overall liquid refreshment beverages while Pepsi was trailing behind at 25.8%. Meanwhile, the carbonated soft drinks market share of Coca-cola declined by 2.2% while PepsiCo decreased by 4.4% primarily. A significant reason for such decline could be traced from the health conscious trend that is hitting the market nowadays.Perceived quality. It refers to the customers perception of the overall quality of superiority of a product or service with its intended purpose compared with the alternatives. Some dimensions of perceived quality could include product features and performance. Coca-cola strictly adheres to its standards to maintain high quality products because they believe that it is the cornerstone of their success and part of their heritage. This belief is reflected in the companys gold standard that, Perfect Product, Trusted Everywhere.HR and Management. Another key success factor that should be considered are the human resources and the management because these people drives the company, utilizes its resources and in a way, helps in creating a reputation for the firm they are working with. In 2013, Coca-cola was named as one of the Worlds Top 25 Global Employers by the Great Place to Work Institute primarily because of the companys sustainability and entrepreneurship efforts. Moreover, employees of Coca-cola also served as global ambassadors of Coke especially during major global events such as the Olympics and World Cup (Unbottled Staff, 2014). In order for the company to attract, develop and retain a highly talented workforce, Coca-cola organized the Coca-cola University which is intended for the companys high performance employees to allow them develop their knowledge, skills and expertise. The management also sees to it that open communication is practiced throughout the organization to create a healthy and well-updated workplace by providing talks, offering speeches and posting them online for the employees to read and understand. The companys focus on beverages also proved to be an appropriate choice since the management and the employees themselves could focus in what they are doing best because the company operates in related fields. According to some articles, PepsiCo lost the cola wars because of its constant shuffling of its managers between the different departments and brands hurt the companys sales. During the first quarter report of PepsiCo in 2012, the company experience a 2.5% percent decline in drink sales and 4 percent decrease in soda sales primarily because the management themselves find it hard to support a particular brand when no one stays long enough on a brand to build up knowledge about how to improve and/or maintain its position in the market (Russell, 2012).Brand positioning. This term refers to the perception of the customers of a particular brand in comparison with that of the competitors or simply put, the mental image of a brand or a company in the minds of the public. When Coca-cola was launched in the 1880s, it created a new category of beverage was created and the brand name became the name of the product itself. Due to the brilliant advertising campaigns of Coca-cola which circulates around cultural themes like the Santa Claus in 1930s, the selling of Coke products to American GIs during the Second World War which provided comfort and encouragement to these soldiers and the promotion of peace and unity among countries through the Hilltop commercial, Id Like to Teach the World to Sing. In addition, the company has successfully positioned its brand with images of happiness and togetherness, tradition and nationalism. PepsiCo has also established itself as the choice of the new generation by utilizing the appeal of celebrity endorsers, popular music and young people in their ad campaigns.5.1.3 Company Self-ConceptPerformance Goals and Objectives2020 Vision: Roadmap for Winning Together: TCC and our Bottling PartnersOur VisionOur GoalsOur System PrioritiesOur Metrics

ProfitMore than double system revenue while increasing system margins. Maximize Company and bottler long-term cash flow:Boost system investment in sales and market execution.Operate the lowest cost manufacturing and logistics in every market, while maintaining our quality standardsUse our size and expertise to create economies of scale.Total shareholder returnEconomic profit growthSystem Cash flow

PeopleBe a great place to work.Attract, engage and retain the best talent.Increase people's system knowledge and cross-system movement.Inspire our people to be passionate ambassadors for our brands.Recruit, develop and advance women and achieve true diversity.Engagement Employer of choice Workplace rights DiversityRetention

PortfolioMore than double our servings to over 3 billion a day.Be #1 in NARTD business in every market and every category that's of value to us.Develop and deploy the world's most innovative and effective marketing. Win with Coca-Cola:Accelerate growth of Trademark Coca-Cola. the epicenter of our business. Act now to ensure the next generation of youth falls in love with Coca-Cola.Aggressively increase the value of our portfolio:Acquire or develop scalable, innovative premium brandsBring innovations to the market faster.Satisfy the needs of older consumers with the right brands and marketing.Together with our bottlers, use new technologies to reinvent our fountain businessEnsure that our products are always the 'gold standard* for quality.Volume & value shareServings growth Brand healthCategory ranking# of new billion dollar brands Commercialization: Percentage Speed LongevityQuality index

PartnersBe the most preferred and trusted beverage partner.Think and act like an integrated global enterprise while intensifying our local focus. Become a critical part of our customers growth strategies:Align our franchise structure to create unsurpassed value for our customers. Focus on selling and merchandising; be flexible on delivery method. Win at the point of sale:Anticipate and serve local tastes, traditions and needs, providing outlets with products and communications tailored to their specific shoppers. Expand immediate consumption investment. Customer relationship health Retail sales growth Shopping trips with a Company product Immediate consumption growth

PlanetGlobal leadership in sustainable water use. PLANET Industry leadership in packaging, energy and climate protectionCreate competitive advantage by fulfilling our Live Positively commitments:CommunityWorkplaceMarketplace (beverage benefits and active healthy living)Environment (climate packaging and water)Reputation trackingEnvironmental performanceSafety record

ProductivityManage people, time and money for greatest effectiveness.Design and Implement the most effective and efficient business system:Redirect resources to drive profitable growth.Standardize and simplify our business processes, data and IT systems.Create a competitive cost advantage across the entire supply chain.Build a continuous improvement and cost management culture.Minimize our energy use.Market-driven spending levels Supply chain costs Overhead per unitTotal energy use

Active Healthy LivingSince the company started its campaign on active healthy living, it started to place calorie or energy information on almost all of its products to allow the customers to create informed dietary decisions through the use of visible, clear and easy-to-understand package labels. It only shows that companies commitment to not only meet the customers refreshment, enjoyment, nutrition and hydration needs but also concerned of the consumers overall well-being as a whole. The Coca-Cola Company also desires to sponsor at least one physical program that is organized in every country that they are operating.Year20112010200920082007

No. of Physical Activity280+~ 150~ 150120+N/A

No. of Nutrition Ed. Programs115+~ 100~ 10085N/A

To support the increasing clamor to support women and provide them with jobs and sources of living, the company sees to it that could empower women through their business operations that as of 2011, about 131 000 women are provided with jobs.The company also allocated 1% of their annual operating income to the Coca-cola Foundation to fund activities involving youth development, HIV/AIDS prevention and awareness programs and emergency relief. Year20112010200920082007

Charitable contributions and equivalent percentage of operating income$ 124 MM1.2%$102 MM1.2%$88 MM1.1%$ 82 MM1.0%$ 99 MM1.4%

Human and Workplace RightsBy 2015, the company aims to achieve a 98% compliance level for all company-owned and managed facilities on the Workplace Rights Policy and 90% compliance for the Supplier Guiding Principles among independent franchise bottling partners and suppliers to maintain and encourage the well-being of the employees and ensure good and quality performance within the organization and its partners. Water is a valuable resource for soft drink companies such as Coca-cola. To save cost and maintain the companys reputable name in the ecological and environmental concern spheres, the company managed to improve its water efficiency in manufacturing by 20 percent annually compared to the 2004 baseline. The company would also aim to perform a comprehensive wastewater treatment in order to reduce the companys carbon footprint and wastage. 2011201020092008

Water use ratio efficiency2.162.262.372.43

Percent of Coca-cola system plants in compliance with internal wastewater treatments standards96938988

Number of community water partnerships supported by the Coca-cola system and number of countries where projects exist382, 94323, 86250, 70203, 56

Percent of water replenished by the Coca-cola system based on the total water used in our finished beverages35%33%22%N/A

The company also plans to improve the packaging material efficiency and invest in recycling programs to achieve their goals of recovering about 50% of the equivalent bottles and cans that the company is using annually.Leadership StyleDemocratic leadershipThis leadership style is headed by a leader who is sharing his/her decision-making abilities with the group members through the promotion of their interests and the practice of social equality. The group, which is made up of the managers, junior managers and employees are involved in the generation of ideas as well as in the final decision-making process. Employees are empowered in this type of leadership and the more they would feel comfortable in interacting with the people within the organization and create decisions with them. Usually, the democratic leadership produces contented, happy and productive employees because they would feel respected and honored. Moreover, because the management practices this type of leadership, it is open-minded and ready to accept feedbacks and opinions coming from the managers in the different countries that the company is operating to create sound and appropriate strategies for the company.Autocratic LeadershipAn autocratic leadership is also practiced by Coca-cola because the management keeps a strict and a close control over the employees through the use of the policies and procedures followed and implemented. This leadership style is evident inside the factories and bottling plants of Coca-cola to ensure that the guidelines are followed and consistency in the quality of the output would be achieved. Risk-taking Behavior The company knows that risk is present in every industry and in every business decision it makes. Coca-cola does not view risk in isolation and recognize that it is impossible to eliminate all risk. Therefore, to remain competitive globally and to obtain the objectives that are indicated in their 2020 Vision, the company ensured the assignment of a Board and management responsibilities.Shareowners elected the Board members and allow them to oversee their interest on the overall success of the business and security of financial strength. They see to it that assets are safeguarded well, appropriate financial and internal controls are maintained and complied and regulations and laws are properly followed. In addition, some of their major responsibilities would include risk oversight, evaluation of the risk management processes, to nurture an environments of integrity and risk awareness and to maintain an open communication between the management and Directors. The Management meanwhile is in-charge with managing risks and ensure that the internal processes and environment are present and always available in identifying and managing risks while sharing this information with the board. Programs such as the enterprise risk management program, the establishment of a Risk Management Committee and disclosure of internal management issues during every meetings are some of the management activities that are done by Coca-cola. Founders PhilosophyCoke was developed because of John Pembertons innovative spirit to create some sort of medicine to cure headaches by creating a flavored drink made from syrup and carbonated water, thus Coca-cola was born. Up to this day, the company maintained its position because of its constant product innovation to keep up with the varying preferences and needs of the consumers worldwide. The founders also consider marketing as a major contributor of the companys success. Asa Candler, a salesman who purchased Coca-cola from Pemberton is noted for his excellent marketing campaign in distributing clocks, urns and calendars that bear the Coca-cola logo to attract customers and make the products, as well as the company, well-known. Moreover, as stated on the company website: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

5.2 Assessment of the Firms Strengths and Weaknesses5.2.1 Operational/Marketing/Technical Dimension The beverage industry is composed of several companies which compete for a significant share in the market. In order to be largely acknowledged in the industry, several critical factors should be considered. First is the organizations size (Zeigler). It would be of great advantage for large organizations to seize opportunities since they could have enough funds to support proactive programs. Also, with their size, they could produce more but with lowers costs (Jeon, 2013). Furthermore, large organizations have a lot of products to offer such that it could cater several market groups (Jeon, 2013). Another factor is the effectiveness of the companys R&D (Zeigler et al., 2006). With a changing environment, and as well as consumer trends, the products being marketed should be innovated to continuously suit to the consumers taste. Next would be the companys market share. Large market share entails that a company is dominating the market. Another critical success factor is the consumers brand loyalty. With an established brand that is being patronized by target consumers, the companys sales could be more stable and their competitors could be left behind. Lastly, a companys marketing efforts play a huge role in their success in the beverage industry. With the stiff competition among other companies, intensive marketing should be done in order to attract consumers to buy the product. Moreover, the marketing should be done in such a way that the consumers would choose the companys products over several other products being offered by the competitors.One of the critical success factors mentioned about the importance of size in this type of industry. In this factor, the Coca-Cola Company overpowers other companies for they are considered the worlds largest company and that they produce 400 brands. This entails that Coca-Cola, given its size, could easily take advantage of opportunities and could think of ways to lessen their costs. Another critical success factor that the Coca-Cola Company is famous of is their large market share. For how many years, the company has been leading the beverage industry. Also, the company is strengthening their marketing efforts with their several campaigns which enticed a lot of consumers. These campaigns include Its Your Heimspiel-Make it Real campaign in the EU which increased the companys volume growth in 2006, and the sensitivity marketing being undertaken in the EU which gained the respect of the European Commission, the MyCokeRewards in North America which encouraged brand loyalty among millions of participants, and among others. With the trend towards healthy eating and drinking, if the company would continue producing a lot of carbonated products over those which offers nutritional values, there is a large possibility that their large chunk in the market share would be taken by those companies which concentrate in offering healthy beverages. However, since the company has been staying up in the list of top companies for over a century, there is a greater chance that they could still remain at the top with the appropriate strategy.5.2.2 Financial Dimension

Coca Cola Company's income statement showed an increase of all the items in the income statement except for the 18.36 decline in Total Other Inc/Exp Net. The increase in percentage of the total revenue for three years is recorded to be 4.73%, greater than the increase of 3.46% in their cost of revenue and yielding to an increase in the gross profit from 5.45%. Other significant increases include Coca-Cola's interest expense with 7.06% and the income tax expense of 7.31%. The net income also improved by 2.39% in from 2004-2006.

The vertical analysis in the company's income statement project a decrease of the cost revenue's percentage from the company's total revenue. From 35% in 2004 and 2005, it dropped down to 34% in 2006. However, an increase in the percentage of selling, gen, and admin is evident from 39% in 2004 to 40% in 2006. This means that Coca-Cola increased their marketing efforts. However, although an increase could be sighted in the net income's horizontal analysis, it is evident in the vertical analysis that Coca-Cola's net income decreased as a percentage in revenue.

Coca-Cola's balance sheet shows a decrease of 39% in the company's handling of cash and other cash equivalents. This implies that the company is using its cash more to finance their operations and that they are taking advantage of opportunities in the industry. This usage of cash could be evident in the company's increase of short term investment by 67.73%. The decline in the company's cash and other cash equivalents largely contributed to the decline of 16.45% in their total current assets. Although the inventory increased by 17.91%, the large decline in cash caused the company's total assets to decline by 2.12%. In the liabilities side, the decrease in the company's short term liabilities by 26.31% and the decrease of 15.13% in other liabilities caused the decline of the company's total liabilities.

In the company's vertical analysis, it shows that in 2004, the largest percentage in the company's total assets in the company's cash and cash equivalents of 21%, followed by their long-term investments of 20% and 19% from property, plant & equipment. However, in the year 2005-2006, the largest percentage shifted towards the company's long-term investments and property, plant and equipment. The company's cash and cash equiv decreased to 8% in 2006. This could imply that the funds from cash and other cash equiv were invested in long-term securities or were spent in the company's fixed assets. In the company's Liabilities side, a decrease in the current liabilities from 35% in 2004 to 30% in 2006 is largely evident. This decrease in the company's current liabilities caused a decline in the total liabilities percentage over TLSE. In the Equity side, a significant increase in the retained earnings from 93% to 106% to 112% in 2004 to 2006, respectively, could be observed. Moreover, huge decreases in treasury stock is also evident.

Coca-Cola companys financial ratios as projected above have declined for a span of 3 years. Both their current and quick ratios decreased which further implies that the company is decreasing the amount of their current assets. Also, this means that their ability to finance short-term debts is negatively affected. The company is also decreasing their dependence to creditors as providers of their funds, as reflected in their decreasing leverage ratios. In the firms activity ratios, it could be concluded that their ability to transform inventory into sales has slowed down by 2.31%. If the firm continues such practice, it could affect the performance of their annual revenue. Furthermore, a decrease in the companys fixed assets turnover implies that they have lessen the productivity relative to their fixed assets. However, the decrease is not that significant and that it could easily be solved by improving asset utilization methods. Meanwhile, the companys profitability ratios decreased in three years, except for their return on total assets. Though the decline is not that big, it is important that they should take this seriously and act on it since these ratios reflect the companys overall effectiveness. 5.2.3 Management Dimension (ALISA)The Coca-Cola Company is recognized as part of the several companies with a strong leadership team. The companys organization chart shows how well represented each segment is with a President assigned to each geographic divisions. Through this, operations in each segments are managed well and that problems and difficult situations could be easily distinguished and solved as well. Moreover, with this fair representation, each geographic segment could be studied well so as to provide specialized product offerings to cater to each specific needs. However, in the companys profitability ratio, which is an indicator of the managements overall effectiveness, most of the values slightly decreased. This means that in the last three years, the managements effectiveness has been reduced. 5.2.4 Research and Development Dimension (VAL)Coca-Cola has been innovative with the products that they provide to their customers. Their innovativeness could be observed in the kind of products that they produce. The company considers the different trends and consumer needs when developing their beverages. Take for example the growing trend on healthy drinking and eating. Coca-Cola has taken advantage of this trend and has developed beverage drinks that could provide health-conscious consumers the kind of drink that they need. Coca-Cola has better understanding of consumer needs with its six R&D centers around the world. Each of Cokes R&D centers and the regional Coke marketing teams work closely together in order to address specific customer needs and to focus on certain areas of innovation.http://www.coca-colacompany.com/innovation/rethinking-r-d-how-coke-uses-its-global-scale-to-take-innovations-further-faster5.2.5 Management of Information System (CAMILLE)Management Information SystemsAn information system is basically a software that allows the user to collect and analyze data. It is important for companies to maintain an information system that is timely and updated because it could be a competitive advantage for them if they are able to collect, analyze data and create appropriate decisions based from the information available. Coca-cola is one of the companies who realized the importance of information that is why, it is taking significant measures to improve the companys existing information system to make information available, accessible, easy to understand, timely and useful for all the management and employees around the globe. The companys Senior Vice President and Chief Information Officer, Mr. Ed Steinike is responsible for the decisions regarding the companys information technology strategy, services and operations. Coca-cola relies on the information system, Internet and other third-party hosted services to support many of its business processes and activities involved in the procurement and supply chain, manufacturing, distribution, invoicing and collection of payments. According to Margaret Carton, the Coca-cola Bottling Corp. Chief Information Officer, the company is now collaborating with SAP to develop a software that would improve the overall efficiency of the organization. More information at the different stores and account levels would be gathered, organized and processed to improve planning and reduce the potential of unwanted deliveries. Managers and employees who are needing the information could also access them through the computers, hand-held devices and smartphones that are provided by the company. Decision-making, high standards and processes would be disseminated and understood well to ensure consistency and quality. The Coca-Cola System also recently adopted KORE, a framework that would aid them in governance and in the management system of their company and operations. The main goals of this framework to ensure the sustainable performance, drive continuous improvement and other pertinent goals. It is a flexible system that has the ability to allow Coca-cola to locally customize their products and operations according to global requirements. KORE also allows a culture of collaboration within the system. Contrary to the past system that the quality and operational control is the responsibility of the top level, the current system, however relies on people in the operations at all levels of the supply chain which is good in empowering and motivating individuals. The KORE Information System also provides information that is accessible to everyone to enable collaboration and information sharing. This information system also includes the following: A documentation library which shows the beverage and product requirements, standards methods and requirements for operations with environmental and employee consideration and specifications on using packaging and facility operations. A collaborative Wiki-style reference tool that would serve as an accessible reference and guide for information and decision-making where anyone is allowed to post articles about their respective expertise.

5.2.6 Others (VAL)5.3 The Internal Factor Evaluation (IFE) Matrix

6.0 THE STRATEGIC AGENDA6.1 SWOT Matrix

STRENGTHS WEAKNESSES

1. Being the world's largest company, Coca-cola could easily act upon opportunities. 2. Coca-Cola's recognized presence globally with their seven geographical segments. 3. The percentage of Coca-Cola's net income from revenue is 21.09%, greater than PepsiCo's 16.12%. 4. Extensive retail and distribution network5. Brand loyalty and reputation 6. Highest market share among players in the soft drink industry 7.Test marketing of coffee dispensing technology 8. Strong leadership team 9. Compared from PepsiCo, the Coca-cola has better employee efficiency 10. Increase in revenue by 4.73% 1. Failure to meet expectations in Japan, 3% decline in unit sales volume 2. Healthy beverages are lagging behind PepsiCo's 3. Decline in Net Operating Revenues by 9.5% (European Union) and about 3.9% in North Asia 4. Brand names could be interchangeably used by customers in soda products. 5. Declining Coke sales in the east, south Asia and Pacific Rim of 1% which is brought about by the political and economic instability in these areas. 6. Negative reputation of Coca-cola in India because of the pesticide content in their products that made their products dubbed to as "toxic colas".

OPPORTUNITIES THREATS

1. Cadbury's beverage division could be a significant addition to Coca-cola's existing product portfolio. 2. The consumers who are patronizing healthy products are increasing annually. 3. Globalization improved the company's quick anticipation and perception of the changing needs and preferences of the customers worldwide. 4. The improving technology could help in improving the company's retail and distribution network, operations efficiency and CSR. 5. Tea is the second most widely consumed beverage after water, thus the bottled tea industry could expect growth annually. 6. In the last decade, consumption growth of coffee in the Americas and Asia increased by about 2.5%. 1. If the Cadbury beverage division is purchased by a rival, the acquisition could result to more competing products within the industry. 2. Carbonated drinks are the core products of Coca-cola, thus, the trend to a healthier living could affect the sales of Coca-cola. 3. Due to certain events, costs of raw materials such as sugar and oranges could decrease the profits of the company. 4. Increasing manufacturing cost per minute of water 5. Political issues, such as the banning of Coca-cola products in US schools and the selective advertising implemented in the European Union. 6. Weaker dollar 7. Economic problems and uncertainty in Europe could limit Coca-cola growth in the said region. 8. Market saturation and sluggishness in the United States because of the arrival of healthier beverages. 9. Strength of PepsiCo's healthy products (Glaceau, Gatorade, Aquafina) 10. PepsiCo complementary products (snacks and beverages)

SO StrategiesST Strategies

Coca-cola should evaluate and improve their existing ERP, MIS and distribution system (S4, O4) Develop new products, perform intensive market studies, purchase and/or acquire undervalued or underperforming companies that are offering healthy drinks (S1, O2) Invest on sustainable projects such as water-saving technology (S1, O4) Market Cadbury products using the existing networks in the seven regions (S2, O1) Use high brand reputation to market Cadbury products together with existing Coca-cola products in advertising (S5, O1) Perform more market studies and market testing for coffee in other locations; develop coffee and coffee-mixed products (S7, O6) Improve MIS and provide more online venue for communication and collaboration among employees and the management, online tutorials and forums (S8, O3) Provide trainings and information manuals to workers to improve efficiency and coping mechanisms towards technology (S9, 04) Propose better financial and strategic incentives to the owners or shareowners on Cadbury to acquire its beverage division (S1, T1) Look and for other suppliers from other locations (S1, T3) Develop complementary products such as snacks and other food items (S1, T10) Provide intensive marketing and advertising efforts in other regions of the world (S2, T7, T8) Develop new beverages such as brewed coffee (S7, T8) Conduct meetings, seminars, market studies to provide more sound decisions (S8, T7)

WO StrategiesWT Strategies

Invest on improving MIS, conduct intensive study on consumer trends (W2, O3) Increase product portfolio with healthier beverages, provide more advertisements on the existing healthy drinks (W3, O2, O5) Improve retail and distribution networks in this area, e.g., trucks, vending machines, engage in ERP (W5, O4) Perform market studies and include the existing healthy beverages and sports drinks to sport event sponsorships (W2, T9) Feature Coke in magazines, televisions and events together with Coca-colas healthy brands (W3, T7)

6.2 SPACE Matrix

6.4 IE Matrix

Considering Coca-Colas scores from their IFE matrix with 3.11 and their EFE matrix with 2.95, the company belongs to the fourth division in the IE matrix. This means that the company should grow and build through integration and intensive strategies.6.5 Grand Strategy Matrix

In the beverage industry, where Coca-Cola is competing actively, the revenue growth for each quarter is 6.6%. Since it exceeds the average market growth of 5%, the beverage industry is said to be rapidly growing. Coca-Colas competitive position in this growing industry is strong considering that they have the highest market share of $111.18B compared to their strongest rival whose market share is $103.10B. Moreover, Coca-Colas market share is way beyond the industry average of $2.21B. Thus, with an industry considered to have a rapid growth, and Coca-Cola having a strong competitive position, the company could be located in the 1st quadrant of the grand strategy matrix. This means that they could proceed with strategies like market development, market penetration, product development, forward integration, backward integration, horizontal integration, and related diversification.6.6 QSPM Matrix6.7 Recommendations: STRATEGIC CHOICEIt is recommended for Coca-cola to perform market penetration because a series of intensive marketing strategies to increase market share for their current products in the markets that they are operating. Market penetration offers the lowest amount of risk and provides more opportunity to increase revenues and profit. This intensive strategy is beneficial for the firm because Coca-cola is operating in a familiar business environment with the existing human capital, infrastructure and facilities and strong management team. In order to sell more to current customers and find new customers, the company must first differentiate itself within the industry. Promotional campaigns featuring the benefits and availability of the companys products should be pursued. Another option is to broaden distribution and retail network so that customers could be attracted to the products availability and ease of access. Altering product usage such offering smaller sizes for convenience and additional purchases would be made, more sales would be achieved and market share would be increased. In addition, market share could be increased through the combination of pricing strategies in order to attract non-loyal buyers, attractive advertising and sales promotion to attract new and hopefully retain these consumers. A detailed market and competitor intelligence should also be present such as market penetration analysis and compilation of market research pertaining to competitor and industry products. The company also has existing sports drinks and energy drinks that are always way below the performance and sales of PepsiCos healthy and sports-related products. An intensive marketing approach is to find appropriate brand ambassadors and host major sports events and sponsorships to make the advertisements and marketing campaigns more appealing and effective because the buyers would perceive that in order to reach the potential to being a good athlete or sportsperson, consuming Coca-colas products would aid in their performance. Coca-cola also possesses one of the most efficient distribution network for Coke that is why, the company could utilized these existing resources to make their healthy beverages available and accessible.

7.0 IMPLICATIONS of the STRATEGIC AGENDA7.1 Management VAL Organizational structure, retain or not? Increase collaboration and communication among departments (finance and marketing) and other geographical units 7.2 Marketing ALISAWith Coca-Colas strategy of market penetration, this implies that the company should increase marketing efforts so as to increase their market share especially in their healthy beverages. This is in response to the trend towards healthy drinking among consumers. Given that Coca-Cola already has a portfolio of energy drinks, flavored water, and juices which are healthier compared to their carbonated products, they should prioritize these healthy beverages in their marketing efforts and advertisements. They could do these by sponsoring leading varsity teams in famous schools, hiring famous sports icons as brand ambassadors, and organizing sports events to facilitate the promotion of these healthy beverages. With the intensive marketing efforts planned for these non-carbonated beverages, the marketing department should also facilitate the distribution of these products for it to be highly available to anyone in the different geographic segments. Also, the differences in culture among the different market segments should be taken into consideration to effectively appeal the promotional message to the target consumers. Another way to effectively market these products to the consumers is to provide attractive labels to make it more appealing to the eyes of the consumers. In this action, the marketing department should to increase their efforts and think of more creative ways to design and to advertise their healthy beverages. With these plans for intensive marketing efforts, this would entail an increased budget in the marketing department to finance such activities. But, the marketing department should continue to be as resourceful as possible to somehow minimize costs. 7.3 Production and Operations VAL Volume of products must be sufficient for healthy beverages Capitalize on their existing distribution networks (accessible and available to the public) Quality assurance not to tarnish their reputation like what happened in India 7.4 Finance ALISA 7.4.1 Total Project Cost/ Investment Cost 7.4.2 Financial Modelling 7.4.3 Vertical and Horizontal Analysis -3- years, use year-year -increase or decrease growth rate-cheaper raw materials and facilities 7.7 Management of Information SystemsCoca-cola is a company that is recognized and operates internationally. A lot of company stores and production plants situated in the different parts of the globe should be informed and updated about the latest changes and strategies that the company decides to implement, especially if their regions are affected. In order for the company to perform market penetration appropriately, investments on ERP and the development of a more interactive and more user-friendly MIS program must be made. This could also serve as a two-way communication medium between the regional companies and the base company with the regional companies offering on-site information and trends to fully aid in facilitating market penetration in their respective areas. In addition to the software, hardware such as computers and hand-held devices could aid employees in learning more about their company, their responsibilities, in decision-making and latest updates. 7.8 Corporate Social Responsibility VAL Youth development and sports-related activities Health and wellness programs and sponsorships 7.9 Environmental Concerns CAMILLESince the company would pursue a market penetration strategy, Coca-cola would need to be knowledgeable and mindful about environmental concerns of the areas that they are operating. Further, in performing intensive marketing campaigns such as organizing fun runs and sporting activities, the company should also provide trash and recycling bins to show and provide a positive perception in the minds of the attendees that Coca-cola is an environmentally-ethical company. Another option is to offer sari-sari and other micro-enterprises tarpaulins with the name of the store and the Coca-cola logo because not only would it add to the companys marketing efforts, it would provide a more sustainable and attractive addition to their stores. In pursuing marketing efforts, Coca-cola must consider environmental laws and regulations, environmental activists and other environmental concerns because different countries have different perspective on how things are managed in their area.

STRATEGY EVALUATION Criteria for Strategy EvaluationStrategies

Develop products to take advantage of existing opportunitiesFocus on marketing and advertising healthy beverages

a. Suitability

b. Validity The information gathered in organizing assumptions are obtained from reliable articles and published by experts and the academe. Coupled with the information coming from the horizontal and vertical analysis of the various case exhibits, these assumptions are well-rounded, realistic and up-to-date. Industry growth rate and revenue growth rate are some of the basis for assuming that it would a lucrative choice for Coca-cola.The company undeniably has strong brands on healthy beverages however, they are lagging behind because of marketing issues and availability of these products to other regions of the world. Such assumption has been obtained through comparison between the PepsiCo and Coca-cola campaigns of their products from various articles and published researches.

c. Consistency This strategy is consistent with the companys objectives such as the provision of competitive product offerings and capitalizing on the industry growth because offering more products or modifying or improving them according to consumer preferences to increase revenue for Coca-cola products. Pursuing market penetration is consistent with the objectives of the company to obtain revenue growth, increase brand recognition and increase product availability.

d. Feasibility ALISA With Coca-Colas increasing revenue over the last three years, it is safe to say that they could finance this type of strategy. Moreover, since they are considered the worlds largest beverage company, they have already a lot of facilities which they could use in the production of these new products. Coca-Cola has been doing a series of marketing efforts throughout the century and thus they have built several channels and accumulated several ideas in creating effective marketing strategies. With this creative resources already present in the company, Coca-Cola would not be having grave difficulties in pursuing this intensive marketing. As to the costs to be incurred, Coca-Colas increasing revenue could finance this action.

e. Vulnerability VAL

f. Potential Rewards ALISA

8.0 STRATEGY IMPLEMENTATION: THE BALANCED SCORECARD 8.1 Functional FitsThe functional strategies and policies that Coca-cola must establish in order to implement the strategy in the best way possible are the following: Invest in improving sales and marketing campaigns Maintain sustainable and low cost manufacturing and logistics processes Improve marketing efforts and differentiate products Improve product delivery and accessibility through technology Hire, train and retain knowledge workers Provide an updated and employee-friendly operation systems The strategies and policies that the company is currently pursuing are as follows: Invest in improving sales and marketing campaigns Improve product delivery and sustainability through technology Hire, train and retain knowledge workers Provide an updated and employee-friendly operation systems 8.2 Administrative FitsIn order for the company to implement the strategy well a well-organized structure, leadership style, systems and culture must be fostered first. The organizational structure that would match this strategy is the functional organizational structure wherein there are top level managers and sub-level managers of both different departments and low-level employees. It dictates the hierarchy of power and determines who reports to who. In addition, the leadership style must be a combination of democratic and autocratic wherein employees and basically, everyone are given the chance to speak up, give suggestions and offer solutions to problems during company meetings and or through personal interaction with the immediate supervisor. Top to bottom and bottom to up information or a two-way communication relationship must be maintained. An autocratic leadership is also important to show that the company is strict in adhering to the company regulations and standards to ensure the products are of the best quality and decisions made are consistent and appropriate. An open, creative and nurturing culture must also be promoted so that employees are encouraged to air out their concerns and the management likewise are committed in knowing the situations of the employees and their suggestions. Currently, the company possesses more or less the desired structure, leadership style, systems and culture that would aid in fully-implementing the recommended strategy.

8.3 Plan of Action

8.4 Strategic ControlThe company adheres to the control systems and standards presented in the company manuals and company policies to ensure conformance and consistency in production. As often as possible, Coca-cola develops and promotes a visionary statement available in their company website and workplaces to serve as constant reminder for the employees and the management. Another option to ensure consistency of the employees and maximize their efficiency, the company sees to it that competitive salaries, benefits and good performance are rewarded. The current MIS provides up-to-date, timely and readily available information for all employees and management that would be needing them. Everyone is encouraged to post information and latest know-hows on their respective expertise so that these information would be communicated and used for collaboration to improve decision-making and strategy formulation. The company website and published annual reports presents the company goals, objectives and strategies that they are currently pursuing and how far is the company from achieving it. Moreover, the company also conducts meetings and online postings to make everyone within the organization knowledgeable about the latest happenings in the industry and discuss upon themselves whether they are contributing to the achievement of the company strategies. Strategies are evaluated annually to ensure that the companys actions are still consistent in achieving it and in cases wherein unexpected occurrences happen, the managers are open for reconsideration and determine what made the strategy ineffective. 9.0 REFERENCESAmerican Beverage Association (2015). School beverage guidelines. Retrieved from http://www.ameribev.org/nutrition-science/school-beverage-guidelines/Bailey, S. (2014). Investing in Coca-cola: the worlds largest soft drink company. Retrieved from http://marketrealist.com/2014/12/investing-coca-cola-worlds-largest-soft-drink-company/ Bhasin, K. (2011). 15 facts about Coca-cola that will blow your mind. Retrieved from http://www.businessinsider.com/facts-about-coca-cola-2011-6?op=1Biswas, A.K., & Bozer, A.C. (2015). Water: Future, prospects and challenges. Retrieved from http://www.coca-colacompany.com/opinions/water-future-prospects-and-challengesCenters for Disease Control and Prevention (2013). Overweight and Obesity. Retrieved from http://www.cdc.gov/obesity/childhood/problem.htmlCoca-Cola. 2011. Front-of-pack energy labelling. http://hkupop.hku.hk/english/report/nutrition11/content/resources/Fact%20Sheet_FOP_ENG_FINAL.pdfJourney Staff. (2014). Coca-cola life arrives on shelves nationwide. Retrieved from http://www.coca-colacompany.com/coca-cola-unbottled/coca-cola-life-to-make-us-debutMoth, David (2013). 10 inspiring digital marketing campaigns from Coca-Cola. Retrieved from https://econsultancy.com/blog/63175-10-inspiring-digital-marketing-campaigns-from-coca-cola/Rappler. (2013) PH poverty in h1 2012 unchanged from 2006. Retrieved from http://www.rappler.com/business/27210-poor-filipinos-in-2012Russell, M. (2012). How Pepsi went from Cokes greatest rival to an also-ran in the cola wars. Retrieved from http://www.businessinsider.com/how-pepsi-lost-cola-war-against-coke-2012-5?op=1Saeidinia, M., Salehi, M., Hashemi, S., Darabkhani, Y. & Ahanijan, B. (2012). Operation strategies for Coca-cola vs Pepsi companies to attract their customers. Retrieved from http://www.businessjournalz.org/articlepdf/CMR_11003.pdfSrivastava, Amit (2006). Coca-Cola: poisoning water, land, and people. Retrieved from http://www.indiaresource.org/campaigns/coke/2006/cokepoisoning.htmlThe Coca-Cola Company (2012). The Coca-Cola sustainability project: product safety and quality. Retrieved from http://www.coca-colacompany.com/sustainabilityreport/me/product-safety-and-quality.html#section-our-policy-on-biotechnologyThe Coca-Cola Company (2015). The Coca-Cola system. Retrieved from http://www.coca-colacompany.com/our-company/the-coca-cola-system

With the trend towards healthy lifestyle, and Coca-Cola Companys healthy products lagging behind PepsiCos, the company needs to formulate a strategy to address this problem and at the same time to take advantage of opportunities such as the increase in bottled water and coffee consumption in some areas of the geographic segment.