Contents:

Introduction

Objectives of the assignments

Scope of the assignment

Definition of Strategic Assignment

Importance of Strategic Assignment

Various roles in Strategic Assignment

Company Overview

Mission of Coca-Cola company

Strategies Of Coca-Cola company

SWOT analysis of Coca-Cola company

Pest Analysis

Conclusion

References

Introduction:

Strategic management is the process of defining an organization's objectives and further

developing policies, strategies and plans to achieve these objectives, and allotting resources

so as to achieve the goals of the company.

According to G. Tyage, Strategic management consists of the investigation, decisions, and

actions an organization undertakes in order to create and sustain competitive advantages.

Strategic management is combination of science and arts which increases an organization’s

chances of success as it involves detailed planning of each and every variable of the

organization that can help in the achievement of goals and objectives.

Definition of Strategic Management

Strategic management is the process of specifying an organization's objectives, preparing

policies and plans to achieve these objectives, and allocating resources so as to implement the

plans. It is the highest level of managerial activity, usually performed by the company's Chief

Executive Officer (CEO) and his executive team. It provide long run direction to the whole

company.

Origin Of Strategic Management:

The increasing importance of strategic management may be a result of several

trends. Increasing competition in most industries has made it diffi cult for some

companies to compete. Modern and cheaper transportation and communication

have led to increasing global trade and awareness. Technological development

has led to accelerated changes in the global economy.Regardless of the reasons,

the past two decades have seen a surge in interest in strategic management.

Three Perspectives on strategic management

Traditional

Perspective

Resource based

view

Stakeholder view

Origin Economics, other

business

disciplines and

consulting firms

Economics ,

distinctive

competencies and

general

management

capability

Business ethics

and social

responsibility

View of Firm An economic

entity

A collection of

resource, skills

and ability

A network of

relationships

among the firm

and its

shareholders

Approach to

Strategy

Formulation

Situation analysis

of internal

and external

environments

leading to

Analysis of

organizational

resources, skills,

and

abilities

Analysis of the

economic power,

political infl

uence,

rights, and

formulation of

mission and

strategies

Acquisition of

superior

resources,

skills, and abilities

demands of

various

stakeholders

Source of

Competitive

advantage

Best adapting the

organization to its

environment by

taking advantage

of strengths and

opportunities

and overcoming

weaknesses and

threats

Possession of

resources, skills,

and

abilities that are

valuable, rare, and

difficult to imitate

by competitors

Superior linkages

with stakeholders

leading to trust,

goodwill, reduced

uncertainty,

improved business

dealings, and

ultimately higher

fi rm performance

Source : http://media.wiley.com

OBJECTIVES OF THE ASSIGNMENT:

Every successful study should have specified and well-defined objectives. A careful

statement of the objective helps in preparing a well-decorated assignment promoting

others to take decision on it. The specific objectives of the study include:

To learn about the strategic management issues of multinational company.

To characterize the challenges of international strategic management.

To know about international strategic management process .

To know about Coca-Cola Company’s strategies management process.

SCOPE OF THE ASSIGNMENT

This study has focused upon the Management Issues which are persecuted by the

Coca-Cola Company for capturing the worldwide market. Through my assignment I

have tried to find out the global challenges of International Strategic Management and

to determine the basic strategies and describe the international strategic management

process of the Coca-Cola Company.

Five Essential Fields of Strategic Management:

Goal-setting

Goal-setting permits a firm to express its vision: identify what needs to be

accomplished, define short-and long-term objectives, and relate them to what the

organization wants to do.

Analysis

Analysis directs to gather and consider information so that a firm apprehends the

situation. Assess external environments and internal situations to identify the strengths

and weakness of the company and the opportunities and threats face to reach the

goals.

Strategy Formulation

To determine a strategy, a firm establishes options, and make decisions, review the

results of the analysis, identify the issues that a firm implementing partners need to

address, and draft them in terms of their urgency and magnitude.

Strategy Monitoring

Monitoring provides checking the progress toward achieving the firm’s goals and

determining whether any changes in the environment is necessary for the firm’s

strategy.

IMPORTANCE OF STRATEGIC MANAGEMENT:

Strategic management accommodates the knowledge and experience procured in

various functional areas.

It helps in understanding how policies are drafted and in creating appreciation of

complexities of environment that the senior management staff faces in policy framing.

A well-formulated strategy can bring various benefits to the organization in

present as well as in future.

1. Strategic management takes into account the future and anticipates for it.

2. A strategy is made on rational and logical manner, thus its efficiency and its

success are ensured.

3. Strategic management reduces frustration because it has been planned in

such a way that it follows a procedure.

4. It brings growth in the organization because it seeks opportunities.

5. With strategic management organizations can avoid helter & skelter and

they can work directionally.

6. Strategic management also adds to the reputation of the organization

because of consistency that results from organizations success.

7. Often companies draw to a close because of lack of proper strategy to run it.

With strategic management companies can foresee the events in future and

that’s why they can remain stable in the market.

8. Strategic management looks at the threats present in the external

environment and thus companies can either work to get rid of them or else

neutralizes the threats in such a way that they become an opportunity for

their success.

9. Strategic management focuses on proactive approach which enables

organization to grasp every opportunity that is available in the market.

Various Roles In Strategic Management:

Senior administration plays an important role in Strategic Management.

Role of Board of Directors: Board of Directors is the highest Authority in a

company. They are the owners/ shareholders/ lenders. . They are the link between the

company and the outside environment.

Role of C.E.O: Chief Executive Officer is the most important Strategist and he is

responsible for all aspects from formulations/Implementation of policies for to review

of Strategic Management. He is the leader, motivator & Builder who forms a channel

between company and the board of directors and responsible for managing the

external atmosphere and its relationship.

Role of Entrepreneur: They are independent in their thoughts and action while they

set / start up a new business. A Company can promote the entrepreneurial spirit and

this can be internal mindset of an organization. They provide a sense of direction and

are very active in implementation of various policies.

COMPANY OVERVIEW:

The Coca-Cola Company (Coca-Cola) is a leading manufacturer, distributor and

marketer of Non-alcoholic beverage concentrates and syrups, in the world. The

company owns or licenses more than 400 brands, including diet and light beverages,

waters, juice and juice drinks, teas, coffees, and energy and sports drinks.

The company operates in more than 200 countries. Approximately 74% of its products

are sold outside of the US.

The company is headquartered in Atlanta, Georgia and employs 71,000 people as of

September 2010.The Company recorded revenues of $24,088 million during the fiscal

year ended December 2010.

Mission Of Coca-Cola Company:

To create and design various consumer products, customer services and

bottling system strategies, processes and tools in order to initiate competitive

advantage and deliver superior value to.

Source: www.coca-cola.uk.

Factors Affecting International Strategic

Management

Labour RelationsTransportation and Communication

ContractsAdvertisingControlMoneyMarketFinancing

LabourGovernmentEconomyPoliticsCultureLanguage

There are various factors which affects the strategies of Coca-Cola Company in case

of international operation. Language is one of the main considerations or barrier when

it does business in any domestic country . The compny in that case generally use

domestic language to expand its business in any regional market. But when it does

business outside the country it follows Polycentric policy that is using different types

of languages in different countries. Side by side culture is also relatively

homogeneous in domestic operation and quite diverse, both between countries and

within countries. Political stability and government policies also to be considered by

the Coca-Cola Company.

Strategies of Coca Cola Company

The four different strategies of coca-cola are shown in the following figure :

Global StrategyTransnational

Strategy

Multi-domestic Strategy

√

Home Replication Strategy

From these four strategies Coca-Cola Company only follows the Multi-domestic

strategy. They produce their own products independently in different countries. All

countries products are not same. They produce their products by following different

strategy for different countries, based on the internal and external environment of that

particular

country. Coca-Cola Company developed their strategy by considering the nature of

the people of different county’s people, culture, status,taste and so many other

related factors.

Corporate Level Strategy

Corporate level strategy aims to define a discipline of business, a firm intends to

operate. Corporate level strategies are concerned with the selection of business in

which the company should compete with the development and coordination of that

portfolio of business. A firm might adopt any of three forms of corporate strategies:

A single business strategy

Related diversification strategy and

Unrelated diversification strategy.

Coca-Cola Company succeeds related diversification strategy that is calls for the firm

to operate in several different but fundamentally related businesses. Each of its

operations are linked with other Coca-Cola characters, the Coca-Cola logo, and a

theme of wholesomeness and a reputation for providing good quality family products.

Coca-Cola Company follows this strategy because it has several advantages. At first,

the firm depends less on a single products so it is less vulnerable to competition or

economic threats. Secondly, related diversification may produce economies of scale

for a firm. Thirdly, related diversification may allow a firm to use technology or

expertise developed in one market to enter a second market more cheaply and easily.

Corporate level strategies of Coca-Cola Company is following:

Figure: Corporate Strategy of Coca-Cola Company

Business Unit Level Strategy

A strategic business unit may be a division, product line, or other profit center that can

be planned independently from the other business units of the firm. Corporate strategy

deals with the overall where as business strategy focuses on specific business,

subsidiaries or operating units within the firm. Business seeks to answer the question

“how should we compete in each market we have chosen to enter?” The firms develop

unique business strategy for each of its strategic business units, or it may pursue the

same business strategy for all of them.

Corporate Level Strategy of Coca-Cola Company

Financial Strategies

Reward System Strategies

System Strategies

R&D Strategies Marketing Strategies

Functional Level Strategy

The functional strategies attempts to answer to question “How we manage the

function?” The functional level of the organization is the level of the operating

divisions and departments. The strategic issues at the functional level are related to

business processes and the value chain.

Developing International Strategies

Developing international strategies is not a one-dimensional process.. Simply put, put

strategy formulations deciding what to do and strategy implementation is actually

doing it. Firms generally carry out international strategic management in two broad

strategies-

Strategy Implementation

A firm develops the tactics for achieving the formulated international strategies is

known as strategy implementation. Strategy implementation is usually achieved via

the organization’s design, the work of its employees, and its control systems and

processes.

Coca-Cola Company’s basic strategies are to develop a mission statement for entering

a new market depending on a fully fledged market survey. Identifying external and

internal environment strength, weakness, opportunity, and threats is the next

management strategies.

Depending on the scope and opportunity the company will go forward as well as try

to resolve the weakness and threats. After entering into a new market Coca-Cola

Company try to achieve strategic goals and guide its daily activities with proper

observation.

Figure: Quality Management System of Coca-Cola Company

SOURCE =www.coca-cola.co.uk

Through this model, we see that the company is first to take the response of customers

and retailers through market survey. Then the management accumulates the best

quality resources for making their products. This process includes-

Skilled employee involvement for production and quality control.

High quality materials for production

Up to date technology for quality control

Effective methods and newly developed strategies

They will follow some continuous steps in developing the international strategy

formulation. Those steps help the Coca-Cola Company to enter and establish their

business in the multinational market.

COCA-COLA COMPANY, THE SWOT ANALYSIS

SWOT ANALYSIS

The Coca-Cola Company (Coca-Cola) is a top most leading manufacturer, distributor

and marketer of Non-alcoholic beverage concentrates and syrups, in the world. Coca-

Cola has a strong brand name and brand portfolio. Business-Week and Inter brand, a

branding consultancy, recognize Coca-Cola as one of the leading brands in their top

50 global brands ranking in 2010.

Analyzing the primary competitor and identifying their Strengths, Weaknesses,

Opportunities, and Threats (SWOT Analysis) help determine target markets,

marketing plan, and customer service, sales forecasting and sales planning.

Examining the following points will aid in the competitive analysis:

Identifying the level of rivalry among competing sellers in the industry.

Review strategies of companies to encourage customers to switch from a

immediate competitor company.

Analyze ease of entry for new competitors in the soft drinks market.

STRENGTHS

Distribution network: The Company has a very strong and reliable distribution

network. The network is formed on the basis of the time of consumption and the

amount of sales made by a particular customer in one transaction. It has a distribution

network consisting of a number of efficient salesmen, 400,000 retail outlets and 2000

distributors.

Strong Brands: The products produced and marketed by the Company should have a

strong brand image. People all around the world should recognize the brands marketed

by the Company. Strong brand names like Coca-Cola, Fanta, and diet coke add up to

the brand name of the Coca-Cola Company as a whole.

Low Cost of Operations: The production, marketing and distribution systems are

very proficient due to forward planning and maintenance of consistency of operations

which minimizes wastage of both time and resources leads to lowering of costs or cost

control.

WEAKNESSES

Low Export Levels: The brands produced by the company are the same brands

produced worldwide thereby making the export levels low. In India, there exists a

major controversy concerning pesticides and other harmful chemicals in bottled

products including Coca-Cola and some other beverages also.

Small Scale Sector Reservations Limits Ability To Invest And Achieve Economies

Of Scale: The Company’s operations are carried out on a small scale and due to

Government restrictions and ‘red-tapism’, the Company finds it very difficult to invest

in technological advancements and achieve economies of scale. Huge corruption

problem around the world is also a burning issue these days.

OPPORTUNITIES

Large Domestic Markets: The domestic market for the products of the Company is

very high as compared to any other soft drink manufacturer. Coca-Cola u.k. claims a

52 per cent share of the soft drinks market; this includes a 42 per cent share of the cola

market.

Higher Income among People: Development of developing countries such as India

and Brazil as a whole has lead to an increase in the per capita income thereby causing

an increase in disposable income of the working population there. Unlike olden times,

people now have the more power of buying goods of their choice without having to

worry much about the flow of their income. The beverage industry can take advantage

of such a situation and enhance their sales.

THREATS:

Imports: For example: As Brazil is developing at a fast pace, the per capita income

has increased over the years and a majority of the people is educated, the export levels

have gone tremendously high. Companies are now trading to a large extent and the

demand for foreign products has increased over the years.

Tax and Regulatory Sector: The tax system in developing countries such as in India

is accompanied by a variety of tough regulations at each stage on the from production

to consumption. When a license is issued, the production capacity is mentioned on the

license and every time the production capacity needs to be increased, the license poses

a huge problem. Renewing or updating a license is now very difficult and costly also.

Slowdown In Rural Demand: The rural market may be very attractive but it is full of

various problems such as low disposable income in rural areas and unemployment.

COCA-COLA COMPANY, THE PEST ANALYSIS

A scan of the external macro-environment in which the firm operates can be

expressed in terms of the following factors:

Political

Economic

Social

Technological

The acronym PEST is used to describe a framework for the analysis of these

macro environmental factors. A PEST analysis fits into an overall

environmental scan, which consists of significant political, economic, social and

technological analysis for a firm to reach their desirable position or to attain the

goals and objectives.

    Environmental Scan

          /   \

External Analysis     Internal Analysis    

/                       \  

Macro environment  Microenvironment     

|

  P.E.S.T.      

Political Factors

It is one of the significant parts of a company where, in which country they

operate their business unit. Political factors include government regulations and

legal issues and define both formal and informal rules under which the firm

must operate. Some examples include:

tax policy

employment laws

environmental regulations

trade restrictions and tariffs

political stability

Economic Factors

Another most imperative element for PEST analysis is economic factors.

Economic factor affects the purchasing power of potential customers and the

firm's cost of capital. The following are examples of factors in the macro-

economy:

economic growth

interest rates

exchange rates

inflation rate

Social Factors

Social factors include the demographic and cultural aspects of the external

macro environment. These factors affect customer needs and the size of

potential markets. Some social factors include:

health consciousness

population growth rate

age distribution

career attitudes

emphasis on safety

Technological Factors

Technological factors can lower barriers to entry, reduce minimum efficient

production levels, and influence outsourcing decisions. Some technological

factors include:

R&D activity

automation

technology incentives

rate of technological change

CONCLUSION

Because of such a high competition (just like the brand Coca-Cola), Coca-Cola should

not take a direct and tough attack upon it. There is no good to either side. The best

way is to keep a peaceful relationship with it and always compare with others; we

should find their disadvantages and show our advantages on this aspect. An

organization’s strategic thinking is governed by the situation prevalent in its external

environment. The external environment comprises of the strategic moves adopted by

the organization’s competitors. The organization has to carefully study these moves

and accordingly prepare strategies to gain competitive advantage. For the same, the

organization needs to conduct an industry and competitive analysis. Lastly Coca-

Company should largely focus on its current strategy only.

REFERENCES:

Cooper, R. D., Schindler, S. P. (2001), “International Business Research Method”

Seventh Edition, New York: McGraw-Hill Irwin

Gerard Prendergast and Leyland Pitt (2007) “International Journal of Strategic

Management: a World Issue”, Vol. 26 No.6, 1996, pp. 60-72. © MCB University

Press.

James Prendergast and Eammon Murphy and Malcom Stephenson (1996)

“International Journal of Quality & Reliability Management”, Vol. 13 No. 5, 1996, pp.

77-90, © MCB University Press.

Annual Report of Coca-Cola Company (2005-2009)

www.coke/homeContent.asp.htm