SWOT Matching

STRENGTHSWEAKNESSES0000000000023. Cash and cash equivalents increased by 126.81% in 2008 from 44.88% decrease in 2007.0000000000000000000OPPORTUNITIESSO STRATEGIESWO STRATEGIES1. Coke's net income and profit margin decreased by 2.91% and 12.3%, respectively, from 2007-20081. Increase marketing and promotional efforts through the retailers and bottlers in Asia and Europe especially on the carbonated drink market (S5, S17, O3)1. Outsource packaging of snacks and cereal products (W1, O1, O10)2. The savory snacks industry is highly concentrated with the top 50 companies controlling 75% of the market2. Expand the portfolio of "Good-for-You" nutritious products by reducing added sugar, sodium and saturated fat in certain key products (S14, O6, O8)2. Joint venture with dairy companies to boost sales of its breakfast cereals (W5, O8, O9, O11)3. The growth in the carbonated drink market was largest in Asia and Europe.3. Devise a promotional campaign wherein the public wil be engaged in designing a stylish yet environment-friendly bottles for bottled products of Pepsi (S6, S7, S8, S13, O10)3. Focus on increasing marketing efforts on promoting soft drink brands and other beverages of PepsiCo as complementary products to its snacks (W7, O6, O9)4. The global chip market is over $32 billion with an annual growth rate of approximately 6.35%.4. (S9, S11, O4, O5)4. Increase R&D expenses to develop environment-friendly and sustainable packaging (W6, O10)5. The global chip market is driven by consumer taste and health considerations.5. Joint venture with dairy companies to boost sales of its breakfast cereals (S10, O7)6. It is estimated that 99% of all American households have salty snacks and the average household spends approximately $80 yearly in 32 pounds of these products.7. Ready-to-eat cereals comprise about 90% of total industry revenue.8. The demand for the breakfast cereal market is driven by consumer demographics (age and lifestyle) and health considerations because a fast-paced life and health concerns shape our perceptions of the first meal of the day.9. The proliferation of products for specific market segments and the increasing use of house brands by retailers (support: will continue to force PepsiCo to innovate new products and at the same time reevaluate current product offerings)10. A recent environmental campaign against plastic containers has impacted the sale of bottled water and forced manufacturers to develop more environmetally friendly containers.11. The greatest growth for breakfast food is in the breakfast bars and the fastest regional growth is the Asian-Pacific market.THREATSST STRATEGIESWT STRATEGIES112. Consumers shift to less costly drinks and snacks.1. Develop affordable and cheaper snack products through smaller packaging (S9, S11, T1)213. News of contamination of water can quickly destroy consumers' confidence in a company's ability to provide a safe, healthy product.2. Devise a promotional campaign wherein the public wil be engaged in designing a stylish yet environment-friendly bottles for bottled products of Pepsi (S6, S7, S8, S13, T6)314. World demand has continued a slow but steady overall growth for the last 5 years of around 9% with sports drinks, bottled water, and energy drinks showing the largest growth3. Productivity ---> new eqiupment (S2, S12, T9)415. The carbonated soft drink market in the United States has shown a decline of 0.4% in 2007 as consumers shifted from soft drinks to bottled water and sports drinks.516. Coca-Cola holds the largest share of the U.S. cola market at 41% with Pepsi second at 36.7% and continues to expand even in the current monetary crises617. A recent environmental campaign against plastic containers has impacted the sale of bottled water and forced manufactures to develop more environmetally friendly containers.718. Coca-Cola has continued to strengthen their juice, ready-to-drink tea and coffee products, water and sports drinks along with the introduction of Truvia as a sweetener.819. Increased net revenue for Kraft Foods of 13.32% over 2007 to $42.201 billion.920. Coca-cola has also invested in bottling investments and streamlining its operations and has a 15.3% market share in China versus Pepsi's 6.2%1021. Kraft's North American Snacks and Cereal division posted a 3% increase in revenue in 2008.

EFEWeightRatingWeighted ScoreOpportunities1. Coke's net income and profit margin decreased by 2.91% and 12.3%, respectively, from 2007-20080.0510.052. The savory snacks industry is highly concentrated with the top 50 companies controlling 75% of the market0.0440.163. The growth in the carbonated drink market was largest in Asia and Europe.0.0520.14. The global chip market is over $32 billion with an annual growth rate of approximately 6.35%.0.0540.25. The global chip market is driven by consumer taste and health considerations.0.0540.26. It is estimated that 99% of all American households have salty snacks and the average household spends approximately $80 yearly in 32 pounds of these products.0.0640.247. Ready-to-eat cereals comprise about 90% of total industry revenue.0.0440.168. The demand for the breakfast cereal market is driven by consumer demographics (age and lifestyle) and health considerations because a fast-paced life and health concerns shape our perceptions of the first meal of the day.0.0640.249. The proliferation of products for specific market segments and the increasing use of house brands by retailers (support: will continue to force PepsiCo to innovate new products and at the same time reevaluate current product offerings)0.0740.2810. A recent environmental campaign against plastic containers has impacted the sale of bottled water and forced manufacturers to develop more environmetally friendly containers.0.0340.1211. The greatest growth for breakfast food is in the breakfast bars and the fastest regional growth is the Asian-Pacific market.0.0420.08Threats12. Consumers shift to less costly drinks and snacks.0.0630.1813. News of contamination of water can quickly destroy consumers' confidence in a company's ability to provide a safe, healthy product.0.0540.214. World demand has continued a slow but steady overall growth for the last 5 years of around 9% with sports drinks, bottled water, and energy drinks showing the largest growth0.0540.215. The carbonated soft drink market in the United States has shown a decline of 0.4% in 2007 as consumers shifted from soft drinks to bottled water and sports drinks.0.0630.1816. Coca-Cola holds the largest share of the U.S. cola market at 41% with Pepsi second at 36.7% and continues to expand even in the current monetary crises0.0640.2417. A recent environmental campaign against plastic containers has impacted the sale of bottled water and forced manufactures to develop more environmetally friendly containers.0.0540.218. Coca-Cola has continued to strengthen their juice, ready-to-drink tea and coffee products, water and sports drinks along with the introduction of Truvia as a sweetener.0.0340.1219. Increased net revenue for Kraft Foods of 13.32% over 2007 to $42.201 billion.0.0320.0620. Coca-cola has also invested in bottling investments and streamlining its operations and has a 15.3% market share in China versus Pepsi's 6.2%0.0440.1621. Kraft's North American Snacks and Cereal division posted a 3% increase in revenue in 2008. 0.0320.06TOTAL1.003.43

CPMPEPSICOCOCA COLA COMPANYKRAFTCritical Success FactorsWeightRatingScoreRatingScoreRatingScore Market Share0.1530.4540.620.3Financial Position0.0320.0640.1230.09Product Quality0.1040.440.430.3Customer Loyalty0.0540.240.230.15Supply Chain Management0.1030.340.430.3Marketing/ Advertising0.1540.640.630.45Innovation/ Product R&D0.1540.630.4530.45Price Competitiveness0.0340.1230.0930.09Product Diversity0.0540.220.130.15Political and Economic Stability0.0730.2130.2130.21Brand Image0.0840.3240.3230.24Management0.0440.1640.1630.12TOTAL1.003.623.652.85

IFEWeightRatingWeighted ScoreStrengths102030405060708090100110120130140150160Weaknesses170180190200210220230240250260270TOTAL0.000

QSPMSTRATEGIC ALTERNATIVES12Key FactorsWeightASTASASTASOpportunities1. In 2007, 66% of the Americans were reported making changes in their diets to improve their health and wellness compared to 57 percent from the previous year.2. Bottled tea is one of the fastest growing drinks in the industry. Bottled tea sector with an average growth rate of 15% during 2007-2012.3. There is a growing business for snacks and confectionery brought about by the increased number of consumers snacking from 1977 (59%) to 2007 (90%).4. Cadbury is planning to divest its beverage division in 20075. Growing market in Latin America and in Cokes bottling investments6. Pepsi Cola only has 2.8% quarterly revenue growth which is way lower than the industrys 6.6%Threats7. In 2007, 66% of the Americans were reported making changes in their diets to improve their health and wellness compared to 57 percent from the previous year.8. Fluctuations in foreign exchange currencies9. Rising cost and low availability of raw materials (corn, orange, water)10. Increased competition in the nonalcoholic beverages segment in the commercial beverages industry11. The parting of ways of Coke and Nestle on selling tea in the United States opened the doors for PepsiCo12. Banning of distribution and sale of soft drink brands to schools due to obesity issues among youth.13. Some of the ingredients in Coke products may be hazardous to ones health and regulations may soon require warning labels.14. PepsiCo succeeded in addressing the concerns of health-conscious consumers with its campaign called Smart Spot that emphasizes better for you snack products15. Federal regulations may prohibit PepsiCo and Coke from bidding for Cadburys carbonated soft drink business.16. PepsiCo leads the market in terms of the water and sports drinks categories -- PepsiCo has the number one water brand, Aquafina and is the top player in the bottled tea market with Brisk17. Cadbury Schweppes leads the industry in terms of quarterly revenue growth in 2006 which is equal to 7.80%Strengths1. Employing about 71,000 people worldwide in over 200 countries and with a market capitalization of $111.1B in 2006, Coca-Cola Company is the worlds largest beverage company2. Coke produces about 400 brands consisting of over 2,600 beverage products, such as water, juice and juice drinks, sports drinks, energy drinks, teas, and coffees.3. Coke products are distributed through restaurants, grocery markets, street vendors, and others, all of which sell to the end users: consumers who consume in excess of 1.4 billion servings daily.4. In the summer of 2007, Coke acquired Energy Brands, Inc. which produces Glaceau - a vitamin water ranked second behind PepsiCos Propel in the fitness market.5. Strong marketing and promotional efforts6. Coke is increasing investment in its bottling investments, front-end capability, equipment, people/training.7. Coke continuously conduct ongoing innovation with their products such as Coke zero, Diet Coke, etc8. The way the Coca-Cola Company works reflects many countries and cultures in which it does business.9. Acquisition of other beverage companies to strengthen their presence (e.g. Jugos del Valle, Apollinaris, Traficante) in other markets10. Net income increased by 2.39% on average for three years (2005-2006)11. Latin Americas net operating revenues increased by 12.13%, on average for the three years.12. Cokes international markets had an average increase of 5.51% per annum in terms of net operating revenues.Weaknesses1. Interchangeable with Pepsi by many consumers expressing their interest in a soft drink.2. Product line is limited to beverages.3. Highly dependent to their bottling partners.4. Fixed Assets turnover decreased by 12.61% from 2005-20065. Cokes selling, general and admin expenses increased by 8. 98% from 2005-20066. Corporate segment of Coke had a 20% decrease in its total net operating revenues from 2004-2005 and no growth from 2005-20067. Cokes net income as a percentage to sales declined by 4.45% from 2004 to 2005 and then had no change from 2005 to 2006Total