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Coca Cola Company is the world's leading company in the field of production, marketing and distribution of non alcoholic drinks established in 1886 (Maria Pinto, Carland, & Lisa, A. Gihring,2003, P.197). Coca cola, the name which everyone, everywhere in the world is familiar with, has been established in 1886 in Georgia. It was after the purchase of the company by Mr. Woodruff that the Company discovered a way to reach a huge cross-section of people in the world. (Lonnie Bell. P.17) the Company made huge sales during the Amsterdam Olympic Games in the summer of 1928 (Lonnie Bell 2003, P.17). What started with the sale of nine drinks a day is today over one billion, in over 200 countries worldwide. This is an indication to the phenomenal growth of a company with a product that is unique and well marketed. Coca Cola entered the UK for the first time in 1900 and was later sold at soda fountain outlets. (Coca-Cola UK, 2010).
Coca-Cola celebrated its 100th anniversary in the August of 2000 by champion boxer Audley Harrison and other renowned athletes. Coca Cola has been a long standing supporter of the Olympics games in UK since 1928.
SWOT and Why SWOT
The words strategy is taken from the Greek word strategos which was primarily used in military circles around 500 BC. The word strategy is a new phenomenon in the field of business which has been used since 1960. One can assess a firm's strategy with SWOT as strength, weakness, opportunity and threat (Mike W. Peng, 2009, P.8).
"SWOT analysis is one of the important analysis in total quality management, marketing and planning (Sally Dibb et. Al. 2006, P. 30). Strength and weakness are internal to the organization while opportunity and threat are the external aspects of the marketplace.
One of the salient features of the Internal Business Environment is that that it is under business control. Control of efficiency is one of the most important elements which can be done through management and proper communication. Therefore, Coca-Cola requires continuous appraisals of business to prevent inefficiencies in consumer process and production.
Any change in the external business environment will strongly affect the business and the economy. Coca-Cola should be aware of the changes in the external environment, which might create threats or opportunities
Coca-Cola has the most sought after image of global popularity. It is one of those very few products with an international recognition to it that extends not only beyond boundaries but penetrates into the deepest parts of several nations, so much so that it can be safely said 'almost everyone knows it.' The brand imaging has been extremely successful and recognizable by masses and has come to be a part of popular culture. Coca-Cola marketing includes branding on hats and t-shirts, thus driving it into the lives of its users. Cited in (Master International Business) "Enjoyed more than 685 million times a day around the world". Coca Cola stands simple, but strong symbol of quality and enjoyment (Allen, 1995).
Coca Cola's bottling system is another huge strength for the company. The bottles are locally manufactures while the concentrate is globally distributed. This is a major cost effective measure that not only saves the company of very large logistics and expenditure but also very effectively maintains its international identity as the core product (drink) is truly international authentic. This is a win-win situation for Coca Cola in which it not only maintains a local image in the society but also does not compromise on its global quality.
Coca Cola's sales are more than 1 billion pound per day in UK. In the economical recession, sales of three brands cross 1 billion pound. For the three brands "Coca-Cola zero, Coca-Cola and diet coke" the annual increase of sales shows 4.7%.Furthermore, the sales have increased globally as 29 % in China and 20% in India for the last quarter ( Coca-Cola, 2010)
Every business should analyze and recognize the weakness and minimize it to the possible extent, in order to reach better achievements. (New York Times, 2007)
According to the New York Times, the world share of Coca-Cola has declined from 57% to 53% in 2006 to 2007. On the other hand, there had been so many publications and advertisements for the health consciousness against fizzy drinks in which coca cola is usually on the top of the list, thanks to its popularity. The effect of Coca Cola on teeth is another issue, to be taken care of.
Coca-Cola has over 400 types of beverages most of which are not as famous as the brand is. Since the products are not famous, they fail to get recognized and accepted by people who are loyal consumers of Coca Cola. This is a major weakness for the company as acceptance follows marketing and drives sales and eventually, the growth of the company.
Coca Cola Brand is very well known the world over, extending itself to a close 94% of the world, thus holding a very competitive position for the company. Sustainability of the business can be done in the way of human progress through innovation (Karlson Hargroves & Michael H. Smith, 2005, P.1). Innovation moves companies forward in sustaining various forms of energy, forestry, mobility, construction and agriculture. It furthermore motivates companies to be cleaner, echo friendly and profitable. The change in packaging and Coca-Cola bottling has caused huge increase and growth opportunity around the world. This strategy is an opportunity for the Coca-Cola to serve large and diverse area around the world. Coca-Cola can take advantage of advertising the products which are not yet popular as. The company can concentrate on selling diverse products rather than sticking to the main products. Coca-Cola can buy their other competitors where they establish their business and where they penetrate the new markets.
The threat of new competitors in soft drink is not highly visible. But the substitutes are real threat for Coca-Cola. Fruit juices, milk, hot chocolate, tea and coffee industries are real threats for Pepsi and Coca-Cola. Although Coca-Cola and Pepsi hold more than 40% of the world's beverage marking, health consciousness is the main cause to divert the customers to other drinks. But, Coca-Cola and Pepsi have diversified their products to other beverages. In case the Coca-Cola health consciousness does not match the Ministry of health, it can be a big treat for the company. Pepsi, another competitor whose products are very similar to Coca-Colas' has been a very tough competitor almost on war with Coca-Cola. Coca-Cola needs to be highly competent against Pepsi in every market.
SWOT Analysis is one of the simplest and most useful approaches to strategy according to Learned, Christiansen, Andrews and Guth in 1969 cited in (Howard, Davies, Pun-Lee Lam, 2001, P.382) according to him SWOT analysis is a universal tool in strategic planning (Julius J. Marke, et al. 2005).
Coca-Cola Corporate Social Responsibility:
Corporate social initiatives are the huge activities of a corporation to perform commitments to corporate social responsibility. Philip Kotler, Nancy Lee (2005).
The Corporate is under a social obligation to help society through health, education, and job opportunity support, environmental safety in the case of reducing energy consumption, raw material consumption, and chemicals. The CEO and Chairman of Starbucks Howard Schultz emphasizes on maintaining transparency in business performance in the field of Corporate-Social-Responsibility too Philip Kotler, Nancy Lee (2005).
Coco Cola's approach to CSR has been widely appreciated, the company says, "Corporate Social Responsibilities CSR is at the heart of our business", and our approach central to what we do (Coca-Cola 2010).
According to the United Nations, 2/3rds of the world population might suffer the shortage of water by 2025. Therefore, Coca-Cola has started recycling and reusing water (Coca-Cola, 2010. Water is a crucial life sustaining element that is also a very important for the functioning of various industries. Given the current water crisis that has a paralyzing effect on life in many parts of the world and poses a threat to many industries too, the efforts that go into water reuse and recycle are considered to be extremely helpful to societies and the world at large. Hence in the current scenario of decreasing water availability and quality, increasing the demand for water is the new challenge. Peter H. Gleick, et. al. (2009).
Companies which address social and environmental responsibilities are learned to have a rapidly growing access to capital which may have not been available otherwise. Philip Kotler, Nancy Lee (2005). One of the most inspiring systems in the fields of minimizing energy consumption is the Coca Cola intelligent light system saves up to 50% of the energy consumption (Coca-Cola, 2010)
The UN CSD emission of the greenhouse, insists on corporate accountability and reporting related to climate change Adrian Henriques, Julie Richardson (2004).
All Coca-Cola plant sites are ISO 14001 accredited in Great Britain to help protect environment Coca-Cola(2010).Coca-Cola considers every new technological investment to be energy efficient which results in reduction of energy in 2008 to up to 5 %.
Cited by (David L. Goldblatt) energy consumption and its relation to global warming, David L. Goldblatt (2005), CSR is defined as "firms doing more than they are required to do under applicable laws and regulations" Bruce L. Hay, et al. (2005).
Cited in (William B. P.5) he says CSR is critical and controversial, as the company considers profit largely on one side, creates jobs and opportunities for societies, contributes taxes to government, facilitates research, investment etc. The Institute of Directors(The Institute of Directors, UK, 2002. P.8) defines organizations or businesses going further than the legal obligations for deal with their affect on the environment and society William B. Werther, David Chandler (2006).
Carbon emission is another huge concern for the society today. People are working together to go carbon neutral, universities in USA, Yahoo, and China announced to create a carbon-neutral island. Amanda Bishop (2008). Carbon footprint helps the organization measure the carbon emission and going through all the steps of production, it can help the companies to decide on how to reduce the carbon footprint. Coca Cola is working with Carbon Trust for calculating the Carbon footprint, while the recycling of bottles and containers after use can reduce the carbon footprint up to 60%.
The Coca Cola Strategy is: "growing business not carbon" for which Coca Cola has set a manufacturing target:
To reduce the emission by 5% by based on 2004 to 2015, reduce the total carbon footprint by 15%, based on 2007 to 2020 which overall carbon should reduce by 40% by 2020 comparing to the growth of the Coca Cola Enterprise.
The Coca Cola planned the following steps regarding reduction of energy consumption and carbon footprint:
The weight of the Coca Cola bottles are reduced from 39g to 24g based on 1994 which saves more than 3900 metric tons of polyethylene terephthalate each year, and reduced the glass bottles by 20% and aluminum cans by 5% applying computer aided design.
Furthermore, Coca-Cola recycles the waste by 92% which plans to bring the wastes at zero level in few manufacturing sites by the end of 2011.
Furthermore, the company updates the agricultural suppliers which provide over 96% of supplies locally, about the company policies and procedures in order to improve the raw material consumption in sustainable way.
Economic Contribution of Coca Cola in UK is as follows:
Job creation for the society, taxes for the government, working with local suppliers in the fields of operation that further resulted as follows:
The raw materials from suppliers, packaging and other services are over 50% and the employees receive over 18% as salary. Furthermore, the company had been involved in community sponsorship and charitable donations which 1.5 million GBP has been contributed to projects in 2008 by Coca-Cola Great Britain and Coca-Cola Enterprise.
Education support: is according to the government enterprise education agenda. as well as the education outside the class room or educational environment. For which the Coca Cola education center won gold in drink and food federation awards in 2008. "Coca Cola which established the bottling plants for the first time in 1932, has acquired Cadbury Schweppes brands in 1999. Coca Cola supports the environment and society such as Tidy Britain Group and Waste Watch and sponsored many cultural and sport activities Europa (2002). Real Business Challenge: had been running for the last four years in Yorkshire. It let the pupils decide for the business plan to set up the soft drink company, which over 8000 students have participated in Yorkshire, which more than 100 teachers had been trained in 2008 too.
For The Enterprise Challenge for the West London Coca Cola has selected 3000 students from 30 schools to design new soft drink brand and launch in Wembly stadium at an event. The winning team won Supernova.
Coca-Cola has supported Olympics for last 30 years
Coca Cola has sponsored Minute Maid Schools Cup since 2003 for over 2000 students from 200 schools. Cola 7s have around 52000 players.
Training and Development programs:
Training and Development is the key factor in performance development today. The trainings improve job performance and it transforms the employees' skills Marisa Brown et. al. (2004).The IBM rebuilt its learning infrastructure in 1990 and hired huge number of employees, they realized the need of training and its huge positive impact on the business. The employees are Coca-Cola G.B trains the employees which the average training cost for each employee had been1413 pound. The training covers personal development, leadership development, consumer marketing, franchise leadership, customer and commercial leadership. Marisa Brown et. al. (2004).
Furthermore, the Coca Cola G.B is running the programs as talent management twice a year, and promotes the employees internally as well as externally.
Performance management is the global strategy of COCA COLA which aims to pursue peak performance that the employees have the environment to boost and develop their skills and improve toward their professional goals.
Managing health and safety:
Safe environment is COCA COLA's priority and it regularly monitors the environment to make sure there is continuous improvement of the environment.
Health and safety employees and representatives are assigned in every COCA COLA E manufacturing and distribution sites which monitor and advice the employees accordingly.
Coca cola has purchased Cadbury Schweppes in many countries as well as UK in 1999 which resulted in more variation of products Coca-Cola(2010).The Fanta Apple Splash, first low sugar product was launched in 2004. The zero added sugar diet Coke varieties was launched in 2005. Sport water. In 2006 the Relentless energy drink was launched in UK.
During the 120th celebration of coca cola in 2006, the coca cola company had more than 400 brands.
Over the centuries, Coca cola had been successful working with the set of ideals. Regardless of the changes in the field of business in the world, Coca Cola believes that these ideals are important to its long term success Maria Pinto Carland, Lisa A. Gihring (2003). During the World War II, Coca Cola had bottlers in 44 countries. Mr. Woodruff announced that everyone with uniform should have coca cola at their service no matter where they are Lonnie Bell (2004, P.19) This policy popularized Coca Cola for both the military as well as the residents of those countries, where coke was served. " Always Coca Cola" The president of the Company said " Never let the consumer be thirsty not reaching Coca Cola" This caused the coca cola availability in more than 190 countries of the world, sustained the business for more than 100s of years " Things go better with Coke" Sergio Zyman, Armin Brott (2002).
Coke strategy has been globally, but at the same time they act locally. The content of the sugar vary based on the geographical levels. In India coke advertisement the word " Thanda" an Indian word which means cold in English. Mike W. Peng (2009).
Coca Cola brand: Most of the soft drinks are more similar to each others. The carbonated drinks all contain sugar and carbonated water, darker or lighter color. Why people prefer to drink Coca Cola is what the brand means to them. The brand is not the label but it signifies a meaning in the mind the customers. ( Sergio Zyman, P.38). The Coca-Cola does contain same Sugar and Carbonated water, but the taste is always different than Pepsi.
According to Mike, W. Peng, stated above, one of the main secret of success for Coca-Cola has been its unique formula. Although Pepsi had been engaged in a war against Coca-Cola, Coca Cola has emerged successful. The slight difference in the taste of Coca-Cola from Pepsi, its main competitor keeps it outstanding. The Coca-Cola Strategy "Think Globally, Act locally" is another success factor for the Company. The concentrate is supplied globally, while the bottlers produce the bottles locally in the local tastes of the consumers. Furthermore, the advertisements are more locally. For example, " Thanda" which means cold in Indian language, is a very good message for the coke consumers in the hot climate of India.
The Company's 2020 Vision is creating a long-term destination for the business and provides winning roadmap for the company and bottlers.
The Company Mission is "To refresh the world...inspire moments of optimism and happiness...create value and make a difference. (Coca-Cola, 2009) The Company brand which more than 94% of the world is familiar with is highly valuable for the success of the company. "In arm's reach of desire" woodruff, (1923) has had a strong impact in the marketing of Coca-cola. He meant that whenever the customer desires to have Coca-cola, it should reach the customers arms, eventually improving the availability of Coca-cola.
The Coca-cola strategy is sustainable growth, being involved in short term commitment and achieve the long term goals of the company. According to Business Week, the Coca-Cola business growth had reduced to 3% in 2004 and 2005. The reason had been stated that since the Company had highly penetrated the market in the North America, there is no more room for the growth. The second reason can be the health consciousness of the people about carbonated drinks. On the other hand, according to the Coca-Cola (2010) the sales of three brands of Coca-Cola are 1 Billion pound per day in the UK. Furthermore, Coca-Cola has concentrated on diversification of the product, which produces more than 3000 varieties of the drinks.