INTERNATIONAL BUSINESS

Presented by:Alisha Mody - 9

Jesal Vaidya - 38
Shibin Varughese - 101
Kirk Quadros - 52
Pratish Manchalwad - 60
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COCA-COLA
Name

The Coca Cola Company

Industries served

Beverages

Geographic areas served

Worldwide

Headquarters

U.S.

Current CEO

Muhtar Kent

Revenue

$ 46.85 billion (2013)

Profit

$ 9.01 billion (2013)

Employees

146,200 (2013)

Main Competitors

PepsiCo Inc., Dr Pepper Snapple Group, Inc.,

Unilever, Groupe Danone, Kraft Foods Inc.,
Nestl S.A. and many others.

Logo

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THE COCA-COLA COMPANY'S NET OPERATING REVENUES WORLDWIDE FROM 2007 TO 2013 (IN BILLION U.S. DOLLARS)

46.54 48.02 46.85

50

40

30

28.86

20

10

0
2007

2008

2009

2010*

2011*

2012

2013

Revenues in billion U.S. dollars

31.94 30.99

35.12

MARKET SHARE OF THE COCA-COLA

COMPANY AND OTHER SOFT DRINK
COMPANIES WORLDWIDE IN 2013, BASED ON
SALES VALUE
70.0%

59.6%

60.0%

50.0%

40.0%

Global market share

30.0%

25.9%

20.0%

11.5%
10.0%

3%
0.0%
PepsiCo Inc

Nestl SA

Other

The Coca-Cola Co.

PESTLE ANALYSIS
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POLITICAL ANALYSIS AND

FACTORS
Changes in laws and regulationschanges in accounting
standards, taxation requirements (tax rate changes, modified tax
law interpretations, entrance of new tax laws), and environmental
laws either in domestic or foreign authorities.
Changes in non-alcoholic business eracompetitive product and
pricing policy pressures and ability to maintain or earn share of
sales in worldwide market compared to rivals.
Political conditions, specifically in international marketscivil
conflict, governmental changes, and restrictions concerning the
ability to relocate capital across borders.

Ability to penetrate emerging and developing marketsthis also

relies on economic and political conditions, such as civil conflict and
governmental changes, as well as Coca-Cola's ability to form
effectively strategic business alliances with local bottlers, and to
enhance their production amenities, distribution networks, sales
equipment, and technology.

ECONOMIC ANALYSIS AND

FACTORS

1. During the recession of 2001, most of the

governments took aggressive actions to turn the
economy around by 2002.
2. Coca-Cola took note of this, and realized that loan
interest rates would likely rise as the economy
returned. Thus, they took out low-cost loans in
2001 to fund growth in 2002. They used the loans
for research and development on new products to
capitalize on in a strong 2002 economy.
3. Currently, as global growth is slowing, Coca-Cola
may be watching for a similar opportunity.

SOCIAL ANALYSIS AND FACTORS

1. The majority of people in Europe are showing increasing
interest in healthy lifestyles. That has strongly influenced the
sales within non-alcoholic beverage sector as many
customers switch to bottled water and diet colas such as
Coca-Cola Light or Zero.
2. Time management is a concern for 43 percent of all
households, a percentage that has increased over the years.

3. Customers from ages 37 to 55 are concerned with their

nutrition. Also, a large portion of the population are baby
boomers. As they become seniors, they are more concerned
about life choices that will impact their life expectancy. That
will continue to affect the non-alcoholic beverage sector by
increasing the demand for healthier drinks.

TECHNOLOGICAL ANALYSIS AND

FACTORS
The efficiency of a company's advertising, marketing, and
promotional programsFor example, television, web, and social
media advertising are constantly evolving. The ability of a company to
effectively promote their products through these channels impacts sales.
Packaging designIn the past, the introduction of cans and plastic
bottles increased sales volume for the company due to how easy these
containers were to carry and dispose.
New equipmentBecause the technology is continuously advancing,
new equipment is constantly being introduced. Because of these new
technologies, Coca-Cola's production volume has increased sharply
compared to that of a few years ago.

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New factoriesCoca-Cola Enterprises (CCE) has six factories in Britain

that use modern technology to ensure the quality and speedy delivery of
product. In 1990, CCE opened one of Europe's largest soft drinks
factories in Wakefield, Yorkshire. The factory has the ability to produce
cans of Coca-Cola at a faster rate than a machine gun can fire bullets.

SWOT ANALYSIS
1
1

O
COCA-COLA SWOT ANALYSIS
1.
2.
3.
4.
5.

1. The best global

brand in the
world in terms of
value ($77,839
billion)
2. Worlds largest
market share in
beverage
3. Strong marketing
and advertising
4. Most extensive
beverage
distribution
channel
5. Customer loyalty
6. Bargaining power
over suppliers
7. Corporate social
responsibility
1.
2.
3.
4.
5.
6.
7.

p
p
o
r
t
u
n
i
t
y

Significant focus on carbonated drinks

Undiversified product portfolio
High debt level due to acquisitions
Negative publicity
Brand failures or many brands with insignificant
amount of revenues

Weakness
St
re SWOT
ng ANALYSIS
th
Threat

1. Bottle water consumption

Growth.
2. Increase in demand of
healthy food and
beverages.
3. Growing Beverages
consumption in emerging
markets.
4. Growth through
acquisition.

Changes in consumer preferences

Water scarcity
Strong dollar
Legal requirements to disclose negative information on product labels
Decreasing gross profit and net profit margins
Competition from PepsiCo
Saturated carbonated drinks market

SWOT
STRENGTHS
1.The best global brand in the world in terms of value. According to Interbrand,
The Coca Cola Company is the most valued ($77,839 billion) brand in the world.
2.Worlds largest market share in beverage. Coca Cola has the largest beverage
market share in the world (about 40%).
3.Strong marketing and advertising. Coca Cola advertising expenses accounted
for more than $3 billion in 2012 and increased firms sales and brand recognition.
4.Most extensive beverage distribution channel. Coca Cola serves more than
200 countries and more than 1.7 billion servings a day.
5.Customer loyalty. The firm enjoys having one of the most loyal consumer
groups.

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6.Corporate Social Responsibility (CSR). Coca Cola is increasingly focusing on

CSR programs, such as recycling/packaging, energy conservation/climate change,
active healthy living, water stewardship and many others, which boosts companys
social image and result in competitive advantage over competitors.

SWOT
WEAKNESS
1.Significant focus on carbonated drinks. The business is still focusing on
selling Coke, Fanta, Sprite and other carbonated drinks. This strategy works in
short term as consumption of carbonated drinks will grow in emerging economies
but it will prove weak as the world is fighting obesity and is moving towards
consuming healthier food and drinks.
2.Undiversified product portfolio. Unlike most companys competitors, Coca
Cola is still focusing only on selling beverage, which puts the firm at disadvantage.
The overall consumption of soft drinks is stagnating and Coca Cola Company will
find it hard to penetrate to other markets (selling food or snacks) when it will have
to sustain current level of growth.
3.Negative publicity. The firm is often criticized for high water consumption in
water scarce regions and using harmful ingredients to produce its drinks.

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4.Brand failures or many brands with insignificant amount of revenues. Coca

Cola currently sells more than 500 brands but only few of the brands result in more
than $1 billion sales. Plus, the firms success of introducing new drinks is weak.
Many of its introduction result in failures, for example, C2 drink.

SWOT
OPPORTUNITIES
1.Bottled water consumption growth. Consumption of bottled water is
expected to grow both in US and the rest of the world.
2.Increasing demand for healthy food and beverages. Due to many
programs to fight obesity, demand for healthy food and beverages has
increased drastically. The Coca Cola Company has an opportunity to further
expand its product range with drinks that have low amount of sugar and
calories.
3.Growing beverages consumption in emerging markets. Consumption of
soft drinks is still significantly growing in emerging markets, especially BRIC
countries, where Coca Cola could increase and maintain its beverages market
share.

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4.Growth through acquisitions. Coca Cola will find it hard to keep current
growth levels and will find it hard to penetrate new markets with its existing
product portfolio. All this can be done more easily through acquiring other
companies.

SWOT
1.

Changes in consumer tastes. Consumers around the world become more health
conscious and reduce their consumption of carbonated drinks, drinks that have large
amounts of sugar, calories and fat. This is the most serious threat as Coca Cola is
mainly serving carbonated drinks.

2.

Water scarcity. Water is becoming scarcer around the world and increases both in
cost and criticism for Coca Cola over the large amounts of water used in production.

3.

Strong dollar. More than 60% of The Coca Cola Company income is from outside
US. Due to strong dollar performance against other currencies firms overall income
may fall.

4.

Legal requirements to disclose negative information on product labels. Some

Coca Colas carbonated drinks have adverse health consequences. For this reason,
many governments consider to pass legislation that requires disclosing such
information on product labels. Products containing such information may be perceived
negatively and lose its customers.

5.

Competition from PepsiCo. PepsiCo is fiercely competing with Coca Cola over
market share in BRIC countries, especially India.

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THREAT

ENTRY STRATEGY OF
COCA-COLA IN EUROPE
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WHY HAS COCA-COLA ENTERED

EUROPE
1. Market Potential and Share
European market has great potential and Cokes Market Share in Europe
is low as compared to its competitors.
2. Improve Market Position
3. Reduction in costs

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4. Formation of European Union:

It was the period where Formation of European Union was to take place
and this would lead to no tariff between EU countries and hence making it
possible for coke to utilize it Manufacturing and bottle assets and partners
to efficiently supply its products to retailers taking into consideration that
it was cheapest and most rapidly available factors.

HOW HAS COCA-COLA ENTERED

EUROPE
Coke opened its first bottling plant in Europe in Paris and Bordeaux in 1919
This was through acquisition backward vertical FDI.
Coca-Cola has also used Network Model(Alliance and Joint Ventures)
MODE OF ENTRY:
Assembling: The firm produces domestically all or most of the components or
ingredients of its product and ships them to foreign markets to be put together
as a finished product. The firm is saving on transportation costs and also on
custom tariffs .
Another benefit is the use of local employment which facilitates the integration
of the firm in the foreign market. Coca-Cola ships its syrup to foreign markets
where local bottle plants add the water and the container .

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Licensing: Licensing is another way to enter a foreign market with a limited

degree of risk. Coca-Cola has highest licensed bottlers in Europe in UK.

HOW HAS COCA-COLA ENTERED EUROPE

The Coca-Cola company is having extensive production abroad with

foreign direct investment and all functions like exporting and
importing and also franchising.

For example in Turkey Coca-Cola gives first franchising to IMSA(HAS

Group) in 1964.

Coke is making FDI in order to improve its market position especially

in Europe.

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1. Construction of new bottling plants is helping the company

produce a low cost product.
2. Marketing expenditures are helping the company to gain the
product recognition needed for growth.
3. Direct investments in facilities closer to the market are reducing
delivery time and eliminating import duties.

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ENTRY MODE STRATEGY IN RUSSIA

IB CHALLENGES
FACING COKE.
2
2

IB CHALLENGES FACING COKE.

The road to success has never been smooth and easy. For Coca-Cola
Company the phrase seems perfectly matched, the Company faced a
lot of challenges in some countries as it was trying to globalize.

Health threatening and cheering obesity

Child labour sweatshops
The British Monopolies and Mergers Commission is investigating
possible anti-competitiveness in Cokes joint ventures.
In Italy, San Pellegrino, the mineral water company, has filed a
complaint with the Commission of the European Communities,

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Infiltration of the beverages market by other strong Companies such

as Pepsi and co

IB CHALLENGES FACING COKE.

Fluctuation
countries.

Health Concern raised and Negative Publicity: In 2003, the

Centre for Science and Environment (CSE), identified
toxins including lindane, DDT, malathion and chlorpyrifos.

Tested products included Coke, Pepsi, and several other

soft drinks (7Up, Mirinda, Fanta, Thums Up, Limca,
Sprite), many produced by The Coca-Cola Company.

In March 2004, local officials in Kerala shut down a $16

million Coke bottling plant blamed for a drastic decline in
both quantity and quality of water available to local farmers
and villagers.

monetary

capital

exchange

between

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of

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CONCLUSION

THANK YOU

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