EXECUTIVE SUMMARY

In this report, an inner view of Coca-Cola Company has been revealed. Here, different types of
strategy analysis tools have been used and we try to find out the actual position or environment of the
Coca-Cola Company. Basically, we use different types of the matrix such as SWOT matrix, EFE
matrix, IFE matrix, BCG matrix and QSPM matrix for this purpose. At the beginning of the report we
have covered the background of Coca-Cola and then move to try to show the company's performance
by using EFE matrix, IFE matrix, SWOT analysis which indicates the strengths, weaknesses,
opportunities, and threats of the Coca-cola Company. On the other hand, the Quantitative Strategic
Planning Matrix (QSPM) is basically used to find out the most suitable strategies of Coca-Cola
Company. It is expected that by implementing these strategies Coca-Cola Company will be able to
avail its opportunities and avoid its threats by gaining competitive advantages.
Key External Factors Weight Rating (1-4) Weighted Score

Opportunities

Growing demand for 0.15 4 0.6

food and non-alcoholic
beverage industry

Fastest growing 0.05 3 0.15

economy

Supply chain and 0.03 3 0.09

distribution

Cheap labour market 0.04 2 0.08

India has the 4th smart 0.08 3 0.24

water market

Threats

Intense Competition - 0.17 4 0.68

Direct & Indirect

Water scarcity 0.14 3 0.42

Increasing 0.16 4 0.64

health-conscious
attitude of public

Inflation 0.03 2 0.06

Bad publicity from 0.15 3 0.45

lawsuits

TOTAL 1 3.41

Key Internal Factors Weight Rating (1-4) Weighted Score

Strengths

Innovation & 0.08 3 0.24

Technological
Advancements

Brand image and 0.15 4 0.6

 Customer Loyalty

Market leader with high 0.13 4 0.52

brand value

Aggressive marketing 0.07 3 0.21

Strong CSR Practices 0.09 3 0.27

Weaknesses

Product Diversification 0.12 3 0.36

Less emphasis on 0.14 4 0.56

nutrition & energy
beverages

High water consumption 0.16 4 0.64

Sales and revenue decline 0.06 2 0.12

of carbonated drinks

TOTAL 1 3.52

Strategies obtained from SWOT (SO, ST, WO & WT):-

1. SO: Coca-Cola can utilize its vast product portfolio and brand value of over 3500 brands to
penetrate into rural markets by improving their supply chain in terms of retail and
distribution. (4th priority) (S3 & O3)

2. ST: Coca-Cola can improve its CSR initiatives by incorporating better technologies with
better emphasis on water conservation and combating other environmental issues to overcome
the issues of water scarcity along with bad publicity courtesy of lawsuits over high water
consumption and violation of quality standards by the use of harmful pesticides. (3rd priority)
(S5 & T2, T5)

3. WO: As India ranks the 4th in the smart water market, Coca-Cola can compensate for its
declining sales Inc carbonated drinks by placing more emphasis on bottled drinking water.
(2nd priority) (O5 & W4)

4. WT: Coca-Cola can indulge in product diversification, shifting emphasis from sodas and
carbonated beverages to healthy and nutritious beverages, snacks and foods enabling them to
cater to the increasingly health conscious consumers and provide them with a competitive
advantage over its direct and indirect competitors. (1st priority) (W1, W2 & T1, T3)
Market leader with high Supply chain connectivity to Coca-Cola ola can utilize its
brand value (S) rural areas (0) vast product portfolio and
brand value of over 3500
brands to penetrate into rural
markets by improving their
supply chain in terms of retail
and distribution. (S0)

Declining sales (W) 4​th​ smart water market (O) As India ranks the 4th in the
smart water market,
Coca-Cola can compensate for
its declining sales in
carbonated drinks by placing
more emphasis on bottled
drinking water. (WO)

Extensive CSR activities (S) Water scarcity/bad publicity Coca-Cola can improve its
(T) CSR initiatives by
incorporating improved
technologies with better
emphasis on water
conservation and combating
other environmental issues. It
will help overcome the issues
of water scarcity along with
bad publicity courtesy of
lawsuits over high water
consumption and violation of
quality standards by the use of
harmful pesticides. (ST)

Product diversification (W) Increasing health conscious Coca-Cola can indulge in

behaviour (T) product diversification. This
can be achieved by shifting
emphasis from sodas and
carbonated beverages to
healthy and nutritious
beverages, snacks and foods
enabling them to cater to the
increasingly health conscious
consumers. This will provide
them with a competitive
 advantage over its direct and
indirect competitors. (WT)

CPM Coca Cola Pepsi

Key Success Weight Rating Weight Score Rating Weight Score

Factors (1-4) (1-4)

Product 0.10 4 0.40 4 0.40

Quality

Social 0.08 4 0.32 3 0.24

Responsibility

Price 0.08 4 0.32 4 0.32

Market share 0.12 4 0.48 3 0.36

Brand Equity 0.10 4 0.40 3 0.30

Profit Margin 0.04 3 0.12 2 0.08

Global 0.10 4 0.40 3 0.30

Presence

Customer 0.08 3 0.24 3 0.24

service

Advertising 0.10 4 0.40 3 0.30

Financial 0.06 3 0.18 3 0.18

Position

Customer 0.04 4 0.16 3 0.12

Loyalty

Distribution 0.10 4 0.40 3 0.30

network

TOTAL 1 3.82 3.14

The Competitive Profile Matrix identifies a company’s key rivals and assesses them on the basis of
key success areas. The most important factors are market share, brand equity, distribution network,
advertising, product quality, and global presence. Coca-Cola is currently the market leader in the
non-alcohol beverage industry with the highest market share in India Coca-Cola is the market leader
in most of the beverage categories. Currently, it is a market share of 31​.4% while PepsiCo is at 17.4%.
It also has the world’s largest distribution which helps it to be present in 200 countries globally
compared to Pepsi’s 150. Thus, it scores a higher ranking in both the factors. Moreover, it has a strong
brand equity since it is loved by people globally and has a high popularity. This is the reason why it
has a full score in CPM. Furthermore, it focuses on social responsibility and indulges in a gambit of
activities under its strong CSR department. These include water stewardship, waste management, etc.
It also has a very strong emphasis on advertising which is important to achieve differentiation from its
strong competitor, Pepsi. It has an effective advertising campaign as it sponsors different teams and
games is also featured in countless television programs and films. Overall, Coca-Cola has a great
competitive edge compared to Pepsi Co.

EXTERNAL FACTOR EVALUATION (EFE)

1. Fastest growing economy

India is the fastest-growing trillion-dollar economy in the world and the fifth-largest overall,
with a nominal GDP of $2.94 trillion. Economic growth means an increase in real GDP – an
increase in the value of national output, income and expenditure. Essentially the benefit of
economic growth is higher living standards – higher real incomes and the ability to devote
more resources to various things.

2. Growing demand for food and beverage industry

Food processing is considered as one of the fastest growing industries in India. With
increasing disposable income of people, the demand for the food and beverage industry is
increasing. The Indian food and grocery market is the world’s sixth largest, with retail
contributing 70 per cent of the sales. The Indian food processing industry accounts for 32 per
cent of the country’s total food market, one of the largest industries in India and is ranked
fifth in terms of production, consumption, export and expected growth. Total consumption of
the food and beverage segment in India expected to increase from US$ 369 billion to
US$1.142 trillion by 2025. The growth of the industry is supported by the availability of a
large raw material production base. India is the largest producer of milk and various fruits,
tea, sugarcane, etc. This comes to an advantage to the Coca Cola company as it can make use
of the high supply of these raw materials to meet the growing demand.

http://foodprocessingindia.gov.in/publishing/publications/9cfdb26d7526817d8d8bhigh-growt
h.pdf

3. Supply chain and distribution system

In FMCG sector, one of the most critical success factors is the ability to build, develop, and
maintain a robust distribution network. Availability near the consumer is vital for wider
penetration as most products are low unit value products and frequently purchased. Out of
reach is out of mind is out of consideration set. Distribution network refers to the consumer
buying points where products are available (almost always). It takes enormous time and effort
to not only build a chain of stockists, retailers, dealer's etc but also improving upon their
efficiency and effectiveness. India has a

4. Cheap labour Market

 India is a highly populated country and there is an excess supply of labour. Private investment
in India is also low, there are lower and lower job opportunities for the masses. Hence, along
with excess supply of labour, the demand for labour is also low. We all know what happens
with higher supply and lower demand. Price falls. As a result labour in India is cheap.
This comes to an advantage for MNCs as they can make use of this cheap labour to
manufacture their goods and keep the costing for their products at the lowest.

5. Smart Water Market

Threats
1. Direct and indirect intense competition​: Coca-Cola faces direct intense competition from
Pepsico in the non-alcoholic beverage segments of carbonated soda drinks, nutrition and
energy drinks along with bottled water and juices. Pepsico is their toughest competitor with
their rivalry known as Cola Wars. But Coca-Cola faces indirect intense competition from Red
Bull as in the energy drinks segments as well as from Nestle and Parle in bottled water and
juices segments.

2. Water Scarcity​: All companies including Coca-Cola generating revenue in the beverage
industry face the major concern of water scarcity. Water is the primary resource to produce a
beverage and its ineffective utilization can lead to over consumption and over dependence for
the beverage companies to sustain. The brand image can be significantly impacted if
sustainable water practices are not given due emphasis.

3. Increasing health conscious attitude​: Consumers today are growing more conscious over their
health, nutrition and fitness with a significant growth in the market segments of
nutrition-energy and energy drinks. Consumers desire less or zero calories, sugar and added
preservatives among other such substances to avoid obesity and other health related ailments.

4. Declining sales of carbonated drinks​: Carbonated soda drinks generally contain a concerning
amount of calories, fats, sugar and added preservatives among others to enhance the taste of
the beverage. Intake of such drinks results in the lack of essential nutrients along with
accumulation of harmful substances in the average consumer leading to health ailments.as
obesity levels are increasing globally, these drinks are now less desired by consumers
resulting in the increasing sales in nutrition, energy and sport drinks.

5. Bad publicity​: Coca-Cola’s brand image was severely impacted by the several lawsuits filed
by the village councils in Kerala regarding the over consumption of water for their beverage
production to meet the distribution of their vast product portfolio at various geographical
locations leading to water shortages for the villages near the plant. Several protests were
staged against the Coca Cola company by citizens and NGOs. The company was even
subjected to lawsuits related to environmental and quality standards over the use of harmful
pesticides in their products.

Internal Factor Evaluation (IFE)

Strengths
 1. Innovation and Technological Advancements​: The rise of new technologies in the 21st
century including digitization and artificial intelligence boosts the marketing capabilities of
Coca Cola. They were pioneers in utilizing bottling companies to licence their drinks,
utilizing bottle cartons making distribution easier, utilizing top opening coolers to dispense
their bottled drinks along with automatic soda dispensers that operated merely with the pull of
the handle.

2. Brand Image and Customer Loyalty​: Being one of the most influential brands in the world,
Coca Cola has successfully formed its brand image and identity on account of their logo,
unique and identifiable formula and advertisements. Their brand showcases the universal
value of happiness, displayed by the marketing campaign "Taste the Feeling". The Coca Cola
Company has a B2C approach to business as they introduced Diet Coke to cater to consumers
who wanted a lighter taste and Coca-Cola No Sugar for people conscious of sugar intake but
at the same time wanted the taste of classic Coke. This has resulted in retaining a large and
loyal consumer base.

3. Market Leader with high Brand Value​: Coca-Cola is the market leader in the Non alcoholic
ready to drink beverage industry wherein it showcases products in the industry segments of
carbonated soft drinks, nutrition and energy drinks, bottled water, juices, RTD tea and coffee
among others with a market share of 49.9% as of 2019. The Coca Cola company has high
brand value solely based on quality assurance with a vast product and brand portfolio of over
3500 brands geographically spread over more than 200 locations of which there are over 15
brands that generate a revenue of over 1 billion USD annually that include Coca Cola, Fanta,
Sprite, Diet Coke, Minute Maid, Schweppes, Dasani, Coca Cola Zero among others.

4. Aggressive Marketing​: In its advertising and marketing arsenal, the Coca Cola company
utilizes TV commercials very effectively in today's digital-driven marketplace. Their global
Taste the Feeling campaign leaned heavily on television ads. Their Quality Drink campaign
included having trained service people ensuring strict standards of uniform quality product of
Coca Cola being served at soda fountains. A good number of television spots showcase
universal stories of young people enjoying their drinks as a part of genuine everyday
moments. Coca Cola even employs competitive pricing to always have an edge over Pepsico.

5. Corporate Social Responsibility​: The company is committed to sustainable development and

inclusive growth conducting its CSR initiatives on issues and concerns like water,
environment, healthy living, agriculture, recycling, grass roots education, social advancement
and promoting gender equality and empowerment of women over the past several years.

Weaknesses
1. Product Diversification​: Coca-Cola has been extremely loyal to the beverage industry without
diversifying into the snacks segment as in the case of Pepsico with Lays and Kurkure which
acts as an additional revenue stream. This has contributed to Coca-Cola’s loss in market
share.

2. Less emphasis on Nutrition and Energy Beverages: Coca-Cola does not generate a lot of
revenue from the market segment of Nutrition and Energy Beverages containing products like
 Powerade and so the company does not place a considerable amount of emphasis on its
performance. With a lot of consumers now becoming heath and fitness conscious, this is
adversely affecting Coca-Cola.

3. High water consumption​: Coca-Cola is heavily reliant on water for the production and
distribution of its vast non-alcoholic beverage portfolio.

4. Sales and revenue decline in the carbonated drinks​: Coca-Cola generates most of its revenue
from the market segments of Carbonated soft drinks that contain a lot of calories and sugar.
With the modern consumer becoming more health and development nutrition conscious,
naturally the sales in this segment have been drastically impacted.

Internal-External or IE Matrix
The weighted score for Internal Factor Evaluation comes out to be 3.52. The weighted score for
External Factor Evaluation comes out to be 3.41. Taking both evaluations into consideration, the IE
Matrix is formed and it is observed that the Coca-Cola company lies in Quadrant 1. As it is the market
leader in the non-alcoholic beverage industry, Coca-Cola can utilize Quadrant 1 strategies of product
differentiation and cost leadership to sustain its competitive advantage.

BCG Matrix
The Coca-Cola company conducts its business operations in the non-alcoholic ready-to-drink (RTD)
beverage industry showcasing products in market segments or categories like carbonated soda drinks,
nutrition and energy drinks, juices, bottled water and RTD tea.
It is observed the market share for the carbonated soda beverages segment is the highest and so the
relative market share of the other beverage segments are calculated taking carbonated soda drinks into
consideration.
There has been a decline in the market growth for the market segments of carbonated soda drinks,
juices and RTD tea of 6.58%, 19.85% and 7.52% respectively on accounts of today's consumers
becoming more health and fitness conscious and rejecting calories, sugar and added preservatives in
their beverages.

The BCG matrix is constructed wherein the x-axis represents the relative market share and the y-axis
represents the growth of the beverage industry. Revenue generated by each market segment has been
taken into consideration as well acting as the z-component.

With high relative market share and low industry growth, Coca-Cola has market segments of
carbonated soda drinks and juices as its cash cows. With low relative market share and high industry
growth, Coca-Cola has the market segment of bottled water as it's question mark. With low relative
market share and low industry growth, Coca-Cola has market segments of nutrition-energy drinks and
RTD tea as its dogs.

Thus, Coca-Cola should strategically become health conscious with the bottled water segment
receiving investments from carbonated soda drinks and juices segments to turn it into a star.

SPACE Matrix
 Internal Strength Position External Strength Position

Competitive Advantage (CA) Industry Strength (IS)

1. Market Share -1 1. Barriers to entry +3

2. Product Quality -2 2. Growth potential
3. Customer Loyalty 3. Access to financing +5
4. Control over -2 4. Resource
suppliers exploitation +5
5. Brand Image -1 5. Technological
Know-how +4.5
-1
+5

Average Score -1.4 Average Score 4.5

Total X-Axis Score: 3.1

Financial Strength (FS) Environmental Stability (ES)

1. ROA +5 1. Inflation rate -3

2. Leverage +6 2. Changes in -2
3. Liquidity +4 technology
4. Working Capital +3 3. Elasticity of -2.5
5. Cash flow +1 demand
4. Taxation -4
5. Competitiveness -1.5
pressure

Average Score 3.8 Average Score -2.6

Total Y -Axis Score: 1.2

The Strategic Position and Action Evaluation (SPACE) Matrix is an analytic technique used in
strategic management and planning. The analysis allows to create an idea of the appropriate business
strategy for the enterprise. The analysis assesses the internal and external environment to determine
the best strategy for any company. Coca-Cola has been given a rank ranging from 1(worst) to 6 (best)
or -1 (best) to -6 (worst) depending on the indicator. For most of the factors, especially the ones
under Financial Stability, the company has been compared to Pepsi Co.

After the assessment of all the four dimensions, it is found that Coca-Cola lies in Quadrant I. This
signifies that it should have an aggressive position. Since the best position in SPACE matrix is the
aggressive position, it can do the following by relying on its abilities and strength:
● Exploitation of external opportunities
● Decreasing of internal weaknesses
● Avoidance of external threats

Coca-Cola has a strong competitive advantage and it can protect it. A critical factor is the possible
entry of new competitors into the industry, it may consider new acquisitions, increasing market share
and focusing on competitive products. Recommended strategies for Coca-Co include

1. Market penetration strategy: It should focus on increasing the market share of water and
juices in order to cater to the increasing demand for healthier options.
2. Product development strategy: It has a strong ability to continue to develop new products and
re-invent old ones. For example, the new eco-friendly recyclable bottles provide a shift in
paradigm in the packaging aspect of the product.
3. Backward and Forward vertical Integration strategy, Horizontal Integration strategy:
Coca-Cola already has inculcated integration strategy in its planning. For example, it owns
 major shares in Hellenic Bottling Company and collaborated with plethora of farmers around
the country.
4. Concentric (Related) diversification strategy
5. Diversification: Healthier snacks and other food items.
6. Combination of some of these strategies.

GSM Matrix

The Grand Strategy Matrix is an instrument used for creating alternative and different strategies for
the organization. It entails two dimensions including competitive position and market growth. All
companies can be positioned in one of the four quadrants. The revenue growth of Non-Alcoholic
beverages industry in 2019 is as follows:
● Bottles water: 10.46%
● Soft drinks: 9.39%
● Juices: 7.37%

The accumulated growth for this industry is 27.22% which signifies rapid growth. Moreover,
according to the SPACE Matrix, Coca-Cola has a strong competitive advantage. Thus, it lies in the
first quadrant where firms operate in a fast moving market growth. Coca-Cola must adopt and pursue
strategies including market development, market penetration, product development, etc in order to
focus and make the current competitive base stronger.

Coca-Cola is already focusing on market penetration through several avenues including organic
growth. The first expected driver is increased market penetration of the company’s stills portfolio.
Since consumers are more conscious about their choices and are switching to healthier options in the
F&B industry, Coca-Cola’s stills products will inevitably benefit from it.

Moreover, Coca-Cola uses vertical integration and product development strategies. The company
strives to own all processes that lead up to the manufacture of the products like making the bottles that
are used for the soft drinks. This helps it to cut some unnecessary costs that were earlier involved.
Coca-Cola has also been creating new products over the years that will always meet the needs and
demands of the ever-changing customer preferences. It also indulges in backward, forward and
horizontal integration. It should focus on accelerating growth of still portfolio through internal
innovation, mergers and acquisition and global expansion.