Académique Documents
Professionnel Documents
Culture Documents
Overview
1. Company Overview
.A brief history about Coca Cola
.Existing Mission and Vision Statement
.Existing Objectives and Strategies
.New Mission and Vision Statement
2. External Audit
.Industry Analysis
.Current Opportunities and Threats
.CPM Matrix
.EFE Matrix
3. Internal Assessment
.Organizational Structure
.Strengths and Weaknesses
.Financial Condition
.IFE Matrix
4. Strategy Formation
SWOT matrix
Space Matrix
BCG Matrix
Grand Strategy Matrix
Matrix Analysis
QSPM Matrix
Strategies
6. Implementation
EPS/EBIT
Projected Financials
7. Evaluation
8. Coca-Cola Update
various ingredients,
where he
then put it
up for sale
for 5 cents
requested 10
bottle plants
to be shipped
to them
a glass
overseas,
which then
created an
overseas business.
1886-1892
1905-1918
1941-1959
1893-1904
1919-1940
1982-1890
1960-1981
1990-1999
Coca-Cola traveled
with the
team and
began
1940s and
global
introduced in
expansion
the 1950s;
Sprite followedin 1961, with
TAB in 1963
andFresca in 1966
People: Be a great place to work where people are inspired to be the best they can be.
Portfolio: Bring to the world a portfolio beverage brands that anticipate and satisfy peoples desires and needs.
Partners:Nurture a winning network of customers and suppliers, together we create mutual, enduring value.
Planet:Be a responsible citizen that makes a difference by helping build and support sustainable communities.
Profit:Maximize long-term return to shareholders while being mindful of our overall responsibilities.
Productivity: be a highly effective, lean and fast-moving organization
Products or Services
3.
4.
Markets
Technology
market.
5.
8.
9.
6.
7.
Philosophy
Self-Concept
External Audit
60
50
40
30
20
10
0
Coca Cola
Pepsi Cola
Nestle
Opportunities
1)Spurring demand for energy drinks, especially in the US where estimates show
about 2 billion.
5)Has the option, but no obligation, to assist bottlers with promotional and
marketing activities ($5 billion in 2010).
Threats
1)
2)
3)
4)
Increasing preference for non carbonated healthy drinks. The Coca Cola soda saw a 5% volume declines respectively in the carbonated soda brands category.
With rising obesity rates of 35.7% for adults and 17% for youth in the U.S. alone, health concerns may cause reduced consumption of sugar sweetened beverages, impacting profitability.
Water is the main and most significant ingredient in beverages, quality and abundance of water is scarce worldwide, where 70% is used for agriculture and irrigation.
With $24.5 billion in net operating revenue generated from international markets, and operating in over 200 countries, unstable economic conditions in foreign countries can dramatically
decrease revenues.
5)
6)
7)
8)
9)
The primary beverage of Coca Cola is sparkling beverages, the most popular drinks consumed worldwide, in their respective order, are water, tea, and beer.
Changes in currency rates. Coca-cola uses 74 functional currencies in 2010.
In 2010 had approximately 18,600 associates represented by labor unions.
PEP operating income and revenues both exceeded KO's by .85 Billion and 7.67 Billion respectively. They are strong competitors in the market
PepsiCo dominated North America with sales of US $22billion,while Coca-Cola only had about US $7billion.
CPM
KO
NSRGY
PEP
Weights
Rating
Weighted Score
Rating
Weighted Score
Rating
Weighted Score
0.0 to 1.0
1 to 4
1 to 4
1 to 4
Advertising
0.08
0.32
0.24
0.32
Product Quality
0.12
0.48
0.36
0.36
Price Competitiveness
0.10
0.4
0.3
0.4
Finanical Position
0.10
0.30
0.40
0.30
Customer Loyalty
0.14
0.56
0.42
0.56
Global Expansion
0.11
0.44
0.33
0.33
Market Share
0.07
0.21
0.28
0.21
Organization Structure
0.06
0.24
0.18
0.18
Customer Service
0.08
0.32
0.24
0.24
Production Capacity
0.10
0.40
0.30
0.40
Employee Dedication
0.04
0.12
0.16
0.12
Totals
1.00
3.79
3.21
3.42
EFE
Key External Factors
Weights
Opportunities
Rating
0.0 to 1.0
Weighted Score
1 to 4
This is spurring demand for energy drinks, especially in the US which according to the latest industry estimates is about 2 billion
0.06
0.24
Approximately 85% of the companys unit case volume is delivered in recyclable bottles and cans, and the company targets to recover at least 50%
0.04
0.12
0.04
0.08
European and China market show large potential to grow, growing into these divisions more will help the revenue sales
0.04
0.08
Has the option, but no obligation, to assist bottlers with promotional and marketing activities ($5 billion in 2010).
0.05
0.1
0.06
0.18
Global beverage industry is expected to grow from a valued $1.4 trillion in 2008, to $1.6 trillion by 2013
0.05
0.15
India currently only consumes 11 8oz servings of KO per person per year
0.04
0.08
0.15
The non-alcoholic ready to drink(NARTD) beverage industry is expected to grow by 50 billion unit cases by 2020
Threats
Increasing preference for non carbonated healthy drinks. The Coca Cola soda saw a 5% volume declines respectively in the carbonated soda
0.05
0.06
0.18
0.06
0.12
0.09
0.18
0.07
0.21
0.07
0.28
0.04
0.08
0.05
0.1
PEP operating income and revenues both exceeded KO's by .85 Billion and 7.67 Billion respectively. They are strong competitors in the market
0.05
0.2
PepsiCo dominated North America with sales of US $22billion,while Coca-Cola only had about US $7billion
0.08
0.32
brands category
With rising obesity rates of 35.7% for adults and 17% for youth in the U.S. alone, health concerns may cause reduced consumption of sugar
sweetened beverages, impacting profitability.
Water is the main and most significant ingredient in beverages, quality and abundance of water is scarce worldwide, where 70% is used for
agriculture and irrigation
With $24.5 billion in net operating revenue generated from international markets, and operating in over 200 countries, unstable economic
conditions in foreign countries can dramatically decrease revenues
The primary beverage of Coca Cola is sparkling beverages, the most popular drinks consumed worldwide, in their respective order, are water, tea,
and beer
Totals
2.85
Internal Audit
4,094
Net Income * 5
59,045
(Stock Price/EPS) * NI
71,177
71,225
51,385
Ratio Analysis
Ratio (2010)
Coca-Cola
Pepsi
Nestle
Current
1.17
1.11
1.29
Quick
1.02
0.89
1.03
0.57
0.68
0.44
Debt to equity
1.35
2.19
0.78
0.45
0.94
0.12
Times-interest-earned ratio
20.43
9.23
41.25
2.38
3.03
5.12
0.48
0.85
0.98
Inventory Turnover
13.25
17.15
13.84
63.86
54.05
58.21
EBT Margin %
40.56
14.23
34.69
33.63
10.93
31.2
19.42
11.7
27.56
38.09
33.27
49.17
Liquidity Ratios
Leverage Ratios
Activity Ratios
Profitability Ratios
Strengths
Weaknesses
3)Currently does not hold a snacks segment, where Pepsi Co. has a
food division which creates for 60% of their total revenue.
IFE
Key Internal Factors
Weights
Rating
Weighted Score
0.0 to 1.0
1, 2, 3 or 4
Internal Strengths
3 or 4
With revenues of $35,119,000 million, Coca-Cola is one of the largest beverage manufacturers globally
0.07
0.28
Coca-Cola owns four of the worlds top five nonalcoholic sparkling beverage brands including Coca-Cola, Diet Coke, Sprite and Fanta
0.08
0.32
0.07
0.21
Accounted for 51% of U.S. unit case volume, and 50% of non-U.S. case volume for 2010
0.06
0.18
Has ownership interest in its bottling/distributing partners; 23% in Coca-Cola Hellenic, 32% in Coca-Cola FEMSA, and 30% in Coca-Cola Amatil
0.05
0.15
Acquired Coca-Cola Enterprises, Inc., one of the major bottlers for Coca-Cola in North America which had $3.6 billion in revenues
0.09
0.36
0.04
0.12
Coca-Cola has more than 500 brands and 3,500 beverages and products
0.06
0.24
Coca-Cola sells 1.7 Billion servings of beverages per day in over 200 countries
0.05
0.15
Coca-Cola generated 8.5 billion in cash from operations in 2010, up 16% over 2009
0.06
0.18
Internal Weaknesses
1 or 2
0.02
0.02
Does not hold number 1 spot for either the water brand or the leading sports drink
0.06
0.12
Currently does not hold a snacks segment, where Pepsi Co. has a food division which creates for 60% of their total revenue
0.07
0.07
Does not perform best in North America, only accounting for 31.7% in total revenue in 2010
0.03
0.03
0.02
0.04
Acquiring Coca-Cola Enterprises (CCE) resulted in assuming additional $7.9 billion in debt
0.07
0.07
0.03
0.03
Interest expense increased $378 million mainly due to premiums paid on repurchasing long term debt
0.03
0.06
Common Stock Market Prices decreased between the first and second quarter in 2010 from $52.23 and $49.47
0.02
0.04
Other operating expenses grew to $5,959 million in 2010 from $ 5,699 million in 2009
0.02
0.04
Totals
2.71
Strategy Formation
SWOT Matrix
ST
1. Create a line of energy drinks to meet a growing demand of those products. (S8,
Strengths
Opportunities
2. Increase marketing in Latin America. (S8, S9, S10, O6, O7, O9)
WO
ST
T5)
WT
1.Create a lower calorie sports drink line to promote healthydrinkinghabits while still
providing the essential electrolyte balance. (W2, W4, T1, T2)
Threats
2. Diversify products by entering the healthy snack/snack food market. (W3, T2)
Weaknesses
Space Matrix
Financial
Ratings
Industry
Strength
Rating
Strength
1
Cash Flow
5.0
FS
Profit
6.0
Potential
2
Price
3.0
Aggressive
Conservative
Earnings
Financial
7.0
Stability
Ratio
Earnings
5.0
Resource
per Share
4
7.0
Capital
Envir
Liquidity
Ratin
g
Stabi
Net
6.0
5
Return on
Barriers to Enter
Average
the Market
4.0
-5.0
-5
-4
-3
-2
-1
6.0
-4.0
Market Share
-1.0
Growth
-4.0
-4.0
Extent
-3
-3.0
2.0
-5
Competitive
Defensive
Customer Loyalty
Industry
4.6
Strength
-6
-2.0
ES
Average
Capacity
-2.0
X Coordinate
2.43
Y Coordinate
1.00
Utilization
Technologically
-3.0
Advanced
6
-4.0
-4
Product Quality
3d
-2.0
Demand
3.0
Leverage
Price Elasticity
-2
Potential
Competitive
Price Range of
-6
-1
Market
ntage
Variability
CS
pressure
1
6
5.14
Strength
2
etitivutilizatio
Entry
Rate of
Assets
Inflation
Financial
Ratin
Adva
Income
7
4.0
CompCapacity
lity
1
Producti
vity,
6.0
onm
ental
Utilizatio
Working
4.0
Global Expansion
-1.0
IS
BCG Matrix
Segments
Revenue
%rev
profit
%pft
Industry Growth
Rate (%)
North America
$11,205.00
39.45%
$1,520.00
15.31%
1.00
4.40%
Pacific
$5,271.00
18.56%
$2,048.00
20.63%
1.00
5.60%
Europe
$5,249.00
18.48%
$2,976.00
29.97%
1.00
5.30%
Latin America
$4,121.00
14.51%
$2,405.00
24.22%
1.00
6.00%
$2,556.00
9.00%
$980.00
9.87%
1.00
6.50%
$28,402.00
100.00%
$9,929.00
100.00%
Total
BCG Continued
Quadrant II
Quadrant I
1. Market development
1. Market development
2. Market penetration
2. Market penetration
3. Product development
3. Product development
4.Forward integration
5. Backward integration
4.Horizontal integration
6. Horizontal integration
5. Divestiture
7.Related diversification
6. Liquidation
Quadrant IV
Quadrant III
1. Retrenchment
2. Related diversification
3. Unrelated diversification
4. Divestiture
5. Liquidation
1. Related diversification
2.Unrelated diversification
3. Joint ventures
Matrix Analysis
Alternative Strategies
SPACE
GRAND
BCG
COUNT
Forward Integration
Backward Integration
Horizontal Integration
Market Penetration
Market Development
Product Development
Related Diversification
Unrelated Diversification
Retrenchment
Divestiture
Liquidation
IE
Strategy Evaluation
Integration Strategies
QSPM
Quantit
Create a
Diversif
ative
lower
Strateg
calorie
product
ic
sports
Planni
s by
enterin
drink
ng
line/
Matrix-
while
QSPM
g the
healthy
snack/s
still
nack
providin
food
market.
essential
electroly
te
balance.
Key
Weight
AS
TAS
AS
TAS
AS
TAS
factors
External
1 to
1 to 4
1 to 4
4
Opport
unities
1.
There is
spurring
demand
for
energy
drinks,
especiall
y in the
US
which
accordin
g to the
latest
industry
estimate
s is
about 2
0.06
0.24
QSPM (2)
Create a
Diversify
Diversify
lower calorie
products by
beverage
sports drink
entering the
line by
healthy
offering
line/ while
still providing
essential
snack/snack
alcoholic
food market.
beverages.
electrolyte
balance.
Strengt
hs
1.With
0.07
0.07
0.2
revenue
0.14
0.16
s of
$35,119
,000
million,
CocaCola is
one of
the
largest
beverag
e
manufac
turers
globally.
2.Coca
-Cola
owns
four of
the
worlds
top five
nonalco
holic
sparklin
g
beverag
e brands
0.08
Strategic Fit
Competitive Risks
Pepsi Co. and Nestle currently have market share in the Food Industry
Funding Aggressive Growth
Moving into the food industry and having very strong customer loyalty,
customers will be drawn to new products
Kellogg Company
3-Year Goals
In 3 Years
-Acquire ownership of Kellogg Company by the end of 2013
Strategic Implementation
(2,930)
Net Income * 5
6,235
(Stock Price/EPS) * NI
17,849
17,868
9,755
EPS/EBIT
Assumptions
Capital Needed
6,000,000,000
EBIT Range
Interest Rate
4%
Tax Rate
16%
30.86
2,308,000,000
CS Shares needed
Common Stock
194,426,442
Recession
Normal
Boom
EBIT
7,000,000,000
10,000,000,000
15,000,000,000
Interest
EBT
7,000,000,000
10,000,000,000
15,000,000,000
Taxes
2,030,000,000
2,900,000,000
4,350,000,000
EAT
4,970,000,000
7,100,000,000
10,650,000,000
# of Shares
2,502,426,442
2,502,426,442
2,502,426,442
Debt Financing
Recession
Normal
Boom
EBIT
7,000,000,000
10,000,000,000
15,000,000,000
Interest
240,000,000
240,000,000
240,000,000
EBT
6,760,000,000
9,760,000,000
14,760,000,000
Taxes
1,960,400,000
2,830,400,000
4,280,400,000
EAT
4,799,600,000
6,929,600,000
10,479,600,000
# of Shares
2,308,000,000
2,308,000,000
2,308,000,000
Financing
EPS/EBIT Continued
Assumptions
Stock needed
5,400,000,000
Debt needed
600,000,000
Interest
24,000,000
CS shares needed
174,983,798
90% Stock -
Stock needed
600,000,000
Debt needed
5,400,000,000
Interest
216,000,000
CS shares needed
19,442,644
10% Stock -
10% Debt
90% Debt
Financing
Financing
Recession
Normal
Boom
Recession
Normal
Boom
EBIT
7,000,000,000
10,000,000,000
15,000,000,000
EBIT
7,000,000,000
10,000,000,000
15,000,000,000
Interest
24,000,000
24,000,000
24,000,000
Interest
216,000,000
216,000,000
216,000,000
EBT
6,976,000,000
9,976,000,000
14,976,000,000
EBT
6,784,000,000
9,784,000,000
14,784,000,000
Taxes
2,023,040,000
2,893,040,000
4,343,040,000
Taxes
1,967,360,000
2,837,360,000
4,287,360,000
EAT
4,952,960,000
7,082,960,000
10,632,960,000
EAT
4,816,640,000
6,946,640,000
10,496,640,000
# of Shares
2,482,983,798
2,482,983,798
2,482,983,798
# of Shares
2,327,442,644
2,327,442,644
2,327,442,644
EPS
1.99
2.85
4.28
EPS
2.07
2.98
4.51
Capital needed
10,000,000,000
Debt needed
6,000,000,000
Cash Used
4,000,000,000
Interest (estimate)
4%
Tax Rate
16%
30.86
Additional Interest
240,000,000
4,223,640,000
2009
Total Revenue
30,990
2010
35,119
2011
52,784
15% increase,
plus Kelloggs
12,397
Cost of Revenue
11,088
12,693
21,324
% of revenue,
plus Kelloggs
7,108
Gross Profit
19,902
22,426
31,460
Operating Expenses
11,671
13,977
17,276
Add Kelloggs
3,299
Nonrecurring
Others
8,231
8,449
14,184
ASSETS
Current Assets
6,959
8,379
4,379
Decrease by
$4 billion for
funds
Short-term Investments
2,192
2,820
3,666
30% increase
Net Receivables
3,758
4,430
5,316
20% increase
Inventory
2,354
2,650
4,236
20% increase,
plusKelloggs
1,056
2,226
3,162
4,336
30% increase,
plusKelloggs
225
Long-term Investments
17,551
6,755
21,579
21,933
7,585
9,861
30% increase
Current Liabilities
Accounts Payable
6,921
9,132
10,045
10%
increase
Short-term Debt
6,800
9,376
11,176
Add 30%
of $6
billion
from
financing
13,721
18,508
Long-term Debt
21,221
5,059
14,041
18,241
Add 70%
of $6
billion
from
financing
Other Liabilities
2,965
4,794
5,033
5%
increase
Deferred Long-term
Liability Charges
1,580
4,261
4,261
Same
2010
2011
Current Ratio
1.17
0.97
Quick Ratio
1.02
0.83
0.57
0.54
Debt to Equity
1.35
1.17
20.43
16.57
2.38
2.45
0.48
0.58
Inventory Turnover
13.25
12.46
63.86
59.60
38.09
38.07
Strategic Evaluation
Balanced Scorecard
Area of Objectives
Measure or Target
Time Expectation
Primary Responsibility
Customers
1 Brand Identity
Yearly
Marketing Officer
2 Satisfaction
Customer Survey
Yearly
Marketing Officer
Employees
1 Employee Moral
Survey
Yearly
People Officer
2 Service Training
# of seminars
Yearly
Administrative Officer
Operations
Yearly
Administrative Officer
Business Ethics
1 Ethics Training
Yearly
People Officer
2 Recycling
Financial
1 Revenues
Yearly
Financial Officer
2 Ratio Analysis
Yearly
Financial Officer
Update
Update
Stock Performance