Contents:

Introduction
Objectives of the assignments
Scope of the assignment
Definition of Strategic Assignment
Importance of Strategic Assignment
Various roles in Strategic Assignment
Company Overview
Mission of Coca-Cola company
Strategies Of Coca-Cola company
SWOT analysis of Coca-Cola company
Pest Analysis
Conclusion
References

Introduction:
Strategic management is the process of defining an organization's objectives and further
developing policies, strategies and plans to achieve these objectives, and allotting resources
so as to achieve the goals of the company.
According to G. Tyage, Strategic management consists of the investigation, decisions, and
actions an organization undertakes in order to create and sustain competitive advantages.
Strategic management is combination of science and arts which increases an organizations
chances of success as it involves detailed planning of each and every variable of the
organization that can help in the achievement of goals and objectives.

Definition of Strategic Management

Strategic management is the process of specifying an organization's objectives, preparing
policies and plans to achieve these objectives, and allocating resources so as to implement the
plans. It is the highest level of managerial activity, usually performed by the company's Chief
Executive Officer (CEO) and his executive team. It provide long run direction to the whole
company.

Origin Of Strategic Management:

The increasing importance of strategic management may be a result of several
trends. Increasing competition in most industries has made it diffi cult for some
companies to compete. Modern and cheaper transportation and communication
have led to increasing global trade and awareness. Technological development
has led to accelerated changes in the global economy.Regardless of the reasons,
the past two decades have seen a surge in interest in strategic management.
Three Perspectives on strategic management
Traditional
Origin

Resource based

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view
Economics, other Economics
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resources,

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abilities

rights, and

formulation of

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demands

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resources,

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Source

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Source : http://media.wiley.com

OBJECTIVES OF THE ASSIGNMENT:

Every successful study should have specified and well-defined objectives. A careful
statement of the objective helps in preparing a well-decorated assignment promoting
others to take decision on it. The specific objectives of the study include:
To learn about the strategic management issues of multinational company.
To characterize the challenges of international strategic management.
To know about international strategic management process .
To know about Coca-Cola Companys strategies management process.

SCOPE OF THE ASSIGNMENT

This study has focused upon the Management Issues which are persecuted by the
Coca-Cola Company for capturing the worldwide market. Through my assignment I
have tried to find out the global challenges of International Strategic Management and
to determine the basic strategies and describe the international strategic management
process of the Coca-Cola Company.

Five Essential Fields of Strategic Management:

Goal-setting
Goal-setting permits a firm to express its vision: identify what needs to be
accomplished, define short-and long-term objectives, and relate them to what the
organization wants to do.

Analysis
Analysis directs to gather and consider information so that a firm apprehends the
situation. Assess external environments and internal situations to identify the strengths
and weakness of the company and the opportunities and threats face to reach the
goals.
Strategy Formulation
To determine a strategy, a firm establishes options, and make decisions, review the
results of the analysis, identify the issues that a firm implementing partners need to
address, and draft them in terms of their urgency and magnitude.
Strategy Monitoring
Monitoring provides checking the progress toward achieving the firms goals and
determining whether any changes in the environment is necessary for the firms
strategy.

IMPORTANCE OF STRATEGIC MANAGEMENT:

Strategic management accommodates the knowledge and experience procured in
various functional areas.
It helps in understanding how policies are drafted and in creating appreciation of
complexities of environment that the senior management staff faces in policy framing.

A well-formulated strategy can bring various benefits to the organization in

present as well as in future.
1.

Strategic management takes into account the future and anticipates for it.

2.

A strategy is made on rational and logical manner, thus its efficiency and
its success are ensured.

3.

Strategic management reduces frustration because it has been planned in

such a way that it follows a procedure.

4.

It brings growth in the organization because it seeks opportunities.

5.

With strategic management organizations can avoid helter & skelter and
they can work directionally.

6.

Strategic management also adds to the reputation of the organization

because of consistency that results from organizations success.

7.

Often companies draw to a close because of lack of proper strategy to run

it. With strategic management companies can foresee the events in future
and thats why they can remain stable in the market.

8.

Strategic management looks at the threats present in the external

environment and thus companies can either work to get rid of them or else
neutralizes the threats in such a way that they become an opportunity for
their success.

9.

Strategic management focuses on proactive approach which enables

organization to grasp every opportunity that is available in the market.

Various Roles In Strategic Management:

Senior administration plays an important role in Strategic Management.
Role of Board of Directors:

Board of Directors is the highest Authority in a

company. They are the owners/ shareholders/ lenders. . They are the link between the
company and the outside environment.
Role of C.E.O: Chief Executive Officer is the most important Strategist and he is
responsible for all aspects from formulations/Implementation of policies for to review
of Strategic Management. He is the leader, motivator & Builder who forms a channel
between company and the board of directors and responsible for managing the
external atmosphere and its relationship.
Role of Entrepreneur: They are independent in their thoughts and action while they
set / start up a new business. A Company can promote the entrepreneurial spirit and
this can be internal mindset of an organization. They provide a sense of direction and
are very active in implementation of various policies.

COMPANY OVERVIEW:
The Coca-Cola Company (Coca-Cola) is a leading manufacturer, distributor and
marketer of Non-alcoholic beverage concentrates and syrups, in the world. The
company owns or licenses more than 400 brands, including diet and light beverages,
waters, juice and juice drinks, teas, coffees, and energy and sports drinks.
The company operates in more than 200 countries. Approximately 74% of its products
are sold outside of the US.
The company is headquartered in Atlanta, Georgia and employs 71,000 people as of
September 2010.The Company recorded revenues of $24,088 million during the fiscal
year ended December 2010.

Mission Of Coca-Cola Company:

To create and design various consumer products,

customer services and

bottling system strategies, processes and tools in order to initiate competitive

advantage and deliver superior value to.

Factors Affecting International Strategic

Management

Language

Culture

Politics

Economy

Government

Labour

Financing

Market

Money

Control

Advertising

Contracts

Transportation and Communication

Source: www.coca-cola.uk.

Labour Relations

There are various factors which affects the strategies of Coca-Cola Company in case
of international operation. Language is one of the main considerations or barrier when
it does business in any domestic country . The compny in that case generally use
domestic language to expand its business in any regional market. But when it does
business outside the country it follows Polycentric policy that is using different types
of languages in different countries. Side by side culture is also relatively homogeneous
in domestic operation and quite diverse, both between countries and within countries.
Political stability and government policies also to be considered by the Coca-Cola
Company.

Strategies of Coca Cola Company

The four different strategies of coca-cola are shown in the following figure :

Multi-domestic Strategy
Home Replication Strategy

Transnational Strategy
Global Strategy

From these four strategies Coca-Cola Company only follows the Multi-domestic
strategy. They produce their own products independently in different countries. All
countries products are not same. They produce their products by following different
strategy for different countries, based on the internal and external environment of that
particular
country. Coca-Cola Company developed their strategy by considering the nature of
the people of different countys people, culture, status,taste and so many other related
factors.

Corporate Level Strategy

Corporate level strategy aims to define a discipline of business, a firm intends to
operate. Corporate level strategies are concerned with the selection of business in
which the company should compete with the development and coordination of that
portfolio of business. A firm might adopt any of three forms of corporate strategies:
A single business strategy
Related diversification strategy and
Unrelated diversification strategy.
Coca-Cola Company succeeds related diversification strategy that is calls for the firm
to operate in several different but fundamentally related businesses. Each of its
operations are linked with other Coca-Cola characters, the Coca-Cola logo, and a
theme of wholesomeness and a reputation for providing good quality family products.
Coca-Cola Company follows this strategy because it has several advantages. At first,
the firm depends less on a single products so it is less vulnerable to competition or
economic threats. Secondly, related diversification may produce economies of scale
for a firm. Thirdly, related diversification may allow a firm to use technology or
expertise developed in one market to enter a second market more cheaply and easily.

Corporate level strategies of Coca-Cola Company is following:

Corporate Level Strategy of

Coca-Cola Company

Marketing Strategies
System Strategies
Reward System Strategies
Financial Strategies R&D Strategies

Figure: Corporate Strategy of Coca-Cola Company

Business Unit Level Strategy

A strategic business unit may be a division, product line, or other profit center that can
be planned independently from the other business units of the firm. Corporate strategy
deals with the overall where as business strategy focuses on specific business,
subsidiaries or operating units within the firm. Business seeks to answer the question
how should we compete in each market we have chosen to enter? The firms develop
unique business strategy for each of its strategic business units, or it may pursue the
same business strategy for all of them.

Functional Level Strategy

The functional strategies attempts to answer to question How we manage the
function? The functional level of the organization is the level of the operating
divisions and departments. The strategic issues at the functional level are related to
business processes and the value chain.

Developing International Strategies

Developing international strategies is not a one-dimensional process.. Simply put, put
strategy formulations deciding what to do and strategy implementation is actually
doing it. Firms generally carry out international strategic management in two broad
strategies-

Strategy Implementation
A firm develops the tactics for achieving the formulated international strategies is
known as strategy implementation. Strategy implementation is usually achieved via
the organizations design, the work of its employees, and its control systems and
processes.

Coca-Cola Companys basic strategies are to develop a mission statement for entering
a new market depending on a fully fledged market survey. Identifying external and
internal environment strength, weakness, opportunity, and threats is the next
management strategies.
Depending on the scope and opportunity the company will go forward as well as try
to resolve the weakness and threats. After entering into a new market Coca-Cola
Company try to achieve strategic goals and guide its daily activities with proper
observation.

Figure: Quality Management System of Coca-Cola Company

SOURCE =www.coca-cola.co.uk

Through this model, we see that the company is first to take the response of customers
and retailers through market survey. Then the management accumulates the best
quality resources for making their products. This process includes

Skilled employee involvement for production and quality control.

High quality materials for production
Up to date technology for quality control
Effective methods and newly developed strategies

They will follow some continuous steps in developing the international strategy
formulation. Those steps help the Coca-Cola Company to enter and establish their
business in the multinational market.

COCA-COLA COMPANY, THE SWOT ANALYSIS

SWOT ANALYSIS
The Coca-Cola Company (Coca-Cola) is a top most leading manufacturer, distributor
and marketer of Non-alcoholic beverage concentrates and syrups, in the world. CocaCola has a strong brand name and brand portfolio. Business-Week and Inter brand, a
branding consultancy, recognize Coca-Cola as one of the leading brands in their top
50 global brands ranking in 2010.

Analyzing the primary competitor and identifying their Strengths, Weaknesses,

Opportunities, and Threats (SWOT Analysis) help determine target markets,
marketing plan, and customer service, sales forecasting and sales planning.
Examining the following points will aid in the competitive analysis:
Identifying the level of rivalry among competing sellers in the industry.
Review strategies of companies to encourage customers to switch from a
immediate competitor company.
Analyze ease of entry for new competitors in the soft drinks market.
STRENGTHS
Distribution network: The Company has a very strong and reliable distribution
network. The network is formed on the basis of the time of consumption and the
amount of sales made by a particular customer in one transaction. It has a distribution
network consisting of a number of efficient salesmen, 400,000 retail outlets and 2000
distributors.
Strong Brands: The products produced and marketed by the Company should have a
strong brand image. People all around the world should recognize the brands marketed
by the Company. Strong brand names like Coca-Cola, Fanta, and diet coke add up to
the brand name of the Coca-Cola Company as a whole.
Low Cost of Operations: The production, marketing and distribution systems are
very proficient due to forward planning and maintenance of consistency of operations
which minimizes wastage of both time and resources leads to lowering of costs or cost
control.

WEAKNESSES
Low Export Levels: The brands produced by the company are the same brands
produced worldwide thereby making the export levels low. In India, there exists a

major controversy concerning pesticides and other harmful chemicals in bottled

products including Coca-Cola and some other beverages also.
Small Scale Sector Reservations Limits Ability To Invest And Achieve Economies
Of Scale: The Companys operations are carried out on a small scale and due to
Government restrictions and red-tapism, the Company finds it very difficult to invest
in technological advancements and achieve economies of scale. Huge corruption
problem around the world is also a burning issue these days.

OPPORTUNITIES
Large Domestic Markets: The domestic market for the products of the Company is
very high as compared to any other soft drink manufacturer. Coca-Cola u.k. claims a
52 per cent share of the soft drinks market; this includes a 42 per cent share of the cola
market.
Higher Income among People: Development of developing countries such as India
and Brazil as a whole has lead to an increase in the per capita income thereby causing
an increase in disposable income of the working population there. Unlike olden times,
people now have the more power of buying goods of their choice without having to
worry much about the flow of their income. The beverage industry can take advantage
of such a situation and enhance their sales.

THREATS:
Imports: For example: As Brazil is developing at a fast pace, the per capita income
has increased over the years and a majority of the people is educated, the export levels
have gone tremendously high. Companies are now trading to a large extent and the
demand for foreign products has increased over the years.
Tax and Regulatory Sector: The tax system in developing countries such as in India
is accompanied by a variety of tough regulations at each stage on the from production
to consumption. When a license is issued, the production capacity is mentioned on the
license and every time the production capacity needs to be increased, the license poses
a huge problem. Renewing or updating a license is now very difficult and costly also.

Slowdown In Rural Demand: The rural market may be very attractive but it is full of
various problems such as low disposable income in rural areas and unemployment.

COCA-COLA COMPANY, THE PEST ANALYSIS

A scan of the external macro-environment in which the firm operates can be
expressed in terms of the following factors:

Political
Economic
Social
Technological

The acronym PEST is used to describe a framework for the analysis of these
macro environmental factors. A PEST analysis fits into an overall environmental
scan, which consists of significant political, economic, social and technological
analysis for a firm to reach their desirable position or to attain the goals and
objectives.

Environmental Scan
/

External Analysis
/

Internal Analysis

Macro environment

|
P.E.S.T.

Microenvironment

Political Factors
It is one of the significant parts of a company where, in which country they
operate their business unit. Political factors include government regulations and
legal issues and define both formal and informal rules under which the firm
must operate. Some examples include:

tax policy
employment laws
environmental regulations
trade restrictions and tariffs
political stability

Economic Factors
Another most imperative element for PEST analysis is economic factors.
Economic factor affects the purchasing power of potential customers and the
firm's cost of capital. The following are examples of factors in the macroeconomy:
economic growth
interest rates
exchange rates
inflation rate

Social Factors

Social factors include the demographic and cultural aspects of the external
macro environment. These factors affect customer needs and the size of
potential markets. Some social factors include:
health consciousness
population growth rate
age distribution
career attitudes
emphasis on safety

Technological Factors
Technological factors can lower barriers to entry, reduce minimum efficient
production levels, and influence outsourcing decisions. Some technological
factors include:
R&D activity
automation
technology incentives
rate of technological change

CONCLUSION
Because of such a high competition (just like the brand Coca-Cola), Coca-Cola should
not take a direct and tough attack upon it. There is no good to either side. The best
way is to keep a peaceful relationship with it and always compare with others; we
should find their disadvantages and show our advantages on this aspect.

An

organizations strategic thinking is governed by the situation prevalent in its external

environment. The external environment comprises of the strategic moves adopted by
the organizations competitors. The organization has to carefully study these moves
and accordingly prepare strategies to gain competitive advantage. For the same, the
organization needs to conduct an industry and competitive analysis. Lastly CocaCompany should largely focus on its current strategy only.

REFERENCES:
Cooper, R. D., Schindler, S. P. (2001), International Business Research Method
Seventh Edition, New York: McGraw-Hill Irwin
Gerard Prendergast and Leyland Pitt (2007) International Journal of Strategic
Management: a World Issue, Vol. 26 No.6, 1996, pp. 60-72. MCB University
Press.
James Prendergast and Eammon Murphy and Malcom Stephenson (1996)
International Journal of Quality & Reliability Management, Vol. 13 No. 5, 1996, pp.
77-90, MCB University Press.

Annual Report of Coca-Cola Company (2005-2009)

www.coke/homeContent.asp.htm