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Strategic Analysis of the Coca-Cola Company STRATEGIC ANALYSIS OF THE COCA-COLA COMPANY Dinesh Puravankara B Sc (Dairy Technology) Gujarat Agricultural UniversityJ 991 M Sc (Dairy Chemistry) Gujarat Agricultural University, 1994 PROJECT SUBMITTED IN PARTIAL FULFILLMENT OF THE REQUIREMENTS FOR THE DEGREE OF MASTER OF BUSINESS ADMINISTRATION In the Faculty of Business Administration Executive MBA O Dinesh Puravankara 2007 SIMON FRASER UNIVERSITY Summer 2007 All rights reserved. This work may not be reproduced in whole or in part, by photocopy or other means, without permission of the author APPROVAL Name: Dinesh Puravankara Degree: Master of Business Administration Title of Project: Strategic Analysis of The Coca-Cola Company. Supervisory Committee: Mark Wexler Senior Supervisor Professor Neil R. Abramson Supervisor Associate Professor Date Approved: SIMON FRASER UNIVEliSITY LIBRARY Declaration of Partial Copyright Licence The author, whose copyright is declared on the title page of this work, has granted to Simon Fraser University the right to lend this thesis, project or extended essay to users of the Simon Fraser University Library, and to make partial or single copies only for such users or in response to a request from the library of any other university, or other educational institution, on its own behalf or for one of its users. The author has further granted permission to Simon Fraser University to keep or make a digital copy for use in its circulating collection (currently available to the public at the "lnstitutional Repository" link of the SFU Library website <www.lib.sfu.ca> at: ~http:llir.lib.sfu.calhandle/l8921112>)and, without changing the content, to translate the thesislproject or extended essays, if technically possible, to any medium or format for the purpose of preservation of the digital work. The author has further agreed that permission for multiple copying of this work for scholarly purposes may be granted by either the author or the Dean of Graduate Studies. It is understood that copying or publication of this work for financial gain shall not be allowed without the author's written permission. Permission for public performance, or limited permission for private scholarly use, of any multimedia materials forming part of this work, may have been granted by the author. This information may be found on the separately catalogued multimedia material and in the signed Partial Copyright Licence. While licensing SFU to permit the above uses, the author retains copyright in the thesis, project or extended essays, including the right to change the work for subsequent purposes, including editing and publishing the work in whole or in part, and licensing other parties, as the author may desire. The original Partial Copyright Licence attesting to these terms, and signed by this author, may be found in the original bound copy of this work, retained in the Simon Fraser University Archive. Simon Fraser University Library Burnaby, BC, Canada Revised: Fall 2007 SlMON FliASER UN1VkIiSI'X'Y THINKING OF THE WORLD STATEMENT OF ETHICS APPROVAL The author, whose name appears on the title page of this work, has obtained, for the research described in this work, either: (a) Human research ethics approval from the Simon Fraser University Office of Research Ethics. (b) Advance approval of the animal care protocol from the University Animal Care Committee of Simon Fraser University; or has conducted the research (c) as a co-investigator, in a research project approved in advance, (d) as a member of a course approved in advance for minimal risk human research, by the Office of Research Ethics. A copy of the approval letter has been filed at the Theses Office of the University Library at the time of submission of this thesis or project. The original application for approval and letter of approval are fded with the relevant offices, Inquiries may be directed to those authorities. Bennett Library Simon Fraser University Burnaby, BC, Canada Last ravlston Summer 2007 ABSTRACT This paper performs a strategic analysis of The Coca-Cola Company, a leader in the beverage industry. Coca-Cola, the world's leading soft drink maker, operates in more than 200 countries and owns or licenses 400 brands of nonalcoholic beverages. Since Coca-Cola operates in more than 200 countries, more emphasis is given to the CanadianINorth American region in this analysis. The company faces challenges in today's marketplace because of market driven changes, regulatory changes and socio-economic changes. An external analysis of the soft drink industry is performed to understand the impact of environment. An internal analysis of Coca-Cola is performed to understand the internal capabilities. The conclusion of this paper emphasizes that the company needs to reduce its dependence on carbonated beverage and diversify its product portfolio into the noncarbonated sector to remain competitive. It is argued that the best way to become a total beverage company is through addressing the key issues identified in this research and eventually moving towards a learning organization. DEDICATION I would like to dedicate this effort to my wife Bindu for her unwavering support and to my daughter Deepika for giving up her story time on many occasions throughout the program. I would also like to dedicate this work to my mother Smt. Nandini Puravankara for all her fervent prayers for my success and all my family for their constant encouragement. ACKNOWLEDGEMENTS I would like to thank Dr. Mark Wexler and Dr. Neil Abramson for assisting me in this project to clear my thoughts, make my case and complete the project on time. I also would like to thank all the faculty members who made the journey interesting by sharing their knowledge and insights along the way. Lastly, I would like to thank all my classmates and especially my team members for their support and encouragement thoughout the program. TABLE OF CONTENTS .. Approval .......................................................................................................11 ... Abstract ........................................................................................................... 111 Dedication .......................................................................................................... iv Acknowledgements ............................................................................................ v Table of Contents ............................................................................................... vi List of Figures .................................................................................................... ix List of Tables ....................................................................................................... x Glossary ............................................................................................................. xi Chapter 1 : Introduction ...................................................................................... I 1. 1 Company Background ................................................................................. 2 1.2 Financial Performance ................................................................................. 3 1.3 Geographic Coverage ..................................................................................4 1.4 Organisational Structure .............................................................................. 4 1.5 Company History ......................................................................................... 5 1.6 The Contemporary Coca Cola Company ..................................................... 7 1.7 Strategic Issues ........................................................................................... 7 1.8 An Overview of the Canadian Soft Drink Industry ........................................ 8 1.8.1 Definition of Category ............................................................................ 8 1.8.2 Coca-Cola Canada ................................................................................ 9 1.8.3 Economics of the Canadian Soft Drink Industry .................................. 10 1.8.4 Change Drivers of the Canadian Soft Drink Industry ........................... 12 1.8.4.1 EconomicIMarket driven changes ................................................ 12 1.8.4.2 Regulatory issue and changes ..................................................... 12 1.8.4.3 Social and Economic changes .................................................. 14 Chapter 2: External Analysis of the Soft Drink Industry ............................... 17 2.1 Introduction to Porter's Five Force analysis ............................................... 17 2.1 .1 Threat of new entrants-Low ............................................................... 18 2.1.2 Threat of Substitutes-Very Strong ....................................................... 18 2.1.3 Threat of Suppliers-Strong ................................................................ 19 2.1.4 Bargaining power of Buyers-High ........................................................ 20 2.1.5 Competitive rivalry-High ...................................................................... 21 2.2 Emerging trends in the soft drink industry-Industry Analysis ..................... 22 2.2.1 Merger & acquisition ............................................................................ 22 2.2.2 Globalization........................................................................................ 22 2.2.3 Lifestyle ..............................................................................................
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