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Republic of the Philippines

CENTRAL LUZON STATE UNIVERSITY


Science City of Muñoz, Nueva Ecija

A case study
for
Coca-Cola Company

Submitted by:
Jennilyn Joy Acosta
Joyce Ann Beltran
Roxsanne Jennyne Cruz
Sedfrey Francisco
Timothy Ramos
Anjelyn Sardillo

Submitted to:
Jamilton Esguerra
I. Time Context: 2007

The time context used and presented in this study is from the end part of 2006 up

to 2007 where the people get conscious of their health diet. During this time, beverage

product such as water, juice drinks, sports drinks, energy drinks, teas and coffees

became the central focus of the market.

II. View Point: Chief Operating Officer

This business case is taking the viewpoint of a Chief Operating Officer who holds

a primary management position in a corporation.

III. Statement of the problem:

Coca-Cola Company derives a large part of its profit from the sales of its soft

drink products. Soft drink industry is now facing problems that are significantly affecting

the Coca-Cola Company soft drink products causing sales to decline due to inability to

match up with the current trend. Consumers are now becoming more concerned with

their health and avoiding the intake of some beverages that might be harmful to their

health. Issues are now spreading that soft drinks are unsafe drinks that might cause

problems like obesity. Many states in the USA now ban the selling of some soft drinks in

public schools. The government is now trying to regulate the sale of soft drinks and may

soon require warning labels.

IV. Objectives:

a.) Short range objective:


 Improvement in products to keep up with current trend.

 Regain or compensate the declining sales in various segments. (North

America, European Union, etc.)

 Increase customer satisfaction without putting their health at risk.

 Increase profits by 5% within the year.

b.) Long range objective:

 Accelerate carbonated soft-drinks growth led by Coca Cola

 Strengthen relationship with customers and improve company image

with social responsibility.

 Selectively broaden our family of beverage brands to drive profitable

growth. Direct investments to highest-potential areas across markets

 Grow system profitability and capability together with our bottling

partners and ally companies.

V. Areas of Consideration:

The problem of Coca Cola Company arises from the dilemma that the soft

drink industry is currently facing. The factors that can help in analyzing and

solving the case are the ff:

 Consumers, of nowadays, are very aware of what might a product cause

on them. They have become more inquisitive and knowledgeable about

the products they consume. Health turned out to be their major concern

and they become very selective with the products they take. Products,
which are health-friendly are now running the current trend in the

beverage market.

 Issues have spread that the Coca Cola Company’s soft drink products are

harmful for those who intake it. Soft drinks are said to have ingredients

that cause health problems such as obesity. In United States, obesity is a

major problem and in public schools, youth are experiencing issues of

obesity.

 Government of different countries are now taking cautions through

regulations of soft drink products, such as banning sale in public schools

and requiring warning labels.

VI. Alternative Courses of Action:

ACA #1 – Coca Cola Company should enter snack division and bring new

products in the market for a change because the consumer cannot stick

with the same old products.

ACA #2 – Coca Cola should maintain and broaden its relationships with their

bottling partners. In addition, Coca Cola Company should tailor or

invest their business approach to the individual marketplace based on its

stage of development.

ACA #3 – Coca-Cola Company research department should improve and

innovate their soft drink products in consistent with health changing

attitude of the consumers such as producing a “health-friendly soft drink”.


ACA #4 – Coca Cola Company should focus on producing and marketing their

healthy beverage products such as water, tea and sports drink.

ACA#1 SWOT Analysis:

Strengths Weaknesses

Strong branding Low profile or non-existent advertising

Strong financial and asset support Negative publicity


available worldwide to take financing
for expansion

Opportunities Threats
Product diversification in categories
such as juice and juice drinks, Intense competition with PepsiCo
bottled water, teas, energy drinks,
coffee and more.

 Government policies may hurdle in


Expansion- reaching all segments expansion

Coca Cola Company should enter snack division and bring new products in the

market for a change because the consumer cannot stick with the same old

products.

ACA#2 SWOT Analysis:

Coca Cola should maintain and broaden its relationships with their bottling

partners and ally companies. In addition, Coca Cola Company should tailor or

invest their business approach to the individual marketplace based on its stage

of development.

Strengths Weaknesses
Sluggish performance in North
World's Leading Brand America
Robust revenue growth in three segment
(Latin America, ‘East, South Asia, and
Pacific Rim)  
Opportunities Threats
Growing bottled water market Dependence on bottling partners
 Bidding for Cadbury’s carbonated soft Parting ways with Nestle on selling
drink business tea
Competitors may access unreached
parts of the world prior to Coca
Cola

ACA#3 SWOT Analysis:

Coca-Cola Company research department should improve and innovate

their soft drink products in consistent with health changing attitude of the

consumers such as producing a “health-friendly soft drink”.

Strengths Weaknesses
World’s Leading Brand Negative brand image of their products
Greater recall in the mind of the Sluggish growth of carbonated
customers beverages
Lack of popularity of many other Coca
 Health conscious products Cola’s brands
Soft drinks is the most profitable
product of the company
Opportunities Threats
Product differentiation Changing health-consciousness attitude
Introduce soft drink with focus of
“health-friendly soft drink” –
eliminate obesity concept  Legal issues
Be recognize as a socially Government policies- for disclosure of
responsible firm health warning
Catering to health consciousness of
people
ACA#4 SWOT Analysis:
Coca Cola Company should focus more on producing and marketing their

healthy beverage products such as water, tea and sports drink.

Strengths Weaknesses
Health-conscious products Negative brand image
Low profile or non-existent
advertising
Opportunities Threats
Entering into or introducing new sports
events to introduce new sport drinks Key competitors (Pepsi Co)
 Catering to health consciousness of
people

VII. Recommendation:

The Coca Cola Company should take the ACA#3 which is to improve and to

innovate their soft drink products to adapt with the health-changing attitude of their

consumers. The Coca Cola Company is globally known as the largest beverage

company, notably, for their brands of soft drinks. People, nowadays, are becoming more

concerned with their health; the company should match such attitude with products that

are health-conscious. Producing a “health-friendly soft drink” is the most effective and

efficient way to increase market share, regain the declining sales and increase profit,

and negate the company’s bad image with regards to their soft drink products. There is

no need for too much marketing effort because there is no other soft drink brand as

immediately recognizable as Coca Cola unlike bringing new products such as snacks,

etc. which is quite unfamiliar with the market regarding Coca Cola Company. Improving

or innovating an established product has more capacity to survive and be successful in

an industry rather than introducing a new product which will need a high degree of
competitive advantage in order to compete with large established competitors. The

Coca Cola Company started and have been recognized with its soft drink products, and

therefore should not let it drop for it was their identity.

VIII. Conclusion/Detailed Action Plan

Program Objective: Coca-Cola Company will improve and innovate carbonated

products in consistent with health changing attitude of customers to maintain

market leadership and profitable growth of the company.

Program Activities:

1. A program objective must be communicated by the top management to its

different departments. This is important to achieve the program objective and to

ensure that the departments will perform in line with the objective.

It is the responsibility of the top management and the allotted time is one week.

2. The finance department will prepare budget for the company and for each

department especially research and development and marketing department. It

usually takes two weeks.

3. A group of expert will be consulted with regards on how to develop and innovate

soft drink products in a healthy way.

4. Survey the marketability of the product.

5. Invest more resources in research and development department in support with

hiring R&D personnel in cooperation with health organization.


6. Create a specialized group of R&D that will focus only in creating health-friendly

soft drinks. R&D activities and other related steps have an allotted time of six

months.

7. The packaging department has to make the packaging attractive so that the

product will meet the eyes of the consumers. It works with the companies bottling

partners to produce an attractive combination.

8. Global distribution of product through creating strategic alliance with other firms.

The distribution should take place within a year.

9. Construct a marketing plan that will ensure that all communication is consistent in

every market.

10. Execute the marketing plan. Advertise and promote the products in the market

through TV ads and posters in stores.

11. Enter into or introduce new health activities to promote health friendly soft drinks.

All these promotional activities will continue until the new product penetrates the

market.

12. Look after the performance of the product in the market and evaluate sales data

in various segments.

Contingency Plans:

If producing these health-friendly soft drinks do not increase profitability

after reasonable time:

 The company should increase effective and high-profile advertisements.


 The company should continue to invest in its product innovation and

improvement.

 The company should stop producing these kinds of soft drinks and just

focus on advertising its less popular products. The firm may cater the

health conscious customers thru their products like juice drinks, teas,

sports drinks, etc.

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