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Team 2 Presenters: Nancy Nguyen Lydia Herschap

Team 2 Presenters: Nancy Nguyen Lydia Herschap Monica Del Bosque Raquel Vasquez Chris Flockerzy Gabriel Gamez Sarah Doyle Quintin Jordan. Mission, Vision, and Values. Mission:

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Team 2 Presenters: Nancy Nguyen Lydia Herschap

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  1. Team 2 Presenters: Nancy Nguyen Lydia Herschap Monica Del Bosque Raquel Vasquez Chris Flockerzy Gabriel Gamez Sarah Doyle Quintin Jordan

  2. Mission, Vision, and Values Mission: • Our Roadmap starts with our mission, which is enduring. It declares our purpose as a company and serves as the standard against which we weigh our actions and decisions. • To refresh the world • To inspire moments of optimism and happiness • To create value and make a difference Goals in their 2020 Vision: • More than doubling our system revenue while increasing system margins by 2020 • Ensuring that we are the most preferred and trusted beverage partner • Attaining global leadership in corporate sustainability • Managing people, time and money for the greatest effectiveness • Becoming one of the world’s premier employers

  3. Industry and Competitive Situation Analysis • Categorized in the food and nonalcoholic beverage section. • Current environment • Economic • Switching to tap water • Sociological • Health conscious • Demographic • Trade down to private label brands

  4. Financial Performance • Coca-Cola’s strategic priorities to maintain dominant market position: • Drive global beverage leadership • Accelerate innovation • Leverage our balanced geographic portfolio • Lead the Coca-Cola system for growth • Enhance core capabilities of consumer marketing, commercial leadership, and franchise leadership.

  5. Financial Analysis Ratios and Results

  6. Inventory Turnover Example

  7. Debt-to-Equity Example

  8. Financial Position Conclusion • Based on sales growth, Return on Equity and strategic profit model, Net Profit Margin and many other strategic indicators we conclude that Coca-Cola has a fair market position financially. • Going forward Coke will be able to maintain the status of a great company and continue increasing shareholder value.

  9. Coca-Cola In a Competitive Market • When operating in a highly competitive beverage and snack market you find yourself competing in all these following areas: • Pricing • Advertising • Sales • Promotional Programs • Product Innovation • Increased Efficiency • Technology • New Packaging • New Vending and Dispensing Equipment • Brand Trademark and Development Protection

  10. Coca-Cola’s Direct Competition • Dr. Pepper Snapple Groups, Inc. • DPS is a Texas by-product of Cadbury Schweppes, being the third-largest beverage franchiser in the domestic market, with market share of 15% for 2008. • DPS manufactures both beverages and confectionery goods, and sells some of its products in the same geographical regions as does Coke and PepsiCo. In the United States some of DPS’s more significantly well know products are the following: Dr. Pepper, 7Up, Hawaiian Punch, Canada Dry, Snapple (US Operations). • They currently have little foothold on the global economy

  11. Coca-Cola’s Direct Competition cont... • PepsiCo • PepsiCo, is Coca-Cola’s most prominent competitor. • PepsiCo has been found to be the second-largest company in the domestic non-alcoholic beverage industry. Its 31.1% market share in the carbonated soft drink (CSD) market back in 2009 comes only second to KO’s (Coca-Cola) share of 42.8% or 43%. • The corporation is known to develop the following well known brands: Pepsi, Mountain Dew, Gatorade, Aquafina, Tropicana, and Lipton.

  12. Coca-Cola’s vs. Pepsi • For years now Coke and Pepsi have been battling for the title of the leading soda producer. Though both of these companies have a strong presence within the beverage industry and powerful brand names, it is easy to see which of the two has a stronger presence in the global economy.

  13. Coca-Cola & It’s Global Presence • When it comes to international presence, Coca-Cola easily triumphs over PepsiCo. Back in 2009 Coca-Cola generated over 75% of its revenue overseas compared to just over a third of revenue for PepsiCo. One of Coca-Cola’s strongest footholds is found in developing countries. As well as in the continent of Africa. Though some may say that this growing trend is bound to slow down, it is apparent that Coca-Cola has less to lose in the market than PepsiCo as indicated by the following graph:

  14. Coca-Cola’s Revenue by Region

  15. Coca-Cola in Africa • Currently both Coke and Pepsi seem to be seeking new markets and are overstepping international boundaries in order to do so. You now see both soft drink giants continuing to compete in new markets like in Africa. Unfortunately for Pepsi, Coke seems to have already won the battle in Africa, before it even started. • Coca-Cola’s growing popularity in Africa • Problems with distribution • Growing Middle Class

  16. Coca-Cola in India • Coca-Cola and Pepsi struggling in India • Different Market • Coke and Pepsi banned from India in 1977 • Growing Middle Class • Great opportunity due to large population • Pepsi’s Popularity Growth in India

  17. Future Competitive Strategy • Using their resources wisely • Diversify their products • Appeal to the healthier generation • Keep their eye on their competition • Improve their innovative and technological strategies • Find ways to set themselves apart from their competitors

  18. Examples of Coca-Cola’s Thoughts of Innovation

  19. Strengths Coca-Cola is thought to be one of the • Best organized • Best financed • Most aggressive competitor in the industry By investing internationally Coca-Cola has greatly expanded the potential size of the soft drink market

  20. Coca-Cola • It is anticipated that in the future Coca-Cola will make its biggest earnings strides overseas where it already earns about 80% of its operating income • Coca-Cola stays committed to making its products available as soon as the local economies become viable, using its vast resources and experienced management

  21. FEMSA • FEMSA is the largest beverage company in Latin America, exporting its products to the United States, and select countries in Latin America, Europe and Asia • May 2003 Coca-Cola FEMSA acquired Panamerican Beverages, Inc. (Panamco) and is now the second-largest Coca-Cola bottler in the world, accounting for almost 10% of Coca-Cola’ s global sales

  22. Coca-Cola • Diet Coke • Sprite • Fanta • Coca-Cola Zero • Vitamin water • PowerAde • Minute Maid, • Simply • Georgia Coffee Globally, Coke is the number one provider of sparkling beverages, juices, juice drinks and ready-to-drink teas and coffees

  23. Weaknesses • Decline in the bottled water market • Fluctuations in foreign currency in relation to the value of the U.S. dollar • Cost of production inputs/bottler dependence • Brand dependence • Liquidity issues

  24. Decline in the bottled water market • Annual sales have declined since 2008 • Can be attributed to many factors including the current recession and increased environmental consciousness • High number of consumers have looked for cheaper water, switched to tap water, or favored reusable containers to save money and eliminate waste

  25. Foreign currency/Value of the dollar • Plays a huge role in the overall attractiveness of the company • Coke generates 76% of income from outside the U.S. • Affects financial ratios and numbers that are crucial to satisfying current stockholder and future investors

  26. Net Operating Revenues (Taken from Coke’s 10-K filed April 30, 2009)

  27. Operating Income “In the first quarter of 2009, foreign currency exchange rates unfavorably impacted consolidated operating income by approximately 17%, primarily due to a stronger U.S. dollar compared to most foreign currencies, including the Euro, Brazilian real, Mexican peso, and South African rand, which had an unfavorable impact on the Eurasia and Africa, Europe, Latin America, and Bottling Investments operating segments. The unfavorable impact of a stronger U.S. dollar compared to the aforementioned currencies was partially offset by the impact of a weaker U.S. dollar compared to certain foreign currencies, including the Japanese yen, which had a favorable impact on the Pacific and Bottling Investments operating segments.”

  28. Cost of production inputs/Bottler dependence • Price variations affect profit margins and total production costs • Red ocean market leads to price taking as opposed to price setting • Raw material costs of bottlers • Examples: Aluminum, Corn, Plastic

  29. Brand Dependence • Coke only competes in the non-alcoholic beverage market • Heavy dependence on carbonated soft drinks (almost 75% of total volume sold)

  30. Liquidity Issues • Below competitor and market averages in the current and acid test ratios raise questions about the company’s ability to finance debt as well as what types of assets it reports on the balance sheet.

  31. Opportunities • Carbonated Soft Drinks • Marketing Messages • Opportunities overseas • Artificial Sweeteners • More power in the hands of customers and retailers

  32. Changing Consumers Taste • Healthier lifestyles • Demand more from products

  33. Non-carbonated Beverages • Acquisitions • Energy Brands • Innocent • Newer Products • Coconut Water

  34. Recycling • Coca-Cola and New United Resource Recovery Corp

  35. Conclusion • Understand your corporations financial stability • Have a strong competitive strategy • Know your strengths and weaknesses • Go global • Understand your market • Know your competitors • Take advantage of opportunities

  36. Work Cited • "AirTran Airways First to Board FUZE(R) «." The Intoxicologist Is In. Web. 09 Apr. 2010. <http://intoxicologist.wordpress.com/press-release-pages/airtran-airways-first-to-board-fuzer/>. • "CNBC Places Spotlight on Atlanta-based Coca Cola November 11 | Radio & TV Talk." AJC Blogs. Web. 27 Mar. 2010. <http://blogs.ajc.com/radio-tv-talk/2009/11/11/cnbc-places-spotlight-on-atlanta-based-coca-cola-november-11/>. • "Coca-Cola's 2-Liter Bottle Gets Curvier | Serious Eats." Serious Eats: A Food Blog and Community. Web. 27 Mar. 2010. <http://www.seriouseats.com/2008/07/coca-colas-2-two-liter-bottle-redesigned-package.html>. • "Coca-Cola - Corporate Responsibility - Marketplace - Global School Beverage Guidelines." Coca-Cola: The Coca-Cola Company. Web. 16 Apr. 2010. <http://www.thecoca-colacompany.com/citizenship/global_school_beverage_guidelines.html>. •  "Coca-Cola - Corporate Responsibility - Marketplace - Responsible Marketing." Coca-Cola: The Coca-Cola Company. Web. 16 Apr. 2010. <http://www.thecoca-colacompany.com/citizenship/responsible_marketing.html>. • United States Securities and Exchange Commission. 2008. 2008 Annual Report on Form 10-K. http://www.thecoca-colacompany.com/investors/pdfs/form_10K_2008.pdf (April 2, 2010). •  "Vitamin Water Posts -- BloggingStocks." WWW - BloggingStocks. Web. 09 Apr. 2010. <http://www.bloggingstocks.com/tag/Vitamin+Water/>. • “No Fizz”, Web, April 12, 2010 http://www.lbo.lk/fullstory.php?nid=508827961 • “Cola Wars, Cola now Has the Edge”, Web, April 12, 2010. http://money.cnn.com/2007/04/12/magazines/moneymag/colawars.moneymag/in dex.htm?section=money_commentary_sivy • Business Profile: Web, April 2, 2010,http://www.thecoca-colacompany.com/citizenship/pdf/2008-2009_sustainability_review.pdf • “Daily Finance”:Web, April 2, 2010, http://www.dailyfinance.com/company/the-coca- cola-company/ko/nys/top-competitors

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