Mission/Vision of the Coca Cola Company
Clo# 2: Describe and apply different techniques to analyze the
organization’s external environment and assess its impact on strategy
development.
Clo# 3: Analyze the organization’s internal environment, including
resources, capabilities and core competencies that help in making strategic
decisions.
Clo # 4: Develop strategies to achieve and maintain competitive advantage.
Solution
INTRODUCTION
Coca-cola Company is an international manufacturer involved in the production,
packaging, and distribution of the coca cola beverages and other related products. This company
has established globally for its unique taste. Most of the other companies who produce beverages
have ever tried to emulate this company but all has been in vain since they have not yet
understood the unique recipe used by coca cola. The enterprise utilizes a franchised system in the
production of its major product, which is then distributed to the various bottlers situated all over
the world (Pendergrast, 2013). Coke is the main beverage produced by this firm. Other drinks,
which are also soft, include Dasani water, Fanta, sprite, Minute Maid among others.
In the Middle East, the sale of the products has risen due to the impact of the successful
partnership that was achieved in 2012 between the Aujan Coca-Cola Beverage Company
(ACCBC) and Rani refreshments. This has enabled the company to appear among the top
hundred enterprises in Saudi Arabia where it serves a market of more than ten states including
UAE, Kuwait, Omani, Egypt and Iraq and many more. This partnership has recorded to the
leading beverage distributor in the United Arab Emirates.
The biggest competitor of this company is Pepsi whose vision is aims at delivering top
financial performance while taking into consideration the sustainability of the business on the
environment and society, while the mission aims at producing affordable and healthy beverages
and foodstuffs distributed over the world (PEPSICO, 2014). Another competitor to this Coca
Cola Company is the Nestle whose vision is commitment to enhance people’s lives by offering
tastier and healthier food and beverage choices at all stages of life and at all times of day. Its
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mission is to be the globally recognized leading Nutrition health and Wellness Company, and the
industry reference for financial performance, trusted by all stakeholders.
Mission/Vision of the Coca Cola Company
The vision of this company is to create memorable moments. The mission statement has
four parts targeting the consumer, the community, partners, and shareholders of the company.
According to the company’s website, Aujan Group Holding (2015), the mission of the company
aims at offering quality services and products for the people and the communities it serves.
Moreover, it aims at ensuring that the partners and shareholders feel part of the team that seeks to
deliver profitable regarding investments while making enduring relationships for the long-term
success of the company. In addition, the enterprise embraces the vision and mission of the entire
coca cola company in ensuring that they inspirational all over the world, while, creating
moments of happiness and emerging to be unique.
These two important statements emanating from the competitors are very close and much
competitive based on the reality that, each is trying to meet its goals, due to this; either can be
displaced out of the market. This implies that strong and brave management strategies need to be
formulated and implemented in advance to ensure the outperformance of this company.
INTERNAL ASSESSMENT
Marketing Strategy
The main marketing approaches, which have been adopted by the company is the
availability, economical and stature of the brand. This has significantly helped the organization
in securing a wider market internationally. The company also acknowledges the essentiality of
sustainable development and thus, it keeps pace with the growing market to ensure its future
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continuation. The company does not lag behind in assessing its plans, products, and the planning.
These once incorporated together they work very well towards the achievement of the set goals
and objectives.
The company should incorporate training sessions on mechanisms and planning to all
associates to ensure excellent performance at the ground. It should also ensure development and
nurturing of necessary cultures and capabilities and enlist all the stakeholders in the headway via
a leadership group.
Internal Factor Evaluation (IFE) Matrix
Internal Factor Evaluation (IFE) matrix is a strategy-formulation tool that is of much
importance in evaluating how a firm is progressing in terms of connection to the established
internal strengths and weaknesses of the particular units (Shojaei, et al 2013).
Internal Strengths
Largest bottler in the middle east
Strong management team
Supplies major airlines
Increasing cash inflow
Good reputation
Highly competitive
Very loyal employees
Strategic geographical location
Record of minimal complaints
Financial ratios
Weight (%) rating Weighted score
12
12
4
8
3
5
3
3
3
4
4
4
3
4
4
3
4
4
2
5
0.48
0.48
0.12
0.32
0.12
0.15
0.12
0.12
0.06
0.20
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Internal Weaknesses
Market saturation
Limited diversification
Absence of strategic partner
20
15
6
1
2
1
0.40
0.30
0.06
Major weaknesses(1), minor weaknesses(2), minor strengths(3), major strengths(4)
TOTAL WEIGHTED SCORE 2.91
The score is 2.79, which implies that the organization has a strong internal position.
EXTERNAL ASSESSMENT
External Factor Evaluation (EFE) matrix is a strategic management appliance mostly
utilized to access the pace of a company’s development. It is of importance in clear-cutting and
computing the opportunities and threats facing a company. It differs from IFE in that, while IFE
deals with the internal factors, EFE is concerned with the external factors, (Shojaei, et al 2013).
Opportunities
Company Consolidation
Increase in travel to other UAE states
Increased demand in UAE
Establishment of new branches in UAE
Growth of low-cost sector
Weight (%)
12
12
12
16
6
Rating
4
3
2
4
4
Weighted score
0.36
0.36
0.36
0.64
0.24
Threats
Government oversight 5 3 0.15
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Economic downturn
Rise in the price of inputs
Increase in taxation
Insecurity
15
8
6
9
2
1
2
3
0.30
0.08
0.12
0.27
Poor (1), below average (2), above average (3), superior (4)
TOTAL SCORE 2.81
Then the total weighted score is 2.81, which shows that the company has very
slightly less than mean ability to respond to external factors an indication that it has a strong
external position. From the matrix, the launching of other company branches in different parts of
the world can lead to a substantial positive change in returns. The major threatening issue that
the enterprise should look at with deep insight is the insecurity due to the increasing rate of
terrorism attacks worldwide that can lead to a cutback in the overall sales.
Aujan Coca-Cola Beverage Company (ACCBC) has several soft drink beverage
competitor companies in the United Arab Emirates. Two of these companies are the Agthia
Group PJSC and Al Rawabi Company. Strategies for emerging out in the market and sustaining
the market position should be established to ensure that the company is in pace with the
competition forces.
STRATEGY FORMULATION
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SWOT Analysis
SWOT analysis is a structured methodology used for the sole purpose of evaluating the
strengths, weaknesses, opportunities, and threats that are involved in a company. It is a procedure
utilized in analyzing the competitiveness position of a corporation using its strengths,
weaknesses, opportunities and the threats to assess both the external and internal aspects of the
functioning of a particular business unit. This section aims at providing information on Coca
Cola's SWOT matrix.
Strengths
Coca Cola being a global brand has a very broad market share. Besides, the brand has
been able to exploit most of the opportunities at disposal in every market that they invest. One of
its strengths is that it has a well-established supply chain (Pendergrast, 2013). The Coca Cola in
UAE supplies products in UAE and regions beyond providing the company with a platform to
compete effectively with the consumers' satisfaction. It is also important to note that the climatic
condition in the UAE, especially in the afternoon, is scalding. As a result, customers' demand for
their fluids like soda and water relatively increases. This has a remarkable impact on the returns
earned. Therefore, the company has managed to identify this excellent opportunity and, as a
result, has designed a supply chain that allows it to reach out to a vast market.
Coca Cola has a moving brand image and therefore, convincing the customers to
consume the company's products is more or less quite an easy process to go through by sales
personnel. The company has gained an adequate market understanding and exposure for quite a
long period compared to their competitors supplying substitute products. This strong brand
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image has also provided Coca Cola Company with a platform to withstand pressures from the
increasing market demand without imperiling the quality of their products.
Other strengths include; location of the company in a geographical area characterized by
stable hot and dry weather conditions (climate) which increase the demand for their products and
loyal employees who own the company with a passion.
Weaknesses
The company is dealing with a lot of pressure trying to compete with other emerging
enterprises in the same market. This is mainly because a majority of these upcoming competitors
are using price as an incentive to convince customers to consume their products whose quality
does not even near that of coca cola. On the other hand, the price model adopted by Coca Cola
aims at making sure that the company maximizes on average profits and, therefore, cannot go
beyond a certain price level. The company has hundreds of products being produced while their
competitors major in a few products. It, therefore, becomes almost impossible for the company
to compete effectively when the pricing approach is considered.
Opportunities
The UAE market is growing and expanding periodically and actually; prospects show
that the market is likely to continue developing with one of the major reasons for the increase
being the utilization of the products. However, for Coca Cola to capitalize their markets in UAE,
it is very crucial for this company to revise its pricing models so that it can be able to compete
efficiently with the present and even the upcoming competitors in the market. With alterations in
the technology, the company has to embrace the emerging new technologies and adjust the
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production systems to match with the technology development towards producing quality
products based on customer requirements and level of satisfaction needs (CSIMarket, 2014).
Threats
The biggest threat for Coca Cola is the issue of the UAE subscription to the principle of
free market, therefore, inducing freedom for new companies to join the market. Coca Cola has
the advantage of producing a variety of products and, therefore, has to ensure that all are of good
quality. The freedom to join the market is eventually resulting to the company losing part of its
marketing share. Other threats include taxation, increase in terrorism, government oversight, and
economic downturn that may be due to inflation problems.
The following table represents a SWOT matrix with the above-discussed strategies.
Strengths
Largest beverage bottler in the Middle East
Strong management group
Rising cash inflow
Appraisable reputation
Remarkably competitive
Loyal employees
Strategically located
Very minimal complaints
Weaknesses
Saturation of the available market
Restricted diversification
No reliable partner
Opportunities
Company Consolidation
Increase in travel to other states
Threats
Government oversight
Economic downturn
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Risen demand in UAE
Establishment of new branches in UAE
Growth of low-cost sector
High cost of inputs
High Taxation
Insecurity
SPACE Matrix
A SPACE matrix is an instrument in strategic project management used to analyze the
market position of an organization. It is majorly used in determining the kind of a strategy that a
particular company or organization is in a position to undertake. The main aim of the matrix is to
provide a framework to some of the strategic options that the company can take towards
improving its performance in the market. The term SPACE is an abbreviation from the Strategic,
Position, and Action Evaluation Matrix.
INTERNAL STRATEGIC POSITION
Competitive Advantage (CA)
(-6 worst, -1 best)
-1 Quality of the product
-1 Market share
-1 Brand
-1 Product life cycle
Average -1.0
EXTERNAL STRATEGIC POSITION
Industry Strength (IS)
(+1 worst, +6 best)
+6 Entrance barrier
+5 Growth potential
+1 Financing accessibility
+5 Consolidation
Average +4.25
Total X-axis score: 4.0
Financial Strength (FS)
(+1 worst, +6 best)
+6 Cash inflow
Environmental Stability (ES)
(-6 worst, -1 best)
-2 Inflation
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+5 Return on Investment
+5 Turnover
+3 Working Capital
Average 4.5
-1 Technology
-3 Competitive pressures
-4 Taxation
Average -2.5
Total Y-axis score : 2.2
SPACE Matrix
The matrix above was developed using the calculated values for the competitive
advantage (CA), industry strength (IS) on the X-axis and the environmental stability (ES) and
financial strength on the Y-axis. The SPACE matrix shows that the Coca Cola Company should
employ an aggressive strategy (point of intersection between the X and Y-axes values). The
company has efficient competing ability in the market. It requires using of its internal strengths
to create a market penetration and strategize a development mechanism.
BCG Matrix
Aggressive Conservative
Competitive Defensive
+1.00
+6.00
+1.00
+6.00
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BCG matrix is used in determining the life cycle theory of a product to enable a company
or organization in prioritizing which products in the particular company's products variety is
often getting funding and attention. The matrix is laid on the prioritization of the organization’s
commodities, which results into quadric categories (Ioana, Mirea, & Bălescu, 2009). Each
product has its life span, and each stage of life represents a distinctive kind and level of risk and
returns to the organization or company. A company should always be ensuring that there is a
maintenance of a balanced products portfolio, and this should put into consideration both high
growth and low growth products.
This mold enables categorization of brands into four in a case of the specific company.
BCG STARS stand the category composed of products holding market share in a developing
merchandising arena. BCG QUESTION MARKS stand for the items with a little share in a
growing arena. These products are not familiar to the clients. They tend to have a high demand
but with relatively reduced returns due the restricted market, they cover. The best handling
mechanism for the particular commodities is by investing more in them to achieve a market
portion in the end.
BCG CASH COWS categorizes the very elevated market share products in a
sophisticated market. They lead to realization of a handful of reaps if they compete well since
they have a high-profit margin. Most business units and companies exaggerate on these items.
BCG DOGS: they include products with little growth markets hence; they have a very small
portion in the market. These kinds of commodities should be minimized or completely avoided;
as they add no value to final return, otherwise they result in losses.
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Adopted from (Stern, C. W., & Deimler, M. S. (Eds.). 2012
Grand Strategy Matrix
This strategy model is developed by the process of examining the ability of a company to
grow slowly or fast while checking on the competitive strengths and weaknesses. With this
matrix, the entire organization is divided into four quadrants. The strategies to be considered for
a given group are listed in a sequential manner to increase the attractiveness of each,
(Komendova, 2013).
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Quadrant –1 contains the conditions for the company in a quick-growing market. The company
should focus on current market and appropriate integration and development strategies to be
implemented accordingly.
RAPID MARKET
GROWTH
SLOW MARKET
GROWTH
QUADRAND II
Market development
Market penetration
Product development
Divestiture
Horizontal integration
Liquidation
QUADRANT I
Market development
Market penetration
Product development
Horizontal integration
Horizontal integration
Concentric diversification
QUADRANT III
Retrenchment
Concentric diversification
Conglomerate diversification
Horizontal diversification
Liquidation
QUANDRANT IV
Horizontal diversification
Joint ventures
Conglomerate diversification
WEAK COMPETITIVE
POSITION
STRONG
COMPETITIVE
POSITION
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Quadrant -2 carries conditions for the company having a weak competitive situation and a rapid
market growth. The enterprise at this point needs to evaluate the present-day access to the market
seriously.
Quadrant-3 contains the corporation’s reduced competitiveness and gradual market growth. In
this type of a situation, the enterprise competes in a slow-growth industry and has a weak ability
to impose competition. Drastic variations are needed to avoid any possible liquidation.
Quadrant-4 has the organization's strongest competitive situation and a slow market
development. The company has the potential to launch different programs in the promising
development areas, due to the high cash inflow and reduced internal growth needs.
CONCLUSION
The SWOT strategy provides the strengths, weaknesses, opportunities, and threats
associated with the company. Understanding of these factors is very much useful for it
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necessitates the management to identify the areas, which need to be improved. Strategic, Position
and Action Evaluation (SPACE) provides the knowledge of where the company is and where it
needs to pursue more to achieve the main objective of every business organization of making a
profit.
The BCG is a sound strategy since it helps the company management in analyzing the
products that have little or no market value to avoid them and maximize on the ones, which have
a market high value and competition. Grand strategy matrix helps in determining the growth of
the company and hence useful to determine if the growth rate is fast or slow and hence adjust
where need be.
The above strategies are recommendable for utilization in the administration of the
company though not much adequate. They obligate to be strengthened by combining them with
other systems.
References
Aujan Group Holding. (2015). About Aujan Group Holding. Retrieved from
http://www.aujan.com/about-us/vision-mission/
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Baldwin, C. Y., Clark, K. B., Magretta, J., Dyer, J. H., & Fisher, M. L. (2000). Harvard business
review on managing the value chain. Harvard Business Press.
CSIMarket, Inc. (2014). Coca Cola, Co (KO) Dividend Comparisons to Industry Sector and
S&P. Retrieved from http://csimarket.com/stocks/KO-Dividend-Comparisons.html
Ioana, A., Mirea, V., & Bălescu, C. (2009). Analysis of service quality management in the
materials industry using the bcg matrix method. Amfiteatru Economic Review, 11(26),
270-276. http://www.amfiteatrueconomic.ro/temp/article_866.pdf
Komendova, A. A. (2013). Viral Marketing Campaign Plan and Its Results: Relationship Games
Ltd.
http://www.theseus.fi/bitstream/handle/10024/68020/Komendova_Alena_Alisa.pdf?sequ
ence=1
Natarajan, R., & Barger, B. (2008). Improving performance through the Baldrige organizational
profile: An application in business education. Academy of Educational Leadership
Journal, 12(1), 63. http://www.innovation.cc/news/innovation-conference/longford.pdf
Pendergrast, M. (2013). For God, country, and Coca-Cola: The definitive history of the great
American soft drink and the company that makes it. Basic Books.
https://books.google.com/books?hl=en&lr=&id=iJgWBQAAQBAJ&oi=fnd&pg=PR9&d
q=For+God,+country+and+CocaCola:+the+definitive+history+of+the+great+American+
soft+drink+and+the+company+that+makes+it&ots=V2-
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PEPSICO. (2014). Our Mission and Values | PepsiCo.com. Retrieved from
http://www.pepsico.com/Purpose/Our-Mission-and-Values
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Shojaei, M., Abbaszade, S., & Aghaei, S. S. (2013). Using analytical network process (anp)
method to prioritize strategies resulted from SWOT matrix case study: neda samak
ashena company. Interdisciplinary Journal of Contemporary Research in Business, 4(9),
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origsite=gscholar
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concepts and new perspectives. John Wiley & Sons.
https://books.google.com/books?hl=en&lr=&id=nBOF0KEXok8C&oi=fnd&pg=PT13&d
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