STI COLLEGE ORTIGAS-CAINTA

TASK PERFORMANCE IN
STRATEGIC MANAGEMENT
(MIDTERM)

Submitted by:
Richelle Ann A. Datlag
(BSHM 603)

Submitted to:
Ms. Sherrie Mae Igne
(Instructor)
 I. Company Background
BRIEF HISTORY
Coca-Cola Beverages Philippines, Inc. (CCBPI, formerly Coca-Cola FEMSA Philippines, Inc.) is a
Philippine-based company engaged in the bottling and distribution of Coca-Cola products in the
country. CCBPI is part of the Bottling Investment Group (BIG), The Coca-Cola Company (TCCC)-
owned bottling operation intent on building a foundation for long-term success. Big’s operations
are primarily focused on markets in Southeast Asia, India, and Southwest Asia, covering 14
countries with 39 plants and 16,500 employees, serving 1.8 billion consumers. CCBPI’s current
product portfolio includes 19 brands, such as Coke, Royal, Sprite, Wilkins, Iva, Thunder,
Schweppes, and Minute Maid. It operates nationwide, with 19 manufacturing plants and
approximately 50 sales offices and distribution centers—employing more than 9,700regular
employees.
II. Industry Analysis
SWOT MATRIX
STRENGTHS
 Brand Equity
Coca-Cola is known for its brand identity. The company's longevity in the industry
supports their ownership of leading brand in the soft drink market. They launched its
newest global campaign "Taste the Feeling" reaching brand equity not just here in local
market but also all over the world.

 Marketing Strategies (Emotional Branding)

Coca-Cola has developed modern strategies in marketing their product. Every
endorsement/advertisement targets all ages be it through life programs. Physical
marketing collaterals or social media. Its success depends on their ability to connect with
consumers by providing them with a wide variety of choices to meet their desires,
needs, and lifestyle.
  Financial Strength
Even now, Coca-Cola one of the highly valued companies in the world. Its business
expansion and transformation of operations continue to generate income as they
continue to exist in the industry. Investment in own brands through product advertising,
expansion of beverage portfolio global marketing campaign generates positive numbers
to the company.

WEAKNESSES
 Water Management
Scarcity of water is one global issue directly associated with the business. Coca-Cola
Philippines have recognized this fact and have long informed their investors that water is
a limited natural resource in many parts of the world and its availability is a key
challenge facing their businesses. Thus, not only Coca Cola Philippines but also other
major multinational companies are actively working to improves water availability,
quality and sustainability, for both continuing their operations and for the benefit of the
communities where they operate.

 Health Issues
Coca-Cola is rich in sugar, especially sucrose, which cause dental caries when consumed
regularly. Besides this, the high caloric value contributes to obesity. Both are major
health issues in the developed world. According to the Harvard school of public health in
2015,"people who drink 1-2cans of sugary beverages daily are 26% more likely to
develop type 2 diabetes, medical news today reported on a study claiming 184,000
global deaths each year are down to sugary drink consumption.

OPPORTUNITIES
 Brand Diversification
Coca-Cola may continue to develop their products other than beverages that will fit the
need of different market segments here in the Philippines.

 Commitment to Transparency
Coca-Cola shares up to date financial status, investment disclosure, efforts to address
obesity and activities related to the welfare of the community. Moreover, Filipino citizen
were delighted when Coca-Cola announced its goal to safely return to communities and
nature the same amount of water, they use in the production of beverages by 2020 in
order to empower lives of its market.

THREATS
 Direct competitor offering the same product
 Companies like Pepsi Philippines and RC Cola also penetrated Philippine market share for
soft drinks and they might offer products better than product line of Coca Cola
Philippines.

 Indirect competitors offering nutritious selection

Coca-Cola Philippines' product includes high amount of sugar making it a threat for this
beverage manufacturers since Filipinos start to become health conscious in food/drink
intake.

Competitive Position of Coca-Cola Philippines

Coca cola's other main income stream Coca-Cola manufacturers and sells concentrates,
beverage bases and syrups to bottling operations. Its bottling partners manufacture, package,
merchandise and distribute the final branded beverages to customer and vending partners, who
sell their products to consumers.

PESTEL Analysis of Coca-Cola Philippines

Political Factors
Political analysis examines the current and potential influences from political pressures.
Thonon-alcoholic beverages falls in the category under the FDA and the government plays a role
within the operation of manufacturing these products. In terms of regulations, the government
has the power to set potential fines for the companies that did not meet their standard law
requirement. The changes in laws and regulations, such as accounting standards, taxation
requirements and environmental laws and foreign jurisdictions might affect the book of the
company as well as their entry if foreign country. Other than that, the changes in the nature of
business as non-alcoholic beverages can gain competitive product and pricing pressures and the
ability to improve or maintain the share in sales in global market as a result of action by
competitors. The political conditions of the country are also basis of the study, especially in
internal markets and other governmental changes that affects their ability to penetrate the
developing and emerging markets that involves the political and economic conditions. However,
Coca Cola continuously monitoring the policies and regulations set by the government.
Economic Factors
Economic analysis examines the local, national and world economy impact which is also
includes the issue of recession and inflation rates. The non-alcoholic beverage industry has high
sales in countries outside the U.S according to the Standard and Poor's industry surveys, For
major soft drink companies, there has been economic improvement in many major
international markets, such as Japan, Brazil, and Germany. There markets will continue to play a
major role in the success and stable growth for a majority of the non-alcoholic beverage
industry.
Technological Factors
Technology is the main focus of the analysis where the introduction and the emerging
technological techniques are valued. This creates opportunities for new products and product
improvements in terms of marketing and production. As the technology advances, new
products are introduced into the market. The advancement in technology has led to the
creation of cherry coke in 1985 but consumers still prefer the traditional taste of the original
coke.
Environmental Factors
Environmental analysis examines the local, national and world environmental issues. According
to the data of the Coca cola Company, all of the facilities are strictly monitored according to the
environmental laws imposed by the government.
Legal Factors
Legal aspect focuses on the effect of the national and world legislation. The Coca Cola Company
receives all the rights applicable in the nature of their business and every invention and product
developments are always going into the patented process.

POSTER’S FIVE (5) FORCES

Supplier Power
Coca-Cola suppliers have weak trade. The reason is that there are suppliers and the cost of
switching to Coca-Cola is low. Coca-Cola can easily transition from one supplier to another, but
other suppliers cannot easily abandon Coca-Cola. This can result in losses for all suppliers. There
are several vendors, but individual vendors are small and medium-sized. Moreover, further
integration is a distant opportunity for most vendors. Although it cannot replace raw materials
such as sugar 4,444, there are still 4,444suppliers. Accordingly, the main factors arising from the
supplier’s bargaining power are: large number of suppliers, small to moderately large size of
individual suppliers, Forward integration difficult for the suppliers, switching costs for Coca-Cola
not so high.
Buyer Power
In the case of Coca-Cola, 4,444 individual customers and 4,444 individual customers have low
market power. Individual customers often buy in small quantities and are not targeted at any
particular market. However, the degree of difference between Pepsi and Coca-Cola is low. They
mainly sell similar perfumes. Although CPC is low's loyalty to both brands are very high. Coca-
Cola buyers are not price sensitive. Reverse integration is not possible whether the customer is
an individual or a large retailer. If the seller gains some bargaining power, it is because he is
buying wholesale. Overall, however,4,444 buyers have weak bargaining power.
Competitive Rivalry
There are two major players in the soft drink industry, Coca Cola and Pepsi. There was a fierce
rivalry between the two big players. There are also a few small players, but they do not pose a
major competitive threat. The two main players are roughly the same size and have similar
products and strategies. The degree of difference between the two brands is also low and
therefore the price competition is fierce. Everyone has heard of the Cola Wars before. As such,
the level of competition among existing companies is a powerful force. Coca-Cola maintains a
conspicuous presence on Facebook and other social networking sites such as Twitter. Coca-Cola
harnesses the power of social media to promote new products, test advertising campaigns, and
more. Unlike regular soft drink faucets, freestanding dispensers allow you to create your own
drinks by choosing from over 100 drinks with a variety of combinations. The distributor records
information about the consumer's beverage choices and then sends the data back to Coca-Cola
as a market researcher. Changing Coca-Cola's Business Process is BPR, because as we all know,
Coca-Cola was one of the inventors who popularized soft drinks.
Threat of Substitution
The main substitutes for Coca-Cola products are Pepsi beverages, juices and other hot and cold
beverages. The number of substitutes for Coca-Cola products is high. There are several juices
and other hot and cold beverages on the market. Low switching costs for customers. In addition,
the quality of the substitutes is generally good. So, based on these factors, the threat of
surrogates is very strong.
Threats of New Entrants
In the beverage industry, several factors discourage the entry of new brands. It is impossible to
develop a brand overnight. There are substantial investments to be made. From operations to
marketing, each part requires a significant investment. Some local brands can start it on a
smaller scale, but marketing and hiring qualified staff requires a big investment. Customer
retention in the industry is moderate, and it takes time for a brand to retain customers. So,
while new entrants can compete with brands like coca cola on a smaller or local level, building
such a large brand is an extremely difficult task. Requires both capital and highly skilled human
resources.
ECOSYSTYEM ASSESSMENT TOOL

CUSTOMER SUPPLIER
> Young individual between the ages of 10 and > MSCS Prime Goods, Inc.
35
> ADM
> Students
> Cargill
> Middle class-Families
> Cofco
> Low income persons
> Ingredion
> Senior Citizens
> Tatc & Lyle
> Every consumer in the market
COCA-COLA
COMPETITORS COMPANY COMPLEMENTARY
> Pepsi Co. > Mc Donalds
> Red Bull > KFC
> Tetra Pak > Burger King
> Keurig Dr. Pepper > Taco Bell
> Soylent > Pizza Hut

III. RECOMMENDATIONS
The assessment tools such as SWOT Matrix, PESTEL analysis, Porters five forces and Ecosystem
assessment tool helps the Coca Cola Company to understand market conditions with regards to
demand, supply, financial return and competitiveness of the industry by showing how the
company that owns one of the most well-known brands ever used its advantages in the market
to become the second largest beverage manufacturer in the world. SWOT Matrix identifies all of
the company's most significant advantages/strengths, disadvantages/weaknesses,
opportunities, and threats. In PESTEL analysis, it demonstrates how economic conditions can
affect the company's sales: As a refreshment organization, Coca-Cola has proactively procured a
client base.
Similar carbonated drinks can serve as a foundation for rival businesses. Based on a variety of
internal and external factors, including competitors, customers, suppliers (vendors and
partners), financial strength, future scope, and alternative solutions, the Coca-Cola Five Forces
analysis aids in assessing the company's current position in the market. And lastly is the
Ecosystem assessment tool which assesses the customers, which is the blood life of
organization, complementors, suppliers, and the competitors for the company to formulate a
competitive advantage. Law of Demand tells us that fewer people will be willing and able to buy
fast foods and hence, causing a decrease in the demand for Coca-Cola as well.

IV. MANAGEMENT LESSON LEARNED

This Coca-Cola Industry analysis highlights the fact that the company has several possibilities to
improve its performance and needs to strategize aptly to plan its future growth. They can think
about working on topics that directly affect them. The company has established itself a position
in the beverage industry worldwide, but it can sustain its success by taking a few more steps
such as formulating steps on strengthening the bargaining power of its suppliers. It is so
because the number of suppliers is high and the switching costs for Coca Cola however is low.
Also, thought he quality of the substitute products is also generally good, the threat from
substitutes is strong. Individual customers generally buy small volumes and they are not
concentrated in specific markets either. Then, it must pay attention to diversify healthy drinks
and foods.
Moreover, the company can build strategies to fight its competitors like Tropicana, Keurig Dr.
Pepper, Red Bull, Fever-Tree, Monster Beverage, and its closest rival, the Pepsi company in
which the level of differentiation between the two brands is also low and therefore the price
competition is intense, so, the level of competitive rivalry between the existing firms is a strong
force. Therefore, the aid of market research and proper execution of strategies can help them to
grow in the competitive market.

BIBLIOGRAPHY
Porter Five Forces Analysis on Coca-Cola. (2020, June 30). MMSI BINUS University.
https://mmsi.binus.ac.id/2020/06/30/porter-five-forces-analysis-on-coca-cola/
Coca Cola SWOT Analysis | EdrawMax Online. (n.d.). Edrawsoft.
https://www.edrawmax.com/article/coca-cola-swot-analysis.html
Coca Cola Value Chain Analysis | EdrawMax Online. (n.d.). Edrawsoft.
https://www.edrawmax.com/article/coca-cola-value-chain-analysis.html
Coca-Cola History | The Coca-Cola Company. (n.d.). The Coca-Cola Company. https://www.coca-
colacompany.com/company/history