STRATEGEIS FOR

SUSTAINABLE
BUSINESS

STRATEGIC PLANNING FOR

COCA-COLA

ANANDITA KAR
DENVER MAGDOL NOGUEIRO
REETICA PASSI
 EXECUTIVE SUMMARY

In this report, an inner view of Coca-Cola Company has been revealed. Here, different types
of strategy analysis tools have been used and we try to find out the actual position or
environment of the Coca-Cola Company. Basically, we use different types of the matrix such
as SWOT matrix, EFE matrix, IFE matrix, BCG matrix and QSPM matrix for this purpose.
At the beginning of the report we have covered the background of Coca-Cola and then move
to try to show the company's performance by using EFE matrix, IFE matrix, SWOT analysis
which indicates the strengths, weaknesses, opportunities, and threats of the Coca-Cola
Company. On the other hand, the Quantitative Strategic Planning Matrix (QSPM) is basically
used to find out the most suitable strategies of Coca-Cola Company. It is expected that by
implementing these strategies Coca-Cola Company will be able to avail its opportunities and
avoid its threats by gaining competitive advantages.
 CONTENTS

1. About Coca-Cola

1.1 The Coca-Cola Company

1.2 About Coca-Cola India
1.3 Coca-Cola Products
1.4 Coca-Cola’s Competitors

2. The Input Stage

2.1 External Factor Evaluation

2.2 Internal Factor Evaluation
2.3 Competitive Profile Matrix

3. Matching Stage

3.1 SO-ST-WO-WT Strategy

3.2 Space Matrix
3.3 BCG Matrix
3.4 IE Matrix
3.5 GSM Matrix

4. Decision Stage

4.1 QSPM Matrix

4.2 Suggestions
 CHAPTER 1

ABOUT COCA-COLA

1.1 THE COCA-COLA COMPANY

The Coca-Cola Company (NYSE: KO) is a total beverage company, offering over 500 brands in more
than 200 countries and territories. In addition to the company’s Coca-Cola brands, our portfolio
includes some of the world’s most valuable beverage brands, such as AdeS soy-based beverages,
Ayataka green tea, Dasani waters, Del Valle juices and nectars, Fanta, Georgia coffee, Gold Peak teas
and coffees, Honest Tea, innocent smoothies and juices, Minute Maid juices, Powerade sports drinks,
Simply juices, smart water, Sprite, vitamin water and ZICO coconut water. We’re constantly
transforming our portfolio, from reducing sugar in our drinks to bringing innovative new products to
market. We’re also working to reduce our environmental impact by replenishing water and promoting
recycling. With our bottling partners, we employ more than 700,000 people, helping bring economic
opportunity to local communities worldwide. Learn more at Coca-Cola Journey at www.coca-
colacompany.com and follow us on Twitter, Instagram, Facebook and LinkedIn.

1.2 ABOUT COCA-COLA INDIA

Coca-Cola India, is one of the country’s leading beverage companies, offering a range of healthy,
safe, high quality, refreshing beverage options to consumers. Ever since its re-entry in 1993, the
Company has gone on to establish an unmatched portfolio of beverages, refreshing consumers with its
leading beverage brands like Coca-Cola, Coca-Cola Zero, Diet Coke, Thums Up, Fanta, Fanta Green
Mango, Limca, Sprite, Sprite Zero, VIO Flavored Milk, Maaza, Minute Maid range of juices, Georgia
and Georgia Gold range of hot and cold tea and coffee options, Kinley and Bonaqua packaged
drinking water, Kinley Club Soda and BURN energy drink. The Company along with its bottling
partners, through a strong network of over 2.6 million retail outlets, touches the lives of millions of
consumers. Its brands are some of the most preferred and most sold beverages in the country.

The Coca-Cola system in India has already invested $2 billion till 2011, since its re-entry into India.
The company will be investing another $5 billion till the year 2020. The Coca-Cola system in India
directly employs over 25,000 people including those on contract. The system has created indirect
employment for more than 1,50,000 people in related industries through its vast procurement, supply
and distribution system. We strive to ensure that our work environment is safe and inclusive and that
there are plentiful opportunities for our people in India and across the world.

With an enduring commitment to building sustainable communities, our Company is focused on

initiatives that reduce our environmental footprint, support active, healthy living, create a safe,
inclusive work environment for our associates, and contribute to the development of the communities
where we operate. Some of the Company’s flagship community development programmes include the
“Support My School” programme, the “Parivartan” retailer training programme, women
empowerment as a part of the global 5BY20 campaign etc.
1.2 COCA-COLA PRODUCTS

Coca-Cola has a varied list of beverages that mainly cover the following segments –

 Carbonated Drinks
(Coca Cola, Coke Zero, Diet Coke, Thums Up, rani Float Sprite, Fanta, Limca)
 Juices
(Minute Maid and Maaza)
 Water
(Smart Water, Dasani, Vitamin Water and Kinley)
 RTD Tea
(Fuze Tea, Gold Peak)
 Energy Drinks
(Powderade)

1.4 COCA-COLA’S COMPETITORS

The main competitors of Coca-Cola are-

Pepsi

The biggest and closest competitor of Coca-Cola; its arch rival PepsiCo was formed after the merger
of Pepsi and Frito lay in 1965. The brand has seen growth in organic revenue in 2017. It has 20 billion
dollar brands in its product portfolio. US is its largest market where it is engaged in intense
competition with Coca-Cola. Its Net revenue in 2017 was 63.5 Billion Dollars and Gross Profit 28.8
Billion dollars (The Coca-Cola Company, 2018). The two brands compete across several categories
including sod beverages, health, and energy drinks as well as bottled water and juices. In fact, Pepsi is
the toughest competitor of Coca-Cola and their rivalry has come to be termed as Cola wars.

Red Bull

Red Bull despite its limited product portfolio is a major competitor for the energy drink products of
Coca-Cola. It is a famous brand that sells across 171 countries and is now focusing on core markets of
western Europe and USA for farther growth. In 2017, the brand sold more than 6.3 Billion cans and
its turnover reached 6.282 Billion Euros (Coca-cola.co.uk, 2018). Red Bull saw its sales booming in
2017 in five major markets including Turkey, India, Netherlands, Northern Europe, and United
Kingdom. This has led to better financial figures including operating profit and revenues for Red Bull
in 2017. Red Bull is the toughest competitor for the energy drinks by Coca-Cola.

Nestle

While Nestle is not a direct competitor of Coca-Cola, still it competes with the brand across some
specific product categories like bottled water. Its Nestle Pure Life and Poland Spring are two bottled
water brands that are quite popular and major competitors for Coca Cola’s Dasani.

Parle

Parle is an Indian brand and competes with Coca-Cola across some specific product categories that
include bottled water and juices. Parle’s Frooty, Appy and Bailey are major competitors of Coca
Cola’s minute maid and other juice products as well as juice drinks and bottled waters in the Indian
market.
 CHAPTER 2

THE INPUT STAGE

The input stage involves analysing your company, the industry and the competitors in the industry.
This stage involves the external and internal analysis that discusses the factors of competitive
structure, competitive position, dynamics and history of the company. The core objective of the
external analysis is to find out the opportunities and threats in an industry or the segment that will
result in profitability, volatility, and growth. While the core objective of the internal analysis is to
understand the strengths and weaknesses of the company.

2.1 EXTERNAL FACTOR EVALUATION

An EFE Matrix permits strategists to review and calculate outside impact factors in terms of political,
governmental, legal, cultural, demographic, economic, social, environmental, technological, and
competitive information. Table 2.1 shows the External Factor Evaluation Matrix for Coca-Cola.
Overall, Coca-Cola receives a 3.41 total weighted score, which indicating it is doing quite well with
taking advantage of the external opportunities and avoiding the threats from industry and rivals.

Table 2.1: External Factor Evaluation

KEY EXTERNAL WEIGHT RATING (1-4) WEIGHTED
FACTORS SCORE

Opportunities

Growing demand for 0.15 4 0.6

food and non-
alcoholic beverage
industry

Fastest growing 0.05 3 0.15

economy

Supply chain and 0.03 3 0.09

distribution

Cheap labour market 0.04 2 0.08

India has the 4th 0.08 3 0.24

smart water market

Threats

Intense Competition - 0.17 4 0.68

Direct & Indirect

Water scarcity 0.14 3 0.42

Increasing health- 0.16 4 0.64

conscious attitude of
 public

Inflation 0.03 2 0.06

Bad publicity from 0.15 3 0.45

lawsuits

TOTAL 1 3.41

2.1.1 OPPURTUNITIES

1. Fastest growing economy

India is the fastest-growing trillion-dollar economy in the world and the fifth-largest overall,
with a nominal GDP of $2.94 trillion. Economic growth means an increase in real GDP – an
increase in the value of national output, income and expenditure. Essentially the benefit of
economic growth is higher living standards – higher real incomes and the ability to devote
more resources to various things.

2. Growing demand for food and beverage industry

Food processing is considered as one of the fastest growing industries in India. With
increasing disposable income of people, the demand for the food and beverage industry is
increasing. The Indian food and grocery market is the world’s sixth largest, with retail
contributing 70 per cent of the sales. The Indian food processing industry accounts for 32 per
cent of the country’s total food market, one of the largest industries in India and is ranked
fifth in terms of production, consumption, export and expected growth. Total consumption of
the food and beverage segment in India expected to increase from US$ 369 billion to
US$1.142 trillion by 2025. The growth of the industry is supported by the availability of a
large raw material production base. India is the largest producer of milk and various fruits,
tea, sugarcane, etc. This comes to an advantage to the Coca Cola company as it can make use
of the high supply of these raw materials to meet the growing demand.

3. Supply chain and distribution system

In FMCG sector, one of the most critical success factors is the ability to build, develop, and
maintain a robust distribution network. Availability near the consumer is vital for wider
penetration as most products are low unit value products and frequently purchased. Out of
reach is out of mind is out of consideration set. Distribution network refers to the consumer
buying points where products are available (almost always). It takes enormous time and effort
to not only build a chain of stockists, retailers, dealer's etc but also improving upon their
efficiency and effectiveness. India has a

4. Cheap labour Market

India is a highly populated country and there is an excess supply of labour. Private investment
in India is also low, there are lower and lower job opportunities for the masses. Hence, along
with excess supply of labour, the demand for labour is also low. We all know what happens
with higher supply and lower demand. Price falls. As a result labour in India is cheap.
 This comes to an advantage for MNCs as they can make use of this cheap labour to
manufacture their goods and keep the costing for their products at the lowest.

5. Smart Water Market

India is the 4th largest Water market in the World. With growing demand for better quality
water, consumers would prefer buying bottles water.

2.1.2 THREATS

1. Direct and indirect intense competition

Coca-Cola faces direct intense competition from Pepsico in the non-alcoholic beverage
segments of carbonated soda drinks, nutrition and energy drinks along with bottled water and
juices. Pepsico is their toughest competitor with their rivalry known as Cola Wars. But Coca-
Cola faces indirect intense competition from Red Bull as in the energy drinks segments as
well as from Nestle and Parle in bottled water and juices segments.

2. Water Scarcity

All companies including Coca-Cola generating revenue in the beverage industry face the
major concern of water scarcity. Water is the primary resource to produce a beverage and its
ineffective utilization can lead to over consumption and over dependence for the beverage
companies to sustain. The brand image can be significantly impacted if sustainable water
practices are not given due emphasis.

3. Increasing health conscious attitude

Consumers today are growing more conscious over their health, nutrition and fitness with a
significant growth in the market segments of nutrition-energy and energy drinks. Consumers
desire less or zero calories, sugar and added preservatives among other such substances to
avoid obesity and other health related ailments.

4. Declining sales of carbonated drinks

Carbonated soda drinks generally contain a concerning amount of calories, fats, sugar and
added preservatives among others to enhance the taste of the beverage. Intake of such drinks
results in the lack of essential nutrients along with accumulation of harmful substances in the
average consumer leading to health ailments.as obesity levels are increasing globally, these
drinks are now less desired by consumers resulting in the increasing sales in nutrition, energy
and sport drinks.

5. Bad publicity

Coca-Cola’s brand image was severely impacted by the several lawsuits filed by the village
councils in Kerala regarding the over consumption of water for their beverage production to
meet the distribution of their vast product portfolio at various geographical locations leading
to water shortages for the villages near the plant. Several protests were staged against the
Coca Cola company by citizens and NGOs. The company was even subjected to lawsuits
 related to environmental and quality standards over the use of harmful pesticides in their
products.

2.2 INTERNAL FACTOR EVALUATION

An IFE Matrix sums up and appraises the main strengths and weaknesses in the functional areas of a
firm such as marketing, finance, operation, R&D and so on. Moreover, The IFE Matrix also offers a
foundation for identifying and evaluating relationships among those areas. Intuitive judgments are
required in assembling an IFE Matrix. Overall, Coca-Cola receives a 3.52 total weighted score, which
indicating it is quite competitive in terms of its operations, marketing, finance, and so on (See Table
2.2).

Table 2.2: External Factor Evaluation

KEY INTERNAL WEIGHT RATING (1-4) WEIGHTED
FACTORS SCORE

Strengths

Innovation & 0.08 3 0.24

Technological
Advancements

Brand image and 0.15 4 0.6

Customer Loyalty

Market leader with high 0.13 4 0.52

brand value

Aggressive marketing 0.07 3 0.21

Strong CSR Practices 0.09 3 0.27

Weaknesses

Product Diversification 0.12 3 0.36

Less emphasis on 0.14 4 0.56

nutrition & energy
beverages

High water 0.16 4 0.64

consumption

Sales and revenue 0.06 2 0.12

decline of carbonated
drinks

TOTAL 1 3.52

2.2.1 STRENGTHS
 1. Innovation and Technological Advancements

The rise of new technologies in the 21st century including digitization and artificial
intelligence boosts the marketing capabilities of Coca Cola. They were pioneers in utilizing
bottling companies to licence their drinks, utilizing bottle cartons making distribution easier,
utilizing top opening coolers to dispense their bottled drinks along with automatic soda
dispensers that operated merely with the pull of the handle.

2. Brand Image and Customer Loyalty

Being one of the most influential brands in the world, Coca Cola has successfully formed its
brand image and identity on account of their logo, unique and identifiable formula and
advertisements. Their brand showcases the universal value of happiness, displayed by the
marketing campaign "Taste the Feeling". The Coca Cola Company has a B2C approach to
business as they introduced Diet Coke to cater to consumers who wanted a lighter taste and
Coca-Cola No Sugar for people conscious of sugar intake but at the same time wanted the
taste of classic Coke. This has resulted in retaining a large and loyal consumer base.

3. Market Leader with high Brand Value

Coca-Cola is the market leader in the Non alcoholic ready to drink beverage industry wherein
it showcases products in the industry segments of carbonated soft drinks, nutrition and energy
drinks, bottled water, juices, RTD tea and coffee among others with a market share of 49.9%
as of 2019. The Coca Cola company has high brand value solely based on quality assurance
with a vast product and brand portfolio of over 3500 brands geographically spread over more
than 200 locations of which there are over 15 brands that generate a revenue of over 1 billion
USD annually that include Coca Cola, Fanta, Sprite, Diet Coke, Minute Maid, Schweppes,
Dasani, Coca Cola Zero among others.

4. Aggressive Marketing

In its advertising and marketing arsenal, the Coca Cola company utilizes TV commercials
very effectively in today's digital-driven marketplace. Their global Taste the Feeling
campaign leaned heavily on television ads. Their Quality Drink campaign included having
trained service people ensuring strict standards of uniform quality product of Coca Cola being
served at soda fountains. A good number of television spots showcase universal stories of
young people enjoying their drinks as a part of genuine everyday moments. Coca Cola even
employs competitive pricing to always have an edge over Pepsico.

5. Corporate Social Responsibility

The company is committed to sustainable development and inclusive growth conducting its
CSR initiatives on issues and concerns like water, environment, healthy living, agriculture,
recycling, grass roots education, social advancement and promoting gender equality and
empowerment of women over the past several years.

2.2.2 WEAKNESSES
 1. Product Diversification

Coca-Cola has been extremely loyal to the beverage industry without diversifying into the
snacks segment as in the case of Pepsico with Lays and Kurkure which acts as an additional
revenue stream. This has contributed to Coca-Cola’s loss in market share.

2. Less emphasis on Nutrition and Energy Beverages

Coca-Cola does not generate a lot of revenue from the market segment of Nutrition and
Energy Beverages containing products like Powerade and so the company does not place a
considerable amount of emphasis on its performance. With a lot of consumers now becoming
heath and fitness conscious, this is adversely affecting Coca-Cola.

3. High water consumption

Coca-Cola is heavily reliant on water for the production and distribution of its vast non-
alcoholic beverage portfolio.

4. Sales and revenue decline in the carbonated drinks

Coca-Cola generates most of its revenue from the market segments of Carbonated soft drinks
that contain a lot of calories and sugar. With the modern consumer becoming more health and
development nutrition conscious, naturally the sales in this segment have been drastically
impacted.

2.3 COMPETITIVE PROFILE MATRIX

The Competitive Profile Matrix identifies a company’s key rivals and assesses them on the basis of
key success areas. The most important factors are market share, brand equity, distribution network,
advertising, product quality, and global presence. Coca-Cola is currently the market leader in the non-
alcohol beverage industry with the highest market share in India Coca-Cola is the market leader in
most of the beverage categories. Currently, it is a market share of 31.4% while PepsiCo is at 17.4%. It
also has the world’s largest distribution which helps it to be present in 200 countries globally
compared to Pepsi’s 150. Thus, it scores a higher ranking in both the factors. Moreover, it has a strong
brand equity since it is loved by people globally and has a high popularity. This is the reason why it
has a full score in CPM. Furthermore, it focuses on social responsibility and indulges in a gambit of
activities under its strong CSR department. These include water stewardship, waste management, etc.
It also has a very strong emphasis on advertising which is important to achieve differentiation from its
strong competitor, Pepsi. It has an effective advertising campaign as it sponsors different
teams and games is also featured in countless television programs and films. Overall, Coca-
Cola has a great competitive edge compared to Pepsi Co.

Table 2.3: External Factor Evaluation

CPM COCA COLA PEPSI

Key Success Weight Rating Weight Rating Weight

Factors (1-4) Score (1-4) Score

Product 0.10 4 0.40 4 0.40

Quality
 Social 0.08 4 0.32 3 0.24
Responsibility

Price 0.08 4 0.32 4 0.32

Market share 0.12 4 0.48 3 0.36

Brand Equity 0.10 4 0.40 3 0.30

Profit Margin 0.04 3 0.12 2 0.08

Global 0.10 4 0.40 3 0.30

Presence

Customer 0.08 3 0.24 3 0.24

service

Advertising 0.10 4 0.40 3 0.30

Financial 0.06 3 0.18 3 0.18

Position

Customer 0.04 4 0.16 3 0.12

Loyalty

Distribution 0.10 4 0.40 3 0.30

network

TOTAL 1 3.82 3.14

 CHAPTER 3

THE MATCHING STAGE

This stage helps us to analyse the current situation of the company. It describes the current scenario of
the company in order to device strategies that would help it use its strength in order to tackle its
weaknesses.

3.1 SO – ST – WO – WT STRATEGY

The Strengths-Weakness-Opportunities-Threats (SWOT) Matrix is an imperative matching implement

that assists managers construct four types of strategies: SO (strengths-opportunities), WO
(weaknesses-opportunities), ST (strengths-threats), and WT (weakness-threats) strategies. First, SO
strategies exercise as firm’s inside strengths to make the most of external opportunities. Second, WO
strategies intend at improving internal weakness by making use of external opportunities. Third, ST
strategies exercise a firm’s strengths to keep away from or decrease the impact of outer threats.
Finally, WT strategies are self-protective tactics directed at reducing inner weakness and avoiding
outer threats. Tables 3.1 shows the Strengths-Weakness-Opportunities-Threats (SWOT) Matrix for
Coca Cola.

Table 3.1: SO ST WO WT Stategy

Market leader with high Supply chain Cola can utilize its vast product
brand value (S) connectivity to rural portfolio and brand value of over
areas (0) 3500 brands to penetrate into rural
markets by improving their supply
chain in terms of retail and
distribution. (S0)
Declining sales (W) 4th smart water market As India ranks the 4th in the smart
(O) water market, Coca-Cola can
compensate for its declining sales
Inc carbonated drinks by placing
more emphasis on bottled drinking
water. (WO)
Extensive CSR activities Water scarcity/bad Coca-Cola can improve its CSR
(S) publicity (T) initiatives by incorporating better
technologies with better emphasis
on water conservation and
combating other environmental
issues to overcome the issues of
water scarcity along with bad
publicity courtesy of lawsuits over
high water consumption and
violation of quality standards by
the use of harmful pesticides. (ST)
Product diversification Increasing health Coca-Cola can indulge in product
(W) conscious behaviour (T) diversification, shifting emphasis
from sodas and carbonated
beverages to healthy and nutritious
beverages, snacks and foods
 enabling them to cater to the
increasingly health conscious
consumers and provide them with a
competitive advantage over its
direct and indirect competitors.
(WT)

Strategies obtained from SWOT (SO, ST, WO & WT):-

1. SO: Coca-Cola can utilize its vast product portfolio and brand value of over 3500 brands to
penetrate into rural markets by improving their supply chain in terms of retail and
distribution.

2. ST: Coca-Cola can improve its CSR initiatives by incorporating better technologies with
better emphasis on water conservation and combating other environmental issues to overcome
the issues of water scarcity along with bad publicity courtesy of lawsuits over high water
consumption and violation of quality standards by the use of harmful pesticides.

3. WO: As India ranks the 4th in the smart water market, Coca-Cola can compensate for its
declining sales Inc carbonated drinks by placing more emphasis on bottled drinking water.

4. WT: Coca-Cola can indulge in product diversification, shifting emphasis from sodas and
carbonated beverages to healthy and nutritious beverages, snacks and foods enabling them to
cater to the increasingly health conscious consumers and provide them with a competitive
advantage over its direct and indirect competitors.

3.2 SPACE MATRIX

The Strategic Position and Action Evaluation (SPACE) Matrix is an analytic technique used in
strategic management and planning. The analysis allows to create an idea of the appropriate business
strategy for the enterprise. The analysis assesses the internal and external environment to determine
the best strategy for any company. Coca-Cola has been given a rank ranging from 1(worst) to 6 (best)
or -1 (best) to -6 (worst) depending on the indicator. For most of the factors, especially the ones
under Financial Stability, the company has been compared to Pepsi Co.

Table 3.2: Space Matrix

Internal Strength Position External Strength Position

Competitive Advantage (CA) Industry Strength (IS)

1. Market Share -1 1. Barriers to entry +3

2. Product Quality -2 2. Growth potential
3. Customer Loyalty 3. Access to +5
4. Control over -2 financing
suppliers 4. Resource +5
5. Brand Image -1 exploitation
5. Technological +4.5
-1 Know-how
+5
Average Score -1.4 Average Score 4.5

Total X-Axis Score: 3.1

Financial Strength (FS) Environmental Stability (ES)

1. ROA +5 1. Inflation rate -3

2. Leverage +6 2. Changes in -2
3. Liquidity +4 technology
4. Working Capital +3 3. Elasticity of -2.5
5. Cash flow +1 demand
4. Taxation -4
5. Competitiveness -1.5
pressure

Average Score 3.8 Average Score -2.6

Total Y -Axis Score: 1.2

After the assessment of all the four dimensions, it is found that Coca-Cola lies in Quadrant I. This
signifies that it should have an aggressive position. Since the best position in SPACE matrix is the
aggressive position, it can do the following by relying on its abilities and strength:
● Exploitation of external opportunities
● Decreasing of internal weaknesses
● Avoidance of external threats
Coca-Cola has a strong competitive advantage and it can protect it. A critical factor is the possible
entry of new competitors into the industry, it may consider new acquisitions, increasing market share
and focusing on competitive products. Recommended strategies for Coca-Co include

1. Market penetration strategy: It should focus on increasing the market share of water and
juices in order to cater to the increasing demand for healthier options.
2. Product development strategy: It has a strong ability to continue to develop new products and
re-invent old ones. For example, the new eco-friendly recyclable bottles provide a shift in
paradigm in the packaging aspect of the product.
3. Backward and Forward vertical Integration strategy, Horizontal Integration strategy: Coca-
Cola already has inculcated integration strategy in its planning. For example, it owns major
shares in Hellenic Bottling Company and collaborated with plethora of farmers around the
country.
4. Concentric (Related) diversification strategy
5. Diversification: Healthier snacks and other food items.
6. Combination of some of these strategies.

3.3 BCG MATRIX

The main benefits of the BCG Matrix are that it draws attentions to the cash flow, investment
qualities, and needs of a firm’s a mixture of divisions. First, question marks, when a division falls into
the quadrant I may have a low relative market share position and fights in a high-growth industry.
Second, stars, quadrant II firm signify the firm’s best long-run opportunities for growth and
prosperity. Third, cash cows, a division positioned in quadrant III may have a high comparative
market share position with competing in a low-growth industry. Finally, quadrant IV divisions of the
firms may have a low comparative market share position with competing in a slow- or no-market-
growth industry. In the end, firms should try hard to accomplish a portfolio of divisions that are Stars
and cash cows.

The Coca-Cola company conducts its business operations in the non-alcoholic ready-to-drink (RTD)
beverage industry showcasing products in market segments or categories like carbonated soda drinks,
nutrition and energy drinks, juices, bottled water and RTD tea.
It is observed the market share for the carbonated soda beverages segment is the highest and so the
relative market share of the other beverage segments are calculated taking carbonated soda drinks into
consideration.

Table 3.3: BCG Matrix

R M S M K T.G R O W TH R EV EN U E
C a r b o n a t e d S o f t D r in k s 1 - 6 .5 8 % 6 ,5 3 6
N u t r it io n & E n e r g y D r in k s 0 .3 3 2 6 .8 9 % 1 8 9 .4 4
J u ic e s 0 .6 3 - 1 9 .8 5 % 5 6 8 .3 2
R T D T ea 0 .0 5 - 7 .5 2 % 3 7 8 .8 8
W a ter 0 .3 7 1 0 0 .3 5 % 1 ,7 9 9 .6 6
There has been a decline in the market growth for the market segments of carbonated soda drinks,
juices and RTD tea of 6.58%, 19.85% and 7.52% respectively on accounts of today's consumers
becoming more health and fitness conscious and rejecting calories, sugar and added preservatives in
their beverages.

The BCG matrix is constructed wherein the x-axis represents the relative market share and the y-axis
represents the growth of the beverage industry. Revenue generated by each market segment has been
taken into consideration as well acting as the z-component. With high relative market share and low
industry growth, Coca-Cola has market segments of carbonated soda drinks and juices as its cash
cows. With low relative market share and high industry growth, Coca-Cola has the market segment of
bottled water as it's question mark. With low relative market share and low industry growth, Coca-
Cola has market segments of nutrition-energy drinks and RTD tea as its dogs.

Thus, Coca-Cola should strategically become health conscious with the bottled water segment
receiving investments from carbonated soda drinks and juices segments to turn it into a star.

3.4 INTERNAL-EXTERNAL OR IE MATRIX

The Internal-External (IE) Matrix positions a firm’s a range of divisions in a nine-cell exhibit. In
Figure 3, the IE Matrix engages plotting divisions in a diagram. The IE Matrix requires more
information about the divisions than the BCG Matrix. The IE Matrix is based on two major
dimensions: the IFE total weighted scores (x-axis) and the EFE total weighted scores (y-axis). The IE
Matrix can be divided into three main regions that have dissimilar insinuations. First, the advice for
divisions that fall into cells I, II, or IV can be explained as grow and build: intensive or integrative
strategies are recommended. Second, divisions that fall into cells III, V, or VII can be explained as
hold and maintain: market penetration and product development are recommended. Third, common
advices for divisions that fall into cells VI, VIII, or IX are harvest or divest: retrenchment and
divestiture are recommended.
Table 3.4: IE Matrix

The weighted score for Internal Factor Evaluation comes out to be 3.52. The weighted score for
External Factor Evaluation comes out to be 3.41. Taking both evaluations into consideration, the IE
Matrix is formed and it is observed that the Coca-Cola company lies in Quadrant 1. As it is the market
leader in the non-alcoholic beverage industry, Coca-Cola can utilize Quadrant 1 strategies of product
differentiation and cost leadership to sustain its competitive advantage.

3.5 GSM MATRIX

The Grand Strategy Matrix (GSM) has turn into a admired instrument for preparing alternative
strategies. All firms can be positioned in one of the GSM’s four quadrants. This Matrix is based on
two evaluative dimensions: competitive position (x-axis) and market growth (y-axis). Any market
(industry) whose annual growth in sales exceeds 5 percent can be viewed to have rapid growth. Firms
located in Quadrant I of the GSM are in an outstanding position. Suitable strategies for these firms are
concentration on current markets or products, integrations and related diversification. Firms
positioned in Quadrant II need to appraise their current approach to the marketplace critically.
The Grand Strategy Matrix is an instrument used for creating alternative and different strategies for
the organization. It entails two dimensions including competitive position and market growth. All
companies can be positioned in one of the four quadrants. The revenue growth of Non-Alcoholic
beverages industry in 2019 is as follows:
● Bottles water: 10.46%
● Soft drinks: 9.39%
● Juices: 7.37%

The accumulated growth for this industry is 27.22% which signifies rapid growth. Moreover,
according to the SPACE Matrix, Coca-Cola has a strong competitive advantage. Thus, it lies in the
first quadrant where firms operate in a fast moving market growth. Coca-Cola must adopt and pursue
strategies including market development, market penetration, product development, etc in order to
focus and make the current competitive base stronger.

Coca-Cola is already focusing on market penetration through several avenues including organic
growth. The first expected driver is increased market penetration of the company’s stills portfolio.
Since consumers are more conscious about their choices and are switching to healthier options in the
F&B industry, Coca-Cola’s stills products will inevitably benefit from it.

Moreover, Coca-Cola uses vertical integration and product development strategies. The company
strives to own all processes that lead up to the manufacture of the products like making the bottles that
are used for the soft drinks. This helps it to cut some unnecessary costs that were earlier involved.
Coca-Cola has also been creating new products over the years that will always meet the needs and
demands of the ever-changing customer preferences. It also indulges in backward, forward and
horizontal integration. It should focus on accelerating growth of still portfolio through internal
innovation, mergers and acquisition and global expansion.
 CHAPTER 4

THE INPUT STAGE

The Input Stage helps in analysing the strategy that would be best for the company after weighing
different options available.

4.1 THE QUANTITATIVE STRATEGIC PLANNING MATRIX

The Quantitative Strategic Planning Matrix (QSPM) indicates which alternative strategies are best.
The QSPM uses input from Stage 1 analyses and matching results form Stage 2 analyses to decide
objectively among alternative strategies. The QSPM is a tool that allows strategists to evaluate
alternative strategies objectively, requires good intuitive judgment, based on previously identified
external and internal critical success factors. The left column of a QSPM consists of information
obtained directly form the EFE Matrix and IFE Matrix (See Table 4.1).

Table 4.1: QSPM Matrix

WT WO ST SO
WA AS TAS AS TAS AS TAS AS TAS
STRENGTHS
Innovation & 0.08 2 0.16 4 0.32 4 0.32 2 0.16
Technology in
Product
Brand Image 0.15 4 0.6 4 0.6 3 0.45 4 0.6
Market Leaders 0.13 3 0.39 2 0.26 0 0 4 0.52
Marketing 0.07 4 0.28 3 0.21 0 0 3 0.21
CSR 0.09 0 0 0 0 4 0.36 1 0.09
WEAKNESSES
Product 0.12 4 0.48 3 0.36 1 0.12 0 0
Diversification
Less emphasis on 0.14 1 0.14 0 0 0 0 0 0
Nutrition drinks
High water Usage 0.16 3 0.48 4 0.64 4 0.64 0 0
Carbonated Sales 0.06 1 0.06 0 0 0 0 3 0.18
declining
OPPURTUNITUE
S
Growing demand 0.15 3 0.45 1 0.15 1 0.15 2 0.3
for F&B industry
High GDP 0.05 2 0.1 2 0.1 0 0 2 0.1
Vast Supply Chain 0.03 3 0.09 3 0.09 0 0 4 0.12
Cheap Labour 0.04 3 0.12 3 0.12 0 0 2 0.08
Market
Smart Water market 0.08 0 0 4 0.32 0 0 0 0
growing
THREATS
 Intense competition 0.17 4 0.68 3 0.51 0 0 3 0.51
- direct & indirect
Water scarcity 0.14 3 0.42 4 0.56 4 0.56 0 0
Health conscious 0.16 4 0.64 3 0.48 0 0 0 0
Inflation 0.03 2 0.06 1 0.03 0 0 2 0.06
Bad publicity 0.15 2 0.3 2 0.3 3 0.45 0 0
TOTAL SCORE 5.45 5.05 3.05 2.93

4.2 SUGGESTIONS

In Table 4.1, four alternative strategy types: (1) Product diversification, (2) Product focus, and (3)
CSR related practices, and (4) Supply Chain building are being considered by Coca-Cola. Note by
sum total attractiveness scores of (1) Product diversification: 5.45, (2) Product focus: 5.05, (3) CSR
related practices: 3.05 and (4) Supply Chain building: 2.93, that the analysis indicates the firm should
first implement product diversification strategy, and then carry out the rest of the strategies.

After an in-depth analysis of Coca-Cola, it is understood that it needs to diversify its business and
should limit not itself as a beverage company. Considering how the general public is becoming more
health conscious and avoiding consumption of carbonated drinks with high calories and sugar, it
needs to change the positioning of its products in order to cater to the healthier youth of the country.
Coca-Cola could diversify its business and launch a line of healthy snacks. This would allow it to
enter the food industry and increase its market share. Considering how Coca-Cola’s marketing and
supply chain is very aggressive, Coca-Cola would enjoy the benefits of these strengths while entering
a new market. Another important strategy for its growth would be to focus more on its smart water
business which can grow up to exceptional heights since Indians have started to consume bottled
water more often than before. The consumer believes that the bottled water is much healthier and
more hygienic than compared to the regular water supply at homes. Using their aggressive marketing,
Coca-Cola should Highlight their business of Smart Water. The third strategy that comes in line
involves them to up their CSR game and build back the reputation that have lost in bad publicity for
using water. Coca-Cola already invests millions of rupees to improve the water resources of the
country. Yet there is a large scope for improvement. The last strategy that it should focus on should be
building a stronger supply chain and distribution system that would allow Coca Cola to reach hundred
and thousands of homes situated in the remote areas.
All these strategies together can bring about a stronger growth rate for Coca-Cola.
 CHAPTER 5

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