Анализ компании кока-кола

The Coca-Cola Company

Since its beginning in the spring of 1886, Coca-Cola has grown to become the most recognized trademark in history. Operating out of more than 195 countries worldwide, Coca-Cola is the most popular beverage on earth and is enjoyed over 773,000,000 times daily.

The Coca-Cola Company is the world’s leading manufacturer, marketer, and distributor of non-alcoholic beverage concentrates and syrups, with world headquarters in Atlanta, Georgia. The Company and its subsidiaries employ nearly 31,000 people around the world. Syrups, concentrates and beverage bases for Coca-Cola, the Company’s flagship brand, and over 230 other Company soft-drink brands are manufactured and sold by The Coca-Cola Company and its subsidiaries in nearly 200 countries around the world.

Production

One of The Coca-Cola Company’s greatest strength lies in the ability to conduct business on a global scale while maintaining a local approach. By contract with The Coca-Cola Company or its local subsidiaries, local businesses are authorized to bottle and sell Company soft drinks within certain territorial boundaries and under conditions that ensure the highest standards of quality and uniformity. The Company takes pride in being a world-wide business that is always local. Bottling plants are, with some exceptions, locally owned and operated by independent business people who are native to the nations in which they are located. Bottlers provide the required capital for investments in land, buildings, machinery, equipment, trucks, bottles and cases. Most supplies are purchased from local sources, often creating new supply industries and areas of employment within local economies. The Company supplies the concentrates and beverage bases used to make its products and provides management assistance to help its bottlers ensure the profitable growth of their businesses. Product manufacturing, quality control, plant and equipment design, marketing and personnel training are just a few of the areas in which the Company shares its expertise. The strong commitment of bottlers to their own profitable volume growth helps to meet the Company’s strategic goals and furthers the interests of the world-wide production, distribution and marketing systems.

Strategy and mission

The strategy of The Coca-Cola Company has for a long time been best characterised as follows: global marketing and local manufacturing. However, the global marketing approach has been changed to local marketing because of the differences in consumer demands and experiences. To implement their “think local, act local” philosophy, the following key areas are considered:

        Consumers – by using innovative and tailored marketing programs based on local consumer insights, The Coca-Cola Company will keep growing its core brands while also leveraging its distribution system to capture other growth opportunities in the ready-to-drink nonalcoholic beverage category.

        Communities – local offices around the world ensure that the Company is a respectful corporate citizen and participates as an integral part of each community.

        Customers – the Company provides value to customers through every consumer purchase, through superior customer service and through great value creation programs.

        Coca-Cola System – the Coca-Cola system business model delivers value to the Company and to its bottling partners. By working together, the Coca-Cola system focuses on growing the overall profits from the beverage category in order to provide strong returns for all parties involved.

        Coca-Cola People – the Company recognises the value of its associates and remains focused on ensuring it has the most talented, creative and motivated people throughout the world.

Mission: to maximize share-owner value over time.

In order to achieve this mission, we must create value for all the constituents we serve, including our consumers, our customers, our bottlers and our communities. The Coca-Cola Company creates value by executing a comprehensive business strategy guided by six key beliefs:

1.       Consumer demand drives everything we do.

2.       Brand Coca-Cola is the core of our business.

3.       We will serve consumers a broad selection of the non-alcoholic ready-to-drink beverages they want to drink throughout the day.

4.       We will be the best marketers in the world.

5.       We will think and act locally.

6.       We will lead as a model corporate citizen.

The ultimate objectives of the Coca-Cola’s business strategy are to increase volume, expand their share of world-wide non-alcoholic ready-to-drink beverage sales, maximize the long-term cash flows and create economic-value-added by improving economic profit.

The Coca-Cola Company is positioned to capture opportunity:

        The Premier Relationship Company

        Innovative Culture

        Energised

        Challenging The Status Quo

        Redefining Our Marketplace

        Anticipating Consumer Trends

Objectives

        Strong cash flow position, which can be derived from consistent performance and

lower investment requirements.

        An average earnings per share growth of approximately 15% over the long term.

        Capital expenditures will be stable to declining from historical trends over the next 5 years, as the investments in the bottling side of the business will be reduced.

        Gradually reduce the dividend pay-out ratio to 30% over time. This reduction will occur due to an increase in earnings, not due to a decrease in the aggregate amount of the dividend payment.

        Maintain the net debt-to-net capital ratios that have been shown historically.

The Coca-Cola Company is confident that all the steps they have taken will put them on the forefront of change. They believe that they have a strong understanding of consumer habits and will continue to learn more as they continue to build our core carbonated soft drink business and as they enter into new categories. With the Coca-Cola’s new culture taking hold, combined with their great brands and bottling partners, they are optimistic about their ability to deliver on volume growth and financial results consistently over the long-term.

Overview of the financial results

Table 1

Marketing

Consumers will have different experiences, given their personal preferences and location. The Coca-Cola is adjusting its approach so that it can tap into these differences and provide the appropriate marketing activities and beverages to connect with consumers.

Its “think local, act local” approach to marketing allows to adapt communications to fit local circumstances. Coca-Cola Company wants to provide consumers with beverages to fit their different life styles and life stages.

As consumers are having different experiences, it has been recognised that the commercial beverage industry is in different stages of development around the world. If we look at theoretical beverage consumption of eight 8-ounce glasses of liquid a day, it becomes apparent that the commercial beverage industry only provides 25% of the liquid that is consumed by the world’s population. The non-commercial beverage consumption is basically tap water and/or homemade fruit juices. Over time, the Coca-Cola Company is expecting that this non-commercial portion of consumption will continue to decline and that the commercial beverage industry will grow.

This 25% slice that represents the commercial beverage industry can be broken down into three segments (see Figure1): alcoholic beverages, not ready-to-drink beverages and ready-to-drink beverages.

Figure 1. Segments of commercial beverage industry (http://www.thecoca-colacompany.com/investors/octpresents/sld012.htm).

This chart represents the consumption of the commercial beverages in the entire world. If we look at the total size of the commercial beverage industry, it can be seen that alcohol and not ready-to-drink beverages are becoming a smaller portion of the total industry. These two segments are experiencing some growth, but not at the same rate as ready-to-drink non-alcoholic beverages. The Coca-Cola Company has chosen to expand into the ready-to-drink non-alcoholic segment of the commercial beverage industry because this is the fastest growing segment as you can see in the graph. This trend of faster growth in the ready-to-drink non-alcoholic segment is true in every operating group around the world. This is also predicted that this trend will continue, as an increasing desire for convenience is a trend that can be observed in consumers all over the world.

Focusing on the ready-to-drink non-alcoholic segment, there are several categories within this segment (see Figure 2). It can be easily seen that the CSD (carbonated soft drinks) and packaged water segments are the largest. The Coca-Cola Company is just getting started in many categories outside of CSDs. They have articulated very clearly that they intend to participate in all of these beverage categories to meet their growth objective.

Figure 2. Coca-Cola’s share in beverage categories (http://www.thecoca-colacompany.com/investors/octpresents/sld014.htm).

Earlier this year, the Coca-Cola Company reconfirmed its long-term target for unit case volume growth at 7-8% (see Figure 3). This target reflects their belief that the ready-to-drink non-alcoholic beverage segment is going to continue growing and that The Coca-Cola Company is going to do better than the rest of this segment of the commercial beverage industry. This chart shows Coca-Cola’s unit case volume trends over the past five and a half years. It can be seen that after three years of 8+ growth from 1995-1997, the growth was slowed in 1998 based on the global economic crisis and then continued to face challenges in 1999. But now the tables are turning again. Thus far in 2000, volume is up 5% through June and the company is remaining comfortable with the estimate of 5% volume growth for the full year. Looking ahead to 2001 and 2002, they are still comfortable with their prior guidance of 6-7% and 7-8% worldwide unit case volume growth, respectively. This accelerating trend will result from the continued success of their local marketing approach and improving economic conditions in most markets around the world.

Figure 3.

Sponsorship

The Coca-Cola Company sponsors the world’s most exciting sports events, including World Cup Soccer, the National Football League, National Basketball Association, NASCAR, the Tour de France, the Rugby World Cup, COPA America and numerous local sports teams. The Coca-Cola Company has sponsored the Olympic Games since 1928.

Summary

The Coca-Cola Company has been a dynamic company, always moving to anticipate and meet the present and future desires of customers and consumers. The world is changing with blinding speed in countless ways: technologically, educationally, culturally and economically. Coca-Cola Company has been able to meet these changes seeing them as new opportunities. Although it has faced many difficulties along the way, it has still been a very successful company and probably continues this way. Coca-Cola has for a long time followed the strategy: global marketing and local manufacturing. They have taken a global approach to different countries trying to reach as wide market as it could, giving them quite standardized products, which are produced locally. With the changes taking place in the global market, companies must try to remain as close to the customers and consumers as it can in order to meet their different desires in the best way. Due to that the Coca-Cola Company has also changed its strategy from global marketing and local manufacturing to local marketing and local manufacturing. This will help the company to differentiate its products in more specific way, which will result in meeting the different needs and desires of consumers and the market situation in a particular country as well. Our opinion is that this strategy will help Coca-Cola to manage its situation in Estonia as well. They have still ensured its leading position in Estonian beverage market and to maintain this they must try to accommodate their products according to the needs of our customers. This may mean developing new products and why not kvass as well if Estonia consumers demand it.

Appendix 2

Financial highlights of the Coca-Cola Company

Appendix 3

Financial highlights of the Coca-Cola Company