Economics CEC3 Project

Submitted by :-
Muskan Rastogi 21BSP2607
Yash Chakankar 21BSP2871
Anamika Patil 21BSP2408

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 A Study on the Coca-Cola Company

Executive Summary
This report is a survey on the Coca-Cola company. It outlines the
history and current scenario of the Coca-Cola Company globally and
locally. The first part of the study takes us through the present state
of affairs of the beverage industry and Coca-Cola Company globally.

The report includes a brief introduction of the beverage industry also

a basic description on the company which includes:

 Company introduction

 History of the company

 Vision and Mission of the company

 Product line of the company

 Analysis of the company via:

A. Porter’s Five Forces Model
B. SWOT
C. PESTLE

The basic objective to conduct the market research was to

understand the company position in the industry, what are its
competitive advantages over the other companies in the market and
also to get an insight on the company’s working.

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 A Study on the Coca-Cola Company

Beverage Industry
In India, beverages form an important part of the lives of people. It is an
industry, in which the players constantly innovate, in order to come up with
better products to gain more consumers and satisfy the existing consumers.

Beverage

Non-
Alcoholic
Alcoholic

Non-
Carbonated
Cabonated

Non-Cola
Cola Non-Cola

The beverage industry is vast and their various ways of segmenting it, so as to
cater the right product to the right person. The different ways of segmenting it is
as follows:

 Alcoholic, non-alcoholic and sports beverages.

 Natural and Synthetic beverages.
 In-home consumption and out of home on premises consumption.
 Age wise segmentation i.e., beverages for kids, for adults and for senior
citizens.
Segmentation based on the amount of consumption i.e., high levels of
consumption and low levels of consumption

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A Study on the Coca-Cola Company

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 A Study on the Coca-Cola Company

Company Profile
MISSION:
The roadmap of the company starts with the mission, which is enduring. It
declares the purpose as a company and serves as the standard against which
the company weigh their actions and decisions.

 To refresh the world...

 To inspire moments of optimism and happiness...
 To create value and make a difference.

VISION:
The company’s vision serves as the framework for their roadmap and guides
every aspect of the business by describing what they need to accomplish in
order to continue achieving sustainable, quality growth.

 People: Be a great place to work where people are inspired to be the

best they can be.
 Portfolio: Bring to the world a portfolio of quality beverage brands that
anticipate and satisfy people's desires and needs.
 Partners: Nurture a winning network of customers and suppliers,
together we create mutual, enduring value.
 Planet: Be a responsible citizen that makes a difference by helping build
and support sustainable communities.

VALUES:
The values serve as a compass for our actions and describe how we behave in
the world.

 Leadership: The courage to shape a better future.

 Collaboration: Leverage collective genius.
 Integrity: Be real.
 Accountability: If it is to be, it's up to me.

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 A Study on the Coca-Cola Company

 Passion: Committed in heart and mind.

 Diversity: As inclusive as our brands.
 Quality: What we do, we do well.

Company Introduction
Coca-Cola, the product that has given the world its best-known taste was born
in Atlanta, Georgia, on May 8, 1886. Coca-Cola Company is the world ‘s leading
manufacturer, marketer and distributor of non-alcoholic beverage concentrates
and syrups, used to produce nearly 400 beverage brands. It sells beverage
concentrates and syrups to bottling and canning operators, distributors, fountain
retailers and fountain wholesalers.

The Company’s beverage products comprise of bottled and canned soft drinks
as well as concentrates, syrups and not- ready-to-drink powder products. In
addition to this, it also produces and markets sports drinks, tea and coffee. The
Coca- Cola Company began building its global network in the 1920s. Now
operating in more than 200 countries and producing nearly 400 brands, the
Coca- Cola system has successfully applied a simple formula on a global scale:
―Provide a moment of refreshment for a small amount of money- a billion times
a day.

The Coca-Cola Company and its network of bottlers comprise the most
sophisticated and pervasive production and distribution system in the world.
More than anything, that system is dedicated to people working long and hard
to sell the products manufactured by the Company. This unique worldwide
system has made The Coca-Cola Company the world ‘s premier soft-drink
enterprise.

Marketing Mix
The marketing mix refers to the set of actions, or tactics, that a company uses to
promote its brand or product in the market. The 4Ps make up a typical marketing
mix - Price, Product, Promotion and Place.

1. Product: the company has the widest portfolio in beverage industry

comprising of approx. 3300 products. Beverage industry are divided into
divided into diet category, 100% fruit juice, water, energy drinks, tea and

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coffee, etc. As per Nielson’s data, Coca-Cola is number one brand in

sparkling beverages, juices, and retail packaged water in 2010. Coca
cola has its market presence around 200 countries. Coca cola brands in
India are Fanta, Maaza, Limca, sprite, Thums up, Minute Maid, Nimbu
fresh, Nested iced tea etc.
2. Price: Due to the availability of wide range of products the pricing is done
according to the market segments. Each sub-brand of Coca-Cola has
different pricing strategy. Their pricing strategy is based on
the competitors pricing, Pepsi is the direct competitor to coke. Beverage
market is said to be a oligopoly market (few sellers and large buyers),
hence they form into cartel contract to ensure a mutual balance in pricing
between the sellers.
3. Place: Coca-Cola is the world’s most favorite brand and is available all
over the world. The distribution system of coca cola follows the
FMCG distribution pattern. The effective distribution network of coke has
almost eroded the small and middle level players in the market. In India
they have captured even the rural market by extensive distribution and
have eroded the market share of Bovonto, Kalimark etc.
4. Promotion: Coca-Cola adopts various advertising and promotional
strategies to create an increased demand in the market by associating
with life style and behaviour and mainly targeting value
based advertising. You are more likely to see a coke ad individualized for
a particular festival or in with a general positive message. Coca-Cola has
made a yearly commitment to large ad spends. Its commitment to
advertising has been fairly consistent between 2015 and 2019, spending
an average of $4 billion each year to market its drinks to consumers
around the world. The company spent roughly $4.24 billion on global
advertising in the 2019 fiscal year—a big chunk of which went to market
Coke

PRODUCT LINE:
COCA-COLA: - In India Coca-Cola was leading soft drink till 1977 when
Government policies necessitated its departure. Coca-Cola made its return
to the country in 1993 and made significant investments to ensure that the
beverage is available to more and more people, even in remote and
inaccessible parts of the nation.

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Over the past fourteen years has enthralled consumers in India by

connecting with passions of India – Cricket, movies, music & food. Coca-
Cola‘s advertising campaigns “Jo Chaho Ho Jaye” & “Life Ho Toh Aise”
were very popular & had entered youths vocabulary. In 2002.Coca-Cola
launched its iconic campaign “Thanda Matlab Coca-Cola” which sky
rocketed the brand to make it India‘s favorite soft drink brand.

LIMCA:- Limca was introduced in 1971 in India. Limca has remained

unchallenged as the No.1 sparkling drink in the cloudy lemon segment. The
success formula is the sharp fizz and lemony bite combined with the single-
minded proposition of the brand as the provider of freshness.

THUMS UP:- Thums up is a leading sparkling soft drink and most trusted
brand in India. Originally introduced in 1977, Thums up was acquires by The
Coca-Cola Company in 1993. Thums up is known for its strong, fizzy taste
and it confident, mature and uniquely masculine attitude. This brand clearly
seeks to separate the men from the boys.

SPRITE:- Sprite a global leader in the lemon lime category is the second
largest sparkling beverage brand in India. Launched in 1999, Sprite with its
cut-thru perspective has managed to be a true teen icon.

FANTA:- Fanta entered the Indian market in the year 1993. Over the years
Fanta has occupied a strong market place and is identifies as ―The Fun
Catalyst. Perceived as a fun youth brand, Fanta stands for its vibrant color,
tempting taste and tingling bubbles that not just uplifts feelings but also
helps free spirit thus encouraging one to indulge in the moment. This
positive imagery is associated with happy, cheerful and special times with
friends.

MINUTE MAID PULPY ORANGE:- The history of the Minute Maid brand
goes as far back as 1945 when the Florida Food Corporation developed
orange juice powder. The company developed a process that eliminated
80% of the water in the orange juice, forming a frozen concentrate that when
reconstitute created orange juice. They branded it Minute Maid a name
connoting the convenience and the ease of preparation.

MAAZA:- Maaza was introduced in late 1970‘s. Maaza has today come to
symbolise the very spirit of mangoes. Universally loved for its taste, colour,
thickness and wholesome properties, Maaza is the mango lover‘s first
choice.

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KINLEY:- The importance of water can never be understated, particularly in

a nation such as India where water governs the lives of the millions, be it as
a part of everyday ritual or as the monsoon which gives life to the sub-
continent. Kinley water comes with the assurance of safety from the Coca-
Cola Company.

Ingredients Used for Manufacturing

1. Carbonated Water
2. Acidity Regulator (338)
3. Sweetener (951,950)
4. Preservatives (211)
5. Caffeine
6. Permitted Natural (150d)
7. Added Flavors (Natural Flavoring Substances)
8. Contains no Fruit

Nutritional Factors (per 100mL)

1. Carbohydrates 11g
2. Sugar 11g
3. Protein 0g
4. Fat 0g
5. Calories 44 kcal

Comparison And Forecast of Past Performance With

Competitors
The past rate of financial progress of the coca cola in terms of market share
especially from previous 5 years is more than $40 billion returns have
accomplished. In the future, it has been projected that coca cola would cross
the revenues of $85 billion in coming or future 5 years. The comparison with the
competitors reveals that Pepsi could be threatening, as there is a difference of
almost $2 billion at least in the net revenues of both the companies annually.
The local or the indirect rivalries of the coca cola are increasing with an efficient
level or rate of penetrating the target markets of the coca cola. Therefore, coca
cola must need to address these types of internal financial indicators for the
growth in beverages markets (McGrath).

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Coca cola has determined the important factors in order to create the strategies
that can give then the profit eventually in the market, they are focused on the
beverage market and the soft drink industry market, coca cola can said to be a
market leader because it is the first over in the beverages industry and have the
best brand image across the world. Thus, the main primary competitors of the
coca cola is PepsiCo; as it have the similar products in the market and also had
the positive brand image, both the companies are suffering from the same
nature of the competition and have targeted the audience in the same way, with
the same or similar products.

Analysis of the Company

I. PORTER’S FIVE FORCES MODEL:
The five forces measure the competitiveness of the market deriving
its attractiveness. The analyst uses conclusions derived from the
analysis to determine the company’s risk from in its industry (current
or potential). The five forces are:

 Threat of New Entrants: (Medium Pressure)

Entry barriers are relatively low for the beverage industry: there is no
consumer switching cost and zero capital requirement. There is an
increasing number of new brands appearing in the market with
similar prices than Coke products Coca-Cola is seen not only as a
beverage but also as a brand. It has held a very significant market
share for a long time and loyal customers are not very likely to try a
new brand.
 Threat of Substitute Products or Services: (Medium to High
Pressure)
There are many kinds of energy drink s/soda/juice products in the
market. Coca-Cola doesn’t really have an entirely unique flavor. In a
blind taste test, people can’t tell the difference between Coca-Cola
and Pepsi.
 Bargaining Power of Buyers: (Low Pressure)
The individual buyer no pressure on Coca-Cola. Large retailers, like
Wal-Mart, have bargaining power because of the large order
quantity, but the bargaining power is lessened because of the end
consumer brand loyalty
 Bargaining Power of Suppliers: (Low Pressure)
The main ingredients for soft drink include carbonated water,
phosphoric acid, sweetener, and caffeine. The suppliers are not

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concentrated or differentiated. Coca-Cola is likely a large, or the

largest customer of any of these suppliers.
 Competitive Rivalry Among Existing Firms: (High Pressure)
Currently, the main competitor is Pepsi which also has a wide range
of beverage products under its brand. Both Coca-Cola and Pepsi are
the predominant

II. SWOT ANALYSIS:

SWOT analysis is a strategic planning technique used to help a person or
organization identify strengths, weaknesses, opportunities, and threats
related to business competition or project planning. The SWOT analysis of
the Coca-Cola company are:

 STRENGTHS:
a. Company Valuation: One of the most valuable
companies in the world, Coca cola is valued around
79.2 billion dollars.
b. Vast Global Presence: Coca cola is present in 200
countries across the world. Chances are, any
country that you go to, you will find coca cola
present in that market. This vast global presence of
coca cola has also contributed to the building of the
mammoth brand name.
c. Distribution Network: Coca cola has the
largest distribution network because of
the demand in the market for its products. On the
other hand, due to this successful distribution
network, Coca cola has been able to command such
a high market presence.
 WEAKNESS
a. Negative Publicity: The Coca-Cola Company has
been involved in a number of controversies and
lawsuits related to its relationship with human rights
violations and other perceived unethical practices.
b. Health concerns: Carbonated drinks are one of the
major sources of sugar intake. It results in two grave
health issues – obesity and diabetes.
c. Aggressive competition with Pepsi: Pepsi is the
biggest rival of Coca-Cola. Had it not been Pepsi,

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Coca-Cola would have been the clear market leader

in the beverage.
 Opportunities:
a. Diversification: Diversification in the health and food
business will improve the offerings of Coca cola to their
customers.
b. Developing Nations: Although developed nations have
a high presence of Coca cola, these countries are
slowly moving towards healthy beverages. However,
developing countries are still being introduced to the
delight of carbonated drinks and soft drinks.
c. Supply Chain Improvement: Supply chain can be a
major cost sink hole with the transportation costs
always rising. Coca cola’s complete business is based
on transportation and distribution.
 Threats:
a. Raw material sourcing: Water is the only threat to
Coca cola. The weakness of Coca cola was the
suspected use of pesticides or vast consumption of
water. However, the threat here is that water scarcity is
on the rise.
b. Indirect competitors: Coffee chains like Starbucks,
Café coffee day, Costa coffee are on the rise. These
chains offer a healthy competition to Coca colas
carbonated 8 drinks. 

III. PESTEL Analysis:

PESTEL Analysis is a strategic framework used to evaluate the external
environment of a business by breaking down the opportunities and risks
into Political, Economic, Social, Technological, Environmental, and Legal
factors. 
 Political Factors: Coca Cola can have a direct impact by the laws
and regulation of the government on the food products. These laws
may vary from country to country. Earlier due to some trade sanctions
of US and Burma, the sale of Coca Cola was banned in Burma. After
nearly six decades the sale was started in the year 2012 when the
sanction was suspended. There are still two countries Cuba and North
Korea where Coca Cola cannot be bought or sold due to the political
condition of these countries. The recent tiff between US and China

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resulting in a trade war has a major impact on the prices of the Coca
Cola canned products. The company is facing cost pressure due to
rise in the tariffs on steel and aluminum.
 ECONOMIC FACTORS: Coca Cola dominates the market with
almost 50% market share in the carbonated beverage market. Despite
all the increase in price due to the tariffs, it has reported 8% growth in
the net revenue in quarter 3 of the financial year 2019. Though the
margin was unfavorably impacted by acquisition of company like Chi
Ltd. in Nigeria. The new trade agreement between US, Mexico and
Canada is supported by the company for free and fair trade between
the nations. The demand of consumers has shifted from sugary drinks
to low calorie drinks. The Coca Cola company has reported 8%
increase in retail value of its products like Diet Coke and Zero Sugar.
The CEO of the company said that Coke Zero Sugar has had its best
year in 2018 and grew the fastest. The demand for these products is
expected to rise in the future too as people are becoming more
conscious about their lifestyle.
 Social Factors: Coca Cola has always come with some social
campaigns to connect to its consumers. In 2014 it had launched a
campaign #shareacoke which was mega successful. People were
encouraged to find bottles with the name they feel connected to and
then give it to their family or friends and share the same on the social
media platform with the hashtag share a coke. The online Coca Cola
store also let the customers customize their name on the bottles. The
brand connected to the consumer on the personal level. The company
revamped all its social media handles with the mission of becoming
more optimistic brand on social media. It was done on the world
kindness day. It posted all of its content with #refreshthefeed. Such
Coca Cola campaigns connect more to the millennials as they actively
participate in these through social media and personalization has
become their way of living.

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 Technological Factors: The Coca Cola company has always been

experimenting in its product line. It is coming with first ever ready to
drink frozen beverage in Japan. The company has a innovation driven
culture. It invites consumers to play games online and associate with
the Coca Cola products. It uses social networking technology to stay
young, fresh and current. The company provides freestyle dispenser
which allows consumers to create its own beverage in various
combinations through computer like interface. It also saves data for
market research which will be further used by the company to
understand the taste and preference of the consumers.
 Legal Factors: Coca Cola has faced trouble due to quantity of
caffeine in its products in different countries in the past. The company
was also accused of paying low wages and inappropriately treating
their employees which attracted various protests from labor unions. It
has alleged suits against racial discrimination to its employees.
Mislabeling of one its products as a pomegranate and blueberry juice
in spite of apple and grape juice has led it to a serious concern. Issues
regarding packaging, water usage and air pollution has been a topic of
concern for the company. It should majorly focus on its corporate
ethics. They are of primary concern to the Coca Cola company.

 Environmental Factors: Coca Cola has faced massive amount of

backlash for the reason of draining off the ground water in India. It has
been reported as the biggest consumer of freshwater in the world. It
has taken steps to eliminate these problems and reduce its carbon
footprints to near zero.

Coca-Cola role in the Indian Economy

 Coca-Cola is one of the first investors in the country post liberalization.
 India Coca-Cola is ranked 6th globally in the Coca-Cola System
 Coca-Cola is committed to invest about USD$ 7 billion
 Employs over:
a. 25,000 people directly
b. 1,50,000 people indirectly
 Coca-Cola is one of the largest institutional buyers of agricultural produce in the
world.

Factory Location of Coca-Cola in India

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 Vast network of 57
plants across India.
 Over 120 product
warehouses.
 Well balanced
distribution across
regions.
 Strategically
designed
distribution to
serve big markets.
 Directly feed into
+7000 distributors
who serve +2.5
million shopkeepers.
 Supported by over 240 suppliers.

CSR by Coca-Cola in India

 Approx. 71 villages and around 1.5 lakh people get benefitted from water
conservation initiatives.
 More than 600 schools re-vitalized through Coca-Cola “SUPPORT MY
SCHOOL PROGRAM”.
 Reaching out to about +25000 mango farmers in Chittoor district
preparing the method of ultra-high-density farming.

Industry Survey
The survey we collected was done via convenience sampling methods and the
medium we used for data collection was google forms.

And the we came to conclusion that

So, the question we asked in the survey was:

1. How often do you consume soft drink on weekly basis?

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Interpretation: 75% of the users consumed a soft drink rarely; 15% of the users
consumed a soft drink once per week and 10% of the consumers consumed
twice a week.

2. Next was what drink comes to your mind when it comes to soft drink.

Interpretation: 65% Coca-Cola; 15% Pepsi; 10% Dew and the rest resonated
other brands as soft drink.

3. What quantity do you prefer to buy?

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Interpretation: 35% prefer the 200-250 ml; rest 35% preferred 500ml; 25%
preferred 300ml and the rest 5% preferred 1 liter quantity

4. How do you feel about product image?

Interpretation: 50% of the population thought that the brand image of the
Coco-Cola company was good enough, 45% thought that it is excellent whereas 5%
of people thought it is not good.

5. Which would you rather choose in the following parameters Pepsi or Coca-
Cola?

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Interpretation: Overall the result of this question was that the population
preferred Coca-Cola over Pepsi in the given parameters.

Conclusion:
Based on our report done on the Coca-Cola company, we can come to a conclusion
that:

The data collected by us clearly indicate that Coca-Cola products are more popular
than the products of Pepsi mainly because of its TASTE, BRAND NAME,
INNOVATIVENESS and AVAILABILITY, thus it should focus on good taste so that it
can capture the major part of the market. The study also indicated that the consumers
are satisfied with the Coca-Cola products and purchase them without any specific
occasions.

In today ‘s scenario, customer is the king because he has got various choices around
him. If you are not capable of providing him the desired result he will definitely switch
over to the other provider. Therefore, to survive in this cutthroat competition, you need
to be the best. Customer is no more loyal in today ‘s scenario, so you need to be
always on your toes.

Bibliography
The websites and videos we referred for the purpose of our report survey are:

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Websites:

 https://www.coca-colaindia.com/about-us/coca-cola-worldwide-and-in-india#ath
 https://www.analyticssteps.com/blogs/how-coca-cola-uses-technology-stay-top
 https://www.linkedin.com/pulse/coca-cola-pricing-strategy-shashank-jindal
 https://www.thestrategywatch.com/competitive-advantages-coca-cola/
 https://www.coca-colacompany.com/

Videos:

 https://www.youtube.com/watch?v=jwCYxwkjw90
 https://www.youtube.com/watch?v=DwCGY5SfLA4
 https://www.youtube.com/watch?v=0FcpHPdceRk

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