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Strategic Management Plan

Strategic Management Plan. Shane Theriault Pierre-Olivier Lachance Garik Theriault Sierra Daigle. Overview. Strategy Formulation SWOT Matrix Space Matrix Grand Strategy Matrix BCG & IE Matrix Matrix Analysis Possible Strategies QSPM Matrix Strategic Implementation

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Strategic Management Plan

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  1. Strategic Management Plan Shane Theriault Pierre-Olivier Lachance GarikTheriault Sierra Daigle

  2. Overview • Strategy Formulation • SWOT Matrix • Space Matrix • Grand Strategy Matrix • BCG & IE Matrix • Matrix Analysis • Possible Strategies • QSPM Matrix • Strategic Implementation • 3 Year Objectives • Strategies & Cost • EPS/EBIT • Projected Financials • Strategic Evaluation • Balanced Score Card • Company Update Company Overview • Company Background • Existing Mission and Vision • Proposed Mission and Vision • Current Strategies External Assessment • Industry Analysis • Opportunities and Threats • EFE Matrix • CPM Matrix Internal Assessment • Organizational Structure • Segment Analysis • Financial Conditions • Strengths and Weaknesses • IFE Matrix

  3. Company Background: Origins Coca Cola Animated History

  4. Company Background: History • 1928 – Coca-Cola traveled with the US Olympics team to Amsterdam, and began global expansion • 1935 – Coca-Cola was certified Kosher by Rabbi Tobias Geffen • 1941 – Fanta is introduced in World War II during a trade embargo against Germany on cola syrup • 1944 – The one billionth gallon of Coca-Cola Syrup was made • 1963 – Coca-Cola’s first attempt to make a diet drink using saccharin • 1982 - Coca-Cola purchased Columbia Pictures, sold to Sony in 1989 • 1985 – New Coke was presented to test tasters who enjoyed it better then Coke and Pepsi; however, top management kept the old formula “Coca-Cola Classic” (which uses a high fructose corn syrup as sweeter instead of the proposed sugar can) in order to avoid possible backlash from customers. It is now only available in select countries • 1990s – Introduction of healthier beverages including Minute Maid Juices to Go, Powerade sports beverage, flavored tea Nestea (in a joint venture with Nestle), Fruitopia fruit drink and Dasani water • 2007 – World of Coca-Cola was built

  5. Company Background: Owned Brands

  6. Existing Vision Statement 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. Profit: Maximize long-term return to shareowners while being mindful of our overall responsibilities. Productivity: Be a highly effective, lean and fast-moving organization.

  7. Existing Mission Statement To refresh the world... To inspire moments of optimism and happiness... To create value and make a difference.

  8. Proposed Vision Statement Coca-Cola aspires to refresh the world, to inspire moments of optimism and happiness, and to create value and make a difference.

  9. Proposed Mission Statement People: Be a great place to work where people are inspired to be the best they can be(9)(6). Portfolio: Bring to the world(3) a portfolio of quality beverage brands that anticipate and satisfy people's desires and needs(2). Partners: Nurture a winning, network of customers(1) and suppliers, together we create mutual, enduring value. Planet: Be a responsible citizen that makes a difference by helping build and support sustainable communities(5). Profit: Maximize long-term return to shareowners(8) while being mindful of our overall responsibilities(7). Productivity: Be a highly effective, lean and fast-moving organization(4). • Customers • Products or services • Markets • Technology • Concern for survival, growth, and profitability • Philosophy • Self-concept • Concern for public image • Concern for employees

  10. Current Strategies • Vision 2020 • Profit, People, Portfolio, Partners, Planet, Productivity • Double the numbers of servings of its products -- water, soft-drinks, juices and the like -- consumed per day to more than 3 billion. • 12 month multicultural plans • 5by20™ program • Expedition 206 • 2020 water use reduction and replenishment

  11. Million Dollar Question “Should Coke strive to enter the snack or food business in order to remain competitive with Pepsi Co”?

  12. External Assessment

  13. Industry Analysis

  14. Industry Analysis: Competitors

  15. Industry Analysis: Ratios

  16. Opportunities • Global beverage industry is expected to grow from a valued $1.4 trillion in 2008, to $1.6 trillion by 2013 • Teenagers have $158 billion dollars of disposable income annually • Economic growth of new emerging markets • Potential to partner with fast food chains • Projected demand increase in bottled water and energy drink market by 5.8% and 14.3% respectively • A growing global awareness of health and wellness

  17. Threats • Pepsi has the leading beverage in the water and sports drink categories with Aquafina and Gatorade • More than 10% of the world's population is obese (WHO) • Unpredictable changes in currency rates • Water quality and scarcity has the potential to disrupt production capacity • Increasing Government regulation on food and drinks • Evolving consumer preferences and a large number of substitute products • Threat of hyperinflationary economies

  18. EFE Matrix

  19. CPM Matrix

  20. Internal Assessment

  21. Organizational Structure

  22. Segment Analysis

  23. Regional Boundaries

  24. Financial Conditions: Income Statement

  25. Financial Conditions: Balance Sheet

  26. Strengths • Over 500 different brands consisting of over 3000 beverage products • Located in over 200 different countries • Consumers consume over 1.7 billion servings of Coca-Cola products worldwide each day • Net income increase of 5 billion from last year • 30% of Coca Cola's revenues come from United States • Coca-Cola owns and markets four of the world's top 5 nonalcoholic sparkling beverage brands. • 12% increase in case volume in Coke's Eurasia & Asia segment, with China posting a 41% increase

  27. Weaknesses • Coke is not competing in the snack and food industries • 20% of the bottle supply are from companies Coca Cola does not have controlling interest • There are not a huge amount of sub-industries in the beverage market in which Coca-Cola does not operate • Only 3 of the 18 top executives are women • Long-term debt of 14 billion, up from last year's 5 billion • Trademark Coca-Cola beverages accounted for 51% of US case volume

  28. IFE Matrix

  29. Strategy Formulation

  30. SWOT Matrix

  31. Space Matrix • Aggressive strategies • Backward, Forward, Horizontal integration • Market Penetration • Market Development • Product Development • Diversification

  32. Grand Strategy Matrix • Quadrant IV Strategies • Related Diversification • Unrelated diversification • Joint ventures

  33. BCG & IE Matrix

  34. BCG Matrix • Star Strategies • Backward, Forward, Horizontal integration • Market Penetration • Market Development • Product Development

  35. IE Matrix • Hold and Maintain Strategies • Market Penetration • Product Development

  36. Matrix Analysis

  37. Million Dollar Question “Should Coke Strive to enter the snack or food business in order to remain competitive with Pepsi Co”?

  38. Million Dollar Question No

  39. Possible Strategies • Market Penetration • SO4 - Increase number of culturally specific products • Product development • SO3 - Increase number of healthy products • SO4 - Increase number of culturally specific products

  40. QSPM – External

  41. QSPM – Internal

  42. Strategy Implementation

  43. 3 Year Objectives Objectives: • Provide healthy alternatives beverages • Diversify revenues amongstproducts • Increase revenue to over 50 billion • currently at 35.119

  44. Strategies and 1 Year Costs • R&D for new products: $65 million (Pepsi spent $45m for similar initiative in Japan) • Marketing: current budget is 2.9 billion • New healthy products: 15% increase – ~435 Million Total expense: $500 Million Desired return : 5.2 billion(15%) revenue increase

  45. Assumptions • Stock Price $57.00 • Cost of Strategy $500,000,000 • Additional Stocks needs to raise strategy cost 8,771,930 • Revenues increase 15% • Interest rate 5% • Tax rate 16.7% • $1.76 in Dividends $4,062 mil.

  46. EPS/EBIT

  47. Projected Financials: Income Statement

  48. Projected Financials: Balance Sheet

  49. Projected Financials: Ratios

  50. Foreseeable problems • Lack of recognition from efforts • Keeping related development costs under control • Cost of goods sold may be higher for healthy alternatives

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