MINISTRY OF EDUCATION AND TRAINING

HOA SEN UNIVERSITY

FALCUTY OF ECONOMICS AND COMMERCE

STRATEGIC
Ordina
l

Name

Numb
er
1
2
3
4
5
6
7

Vo Hue Van
Tran Dinh Khoi
Le Nguyen Thien Thanh
Tran Hue Chi
Nguyen Hoang Phi Van
Nguyen Dang Que Tram
L T Kim Long

Students code

2000637
200228
2001191
200637
2001151
2001131
2001478

MANAGEMENT REPORT
Topic: COCA-COLA
Class: QT302DE01-0200
Lecture: Mr. Do Huu Anh
Group: Group 1

Ho Chi Minh City

August, 2014

MINISTRY OF EDUCATION AND TRAINING

HOA SEN UNIVERSITY
FALCUTY OF ECONOMICS AND COMMERCE

STRATEGIC
Ordina
l

Name

Numb
er
1
2
3
4
5
6
7

Vo Hue Van
Tran Dinh Khoi
Le Nguyen Thien Thanh
Tran Hue Chi
Nguyen Hoang Phi Van
Nguyen Dang Que Tram
L T Kim Long

Students code

2000637
200228
2001191
200637
2001151
2001131
2001478

MANAGEMENT REPORT
Topic: COCA-COLA
Class: QT302DE01-0200
Lecture: Mr. Do Huu Anh
Group: Group 1

Ho Chi Minh City

August, 2014

ABSTRACT
As you know, Coca-Cola is one of the most favorable drinks all over the world, its own brandname costs about $80 billion. In 1960, Coca-Cola was the first time introduced in Vietnam. After
that, Coca-Cola Indochina Pte Company was established officially in Vietnam on August 1995.

And now, to figure out how Coca-Cola is able to achieve that reputation, meet the goals, and
obtain a vital position in consumers demands and develop sustainably, we is going to make a
research of this company and analyze the Coca-Colas information, statistics and ratio by using
the knowledge from Strategic Management such as EFE, IFE, QSPM matrices, etc.

ACKNOWLEDGEMENT
We honestly like to thank our lecturer Mr. Hu Anh for supporting us with the potential,
significant information, steps, experience and knowledge to fulfill this assignment. Those things
we did learn from him are very practical and useful, so we can use them correctly in work.

CONTENT
ABSTRACT.....................................................................................................................................i
ACKNOWLEDGEMENT...............................................................................................................ii
CONTENT.....................................................................................................................................iii
LIST OF PICTURES.......................................................................................................................v
LIST OF TABLES..........................................................................................................................vi
TEACHERS COMMENT............................................................................................................vii
1.

Company background...........................................................................................................1

2.

Vision and mission................................................................................................................2

2.1.

Vision.............................................................................................................................2

2.2.

Mission..........................................................................................................................2

3.

Current strategic objectives..................................................................................................4

4.

Organizational structure........................................................................................................5

5.

Leadership.............................................................................................................................5

6.

Culture..................................................................................................................................6

7.

Analysis of macro environment (PEST Model)...................................................................7

7.1.

Political Analysis...........................................................................................................7

7.2.

Economic analysis.........................................................................................................8

7.3.

Social Analysis..............................................................................................................9

7.4.

Technology Analysis.....................................................................................................9

8.

Industry analysis (Five-force model)....................................................................................9

8.1.

Rivalry among existing competitors..............................................................................9

8.2.

Threat of new entrants.................................................................................................10

8.3.

Threat of substitute products.......................................................................................11

8.4.

Bargaining power of buyers........................................................................................11

8.5.

Bargaining power of suppliers.....................................................................................11

9.

Competitive Profile Matrix (CPM).....................................................................................12

10.

External Factor Evaluation (EFE) Matrix.......................................................................12

11.

Internal Factor Evaluation (IFE) Matrix.........................................................................14

12.

Produce a BCG Matrix....................................................................................................16

3

13.

Produce a Grand Strategy Matrix....................................................................................18

13.1.

Market penetration...................................................................................................20

13.2.

Market expanding....................................................................................................20

13.3.

Product development/Related diversification..........................................................20

13.4.

Forward integration.................................................................................................21

14.

SWOT Matrix..................................................................................................................21

14.1.

SWOT Analysis.......................................................................................................21

14.2.

Strategic in SWOT...................................................................................................24

15.

Produce a QSPM analysis...............................................................................................25

16.

Conclusion......................................................................................................................28

REFERENCE................................................................................................................................29

LIST OF PICTURES
Figure 1: Coca-Cola Corporations logo 1................................................................................1
Figure 2: Coca Cola can............................................................................................................4
Figure 3: Mr. Vamsi Mohan - General Director of Coca-Cola Vietnam and Cambodia..........5
Figure 4: Coca Colas values....................................................................................................5
Figure5: Revenue and growth on Coca-Cola Vietnam in April, 2014......................................10
Figure 6: Carbonated beverage market in Vietnam in April, 2014...........................................10
Figure 7: Competitive profit matrix between Coca-Cola Corporation and PepsiCo................12
Figure 8: Product matrix of Coca-Cola Corporation................................................................16
Figure 9: Grand Strategy Matrix..............................................................................................18
Figure 10: Revenue and growth in Vietnam soft drink industry in April, 2014.......................19
Figure 11: Revenue structure on products in April, 2014.........................................................19
Figure 12: The Coca-Cola bottle through years........................................................................21

LIST OF TABLES
Table 1: Annually Inflation Rate Vietnam from 2010 to 2014................................................. 9
Table 2: External Factor Evaluation (EFE) Matrix of Coca-Cola Corporation........................12
Table 3: Internal Factor Evaluation (IFE) Matrix of Coca-Cola Corporation..........................14
Table 4: QSPM Analysis on Coca-Cola Corporation...............................................................25

TEACHERS COMMENT
.........................................................................................................................................................
.........................................................................................................................................................
.........................................................................................................................................................
.........................................................................................................................................................
.........................................................................................................................................................
.........................................................................................................................................................
.........................................................................................................................................................
.........................................................................................................................................................
.........................................................................................................................................................
.........................................................................................................................................................
.........................................................................................................................................................
.........................................................................................................................................................
.........................................................................................................................................................
.........................................................................................................................................................
.........................................................................................................................................................
.........................................................................................................................................................
.........................................................................................................................................................
.........................................................................................................................................................
.........................................................................................................................................................
.........................................................................................................................................................
.........................................................................................................................................................
.........................................................................................................................................................
.........................................................................................................................................................
.........................................................................................................................................................
.........................................................................................................................................................
.........................................................................................................................................................
.........................................................................................................................................................
.........................................................................................................................................................
.........................................................................................................................................................
7

.........................................................................................................................................................

1. Company background

Figure 1 Logo of Coca Cola

The Coca-Cola Company is headquartered in Atlanta, Georgia in United States. Coca-Cola
was invented in 1886 by John Pemberton who was Georgia pharmacist. Muhtar Kent who was
born in 1952 in New York, United States is currently the Chairman and Chief Executive Officer
(CEO) and stick with the operation of The Coca-Cola Company.
The Coca-Cola Company establishes its firm in the worldwide areas and currently sells its
products to over 200 countries. The firm operations are divided into several geographies which
are Eurasia and Africa, Europe, Latin American, North American and Pacific. The Coca-Cola
Company is a beverage company which produces more than 3000 beverage products. The CocaCola Company is also a manufacturer, distributor, bottler, and marketer of non-alcoholic
beverage concentrates and syrups. Under the implementation of the Coca-Cola system, the CocaCola Company has to cooperate with over 300 bottling partners worldwide. The company
produces the products such as waters, juices and juice drinks, teas, coffees, sports drinks and
energy drinks. The company has four of the worlds top five nonalcoholic sparkling beverage
brands which are Coca-Cola, Diet Coke, Sprite and Fanta.
In 1960, Coca cola was the first time introduced in Vietnam. After that, Coca-Cola Indochina
Pte Company was established officially in Vietnam on August 1995. Since then, Coca-Cola has
some locations in Vietnam, which were united as one Beverage Company called Coca-Cola
Vietnam with the head office located in Thu Duc District, Ho Chi Minh City.

2. Vision and mission

In the strategic management model, clear vision and mission statements are very important for
alternative strategies to be formulated and implemented. A clear business vision will help the
firm build a comprehensive mission statement and a clear mission is needed before alternative
strategies can be formulated and implemented. So developing a good vision and mission is
essential for any firm and a big company like Coca Cola is not an exception.
2.1.

Vision

The vision 2020 is a great direction for Coca colas development in beverage industry. The
company is aware of what they need to do in present and in the future. They concern not only in
their profit or productivity but also in people. This can support them to develop in both quantity
and quality.
People: Be a great place to work where people are inspired to be the best they can.
Attract, engage and retain the best talent by knowledge, inspiration of passion, recruiting,
developing and advancing women, achieve true diversity.
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: Have responsibility to society 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; manage people,
time and money for the greatest effectiveness.

2.2.

Mission

Coca Cola need a clear mission before setting up alternative strategies to be formulated and
implemented. Mission will be analyzed based on nine main factors which are customers,
products, markets, technology, concern for survival growth-profitability, philosophy, selfconcept, concern for public image and employee.
2

Our Roadmap starts with our mission, which is enduring. It declares our purpose as a company
and serves as the standard against which we weigh our actions and decisions.
To refresh the world...
To inspire moments of optimism and happiness...
To create value and make a difference.
Above are three main factors that is inspiration for doing with Cokes mission from current to the
future, at least to 2020 with companys expectation of serving people best.
Customers: For Coca cola, customers are the ones who need to be appreciated and offered the
most quality products and the best of serving from Coca cola. The company serves the diversity
of customers including their agencies, distributors and all the Coca cola users in a large scale.
Products: Coca cola towards to bring the safety and quality products which ensure about the
natural alcohol levels, colorings and carbon dioxide levelDiversity in kind of drinks is also a
criteria of Coca cola products.
Market: Expand the market of Coca Cola; gain the aimed point of sales. Coca cola expand their
consumption investment. They increase to participate and serve in local, provide more outlets
and to many specific shoppers.
Public image: Mission of Coca cola is not only a leader in offering the best drinks, but also a
global leader in environment protection, in packaging and producing and disposing system.
Philosophy: Coca-Cola Enterprises provides products and services meeting the beverage and
business needs of thousands of retail customers. Opening dialogue and ongoing relationships,
Coca cola work to build mutual understanding and trust to pursuit the goals. Customer
relationships are central to Coca colas effort and philosophy.
Technology: The company displays their direction of technology in the vision report as the
purpose needed to achieve such as using the advanced and modern technology which contributes
to increase the productivity.
Self-concept that Coca cola is the firm which refreshes the world with the delicious and fresh
drinks and brings people on over the world the moments and feelings of optimism and happiness,
creates the difference to make customers remember and appreciate Coca colas values.
Concerns for employees: increasing peoples system knowledge and cross-system movement,
inspiring employees to be passionate, recruiting, developing and advancing women, making
better conditions for all employees to devote their creative and qualification for great drinks.
Concerns for growth, profit, survival: This element is not also demanded in the mission but
generally the company displays what to do in a detail report. Coca cola want to operate the
3

lowest cost manufacturing and logistics in every market while maintain the quality standards;
also use the size and expertise for creating the economic scale.
There are some important components that should be considered and put in the mission such
as technology, philosophy and its concern for survival growth and profitability. Company
should give more details about mission which would show the customers and employers
know what Coca Colas aim, targets and big picture about it in future.

3. Current strategic objectives

Coca-Colas objective is maintaining a trusted local presence in every community its serve. Coca
Cola is constantly looking ahead to anticipate what communities may need and gathering
resources to support them. To carry out this objective, theyve devised a strategy to build out on
fundamental strengths in marketing and innovation by increasing efficiency and effectiveness in
interactions and generating new energy through core brands that focus on health and wellness.
Their tactic is to increase their annual marketing budget, launch many new products, and
developed a model to help our retail customers maximize their sales.

Figure 2 Coca Cola can

4. Organizational structure
Vice President supply chain

Chief Finance Officer

Chief Executive Officer
Human Resource Director

Regional Vice President

5. Leadership
Mr. Vamsi Mohan was born and
brought up in India. During the nearly
20-year career at Coca-Cola, he had
played many important roles before
becoming general director of Coca-Cola
Vietnam and Cambodia. He holds a
Bachelor of Technology degree in
Electronics

and

Communications

Engineering from Jawaharlal Nehru

Figure 3 Mr. Vamsi Mohan - General

Technological University, Hyderabad

Director of Coca-Cola Vietnam and

and

Cambodia

Management from the Indian Institute

post-graduate

Diploma

in

of Management, Calcutta.
Vamsi Mohan and other managers of Coca Cola have recognized that Vietnamese industry is
extremely potential. Some surveys have shown that the demand of this product in Vietnamese
5

market is very high. A lot of people, especially young people are very keen on Coca Cola drinks.
Therefore, Vamsi Mohan and his team successfully reintroduced and launched a number of
Company brands and established Coca Colas commercial operations across the country, laying a
strong foundation for their business in this market.

6. Culture
Coca-Cola exists to benefit and refresh everyone it touches. Its beliefs stem from global ideals
grounded in local insights and influences. Coca-Cola takes responsibility for providing a wide
variety of quality beverages so that parents, youth, children and all consumers will have
enjoyable refreshment choices. Today, these choices include soft drinks, juices, waters, sports
drinks, tea and coffee products and others - with more options to come in the future.
Live Our Values. It serves as a compass for Coca cola companys actions and describes how
they behave in the world.

Figure 4 Coca Colas values

Coca cola focuses on the Market, especially on needs of consumers, customers and franchise
partners. Getting out into the market, listen and observe helping them to learn and understand
6

more their business environment. They become a world view focusing on execution in the
marketplace every day. However, the curiosity is never satiable because it is the factor
stimulating the learning and development.
Work Smart is one of the most important core values. They always act with urgency, remain
responsive to change, have the courage to change course when needed, remain constructively
discontent, work efficiently. These are the smart way to work that brings more success to Coke in
the future.
Coca cola act like an owner by understanding needs and what to do well for themselves and
their customers. An owner must have a smart system to operate and must focus on building their
values, positioning in the beverage market. The action of rewarding for people who take risks
and find better way to solve problem is a good solution to increase and develop the loyalty.
Learning form the outcomes is also a qualification of an owner.
Be the Brand Coca cola inspire creativity, passion, optimism and fun as their brand.
The true secret formula of Coca-Cola is its highly talented and motivated associates. There is
a statement spoken by a manager: We are a high performance team in a happiness factory with
happy energy who takes ownership and pride in refreshing and inspiring the world around us. We
leverage our rich individuality to grow the collective excellence.
Employee engagement at every level is the key to being the employer of choice, where people
create extraordinary results every day. Not only does Coca Cola refresh the world through our
brands, it also inspires each employee with optimism and ignites the passion within every
individual. Coca Cola ensures that every single employee at Coca-Cola Singapore is equipped
with adequate knowledge and opportunities to grow. An openness in communication is what
drives the dynamism here.

7. Analysis of macro environment (PEST Model)

Coca Cola is a well-known multinational company, they might know their Strength and
Weakness clearly, but to have a good strategies forward Vietnam market, Coca Cola Company
needs to analyze its Opportunities and Threats by PESTEL analysis.

7.1.

Political Analysis

Tax policy: The government decided to decrease corporate income tax from 25% today down to
22% in the 2014 and 2015 to help enterprises overcome difficulties, to expand production,
increase competitiveness
Government regulations: There are some regulations strictly limited and prevent the expanding
of the company. The Coca cola has experienced public policy which challenges them about the
sale of soft drinks in elementary, middle and high schools. This regulation cares about the
youths health as well as nutrition. It affected directly to the business of Coke Company in that
period.
Social welfare policies: The Vietnamese government always encourages the enterprises have
responsibilities toward the citizen by helping people. In Vietnam, Coca cola has set up many
regional and local foundations, organized charity programs in local. Some reality programs such
as Vietnam pushcarts program helping economically disadvantaged women build sustainable
livelihoods..
The political risks are impact to change in its business. The complicated as political conflicts,
disagreements cabinet and sluggish affect the development and sales. Vietnam has a steady
political condition for the development of Coca Cola. However, some affairs such as economic
crisis, East Sea conflicts also affect to Coca cola Vietnam, but not too much.
The Coca cola Vietnam can find the opportunities to develop the reputation with social
programs. However, political situation or state regulation is the components that Coca cola
Vietnam should consider. It can prevent their operation effectively in the future.
7.2.

Economic analysis

The economy in Vietnam is growing rapidly. It is advantages for the company's operations.
Muhtar Kent who is the president of Coca-Cola announced $ 300 million investment in Vietnam
in the next few years. He said that this was still an attractive market as consumption of new
people with 20% of the average world.1
The operations of Coca cola Vietnam has influenced by the economic recession. Above is the
total of inflation of Coca cola. Vietnam has a high inflation rate per year which impact to the
companys operation, and particularly affects to the price of products. In addition, the inflation
1 VNexpress, u t vo Vit Nam vn rt hp dn, http://www.thanhlapcongtytrongoi.vn/chutich-coca-cola-dau-tu-vao-viet-nam-van-rat-hap-dan/. By VNexpress.
8

rate of Vietnam economy also has been fluctuating for years, which also affect directly to Coca
Cola consumption in an unexpected way. Moreover, During 20 years operating in Vietnam, Coca
cola has many scandals about the taxation which get their reputation down.
Table 1 Annually Inflation Rate Vietnam from 2010 to 2014
Years

2014

2013

2012

2011

2010

Inflation rate (%)

6.3%

6.6%

9.27%

18.64%

9.19%

7.3.

Social Analysis

Vietnam is a developing country; the standard of living is quite lower than other countries.
Vietnam has an extremely young population with rising household incomes, which forms a very
attractive consumer base. Vietnam has a population of around 90 million people, with 70% under
the age of 35. English is the second most spoken language in the country, combined with a
literacy rate of 90%. Government makes education compulsory and literacy rate is about 80%.
7.4.

Technology Analysis

Vietnam is a rapidly developing country, Internet users had reached 24 million in 2010, which
accounted for 27.1% of the population of 86 million in 2010, which saw it ranked 7th among the
world with proportional internet users in Asia. Strong investment into infrastructure has been
coupled with tax cuts, reducing land lease and service prices, and electricity for both domestic
and foreign investors. In terms of telecommunication systems, there are 57 million mobile
subscribers of the total population back in 2010. The government encourages enterprises using
new technological renovation to improve the quality of local products.

8. Industry analysis (Five-force model)

8.1.

Rivalry among existing competitors

Growth rate of beverage industry

Consumer demand of soft drink is more and more increase. Growth rate is high and still
continuously grow up with high speed. In 2013, soft drink market reaches 2.083,06 liters, equal
80.000 billion VND.

Expert predicted it will continue growing up dramatically, reaches

9

3.000.000 liter equal 150.000 billion VND in 2017. Therefore, many beverage companies invest
and build more new factory to meet the market demand.
In addition, the growth rate of beverage market output (3-2013) increases 19.35%.
Beverage market has potentiality.

Figure 5 Growth rate of beverage industry

Figure 6 Beverage industry from 2010 to 2017

Competitive structure:
Pepsi and Tan Hiep Phat is large current competitors of Coca Cola Viet Nam. Pepsi hold a large
market share for years (about 24%). The Coca Cola Viet Nam accounts for a large market share
28% while Pepsi makes up 24%. Tan Hiep Phat is still the Beverage Company with the highest
profitability, account for 30% market share. The rest of market share belong to other soft drink
companies.

10

 Rivalry among existing competitors: High pressure

8.2.

Threat of new entrants

Beverage industry has high profitability index and high growth rate. Its potential market
because the demand of soft drinks in Vietnam is very high. The growth speech of fast food
services in Viet Nam is more than 10%, which is leading to the development of the beverage
industry especially for soft drinks. Three enterprises holding a majority market share of the
beverage industry are Coca Cola, Pepsi and Tan Hiep Phat. However, the market share of these
large firms is shrinking gradually because of the participation of many new companies with
different kinds of products, offering diverse and competitive market. However, 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.
The Threat of new entrants: high pressure
8.3.

Threat of substitute products

Nowadays, the standard of living in Vietnam is higher and more improved. Vietnamese consumer
is more clearly aware of the nutritional factors, which causes the decline in the proportion of
consumption of soft drinks. Besides that, there are the increase of green tea, fruit juice, vitamin
and other nutrients drinks. Coca Cola doesnt really have an entirely unique flavor However, the
Vietnamese population has young structure, and young people always love the convenience so
their first choice is still the carbonated soft drinks.
Threat of substitute products: high pressure.
8.4.

Bargaining power of buyers

The individual buyer no pressure on Coca-Cola.

Large retailers, like Coop-Mart, Metro, fast food stores, etc. 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 buyers: low pressure.

11

8.5.

Bargaining power of suppliers

The main ingredients for soft drink include carbonated water, phosphoric acid, sweetener, and
caffeine. The suppliers are not concentrated or differentiated.
Coca-Cola is likely a large, or the largest customer of any of these suppliers.
Bargaining power of suppliers: low pressure

12

9. Competitive Profile Matrix (CPM)

Figure 7 Competitive profit matrix between Coca-Cola Corporation and PepsiCo

The CPM Matrix reveal that Coca Cola is the strongest in the beverage industry with relative
strengths in covers many aspects such as Financial Position, Advertising, Market Share, Brand
Image, Product Quality, Distribution and Geographical Expansion but Pepsi has Product Range
higher than Coca Cola.

10.

External Factor Evaluation (EFE) Matrix

Table 2 External Factor Evaluation (EFE) Matrix of Coca-Cola Corporation

No.

Factors

Weight

Rating

Evidence for rating

Weighted
score

Opportunities
Consumption

0.9

Increasing

Expenditure Increase
Increase in middle- 0.8

ability among customers

Increasing number of 0.32

class consumers

purchasing 0.36

customers in Coca Colas

strategic segment
13

High Technology in 0.7

the

system

producing

0.21

0.18

of
and

packaging
Wide-spreading

0.6

internet and gadgets

Political stability

0.9

Widen

market

through 0.36

most of the provinces in

6

Widen market

0.8

Vietnam
Use the widen market 0.32
effectively to distribute

Vietnamese labor is 0.9

cheap in large scale

products
Use Vietnamese labor to 0.36
reduce

manufacturing

cost
8

Changing taste among 0.7

0.21

youth
Health

conscious 0.9

0.27

consumers
Threats
Tax policy for foreign 0.8

0.24

2
3
4

companies
Inflation rate
0.7
Economic crisis
0.8
Intense
competition 0.8

3
3
4

Effective

0.21
0.24
Marketing 0.32

5
6

such as Pepsi
Low-skilled labor
0.7
Increasing demand for 0.7

4
4

strategies forward
High skill training
Develop
more

non-carbonated
7

0.28
non- 0.28

carbonated products

products e.g juices

Increasing price of 0.8

raw material such as

8

sugar and metals

Many smaller players 0.6
are

furious

competitors
14

11.

Internal Factor Evaluation (IFE) Matrix

Table 3 Internal Factor Evaluation (IFE) Matrix of Coca-Cola Corporation

No.

Factors

Weight

Rating

Evidence for rating

Weighted
score

Opportunities
Consumption

0.9

Increasing

Expenditure Increase
Increase in middle- 0.8

ability among customers

Increasing number of 0.32

class consumers

purchasing 0.36

customers in Coca Colas

strategic segment

High Technology in 0.7

the

system

producing

0.21

0.18

of
and

packaging
Wide-spreading

0.6

internet and gadgets

Political stability

0.9

Widen

market

through 0.36

most of the provinces in

6

Widen market

0.8

Vietnam
Use the widen market 0.32
effectively to distribute

Vietnamese labor is 0.9

cheap in large scale

products
Use Vietnamese labor to 0.36
reduce

manufacturing

cost
8

Changing taste among 0.7

0.21

youth
Health

conscious 0.9

0.27

consumers
Threats
Tax policy for foreign 0.8

0.24

2
3
4

companies
Inflation rate
0.7
Economic crisis
0.8
Intense
competition 0.8

3
3
4

0.21
0.24
Marketing 0.32

Effective

15

5
6

such as Pepsi
Low-skilled labor
0.7
Increasing demand for 0.7

4
4

non-carbonated
7

strategies forward
High skill training
Develop
more

0.28
non- 0.28

carbonated products

products e.g juices

Increasing price of 0.8

raw material such as

8

sugar and metals

Many smaller players 0.6
are

furious

competitors

16

12.

Produce a BCG Matrix

Figure 8 Product matrix of Coca-Cola Corporation

Stars: high growth, high market share

-

Stars are leaders in business.

They require heavy investment to maintain its large market share.

It leads to a large amount of cash consumption and cash generation.

Attempts should be made to hold the market share otherwise the star will become a
cash cow

The star products of Coca Cola are Coca Cola, Diet Coke, Sprite. They are the leading soft
drink in current market share and have a high growth rate, defeat all the competitors,
especially is Pepsi Co.
17

Cash cows: low growth, high market share

-

They are foundation of the company and often the stars of yesterday.

They generate more cash than required.

They extract the profits by investing as little cash as possible.

They are located in an industry that is mature, not growing or declining.

The products which are Cash cows are Schweppes, Nutri Boot, Fanta, Teppy. Both Schweppes
and Nutri Boot are not invested much in marketing and PR, however, we can identify them
easily on the market. The Soda (carbonated mineral water) market does not have many
competitors. Therefore, Coca Cola Company quickly realized this to take the market which
has a little interest from competitors. About Nutri Boot, this is a breakthrough in the market
when they are the first and the only one who create a new fruit juice made from fresh orange
and milk while other competitors squirming in the war of bottled orange juice. Conversely,
with Fanta and Teppy, in the first stage, Coca Cola has launched a lot of ad campaign to
promote for these two products. Until now, these products are not the best products on the
market in bottled orange juice; however, we cannot ignore the revenue that they have brought
to Coca Cola every year.

Question mark: high growth, low market share

-

Most businesses start of as question marks.

They will absorb great amounts of cash if the market share remains unchanged

Question marks have potential to become star and eventually cash cow but can also
become a dog.

Investments should be high for question marks.

The question marked products of Coca-Cola is Dasani. This is a new bottled water high
quality product of Coca Cola. Danisa has a lightweight, environmentally friendly. Specially,

18

the bottle is easy to twist into a small piece in the palm of your hands after using. Although
until now, it still cannot defeat the other big competitors such as Lavie, Aquafina.

Dogs: low growth, low market share

-

Dogs are the cash traps.

Dogs do not have potential to bring in much cash.

Business is situated at a declining stage.

The products which are at Dogs are Samurai and Splash. With many orange juice product
lines such as Fanta, Teppy; the appearance of Splash cannot impress the customers although
this product has a new advanced in orange juice product lines: the orange cloves. Besides, the
reason why Samurai is arranged in Dogs is because of their scandals in the quality and
advertising. The only one thing that reminds the customers about Samurai is the offensive
and deput.

13.

Produce a Grand Strategy Matrix

Figure 9 Grand Strategy Matrix

19

Soft drink in Vietnam is estimated as an industry with high growing rate in defiance of world
economic crisis. Demographic explosion in countries with the young population and the growing
up of average per capita income make a lever for soft drink industry in Vietnam.

Figure 10 Revenue and growth in Vietnam soft drink industry in April, 2014
In the world, soft drink has many kinds: carbonated beverage (soft drink with gas), soft drinks
without gas, fruit juice, green tea, mineral water, etc. In the recent years, the trend of soft drink
market is the decreasing of carbonated beverage (decrease 5%) and the increasing of soft drink
without gas (increase 10 %) because Vietnam consumers choose soft drinks which come from
natural sources, have more vitamin, mineral, less chemical.

Figure 11 Revenue structure on products in April, 2014

20

In general, carbonated beverage market is going down but market share of Coca Cola and
PepsiCo are also highest. In 2013, according to Nilsen, the Coca Cola has 28% in market share
(more than Pepsi, just 24%).
Coca Cola had its firm over 200 countries and became the fastest selling brand over the
world. Coca Cola sold over 1 billion drinks, consume over 10.450 drinks bottle every second. In
2003, Coca Colas revenue is 4.347 million USD. Up to now, Coca Cola still the best drinks
company in drink industry of American, defeated many competitors. Besides selling activity,
Coca Cola always spend money on PR strategy for their products. So that Coca Cola become a
giant person in soft drink.
13.1.

Market penetration

For example: In Vietnam, Coca Cola penetrated Vietnam market by association of companies.
This is a trend of companies in Vietnam at market opening period.
Coca Cola cooperated with domestic companies in Vietnam to share the technology and
develop product. But within 6 years, Coca Cola M&A these companies and Coca Cola becomes
an official foreign company which has 100% foreign budget.
13.2.

Market expanding

Globalization is an opportunity for companies to develop. The main purposes of expanding

market are increasing revenue, reducing risks, and making the companys value more valuable,
finding more consumers, etc.
When Coca Cola established, it had its firms over 200 countries and became the fastest selling
brand over the world. At first, Coca Cola concentrates on developing countries, which has high
GPD, GNP such as Europe, North America. Then Coca Cola expands its brand to other countries
like Vietnam or Philippine, etc. Africa is a potential market.
Nowadays, Coca Cola successes in expanding its market with variety of drink such as carbonated
beverage, fruit juice drink, tea, etc.
13.3.

Product development/Related diversification

Coca Cola has products in drink without alcohol.

21

About eelated diversification, Coca Cola (Coke) is a carbonated beverage, it has a good
assumption so beside the original product is Coke, Coca Cola makes variety of drink and shape
such as Diet Coke, Vani Coke, Coke Zero, Sprite, Fanta.
Recently, Coca Cola has had more products such as fruit juice, water, etc. to serve consumers.
Coca Colas packing has changed year to year.

Figure 12 The Coca-Cola bottles through years

13.4.

Forward integration

Forward integration (choose this form because Coca Cola uses franchise)
Product distribution franchise: Coca Cola, Goodyear Tires, Ford, etc. are the examples for
product distribution franchise. This is a form that franchisor allows franchisees to distribute
products and services in the certain range and time, use the brand, icons, the trade mark, logo,
slogan but not business method. Some industry use Product distribution franchise such as fast
food industry, petroleum industry, vehicle industry, etc. In reality, this kind of franchise is not
common in business.
Coca Cola uses product distribution franchise for multiple corporations in many countries. Coca
Cola holds most of shares in many corporations such as Coca-Cola Enterprises, Coca-Cola
Amatil, Coca-Cola Hellenic Bottling Company (CCHBC) and Coca-Cola FEMSA.

22

14.

SWOT Matrix

14.1.

SWOT Analysis

Strengths (S)

One of the best brand in the world in term of value: The Coca Cola Companys in the top 10
of the band having the highest value in the world. In 2014 the most valued is $80,68 billion.
The number proves that the reputation and the high value of Coca Cola in the world market.

Worlds largest market share in beverage: Coca Cola holds the largest beverage market share
in the world (about 40%) and have a large share in the Viet Nam beverage market.

Old-famous brand: Coca Cola penetrate in Viet Nam in 1994 and now its nearly hold a
dominant share of the Viet Nam beverage market. This brands too familiar with Vietnamese
and popularity in the North.

Brand recognition: following the research about 94% population in over the world awareness
Coca Cola brand.

Strong, impressive marketing and advertising: Coca Cola advertising cost accounted for more
than $3 billion in 2012 to increased firms sales and build brand recognition. Beside that,
Coca Colas advertising very impressive by print name on the can, this is a recent strategy to
attract customers, especially is young people and print lucky word on the can in Tet holiday.

Suitable price with almost social class: Vietnamese buy Coke regularly as their habits.
Moreover, Coke has been bought with the suitable price in Vietnamese Market, just 7-10
thousand VND for a small 500ml Coke.

Various soft-drinks: Coca Cola has about 500 other soft- drink products in 200 countries.
Some of other product in Viet Nam as Sprite, Fanta, Schweppes Tonic, Lemon Soda, Minute
Maid, Dasani mineral water, Nutriboost fruit milk.

Customer loyalty: Coca Cola capturing a large number people whos always loyal with Coca
Cola, in Viet Nam has a big fan in both the north and the south, especially in the north.

Weaknesses (W)
23

Unhealthy issue: as you know if you drink a lot of carbonated water, itll be harm your health
and get fat, because of contenting high sugar, calories. And now the world is fighting obesity
and is moving towards consuming healthier food. Some people recognize this problem, so
they refuse to use carbonated drink, this is a weak point that Coca Colas considering.

Undiversified product portfolio: Unlike other soft- drink company, Coca Cola is still focusing
only on selling beverage, but dont invest in other line product, which puts the firm at a
disadvantage. Coca Colas competitor is Pepsi, theyre not only developing soft-drink
products, but they also release some kind of snack, to be diversity their product portfolio.

Controlling taste and quality: if someone tries to drink Coca Cola in other countries, the taste
is clearly different. Vietnamese trend to adore sweet drink, but Coca Cola in Viet Nam isnt
sweet enough. So some people use other alternative product.

Opportunities (O)

The 6th population country in the world: It takes advantage to develop image and products.
Besides that, it attracts other consumers to use and emphasizes their brand value in the world.

Young population and emerging market: Consumption of soft drinks is still significantly
growing in emerging markets, where Coca Cola could increase and maintain its beverage
market share. In Viet Nam, a majority of youth adores drinking Coke because of its taste and
the suitable price.

Abundant resources and cheap resource: the labor in Viet Nam very cheaper and higher level
than other countries, so its easy to train and reduce cost for hiring.

Technological advance: with high technology, Coca Cola can cut down some cost in
packaging, producing, increase productivity and apply technical machines in the production
chain.

Fast food stores appearance: in the recent time the appearance of many fast food stores
created a great chance for Coca Cola cooperate with these stores as McDonalds, KFC,
Lotteria, Burger King to increase sale and attract more consumer. Its such a partner and
alliance strategy to expand the scope of market.
24

Threats (T)

Competition from PepsiCo: PepsiCo is fierce competing with Coca Cola over market share. It
is a pioneer in the Vietnam market and hold a large market share. And up to now, Pepsi has so
much success, especially in the South Viet Nam. Apart from PepsiCo, there are some
competitors in Viet Nam as Tan Hiep Phat, Tribeco, Wonderfarm, etc.

Development alternative product: Consumers in Vietnam become a more healthy concern and
reduce their consumption of carbonated drinks that have large amounts of sugar, calories and
fat. This is the most serious threat as Coca Cola is mainly serving carbonated drinks. Thus,
more and more healthy product as an alternative soft drink for responding to consumer
demand.

Unstable economics and policy in Viet Nam: the rate, tax and inflation are a serious issue for
any company in Viet Nam. The economic environment will affect on consumer expenditure
and business cooperation. In addition, because of high rate in Viet Nam, it influences on
investment loans.

Polluted environment: Waste disposal is a big problem for Coca Cola, most of waste made
from plastic, classic mental, its difficult to decompose and recycle. So friendly packaging
production is to love and to belief.

Global environment: the fluctuation in global economic will impact on cost material import.
Perhaps, increasing cost will influence on business cooperation and increase other cost lead to
lose down the profit.
14.2.

Strategic in SWOT

SO (strengths-opportunities) Strategies
-

Expand many retail channels through stores or shops and supermarkets (Market
penetration and expansion) - S2S3O3

Enhance amazing advertising programs. S1S5O1

25

Develop new functional products which have potential growth (related diversification)
S6S7O2O5

Enhance new beverage following the trendy healthy S7O1O2

WO (weaknesses-opportunities) Strategies
-

Improve and provide the products with high qualification and taste (product
development) - W3O2O4

Diversified product portfolio W2O2O4

Improve technology to create new products and compete with other competitors
W1O2O3O4

ST (strengths-threats) Strategies
-

Enhance building reputation and image in community channels S1S3T1

Keep creating differentiation advantages. S5S7T1

Analyze economic market before giving strategies and plans. S2S3T3

WT (weaknesses-threats) Strategies
-

Establish protecting environment program to reduce waste S1S3T4

Control resource and saves material to reduce cost. - W3T5

Develop healthy product and use natural material to meet consumer needs. W1W3T2

15.

Produce a QSPM analysis

Table 4 QSPM Analysis on Coca-Cola Corporation

KEY FACTORS

ALTERNATIVE STRATEGIES
Diversified product portfolio,
Bargaining with the
besides carbonated drinks to

suppliers with suitable

care the healthy consumers

price (backward

with amazing advertising

integration)
26

Weight

programs.
AS

TAS

Weight

AS

TAS

Strengths
1. Consumption expenditure

0.1

0.4

0.05

0.1

increase
2. Suitable price with almost

0.07

0.21

0.05

0.1

social class
3. The best global brand in the

0.1

0.3

0.1

0.2

world in terms of value

Weaknesses
1. Significantly focus on

0.15

0.45

0.1

0.2

0.1

0.2

0.12

0.36

0.1

0.1

0.15

0.6

0.08

0.08

0.1

0.4

0.05

0.1

0.05

0.1

0.05

0.1

0.05

0.1

0.03
0.02

3
1

0.09
0.02

0.01
0.1

1
4

0.01
0.4

negative information on

0.05

0.05

0.02

0.02

product labels
4. Competition from PepsiCo
Sum weights
Sum Total Attractiveness Scores

0.1
100%

0.3

0.1
100%

0.2

carbonated drinks
2. Undiversified product
portfolio
3. High debt level due to
acquisitions
4. Decreasing gross profit and
net profit margins
Opportunities
1. High technology
2. Growing beverages
consumption in emerging
markets
Threats
1. Changes in consumer tastes
2. Waste disposal
3. Legal requirements to disclose

2.4

2.79

Analysis:
For the 1st strategy: Diversified product portfolio, besides carbonated drinks to care the
healthy consumers with amazing advertising programs.

27

Consumption expenditure increase and suitable price with almost social class:
Vietnamese buy Coke regularly as their habits. Moreover, Coke is bought with the
suitable price in Vietnamese Market, just 7 thousand dong for a small 500ml Coke.

The best global brand in the world in terms of value: The Coca Cola Company is the
most valued ($77,839 billion) brand in the world, the key to affect Vietnamese
consumers.

Significantly focus on carbohydrate drinks: The business is still focusing on selling

Coke, Fanta, Sprite and other carbonated drinks. This strategy works in short term as
consumption of carbonated drinks will grow in emerging economies but it will prove
weak as the world is fighting obesity and is moving towards consuming healthier
food and drinks.

Competition from PepsiCo: PepsiCo is fiercely competing with Coca Cola over
market share. Although Coke goes behind in the beverage field in the world, it is a
pioneer in the Vietnam market. And up to now, Coca-Cola has so much success in
Viet Nam.

For the 2nd strategy: Bargaining with the suppliers with suitable price (backward
integration)
-

High debt level due to the acquisitions: Nearly $8 billion of debt acquired from
CCEs acquisition significantly increased Coca colas debt level, interest rates and
borrowing costs.

Decreasing gross profit and net profit margin: Coca colas gross profit and net profit
margin was decreasing over the past few years and may continue to decrease due to
higher water and other raw material costs.

Waste disposal: Waste of the Coca cola is all cover, can, bottle that are metal, plastic,
etc. Reducing landfill is a top priority.

Conclusion:

28

According to the QSPM, the sum TAS of the 2nd strategy is higher the 1st one (2.79> 2.4).
Thus, our group is going to choose the 2 nd one because it is able to reflect the practical Coca
colas performance these years such as the decrease in profit margins, material costs, etc. Those
are affecting on the sustainable development of Coca cola.

29

16.

Conclusion

In general, carbonated water and soft drink market in Vietnam is developing rapidly and
increasingly diversified products. Coca Cola is one of the beverage brand is very successful and
hold a large market share in Vietnam. With the above models have a clear analysis of the
advantages and drawbacks of Coca Cola in Vietnam. In the model analysis and strategic
assessment of Coca Cola, the SWOT model only has the most reasonable in terms of analysis to
determine strategy. Due to the nature of SWOT analysis gives the specific views about the
potential of a company, because the model is mainly based on the internal factors and external
factors in order to identify strengths, weaknesses, opportunities and threats of a business. It's
helpful to bring this model is objective view and specific adjustment to help companies
determine the business strategy. Thus the SWOT, strengths and weaknesses of Coca Cola has
been pointed out clearly and helps us see the strategy that the company has applied to each
product to conquer the market in Viet Nam.

30

REFERENCE
Foreign Documents

COCA-COLA

COMPANY,

Coca-cola

company,

Vision

mission

and

values,

http://www.coca-colacompany.com/our-company/mission-vision-values,

SCRIBD, BCG Matrix for Coco Cola, http://vi.scribd.com/doc/16655962/Bcg-Matrixfor-Coco-Cola

November 16, 2010, MBA-LECTURES, Grand Strategy - Matrix of Coca-Cola,

http://mba-lectures.com/management/strategic-management/1106/grand-strategymatrix-of-coca-cola.html

MAXI-PEDIA, Quantitative Strategic Planning Matrix (QSPM), http://www.maxipedia.com/quantitative+strategic+planning+matrix+QPSM

NetMBA, BCG Growth Share Matrix, http://www.netmba.com/strategy/matrix/bcg/

By Vnexpress, THNH LP CNG TY TRN GI, u t vo Vit Nam vn rt hp

dn, http://www.thanhlapcongtytrongoi.vn/chu-tich-coca-cola-dau-tu-vao-viet-nam-vanrat-hap-dan/

Vietnamese Documents

May 22, 2014, DN TR- DIN N DN TR VIT NAM, Top 10 thng hiu t
gi nht th gii nm 2014, http://dantri.com.vn/kinh-doanh/top-10-thuong-hieu-dat-gianhat-the-gioi-nam-2014-877903.htm

July 20, 2014, NGI A TIN C QUAN CA LUT GIA VIT NAM, CocaCola

hu

nhng

sn

phm

no

ti

th

trng

Vit

Nam?

http://www.nguoiduatin.vn/coca-cola-so-huu-nhung-san-pham-nao-tai-thi-truong-vietnam-a140429.html

31

123DOC, Chin lc kinh doanh v gia nhp th trng quc t ca Coca-Cola,

http://123doc.vn/document/463574-chien-luoc-kinh-doanh-va-gia-nhap-thi-truong-quocte-cua-coca-cola.htm

32