Coca Cola Business Strategy Paper
HEADING
To: Mr. Muhtar Kent, CEO
From: Erica Wei, Corporate Analyst
Date: May 1st, 2013
Subject: Increasing Marketing Focuses in Asian Markets
As society becomes more health conscious, domestic consumers are looking for healthier products. Increasing public concern of health issues, such as obesity, poses new challenges for the carbonated soft drink (CSD) industry, which has experienced declining growth in demand for recent years (Exhibit 1). As the United States has been Coca-Cola’s largest source of revenues by country and the company relies heavily on its domestic CSD market, this trend threatens the company’s future profitability. Coca Cola must dedicate more resources to the emerging markets of Asia in order to capture larger market shares and revenue.
U.S. CSD Industry Revenue Growth Year | Revenue $ million | Growth % | 2005 | 24,838.5 | -3.6 | 2006 | 23,150.1 | -6.8 | 2007 | 21,523.7 | -7.0 | 2008 | 20,436.6 | -5.1 | 2009 | 18,640.6 | -8.8 | 2010 | 19,794.3 | 6.2 | 2011 | 19,123.5 | -3.4 | 2012 | 18,263.4 | -4.5 | 2013 | 17,598.9 | -3.6 |
Exhibit 1- United States CSD Industry Growth (IBISWorld)
The Coca-Cola Company
An American multinational beverage manufacturer and retailer, the Coca-Cola Company is a leader in non-alcoholic beverage concentrates with over 3,500 beverage products sold in over 200 countries. The company’s products can be broadly categorized into two segments: CSDs such as Coke, Sprite, and Fanta that bring in an estimated 78 per cent of the company’s beverage revenues, and non-carbonated beverages of water, fruit juice, and energy drinks that make up the remaining 22 per cent (wikinvest). Coca-Cola maintains a long-standing industry leader in CSD, hauling in large revenues from its domestic market, with market share reaching 32.7 per cent as in 2012 (IBISWorld).
Competitive Advantages & Emerging Opportunities
Brand Equity – the CSD industry has long been a highly concentrated market with little
To: Mr. Muhtar Kent, CEO
From: Erica Wei, Corporate Analyst
Date: May 1st, 2013
Subject: Increasing Marketing Focuses in Asian Markets
As society becomes more health conscious, domestic consumers are looking for healthier products. Increasing public concern of health issues, such as obesity, poses new challenges for the carbonated soft drink (CSD) industry, which has experienced declining growth in demand for recent years (Exhibit 1). As the United States has been Coca-Cola’s largest source of revenues by country and the company relies heavily on its domestic CSD market, this trend threatens the company’s future profitability. Coca Cola must dedicate more resources to the emerging markets of Asia in order to capture larger market shares and revenue.
U.S. CSD Industry Revenue Growth Year | Revenue $ million | Growth % | 2005 | 24,838.5 | -3.6 | 2006 | 23,150.1 | -6.8 | 2007 | 21,523.7 | -7.0 | 2008 | 20,436.6 | -5.1 | 2009 | 18,640.6 | -8.8 | 2010 | 19,794.3 | 6.2 | 2011 | 19,123.5 | -3.4 | 2012 | 18,263.4 | -4.5 | 2013 | 17,598.9 | -3.6 |
Exhibit 1- United States CSD Industry Growth (IBISWorld)
The Coca-Cola Company
An American multinational beverage manufacturer and retailer, the Coca-Cola Company is a leader in non-alcoholic beverage concentrates with over 3,500 beverage products sold in over 200 countries. The company’s products can be broadly categorized into two segments: CSDs such as Coke, Sprite, and Fanta that bring in an estimated 78 per cent of the company’s beverage revenues, and non-carbonated beverages of water, fruit juice, and energy drinks that make up the remaining 22 per cent (wikinvest). Coca-Cola maintains a long-standing industry leader in CSD, hauling in large revenues from its domestic market, with market share reaching 32.7 per cent as in 2012 (IBISWorld).
Competitive Advantages & Emerging Opportunities
Brand Equity – the CSD industry has long been a highly concentrated market with little