Strategic Management

STRATEGIC MANAGEMENT
Name:
Grade Course:
Tutor’s Name:
(30 October, 2010)
Table of Contents
 TOC \o "1-3" \h \z \u  HYPERLINK \l "_Toc276179650"
1.0 Introduction  PAGEREF _Toc276179650 \h
3
 HYPERLINK \l "_Toc276179651"
2.0 Mission and Vision Statements Analysis  PAGEREF _Toc276179651 \h
4
 HYPERLINK \l "_Toc276179652"
3.0 Situation Analysis  PAGEREF _Toc276179652 \h
6
 HYPERLINK \l "_Toc276179653"
3.1 PEST analysis  PAGEREF _Toc276179653 \h
7
 HYPERLINK \l "_Toc276179654"
3.2 Porter forces analysis  PAGEREF _Toc276179654 \h
7
 HYPERLINK \l "_Toc276179655"
3.2.1 Barriers to entry  PAGEREF _Toc276179655 \h
7
 HYPERLINK \l "_Toc276179656"
3.2.2 Suppliers  PAGEREF _Toc276179656 \h
8
 HYPERLINK \l "_Toc276179657"
3.2.4 Substitutes  PAGEREF _Toc276179657 \h
9
 HYPERLINK \l "_Toc276179658"
3.2.5 Competitive rivalry  PAGEREF _Toc276179658 \h
9
 HYPERLINK \l "_Toc276179659"
3.3 External Factor Evaluation  PAGEREF _Toc276179659 \h
9
 HYPERLINK \l "_Toc276179660"
3.4 Internal Factor Evaluation  PAGEREF _Toc276179660 \h
10
 HYPERLINK \l "_Toc276179661"
3.5 Competitive Profile Matrix  PAGEREF _Toc276179661 \h
11
 HYPERLINK \l "_Toc276179662"
4.0 Financial Analysis  PAGEREF _Toc276179662 \h
12
 HYPERLINK \l "_Toc276179663"
5.0 Organizational Analysis  PAGEREF _Toc276179663 \h
14

Strategic Management
1.0 Introduction
Effective Management must be a key element in any successful company. The systems in the company must work harmoniously to achieve a common purpose and goal with an objective of attaining success and most of all maximizing profits. Without a management and leadership team that guides the company to its set objective the company looses focus on its goals and may even collapse if not rescued early. Managers must lead by example where they must establish a mission and vision for the company and the values that will be followed for the common good of attaining maximum profitability (Nonaka, & Takeuchi, 1995).
The Coca Cola Company established in 1886 is one of the most successful soft drink manufacturing companies globally selected for this study. Its success can be seen by the major domination in the soft drink market in almost all regions of the world, where their products have made huge sales while the company continues to increase its networks to all corners of the world (Coca-Cola, 2010). According to the company’s website the company has over 3,300 beverages that range from diet and regular drinks to still drinks; that are; fruit juices, sports and energy drinks, milk-and soy-based drinks fruit drinks, tea and coffee, and water.
This paper examines the Coca Cola Company and its management and how it has played its part in its success. It researches and analyzes the mission and vision statement of the company and performs a situational analysis evaluating both the external and internal environment factors of the Coca Cola Company. On this area the paper specifically addresses the current and future external factors of the Company where the external evaluation matrix is used as a summarization tool. A current financial analysis is critically evaluated where income statements for the most recent three years are included. The paper also provides a trend analysis, performs a comparison to the industry and discusses the solvency, efficiency and profitability of the Company. Finally the organizational structure is discussed where the board of directors, the organization's culture, its leadership, and the competition the organization faces are factored in.
2.0 Mission and Vision Statements Analysis
The company’s mission and vision are based on a dynamic world that keeps on changing, it dominance in the soft drink industry in future and an understanding of the trends, inclinations, drifts and forces that influence the business currently and in future. The future is always planned for in the vision and the mission creates a long term plan to continue dominating and succeeding. The mission is enduring and speaks out the purpose of the company and at the same time act as a standard that measures the company’s decisions and actions (Coca-Cola, 2010).
The mission states “To refresh the world... To inspire moments of optimism and happiness and to create value and make a difference.”
The vision gives a basis of the plans and guidelines on the different aspects of business and describes what must be accomplished so as to achieve sustainability and quality growth. On the issue of people, they must be inspired to achieve the best as they work with the company. The portfolio initiates the desire to offer quality products that adequately satisfy the consumers’ needs and desires.
The partners: must be a winning and achieving team of suppliers and consumers so as to mutually network of individuals with enduring value. For the planet: the company must be responsible and aim to make a difference through corporate social responsibility programs in building and supporting sustainability in communities. The main goal of Profit is to maximize the returns of the stakeholders and shareholders without loosing track of the overall responsibilities. In productivity the company has a vision of being a highly effective, lean and fast growing organization that spreads throughout the world thus reaching all markets that are not explored. The vision is made a reality by the effectiveness of management and a culture of winning in view of the fact that their attitude and behavior are set on winning (Cummings, 2010).
The company values give direction of the actions of the employees and ensure that all employees behave in the right manner at all times. The values include; “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, Passion: Committed in heart and mind, Diversity: As inclusive as our brands and Quality: What we do, we do well”.
The Coca Cola Company focus on the market is on the needs of the consumers, customers, clients and franchise partners; the company aims to venture in to the market and listen, observe and learn the likes and dislikes of the consumers’; incorporate a global perspective; ensure a daily execution of the business in the market place and is always insatiably curious. The company aims at working smart where it always acts with urgency, never opposes change, works with courage and confidence when there is change is needed, and remains constructively restless and works efficiently at all times.
Everyone in the company act likes the owner in that everyone is accountable for their actions and inactions, every employee is a steward and protects the assets of the company as their own and majors on building value at all times; the company rewards the employees for risks taken in solving problems and all employees are encouraged to learn from the results of what was perfect and what failed. The company also seeks to build a brand that Inspire creativity, passion, optimism and fun. The mission, vision and values of the Coca Cola Company can be said to be essential and vital in the attaining of the goals and objectives set by the company.
Following them strictly has enabled the company build an empire in the soft drink industry that has dominated the markets and acted as a monopoly in many markets. It has made the company have a competitive advantage over it competitors who have lagged behind in sales, revenues and profits.
All aspects of accounting, management, finance, and human resources have been effectively addressed in the mission and vision of the Coca Cola Company; but the marketing and information technology issues have not been adequately addressed (David, 1999). The company assumes that its monopolistic nature in many markets will last but in a world that is changing factors of technology and marketing must be incorporated in the mission and vision so that the company remains competitive even in future. Technological advancement ensure that the company has new ideas to develop it products and marketing lays out procedures to market them, relying on the dominance and customer loyalty may be a factor that can be changed by competitors to gain entry into the markets.
3.0 Situation Analysis
The company has brands such as Coke, Sprite, Fanta and Dasani that dominate the markets and customers have continued to enjoy their nourishment world over. There is no doubt that management has played a very significant role in the establishment, running and success of the company. Owning 4 of the world’s top 5 drinks in the world, having approximately 92, 800 associates in the world, a global reach of more than 200 companies and serving over 1.6 billion consumers a day are some of the achievement of this company (Cummings, 2010).
3.1 PEST analysis
The Coca Cola Company similar to most companies is face by political, economic, social and technological factors. The company is based in different political environments that are characterized by different government policies and regulations. Political goodwill in most cases favors coca cola since most government welcome the company (Kamruzzaman, Et al. 2010).
In economic issues carbonated drinks have experienced low growth in the North American market in 2004; by 2009 the unit case volume has grown globally at a 3% rate that translates to 24.4 billion unit cases. The operational cash flow also grew at 8% that was $8.2 billion. And in North America the net operating revenues were over 70%.
The social scene has seen changes in consumer li...