Supply Chain Management of Coca Cola Company

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Supply Chain Management of Coca Cola Company
Course Name: Supply Chain Management

Instructor Name: Sir Danish Saleem
Group Members:
1. Muhammad Qasim BM-26464
2. Naveed Ur Rehman BM-26507
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Introduction
Company Profile:The Coca-Cola Company is an American multinational beverage

corporation and manufacturer, retailer and marketer of nonalcoholic beverage concentrates
and syrups, which is headquartered in Atlanta, Georgia. The company is best known for its
flagship product Coca-Cola, invented in 1886 by pharmacist John Stith
Pemberton in Columbus, Georgia. The Coca-Cola formula and brand was bought in 1889
by Asa Griggs Candler (December 30, 1851 - March 12, 1929), who incorporated The Coca-
Cola Company in 1892. The company operates a franchised distribution system dating from
1889 where The Coca-Cola Company only produces syrup concentrate which is then sold to
various bottlers throughout the world who hold an exclusive territory. The Coca-Cola
Company owns its anchor bottler in North America, Coca-Cola Refreshments.Its stock is
listed on the NYSE and is part of DJIA, S&P 500 index, the Russell 1000 Index and the Russell
1000 Growth Stock Index. Its current chairman and CEO is Muhtar Kent. Coca-Cola currently
offers more than 500 brands in over 200 countries or territories and serves over 1.7 billion
servings each day.
 Over 146,000 employees around the world
 More than 1.7 billion servings per day

 More than 3500 kinds of beverages
 Sponsorship: Olympics, FIFA, EURO etc.
 Charity and contributions 1% from the total income
 The Coca Cola Foundation, 1984. Financial support for improving society.
 2002-2010 more than $690 millions of contribution and charity.
 The biggest contributions:
 Africa – 11 millions
 China Youth Development – 6 millions
Institute of Business & Technology (IBT) Page 3

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 United Nations – 2 millions
Vision
• To become the best place to work for people
• To present the world a quality beverage brand.
• To make a difference by helping, building and supporting sustainable communities.
• Being highly effective and fast moving organization
Mission
• To refresh the world and inspire moments of happiness and optimism.
• To create value and make a difference.
Values
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
Quality: What we do, we do well

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Images of few of The Coca Cola Company Brands

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“upply hai A ordi g to The Co a Cola Co pa y I ter atio al

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Market Share by Coca Cola World Wide

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Competitive Strategy
• Focus on aggressive marketing has been the cornerstone of the culture and strategy of
its business.
• Coca-Cola always made expansion efforts.

• Coca-Cola not only produces soft drinks but it also serves energy drinks, tea, juice
drinks and water.
• Acquisition for gaining competition advantage.

• The most important factor of the Coca Cola Company is its employees.
• Coca-Cola is selling its product to the multinational organizations like MC Donald's,
KFC, Sub-way, Dunkin Donuts and also keeping local market in focus.
• Coca-Cola is focusing on public by charitable contributions.

• Coca-Cola’s alue a d future de elop e t pla s lead to i rease i the i terest are
holders.
• They are operating through push strategy of supply chain worldwide in the beverages
industry.

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Global Presence till 2016

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Global business is organized into six geographic Operating departments:
1. Africa
2. Pacific
3. European Union
4. Latin America
5. Asia
6. North America

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Organization Structure Global Decision Making Process

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Coca Cola Supply Chain Process
Supply Chain Stages

 A typical supply chain may involve a variety of stages:
 Customers
 Retailers
 Wholesales/distributors
 Manufacturers/ Plants
 Component/raw material suppliers

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Inventory and Warehouses system

 A-B-C classification
 Studying the demand and finding the best method for forecasting.
 Studying the inventory problems.
 Building the dynamic inventory model.

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 Determination of economic order quantity.

 Determination of stock level.
 Determination of safety stocks.
 Selecting the proper system of ordering for inventory.
 Ending up with the final inventory model, which will be solution for our problem with
numerical example.
Information Flow System

 Studying the information flow system of the company.
 Detecting and identifying the problems and the area for improvement.
 Build the information system for the company with the improvements and
modifications.
 Ending up with final information flow system, which will be the solution for our
problem.
 The information model deals with the integration of supply chain members and
concentrates on the flow of information among the chain members.
 Information technology plays a vital role for increasing collaboration among supply
chain members. From the information point of view the effective supply chain
management must provide the right amount of relevant information to the right
person at the right time.
 Information is the key to successful supply-chain management because no product

flows until information flows.

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Benefits of Information Technology

 Higher visibility
 Reduced transportation spend
 Immediate availability of information
 Greater accuracy
 More economic
 Better customer service
 Higher productivity
 Reduced paper work
 Faster processing
 Increase on-Time Deliveries
 Improved Capacity Utilization
Information Requirements
 To ensure that valuable, actionable knowledge readily flows across the supply chain,
information must be
 Accessible
 Relevant
 Accurate
 Timely
 Transferable

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Suggested Improvements
 Electronic pick slip report for the warehouse/ transportation

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Radio frequency identification (RFID)

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Positioning of the coca cola company

 Co a ola o s ore tha ½ of the orld’s e erages.
 Coke is affordable in all the countries. It was not out of the price range for an
afternoon snack.
 Coke comes in a variety of sizes worldwide so you can use it for a crowd or as a
personal snack drink
 Coca-Cola is re og ized y 94% of the orld’s population
TARGET MARKET
Coke’s commercials basically based on young generations, so, the young generation is
the target market of Coke because they want to represent Coke with the youth and
energy but they also consider about the old people they take then as a co-target
market.
MAJOR SEGMENTS
Major segments are basically those people who take this drink daily and those areas
where the demand are higher than the other areas. There are so many people who
take this drink daily and those people who take weekly and those who take less often
are always there as well. So, their basic segments are those people who take this drink
regularly.
FACTORS EFFECTING SALES
There are so many factors, which affects the sale of coke. Here we are discussing three
major factors which effects coke.
 Per capita income
 Competitors
 Weather

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PER CAPITA INCOME

First e ill dis uss a out Per apita i o e . This is ajor fa tor that affe ts the sale of
this soft drink. Because which every passing year budgets are becoming very strict and tight
in order to purchase things. So the disposable incomes of the people are coming down. They
spend heavily on rents, utilities, and education and basic necessities and after that when
they get extra money they think about this soft drink .So the decreasing per capita income
effects badly in selling and production of this soft drink. And to get through with this
difficulty there is need to increase the level of per capita income of Pakistan because it is
much lesser than the rest of the countries.
FEATURES
 Coke is having difference in taste than Pepsi due to having difference in ingredients.
 Coke has maintained global leadership in soft drink industry.
 Coke is trying to focus on worldwide expansion of the cola market.
 Coke must try to focus on its relationships with bottling subsidiaries.
 Coke is facing a major challenge in developing countries that their regional bottlers may
not have the financial resources to continue expansion.
 The brands are trying to create world-wide economic development and population
growth to sustain sales and profits

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c) PRODUCT REVIEW
Coca-Cola has, and still, continued to reign in the consumers market stunning other
companies with their artistic and viewer-friendly commercials
 Coke is having difference in taste
 Coke has maintained global leadership in soft drink industry
 Coke is trying to focus on worldwide expansion of the beverage market
d) Competitive Review
BUYERS/CUSTOMERS
Coca-Cola has three major and large customers in the market, food street 60,000 cerates
/year, McDonalds 40,000 cerates/year and Pakistan Railways who buy 50,000 cerates /year.
However, these three customers being large and powerful are in an influential and
bargaining position they can demand discount or others facilities like (boards
sign/freezers/coolers etc.) and impose a threat to switch to their closest rival and
competitor Pepsi.
SUBSTITUTES
Nestle products like juices, coffee, mineral water etc. and Shezan juices are substitutes of
Coke for health conscious people and other fresh juices.

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RIVALS/COMPETITORS
DIRECT COMPETITORS
The direct competitor of Coca-Cola is Pepsi and that of CCBPL is PCI (Pepsi cola international)
there is always ongoing tuff competition between these two arch rivals with Pepsi leading
with 54% market share and Coke gradually growing and catching up 36% market share in
Pakistan. However on global level the situation is reverse. Both companies often engage in
price cut wars, prize scheme wars and sponsorship wars to win over each other customers.
INDIRECT COMPETITORS
These include Nestle and Shezan juices that do not pose a threat to Coke as yet but
has the potential to do so as it is exploiting the natural aspect and health issues more
a d ore to ake people o s ious a out physi al fit ess Coke has lau hed Diet
Coke to ou ter the physi al fit ess de a ds.
BUFFERING AND SMOOTHING
For beverages like Coke the buffering and smoothing policies does ’t matter and they
don’t apply anymore because Coke remains in demand all the year round in festivals,
parties, events, meetings sports etc.
SUPPLIERS
Coca-Cola has authorized suppliers and which do not pose a threat to it. Anyhow Coke
does have a quality check procedures in its plants to ensure that they get the right
kind of ingredients from suppliers.

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NEW ENTRANTS
Coca-Cola is not afraid of competing .it doesn’t fear losing its share to Mecca- Cola or
other new entrants. The company management believes that new entrants provoke
healthy competition, which will provide Coke with a challenge to hold on to its loyal
customers. Besides it will take a lot of effort on the part of new entrants like Mecca-
Cola, Pak-cola to fully launch its product in Pakistan and capture or even motivate
people to switch on to their new product from Coke.
COMPETITIVE ADVANTAGES
BRAND NAME, SYMBOL, BOTTLE SHAPE.
Brand name, symbol and bottle shape are distinctive features of Coca-Cola which give
it an edge over its competitors. (Even without name people can easily identify Coke’s,
fanta’s, and sprite’s bottle from crowd.) They cannot be copied or imitated by others.

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Images of The Coca Cola Company Timeline

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Plant Bottle Manufacturing Process

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Value Chain Process

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Supply Chain Management of Coca Cola Company

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