COCA COLA VIETNAM ANALYSIS

COCA COLA I/ Coca Cola Vietnam Background In 1886, Coca-Cola history began when the curiosity of an Atlanta pharmacist, Dr John S Pemberton, created a distinctive tasting soft drink that could be sold at soda fountains He created a flavored syrup, took it to his neighborhood pharmacy, where it was mixed with carbonated water and deemed “excellent” by those who sampled it Dr Pemberton’s partner and bookkeeper, Frank M Robinson, is credited with naming the beverage “Coca-Cola” as well as designing the trademarked, distinct script, still used today.1 Coca-cola is distributed by 14 million distributors all over the world nowadays 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 II/ Vision and Mission In the strategic management model, clear vision and mission statements are very vital for alternative strategies to be formulated and implemented Vision statements have to answer the question “What we want to become?” while a mission statement answers the question “What is our business?” 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 Vision A good vision need to meet three components which are core values, core purpose and BHAG (Big Hairy Audacious Goal) Core values and core purpose are core ideology and BHAG can be Coca-cola History, https://www.worldofcoca-cola.com/coca-cola-facts/coca-cola-history/ considered as envisioned future which needs both 10-to-30-year BHAG(s) and a vivid description Elements of a good vision By Dr Hoa Thi Thu Ho, Strategic Management Lecture “To continue to thrive dispatched in the next 10 years and beyond, we must look ahead and understand the trends and forces will shape our business in the future and move quickly to prepare for what is to come We have to get ready for today and tomorrow” This is Coca Cola Vision in 2010; it creates one long-term destination for the business and provides a "roadmap" for winning together with bottling partners The world is changing day after day The world and the individual country are changing To be suitable for the environment in each country, Coca cola poses a vision called “2020 Vision” as an improved vision for future aims The current vision is: “Our vision serves as the framework for our Roadmap and guides every aspect of our business by describing what we need to accomplish in order to continue achieving sustainable, quality growth.” Coca-cola Company, Vision mission and values, http://www.coca-colacompany.com/ourcompany/mission-vision-values, By Coca-cola Company website Coca-cola Company, Vision mission and values, http://www.coca-colacompany.com/ourcompany/mission-vision-values, By Coca-cola Company website No Components Identification Evidence/ Improvement Yes No Core values X Evidence Core purpose X Evidence BHAG X Evidence Current vision: ““Our vision serves as the framework for our Roadmap and guides every aspect of our business by describing what we need to accomplish in order to continue achieving sustainable, quality growth.” (http://www.coca-colacompany.com/our-company/mission-visionvalues, 21/12/2013)” CORE VALUES Core values are set to define the criteria, attitudes and behaviors that will be required to make the “2020 Vision” real in Coca vision This vision and values are made throughout the years, most recently in 2020, also known as the “Coca Vision 2020” including: First is Live Our Values It serves as a compass for Coca cola company’s actions and describes how they behave in the world In leadership, Coca Cola encourage employers to shape a better future by the best leading role in beverage industry In collaboration, Coca is looking forward to operating collective power Coca cola is also reality in integrity of every area they are and have responsibility for giving accountability The passion is extremely important so that it is committed in heart and mind of every Coca cola member and inspire to people Coca cola continuously support a diversity of products and it becomes a criterion inclusive as Coca Brand Especially in quality, Coca cola has a slogan: “What we do, we well” It is proved that the quality of Coca Cola’s soft drinks is always in the best rate and favored by more people The program promotes the highest standards in product safety and quality, occupational safety, and health and environmental standards across the entire Coca-Cola system Coca-Cola does not contain alcoholic, and company not add alcohol as an ingredient Any traces levels of alcohol existing in Coke, governments and religious organizations have recognized that is a result of natural processes, are completely normal and are acceptable in non-alcoholic foods and beverages.4 Coca-cola Company, Product safety and quality, http://www.cocacolacompany.com/sustainabilityreport/me/product-safety-and-quality.html#section-safety-andquality-in-every-serving, By Coca-cola Company website Secondly, 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 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 Thirdly, 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 Fourthly, Coca cola act like an owner by understanding needs and what to 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 Finally, Coca cola inspire creativity, passion, optimism and fun as their brand CORE PURPOSE Core purpose is the organization’s for being, and it is also a part of core ideology besides core values With new vision, 2020 vision, Coca Cola has been set up a big aim to “continue achieving sustainable, quality growth” in the beverage industry BHAG As well as a good core ideology, Coca Cola includes it’s envisioned future with BHAGs and a vivid description below, which can conjure up pictures and images of a great leader as well as firm in beverage industry • 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 with more than double in serving to over billion a day Coca cola accelerates growth, acts to ensure the next generation of youth fallings in love with Coke, continues to increase the values of portfolio with many actions such as developing the innovative premium brands, bringing this innovation to the market quickly, satisfying needs of consumers, using updated high technology and ensure the standard of products • Partners: To be the most preferred and trusted beverage partner, nurture a winning network of customers and suppliers, together we create mutual, enduring value Thinking and acting like an integrated global enterprise • Planet: Be a responsible citizen that makes a difference by helping build and support sustainable communities toward to not only the global leadership in sustainable water use, the industry leadership in packaging, energy and climate protection as well • 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 The vision 2020 is a great direction for Coca cola’s development in beverage industry The company is aware of what they need to 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 Mission Mission is also a vital part to build the image of the brand as well as vision Mission have to reveal what an organization wants to be and whom it wants to serve so to develop a good mission, diverse managers need to participate to find out effectively establishing objectives and formulation strategies 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 No Components Identification Yes Evidence/ Improvement No Customers X Evidence Products X Evidence Markets X Evidence Technology X Improvement Concern for survival growth, profitability X Improvement Philosophy X Improvement Self-concept X Evidence Concern for public image X Evidence Concern for employee X Evidence Current mission: “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.”(http://www.coca-colacompany.com/our-company/mission-vision-values, 21/12/2013) “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 Coke’s mission from current to the future, at least to 2020 with company’s expectation of serving people best Customers: Align for Coca cola’s franchise structure to create unsurpassed values for 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 level…Diversity in kind of drinks is also a criteria of Coca cola products There are many kinds such as Coca-Cola Light (or Diet Coke), Coca-Cola Cherry However, coca and cola is the main favor in drinks Its major products are Coca cola soft drinks Other kind of Coca cola products such as Diet Coke or Cherry…counts less in market 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 They also focus on selling and merchandising The company has competition with many beverage companies in the market Pepsi Company is the most important competitor because of large market share in beverage industry 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 cola’s effort and philosophy Coca cola has a slogan: Coca-cola Company, Vision mission and values, http://www.coca-colacompany.com/ourcompany/mission-vision-values, By Coca-cola Company website “Anywhere, anyone, anytime, always Coca cola” However, this should be seen directly on the mission because it is the inspiration to cheer people use Coca cola Technology: In the mission, there has not been this segment yet 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 Coca cola produces the first-ever recyclable plastic bottle made from plants In 2012, Coca cola managed to recycle 371M pounds of recovered aluminum and PET plastic beverage containers.6 This is a very important element which should be considered in company’s mission Self-concept that Coca cola is the firm which refreshes the world with the delicious and fresh drinks, inspires the people of the Coca cola’s passion, brings people on over the world the moments and feelings of optimism and happiness, creates the difference from other beverage in order that customers can remember and appreciate Coca cola’s values Concerns for employees: increasing people’s 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 in a detail report Coca cola boosts investment in sales and market execution, operate the lowest cost manufacturing and logistics in every market while maintain the quality standards; also use the size and expertise for creating the economic scale The Coca cola mission has huge inspiration which spreads company’s expectation to their employers as well as customers Besides, Coca Cola mission statements also have some essential characteristics such as broad in scope, less than 250 words in length, inspiring, identify the utility of the firm’s product, enduring and include most of nine components discussed above Coca-cola Company, Infographic: our 2020 environmental goals, http://www.coca- colacompany.com/plantbottle-technology/, By Coca-cola Journey However, 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 The mission needs to be more detail, which would show the customers and employers know what Coca Cola’s aim, targets and big picture about it in future III- External environment factors- PESTEL While the internal environment of an organization is factors inside its firm and affect the organization’s performance as well as can control, the external environment factors are something outside of the boundaries of the company which can’t be controlled or forced to change To be success, any company has to analyze both internal and external environment factors to have to most appropriated strategies forward the economy By analyzing the internal environment, company will find out its Strengths and Weakness to change in a suitable way, while analyzing external environment will help the company figure out its Opportunities and Threats in the particular market that they are investing in 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 PESTEL analysis is a method focusing in the external factors of the business and the environment PESTEL stands for Political, Economic, Sociological, Technological, Legal, and Environmental All of those components will affect the company in a positive or negative way is up to a good analysis and strategy forward it Political Analysis As we know, the government has the power to set fines for the companies not meeting their standard law requirements The changes in laws and regulations, such as tax policy, government regulations, social welfare policies, political risks might affect the company as well as their entry in foreign countries The political conditions, even the civil conflict can impact to the markets and other governmental changes that affect their ability to penetrate the developing and emerging markets that involves the political and economic conditions However, Coca Cola continuously monitoring the policies and regulations set by the government Tax policy Tax is the issue which any business operating in Vietnam is under the impact of laws and regulations However, the tax service has recently questioned for many large foreign companies in Vietnam Tax Agency has written requests for consideration local inspection hole operations, profitability of the business to conclude if companies report losses for the purpose of increasing costs to evade taxes or not Among them, Coca Cola Company reported losses in continuous operation for 20 years in Vietnam The biggest difficulty is prompted many experts to be the multinational corporations often use the " guise " of proprietary material or technology , that agency is difficult to determine the actual cost of inputs Vietnam businesses spend Coca Cola, according to the tax agency costs flavorings imported from the parent company accounts for about 70-85 % of the cost of plant in Vietnam The data cannot be determined by the agency because of not knowing whether the proportion of flavor additives from Coca Cola parent company in Vietnam is, compared to other markets to put conclusions However, this is the major reason Coca cola Vietnam proves for their losses to dodge the government policy of tax It also makes a bad reputation for Coca cola in Vietnam Government regulations As a famous brand, manufacturer, distributor and seller in beverage industry, the Coca-Cola Company and other soft drink manufacturers are subject to antitrust laws of general applicability The Company may have an exclusive right to manufacture, distribute and sell a soft drink product if its product is in substantial and effective competition with others of the same general class in the market It is the general regulation in business in every country However, there are some regulations strictly limited and prevent the expanding For example, the Coca cola has experienced public policy which challenges them about the sale of soft drinks in elementary, middle and high schools At January 1, 2006, a number of states had regulations restricting the sale of soft drinks and other foods in schools Many of these restrictions have existed for several years in connection with subsidized meal programs in schools.7 This regulation cares about the youth’s health as well as nutrition This led to obesity among students and it affected directly to the business of Coke Company in that period Moreover, the restrictive legislation, if it enacted for a long time widely, it could impact on the Company’s products, image and reputation as well Social welfare policies Mar 14, 2007, Government regulations, http://www.wikinvest.com/stock/CocaCola_Bottling_Co._Consolidated_(COKE)/Government_Regulation, By Wikinvest Company as a body authorized to solve and cares about health and working conditions of employees Product safety is the most concerned issues of consumers The Coca cola always cares about the safety and quality in every parts from products to services The core criteria of Coke are to ensure safety and quality through strong governance and compliance with applicable regulations and standards In Vietnam, the problem of product safety is extremely important There are so much food poisoning in current time that make people worry and not believe in undefined drinks and foods There are many scandals about product safety not only domestic company but also the foreign ones Coca cola also has this In details, Coca-Cola Vietnam customers accused of being "prime" the bottle mold Minute Maid Teppy (fresh orange juice) type of 240ml, affecting the health of consumers In the document dated October 29, Coca-Cola unexplained mold floating on the water bottle containing anything, whether hazardous or not, which shows that the two bottles of orange juice Minute Maid Teppy client was found Long An is only present in the "isolated incident" occurred in manufacturing shipment This document is for that reason "error" in the bottle is due to the can "no longer make bottle cap security tightness.15 This is unreasonable All above is to link to the success of The Company so that they surely keeps the promise of quality products and services Documents of laws or regulation, statements help The Coca cola maintain and improve their reputation However, it also requires the continuous efforts to adapt these laws to brings the best products and services, especially in a sensitive market like Vietnam The opportunities: Competitive laws, Product safety The threats: Environmental protection laws, health and safety concern The law system in Vietnam may not be completed like other developed country This may be a chance for some company However, this system is more and more perfect Moreover, the citizen, government and the press’s concern is the help to treat the violation Therefore, this factor is both opportunity and threat IV- EFE Matrix No Factors Opportunities Consumption Expenditure Increase Increase in middle- Weight Rating Evidence for rating Weighted score 0.9 0.36 0.8 Increasing purchasing ability among customers Increasing number of 0.32 15 Quang Minh, Rùng sản phẩm Coca cola bị nấm mốc, November 12, 2013, http://www.kinhtenongthon.com.vn/Story/bandoc/2013/11/44447.html By countryside economy class consumers customers in Coca Cola’s strategic segment 0.7 0.21 0.6 0.18 High Technology in the system of producing and packaging Wide-spreading internet and gadgets Political stability 0.9 Widen market 0.8 Vietnamese labor is cheap in large scale 0.9 Changing taste among youth Health conscious consumers Threats Tax policy for foreign companies Inflation rate Economic crisis Intense competition such as Pepsi Low-skilled labor Increasing demand for non-carbonated products e.g juices Increasing price of raw material such as sugar and metals Many smaller players are furious competitors 0.7 0.21 0.9 0.27 0.8 0.24 0.7 0.8 0.8 3 0.21 0.24 0.32 0.7 0.7 4 0.8 0.6 Widen market through most of the provinces in Vietnam Use the widen market effectively to distribute products Use Vietnamese labor to reduce manufacturing cost Effective Marketing strategies forward High skill training Develop more noncarbonated products 0.36 0.32 0.36 0.28 0.28 V- Used Strategies Price strategy toward integration During the long time, the price of Coke always pursues 3A and 3P aimed at achieving the main market in Viet Nam In the 3P strategy, it consists of Price to value, Pervasiveness and Preference Firstly, Price to value means that customers not only buy the Coke with the suitable price but also gain the real value from it Secondly, throughout the Pervasiveness, Coke makes sure that the customers can find and buy it every time at any places They want to supply and deliver Coke in every store, supermarkets Finally, they want customers not only to accept and enjoy coke but also choose Coke as a first choice Moreover, in the 3A strategy, it is illustrated by affordability, availability and acceptability The company want to sell the coke with a suitable price which everyone can afford buying it Besides, Coke company also deliveries their products in everywhere for the customer to satisfy their demand In particular, the company enjoys the feeling which everyone can have a wonderful drink, means that the customer can be happy with each Coke product In Vietnam, Coca- cola Company have a creative mixture in the marketing mix Furthermore, Coca- cola Company has still formed the strategies by many ways It surveys the customer attitude and demand, so the price strategy based on the customers psychology For example, the housewives also prefer to buy the cheaper products, so they produce the big PET is more economic than others Coke Company has the price according to the price of counter partner, especially Pepsi Company 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 much success in Viet Nam  Price strategy of coca in order to provide appropriate price to consumers and make them comfortable about price and product quality, short the distance between introduce products and customers They would exchange information about each product by themself, creating an effect to clients Vertical integration which company select is bringing the price to the customer directly, the product is reduced, everything based on customer review and respond to the essential needs of customers and then make them feel good about their choice Marketing and local strategy in Viet Nam Part of the success of any company can most likely be attributed to its marketing strategies Coca-Cola has successful marketing techniques over the time, but has also scratched a few marketing techniques Customers respond to marketing techniques and Coca-Cola has learned to recognize what they should work or and not work This has no doubt partially contributed to the success of Coca-Cola Coca cola logo is one of the top favorite logo because of its classical nature both in terms of design and the taste of the product International marketing: the way companies get out the world and targeting audiences who may not be local to the United States When marketing outside of the US, your company needs to think outside of the box There’s a difference between marketing nationally and marketing to a specific country or region, and Coca-Cola’s about to show some of the reasons for their success Coca - Cola will add $ 300 million poured into Vietnam in the period 2013-2015, bringing the total investment to $ 500 million commitment to improve the investment performance of the plant in Vietnam, found brand and market development , as well as human resource development and reseller support With new investments of Coca – Cola, the market once again shows the comparison between the two embankments giant Coke - Pepsi Because, previously, Pepsi also announced formation of a strategic alliance with Suntory (Japan) in Vietnam, through the agreement, Suntory will hold 51 % stake in Vietnam Pepsi and Pepsi hold 49 % remaining stake in the project Previously, Pepsi plant opened with a total investment of $ 73 million in VSIP Bac Ninh The move this capital increase of Coca - Cola is causing much buzz in the context of ongoing Coca-Cola reported losses in Vietnam market According to the HCM City Department of Taxation, the losses of Coca - Cola stood at around 100 billion / year in the past 10 years, nearly five third turnovers According to the specialized magazine Digest Beverage, the market share of the carbonated beverage Coca - Cola is 52 % of PepsiCo Although Pepsi lead on the global market, but in Vietnam market, due to later extend the system to the distribution of Coca - Cola showed weaker After it is slow in supermarkets and restaurants to hold the position, Coca- Cola has developed distribution channels tactically "guerrilla" hit retail around alleys and side streets, constant encouragement sales discounts, dealer incentives For fast product supply strategies in the market , especially transport costs , price competition , Coca - Cola was quick to invest in the construction of the plant is the key area of HCMC , Da Nang , Ha Noi Coca Cola has attempted to enhance production capacity and distribution by adding modern production lines, providing new refrigeration equipment for consumers and support local businesses increase sales product which product extensions focus on areas such as leisure and sports, fast food restaurants and chain restaurants The location has good impact and fastest to promote the brand new product According to the Association of Beer - Alcohol and Beverages Vietnam , total 2010 sales of PepsiCo and Coca - Cola account for over 80% of the beverage market in Vietnam, with roughly equal market share Up to the present time , Coca - Cola Vietnam has achieved over 25 % growth compared to the plan However, to date, Pepsi has a better advantage than proactive Coca - Cola in developing distributed system Coca - Cola has penetrated the international market that is very unique, they invest into the Vietnamese market, increasing investment in factories and services, then they develop market and product quickly Investment in human resources is to create good quality products, then distribute the agents have created good effects to customers about business VI- SWOT STRENGHTS 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 world16 World’s largest market share in beverage Coca Cola holds the largest beverage market share in the world (about 40%).17 Strong marketing and advertising Coca Cola’ advertising expenses accounted for more than $3 billion in 2012 and increased firm’s sales and brand recognition 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 thousand dong for a small 500ml Coke March 3rd, Coca Cola essay, http://www.studymode.com/essays/Chibinh1541347.html 16 Solitary, Solitary, March 3rd, Coca Cola essay, http://www.studymode.com/essays/Chibinh1541347.html 17 Customer loyalty, especially it enjoys having one of the most loyal consumer groups It has also many fanpages in social network such as facebook, twitter… Bargaining power over suppliers The Coca Cola Company is the largest beverage producer in the world and exerts significant power over its suppliers to receive the lowest price available from them Corporate Social Responsibility (CSR) Coca Cola is increasingly focusing on CSR programs, such as recycling/packaging, energy conservation/climate change, active healthy living, water stewardship and many others, which boosts company’s social image and result in competitive advantage over competitors In Viet Nam, it conducts a lot of social programs for children with many gifts for Tet holiday… Weaknesses Significantly focus on carbonated 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 Undiversified product portfolio Unlike most company’s competitors, Coca Cola is still focusing only on selling beverage, which puts the firm at disadvantage The overall consumption of soft drinks is stagnating and Coca Cola Company will find it hard to penetrate to other markets (selling food or snacks) when it will have to sustain current level of growth High debt level due to acquisitions Nearly $8 billion of debt18 acquired from CCE’s acquisition significantly increased Coca Cola's debt level, interest rates and borrowing costs Decreasing gross profit and net profit margins Coca Cola’s 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 OPPORTUNITIES Diego Fastal, 08-Oct-2009, Coca cola Company, http://www.standardandpoors.com/ratings/articles/en/us/? assetID=1245184788910 18 13rd population country in the world It is big market for Coca cola to take advantages from the local labors and the customers High technology offers many advantages for producing, packaging In order to continually grow the business, The Company need to be increasingly efficient in use of resources This is required new investments in technology, innovation, a significant amount of collaboration throughout the Coca-Cola system Growing beverages consumption in emerging markets Consumption of soft drinks is still significantly growing in emerging markets, where Coca Cola could increase and maintain its beverages market share In Viet Nam, a majority of youth really like Coke because of its taste and the suitable price THREATS Changes in consumer tastes Consumers in Vietnam become 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 Waste disposal: Waste of the Coca cola is all cover, can, bottle that are metal, plastic… Reducing landfill is a top priority 99.5 per cent of the waste produced at our factories is now recycled, with just 0.5 per cent going to landfill Legal requirements to disclose negative information on product labels Some Coca Cola’s carbonated drinks have adverse health consequences There many negative information about Coke qualification Legal requirements to disclose negative information on product labels Some Coca Cola’s carbonated drinks have adverse health consequences There many negative information about Coke qualification the Coca cola has experienced public policy which challenges them about the sale of soft drinks in elementary, middle and high schools At January 1, 2006, a number of states had regulations restricting the sale of soft drinks and other foods in schools Many of these restrictions have existed for several years in connection with subsidized meal programs in schools This regulation cares about the youth’s health, nutrition This led to obesity in business of Coke Company in that period 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 Negative publicity The firm is often criticized for high water consumption in water scarce regions and using harmful ingredients to produce its drink SO STRATEGIES S1 The best global brand in the world in terms of value ($77,839 billion) S2 World’s largest market share in beverage Use Strengths to take S3 Strong marketing and advertising advantages of Opportunities S4 Most extensive beverage distribution channel S5 Customer loyalty S6 Bargaining power over suppliers O1 13rd populated country O2: High technology O3 Bottled water consumption growth WO STRATEGIES S1S6O1 Expand many retail channel through store or shop (Market penetration) Build the Coca cola retail outlets (Forward Integration) S2S3O3 Provide the products with high qualification (product development) S5S6O1O3: Develop new functional products which have potential growth (related diversification) Enhance new beverage following the healthy trendy (unrelated diversification) Improve weaknesses taking advantages Opportunities W1 Significant focus on carbonated drinks by W2 Undiversified product portfolio of W3 High debt level due to acquisitions W4 Decrease gross profit and net profit margins O1 13th populated country O2 High technology O3.Growing beverages consumption W1W2O1O2: Diversified product portfolio, besides carbonated drinks to care the healthy consumers with amazing advertising programs (related diversification) Products made from healthy materials (related diversification) W3W4O1: Bargaining with the suppliers with suitable price (backward integration) ST STRATEGIES S1 The best global brand in the world in terms of value ($77,839 billion) Use the Strengths to S2 World’s largest market share in beverage reduce/avoid the impact of S3 Strong marketing and advertising Threats S4 Most extensive beverage distribution channel S5 Customer loyalty S6 Bargaining power over suppliers T1 Changes in consumer preferences T2 Waste disposal T3 Legal requirements to disclose negative information on product labels T4 Competition from PepsiCo T5 Negative publicity S3S5 T1: Provide many thank you programs or build up the customer service well (unrelated diversification) Create a fan page in social network (forward integration) S4S6T5: Take advantages of bargaining suppliers to enhance products for folio (related diversification) Buy with the suitable price to compete with Pepsi Co (market development) WT STRATEGIES W1 Significantly focus on carbonated drinks Reduce weaknesses and avoid W2 Undiversified product portfolio threat’s impacts W3 High debt level due to acquisitions W4 Decrease gross profit and net profit margins T1 Changes in consumer W1W2T2T5 preferences - Diversified with a lot of kinds products (product T2 Waste disposal development) T3 Legal requirements to - Protect the environment, especially the water resources disclose negative information on product labels T4 Competition from PepsiCo T5 Negative publicity An appropriate Strategy WO Strategy W1W2O1O2: W1 Significantly focus on carbonated drinks W2 Undiversified product portfolio O1 13th populated country O2 High technology Coke Company offers many advantages for producing, packaging In order to continually grow the business, the Company needs to be increasingly efficient in use of resources This is required new investments in technology, innovation, a significant amount of collaboration throughout the Coca-Cola system With the high technology available, Coca-Cola uses subtle yet effective online advertising to make customers in Viet Nam enjoy and desire to buy its products Targeted advertisements on websites mean that Coca-Cola has greater control over who sees their ads and when they see them For instance, when you're perusing the online menu of a local eatery, Coke ads may appear, making you associate that restaurant with a tall, icy glass Or, when you're researching local beaches, you may see an ad for Coca-Cola products, thereby associating heat with the refreshment of Coke It is really suitable for Coke Company because Coca-Cola plans to make a system investment of $300 million in Vietnam over the next three years to build new infrastructure, create jobs, develop strong partnerships and build its brands in the country With this additional investment, which will begin in 2013, Coca-Cola and its bottling partners’ total investment in Vietnam will shoot up to $500 million between 2010 and 2015 With this investment, Coke should invest in the online advertising for the effective brand in Viet Nam Besides, Coke needs to diversify product portfolio, besides carbonated drinks, to care the healthy consumers Now, the Vietnamese concern more about their health, so it is high time to think about the healthy products to meet the Vietnamese market where has many people with their loyalty to Coke No Alternative Strategies Expand many retail channel through store or shop Build the Coca cola retail outlets Provide the new products with high qualification Develop new functional products which have potential growth Enhance new beverage following the healthy trendy Diversified product portfolio, besides carbonated drinks to care the healthy consumers with amazing advertising programs Products made from healthy materials Bargaining with the suppliers with suitable price Provide many thank you Suitabilit y Feasibilit y Acceptabilit y Ave score 4.00 4 3,67 4 3.67 4 3.67 3 3,33 4 4.00 Explanation Reduce the cost as well as price of products Great programs or build up the customer service well Create a fan page in social network number of people using internet to be advertised, which is cheaper ad cost Take advantages of bargaining suppliers to enhance products for folio Buy with the suitable price to compete with Pepsi Co Diversified with a lot of kinds products 3 3.33 4 4.00 Protect the environment, especially the water resources 3.00 Suitabilit y Feasibilit y Acceptabilit y Ave score 4.00 4 4.00 4 4.00 Meet diversity of needs, which increases the competitive ability High cost Appropriate strategies No Alternative Strategles Expand many retail channel through store or shop Build the Coca cola retail outlets Provide many thank you programs or build up the customer service well Create a fan page in social network Diversified with a lot of kinds products Explanation Save cost of delivering and reduce the price of products Great number of people using internet to be advertised, which is cheaper ad cost Meet diversity of needs, which increases the competitive ability Conclusion and Recommendation The strategy in Coca cola Company used effectively is marketing and advertising strategy, so I strongly believe in the future the company continuously conducts such more effective strategy However, it knows how to control the negative publicity through the social network Moreover, although development is always higher, it makes a big concern in terms of environment and social activities I am encouraged by the company’s global reach, strong brand power, expanding presence outside the U.S and its solid cash position Moreover, the company’s acquisition of Coca-Cola Enterprises bottling business and its productivity initiatives are expected to result in significant cost savings In particular, in the Viet Nam market, Coke Company plays an important role in the beverage field The customer really love their advertisings which is meaningful and colorful, it also attracts with the lively music In the future, I think Coca cola Company should create much more advertisings to meet the Vietnamese customer demand However, Coca-Cola needs to ramp up its advertising spending to match arch competitor PepsiCo Inc REFERENCE ... for Coca cola Vietnam for operation Legal analysis 12 Coca- cola Company, What is coca- cola doing to reduce energy use waste packaging?, http://www.cocacola.co.uk/faq/environment/what-is -coca- cola- doing-to-reduce-energy-use-waste-packaging.html,... criteria of Coca cola products There are many kinds such as Coca- Cola Light (or Diet Coke), Coca- Cola Cherry However, coca and cola is the main favor in drinks Its major products are Coca cola soft... relationships, Coca cola work to build mutual understanding and trust to pursuit the goals Customer relationships are central to Coca cola? ??s effort and philosophy Coca cola has a slogan: Coca- cola Company,