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LEVELS OF STRATEGIC MANAGEMENT

THREE ASPECTS OF STRATEGY FORMULATION


The following three aspects or levels of strategy formulation, each with a different focus, need to be dealt with in the formulation phase of strategic management. The three sets of recommendations must be internally consistent and fit together in a mutually supportive manner that forms an integrated hierarchy of strategy, in the order given.

Corporate Level Strategy:


In this aspect of strategy, we are concerned with broad decisions about the total organization's scope and direction. Basically, we consider what changes should be made in our growth objective and strategy for achieving it, the lines of business we are in, and how these lines of business fit together. It is useful to think of three components of corporate level strategy: (a) Growth or directional strategy: what should be our growth objective, ranging from retrenchment through stability to varying degrees of growth - and how do we accomplish this, (b) Portfolio strategy: what should be our portfolio of lines of business, which implicitly requires reconsidering how much concentration or diversification we should have, and (c) Parenting strategy: how we allocate resources and manage capabilities and activities across the portfolio -- where do we put special emphasis, and how much do we integrate our various lines of business. It consists of the CEO, managing directors, chairman, board of directors, etc.

Business level strategy:


This involves deciding how the company will compete within each line of business (LOB) or strategic business unit (SBU).Business unit level strategy has to confirm the corporate philosophy and expectations of the stake holders. The business level strategy is also known as competitive strategy. It includes the head of department, zonal managers, regional managers, etc. Business level strategy decides the strategies to be taken to succeed in the business. Competitive strategy is about being different. It means deliberately choosing to perform activities differently or to perform different activities than rivals to deliver a unique mix of value. (Michael E. Porter) The essence of strategy lies in creating tomorrow's competitive advantages faster than competitors mimic the ones you possess today. (Gary Hamel & C. K. Prahalad)

Functional Strategy:

These more localized and shorter-horizon strategies deal with how each functional area and unit will carry out its functional activities to be effective and maximize resource productivity. These strategies for functional areas such as production, marketing, finance personnel, etc.Functional level strategic management is the management of relatively narrow areas of activity which are vital, pervasive, continuing importance for the organizations overall development. It includes the supervisor, workers, employees, executives, etc.

STRATEGIC PLANNIG OF THE COCA COLA COMPANY


The preparation of a strategic plan is a multi-step process covering many steps.this steps are very important for growth of an organization.

Mission, Vision & Values


The world is changing all around us. To continue to thrive as a business over the next ten years and beyond, we must look ahead, understand the trends and forces that will shape the business in the future and move swiftly to prepare for what's to come. the must get ready for tomorrow today. That's what is the 2020 Vision all about. It creates a long-term destination for business and provides us with a "Roadmap" for winning together with our bottling partners.

Vision
The vision of the coca cola company serves as the framework for their Roadmap and guides every aspect of business by describing what we need to accomplish in order to continue achieving sustainable, quality growth. People: Be a great place to work where people are inspired to be the best they can be. 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: Be a responsible citizen that makes a difference 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.

Our Mission
the Roadmap of coca cola company starts with the 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. To maximize share-owner value over time. In order to achieve this mission, we must create value for all the constituents we serve, including our consumers, our customers, our bottlers and our communities. The Coca-Cola Company creates value by executing a comprehensive business strategy guided by six key beliefs: 1. Consumer demand drives everything we do. 2. Brand Coca-Cola is the core of our business. 3. We will serve consumers a broad selection of the non-alcoholic ready-to-drink beverages they want to drink throughout the day. 4. We will be the best marketers in the world. 5. We will think and act locally.

Values
The values serve as a compass for the actions and describe how to behave in the world.Values which the company follows are: 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

Strategy
The strategy of The Coca-Cola Company has for a long time been best characterised as follows: global marketing and local manufacturing. However, the global marketing approach has been changed to local marketing because of the differences in consumer demands and experiences. To implement their think local, act local philosophy, the following key areas are considered: 1 :Consumers by using innovative and tailored marketing programs based on local consumer insights, The Coca-Cola Company will keep growing its core brands while also leveraging its distribution system to capture other growth opportunities in the ready-to-drink nonalcoholic beverage category. 2 : Communities local offices around the world ensure that the Company is a respectful corporate citizen and participates as an integral part of each community. 3 : Customers the Company provides value to customers through every consumer purchase, through superior customer service and through great value creation programs. 4 :Coca-Cola System the Coca-Cola system business model delivers value to the Company and to its bottling partners. By working together, the Coca-Cola system focuses on growing the overall profits from the beverage category in order to provide strong returns for all parties involved. 5 : Coca-Cola People the Company recognises the value of its associates and remains focused on ensuring it has the most talented, creative and motivated people throughout the world.

Objectives

Strong cash flow position, which can be derived from consistent performance and lower investment requirements. An average earnings per share growth of approximately 15% over the long term. Capital expenditures will be stable to declining from historical trends over the next 5 years, as the investments in the bottling side of the business will be reduced. Gradually reduce the dividend pay-out ratio to 30% over time. This reduction will occur due to an increase in earnings, not due to a decrease in the aggregate amount of the dividend payment. Maintain the net debt-to-net capital ratios that have been shown historically.

The Coca-Cola Company is confident that all the steps they have taken will put them on the forefront of change. They believe that they have a strong understanding of consumer habits and will continue to learn more as they continue to build our core carbonated soft drink business and as they enter into new categories. With the Coca-Colas new culture taking hold, combined with their great brands and bottling partners, they are optimistic about their ability to deliver on volume growth and financial results consistently over the long-term.

BUSINESS STRATEGIES OF THE COCA COLA COMPANY


A scan of the internal and external environment is an important part of the strategy planning process.environmental factors external to the firm can be classified as opportunites and threats.factors internal to the firm can be classified as strength and weakness.this is known as SWOT analysis or keys towards business strategies. The SWOT analysis provide information that is helpful in matching the firms resources and capabilities to the competitive environment in which it operates.

STRENGTHS
1. Coca-Cola is the worlds most valuable brand and has strong brand loyalty. 2. Wide variety of Coca-Cola products is sold in the restaurants, stores and vending machines over 200 countries. 3. Coke is the dominant market leader of the global soft-drink industry right through the 20thcentury. 4. Coke primarily competes on advertising and differentiation and has the high market share. 5. Coca-Cola has enormous distribution and production facilities of non-alcoholic beverages and related products. 6. Joint venture with Nestle has resulted in the formation of Beverage Partners Worldwide (BPW). 7. The company has strong financial position and profits throughout the history. Its average ROE (return on equity) for the past five years is 37.08% whereas its ROC (return on capital) is 33.6%. 8. Coca-Cola has the heavy advertising and promoting activities. 9. More than70 percent of revenue comes from outside the United States. 10. Enormous number of loyal customers and brand equity all over the world.

WEAKNESS
1. New coke formula leading to a back lash which results in bad image of coke. 2. The company is facing high burden of external debts for the last few years. In2002, long-term debt of the company was 2700 million dollars. 3. Product offering is restricted to beverages. 4. In November 2009, because of a dispute over wholesale prices of Coca-Cola goods, Costco blocked the replenishment of their shelves with Diet Coke and coke. 5. Coca-Cola has discontinued its many products after few years of launching such as New Coke, Coca-Cola with Lemon, Coca-Cola with Lime, Coca-Cola Blak , etc. Which result in bad image of the brand. 6. Coke has taken less aggressive market standing in todays changing economic surroundings.

OPPORTUNITIES
1. Bottled water drinking has increased 11 percent. 2. Consumers prefer to drink new smaller beverage products that are not sold on a mass scale. 3. One of the biggest opportunities is to diversify into the non-carbonated drinks such as coffee, water, juices, etc. 4. The company can offer the hygienic products due to increasing number of health conscious consumers. 5. European market and China show marvelous potential for growth. 6. The economic conditions are improving globally after economic meltdown2007-10. 7. Diversify into complementary food products which will ultimately increase the drink consumption. 8. Coca cola should increase its partnership with fast food chains. THREATS

1. There is Low growth rate in the carbonated drinks market in North America which is the main market of Coca-Cola. 2. There is a problem with Coke to raise its prices by an edge that would permit it to keep pace with inflation. 3. Huge numbers of substitutes such as beer, water, juices, coffee etc are accessible to the end consumers. 4. Pepsi is the strong competitor which competes with advertising and 5. Since the consumer lifestyle is changing rapidly and they are becoming more health conscious therefore there demand is shifting towards non-carbonated products such as juices, tea and bottled drinks. 6. Many smaller players are furious competitors which are also creating the competition severe. 7. The prices of raw material such as sugar and metals used in manufacturing of cans are increasing rapidly

INTRODUCTION
The Coca-Cola Company was originally established in 1891 as the J. S. Pemberton Medicine Company, a co-partnership between Dr.John Stith Pemberton and Ed Holland.The company was formed to sell three main products: Pemberton's French Wine Cola (later known as Coca-Cola), Pemberton's Indian Queen Hair Dye, and Pemberton's Globe Flower Cough Syrup. In 1884, the company became a stock company and the name was changed to Pemberton Chemical Company.The new president was D. D. Doe while Ed Holland became the new Vice-President. Pemberton stayed on as the superintendent.The company's factory was located at No. 107, Marietta St. Three years later, the company was again changed to Pemberton Medicine Company, another co-partnership, this time between Pemberton, A. O. Murphy, E. H. Bloodworth, and J. C. Mayfield.the Russell 1000 Growth Stock Index. Its current chairman and CEO is Muhtar Kent. Since its beginning in the spring of 1886, Coca-Cola has grown to become the most recognized trademark in history. Operating out of more than 195 countries worldwide, Coca-Cola is the most popular beverage on earth and is enjoyed over 773,000,000 times daily. The Coca-Cola Company is the worlds leading manufacturer, marketer, and distributor of non-alcoholic beverage concentrates and syrups, with world headquarters in Atlanta, Georgia. The Company and its subsidiaries employ nearly 31,000 people around the world. Syrups, concentrates and beverage bases for Coca-Cola, the Companys flagship brand, and over 230 other Company soft-drink brands are manufactured and sold by The Coca-Cola Company and its subsidiaries in nearly 200 countries around the world.