Strategic Analysis of Coca-Cola This Report Provides

Strategic Analysis of Coca-Cola

Coca-Cola

This report provides information for Coca-Cola's Board of Directors and CEO on how well the company's mission, vision and value statements are communicated in two vehicles, the Company website and 2010 annual report. This report analyzes key components of the Company's strategic planning using management concepts identified by Michael Porter. Between the website and annual report, the Company's vision, values and goals are effectively articulated, while the mission statement needs improvement. This report recommends a better defined mission statement on the Company's webpage.

This report evaluates the Coca-Cola Company's published mission, vision, values and goals for the purpose of identifying areas for improvement. This analysis reviews the company's website and annual report for information on its mission and vision statements, as well as values and goals. The report also uses strategies developed by Michael Porter to gauge the effectiveness of Coca-Cola's mission, vision, values and goals in promoting its strategic planning efforts.

Analysis

Coca-Cola's Website

Coca-Cola presents its mission statement in a somewhat vague and disjointed discussion on its webpage Mission, Vision & Values (Coca-Cola Company, 2011). Under the heading "Our Mission," the statement declares their purpose but without identifying stakeholders, specific markets, or by defining their unique position. If the company's various stakeholders, particularly employees, were exposed only to this mission statement for a sense of purpose, they would gain only a limited sense of direction for the organization.

However, under separate headings on the same page, one finds the remainder of the mission statement. "Focus on the Market" identifies stakeholders and lists which markets the company serves and how it serves them. "Work Smart," "Act Like Owners" and "Be the Brand" all clarify ways in which Coca-Cola is distinct from competitors as well as provide specific direction on the company's purpose. There is little information however that would be useful for resolving tradeoffs between different business stakeholders.

Coca-Cola's vision statement is better articulated. It clearly describes what the Company and its stakeholders will look like when it achieves its goals. The heading "Our Vision" provides clear guidance for the Company's future courses of action regarding employees, the Company's portfolio, its partners, the planet, and company goals for profit and productivity .

"Live Our Values" offers a clear picture of shared beliefs among Coca-Cola stakeholders. It should be noted that in most cases, the company's values apply equally well to multiple communities of stakeholders. For example, accountability leads to satisfied customers and increased sales, greater employee job satisfaction, and increased shareholder value. The same can be said for quality, integrity and passion.

Coca-Cola's Annual Report

Coca-Cola's 2010 Annual Report (2011) provides more information on the company's mission which, even though specifically directed to shareholders, is enlightening. The Shareowners letter communicates the company's strategic plans for growth and expansion and identifies key markets. The letter discusses the Company's sustainability strategy in rebuilding Haiti, its global expansion in the Eurasia and Africa Group, and the attractive youth demographics of the North American market.

With respect to Porter's strategy, Coca-Cola is effectively implementing many of Porter's principles. His criticism of companies whose goal is simply to "get big fast" does not apply to Coke. The Company has achieved consistent growth over the course of 125 years, and also has a record of 49 consecutive years with increased dividends (2010 Annual Report, 2011).

The company has also achieved an effective balance between operational effectiveness and strategy execution. The Company's vertical integration in acquiring the North American business of Coca-Cola Enterprises gives it added flexibility and control in its bottling operations, which in turn allows it to be more responsive to market trends and customer demand. This acquisition also better positions Coke to respond to growth opportunities.

The Company also exemplifies Porter's strategy of setting limits on what it tries to accomplish and achieving the right goals. Coke is not trying to be all things to all people, but instead limits itself to specific revenue targets, specific geographic regions and specific demographics. Coca-Cola's growth in unit case volume, operating income and individual brands show their commitment to setting and achieving specific goals.

Porter also argues that it is the role of a leader to make sure that everyone understands the strategy, and Coca-Cola's CEO Muhtar Kent exemplifies this approach. Kent uses the annual report to communicate the importance of the Company's expansion in China and other nations. Kent also effectively communicates a sense of optimism and enthusiasm about his vision for the Company.