1313 Mockingbird Lane

Clarion, PA 16214
April 15, 2009
The Coca-Cola Company
P.O. Box 1734
Atlanta, GA 30301

To the Board of Directors of Coca-Cola Company:

We, at Alpha Consulting Group, appreciate the opportunity to present you with this
proposed three year strategic business plan. In order to compose this plan, we conducted
extensive research, including a detailed analysis of your company’s environment, both
internal and external forces and factors. Based upon this analysis, we devised five
strategic goals which we trust you will consider implementing. We have also included the
appropriate strategies we feel you should employ over the next three years in order to
achieve these goals. In addition we have developed three year financial projections which
are based upon successful implementation of these proposed strategies.
Our team will be willing to answer any questions you may have concerning this plan. A
list has been provided at the bottom of this letter to better direct your questions to the
correct responsible team member. We wish you all the luck in implementing this plan
over the next three years.

Thank-You,
Laura J. Dubois
Aberia Hile
Rosalee A. Hurn
Kevin P. Schuetz
Lindsey M. Woods
Contacts:
Mission Commentary – Kevin Schuetz s_kpschuetz@clarion.edu
External Factors Analysis – Rosalee Hurn s_rahurn@clarion.edu
Internal Factors Analysis – Laura Dubois s_ljdubois@clarion.edu
Financial Analysis and Projections – Aberia Hile s_ahile@clarion.edu
Strategic Analysis and Maps – Lindsey Woods s_lmwoods@clarion.edu

Alpha Consulting Group

Laura Dubois
Aberia Hile
Rosalee Hurn
Kevin Schuetz
Lindsey Woods
Clarion University of Pennsylvania
College of Business Administration
BSAD 490: Administrative Decision Making
May 15, 2009
Instructor: Lawrence A. Carr
Table of Contents

Executive Summary
This Strategic Business Plan will provide a guide to Coca-Cola Company through the use
of the environmental analysis and various strategies contained within. Over the next three
years Coca-Cola Company will strive to invest more money in reaching out to our home
country of North America by expanding our marketing revenues. Also, we will attempt a
merger with Nabisco snack foods in order to promote healthy snacks for consumers.
Coca-Cola company will accrue research and development cost to create organic
beverages and snack lines. Moreover, we will promote the reduction of plastic waste
through new advertisements that encourage recycling. Lastly, Coca-Cola will reformulate
Powerade to make it contain more nutrients and energy than that of Pepsi’s Gatorade.

Mission Commentary
Statement of Moral Values
Customer satisfaction is at the core of everything that we do. Our desire to not only
improve our bottom line, but to improve the environment around us as well is central to
our business practice. This will be displayed in the actions of not only our management,
but our employees as well. We will focus on our values and vision throughout the year
and constantly try to improve the relationships within the communities where our bottling
and manufacturing plants are located.

Statement of Prudential Values

Our values serve as a compass for our actions and describe how we behave in the world.
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

Statement of Corporate 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.
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
Statement of Public 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.
To refresh the world...
To inspire moments of optimism and happiness...
To create value and make a difference.

Statement of Corporate Mission

Over the course of the next three years, Coca-Cola will make use of the strategies
formulated in this Business Plan. These strategies include:
Increase Revenue in North America
Merge with Nabisco to enter the snack food market
Create a line of Organic Beverages and Snack Foods
Reduce Plastic Waste
Reformulate PowerAde to contain more nutrients

Environmental Analysis
External Factors
The external analysis will unfold the opportunities and threats that exist among Coca-
Cola. The list provided contains key variables that offer actionable responses to these
external forces. Because Coca-Cola stands powerless to these forces, it is imperative that
they be analyzed.
The External Forces are divided into six categories:
1.) Social and Cultural Forces
2.)Legal and Regulatory Forces
3.)Economic Forces
4.)Industry and Market Forces
5.)Technological Forces
6.)Competitive Forces

Social and Cultural Forces

Social and Cultural Forces reveal the environmental changes in today’s society. These
forces will have an impact on the future demand for Coca-Cola’s products.
Trend toward Healthy Eating and Drinking
As of last year, calorie conscious consumers have gripped the nation. Particularly the US
consumers have taken the approach to seek a greater variety in their drinks. Because of
this trend, it has led to a decrease in the consumption of carbonated and other sweetened
beverages in the US. This has, and will continue to have a negative effect on sales for
Coca-Colas’ traditional sugar and sugar-substitute-based drinks.
‘’The US carbonated soft drinks market generated total revenues of $63.9 billion in 2005,
this representing a compound annual growth rate of only 0.2% for the five-year period
spanning 2001-2005. The performance of the market is forecast to decelerate, with a
predicted compound annual rate of change of -0.3% for the five-year period 2005-2010,
which is expected to drive the market to a value of %62.9 billion by the end of 2010.’’
(web.ebscohost.com)
Beyond this damaging trend, beverage companies have been carped on for selling
carbonated beverages that contain high amounts of sugar and objectionable levels of
perilous chemical content, and have been accused for facilitating poor diet and
amplifying childhood obesity. To eliminate this threat, changes must be done in the way
we formulate our beverages. This could serve as an opportunity for Coca-Cola to
generate healthier beverages that will attract our calorie conscious consumers. By doing
this, the company will grow stronger, and our customers will walk away satisfied.
Legal and Regulatory
Political, governmental, and legal factors represent opportunities or threats that affect
organizations significantly.
Cutting city bottled water budgets
Each year, billions of pounds of plastic waste from Coke products wind up in landfills,
incinerators, or as road litter. The US Conference of Mayors proposed to cut city bottled
water budgets to reduce waste and promote tap water. We aggressively lobbied against
this. Because of this, a press release stated, “Shareholders have a right to know that their
company is continuing to cover up damaging practices with glossy corporate social
responsibility reports. Claiming water neutrality and highlighting sustainable initiatives
does not change the negative and very real impacts Coca-Cola has on communities
around the world” (www.alternet.org)
Because we continue to lobby against reducing waste, it only contradicts the stability
we’re building in Africa. From this threat, it can build a potential reputation, one that
only damages our image to the society. Saying this, ultimately what we’re doing in Africa
will mean nothing. We will start to promote reducing plastic waste.
Pepsi Sues Coke for False Advertising
We advertised our Powerade to be more complete than Pepsi’s Gatorade, and now we are
facing a lawsuit. “There is no evidence, scientific or otherwise, that Powerade Ion
functions better than Gatorade as a sport drink,” the lawsuit said. “There is no evidence
that Powerade Ion will help consumers achieve better hydration, have more energy or get
nutrients that will result in improved athletic performance.”(consumerist.com)
The complaint claims there is no evidence the “minute quantities of magnesium and
calcium” present in the Powerade drink make it superior to Gatorade. This lawsuit is
actually demanding that the drinks be recalled if our labels contain the false advertising
message. (consumerist.com)
This is a serious threat to our company. Not only will this hurt us financially, but our
reputation is at stake. We will reformulate our Powerade to scientifically prove that it
contains more nutrients and energy than Pepsi’s Gatorade.

Economic Forces
Economic factors have a direct control over when and how our company can operate.
Building Africa
When it comes to poverty, Africa is one of the hardest hit continents. Using Coca-Cola’s
expertise, we can assist Africa to build sustainable wealth. We can achieve this goal by
implementing our core strengths in ways that are both good for our business and the local
communities we serve.
Our plan is to expand our distribution network across Africa. This will generate 1,300 to
2,000 new, independent distribution businesses; creating between 5,300 and 8,400 new
jobs; generating up to $520 million in new revenue for local economies. We also have
programs in other parts of the world to create wealth and further job opportunities. This
has benefited 500 low-income families through mentoring of entrepreneurs by business
leaders, and access to low interest loans.
This serves as an opportunity for us to create good will across the world. In addition, we
will promote peace by bringing people together with prosperous degrees of success.

Industry and Market Forces

Industry and market forces allow our company to make appropriate segmentation
decisions based upon the newly developing market force.
Growing bottled water market
One of the fastest-growing segments in the world’s food and beverage market is bottled
water. The market’s consumption volume is expected to raise 38.6 billion units by the
end of 2010. In terms of value, the bottled water market is forecast to reach $19.3 billion
by the end of 2010. (web.ebscohost.com)
Our company is the third largest player in the bottled water market in the US, with a
market share of 11.9%. This being said, Coca-Cola could force its strong position in the
bottled water segment. Moreover, this creates an opportunity for us to take advantage of
growing demand for flavored water.

Technological Forces
Technological issues that are presented will create new strategies for our company.
Dependence on bottling partners
Coca-Cola generates most of our revenues by selling concentrates and syrups to bottlers
in whom it does not have any ownership interest. As independent companies, its bottling
partners, some of whom are publicly traded companies, make their own business
decisions that may not always be in the line with the company’s interests. Moreover,
many of our bottling partners have the right to manufacture or distribute their own
products or certain products of other beverage companies. (web.ebscohost.com)
This only leaves us with the need to provide an appropriate mix of incentives to its
bottling partners. If we fail to do this, our partners may take actions that will be
detrimental to our company. These bottlers may devote more resources to business
opportunities or products offered by our competitors. These actions will have a negative
impact on our profitability.
Now that this threat is recognized we will not have such a strong dependence on third
parties. This only increases our risk of failure.

Competitive Forces
Competition is a significant force in the business world. Being able to identify the
capabilities our rivals have against us will serve as an opportunity to step ahead.
Pepsi is in the lead
Coca-Cola competes in the nonalcoholic beverages segment of the commercial beverages
industry. Although our company faces intense competition in various markets from
regional as well as global, Pepsi is our main competitor, and as of now they are in the
lead. Health wise, their Gatorade is more appealing to consumers. In addition to this,
Pepsi has a product line that expands into snack foods.
Not only is Pepsi in the lead with their product, but their marketing seems to have a
greater and more positive affect then ours. Competitive factors impacting our business
include pricing, advertising, sales promotion programs, product innovation, and brand
and trademark development and protection. This intense competition has impacted our
company’s market share and revenue growth rates. Although this serves as a threat, an
opportunity awaits us. Our step to ensure that we don’t fall behind and rise up to number
one we will merge with Nabisco snack foods to create healthier varieties for our
consumer.

Summary of Major External Forces

The summary of the major external forces for the commercial beverages industry
includes the top concerns that need close attention in order for survival in the industry.
The major external forces have been ranked in order 1 = most important and 3 = least
important.
1.)Trend toward healthy eating and drinking
In order to ensure strategic performance in pursuance of the corporate mission, expanding
into organic product line is very important. A successful organic product will satisfy the
customer’s needs. In turn, this will alleviate competition that we are facing.
2.)Legal and Regulatory Forces
Each year, billions of pounds of plastic waste from Coke products wind up in landfills,
incinerators, or as road litter. Coca-Cola continues to lobby against reducing waste.
Doing this contradicts the stability we’re building in Africa, and can potentially ruin our
image to the society. We will start to promote reducing plastic waste.
3.)Intense Competition
Pepsi is in the lead with their product, as well as their marketing, which seems to have a
greater and more positive affect then ours. This intense competition has impacted our
company’s market share and revenue growth rates. From this threat, it has left us with the
decision to merge with Nabisco snack foods in order to create healthier varieties for our
consumer.
Internal Forces
The internal forces include an analysis of internal factors that are largely within the direct
control and influence of management. These factors are expected to influence and affect
the performance and operations of the enterprise
Corporate Governance
Our Company is committed to sound principles of corporate governance. Our Board is
elected by the shareowners to ensure health and success of our business in the long run.
Our Board makes the ultimate decisions in our company except for some matters that are
specifically reserved for our shareowners. Our Board also selects and oversees the
members of senior management.
We also review our systems to ensure we achieve the best international practices in terms
of transparency and accountability. Our core of ethics and compliance is our Code of
Business Conduct. This Code guides our conduct and requires honesty and integrity in all
matters we face. All of our associates and directors are required to read and understand
this Code and follow its precepts in the workplace and in the community.
Human Resources
Our Company is established around our brand and our people. We try to make the
workplace more than just a place that we have to go every day; we make it be a place of
exploration, creativity, professional growth and interpersonal relationships. We strive to
be inspired and motivated to achieve extraordinary things. We also strive to have our
people take pride in their work and in building the brand that others love. We employee
people who have combined talents, skills, knowledge, experience and passion.
We currently employee over 92,400 associates worldwide, more than 86% of them are
outside of the U.S. This serves as a complex issue, so we ensure that we hire employees
that live and work in the markets that we serve. We learn from our employees from each
market and incorporate those learning’s into our corporation. Our culture therefore is ever
more collaborative. Our associates sharing ideas across departments and markets make
them increasingly enthusiastic about their work and also inspired to turn plans into action.
Organization Structure
Our company currently has a thriving international market and this is mainly due to our
strategic implementation of executives who live and work in the regions we serve. Our
International organizations are designed to increase growth in rapidly developing markets
and also provide focus on current critical markets. We reflect our Manifesto for Growth
internationally in action and are supportive and consistent with our highest priorities.
This structure that we employ with our excellent leadership teams enables us to focus on
driving profits for our company as a whole by meeting customer and consumer needs.
Financial Performance
Our company is the world’s largest beverage company. We posted revenues of $24
billion in 2006. We reported third quarter 2007 earnings in line with estimates, as price
increases driven by rising aluminum and sweetener costs. We posted a net income of
$268 million, or 55 cents per, for the third quarter, compared with $ 213 million, or 44
cents per share, a year earlier. In 2008 we posted a decrease in net income which could be
due to the economic crisis. We currently have several investments in bottling companies
across the globe along with many joint ventures that provide increasing profits annually.
Compared to our rival PepsiCo we are at a disadvantage. They have entered the snack
business and enjoy increasing revenues from this venture. In 2007 PepsiCo had double
the amount of employees than we employed, they also took in revenue of over $10 billion
more than our company took in. We still are ahead of our second biggest rival Cadbury
Schweppes, as of 2007 they were bringing in revenues of around $10 billion less than
what we were. This should continue in the future due to Cadbury Schweppes small line of
beverages and limited international presence.
Strategic Performance in Functional Areas
a) Marketing
At our company we strive to increase our consumer demand through our marketing and
strong advertising. We have taken advantage of major events such as the Olympics and
the Super Bowl to advertise our new products such as Coke Zero. With our strategic plan
we will need to continue to use our advertising to market our new organic products. Our
marketing department will be responsible for conveying characteristics about our new
healthier product lines through our advertising as well as promotions such as
MyCokeRewards. During this time our marketing expenses will increase to ensure that
our product is well promoted to our consumers.
b) Operations
Operations at our company are on the rise as we expand our bottling facilities
internationally. We currently have four bottling companies under our Coca-cola name.
We are present in over 200 countries and are the leading bottler in Germany. Opening
these facilities is a major strength for our company of the 200 countries we are present in
we have major operation segments in countries like Africa, East and South East Asia and
Pacific Rim, The European Union, Latin America, North America, North Asia, Eurasia,
and the Middle East. Some restructuring will need to be done as we continue expansion
in our home country of North America, but overall this is a continued strength for our
company.
c) Research and Development
As we work on introducing our new organic product lines an increase in Research and
Development costs will be incurred. We will be relying on our strong R&D department to
ensure success on researching and creating healthier products that will meet our
consumer’s needs and expectations. As a result of this expansion of product lines we
hope to have increasing sales and revenues due to our new products.
We also expect to enter into talks with Nabisco about a possible merger. If this happens
our R&D department will also be in charge of helping to construct new 100 calorie packs.
This new variety will help us to expand into the snack food market and hopefully put us
at an advantage against our biggest competitor PepsiCo. We expect to get a positive
response from our current consumers when introducing our new venture with the current
health craze.
Summary of Major Internal Forces
The summary of the major internal forces within the coca-cola industry includes a
description and analysis of developing and existing internal forces that are largely within
direct control and influence of management, which are expected to affect the
performance and operations of Coca-Cola. The major internal forces have been ranked
in order 1=most important and 4=least important.
1) Financial Performance
Our financial performance is one of our strong internal factors. One of our strengths is
our strong revenue growth. As we said before our company is the world’s largest
beverage company. However, compared to our rivals Pepsi we are at a disadvantage and
we want to strive to better our performance compared to Pepsi.
2) Research and Development
Limited product offering is one of our greatest weaknesses. As we work in the area of
research and development we are hoping to develop product variety as stated before. We
would also like to introduce organic products due to the trend towards healthy living. By
introducing product variety we feel that we will gain an advantage on our competitors.
3) Operations
One of our strengths is due to the fact that we have a low cost of operations. Operations
at our company are on the rise as we expand our bottling facilities internationally. Our
company has strong overseas operations. More than 70% of the $ 31.1 billion sales that
analysts expect the company to rake in this year are generated outside the U.S. That
means that we will benefit from the weak dollar.
4) Human Resources
We are built around two core assets, its brand and its people. Theses two assets give us
the opportunity to keep our central promise: to refresh the world in mind, body, and sprit
and inspire moments of optimism. As one of strengths we stated, that we try to make the
workplace more than just a place that we have to go every day; we make it be a place of
exploration, creativity, professional growth and interpersonal relationships.

A.Corporate Mission Goal 1.

Invest more money in reaching out to our home country of North America and expanding
our market and revenues here. This will decrease our need for outsourcing to foreign
subsidiaries as well as build up our brand name in the U.S.
DISCUSSION:
Currently we are seeing a decrease in growth in our performance in North America.
During the fiscal year in 2007, North America sales generated about 27% of total
revenues. However, the sale of unit cases did not record any growth, and the unit case
volume decreased 1% due to a decline in the food service and hospitality division. If this
sector continues to be weak it could impact future growth prospects.
We at Coca-Cola would like to change these numbers and expand our market and
revenues in North America. This is where we originally started our company and would
like to bring the brand back on top here. We plan on doing this by increasing operations
expenses to create advertising, promotions, and new products marketed toward the North
American demographic.

Strategic Map for Coca-Cola Strategic Area: Operations

GOAL (1): Increase Revenue in North America
Objective: To achieve an increase in revenue in our North American operations.
Strategy: Market Penetration [Increase Operations expenses by 4% in 2010 to focus on
our home market.]
Responsibility Center Timetable for Completion Performance Measure
CFO By the end of year 1 Revenues in North America
show an increase
Resource Allocation: 4% of operations expenses

B.Corporate Mission Goal 2.

Attempt a merger with Nabisco Snack Foods in order to promote healthy snacks for
consumers. We will operate with Nabisco to urge consumers to buy more “100 calorie”
snacks opposed to high calorie chips and pretzels sold by Frito Lay.
Discussion:
Our company faces a huge competitor in PepsiCo, they have one thing up on us and that
is their snack food division. They obtain over 60% of their revenues from this division. It
has even succeeded throughout these health-conscious times by way of their Smart Spot
campaigns that emphasize “better for you” products.
We would also like to try our hand in the snack food market, but would like to do it by
way of merging with a company that already has a quality brand and is well known. By
doing this we also hope to get ahead of PepsiCo in doing more advertising and promotion
for the “100 calorie” snacks that Nabisco produces. They are more nutritional and overall
better for our consumers than most of the snack products offered by Frito Lay.

Strategic Map for Coca-Cola Strategic Area: Investing

GOAL (2): Merge with Nabisco.
Objective: Obtain a healthy snack food line.
Strategy: Merger [Increase Other investment expenses 5% annually to obtain a healthy
snack food line, preferably by merging with Nabisco and inheriting their 100 calorie pack
product line.]
Responsibility Center Timetable for Completion Performance Measure
CFO Over the next 2 years A healthy snack line is acquired
Resource Allocation: 5% of other investment expenses annually

C.Corporate Mission Goal 3.

Accrue Research and Development costs to create organic beverages and snack lines,
because of the recent consumer trend of healthy eating and pure consumption.
DISCUSSION:
In today’s world healthier eating has become a main priority. Healthy eating trends are
quickly changing as we learn more about nutrition values of pure natural foods. Here at
Coca-Cola we would like to be able to offer our consumers more organic and healthier
product choices to meet their needs. Organic foods are now becoming more readily
available and the range of products more vast. At a time when we need to be thinking
about our earth, harvesting organic foods helps by saving land.
We intend to, over the next two years, increase our research and development costs by
5% This extra expense will be put directly towards further research into organic snacks
and beverages and finally to develop new product lines for our company. We furthermore
expect these products to increase our revenues and put us ahead of our competitors when
facing new healthy eating trends.

Strategic Map for Coca-Cola Strategic Area: Research and Development

Goal (3): Create organic beverages and snack lines.
Objective: Increase research and development costs to create new healthier product lines.
Strategy: Horizontal Diversification [Increase Research and Development costs yearly
by 5% to create organic snacks and beverages.]
Responsibility Center Timetable for Completion Performance Measure
SVP of Consumer Innovation Over the next 2 years An organic product line is
produced
Resource Allocation: 5% of Research and Development costs annually

D.Corporate Mission Goal 4.

Promote reducing plastic waste through new advertisements encouraging recycling.

DISCUSSION:
We at Coca-Cola understand that we need to take steps to help protect our eco-system.
Our company is the world’s largest beverage company and own over 5 bottling
companies. Some of what we produce comes in plastic bottles or containers. “Plastic
waste has recently become a major issue; it is the fastest growing component of the waste
stream. Plastic does not biodegrade in the natural environment, so when it is littered it
degrades the environment for a lifetime as litter. Governments spend millions to clean up
plastic litter as it as suffered from low recycling rates.”
We would like to change this through our soon to come new advertising campaigns that
promote recycling. These will come in the way of commercials, our website, and even on
our products. We hope to help cut back the plastic waste and create a friendlier eco-
system by using our well known name to help promote recycling.

Strategic Map for Coca-Cola Strategic Area: Advertising

Goal (4): Reduce plastic waste.
Objective: Promote reduction of plastic waste through new advertisements encouraging
recycling.
Strategy: Retrenchment [Increase accrued expenses annually by 3% to create new
advertising and promote reduction of plastic waste.]
Responsibility Center Timetable for Completion Performance Measure
CFO Over the next 5 years New advertisements are released

Resource Allocation: 3% of accrued expenses annually

E.Corporate Mission Goal 5.

Reformulate PowerAde to make it contain more nutrients and energy than its competitor
Gatorade.
DISCUSSION:
We are in a tight race again with our competitor PepsiCo in our sports drink area. They
produce Gatorade which currently in some studies has come out on top of our PowerAde
line. We would like to change this, by revamping our signature PowerAde drinks by
making them more nutritional. Although our sports drink currently does contain some
nutrients that Gatorade doesn’t have, one major issue is the existence of high fructose
corn syrup. This substance has been linked to things such as insulin resistance and
elevated triglyceride levels which can lead to heart disease.
We plan to spend $1 million of accrued expenses annually to reformulate our PowerAde
sports drinks. We would like to completely cut out high fructose corn syrup and use a
substitute that is more nutritional as well as add more nutrients and vitamins. We also are
striving to cut back on the sugar content currently in our PowerAde drinks and replace
them with artificial sweeteners that will keep our drinks tasting delicious but more
nutritional and better for our consumers.

Strategic Map for Coca-Cola Strategic Area: R&D

GOAL (5): Reformulate PowerAde to contain more nutrients.
Objective: Have or line of PowerAde be more nutritional and become bigger than
Gatorade.
Strategy: Product Development [Increase accrued expenses by 1 mil. yearly to
redevelop PowerAde to be more nutritional.]
Responsibility Center Timetable for Completion Performance Measure
SVP of consumer innovation Over the next 3 years PowerAde is reformulated
Resource Allocation: $1 million of accrued expenses annually

Financial Assumptions
The Coca-Cola Company is the world’s largest beverage company, refreshing consumers
with nearly 500 sparkling and still brands. Along with Coca-Cola, recognized as the
world’s most valuable brand, the Company’s portfolio includes12 other billion dollar
brands, including Diet Coke, Fanta, Sprite, Coca-Cola Zero, vitaminwater, POWERADE,
Minute Maid and Georgia Coffee. Globally, we are the No. 1 provider of sparkling
beverages, juices and juice drinks and ready-to-drink teas and coffees. Through the
world’s largest beverage distribution system, consumers in more than 200 countries enjoy
the Company’s beverages at a rate of nearly 1.6 billion servings a day. With an enduring
commitment to building sustainable communities, our Company is focused on initiatives
that protect the environment, conserve resources and enhance the economic development
of the communities where we operate.
Operating with these initiatives assisted Coke is increasing the sale of cases 5% from
2008 to 2009 to 23.7 billion cases worldwide. And net operating revenue increased 11%
reaching 31.9 billion in 2009. Not only is our company growing in the originating nation,
the United States, but it is also growing rapidly internationally all over the globe. More
than 70% of the revenue generated in 2009 was from countries other than the United
States, and more than 75% of cases sold were sold outside the United States. (Financial
Highlights)
Coca Cola is the world’s largest beverage company, but we are still behind PepsiCo when
it comes to sales and yearly net income. In the year 2009, PepsiCo generated 35.14
billion in sales, and Coke generated only 24.09 billion. Net income was 5.63 billion for
PepsiCo and 5.08 billion for Coke. This rank and difference could be due to the fact that
Pepsi does not only sell soft drinks, they also operate in the snack foods sector of the
industry. Therefore, they have more of a variety for consumers to purchase. Coke has not
yet entered into the snack foods chain of the industry, but will hopefully make that move
over the next three years.
Some assumptions that can be made from the financial goals that have been set for our
company are the fact that expanding our product line into healthy snacks and organic
products will generate more revenue in the next three years, and will hopefully continue
to increase our revenue each year following. The goal of the revenue increase is set to be
15% for each year, considering that cost of goods sold will remain to be 35% of the gross
revenue generated.
We will also begin the research and development for the organic food and beverage line
in 2010 assuming to spend 4 million on that research for the first year and increase that
cost by 5% for the following two years. This will enable us to operate with all the other
industries that are moving toward a healthier and more pure economy.
Lastly, we will begin to accrue expenses to go toward the formulation of a new
POWERADE due to the recent lawsuit with PepsiCo for false advertising claiming that
the new POWERADE is better than the Gatorade (McCool). We will begin to accrue
expenses in 2010, and plan to find a formula that will factually be better in nutrients and
energy than Pepsi’s Gatorade. Therefore, there will be no more false allegations for false
advertising. We plan to spend 1 million dollars on this for the next three years, until this
formula is discovered.
Overall, Coca Cola has been increasing its operations each year and has been expanding
internationally rapidly each year. They also have increased their annual dividend
consecutively each quarter for the last forty-seven quarters, this increases the
shareholders’ wealth of the company. We plan to continue to grow the company and
expand the product line so by the year 2012, we will be operating with higher sales and
revenues than our biggest competitor, PepsiCo.

Pro forma Financial Statements

Coca-Cola
Projected Consolidated Balance Sheet
December 31, 2009, 2010, 2011, 2012

2009
2010
2011
2012
Current Assets:

(In millions)

Cash and Cash Equivalents

$4,701
$5,359
$6,109
$6,965
Marketable Securities

$278
$334
$400
$480
Receivables

3,090
2,905
2,730
2,567
Inventories

2,187
2,100
2,016
1,935
Prepaid Expenses & Other Current Assets
1,920
1,690
1,487
1,308
Total Current Assets

12,176
12,386
12,742
13,255
Property, Plant & Equipment

8,326
8,243
8,160
8,079
Intangible Assets

12,503
12,378
12,254
12,132
Investments

5,779
6,068
6,371
6,690
Other Assets

1,733
13,592
28,281
45,462
Total Assets

$40,517
$52,667
$67,809
$85,617

Liabilities:

Current Maturities

$465
$460
$456
$451
Accounts Payable & Accrued Expenses

6,205
6,392
6,585
6,783
Accrued Income Taxes

252
247
242
237
Loans & Notes Payable

6,066
6,187
6,311
6,437
Total Current Liabilities

12,988
13,287
13,594
13,909
Long term Debt

2,781
3,143
3,551
4,013
Other Long term Debt

4,278
4,749
5,271
5,851
Total Liabilities

$20,047
$21,178
$22,416
$23,773

Shareholders' Equity:
 Common Stock

$880
$880
$880
$880
Capital Surplus

$7,966
$8,524
$9,120
$9,759
Retained Earnings

38,513
49,699
63,494
80,338
Accumulated Other Comprehensive Income
($2,674)
($2,674)
($2,674)
($2,674)
Treasury Stock

($24,213)
($24,939)
($25,688)
($26,458)
Total Shareholders' Equity

20,472
31,489
45,133
61,845
Total Liabilities & Shareholders' Equity

$40,519
$52,667
$67,549
$85,617

Coca-Cola
Projected Consolidated Income Statement
For Years Ending 2009, 2010, 2011, 2012
2009
2010
2011
2012

(In millions)

Net Operating Revenues

$31,944
$36,735.60
$42,245.94
$48,582.83
Cost of Goods Sold

11,374
12857.46
14786.079
17003.9909
Gross Profit

20,570
23,878
27,460
31,579
Selling, General, and Administrative Expenses
11,774
11,539
12,462
13,459
Research & Development

0
4.00
4.20
4.41
Other Operating Charges

350
364
379
394
Operating Income

$8,446
$11,972
$14,615
$17,722
Interest Income

333
290
273
257
Interest Expense

438
529
591
661
Other Income (Loss)

(902)
239
400
559
Income Before Income Taxes

$7,439
$13,030
$15,880
$19,199
Provision for Income Taxes

1,632
1,844
2,084
2,355
Net Income

$5,807
$11,186
$13,796
$16,844

Coca Cola
Industry Ratios
For Years 2009, 2010, 2011, 2012
Key Ratios
Krispy Kreme Actual
Industry Average
2010
2011
2012

Return on Equity

25.85
27.23
35.52
30.57
27.24

Net Profit Margin

17.85
12.68
30.45
32.66
34.67

Current Ratio

1.12
1.31
0.93
0.94
0.95

Asset Turnover

0.59
0.86
2.97
3.32
3.67

Return On Assets
12.58
10.98
21.24
20.34
19.67

Financial Ratio Descriptions

Return on Equity (Net Income/Average Shareholder Equity) – measures the rate of the
ownership interest in the common shareholders, this demonstrates how well the company
uses investment dollars to generate earnings
Net Profit Margin (Net Income/Revenue) – used for internal comparison, indicator of a
company’s pricing policies and its ability to control cost
Current Ratio (Current Assets/Current Liabilities) – indication of a firm’s liquidity and
ability to meet creditors’ demands
Asset Turnover (Revenue/Total Assets) – efficiency of company’s use of assets in
generating sales revenue or sales income for the company
Return on Assets (Net Income/Total Assets) – how profitable a company’s assets are in
generating revenue, what the company is able to do with the assets it has
Return on Equity (Net Income/Shareholders’ Equity) - measures the rate of return on the
ownership interest of the common stock owners.

Company History
In 1886, when the Statue of Liberty was being created in the New York Harbor, only
eight hundred miles away, another great American symbol was being stirred up. Like
many people who change history, John Pemberton, an Atlanta pharmacist, was inspired
by simple curiosity. One afternoon, he created a fragrant, caramel-colored liquid and,
when it was done, he carried it a few doors down to Jacobs' Pharmacy. Here, the mixture
was combined with carbonated water, and put on sale for five cents a glass to see if
customers would like it. The decision was anonymous, the drink was something special.
Pemberton's bookkeeper, Frank Robinson, named the mixture Coca-Cola, and wrote it
out in his distinct script. To this day, Coca-Cola is written the same way. In the first year,
Pemberton sold just 9 glasses of Coca-Cola a day. A century later, The Coca-Cola
Company has produced more than 10 billion gallons of syrup. Unfortunately for
Pemberton, he died in 1888 without realizing the success of the beverage he had created.
Over the course of three years, 1888-1891, Atlanta businessman Asa Griggs Candler
secured rights to the business for a total of about $2,300. Candler would become the
Company's first president, and the first to bring real vision to the business and the brand.
He gave out free coupons for complimentary first tastes of the new product. By 1895,
there were syrup plants in Chicago, Dallas, and Los Angeles.
The beverage was first into bottles in 1894, and soon became the portable beverage that
people could take anywhere with them. They began to advertise the product more and
more, and their main encouragement for consumers was to “demand the original, accept
no substitutes”. To this day, people stay loyal to the brand, and accept no substitutes.
Coca cola has changed dramatically over the years, but through all the changes has
continued to stay loyal to the original taste.
From the early beginnings when just nine drinks a day were served, Coca-Cola has grown
to the world’s most ever-present brand, with more than 1.4 billion beverages sold each
day. When people choose to reach for one of The Coca-Cola Company brands, the
Company wants that choice to be exciting and satisfying, every single time.

EFE Matrix

External Factor Evaluation Matrix

Coca-Cola Company
May 15, 2009

Key External Factors

Weight
Rating
Weighted Score
Threats

1.Intense Competition
0.17
2
0.34
2.Limited Brand Loyalty
0.1
2
0.2
3.Economic Recession
0.11
2
0.22
4.Trend toward healthy eating
0.12
3
0.36
5.Dependence on bottling partners
0.1
1
0.1

Opportunities
1.Overseas related diversification
0.05
2
0.1
2.Snack Food Market Penetration
0.05
1
0.05
3.Increase in Consumption
0.1
2
0.2
4.Growing Bottled water Market
0.12
4
0.48
5.Growing Hispanic population in US
0.08
3
0.24
Total
1

2.29

The external factor evaluation matrix allows us to evaluate the external forces that have a
direct impact on our
Company. In this matrix, there is an assigned rating between 1 and 4 to each key
external factor to factor how
Effectively the firm’s current strategies respond to the factor, where 4=the response is
superior, 3=the response
is above average, and 1= response is poor. The average total weighted score is 2.5,
Coca-Cola is operating at
2.29.

CPM Matrix
Competitive Profile Matrix

Coca-Cola Company

15-May-09

Coca-Cola
PepsiCo
DPS
Critical Success Factors
Weight
Rating
Score
Rating
Score
Rating
Score
Advertising
0.10
3
0.30
3.5
0.35
1
0.10
Product Quality
0.20
2.5
0.50
4
0.80
3.2
0.64
Price Competitiveness
0.15
3.1
0.47
2.9
0.44
3.5
0.53
Customer Loyalty
0.20
2
0.40
2.3
0.46
3
0.60
Global Expansion
0.10
3
0.30
4
0.40
2
0.20
Market Share
0.05
3
0.15
3.5
0.18
2
0.10
Product Line
0.10
2
0.20
4
0.40
1
0.10
Financial Position
0.10
3
0.30
4
0.40
2
0.20

2.62

3.42

2.47

The Competitive Profile Matrix (CPM) identifies a firm's major competitors and its
particular strengths and weaknesses in relation to another firm's strategic position. The
weights and total weighted score in both a CPM and an EFE have the same meaning.
However, critical success factors in a CPM include both internal and external issues;
therefore, the ratings refer to strength and weaknesses, where 4 = major strength, 3 =
minor strength, 2 = minor weakness, and 1 = major weakness.

Key Internal Factors

Weight
Rating
Weighted Score
Weaknesses

1.Brand loyalty

0.08
1
0.08
2.Lack of Organic Products

0.09
1
0.09
3. Spending too much money on top management compensation
0.05
2
0.1
4.Low Export Levels

0.07
2
0.14
5 Limited product offering

0.1
1
0.1

Strengths

1. Depth of product Offering

0.13
3
0.39
2.Brand Awareness

0.14
4
0.56
3.Low cost of operations

0.1
3
0.3
4.Promotion

0.1
4
0.4
5. Strong revenue growth

0.14
4
0.56
Total

2.72

The Internal Factor Evaluation Matrix is a systematic tool used to evaluate the major
strengths and weaknesses in the functional areas of Coca-Cola. The IFE Matrix lists key
internal factors based on significance under strengths and weaknesses the importance of it
being successful at Coca-Cola. Each factor is then assigned a weight that ranges from
0.0 to 1.0. The weight given to factor indicates the importance of it being successful at
Coca-cola. The factor is then assigned a rating from 1 to 4, 1 being a major weakness, 2
being a minor weakness, 3 being a minor strength, and 4 being a major strength. A
weighted score is then calculated by multiplying each factor's weight by its rating. The
average total weighted score is 2.5, whereas Coca-Cola has a total weighted score of 2.72
signifying that Coca-Cola is above average.

Strengths (S)
Weaknesses (W)

1. Depth of Product Offering

1. Brand Loyalty
Coca-Cola
2. Brand Awareness
2. Lack of organic products

TOWS Analysis
May 15, 2009

3. Low Cost of Operations

3. Spending too much money on top management compensation

4. Promotion
4. Low export levels

5. Strong Revenue Growth

5. Limited Product offerings

Opportunities (O)
SO Strategies
WO Strategies

1. Overseas related Diversification

1.Advertise towards Hispanics(O5,S2)
1. Expand into snack foods(O2,W5)

2. Snack Food Market Penetration

2. Concentrate on bottled water(O4,S1)
2. Create an Organic Snack(O2,W2)

3. Increase in Consumption
3. Expand into snack foods(O2,S1-S5)

4. Growing Bottled Water Market

5. Growing Hispanic population in the U.S.

Threats (T)
ST Strategies
WT Strategies

1. Intense Competition
1. Increase Promotions( T1&T2,S4)
1. Expand into snack foods(T1,W5)

2. Limited Brand Loyalty

2.Create Healthier product lines(T1&T4,S5)
2. Cut wages to top management(T3,W3)

3. Economic Recession

4. Trend toward healthy living

5. Dependence on bottling partners

The Quantitative Strategic Planning Matrix -QSPM

Coca-Cola May 15 2009

Strategic Alternatives
1
2

Merging with Nabisco

Continue with current product lines

Key Factors
Weight
AS
TAS
AS
TAS

Opportunities

1.Overseas related diversification

0.05

2.Snack Food Market Penetration

0.05
4
0.2
1
0.05

3.Increase in Consumption
0.1
3
0.3
2
0.2

4.Growing Bottled water Market

0.12

0
3
0.36

5.Growing Hispanic population in the US

0.08
3
0.24

Threats

1.Intense Competition
0.17
1
0.17
2
0.34

2.Limited Brand Loyalty

0.1
2
0.2

3.Economic Recession
0.11
1
0.11
2
0.22

4.Trend toward healthy eating

0.12
4
0.48
2
0.24

5.Dependence on bottling partners

0.1
0
2
0.2

Strengths

1. Depth of product Offering

0.13
4
0.52
2
0.26

2.Brand Awareness
0.14

0
4
0.56

3.Low cost of operations

0.1
1
0.1
3
0.3

4.Promotion
0.1
4
0.4
3
0.3

5. Strong revenue growth

0.14
4
0.56
3
0.42

Weaknesses

1.Brand loyalty
0.08
3
0.24
2
0.16

2.Lack of Organic Products

0.09
1
0.09
2
0.18

3. Spending to much money on top management compensation

0.05

4.Low Export Levels

0.07
2
0.14
1
0.07

5 Limited product offering

0.1
4
0.4
1
0.1

Total

4.15

3.96

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