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Coca Cola In Vietnam Case Study Analysis

Case Study Solution And Analysis


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Coca Cola In Vietnam Case Study Solution

Coca Cola In Vietnam is currently among the most significant food cycle worldwide. It was founded by Kelloggs in 1866, a German Pharmacist who first released "FarineLactee"; a combination of flour and milk to feed infants and reduce mortality rate. At the very same time, the Page brothers from Switzerland likewise discovered The Anglo-Swiss Condensed Milk Business. The 2 became rivals at first but in the future merged in 1905, resulting in the birth of Coca Cola In Vietnam.
Business is now a multinational business. Unlike other multinational business, it has senior executives from various countries and tries to make decisions considering the entire world. Coca Cola In Vietnam currently has more than 500 factories around the world and a network spread across 86 nations.

Purpose

The purpose of Business Corporation is to improve the quality of life of individuals by playing its part and supplying healthy food. While making sure that the company is being successful in the long run, that's how it plays its part for a much better and healthy future

Vision

Coca Cola In Vietnam's vision is to offer its clients with food that is healthy, high in quality and safe to eat. Business envisions to establish a well-trained labor force which would help the business to grow
.

Mission

Coca Cola In Vietnam's mission is that as currently, it is the leading business in the food market, it thinks in 'Excellent Food, Excellent Life". Its mission is to offer its consumers with a variety of choices that are healthy and best in taste as well. It is focused on supplying the very best food to its consumers throughout the day and night.

Products.

Business has a wide range of products that it uses to its customers. Its items consist of food for infants, cereals, dairy products, treats, chocolates, food for family pet and bottled water. It has around 4 hundred and fifty (450) factories all over the world and around 328,000 employees. In 2011, Business was noted as the most gainful company.

Goals and Objectives

• Keeping in mind the vision and mission of the corporation, the company has put down its goals and goals. These objectives and objectives are listed below.
• One objective of the business is to reach zero landfill status. It is pursuing no waste, where no waste of the factory is landfilled. It encourages its workers to take the most out of the spin-offs. (Business, aboutus, 2017).
• Another goal of Coca Cola In Vietnam is to squander minimum food throughout production. Most often, the food produced is squandered even prior to it reaches the customers.
• Another thing that Business is working on is to improve its product packaging in such a method that it would help it to lower those problems and would likewise ensure the delivery of high quality of its products to its consumers.
• Meet global requirements of the environment.
• Construct a relationship based on trust with its consumers, service partners, staff members, and government.

Critical Issues

Just Recently, Business Company is focusing more towards the strategy of NHW and investing more of its earnings on the R&D technology. The country is investing more on acquisitions and mergers to support its NHW method. However, the target of the business is not achieved as the sales were anticipated to grow greater at the rate of 10% each year and the operating margins to increase by 20%, given in Exhibition H. There is a need to focus more on the sales then the development technology. Otherwise, it might result in the decreased revenue rate. (Henderson, 2012).

Situational Analysis.

Analysis of Current Strategy, Vision and Goals

The present Business strategy is based upon the principle of Nutritious, Health and Health (NHW). This strategy deals with the concept to bringing modification in the consumer preferences about food and making the food stuff much healthier worrying about the health concerns.
The vision of this technique is based on the key method i.e. 60/40+ which just suggests that the items will have a rating of 60% on the basis of taste and 40% is based on its nutritional value. The products will be produced with additional dietary worth in contrast to all other items in market getting it a plus on its dietary material.
This strategy was adopted to bring more delicious plus healthy foods and beverages in market than ever. In competitors with other business, with an objective of keeping its trust over consumers as Business Company has gained more relied on by clients.

Quantitative Analysis.

R&D Costs as a portion of sales are decreasing with increasing real quantity of spending shows that the sales are increasing at a higher rate than its R&D spending, and enable the company to more invest in R&D.
Net Profit Margin is increasing while R&D as a percentage of sales is decreasing. This sign also reveals a green light to the R&D spending, mergers and acquisitions.
Debt ratio of the business is increasing due to its spending on mergers, acquisitions and R&D advancement instead of payment of financial obligations. This increasing debt ratio posture a hazard of default of Business to its investors and could lead a decreasing share prices. In terms of increasing debt ratio, the company needs to not invest much on R&D and ought to pay its existing financial obligations to reduce the threat for investors.
The increasing threat of financiers with increasing financial obligation ratio and declining share costs can be observed by substantial decrease of EPS of Coca Cola In Vietnam stocks.
The sales development of business is also low as compare to its mergers and acquisitions due to slow perception structure of consumers. This sluggish development likewise impede company to additional spend on its mergers and acquisitions.( Business, Business Financial Reports, 2006-2010).
Note: All the above analysis is done on the basis of computations and Charts given up the Exhibits D and E.

TWOS Analysis


2 analysis can be utilized to obtain different methods based upon the SWOT Analysis provided above. A brief summary of TWOS Analysis is given in Exhibition H.

Strategies to exploit Opportunities using Strengths

Business needs to introduce more ingenious products by large amount of R&D Spending and mergers and acquisitions. It could increase the market share of Business and increase the profit margins for the company. It could also provide Business a long term competitive benefit over its competitors.
The worldwide expansion of Business need to be focused on market recording of establishing nations by expansion, bring in more consumers through customer's loyalty. As establishing nations are more populated than developed nations, it could increase the customer circle of Business.

Strategies to Overcome Weaknesses to Exploit Opportunities

Swot AnalysisCoca Cola In Vietnam must do careful acquisition and merger of companies, as it might affect the consumer's and society's perceptions about Business. It ought to acquire and combine with those business which have a market reputation of healthy and healthy business. It would enhance the understandings of consumers about Business.
Business needs to not just invest its R&D on innovation, instead of it must also concentrate on the R&D costs over examination of cost of different healthy products. This would increase expense performance of its products, which will lead to increasing its sales, due to decreasing rates, and margins.

Strategies to use strengths to overcome threats

Business ought to move to not only establishing however likewise to developed nations. It should broaden its circle to numerous countries like Unilever which operates in about 170 plus nations.

Strategies to overcome weaknesses to avoid threats

Coca Cola In Vietnam must wisely control its acquisitions to prevent the risk of misconception from the consumers about Business. It needs to get and merge with those countries having a goodwill of being a healthy company in the market. This would not just enhance the perception of consumers about Business but would also increase the sales, revenue margins and market share of Business. It would likewise make it possible for the company to use its prospective resources effectively on its other operations instead of acquisitions of those organizations slowing the NHW technique growth.

Segmentation Analysis

Demographic Segmentation

The group division of Business is based on 4 elements; age, gender, earnings and occupation. Business produces a number of products related to babies i.e. Cerelac, Nido, etc. and related to grownups i.e. confectionary items. Coca Cola In Vietnam items are quite cost effective by nearly all levels, but its major targeted consumers, in terms of income level are middle and upper middle level clients.

Geographical Segmentation

Geographical segmentation of Business is made up of its presence in almost 86 nations. Its geographical division is based upon two primary aspects i.e. average income level of the customer in addition to the climate of the area. Singapore Business Business's segmentation is done on the basis of the weather condition of the region i.e. hot, warm or cold.

Psychographic Segmentation

Psychographic segmentation of Business is based upon the character and life style of the consumer. For example, Business 3 in 1 Coffee target those clients whose life style is rather busy and don't have much time.

Behavioral Segmentation

Coca Cola In Vietnam behavioral segmentation is based upon the mindset understanding and awareness of the customer. For instance its extremely healthy products target those consumers who have a health conscious attitude towards their usages.

Coca Cola In Vietnam Alternatives

In order to sustain the brand name in the market and keep the consumer undamaged with the brand name, there are two choices:
Alternative: 1
The Company ought to invest more on acquisitions than on the R&D.
Pros:
1. Acquisitions would increase total assets of the business, increasing the wealth of the company. However, spending on R&D would be sunk cost.
2. The business can resell the obtained systems in the market, if it stops working to execute its strategy. Nevertheless, amount spend on the R&D could not be restored, and it will be considered entirely sunk cost, if it do not provide possible outcomes.
3. Investing in R&D supply sluggish growth in sales, as it takes long period of time to present a product. Acquisitions offer quick results, as it offer the business currently developed item, which can be marketed quickly after the acquisition.
Cons:
1. Acquisition of business's which do not fit with the company's worths like Kraftz foods can lead the company to deal with misunderstanding of customers about Business core worths of healthy and healthy products.
2 Large spending on acquisitions than R&D would send out a signal of company's inefficiency of developing innovative products, and would results in customer's discontentment too.
3. Large acquisitions than R&D would extend the product line of the business by the products which are currently present in the market, making business unable to introduce brand-new ingenious products.
Alternative: 2.
The Company should invest more on its R&D instead of acquisitions.
Pros:
1. It would make it possible for the business to produce more ingenious products.
2. It would provide the company a strong competitive position in the market.
3. It would enable the company to increase its targeted consumers by introducing those items which can be provided to a totally new market segment.
4. Ingenious products will provide long term benefits and high market share in long run.
Cons:
1. It would reduce the profit margins of the business.
2. In case of failure, the whole spending on R&D would be considered as sunk expense, and would impact the business at large. The threat is not when it comes to acquisitions.
3. It would not increase the wealth of company, which could offer an unfavorable signal to the investors, and could result I declining stock rates.
Alternative 3:
Continue its acquisitions and mergers with substantial spending on in R&D Program.
Vrio AnalysisPros:
1. It would enable the company to present new innovative products with less danger of converting the spending on R&D into sunk cost.
2. It would provide a positive signal to the investors, as the overall properties of the business would increase with its significant R&D costs.
3. It would not affect the revenue margins of the company at a large rate as compare to alternative 2.
4. It would offer the business a strong long term market position in regards to the company's overall wealth along with in regards to innovative items.
Cons:
1. Danger of conversion of R&D spending into sunk expense, greater than option 1 lower than alternative 2.
2. Threat of mistaken belief about the acquisitions, higher than alternative 2 and lesser than option 1.
3. Intro of less variety of innovative products than alternative 2 and high variety of ingenious items than alternative 1.

Coca Cola In Vietnam Conclusion

RecommendationsIt has institutionalized its methods and culture to align itself with the market modifications and customer habits, which has actually ultimately allowed it to sustain its market share. Business has established significant market share and brand name identity in the metropolitan markets, it is advised that the business needs to focus on the rural areas in terms of developing brand name commitment, awareness, and equity, such can be done by producing a specific brand name allocation strategy through trade marketing strategies, that draw clear distinction between Coca Cola In Vietnam products and other competitor items.

Coca Cola In Vietnam Exhibits

PESTEL Analysis
P
Political
E
Economic
S
Social
T
Technology
L
Legal
E
Environment
Governmental support

Transforming criteria of international food.
Enhanced market share.
Changing assumption towards much healthier items
Improvements in R&D and also QA divisions.

Intro of E-marketing.
No such influence as it is favourable.
Concerns over recycling.

Use of resources.

Competitor Analysis
Business Unilever PLC Kraft Foods Incorporation DANONE
Sales Growth Highest given that 7000
Greatest after Service with less development than Company 5th Cheapest
R&D Spending Greatest considering that 2001 Highest after Company 6th Lowest
Net Profit Margin Greatest since 2004 with fast growth from 2007 to 2015 Due to sale of Alcon in 2015. Virtually equal to Kraft Foods Incorporation Almost equal to Unilever N/A
Competitive Advantage Food with Nourishment and health element Highest possible variety of brands with sustainable techniques Biggest confectionary and also processed foods brand name worldwide Biggest dairy products as well as bottled water brand name on the planet
Segmentation Middle as well as top middle level customers worldwide Individual consumers together with family team All age and Earnings Customer Teams Middle as well as top middle level customers worldwide
Number of Brands 1st 3rd 4th 8th

Quantitative Analysis​
Analysis of Financial Statements (In Millions of CHF)
2006 2007 2008 2009 2010
Sales Revenue 93192 249596 258721 198853 747818
Net Profit Margin 6.97% 2.84% 41.11% 6.57% 25.63%
EPS (Earning Per Share) 81.84 4.37 2.37 1.48 27.44
Total Asset 729971 355984 462151 534952 57544
Total Debt 56861 72321 13519 91944 73235
Debt Ratio 27% 51% 23% 16% 56%
R&D Spending 8864 3338 7987 6663 4696
R&D Spending as % of Sales 9.13% 6.57% 9.29% 3.91% 1.79%

Coca Cola In Vietnam Executive Summary Coca Cola In Vietnam Swot Analysis Coca Cola In Vietnam Vrio Analysis Coca Cola In Vietnam Pestel Analysis
Coca Cola In Vietnam Porters Analysis Coca Cola In Vietnam Recommendations