Business Description (1)

CocaCola 1

Business Report on Coca Cola (Amatil)

[Name of the Writer]

[Name of the Institution]

[Name of the Subject]

[Date]

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Table of Contents

Business Description.................................................................................................................................1

Product Life Cycle................................................................................................................................2

Financial Performance..........................................................................................................................2

The Market of the business.......................................................................................................................2

Market definition...................................................................................................................................2

Market Analysis....................................................................................................................................3

Market Segmentation............................................................................................................................4

The Workplace........................................................................................................................................10

Technology.............................................................................................................................................11

Global Business Environment................................................................................................................11

Strengths..............................................................................................................................................12

Weakness.............................................................................................................................................13

Opportunities.......................................................................................................................................13

Threats.................................................................................................................................................13

Government Regulations........................................................................................................................14

Recommendations...................................................................................................................................14

References...............................................................................................................................................15

CocaCola 1

Business Description

Coco Cola manufacture, supply as well as market drinks which do not contain alcohol. The

company is the owner of most famous brand worldwide which is coco cola. Moreover, Fanta, Sprite,

Coca cola as well as Diet Coke these drinks comes in top 5 inebriated drinking brands worldwide and

all four of these are marketed by coco cola. The drinking products which are done are being sold in

two hundred countries all across the world.

At least more the three thousand and five hundred drinking products are made by Coco cola,

containing a range of dazzling drinks. Syrups and drinks are produced by the country, and it is sold to

dealers who are approved to do bottling and canning. Finished drinks are also manufactured by

company. Coco cola also have more than five hundred products, containing dazzling drinks, juices,

water, tea, energy and athlete drinks

Many of Coco cola items are made and sold out by the bottling partners, who change them to

finished packed items in order to sale it to customer and the one who distributes it. Syrups as well as

concentrates are sold by the company for drinks which comes in bottles and cans to the approved

workers who perform canning and bottling (Way, 2013). Moreover, apart from selling these syrups

along with concentrates in order to produce dazzling drinks, the company also offers pure water

products like Dasani to responsible bottling operation. Apart from United States concentrates are sold

by coco cola for fountain drinks to its respected bottling associates responsible to make fountain

syrups.Coca Cola Amatil Limited is an Australian company renowned company. Coca Cola Amatil

Limited is the leading drink producer inside the country, where most of profits are resulted from

distributing and manufacturing fizzy drinks (Kennon, 2013). Coca Cola Amatil has special bottling

rights of Australia to Coco cola variety of brands of drinks. Concentrates are brought from Coco cola

based in United States in order to produce and manufacture the products in licensed area around

Indonesia, Papua New Guinea, Australia and Fiji. Headquaters of Coca-Cola Amatil Limited (CCA) is

in Sydney and has employeed over 14 thousand people.

Outside the US, Coca-Cola sells concentrates for fountain beverages to its bottling partners

authorized to manufacture fountain syrups. Coca-Cola Amatil Limited (CCA) is an Australian publicly

listed company. It is the largest beverage manufacturer in the country, with the majority of income

derived from manufacturing and distributing soft drinks. CCA has exclusive Australian bottling rights

to the Coca-Cola brand’s range of beverages. The company acquires concentrates from US-based The

Coca-Cola Company to manufacture and distributes its products in exclusively licensed territories

across Australia, New Zealand, Indonesia, Fiji and Papua New Guinea. CCA is headquartered in

Sydney and employs over 14,000 people (Kennon, 2013). Coca Cola Amatil Limited (CCA) is a soft

drink manufacturing company that makes a variety of pop drinks, sports and energy drinks and other

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beverages. Along with the regular drinks such as coke, fanta, sprite, CCA also produces kirks, Deep

Spring, Appletiser, Powerade, Mother and Glaceau Vitamin water.

In 2010, CCA initiated a five year Project Zero program that has been completed now. The

project focused at revamping the manufacturing units, processes and capacity. The project had many

plans for over hauling the system. One main element of this project was the vertical integration

through the in house production of PET bottle packaging. Another was to make the processes

automatic in various operations. The project also aimed at cost cutting and increasing the production

efficiency. For this small production units were closed and capacity was shifted to major production

facilities. This was done to save $100 million dollars over the next three years.

Product Life Cycle

Financial Performance

CCA always maintained a stable financial position however greater than before competitive

market and recent low demand of carbonated drinks have decreased the revenues in past two years.

The profit margin has been seen on a declining trend for the past two years because of competitive

pressure and rising manufacturing costs. It has been anticipated that CCA’s industry specific revenue

would decline at an annual rate of 0.9% over the past five years through December underperforming

the wider industry in nominal terms (Baxter, 2006). Inspite of the declining profit, CCA has received a

boost from the sale of Coke Zero, which is becoming the most popular brands among the diet cola

beverages. The Mother range has also provided an avenue of growth in the energy drink market, with

sales growing strongly in the product segment.

The Market of the business

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Market definition

The scope of this report revolves around the soft drinks market. The pop soft drinks market

comprises of retail sales of diet cola, standard cola, fruit- flavored carbonates, mixers and other

carbonates. The market is priced according to on shelf price and related taxes. Currency conversions

used in the assemblage of this report have been calculated using 2014 annual average exchange rates.

In the domain of this report, the regions have been divided along these geographical lines,

North America consists of Canada, Mexico, and the United States.

South America comprises Argentina, Brazil, Colombia, and Venezuela.

Europe comprises Austria, Belgium, the Czech Republic, Denmark, Finland, France, Germany,

Greece, Ireland, Italy, Netherlands, Norway, Poland, Portugal, Romania, Russia, Spain,

Sweden, Switzerland, Turkey, and the United Kingdom.

Scandinavia comprises Denmark, Finland, Norway, and Sweden (Seals, 2013).

Market Analysis

The growth in the Australian soft drink market has been fairly diffident as compare to recent

years and its anticipated that it would continue to grow at the same rate through the forecast period to

2019. Obesity is alarming issues in Australia where 63% of adults have found to be overweight the in

2014 (Way, 2013). In order to deal with obesity issue and promote healthy living, the government may

consider intervening and taking health initiative and impose taxes at obesity causing products such as

soft drinks. This could lower the sales of soft drinks even further.

Around the globe, the carbonated soft drink markets have varying growth rates. In Australia,

the carbonated soft drinks market had total revenues of $5,583.6m in 2014 with a compound annual

growth rate (CAGR) of 2.1% between 2010 and 2014 whereas, the Chinese and Japanese markets

grew with CAGRs of 5.5% and 4.6% respectively, over the same period. The Chinese and Japanese

market had total revenues of $13,320.5m and $5,920.7m in 2014 (Way, 2013).

In 2014, the Market expenditure volume improved with a CAGR of 2% between 2010 and

2014, to reach a total of 2,530.6 million liters. The market's volume is expected to rise to 2,750.8

million liters by the end of 2019 that is, CAGR of 1.7% for the 2014-2019 periods. The standard cola

segment was in high demand in 2014, with total revenues of $2,004.2 million that is equivalent to

35.9% of the market's overall value (Baxter, 2006). The other major contributor to revenues was the

fruit flavored carbonate that gave revenues of $1,670.3m in 2014, equating to 29.9% of the market's

aggregate value.

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According to the forecast, the market growth would supposedly decline, with an probable

CAGR of 1.3% for the five-year period 2014 - 2019, which is expected to drive the market to a value

of $5,956.3m by the end of 2019. On the contrary, the Chinese and Japanese markets will grow with

CAGRs of 4.5% and 3.3% respectively, over the same period, to reach respective values of

$16,627.9m and $6,955.4m in 2019 (Kennon, 2013).

Market Value

The compound yearly growth rate of the Australian Carbonated market was 2.1% during the

period 2010-2014. However, in 2014 the growth rate was less than average and market grew with

1.5% to achieve a value $5,583.6 million.

Market Segmentation

Category Segmentation

The biggest chunk of carbonated soft drink market in Australia is the standard cola, comprising

of 35.9% of total market’s value.

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Geography Segmentation

Among the Asia-Pacific, Australia acquires 16.3% of the market share where as China has 39%

share in the Asia-Pacific market (Baxter, 2006).

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Market share

In the Australian beverage industry, Coca-Cola is the major player with a 60% share of the

market’s volume. The other smaller player is the Ashai Group Holdings Ltd. with a share of 11.4%.

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Market distribution

The foremost supply channel in the Australian carbonated softdrink market has been On-Trade

with a share of 42% of the total market’s volume. Along with this, Supermarkets and hypermarkets

account for 38.2% of the market share (Way, 2013).

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Market value forecast

According to the forecast, the compound yearly growth rate of Australian beverage market

would be 1.3% in the period 2014-2019. The market has been anticipated to have a value $5,956.3

million in 2019 that is 6.7% more than 2014

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Market Volume Forecast

As per the forecast, the Australian carbonated soft drinks market would have a volume of

2,750.8 million liters in 2019 that is an increase of 8.7% since 2014. Along with this, it has been

anticipated that compound annual growth rate of the market would be 1.7% during the period 2014-

2019 (Teal, 2010).

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The Workplace

CCA comprises of more than 15,000 employees and acquaintance to more than 265 million

consumers among which 700,000 customers are active. At its workplace, all the employees are valued

and the company recognizes that each employ brings his own experiences, skills and unique

differences. The CCA appreciates individual difference and comprehend that diverse teams show

better performance (Baxter, 2006). The company also encourages the career development and growth

of its employees and fosters the culture of promoting employees’ needs. The aim of the company is to

attract and retain passionate and talented employees. Apart from fostering career growth and

development, the company also offers competitive salary packages to its employees which are

reflected in the contribution and experiences of its employees.

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Technology

Global Business Environment

` The business environment of a company can be classified into Micro and Macro Analysis

Micro Environment

Customers – CCA plans to develop and expand their business status in the global market and in

order to accomplish this plan; the company is applying all the marketing promotion and

communication techniques for constructing their growth strategy

Employees-CCA comprises of large number of employees.

Venders connected to the Internet can report sales, inventory and service issues to Coca-ColaRefreshments in real-time — drastically improving service levels at substantially reduced operating costs

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Media-CCA accomplishes is consumer development goals through sales, public relations,

direct marketing and promotions.

Macro Environment

Political-For the CCA, the political environment is feasible for importing and exporting

products. The company receives regular support from the Australian governmental and non-

governmental associations for the counseling of their management issues on the political

background.

Economical-CCA had experienced a momentous performance decline in the year 2008 as a

result of serious credit crunch in the market

Technological-Technological advancements in Australian market are fostering the strategic

development of the CCA business.

SWOT

Strengths

Experienced company and management team

Currently Coca-Cola Amatil Limited works exclusively in the fizzy drink business, and it

possess an important existence in the countries where it operates. In order to market the techniques

used by TCCC and CCA has caused well known perceptive of the company as well as the brand coco

cola. All the modifications made during the last century all the credit goes to the management team.

Leader in all soft-drink markets in which we operate.

The distinctive and great marketing techniques have results in major success of all brands of

Coco cola and Fanta, Sprite along with Mount Franklin Spring Water.

Unique Delivery Management System

· The arrangement of delivery permits Coca-Cola Amatil Limited to transport its products

straight from stockroom or the bottling plant to the point where it will be purchased. The different

system of CCA has made sure that the distributer only has to tackle the drink during the time of its

scanning at the checkout. This advantage also low down the costs in transportation.

JIT (Just-In-Time) Inventory System

JIT inventory system causes profit to CCA since it cut down storage and travelling costs, and

enhances effectiveness in the bottling plants that is operated by CCA.

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Weakness

Dynamically changing market

The market is continuously varying , and latest products are launched by CCA as well as by its

rivals ( like Pepsi) very quickly. This cause a issue to CCA because the products lack in required time

in order to incorporate with the Australian culture as Coco cola.

Entry of new competitors

Even though it’s not a main weakness to CCA, the beginning and victory of competitors do

affect the sales generated by CCA. The current modifications of ethical concern with respect to fizzy

drinks have resulted in a bad image of brads of these drinks like Sprite as well as Coco cola. And it’s

considered as weakness for the company, as a result in order to resolve this issue via its brand

expansion CCA is manufacturing healthy drinks (like Diet Coke) (Kennon, 2013).

Asian economic crisis

The financial crises in the late ninety’s has caused in a fast turn down of the fizzy drink market.

The market of fruity drinks specifically acts as a favorable venture for CCA. The growth for

upcoming access in the market should be kept in mind.

Opportunities

Brand Extensions

CCA had a chance ever since its connection with Coco Cola Company is TCCC as names of

brand in order to launch latest products. Launching latest products with a well known name of brand is

an efficient manner for prosperous business. In the previous year an incline is noticed in the economy

of Australia. Tentatively, this increase will permit more people belonging to various economic

categories to buy soft drinks (Teal, 2010).

Threats

Growing Terrorist Threat

Terrorism can cause impacts on businesses like CCA by declining fame for Americanization

and products of America. Muslim societies for instance have manufactured a latest drink same as

coco cola in order to take over it in Muslim community. And this threat has huge impact.

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Changing sugar prices

Varying costs of sugar can also be a threat to all the companies which greatly depend on this

resource. And most of its products contain sugar content, which can reduce the profits.

Financial Forecast

Guessing the approximate price and revenue to be generated in future is tough work,

particularly while launching a new product.

Government Regulations

It is the chief policy of CCA to comply with applicable laws of Australia. The production,

distribution and sales of various products of CCA is subjected to the Occupational Safety and Health

Act, Federal Trade Commission Act, Federal food, Drug, and Cosmetic Act, state consumer protection

laws and several other environmental statues plus various other local, state and federal regulations

applicable to the designing, production, labeling and ingredients, transportations, safety and sales.

Bottlers of our beverage products present recyclable and non-refillable containers in Australia. Lawful

prerequisites have been established in locales in the Australia and abroad requiring that stores or

certain taxes or expenses be charged for the deal, advertising and utilization of certain non-refillable

drink containers (Teal, 2010). The exact prerequisites endorsed by these measures vary. Other drink

container–related deposit, reusing, tax and/or item stewardship proposition have been presented in

different purviews in the Australia and abroad. CCA look forwards that comparative enactment or

regulations may be proposed later on at local, state and government levels, both in the Australia and

other countries. All of the CCA offices in the Australia are liable to different natural laws and

regulations. Consistence with these procurements has not had, and we don't anticipate that such

consistence will have, any material antagonistic impact on our Company's capital consumptions, net

salary or competitive position.

Recommendations

Despite the fact that Coca-Cola Amatil remains the most dominant non-alcoholic beverage firm

in Australia and other countries it operates in and continues to demonstrate an enhancing control on

the beverage market, the continuous development and introduction of new products must not be

overlooked. Introducing a new product into the competitive and dynamic market is a project requiring

the precise amalgamation of persistence and planning. The success of CCA significantly relies on

these aspects and the accurate image to link to its target market.

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References

Baxter, R. (2006). The Role if Spreadsheets in Today’s Corporate Climate. Internal Auditor.

Kennon, J. (2013). How to Get a Company's Annual Report, 10K, and Other Financial Information.

About.com.

Seals, J. (2013, November 14). Personal interview at Coca-Cola Headquarters in Atlanta.

Teal, A. (2010, February 23). How Accrual Accounting Works and Why it is Important to Businesses.

Way, J. (2013). What Is the Importance of a Company’s Financial Statements? Chronicles.com.