The Coca-Cola Company Executive Summary Coca-Cola has been the staple in the soft drink market since John Pemberton founded the company in Atlanta, Georgia, 1866. With 1.8 billion Coke bottles consumed each day, CocaCola has grown to be the powerhouse they are today not by chance, but by smart management decisions based off the company's mission \"To refresh the world...To inspire moments of optimism and happiness...To create value and make a difference...\" (Coca-Cola). Throughout this paper different analytical tools were used to analyze the external and internal environment of the Coca-Cola Company, as well as identification of corporate strategies and company strengths and weaknesses. These tools allow us to identify that the company's most sustainable competitive advantages come from their marketing strategies and strong consumer and bottling partnerships. These competencies lead to strategy recommendations that will strengthen Coca-Colas current position in the market. Recommendations are made on strategies and competencies the Coca-Cola Company should focus on to establish them further and continue long run success. With emphasis on marketing and product development Coca-Cola will be able to increase their market power in the industry through research and development of newer and healthier product options. Introduction History In 1886, Coca-Cola was founded by pharmacist John Pemberton of Atlanta, Georgia. \"Coca Cola is one of the largest manufacturers, distributors, and marketers of nonalcoholic beverages and syrups in the world.\" Coke owns or licenses more than 500 beverage brands and sells its products in more than 200 countries (Coca Cola Company, 2014). Coke has operating revenue of $45,998,000,000 with 129,200 employees and a market share of 26.8%. Publicly traded on the NYSE, Coke (NYSE: KO) has a current stock price of $43.59 (Yahoo Finance, 2015). Their North American Industry Classification System (NAICS) number is 312111 and their Standard Industry Classification (SIC) number is 2086. Current Organizational Challenges The Coca-Cola Company knows that it isn't all about profits, and it is important to them to make a difference in the environments they're in. The company has some challenges to overcome in order to make a difference. Coca-Colas current organizational challenges that they face are: True sustainability means looking beyond the concerns of our business and considering our connections with the world at large. It involves contemplation of our role in addressing global challenges that are far bigger than any one companychallenges such as climate change, water stewardship, economic disparity and more. And it means, simply, doing what we can in response: stepping up with our resources and influence to play a part in solving seemingly intractable problems. 1|Page Inside every bottle of Coca-Cola is the work of a global systemof people in more than 200 countries who are citizens firstfocused intently on some of the most pressing issues of our time. (Global Challenges, 2012) To control obesity, Coke sponsors more than 280 active, healthy living programs in over 115 countries worldwide. They are intensely involved in water stewardship across the system and in hundreds of communities throughout the world. They are working to use water more efficiently and are treating and recycling wastewater. They aim to replenish the amount of water used in our finished beverages by 2020. To address gender disparity, \"Our 5 BY 20 program is helping to address economic gender disparity by helping to remove economic barriers for women in our value chain. Our goal? To enable the economic empowerment of five million women by 2020.\" To promote respect for human rights, \"through our labor practices and policies, our procurement of ingredients and supplies, our plant siting, our consumption of resources, our actions as a corporate citizen in the communities that host our operations and much more\" (Global Challenges, 2012). Strategy Formulation Vision and Mission The Coca-Cola Company has a specific mission for their company, one which lies at the center of every decision the company makes \"To refresh the world... To inspire moments of optimism and happiness... To create value and make a difference...\" (Coca-Cola). With keeping their mission in mind, Coca-Cola has a set vision to help guide all aspects of the business in order to achieve a sustainable competitive advantage in the market. These six factors help to achieve their vision (Coca-Cola): 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. Stakeholder Analysis Coca-Cola identifies their diverse group of stakeholders as \"global partners, including bottling partners, consumers, customers, distributors, employees, government agencies, investors, nongovernmental organizations (NGOs) and nonprofit partners,\" (Coca-Cola, 2015). 2|Page Coca-Cola takes an active approach in communicating with their stakeholders as they know their engagement is important to the company's success. Coca-Cola has implemented what they call a \"Golden Triangle partnership approach\" to engage their stakeholders. This approach is a core aspect of Coca-Colas business strategy, as it can help with the growth and sustainability commitments of the organization. Having this \"Golden Triangle\" allows the company to strengthen their relationships with stakeholders while gaining a broader understanding that guides decisions on future commitments (Coca-Cola, 2015). External Analysis Industry Environment Threats of New Entrants: Moderate There are considerably high barriers to entry in the US soft drink industry. New entrants face struggles to compete with leading producers, Coca-Cola and PepsiCo, who dominate this segment collectively generating 43.2% of the market share (McKitterick, 2015). These large players have developed substantial brand power, resulting in a high degree of customer loyalty, and benefit from scale economies (\"Soft Drinks-Industry profile,\" Oct 7 2014). Thus, making it difficult for a new firm to compete when considering entry into the industry where competitors have spent decades to create prominent brand recognition and reliability. The requirement of an initial capital investment can also deter new firms if these costs, necessary for successful entry, aren't readily available. Firms entering this market must not only consider the production costs needed, but also the marketing expenses that are vital to draw in customers and compete with industry leaders. It's also important for prospective entrants to consider the increasing amount of regulations and policies in the soft drink industry, such as labeling requirements and extra taxes on the sale of sodas in some states. Although there's a high level of market saturation, firms considering market entry can achieve some success by tapping into a niche market and finding ways to be seen as unique or perhaps beneficial to consumers, in order to create product differentiation between large competitors. These overall factors create a moderate threat of new entrants in the soft drink industry. Bargaining Power of Suppliers: Low With numerous substitute suppliers and 25 competitors within the soft drink industry it leaves the suppliers with a relatively low bargaining power (Coca Cola Co, 2015). This is due largely to the fact that Coca-Cola can move to a different supplier, who is willing to capture such a large companies business, if the current supplier is offering products at a rate that the company does not deem satisfactory. Bargaining Power of Consumers: Moderate The soft drink industry has a moderate consumer bargaining power due to several factors: price and health concerns. As the law of demand states, quantity and price demanded are inversely related to one another; this being said, when the price of a good increases the quantity demanded will decrease. This is true of soft drinks, if the price increases on brand names consumers will switch a drink that is more cost efficient. The income of a person also affects how much and if they are willing to consume a good (Jeon, 2013). Health concerns and nutrition are another reason consumers bargaining power is raised. Today, it's not just enough to offer 3|Page low-calorie products. Consumers are conscious of the products they put in their bodies and want them to be beneficial to them (Jeon, 2013). Due to these factors, consumers hold a moderate buying power over the industry, but this in turn leaves room for the industry to innovate and improve to recapture the power. Threat of Substitutes: Moderate The soda industry has been under the rule of Coca-Cola and Pepsi Co., controlling around 43.2% of the market share between the two (McKitterick, 2015), . There are plenty of substitutes for soft drinks including water, sport drinks, tea, juices, and coffee. Currently the U.S. market is in a trend of healthy lifestyle choices leading to healthier substitutes to soft drinks becoming more popular. Coca-Cola offers some healthier choices and has a capability of buying out products. They have done this with Vitamin Water in 2007 and Odwalla in 2001 (Coca-Cola, 2014). Coca-Cola is still falling behind in the healthier category and slowly losing market presence, especially to the largest substitute in Gatorade from Pepsi. There will always be a threat of substitutes for Coca-Cola from new product releases and change in trends in the market. Rivalry Among Existing Competitors: High Since there are many competitors in the soft drink industry, the pressure is high. CocaCola's main competitors are PepsiCo, Inc., Dr. Pepper Snapple Group, Inc., and Nestl. With more and more consumers tending to take the healthy route, Coca-Cola is also competing against other water manufactures besides Dasani as well as any other healthy drink substitute. With the number of competitors being high, that leaves little room for large profit margins. Overall, Coca-Cola is not concerned with the threat of new entrants. Since it is hard to compete with the leading brands, new entrants will struggle and more than likely fail. The bargaining power of suppliers is low due to Coca-Cola being able to switch to a new supplier if necessary. Bargaining power of consumers is getting higher each year due to people wanting to take the healthier route and wanting to be price cautious. Threat of substitutes is growing each year as well. There are many alternatives to soda that people are turning to so they can make healthier choices. Since Coca-Cola is competing with many others in the soft drink industry, the pressure is high. Key Success Factors There are numerous factors that contribute to a company's success; these are some of the critical success factors of the Coca-Cola Company that help them capture 26.8% of the market (McKitterick, 2015): Marketing Research and Development Human Resources Distribution Services Supply Chain Manufacturing Sales Finance Acquisition Strategic Partnership Quality Control Coca-Cola is one of the most recognizable companies in the world; this is due in large part to the company's marketing strategies. In 2014, Coca-Cola spent $2.4 billion (Mergent, 4|Page 2015) on marketing to their global markets by focusing on personalization, socialization, and the customer experience. Marketing to different regions of the world requires knowledge of the environment in which the company is operating. Coca-Cola customizes the marketing tactics they use to reflect local culture and language in the region. A key example of this is the company's 'Share a Coke' campaign, which has been a success in over 50 countries. The company also uses social media as a way to market their products to the masses. The 'Share a Coke' campaign put notice to the use of social media prompting consumers to want to share their experience with the product. Coca-Cola's investment in driving the consumer experience is another aspect of their marketing techniques. The company doesn't sell soda they sell happiness and friendship in a bottle, wanting to create a lifestyle that goes along with buying the brand (Warkentin, 2014). Research and Development activities are on the forefront for the Coca-Cola Company. With multiple research facilities globally Coca-Cola is able to focus their research to specific regions to better understand what consumers are wanting (Moye, 2013). Not only is Coca-Cola focusing on developing new products, but they have a focus on being able to impact the lives of the communities they're in. Employees are often one of the most valuable resources a company can have, so it is clear that human resources are a driving factor for Coca-Colas success. Having 129,200 employees (Mergent, 2015) worldwide the company is able to operate in such a way that has helped gain them control of 26.8% of the market (McKitterick, 2015). Coca-Cola strives to keep a culture that is based upon respect among all processes and positions within the organization that keep the system running smoothly. From interactions between bottlers, suppliers, manufactures, and consumers the basis is bound on respects. With operations in more than 200 countries, the Coca-Cola Company operates more than 900 plants filled with 92,000 employees who represent those geographic regions (Staff, 2012). Many of the supplies are local sourced making for faster delivery, production, and distribution of products to local markets. The efficient distribution technique the company has implemented is a driving force in the consumer experience as well. When consumers can get the products they want quickly satisfaction perceived can grow to consumer loyalty because consumers know they will always be able to get the products they want. It is important to the Coca-Cola Company that they understand their consumer's wants and needs. Since operations are global different cultures and geographic regions wants and needs vary. To overcome this, Coca-Cola offers customer support training and development to their employees as well as independent firms who carry their products. This not only helps to satisfy consumers, but assists independent firms on how to handle consumers. The company has offered training and development for countless small businesses in order to help them get off the ground (Moye, 2013). To ensure \"customers stay refreshed,\" the supply chain team works hard to make sure each link of the chain is connected (Career Areas, n.d.). Operating on a global level means working closely with each link of the supply chain as well as negotiating new contracts. The supply chain team plays a vital role in making sure the operations are going smooth to satisfy consumers and ensure success. 5|Page In ten years, Coca-Cola has had an 8% compound annual growth pace per year and has increased gross revenue by 6.4% each year, the consistent performance of the company financially, is a key success factor ("PepsiCo, Inc. (PEP) or The Coca-Cola Co (KO)"). CocaCola maintains high profitability and growth every year. Their profits earnings ratio grew 21 times its earnings in the last nine years. The company has also stated a financial objective to double its revenue between 2010 and 2020. Financially, Coca-Cola has been constantly beating the competition in this feat. With $45.93 billion in sales in 2014, the focus for Coca-Cola now is to sustain its sales in developed markets and continue expansion to untapped markets in which the penetration of the soft drink industry is low. Coca-Cola is one of the most valuable soft drink brands globally, with competition by only a few. If Coca-Cola is to increase sales they will need to penetrate new markets before their competitors to create brand loyalty. If they are able to accomplish this there is high potential for greater sales. For Coca-Cola, manufacturing is key component of the company. The manufacturing process revolves around two operations: creating raw materials and bottling of finished goods. With 250 bottling partners around the world on five continents, Coca-Cola has created the Bottling Investment Group to guarantee these operations remain a core part of their system and to provide investments and expertise for their long-term success. Coca-Cola uses acquisitions to expand and diversify their company. Over the years CocaCola has aquired companies who were strong in areas they were not. In 2001 Odwalla, a juice company was bought by Coca-Cola for $181 million which increased their presence in the organic drink market. In 2007, the company bought out Glaceau for $4.1 billion to increase their presence in the water industry, mainly through the Vitamin Water brand (Coca-Cola Co., 2014). While acquiring companies isn't by itself a critical factor, combined with the distribution and manufacturing that Coca-Cola already has it allows for them to reduce cost and increase sales. Similar to acquisitions but with less capital, strategic partnerships are a method CocaCola uses to increase their revenues. One market the company had no presence in was the energy market niche, which has exploded over the past decade. Instead of investing into research and development to create their own products, Coca-Cola created a strategic partnership with Monster Inc., by purchasing 16.7% equity stake in the company. This allows Coca-Cola to use their mass distribution across the world to further push the brand of monster and increase revenue for both companies (Coca-Cola Co., 2014). Coca-Cola also has strategic partnerships with organizations in the humanitarian sector. These partnerships allow the company to give back to the communities in which they operate fulfilling their social responsibilities. Quality Control is critical to Coca-Cola. They produce and distribute products globally, so meeting all health and government standards in various countries is a difficult task, but is something Coca-Cola has succeeded with over the years. They have done so by holding themselves to standards that lead food safety and supplier strategy from the center out to all their branches. (Lupo, 2013) 6|Page While these are not all the factors essential for Coca-Cola to have an advantage in the market, they are important in creating a unique value to consumers. They are critical to the company's success and drive them to be a global leader. External Factor Evaluation (Refer to Figure 1) The External Factor Evaluation Matrix is a subjective evaluation of companies in the soda production industries ability to react to new opportunities and threat in the market. Some of the potential up and coming threats in the market are consumer health concerns, rising cost of corn, governmental regulations, and competition. Possible opportunities identified are new technological advances, possible acquisitions, development of foreign nations, and market perspective. Rising consumer health concerns poses a threat to entire soda production industry. As consumers decide on making better nutritional choices in their lives sugary, empty calorie drinks may be at the bottom of the list they choose from (McKitterick, 2015). Pepsi seems to have the superior ability to respond to these growing health concerns with products such as Gatorade and Lipton. Coca-Cola follows behind Pepsi in their ability to respond to health concerns with products from Minute-Maid to Vitamin Water. Dr. Pepper Snapple Group and Red Bull fall low on the ability to respond as the offer few to none low calorie, health options. With the cost of corn rising, this could also potentially be a threat to the industry. This is because corn, the bases for high fructose corn syrup, is a main ingredient in most soda products. If the cost of corn rises, the cost of producing beverages in turn rises. If the cost of production rises, companies in the industry will want to recover these costs and more than likely do so in the form of raising the price of the products offered (McKitterick, 2015). A study in 2010 by Keck researchers found that sweeteners in Coca-Cola and Pepsi were as much as 65% fructose and 17% of the sweetener in Red Bull was fructose (Kaplan, 2010). Due to this research it appears that Red Bull will have the superior ability to respond to these rising health concerns due to the simple fact that the company uses less than half the amount of fructose the other soda production companies do. There is always the possibility of future government regulations that could impact how businesses conduct their business or how the make or sell their products. A large company who has more access to resources to handle these possible regulations is going to be more capable to respond to this threat, which is why Coca-Cola and Pepsi are rated higher than Dr. Pepper Snapple Group and Red Bull. Competition is always a threat that companies should be aware of. Coca-Cola has captured the largest market share, followed closely by Pepsi. Due to the fact that Coca-Cola has such a large and successful marketing tactic, they have a higher ability to respond to this threat. Red Bull has the upper hand in the niche market for energy drink market, but still faces competition from substitutes from the other companies in the soda production industry. New technologies are being developed every day to try to improve the products being produced, either for a better quality or new products as a whole. Coca-Cola and Pepsi have large readily available capital to invest into new technology that could benefit the companies. Dr. Pepper Snapple Group and Red Bull, while they capture a much smaller market share than the 7|Page other two companies still have almost an equal ability to respond to new technologies that become available, especially if it is on the production end of the spectrum. Acquisitions and Mergers can be a great way to expand and diversify a company. Pepsi and Coca-Cola have both made large, successful acquisitions in the past leading them to be more readily able to respond to this opportunity. Red Bull and Dr. Pepper Snapple Group have a much lower response rate due to their small size. Coca-Cola is a superior marketing competitor, with distribution centers globally. With more than 900 plants and 92,000 local employees from those geographic regions, Coca-Cola has the strongest response to be able to imbed their brand in developing nations (Staff, 2012). The other companies may be known globally but their ability to capture the market like that of the Coca-Cola Company is not something that has been as successful. Marketing comes into play again when considering market perspective. Having such a large and recognized global name is due to the marketing efforts of Coca-Cola. Pepsi, following behind might not have has much brand recognition but do have a stronger production process. Red Bull, being in a niche market, has a greater advantage being able to serve its consumers than that of Dr. Pepper Snapple Group who only offers a small variety of products. Internal Analysis Management Team Muhtar Kent serves as both the Chief Executive Officer (CEO) and Chairman of the Board. Kent has been CEO since 2008 and joined the Board in 2009. Kent has been with the Coca-Cola Company since 1978. James Quincey is President and Chief Operating Operator (COO). Before being named President in 2013, Quincey served as President of the Coca-Cola Company's Europe Group. Other members of management include Ahmet C. Bozer (EVP), Irial Finan (President of Bottling Investments, EVP), and J. Alexander M. Douglas Jr. (PresidentCoca-Cola North America, EVP). Analysis: Overall, the company is well managed by a large team of experienced senior leadership. Led by Muhtar Kent since 2009, the company is in good position to meet future goals under this group of leadership. The members of the senior leadership team are seasoned in many aspects of the company's systems and routines, with experience in the company that spans decades. Board of Directors The Board of Directors of the Coca-Cola Company consists of 15 individuals including Chairman of the Board and CEO, Muhtar Kent. The other members of the Board include: Herbert A. Allen, Ronald W. Allen, Marc Bolland, Ana Botin, Howard G. Buffett, Richard M. Daley, Barry Diller, Helene D. Gayle, Evan G. Greenberg, Alexis M. Herman, Bobby Kotick, Maria Elena Lagomasino, Sam Nunn, and David B. Weinberg. The Board of Directors are elected by the shareowners to oversee their interests in the overall success and well being of the company, while the Board selects and oversees the members of senior management (Coca Cola Company, 2014). The Board has an Audit Committee, a Compensation Committee, a Committee 8|Page on Directors and Corporate Governance, an Executive Committee, a Finance Committee, a Management Development Committee and a Public Issues and Diversity Review Committee. Analysis: The Board of Directors is made up of many respected members from various companies and industries. The Board has added many diverse individuals in the last five years, but also maintains a number of long standing members. This choice shows the value Coca-Cola sees in new and diverse members to provide expertise in areas in which they are not particularly well versed. Value Chain Analysis of Functional Areas Primary Activities: Marketing Research and Development Distribution Services Secondary Activities: Supply Chain Manufacturing Sales Finance The Coca-Cola Company does an outstanding job in marketing to their consumers. From the infamous polar bear commercials to the share-a-coke campaign, these are just a fraction of their advertising efforts. In 2014 Coca-Cola spent $2.4 billion (Mergent, 2015) on advertising to drive growth in current and developing markets. Marketing has been a strong focus for Coke for many years and only recently has Pepsi Co. come even close to the capital spent on marketing as Coke. With multiple Research and Development facilities globally, Coca-Cola works with not only each other but outside industries as well to understand what consumers are wanting. The company has a focus on developing new products and techniques that will better satisfy new and existing consumers (Moye, 2013). Preferences change and recently the shift has been to healthier or higher caffeinated drinks. Coke has kept up with these trends by changing already in the market drinks and introducing new drinks to fill the new wants. With operations in more than 200 countries, the Coca-Cola Company operates more than 900 plants filled with 92,000 employees who represent those geographic regions (Staff, 2012). Many of the supplies are local sourced making for faster delivery, production, and distribution of the products available in the local markets. Coke keeps time spent delivering and cost down by the vast number of distribution centers globally. Spending capital in the short run causes higher returns in the long run by establishing a vast network. The Coca-Cola Company values their consumers as well as their partners and wants to be of service to them. In serving their consumers it is understood that different cultures and geographic regions have a different set of wants and needs. To overcome this, Coca-Cola offers customer support training and development to their employees as well as independent firms who carry their products. This not only helps to satisfy consumers, but assists in independent firms in how to handle consumers. The company has offered training and development for countless small businesses in order to help them get off the ground (Moye, 2013). 9|Page To ensure \"customers stay refreshed,\" the supply chain team works hard to make sure each link of the chain is connected (Career Areas, n.d.). Operating on a global level means working closely with each link of the supply chain as well as negotiating new contracts. Supply chain focuses on how each part works with the others; having raw materials go to manufacturing pants and to the store seamlessly is what creates the value. Having partners and creating a network can separate you from the competition. Manufacturing is vital role for Coca Cola. Globally, Coca Cola has more than 900 bottling and manufacturing facilities (Staff, 2012). They work hard on lowering the emissions produced from each location. Manufacturing falls under a secondary activity because it doesn't create enough in the VRINE to separate it from the competition. The sales team plays a major role in negotiating with the different customers Coke has. The sales team is responsible for getting Coke into as many places as possible and into the hands of as many consumers they can. They also play a role by creating unique partner ships or deals to receive the cheapest raw materials that fit Coke's standards. To decide on which financial decision is best, the finance team works daily to \"evaluating the economic viability of a product innovation, undertaking financial planning, forecasting a brand's financial results or analyzing sales performance by channel\" (Career Areas, n.d.). Coke's financial team adds value to core commercial processes. VRINE Analysis (Refer to Figure 2) Coca-Cola is one of the best-recognized global brands. Marketing is an extremely valuable capability for Coca-Cola as it enhances customer awareness and consumer preference for the brand. Marketing is not rare in the sense that any company can use it but Coke uses it far more than any other company and with great success. Coca-Cola has outspent Pepsi in marketing by 1 billion in the past 5 years and there are even larger gaps spanning further back (Mergent, 2015). Coca-Cola led the most extensive global marketing activation in company history last year, in support of the 2014 FIFA World Cup in Brazil, reaching customers across 175 markets (\"The Coca-Cola Company 2014 Annual Review,\" 2014). These type of marketing strategies are exploitable, as Coca-Cola is constantly one of the largest sponsors of sporting events, in which they are able to execute due to the large capital spent on marketing. This is not easily imitable and Coca-Cola continues to further this capability through many campaigns, for example, the \"Share a Coke\" campaign across North America. This marketing capability is also nonsubstitutable, as it is the main strategy for increasing sales, product placement, and awareness across the world. Research and Development creates value for the Coca-Cola Company, as it creates new products and offers products to fit consumer's wants or needs. R&D is rare in that every company produces unique items and they have different successes with these new products. Coke may have the most money to invest but have not been the most successful, specifically in the healthy alternative drinks and energy drink market. However, it is not imitable because it is not likely that a company would introduce identical new products. Research and development is substitutable by using acquisitions instead of new products. For instance, Coca-Cola announced 10 | P a g e strategic investments in Keurig and Monster recently. Through research and development, Coke is working with Kuerig to develop a Kuerig Kold system, which will enable consumers to produce Coca-Cola and other beverages at home and also expanding their partnership with Monster in hopes to strengthen their position in the energy drink market. (\"The Coca-Cola Company 2014 Annual Review,\" 2014). R&D is exploitable by hiring more people for an increase in ideas and executable through creating new products and testing the market on them. After acquiring global value share of the industry in 2014, Coca-Cola's focus on global markets has helped create value and strengthen their distribution network. Coca-Cola and its nearly 250 bottling partners create the most extensive beverage distribution system in the world (\"The Coca-Cola Company 2014 Annual Review,\" 2014). These partnerships have allowed them to maximize the strength and efficiency of its production and distribution capabilities around the world (\"Company Profile,\" 2015). The rare size of Coca-Cola's distribution network has given them advantage over competitors in this aspect as well, and will forever be worldwide. Although this model may be imitated at a basic level, the size of Coca-Cola's distribution channels is very unique, and would be too costly for competitors to imitate at this large of scale. Coca-Cola is also able to exploit distribution by dominating the foreign markets they have entered. By creating a global distribution network, Coca-Cola has been able to create a non-substitutable capability. Services are valuable because of the high standards Coca-Cola holds themselves and partners too. Services are not rare because competition has shown to have similar standards in the past. It is imitable as its cost in dollars and time are fairly low and mainly rely on establishing and following guidelines. Service is not substitutable because nothing can truly make up for good service. It is also executable through training. Overall Coca-Cola's marketing capability has the greatest potential for being the sustained competitive advantage for the company as it received a Yes in all 5 VRINE categories. Research and development and distribution also add to their competitive advantage but are only temporary because these capabilities are not as unique, and can't be kept to only one firm, as others will try to imitate. Identification of Unique Value Marketing is the most sustainable competitive advantage for the Coca-Cola Company, and they realize that because of their marketing strategies they are able to sustain one of the world's most valuable brands. From the infamous polar bear commercials to the share-a-coke campaign, Coca-Cola has spent billions of dollars on marketing to drive growth, using different marketing strategies to capture different cultures throughout the world. Coca-Cola has been able to sustain a unique value by indirectly embedding the idea that Coca-Cola is \"the\" product to choose in the mind of the consumer. Their marketing strategies far outnumber competitors, as Coca-Cola has outspent competitors such as Pepsi by $1 billion in the past 5 years and there are even larger gaps spanning further back (Mergent, 2015). Competitors haven't yet established the brand power of Coca-Cola and it is more recognized and available, being identified by 94% of the world. The company's unique value also comes from its strong consumer and bottling partnerships, which equally attribute to the company's organic growth. The Coca-Cola system is a highly sustainable, unrivalled distribution network of bottling partnerships that operate in over 11 | P a g e 200 countries (Marketline Advantage, 2015). Although competitors may try to expand their distribution market, they would find that it is extremely difficult and costly to acquire on CocaCola's rare global scale, due Coca-Cola's economy of scale advantage. Firms must spend billions on acquisitions and mergers to create the most basic essence of Coca-Cola's distribution strategy, but the size and exploitation in foreign markets are unmatched by even their largest competitors. Internal Financial Analysis (Refer to Figure 4) Profitability Over the past several years Coca-Cola has had declining profitability ratios. The firms ROA, ROE, and ROI have decreased quite rapidly since 2010. ROA, or return on assets, is the firm's profits expressed as a percentage of total assets, the higher the ratio the more profitable the company. We can determine from this that Coca-Cola is holding large amounts of fixedassets, inventory, or current assets within the company compared to the amount of net income being generated. The ROE, return on equity, measures the firm's ability to make a return to stockholders. Since the ratio has dropped by almost half the firm's ability to manage their investments to shareholders dropped, this signifies that common stockholders are receiving smaller returns on their investments in the company. ROI, return on investment, looks at CocaColas ability to manage investments in projects that will gain a return to their stockholders. Being that this ratio has fallen over the past five years, it can be determined that some of the investments the company has made have not paid of the way they could have been projected to when the initial decision was made. Liquidity In the past five years Coca-Colas quick and current ratios have seen minimal fluctuation. The company having low ratios indicates that they hold larger amounts of current liabilities than current assets and inventory inside the company. The company's net current assets indicate how much capital is being generated within the company. Over the past five years the company's ratio has fallen this could be due to the company holding to many assets compared to the liabilities. While Coca-Cola's ratio has dropped significantly over the past five years, the ratio is still positive meaning the company is still able to finance their day-to-day operations. Efficiency The decline in total asset turnover after 2011 indicates issues pertaining to the company's utilization of assets. Although they increased operating efficiency during the year, there has been a steady decline of over 10% in the last three years. Coca-Cola must increase sales or drive assets in order to become more competitive on this front. The Coca-Cola Company has also been experiencing a decline in their inventory turnover ratio, which suggests an increased amount of goods on hand could indicate issues that include decline in sales. There is an push to increase sales and lower inventory purchases in order to maintain an increased turnover. Over the past five years Coca-Colas receivables turnover ratio has maintained a steady level. Having a constant ratio demonstrates that the company is able to quickly collect funds from customers and use these funds for investments. External Financial Analysis (Refer to Figure 5) Profitability 12 | P a g e Coca-Cola profitability is significantly lower than its competitors. Return on assets seems to get lower as the company grows larger and take on a greater product line. Monster, being the smallest, has the highest returns in all measurements of profitability. Focusing on one main product, energy drinks have a higher profitability margin than most other drinks. Return on investment, or ROI, indicated the benefit to the company from some investment. Since CocaColas ROI is lower than that of its competitors we are able to determine that the amount the company has invested into their causes is greater than the benefit. This is possibly due to the company's significant use of marketing and research and development. Return on equity focuses on bringing money to the stockholders and we can see Coca-Cola falls again below the competition showing that they may use investors' money to help the company in the long run instead of increasing returns today. Coca-Colas main focus has been on the traditional soft drink while Pepsi has Frito Lay and Gatorade. Dr. Pepper presents the closest mirror to Coca-Cola and does it on a smaller scale which may explain the greater profitability. Liquidity The quick and current ratios are fairly similar across the board excluding Monster. This shows that many of the companies operate with higher liabilities than current assets. Quick is lower than current meaning the companies have less liquid short-term assets than they do shortterm debts. Monster doesn't fit in this trend and again it has to do with profit margins, focusing on fewer products and strategic partnership with Coke keeping debts down. Net current assets is significantly lower in Coke and signifies how much money Coke has to finance day to day operations. Coke is so much lower perhaps from the global presents they have. With distribution and manufacturing around the world Coke holds greater liabilities than its competitors but still maintain a positive net current asset showing that they have not over extended in the market yet. Efficiency Coca-Cola trails competitors in every category of the asset management ratios, therefore it can be inferred that the Coca-Cola Company does not operate on the same level of efficiency as their competitors. Coca-Cola ranks lowest in total asset turnover and accounts payable turnover, which shows the need for increased sales and lower inventory purchases. They only take a slight lead over Monster in the categories of inventory purchases. This indicated the CocaCola doesn't have leverage over competitor on the basis of efficiency. Long-Term Objectives The Coca-Cola Company has addressed challenges posed by the declining sales in the carbonated soft drink industry and unfavorable currency fluctuations, and in response, has established long-term objectives to restore momentum and transform the current business. CocaCola's long-term objectives include driving revenue and profit growth, making disciplined brand and growth investments, expanding the productivity program, streamlining and simplifying its operating model, and refocusing on its core business model (Coca-Cola Co., 2015). Coca-Cola Company's values are based on actions and behaviors that will make these long-term objectives become a reality. Therefore, the company has placed an emphasis on the following basic principles: focus on the market, work smart, act like owners, and be the brand. The Company understands the amount of work they have to do in order to obtain these goals, but remains confident in the direction of long-term objectives in place to restore momentum and deliver value to shareholders. \"We are determined to make the necessary changes to sustainably meet or 13 | P a g e exceed our long-term growth targets...our 2020 Vision will remain focused on delivering value growth ahead of the industry for our system,\" (Coca-Cola Co., 2015). In order to achieve CocaCola's Mission and Vision, the company will need to focus on their competitive advantages to reach these long-term objectives. Analysis of Strategic Alternatives In order to determine the best strategic plan for Coca-Cola to achieve these long-term objectives, an extensive review was conducted of: the External Factor Evaluation Matrix and SWOT Analysis. Coca-Cola's long-term objectives are driving revenue and profit growth, making disciplined brand and growth investments, expanding the productivity program, streamlining and simplifying its operating model, and refocusing on its core business model. The analysis of the External Factor Evaluation Matrix shows advantages that include: new technological advances, acquisitions and mergers, development of foreign markets, and market perspective. The advantages support the goal of making disciplined brand and growth investments as well as driving revenue in undeveloped and emerging foreign markets. SWOT Analysis supports the long-term objectives through the ways in which Coca-Cola plays to its strengths, such as their bottling and distribution system and their marketing strategies as some of their key assets. Areas of opportunity in the SWOT Analysis indicate ways in which the company can achieve long-term objectives to deliver value and restore momentum. For instance, if Coca-Cola pursues strategic partnerships opportunities by making disciplined brand and growth investments, it can drive growth and combat their weakness in an undiversified product portfolio. Increasing debt and fluctuations in currency exchange rates is an area of weakness for Coca-Cola in terms of achieving long-term objective of expanding the productivity program because it will take more time to adjust and overcome these macroeconomic conditions. However, Coca-Cola has a number of strengths and resources, which are necessary to maintain their market share. SWOT Analysis (Refer to Figure 3) Strengths Coca Cola has a large number of strengths, which is why they have such a large share of the market. As the leader of the soft drink industry, it is important they maintain a strong bottling and distribution network. The Coca-Cola System is a global business comprised of nearly 250 bottling and canning partners, which operate on a local scale. With this type of scale the company is able maximize efficiency by reducing distribution costs. Through their unique bottling network Coca-Cola is able to provide a strong supply chain network based on their specific markets. The Coca-Cola Company is the world's largest beverage company, with over 3,600 products in their portfolio. They own four of the world's top five non-alcoholic beverages, in other words, they rule the market. Coca-Cola is able to maintain leadership of the industry through their brand portfolio, which provides an edge over their competitors while drawing in new consumers and retaining current ones. Coca-Cola's geographical footprint stretches over 200 countries; this allows Coke's consumers to not be dependent on a particular market and protects the company from the risks of participating in a single economy (Marketline Advantage, 2015). It also allows Coke to market 14 | P a g e their products based on the consumers' preference in the region and providing a more differentiated brand in developing markets. Moreover, it helps Coke achieve larger market growth and expansion in emerging economies as compared to its competitors. Through their presence in over 200 countries, Coca-Cola has mastered their brand awareness through marketing and advertising. A study has found that 94% of the world's population could identify the classic Coca-Cola red logo. Coke is also recognized as the world's most valuable brand (Who we are, 2013). This has been achieved through the large marketing efforts Coca-Cola implements. In 2014, the Coca-Cola Company spent $2.4 billion on global marketing by focusing on personalization, socialization, and the customer experience (Mergent, 2015). Coke uses the different marketing strategies to capture different cultures in the world, for example, the international campaigns like the \"Share-a-Coke\" and in China, \"The Friendship Experience.\" Customer experience is another way Coke invests in marketing. By launching the Share-a-Coke campaign, Coke's social media marketing skyrocketed, which generated more engagement than they had before. Weaknesses Product recalls have been a weakness for the Coca-Cola Company recently. In 2013, the company had five product recalls around the world, some of which included Minute Maid, Tonic Water, and Dry Ginger Ale. These recalls were for various reasons such as chlorine contamination, glass fragments, and the botulism bacteria. Most recently, in July 2014, they recalled almost two million bottles with the \"Share-a-Coke,\" 'Michael' label due to compromising ingredients. These recent recalls impact the image of the brand, which in turn, affect the confidence customers have in the products. At the end of year 2014, Coca-Cola reported a total debt amount of $41,745 million, an increase of 12.6% from the previous year (Business Insights: Global, 2015). This increasingly large amount of debt could have a major impact if the company isn't able to generate the funds to make payments and can negatively affect future earnings due to the rising interest expense. The Coca-Cola Company has a strong presence in the soda industry, but lacks any presence in the food industry unlike Pepsi Co. This could potentially affect the company when considering its presence among competitors. Coca-Cola has been primarily focused on the soft drink industry; whereas, Pepsi has made steps to create a more diversified product line through acquisitions such as Frito Lay. Solely focusing on selling beverages puts the company at a possible disadvantage when consumer preferences are shifting away from the consumption of soft drinks. Water is a limited resource in many parts of the world and the Coca-Cola Company uses a substantial amount of it in production. Since water is a main ingredient used to produce CocaCola products they are often highly criticized for having poor water and pollution management (DeFranco, 2015). Opportunities Consumers have become more conscious of their choices regarding food and drinks in the last few years. The growing market for healthy and nutritious alternatives can prove to be a huge opportunity for companies such as Coca-Cola if they focus on innovation and responding to 15 | P a g e changes in consumer preferences. Coca-Cola can strengthen their position in the recent emerging health beverage market by focusing on providing healthier options in every market (Marketline, 2015). Coca-Cola can expand its current product portfolio and penetrate new markets through acquisition and strategic partnerships. Last year, Coca-Cola and Monster Inc. became partners after Coca-Cola purchased a 16.7% equity stake in the company. This means, Monster will become Coca-Cola's access into the energy drink market and Coca-Cola will be Monster's global distribution partner. Coke will use its mass distribution across the world to further push the Monster brand, thus increasing revenue for both companies (Coca-Cola Co., 2014). CocaCola also developed a partnership with Green Mountain Coffee Roasters to develop a Kuerig Kold beverage system, further expanding the company's brand portfolio. By penetrating fast growing markets Coca-Cola could improve revenues. Coca-Cola has the superior ability to expand into developing nations due to its brand strength and recognition. With Coca-Cola's superior distribution network, it'd be much easier for them to gain access into emerging markets and expand their growth globally. Coca-Cola is focusing on improving efficiency by cutting production costs in order to gain larger future profits. Through their water stewardship commitment Coca-Cola plans to improve water efficiency in manufacturing operations by 25% since 2010 and hopes to gain annualized savings of $3 billion per year by 2020 (Coca-Cola Co., 2015). To achieve these savings, Coca-Cola plans to restructure its global supply chain by streamlining and simplifying the operating model (Business Insights: Global, 2015). These plans can help Coca-Cola achieve increased profit and improved efficiency. Threats Rising consumer health concerns poses a threat to the soda production industry. As consumers decide on making better nutritional choices in their lives, sugary, empty calorie drinks may be at the bottom of the list they choose from. The choice of consumers choosing alternative beverages over soda is causing a industry wide decline that is expected to continue for at least the next five years (McKitterick, 2015). If necessary measures to develop new products for this growing segment are taken the company faces the risk of losing out their market share of this segment. Many state and local governments are contemplating imposing a soda tax on carbonated beverages. This tax idea is meant to discourage people from purchasing unhealthy options and encourage them purchase healthier substitutes. A prime example of this is New York City's regulation of 16-ounce limits on calorie packed beverages. The regulation applies to most places selling prepared foods (Associated press, 2015). The rising cost of corn could potentially be a threat to the industry as well. Since corn (the base for high fructose corn syrup) is a main ingredient in most soda products if the cost of corn raises the cost of producing beverages in turn rises. If the cost of production rises, companies in the industry will want to recover these costs and more than likely do so in the form of raising the price of the products offered (McKitterick, 2015). 16 | P a g e The risk of expansion from ompetitors is also a major threat to the Coca-Cola Company. Even though the company captures 26.8% of the market companies like Pepsi Co. are close behind (McKitterick, 2015). For instance, Pepsi Co. has invested $500 million for plans to expand production in Egypt and introduced new flavors of soft drinks for the Mountain Dew brand. With these new expansions from the Pepsi Company, Coca-Cola could face added pressure to the company's market share as well as their operating and profit margins (Business Insights-Global). Strategy Recommendation For Coca-Cola to improve their position in the market they will need to further diversify their product line, focus on marketing, and maintain and form strategic partnerships/acquisitions. With consumers becoming more and more health conscious, Coca-Cola should invest more time into their research and development in order to create new healthier, nutrition rich products. Over the past several years the company has spent $118.6 million on health research to better advance their place in the market for health options (The Guardian, 2015). The marketing strategies of Coca-Cola are extremely valuable to the company and should be maintained in order to create new customers and sustain the ones they already have. In the past, Coca-Cola has formed strategic alliances with companies such as Odwalla, Glaceau, and Monster in order to create a presence in markets they either didn't have a presence in already or because the other companies were stronger in their chosen markets (Coca-Cola Co., 2014). If Coca-Cola continues on this path they will have strong alliances with numerous different companies that can only help improve their standing in the market. Strategy Implementation Annual Objectives Increasing operational efficiency: In the coming year Coca-Cola must concentrate on achieving their 2020 Vision, a series of commitments that the company laid out in 2013. The Coca-Cola Company should primarily focus on improving their gross profit margin and volume growth by increasing operational efficiency across the business. By optimizing infrastructure, streamlining production and using resources more efficiency, thereby reducing the cost of goods sold and operating expenses. In order to accomplish this Coca-Cola aims to transform existing plants into more efficient, large-scale plants to serve entire regions. Consolidating global operations to two regions in order to increase the focus on key markets and create a streamlined process (CocaCola Co., 2014). Generate value and increase volume: The second objective is to create value and improve volumes through marketing initiatives. Coca-Cola has always placed a large importance on marketing in order to leverage its brands and assets. The company must continue this trend by increasing awareness and demand, which in turn will generate value and increase volumes. In 2016, Coca-Cola must focus on improving the quantity and quality of its campaigns by engaging in both local and global campaigns, establishing a clear vision for consumers to link occasions with their brands, and continue to establish marketing partnerships. Coca-Cola marketing initiatives in the coming future must redirect focus on the mission and vision of the company instead of the product to produce more creative consumer campaigns. 17 | P a g e Organizational Issues to be Addressed Corporate Culture Coca Cola focuses their attention on the 7 core values. To ensure the employees are sticking to the core values, Coca-Cola provides training on a regular basis. For the strategy recommendation, Coca-Cola will continue to train and educate their employees regularly to continue success in the marketplace. The corporate culture will continue to strengthen overtime. Corporate Governance Coca Cola has always lead by example and learned from experience. To implement the new strategies, Coca-Cola will continue their current path of corporate governance and code of ethics they follow. They will continue to improve all areas of their product line, marketing, and strategic partnerships by taking from what they did in the past and improving from what they learned. Coca-Cola will continue to enforce honesty and integrity to improve their position in the market. Organizational Structure Coca Cola has always maintained a strong organizational structure. To implement the new strategies, Coca-Cola will work on diversifying their product line by spending more time and money into the research and development department. This will allow Coca-Cola to figure out what new product lines to implement as well as what partnerships/acquisitions they can move into. To enhance the marketing sector, Coca-Cola will continue to focus heavily on the marketing department. The amount of effort they put into marketing is the reason why CocaCola is the most recognizable brand in the world, therefore they will continue to grow from what they have done in the past. Organizational Performance Systems To monitor how well they are achieving their strategy recommendations, Coca-Cola will continue to monitor their sales goals for the quarter after each strategy is implemented. To monitor the marketing sector, Coca-Cola will continue to check its social media performance as well as sales after a new campaign is launched. They will continue to work closely with all of their partners to manage performance of each sector. Organizational Controls Coca Cola's successful chain of command will continue to oversee the daily operations of each sector. When the new strategies are implemented, it will have to be approved and controlled by each person in the organizational structure. This will ensure they are staying on track to achieve the new strategy recommendation goals. Contingency Plans If growing in marketing does help to fix some of the financial problems focusing more on distribution in foreign countries is a valid option. Increasing sales and brand strength in these markets. Research and development is a way to diversify the product line but can use strategic partnerships/acquisitions as a backup plan. Using Monster's product line is another contingency, since Monster has handed over all non-energy drink products. Strategy Evaluation and Control 18 | P a g e Standards/Targets Used as Guidelines For Coca-Cola to improve their position in the market they will need to further diversify their product line, focus on marketing, and maintain and form strategic partnerships/acquisitions. Coca-Cola spent 3.499 billion dollars on marketing in 2014 (Investopedia, 2015) and needs to grow by approximately 6-7% annually while the economy is still strong. Pepsi Co. has increased marketing consistently and has been catching up to Coca-Cola. The 7% comes from the increase in marketing from 2013 to 2014 which caused the gross margin of Coca-Cola to increase for the first time in 5 years. (Financials, 2014). While not the only factor, it is a contribution to gross margin. Marketing needs to be focused on new products and healthy alternatives. A target of 2% growth annually in ROI% will help Coca-Cola compete with the growing competition. Coca-Cola has slowly been seeing the ROI decrease over the past 5 years with some investments that did not go as projected. Coca-Cola has finalized the strategic partnership with Monster with a 16.7% equity stake in the company (Coca-Cola, 2015). Coca-Cola needs to see a return on this investment, Monster has turned over all non-energy drinks over to Coca-Cola and Coca-Cola is providing distribution to Monster. This is a long-term investment and Coca-Cola needs to see an increase in revenue that has been falling. Maintaining the same revenue in 2016 as 2015 and growing by .5% /year over the next three years will help fix the decreasing revenue problem. This is all can be accomplish through the three suggestions we have made. Another target is to maintain current market share of the beverage industry. With a constant decrease in presence in the beverage industry over the past 4 years causing no change over the next three years would be a huge positive for Coca-Cola. They can accomplish this through research and development, introducing new products to help fight unseen competition, growing in foreign countries which will help dictate cost, and more strategic partnerships. Operations target should be a continued growth in strategic partnerships and to working at making Monster partnership a success. A strategic partnership with a large healthy drink alternative is a possible option. The acquisition of Vitamin Water as a healthy beverage alternative did not pan out, as publicity spread on the unhealthy contents. This a part of the market that Coca-Cola is still weak in and creating a new product is also an option. Monitoring the Recommended Strategies To monitor these strategies Coca-Cola should pay attention to each quarter's number and also the change in competitions number. Advertising should show a correlation to revenue. They should also monitor sales of new products especially healthy alternatives. And then marketing products that could use it the most. Monitoring sales and growth in other countries is also important in trying to grow products Conclusion Coca-Cola needs to stay focused on marketing and distribution. The distribution CocaCola has already established will keep cost down and allow for quicker movement into emerging markets. Marketing has grew Coca-Cola from a small company in Atlanta, Georgia to the powerhouse they are today; and will continue to be needed in the future, by bringing in new customers and maintaining the same image. Being able to react in the changing market is also an important factor, Coca-Cola must continue to use research and development and acquisitions to 19 | P a g e adapt to the needs of the market. If Coca-Cola can use these competencies as well as they have in the past then they will continue to control the market for soft-drinks. 20 | P a g e Works Cited Business Insights: Global. "The Coca-Cola Company - Financial and Strategic Analysis Review." 08 May 2015. Web. 26 Oct. 2015. Career Areas. (N.d.) Retrieved from: http://www.coca-colacompany.com/careers/career-areas Coca Cola Company. (2014). Coca Cola Company.: Company profile. Retrieved from Business Insights: Global database. Coca-Cola Co. (2014). Monster Beverage Strategic Partnership. Retrieved from: http://www.coca-colacompany.com/press-center/press-releases/the-coca-cola-company and-monster-beverage-corporation-enter-into-long-term-strategic-partnership Coca-Cola Company. (2014). The Coca-Cola Company 2014 Annual Review. Retrieved from http://assets.coca-colacompany.com/6c/70/b23ba5fe42bb86846726cf4779c4/2014-yearin-review-pdf.pdf Coca-Cola Company. (2015). Stakeholder Engagement. Retrieved from: http://www.cocacolacompany.com/stories/stakeholder-engagement/ Coca-Cola Company. (n.d.). Our Company. Retrieved October 22, 2015 from: http://www.cocacolacompany.com/our-company/mission-vision-values/ Global Challenges. (2012). Sustainability Report. Retrieved from http://www.cocacolacompany.com/sustainabilityreport/global-challenges/ Kaplan, K. (2010). High-fructose corn syrup in soda has much more fructose than advertised, study finds. Retrieved from: http://articles.latimes.com/2010/oct/26/news/la-heb-toomuch-fructose-in-hfcs-soda-20101026 Lupo, Lisa. (2013). Coca-Cola. Retrieved from: http://www.qualityassurancemag.com/qa0413coca-cola- company-profile.aspx MarketLine. (2015, June 25). The Coca-Cola Company: Company Profile. Retrieved from MarketLine Advantage database. McKitterick, W. (2015, April). Soda Production in the US. Retrieved from IBISWorld database. Mergent. (2015). Coca-Cola Co. company financials: As Reported. Retrieved from Mergent Online database. Mergent. (2015). Coca-Cola Co. company financials: As Reported. Retrieved from Mergent Online database. 21 | P a g e Moye, J. (2013). Rethinking R&D. Retrieved from: http://www.cocacolacompany.com/innovation/rethinking-r-d-how-coke-uses-its-global-scale-to-takeinnovations-further-faster Staff, J. (2012). Economic Opportunities. Retrieved from: http://www.cocacolacompany.com/stories/economic-opportunity The Guardian. (Sept. 22, 2015). Coca-Cola discloses it spent $119m on health research over five years. Retrieved from: http://www.theguardian.com/business/2015/sep/22/coca-coladiscloses-health-research-funding Yahoo Finance. (2015). The Coca Cola Company. Retrieved from http://finance.yahoo.com/q?s=KO 22 | P a g e Appendix Figure 1, EFE Matrix Weights Coca-Cola Co. PepsiCo Inc. Dr. Pepper Snapple Group Red Bull Rate Score Rate Score Rate Score Rate Score Threats Health Concerns 16% 3 .48 4 .64 2 .32 1 .16 Rising Price of Corn 14% 3 .42 4 .56 2 .28 4 .56 Regulations 12% 3 .36 3 .36 2 .24 1 .12 Competition 8% 4 .32 3 .24 2 .16 3 .24 New Technology 13% 3 .39 3 .39 3 .39 3 .39 Acquisitions 16% 4 .64 4 .64 2 .32 1 .16 Developing Nations 13% 4 .52 2 .26 1 .13 1 .13 Market Perspective 8% 4 .32 3 .24 2 .16 3 .24 Opportunities Total 100% 3.45 3.33 2.00 2.00 23 | P a g e Figure 2, VRINE Analysis Marketing Research and Development Distribution Services Yes Yes Yes Yes Yes No Yes No Yes Yes Yes/No No Nonsubstitutable Yes No Yes