Impractical Performance Expectations

Running Head: COCA-COLA 0
Coca-Cola
Business Strategies
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COCA-COLA 1
Executive Summary
Coca-Cola aims to enlarge its product line hence acquiring companies from different parts of
the world. This report will address the problems faced by Coke such as high sugar
containment and negative publicity due to unhealthy carbonated drinks. In this report,
situational analysis regarding Coca-Cola has been done. It is found that the company is facing
challenges regarding environmental factors while other factors support the business
environment of Coca-Cola. This company is facing the issues related to stakeholder
management. In this report it is also found that acquiring Costa will enhance the overall
resources of the Coca-Cola. This company is facing challenges such as pay high, bad
strategic rationale, culture mismatching, communication hurdles, impractical performance
expectations, management being over-confident, and existing employees disbelief. However,
it has opportunities in terms of the fact that it will have profit of acquiring Costa valued to be
$0.8 trillion to $1.5 trillion. On the other hand, this company faces threats related to climate
change having impact on getting approvals.

COCA-COLA 2
Contents
1.0 Introduction.....................................................................................................................3
2.0 Coca-Cola and Costa Coffee...........................................................................................3
2.1 Coke’s problems..........................................................................................................4
3.0 PESTLE Analysis............................................................................................................4
4.0 Capabilities and Competencies.......................................................................................7
4.1 Challenges...................................................................................................................8
5.0 Opportunities and Threats...............................................................................................8
6.0 Recommendations...........................................................................................................9
7.0 Measures.........................................................................................................................9
8.0 Conclusion.....................................................................................................................10
9.0 Bibliography..................................................................................................................11

COCA-COLA 3
1.0 Introduction
In 1892, Coca-Cola as founded to be an American corporation for manufacturing carbonated
sweet beverages. The company provides more than 2,800 products in 200 plus countries as
the world’s largest distributor (Britannica, 2019). Costa Coffee is an international company
that operates 4,256 vending machines in the UK where the company also focuses on
economic and social welfare for the groups who grow coffee with 100% pure coffee beans
from Rainforest Alliance farms (Bulman, 2015). It is a fully owned secondary of Whitbread-
Coca Cola procurement undecided with a huge coffeehouse chain with 3,277 stores in more
than 31 countries. Further, the final intention was told of acquiring Costa Coffee by Coca-
Cola for $5,1bn by 2019 (Arthur, 2018). In this report, the aim is to analyse the environment
of the companies with its micro and macro trends impacting the decision to purchase
knowing its competences and capabilities with challenges faced by Coca-Cola for new
undertakings. Moreover, after the combining of the companies, the opportunities and threats
they face, and the recommendations to make sure about the successful execution by directing
new strategies with its measures are going to be discussed as well.
2.0 Coca-Cola and Costa Coffee
Cola-Cola wanted to acquire Costa Coffee from its parent company Whitbread PLC for
$5.1bn which was finalized in 2019. In the UK, Costa Coffee was leading with almost 4,000
stores globally and its operations in China. The reasons for acquisition were on the basis of
Coca Cola as a marketing and distribution expert and Costa Coffee for its capabilities. Its
purchase provides strong expertise for Coca-Cola with resourceful supply chain that includes
sourcing, distribution, and marketing. The acquisition with Costa coffee gives the capacity
capabilities in the future. The Costa’s Express 8,237 machines universally for large built up
of business which was helpful for the expansion of Coca-Cola’s existing offerings (Forbes,
2018).
Another aspect was diversity in fast-growing and new segments as Coca-Cola is a non-
alcoholic instant drinking beverage player. The hot beverage availability in the market helps
in expansion increment at a fast pace as Costa is the number one brand for coffee, especially
in the UK. The opportunity for growth in China increases for the companies with an increase
in consumption and control over the market. It also leads to the new revenue increment with
resources for Costa as Coca-Cola has the capability of expansion to move economically and
faster than Whitbread (Rao-Nicholson, et al., 2016). With the widespread of companies, the