Coca Cola Amatil Strategic Analysis

This assignment is a strategic analysis of Coca Cola Amatil, focusing on its operations in the tobacco and bottling industry, as well as its efforts to adapt to changing market conditions. The company has introduced zero-sugar products and diversified into snacks and alcoholic beverages to minimize losses due to rising health consciousness in Australia and New Zealand. The assignment also discusses the importance of analyzing external market trends and adjusting strategies accordingly.

Strategic Development
within an Organisation

Executive Summary
Coca cola Amatil is considered to be world biggest bottler of non alcoholic and ready to
drink beverages. It is present in more than six countries in Asia Pacific. The company was
originally founded in Australia in 1904 as a Tobacco manufacturing organisation. In 1964, it
started manufacturing soft drinks bottles when it bought out Coca Cola Bottlers. CCA was
finally listed on Australian Stock Exchange in 1972. This research will focus on noting down
whole journey of company and various strategies it used as to attain its current position. There
have been different types of controversies in last few years which were later corrected. It will
also aim to state about organisational culture as well as leadership style.

Table of Contents
Executive Summary.........................................................................................................................2
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
1. Strategies that have been deployed by company.....................................................................1
TASK 2............................................................................................................................................3
Two Controversies and their outcome related to Coca Cola Amatil..........................................3
TASK 3............................................................................................................................................5
3. Performing environmental analysis and identification of strengths and weakness.................5
TASK 4............................................................................................................................................7
4. Examining organisation culture or leadership style................................................................7
CONCLUSION................................................................................................................................8
REFERNCES.................................................................................................................................10

INTRODUCTION
This report will state about how Coca Cola Amatil turned its business around and attained
the position of being world biggest manufacturer of bottling and distributor. It will assist reader
in understanding various strategies which assisted and hampered organisation ability to serve
market.
TASK 1
1. Strategies that have been deployed by company
Coca Cola Amatil is a well known organisation in world of bottling and packaging.
Today, it is one of world biggest manufacturer of food and beverages. The company is operating
from last 110 years and it is growing even after certain controversies which were there due to its
own tactics and strategies (Stanley, Leveritt and Peake, 2010). The company changed its
approach in 1950's with rise in packaged non alcoholic drinks. It bought out Coca Cola bottlers
Pty Ltd based in Perth in 1965 which marked its entrance into this business. By 1980's, company
had more presence in Europe's snack business as well as had purchased Coca Cola franchises.
Basically, company aimed to grab opportunity to grow in market by capturing bottlers as well as
distributors of all beverages. Today, company is largest Bottler in Asia Pacific of both alcoholic
and anon intoxicating drinks and snacks.
CCA has a well defined set of Vision as well as Mission statement that will assist in
creating moments of happiness and possibilities (CCA, 2017). They aim to develop environment
which is suitable for all and allows people to interact more. The Vision of Company is divided
into few parts: For Consumers, The company is offering huge range of products which are within their
reach. With Consumers, creating higher value and satisfaction is required as to attain growth. For community, The company aims to contribute in distinctive and positively. To create value, for all stakeholders. To drive, productivity with most efficient and leaner methods.
 For shareholders, Delivering better sustainable returns.
Mission statement of the company is: “To create higher better value for all stakeholders
as to spread happiness with possibilities around world”.
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Core competencies of organisation is stated to be bottling and distribution of alcoholic
and non intoxicated products. It have well established presence in Asia Pacific as well as in
Europe and other places. The other competencies are related to its dealing in snack business and
venturing into no sugar segment.
There are different types of strategies which were used by organisation in past and this
allowed company in gaining more market share (Tomlinson and et. al., 2014). Today, CCA has
become one of largest bottler and distributor of various types of beverages (not alcoholic and
snacks in beginning). It has deployed different types of strategies in past which are stated below:
Growth Strategies
The company was very much focused on this strategy as it allowed company in
determining various task in more effective and efficient manner. There are basically two types of
approaches which were used by organisation while using growth strategies, first one was
horizontal and second one was vertical.
Vertical Approach is considered to be a strategy where company opted to acquire
another organisation operating at a level below or above its product line. For example, they
acquired major suppliers to strengthen their own capabilities.
Horizontal approach was used to merge or buy out bottlers and distributors operating in
same line of production. This allowed organisation in attaining a better market position and
enlarge its scope for future.
The prime motivation behind usage of this strategy was that, company wanted to grow in
all sides of business and capture higher percentage of market share.
Contingency approach
This is another technique used by organisation. It effectively assisted them in lowering
down cost of impact that they had to suffer due to certain situations (Pertusa-Ortega, Molina-
Azorín and Claver-Cortés, 2010). Also various controversies were there which were later solved
because of contingency plans that organisation had.
The company had deployed new strategies with change in market dynamics. They now
also manufactures alcoholic beverages too. It has identified various ways which needs to be
managed as to ensure that profitability can be kept in double digits. It is using Emergent
approach which is used as to identify and develop strategies in a set period of time. It is mostly
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used at time when company is facing hard time and wants to grow its capabilities as to earn more
profits.
Porter Generic approach
These are strategies which are used by organisation as to gain competitive advantage in
market. There are three to four generic approaches which are used by companies to lower down
cost, increase differentiation and focus resources in same direction as to gain better position in
market. Currently, the aim of organisation behind using this approach is to differentiate itself and
lower down overall cost in a effective way.
(Source: Porter’s Generic Strategies. 2017)
TASK 2
Two Controversies and their outcome related to Coca Cola Amatil
No company can grow without any issues or trouble. These problems are there due to risk
that is taken by organisation in order to achieve market share. CCA is operating from last 110
years and company has outgrown its desired vision. It is today, following different strategies and
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Illustration 1: Porter’s Generic Strategies.

approaches in order to achieve a higher market share. Even though there is downfall in its
business due to changes in market dynamics. But CCA has decided to enter into new markets so
that they can increase their profitability (CCA, 2017). In past few years, and growth in health
consciousness of people. The company has suffered from lower market share and revenues
which are hampering its ability to grow further.
The most recent issue which converted into controversy was sugary content of soft drinks
that were manufactured. Currently, the company is manufacturing more than 5 million units of
single soft drink brand and it is currently having a capacity to manufacture more than 30 brands
at once so overall it has a a production capability of 140 million units per year. The issues which
are hampering organisation ability to perform well are stated below:
 Expansive Growth strategy: The company relied to much on growth strategies which
consumed a lot of resources. This somewhere weaken organisation financial
capabilities and today it is going through losses. The company was on acquiring and
merging drive which made it to lose its crucial financial resources. These were factors
that acted as a pillar for company but were spent without proper planning. The
concept of horizontal and vertical expansion led to scarcity of resources and has
impacted organisation current prospects. The concerned parties “stakeholder”
complained about issue when profit target was downgraded due to less availability of
resources. In past, there were few more strategies that were adopted as to achieve a
higher level of profitability. They aided organisation in increasing its size and scope
but also minimised number of resources that were present. In the last report company
registered better results due to rise in sales in Indonesia and other Asian countries but
in Australia and New Zealand it is still growing in a single digit range.
Outcome
The final result led company to change its approach towards market. It focused on developing
differentiation and attaining organic growth. It also paid various stakeholders a major amount as
to fulfil their requirements and assure right amount of support from their side. Health consciousness: By the end of 20th century, consciousness related to health
increased in between public. In Australia, the company has been blamed for rising
obesity cases as its drinks contained more sugary content. One can of Coke contained
more than 40 grams of sugar which is almost 1 table spoon. The drink is considered
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to be a regular dairy consuming product but the rise in health consciousness, people
stopped consuming these drinks or it can be said that they have minimised the
consumption rate by 30%. All the operations of company are hampered and that is
why they they innovated the traditional coke and launched Diet version which
contains no sugar. The allegations of environmentalist and health organisations
remains and company is trying to solve them in a appropriate manner.
Outcome
The company have to go through a certain level of impact on its product consumption but later
on with the introduction of diet coke it was able to grab market share. This new drink only had
7-10 grams of sugar or even less because of which people bought it.
These are the two major controversies which have impacted company in a major ways.
One side it had to manage shareholders and other interested parties effectively while on the other
hand it had to solve a problem related to fall in sales. The company was able to manage these
issues in a very effective manner by using contingency strategy and did not lose major funding or
market share.
TASK 3
3. Performing environmental analysis and identification of strengths and weakness
There are different methods which can be used for analysing external as well as internal
environment. For Coca Cola Amatil, it is very important to conduct these analysis as this will
enhance their ability to identify competition existing in industry. It will be using two different
methods as to identify its external factors impact and its own strengths, and weakness. The
approaches are: Porter Five Forces model: It is an analytical method which is used to determine market
competitiveness and prepare strategy on the basis of outcomes. The five forces are:
◦ Threat of new entrants: It is not significant for new players to enter into a market
which is already highly saturated. It will not be beneficial for them. This is why the
threat from new players in MINIMUM.
◦ Bargaining power of buyers: Individual have no power to negotiate with company
but powerful customers like Walmart have higher level of negotiating power as they
buy more quantity. But still This factor is kept at MEDIUM level.
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◦ Bargaining power of suppliers: The company do not have to worry about suppliers
as the main ingredients of manufacturing soft drinks are easily available and also
suppliers are not differentiated or concentrated. The company spends million to
diversify range of suppliers as to reduce their level of power. So the bargaining power
is LOW.
(Source: John Dudovskiy, 2015)
◦ Threat of substitute: The product offered by company have HIGHER level of threat
from the substitutes that are present in the market.
◦ Rivalry in existing companies: The existing player in market are also of same size as
the CCA. So they pose INTENSE threat level. SWOT analysis: This will assist organisation in identifying various issues and strengths
that can be used to exploit opportunities to gain competitive advantage. This is one of the
most utilised tool that ensures that all task are completed in a set period of time.
Strength  Coco cola is biggest brand equity company.
 The firm cover largest market share.
 It has effective marketing strategies for attracting large number of
customers.
 It is natural product and fulfil customers need.
 The company has large distribution channels in different market.
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Illustration 2: Porter Five forces Model.

which offers products to potential buyers.
Weaknesses  This firm face tough competition from another branded company
which is Pepsi.
 There is low products diversification
 It is unhealthy drinking product that cause problem to customers.
 Company will not manage water in a proper manner.
 They will not add new flavour for attracting buyers.
Opportunities  Firm can improve supply chain management
 Expand their market area
 Diversification can enhance their customers level.
 Adopt effective marketing strategies which helps in increasing
profit.
Threats  Entrance of competitors in the market.
 Threats of raw material which assist in making coca cola.
TASK 4
4. Examining organisation culture or leadership style
This is a very important aspect for any company and its growth prospects. Today, there
are organisations that are aiming to attain major market share by capturing consumer attraction
towards their own products and services. Coca Cola Amatil is a well known brand which is
established in various countries situated in the Asia pacific region. The group has a blueprint
which it will be using for attaining success and capturing huge market share in the developing
countries. It is also investing a lot of resources into cleaning and achieving a sustainable
environment. Basically, organisation aims to navigate all resources in the direction which will
assist in changing whole market scenario.
The core values of company are very simple and clear. They state that it wants to achieve
a organic growth rate that will deliver higher value to organisation. These statements and terms
state about organisation and its reason to exist (Wong, Tseng and Tan, 2014). The vision and
values of company act as a common statement which unites every single resource and individual
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within organisation together. It provides inspiration to everyone working with company and aids
in achieving the best results. The core values of company are as follows: Straight forward and transparent: This is a value which states that company wants to be
the best organisation that keeps things simple and open for research and growth. Initiating programs and being accountable for outcome: Different activities and process
are initiated for enhancing organisation productivity, while also the managers are ready to
own the results.
 Focusing on today for better tomorrow: The company is investing a lot of resources in
developing world class facilities for its employees and society so that environment can be
protected, and living standards can be raised.
The CEO of company Alison Watkins is known for her Initiatives regarding women
empowerment and motivating equality between different genders. She is considered to be one of
the most innovative and charismatic personality in Australian business world (CATHERINE
FOX, 2015). She states that she wants to be see more than 50 (out of top 100) organisations to be
headed by women. There are various programs which she is initiating as to reduce the level of
gap that exist within male and female within organisation. She changed company approach and
strategy. Now, it is dependent on three pillars.
Leadership
Strengthening quality of people initiation and
working within company.
Execution
Making changes within productivity as well as
in market condition.
Partners
Aligning company aims and objectives with its partners and other stakeholders as to attain
sustainable targets.
The table states about new strategic push that is provided by the CEO of CCA Alison
Watkins. She aims to align each and every aspect of business as to attain a better market
positioning and develop good image of company in the mind of consumers.
CONCLUSION
Coca Cola Amatil has a brief history of operations in the industry of Tobacco and
bottling as well as distribution. Today, it is suffering from losses in Australia and New Zealand
where health consciousness in public is on rise. Even though company has introduced many
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products which have zero sugar. Also they selling different types of snacks as well as alcoholic
beverages as part of diversification and minimisation of risk. The company has to keep on
analysing its external market as as effort to understand it and reduce the level of impact on firm
operational capabilities if any event takes place. The CEO of company is aiming to change its
approach and make the organisation more viable and enrich its culture with higher leadership
qualities again.
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REFERNCES
Books and Journal
Pertusa-Ortega, E. M., Molina-Azorín, J. F. and Claver-Cortés, E., 2010. Competitive strategy,
structure and firm performance: A comparison of the resource-based view and the
contingency approach. Management Decision. 48(8). pp.1282-1303.
Stanley, J., Leveritt, M. and Peake, J. M., 2010. Thermoregulatory responses to ice-slush
beverage ingestion and exercise in the heat. European journal of applied physiology.
110(6). pp.1163-1173.
Tomlinson, M., and et. al., 2014. Multiple risk factors during pregnancy in South Africa: the
need for a horizontal approach to perinatal care. Prevention Science. 15(3). pp.277-
282.
Wong, W.P., Tseng, M. L. and Tan, K. H., 2014. A business process management capabilities
perspective on organisation performance. Total Quality Management & Business
Excellence. 25(5-6). pp.602-617.
ONLINE
CCA, 2017. Our Strategy. [Online]. Available through:<https://www.ccamatil.com/en/our-
company/our-strategy>. [Accessed on 9th September 2017].
CCA, 2017. Our Vision and Values. [Online]. Available
through:<https://www.ccamatil.com/en/our-company/our-vision-and-values>.
[Accessed on 9th September 2017].
CATHERINE FOX. 2015. [Online]. Available
through:<http://www.theaustralian.com.au/business/the-deal-magazine/cocacola-amatil-
ceo-alison-watkins-on-how-to-promote-women/news-story/
b661256139c100b1fa15b9f542ca4d83>. [Accessed on 9th September 2017].
John Dudovskiy. 2015. Coca Cola Porter's Five Forces Analysis. [Online]. Available
through:<http://research-methodology.net/coca-cola-porters-five-forces-analysis/>.
[Accessed on 9th September 2017].
Porter’s Generic Strategies. 2017. [Online]. Available
through:<http://www.businesssetfree.com/small-business-competitive-advantage/>.
[Accessed on 9th September 2017].
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