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China became Coke’s second largest market in Asia in 2003. (Coke Annual Report,2003) 1. Case Issues coke Imported cans and bottles can only sell to foreigners, the Initial bottling plants ere built by Coca-Cola Company but handed over to China Government because of the restrictive policies and had to produce the local product in addition due to the “anti-monopoly’ policy. It also developed the non-carbonated beverages to cater to Chinese flavors. And then Coke faced the distribution problems, due to the large geographical, Coke had to give up the “direct store delivery” method. On the other hand, Coke also faced the communication barriers because the different languages and cultures. Ample, 2004) FIFO 2. 1 Strength A) Brand Recognition Coca-Cola as an image deeply in customers’ heart, is the largest beverage industry in nowadays. It operates more than 300 bottling plants and sells the products over 200 counties. Coca-Cola become No. L beverage industry and be selected as one of the most respected companies. (Business World, 2007) it is also one of the 50 most admired companies in the word in 2010. B) Great Financial Capacity Due to Coke’s market share growth rapidly, it enjoyed a large amount profit in the global market.
It reported that the market share of soft drinks up 2. 6% and making $31 billion revenues. (Waistlines 2009). C) Advantage Technological Capacity Coca-Cola has the standardization production line, with a strong and complete sell channels. It also develops the new product, for example, fruit Juices and Jasmine flavors tea which are non-carbonated beverages. Considers the health factors, Coca- Cola marketed the diet coke. 2. 2 Weakness A) Culture Problems and Health Issues Coca-Cola Company runs successfully but there are still some weaknesses.
Some consumers may not choose Coke because they preferred non-carbonated drinks or worry about the health issues. Coke is a type of drinks contains caffeine, which easily asses obesity and lead to other problems. B) Distribution Problems The main method of Coke is ‘ direct store delivery’, but it is not suit to China Market due to a large geographical. It cannot deliver the drinks directly to the retail outlets; this shows the weak of management on delivery. For the rural area, Coke has to develop a different distribution network, for example, also use the wholesalers. 2. Opportunities A) Expand the Production Line Coca-Cola can try to expand the market segments, so that to obtain more customers in different classes. Develop and improve the production line, develop the new reduces, open new bottling plants and to do cross-marketing can be the ways to expand the marker segments. And it can also modernization of production line to reduce the cost. B) New International Market As the excellent benefit Coca-Cola enjoyed in Asia market, it can continue the localization strategies to consolidate the market position and develop the distributions to the rural area.
In the other hand, Coca-Cola should to develop the new international market to gain more consumers so that earn more profits. 2. 4 Threats A) Local and global competitors Pepsi is the main competitor of Coca-cola. The performance of Pepsi is growing sustained, but Coca-cola appears stagnant in recently years. The rapid growth of soft drink industries is also a threat should be award. B) Customers Preference the reason of health. For example, tea, Juices, milks and hot chocolates. The non- carbonated beverages is more and more popular create pressures to Coca-cola company. (cola wars,1991) 2. SOOT Analysis Conclusion By clarifying the SOOT Analysis of the Coca-Cola’s Re-entry into China Market, the author found Coca-Cola Company runs great successfully in China Market. Thought there’s weakness of some field, it still has lot opportunities to improve. . 0 Recommendations According to clarify the SOOT analysis, there are four recommendations based on Localization Strategies and Advertising& Marketing Strategies for Coca-cola to overcome the government restriction, advance the product, develop the research& development and expand the market share to help the company more success and gain more profit.
Firstly, Coca-Cola should try to expand the market segments thus to reduce the local competitors’ rivalry. The key point is Coca-Cola has to expend its business through Joint-venture with government or local companies instead of acquisitions. This is because the anti-monopoly regulations which are not allowed Coca-Cola take over the local industry. The anti-monopoly regulations made Coca- Cola had failed in bid to buyout Human Juice in 2009. Secondly, to cater to the need of customers taste is an important destination.
Thus, Coca-Cola has to increase the product range and develop new beverage of both carbonated and non-carbonated to provide more choices to customers. Based on “differentiation strategy”, Coca-cola also needs to innovate new product which is different from competitors. At that time, he purpose of customers to pursue healthy consciousness will reduce purchase of carbonated drinks. That is why healthy beverages are more and more popular in nowadays.
For example, the fruit Juice, ready-to-drink teas and energy drinks. This caused Coca-Cola introduces a new tea drinks which is called “Modern Tea Workshop”. On the other hand, it should do more promotions and advanced the advertisement to overcome the fierce competition. Lastly, to boost Coca-Cola’s supply chain preferably and improve distributions to the rural areas through increase the investment on product equipments, trucks, and other distribute facilities, and also rain and hire more sales officers.
Moreover, to invest more in the key departments such as research& develop to adapt the rapid changes of China market and economic environment. In conclusion, Coca-Cola is a very successful beverage company by throwing the light on SOOT Analysis. But it should keep up the good work and compensate the weakness to solidify the market position and step forward. At the same time, Coca- Cola must keep an eye on the changes of the external environment and the actions of the competitors so that to make the relevant strategies for continued success.