日本市场可乐产品分析报告(2)

1、CONFIDENTIALThis report is solely for the use of client personnel. No part of it may be circulated, quoted, or reproduced for distribution outside the client organization without prior written approval from McKinsey & Company. This material was used by McKinsey & Company during an oral prese

2、ntation; it is not a complete record of the discussion.Discussion documentDecember 2000Coke Case Study Winning in Japan RatingRationaleProduct Product and category selection Offers many localized brands, including brands in new categories (75% of sales) Products optimizedfor Japan market Changes for

3、mulations for local tests (e.g., Fanta Golden Pineapple)Capabilities Resources Significant resources and attention dedicated to most profitable market Research and development Effectively develops copies of most popular local brands (e.g., coffees and teas); has had todevelop new skills in developin

4、g non-carbonated beverages Market relations Bottlers alliances smoothed market entry and continuing operations for Coke in Japan Distribution and saleschannels Relationship with 17 bottlers, owns 930,000 vending machines (over twice the numberof competitors) Marketing Devotes huge resources to adver

5、tising campaigns and promoted activities resulting in storyand brand image Alliances and acquisitions Frequently allies with bottlers, restaurants and marketing agencies (e.g., supply alliance withMcDonalds, partnership with Denisu)Organization Aspiration and priority Japan region made priority and

6、strongest talent was deployed there (e.g., current CEO usedto head Japan, current chief of marketing used to head marketing for Japan) Talent Tension with local staff (almost 10% of Japan office is foreigners) Decision making andresponsibilities Most profitable market after the U.S. (17% -20% of ove

7、rall profit); well respected Culture, values and style Reflects many characteristics of local culture but retains key “winning” factors from U.S.culture (e.g., more aggressive than traditional Japanese cultures) Coordination mechanisms Applies best practices in Japan to businesses and people managem

8、entFINGERPRINT COKEHighLow1NJ-262408.756/001117NbgeoHR1COKE IN JAPAN Capabilities Localizes physical assets; bottling and distribution managed through alliances; bottling alliances are typically inclusive 17 bottlers in Japan Creates direct distribution system to stores through bottlers Offers marke

9、ting, manufacturing, and investment support to partners, when needed Has supply alliances with McDonalds Spends huge resources on influencer relationships Partners with local agencies for marketing capabilities (e.g., Dentsu) Customer pull demand in product push Japan Uses segment marketing to under

10、stand customer behaviorOrganization Strong community feel to Coke Holds conventions for bottlers Distributes bottlers magazine Compensation is competitive attracts graduates from top schools Almost 10% of Japan office is foreigners some degree of tension with local staff; still has “ugly American” s

11、yndrome; senior Japanese experience glass ceiling Japan seen as strong progression path CEO used to head JapanProduct Adapts products to local markets Almost 10% of revenue comes from Japan-specific products Brands include Georgia Coffee, Sokenbicha, and Aquarius Bottlers guided Coke into developing

12、 localized products “Fast follower” strategy quickly followed lead of smaller local players to enter tea and coffee drinks Coke maintains full control over product content Launches new types of products in Japan (e.g., canned soup drink)Middle Far EastEuropeNorth AmericaSales$ Billions19931995199719

13、99Performance/backgroundLevers for successOtherMarket information Market is very competitive more than 7,000 soft drinks are sold in Japan by 500 manufacturers Vending machines account for 50% of soft drink sales Company information Coke is the market leader in Japan Japan is a very profitable marke

14、t for Coke (potentially the most profitable) Maintains 900,000 vending machines, 2x the number of competitors Products Coffee drinks, green tea, black tea, milk/yogurt drink Coke offers 5 brands with 60 flavors; 75% of brands are JapaneseCompetitors: Kirin, Ito En, SuntoryCST DCS Eric Friberg*, Todd

15、 Guild*, Mark Loch, Hirokazu Yamanachi*14.018.018.919.833322114231533293429221525233814CAGR 9%* Has worked on Japan studies2NJ-262408.756/001117NbgeoHR1CONTENTS Company overview Japan market entry strategy Products Capabilities Organization3NJ-262408.756/001117NbgeoHR1COKE COMPANY BACKGROUND Founded

16、 1886 in Atlanta, USA Number of global employees: 37, 400 CEO: Douglas N. Daft (Australian) Most senior manager for Japan: Mary Minic (President, Japan) Key products: carbonated and sports drinks, juices, tea, coffee Market cap: $151 billion (as of November 13, 2000) Key industry focus: beverages No

17、. 1 soft drink company globally 50% global market share Owns two of top three global brands (No. 1 Coca-Cola classic, No. 3 Diet Coke) Market leader in soft drinks in Japan 56% market share; competes with 500 manufactures selling over 7,000 drinks Global competitors: PepsiCo, Cadbury Schweppes, Nest

18、le Competitors in Japan: Kirin, Ito En, Suntory Owns 40% stake in Coca-Cola Enterprises (worlds largest bottler)4NJ-262408.756/001117NbgeoHR1COMPANY EVOLUTION Coke has been an international company since the start of the century, but WWII made it a true multinational. Coke entered the bottling busin

19、ess in the mid-eighties. Recently, the company has seen strong profits from financial reengineering in its bottling segment. 1800s Invented in 1886 in Atlanta, USA, as a headache, indigestion, and exhaustion remedy Major advertising started in 1892; by 1895 Coke was sold in every U.S. state 1900s-19

20、20s Coke sells in Cuba, Jamaica, Bermuda, the Philippines, Puerto Rico, and Europe by 1916 First bottling franchise established in 1901 Repositions Coke as non-medicinal product Coke bottle invented in 1916 Devotes personnel to maintaining good relations with bottlers in 1922 Establishes pioneering

21、market research agency 1930s-1960s Advertising targets minorities starting in 1950s World War II catapults Coke into world market, creating first U.S. multinational Fanta innovated by Coke in Germany, driven by ingredient constraints during WWII Opens 15-20 plants worldwide during 1950s Merges with

22、Minute Maid in 1960 Merges with Duncan Foods in 1964 Acquires Belmont Springs Water Co. in 1969 Expands product line in response to PepsiCo competition in 1960s Fanta in U.S. in 1960 Sprite, Tab, Fresca introduced Diet versions introduced 1970s-1980s Acquires Aqua-Chem (desalting machines) in 1970 A

23、cquires Taylor Wines and other wineries in 1977 Introduces Coke in Russia and China in 1970s Acquires Columbia Pictures in 1982 for $750 million Reformulates Coke in 1985; unfavorable customer reaction Divests entertainment business in 1987 Focuses on core, profitable business and doubles net income

24、 to $1 billion in 1988 Enters bottling business in mid 1980s1990s Launches “Always Coca-Cola” theme in 1993 CEO articulates priorities in 1993 creation of stock holder value, brand building long-term focus Top 16 markets account for 80% of volume; the markets comprise 20% of world population Bottlin

25、g business plays important role in profitability Invention Repositioning and marketing Expansion, acquisitions, and diversification Diversification and rationalization MarketingSource: International Directory for Company Histories 5NJ-262408.756/001117NbgeoHR1Source: Annual report; Standard & Po

26、ors RegistarNameRoleJapan experienceDouglas N. Daft CEO and ChairmanSENIOR MANAGEMENT President and COOJames E. Chestnut EVP, Operations SupportCharles E. FrenetteGary P. Fayard SVP and CFOJoseph R. Gladden EVP and General CounselCarl Ware EVP, Head of Global Public Affairs and Administration SVP, C

27、hief Marketing OfficerStephen C. JonesCoke has a diversified team of senior managers.Used to head JapanJack L. Stahl EVP, President of Greater EuropeUsed to run marketing in Japan6NJ-262408.756/001117NbgeoHR1COKE STOCK PRICE COMPARISON U.S. 01,0002,0003,0004,0005,000198019811982198319841985198619871

28、98819891990199119921993199419951996199719981999Oct-00Coca-Cola Co.Beverages (non-alcoholic)S&P 500 Comp Ltd.Coke dramatically outperformed the market as well as its competition, especially when it started divesting non-core businesses to focus on its profitable segment.Coca-Cola Co.Beverages ind

29、ex(non-alcoholic)S&P 500 index7NJ-262408.756/001117NbgeoHR1COKE SALES BY REGION $ Billions Coke has an estimated 56 percent market share in Japan and has been growing its Japanese contribution to total sales.199319951997199914.018.018.919.8OtherMiddle and Far EastEuropeNorth America CAGR = 9%142

30、132332933231514222935382326138NJ-262408.756/001117NbgeoHR1Source: Company web-siteCOKES SALES BY BRAND In 1999, 63 percent of Cokes total gallon sales came from products bearing “Coke” trademark.63%37%CokeOther9NJ-262408.756/001117NbgeoHR1Coke has historically made equity investments in selected bot

31、tlers with the intention of financial reengineering, but is now moving away from this strategy. The company has realized that “big is not always better” and is trying to get out of anchor bottlers in Brazil and the Philippines.Source: Annual reports; McKinsey analysisHIGHLIGHTS OF COKES BOTTLING BUS

32、INESS 581527Breakdown of worldwide unit case volume produced/distributedBottlers owned and controlled by CokeIndependently owned bottlersBottlers in who Coke has non-controlling ownershipPercentHistorically, Coke invested in undervalued bottlers worldwide, provided financial and managerial support,

33、and improved operating efficiencies which generated increased sales; Coke benefited from growth, improved cash flows and increased owner value; at times, Coke sold these bottlers after turning them around, for sound profits10NJ-262408.756/001117NbgeoHR1SELECTED LOCATIONSCoke is headquartered in Atla

34、nta, Georgia in the U.S., but has subsidiaries located over a wide geography.NOT EXHAUSTIVE11NJ-262408.756/001117NbgeoHR1CONTENTS Company overview Japan market entry strategy Products Capabilities Organization12NJ-262408.756/001117NbgeoHR1STORYLINE In order to enter and succeed in Japan, Coke realiz

35、ed that it needed to adopt a partnering strategy. Coke allied with 17 locally owned and managed bottlers and leveraged these relationships to set up a direct distribution channel as well as gain manufacturing and marketing capabilities It followed its bottlers advice and expanded its product offerin

36、gs to include specialized beverages (e.g., milk-based drinks, coffee drinks, teas). In addition, Coke introduced new product categories (e.g., canned soups, Coo, a flavored juice product) and new flavors in existing brands (e.g., Fanta Golden Pineapple) to increase its market share in trend-oriented

37、 Japan The company was also innovative in its alliance strategy (e.g., supply alliance with McDonalds), its marketing techniques (e.g., introduced reclosable PET bottles), and its acquisitions (e.g., acquisition of Kanebos vending machine operations). Cokes sales channel (930,000 vending machines, o

38、ver twice as many as its nearest competitor) is a distinct competitive advantage in Japan where vending machines are the most popular sales channel Coke realized that it needed top talent to compete effectively in Japan and sent strong managers like Doug Daft (current CEO) and Stephen Jones (current

39、 Chief of Marketing), to Japan in leadership roles. Thus, Japan was seen as a progression path to top positions in the company Coke is currently the market leader in Japans soft drink segment with a 56% market share. Coke owns the number 1 local brand Georgia (coffee drink). However, the company has

40、 been a slow mover in exploiting new opportunities (e.g. water and sports drinks) In the future, Coke faces the challenge of expanding its low market share penetration (20%) in the Japans most rapidly growing segment of specialized beverages 13NJ-262408.756/001117NbgeoHR1CONTENTS Company overview Ja

41、pan market entry strategy Products Capabilities Organization14NJ-262408.756/001117NbgeoHR1PRODUCT STRATEGY Coke understands the importance of offering products that appeal to the local market, in addition to its existing, classic products.Tailors productsto local tastes Creates new products that app

42、eal to local customers following lead of smaller local players Milk-based drinks (e.g., Ambasa) Coffee drinks (e.g., Georgia) Tea drinks (e.g., Saryusaisai) Offers product variety which is important to win in Japan Only 25% of sales in Japan come from Coke brand, rest from Japan- specific products P

43、roduct range in Japan includes over 25 brands and 60 flavorsDevelops newcategories Launches new product categories for Japan Introduced canned soups However, does not compete in many new categories in trend-oriented Japan Did not move fast enough to capitalize on huge opportunity in water and sports

44、 drinksAlters product flavorsto local tastes Offers existing brands in flavors with local appeal “Fanta” brand is offered as “Fanta Golden Pineapple” in JapanIncorporates localbottlers advice Heeds local bottlers advice on categories to compete in Initially, wanted to sell only Coke brands (high pro

45、fit margin) but Japanese bottlersadvised introducing local, specialized products15NJ-262408.756/001117NbgeoHR1COKES JAPANESE PRODUCTS Coke has consistently rolled-out new products tailored for the Japanese market.Source: Company website Georgia (coffee drink) Ambasa (non-carbonated lactic soft drink

46、) Real Gold (carbonated herb mix flavored drink) Vegitabeta (fruity drink with multiple nutrients) Ko Cha Ka Den (blended tea Royal Milk, Fine Aroma Straight, Garden Lemon) Saryusaisai (non-sugar Oolong tea) Saryusaisai Sokenbicha (special branded tea) Seiryusabo (Green and Barley teas) Shipla (“fun

47、ctional”, stress flavored drink with mulivitamins) Lactia (lactic, non-carbonated drink; promotes healthy digestion) Calo (“functional” soft drink; helps build healthy bones) Perfect Water (mineral water)16NJ-262408.756/001117NbgeoHR1CONTENTS Company overview Japan market entry strategy Products Cap

48、abilities Organization17NJ-262408.756/001117NbgeoHR1COKE CAPABILITIES IN JAPAN Coke leverages local alliances to gain capabilities. The company also offers marketing, manufacturing, and investment support to partners when needed. Marketing Leverages local agencies for marketing capabilities Alliance

49、 with Dentsu Aggressively advertises its brands Sponsored 1997 Winter Olympics in Japan Creates innovative packaging to boost sales First to launch beverages in convenient, reclosable PET bottles in Japan Loses market share due to slow responsiveness to market conditions Does not react quickly enoug

50、h to capitalize on new product opportunities (e.g., water and sports drinks)Distribution Identifies and utilizes optimal sales channel Vending machines account for over 50% of all Japanese soft drink sales; Coke maintains 930,000 vending machines inJapan, over two times its nearest competitor Levera

51、ges acquisitions to expand distribution capabilities Acquired Kanebo Foods vending machine operations in 1996, including 26,000 machines and 250 employees Leverages local bottlers to set up highly functional direct distribution system Alliances with 17 bottlers in Japan 5% equity interest in Coca-Cola West Japan, largest Japanese bottler