Coca Cola
... move from a family business organization to a corporate administration, and this can also be applied to KOF and Panamco. The working environment is more open and accurate for information, organization in teams and more multicultural, due that they are open to hire new managers from out side taking the experience from outside and apply it in the local environment; this experience can be in the international business or in other local markets as in South America. Basically the cultural practices are based in the same parameters in Mexico and South America, of course, with some “tropicalization” of the operation and structure, but based on the same parameters and ideas to provide the information quick, precise and with real feed back from the market. D.- PHYSICAL SETTING: The Mexican territory is divided in 3 zones, the North managed by ARCA Bottling Co, the Central by CONTAL GROUP and the Central-South region by Coca Cola-FEMSA SA de CV (KOF). (EXHIBIT B) ARCA is comprised of 18 bottling companies, with 21 productions plants, 59 production lines and 82 warehouses or strategically located distribution centers. And their head office is located in Monterrey, Mexico. Arca distributes and markets its products exclusively in Mexico in the states of Sonora, Chihuahua, Coahuila, Nuevo Leon, Durango, Zacatecas, Tamaulipas, Sinaloa, San Luis Potosi, Baja California and Baja California Sur. Arca also produces plastic ("Pet") bottles mainly to supply its needs. Additionally, it produces ice, bottle caps, lids, containers and plastic boxes.All this locations are in the North Part of Mexico. CONTAL GROUP has 16 bottling plants and 71 distribution centers located in the main towns and cities of the Mexican states of: Aguascalientes, Coahuila, Colima, Durango, Jalisco, San Luis Potosí and Zacatecas. Its workforce reaches over 14,000 employees. Grupo Continental's franchises cover 110,000 square miles, 14.5% of Mexico's territory. The Group attends a market of 12 million consumers and supplies to more than 836,000 customers with The Coca-Cola Company's products. Coca-Cola FEMSA, S.A. de C.V. ("KOF"), the biggest Coca Cola Bottling group in Mexico and Latin America operates in 9 countries distributed in 4 regions, including Mexico: a) The Valley of Mexico: Covering the metropolitan area of Mexico City and a large part of the adjacent State of Mexico. b) Southeast Mexico: Covering the states of Tabasco and Chiapas, and part of the states of Oaxaca and Veracruz. c) Central America: Covering countries as Guatemala, Nicaragua, Costa Rica and Panama. d) South America Covering countries as Venezuela, Colombia, Brazil and Argentina. (EXHIBIT D). E.- TECHNOLOGY: Coca Cola in Latin America uses a state-of-the-art information technology for: Channel marketing, Supply chain management, and re-sales system, trying to get the biggest advantage taking the order from their clients using “Hand Helds” to have a real and live status of the order and mix, making it fast, and very reliable for the supply chain. It was until a couple of year ago that ARCA and KOF started to implement the SAP system in their operations, in order to make the operation more accurate and complete with updated information from production, storage and deliveries, together with GPS systems on their trucks, making deliveries on time with the right product. The bottle companies, with the support of market information and intelligence systems, as well as promotional and merchandising projects, strengthen the value of brands of Coca-Cola Co. and product portfolio during the recent years. It’s not affordable to put a receiving order through the internet nor other sophisticated system, due that almost 60% of their sales are from small stores and POPS that does not uses internet or other systems to add an order, but the bottle companies are open to try this or other process with technology. Their web pages basically are for information fro the stock market, sales and other, but not related to live operation. F.- LEADERSHIP: The three companies in Mexico worked in a team, with different regions but work under the same rules, strategy and guidance of and maintaining a solid and successful relationship with the Coca-Cola Company based on trust and shared learning experiences. Within this context their efforts have been characterized by the constant pursuit of operational efficiency, quality of Coca Cola products, focus on customer service and total respect for their Collaborators. Part of Coca Cola’s well defined position in Mexico’s nonalcoholic beverage industry stems from our consistent contribution to developing the sector and growing the Coca-Cola System in Mexico; which, for the fourth consecutive year, registered the highest per capita consumption in the world. This is clearly a demonstration of the high potential of our domestic market -- second in soft drinks worldwide. Our operating strategies within the current business setting have consistently demonstrated their effectiveness for meeting the needs and preferences of our consumers in a timely fashion, advancing in the specialized service of our market, and maintaining the profitability of the business. Most of the leaders are good and have vision, but they need to transmit these leadership to the managers and directors, that exemplary calling and leadership continue to inspire new generations that have accepted the commitment and challenges of keeping the principles of their organization’s culture of excellence alive. This transcendent vision has left an indelible mark on the way that the things are done, strengthening the successful practices that define who we are as a company, keeping us sensitive to the wisdom of our history and committed to a brilliant future. G.- PRODUCTS AND SERVICES: Coca Cola products in Latin America (LA) are based on the significant brands or core products as Coca Cola, Sprite, Coca Cola Light and Fanta, and Ciel in water, but at the same time we can have different local brands in each country, but the basic family (beside the core product in LA) includes Fresca, Lift, Delaware Punch, Mundet, Extra Poma, Senzao, Beat, Etiqueta Azul, Power Ade, Tea Nestea, Disney Adventures, Ciel, and Ciel Mineral. And the local markets for South America product lines also include Quattro, Kin, Taí, Cruz, Hi-C and Schweppes, and in Mexico we can mention Joya, Topo Chico, Tipp and Frituer. One of the biggest attractions in the market since the mid 90’s, it has been the introduction of the bottled water (Ciel and Sierra Azul), It’s a complement product, and they already have the distribution channel, and can assure the success of the product. The only Coca Cola products in Latin America that didn’t worked, we can mention Coca Cola Vanilla and Cherry Coke, such products were introduced in 2000 and 2003 respectively, but the market wasn’t ready for such flavor change, “Vanilla Coke was very sweet and Cherry Coke was with a strange flavor, although the marketing was good and very extensive, the end clients didn’t accept the product as Coca Cola Co. expected.” Coca Cola products has been a first market in general, since the 1920’s were introduced in the Latin America region, of curse, there has been ups and downs regarding the developing of new products, but we can say that in general all the products has been 1st in to the market, H.- VISION: CORE VALUES, PURPOSE, AND VISIONARY GOALS: Coca Cola’s philosophy it’s transmitted to each bottle company making one platform applied to different scenarios making it a unique way to embraces the highest values that the company seeks, promotes, and defends among its people: a passion for service, a customer/consumer focus, innovation and creativity, quality and productivity, respect, and the integrated development of excellence in our personnel. This is all their people (employees) are highly trained who feel motivated to seek continuous improvement. "To create value for society through the development of companies and institutions" is the long-term goal that gives KOF its sense of on-going commitment. KOF mission is “To satisfy and please the beverage consumer with excellence”, and their VISION is “To be the best bottling company in the world, known for the excellence of its operations and the quality of its people.” Their vision allows everyone in the company to participate in making the ideal scenario—which is Coca Cola’s organization’s future goal—a reality and contribute to social development. The basic goals for 2004 for all the bottle companies are structured under the same vision of Coca Cola Co., in Mexico, are: 1) Improve the efficiency and productivity in each area of our company. 2) Develop new profitable lines of business. 3) Implement essential strategies for maintaining the loyalty of our key customers. 4) Constantly innovate to strengthen our market share. 5) Expand our beverage brands such as multi-serve water and non-carbonated drinks. “For KOF, our consumers and customers are the most important part of the company, which is why we are committed to offering them the best brands, products, and services. We firmly believes that excellence can only bear fruit if we have the support of talented, energetic people who are strongly committed to quality”. To continue being an organization aligned with the essence of our company - modern, agile, flexible - the bottle companies and Coca Cola should look to go beyond mere permanence, pursuing higher goals, with an attitude of continuous improvement. I.- MARKET AND ENVIRONMENT: Before 1992, The Mexican Business landscape was with price controls, protectionism, economic instability and one political party and the soft drink channel was on a single channel, one pack, one size, under government price controls and few brands / several locals, and there was no consumer promotions allowed. The opening of the economy move the industry in to significant changes, and coca cola jumped to a diversified line of products, introducing marketing campaigns, managing discounts, and getting big deals with big companies or fast food chains as McDonalds, Dominoes, etc. and these small changes gave to Coca cola a sustainable growth. Coca Cola Growth model is applied strong according to 6 different important points as: Brands: Strengthen Coca Cola brand equity and develop new carbonated soft drinks (CSD) and Non-Carbonated brands. Marketing: Consistently investing in all elements of the marketing mix. Packages: Multiple choices (refillable and non-refillable) Channels: Developing and serving multiple channels. Prices: Leverage brand equity and portfolio to maintain premium. Bottle System: Capable, healthy and committed. All this was intending to focus to the local market, and trying that the end consumers can take all and/or each product as a part of their daily life, an entertainer, imbedded in the culture and a trusted brand leader, giving a consistently support to built a brand equity across all elements of the marketing mix (Promotions, Media, Advertising, Events, Property activations. The base portfolio of Coca Cola Latin America up to 1990 included just 5 products, 3 Bra...