Organizational capability

Coca-Cola seeks to provide its shareholders with an attractive return on their

investment by increasing the company’s profitability.
The key factors in achieving profitability are increasing revenues by:
 1. implementing multi-segmentation strategies in the company’s major
markets to target distinct market clusters divided by competitive intensity and
socioeconomic levels;
 2. implementing well-planned product, packaging and pricing strategies
through channel distribution; and;
 3. achieving operational efficiencies throughout the company.
To achieve these goals the company continues its efforts in:
 working with the Coca-Cola Company to develop a business model to
continue exploring new lines of beverages, extend existing products, participate
in new beverage segments and effectively advertise and market the company’s
products;
 developing and expanding the non-carbonated beverage portfolio
organically and through strategic acquisitions together with the Coca-Cola
Company;
 implementing packaging strategies designed to increase consumer
demand for the company’s products and to build a strong returnable base for the
Coca-Cola brand selectively;
 replicating the company’s successful best practices throughout the whole
value chain;
 rationalizing and adapting the company’s organizational and asset
structure in order to be in a better position to respond to a changing competitive
environment;
 strengthening the company’s selling capabilities and selectively
implementing pre-sale system, in order to get closer to clients and help them
satisfy the beverage needs of consumers;
 evaluating the company’s bottled water strategy, in conjunction with the
Coca-Cola Company, to maximize its profitability across its market territories;
 committing to building a strong collaborative team, from top to bottom;
and
 seeking to expand the company’s geographical footprint.
 Competitive Advantage

Market Leadership. Coca-Cola is the largest bottler of Coca-Cola trademark

beverages in Latin America in terms of total sales volume in 2006, with
operations in Mexico, Guatemala, Nicaragua, Costa Rica, Panama, Colombia,
Venezuela, Argentina and Brazil. The company is also the world’s second
largest Coca-Cola bottler;
Managerial expertise.  the Coca-Cola Company provide the company with
managerial experience. Coca-Cola also offers management training programs
designed to enhance executives’ abilities and exchange experiences, know-how
and talent among an increasing number of multinational executives from the
company’s new and existing territories.
Innovative business partnerships. Coca-Cola is working together with the
Coca-Cola Company to develop more advanced joint business models and to
increase shared incentive to capture important growth opportunities- including
the evident opportunities presented by Latin America’s non-carbonated
beverage category.
Joint-ventures. Coca-Cola Company agreed to acquire Jugos del Valle, one of
the leading juice manufacturers in Mexico and Brazil, through a new joint-
venture company. Beyond the potential synergies, this transaction will
considerably increase the company’s presence in Latin America’s fast-growing,
but under-developed non-carbonated beverage segment.
Innovative, collaborative customer relationships. As an organization, Coca-
Cola FEMSA continually looks to deepen its customer relationships. In Mexico,
the company is working closely with its largest clients to develop stronger
multi-faceted relationships. Among the company’s initiatives, are tailoring its
extensive portfolio of products and packages for their stores - based on the local
market’s socioeconomic demographics and the store’s distinctive
characteristics.
Innovative market segmentation model. The company is better able to serve
the distinct needs of its customers and consumers and to differentiate its brands
across the franchise territories by segmenting markets according to their
regional and socioeconomic characteristics. As a result, the company is
managing to capture more growth, adjusting it’s portfolio to better fit every
consumption occasion.
Innovative go-to-market strategies. Coca-Cola constantly tailors the way to
market to better serve the particular needs of clients - from traditional mom-
and-pop retailers to modern hyper and supermarkets.
Innovative, strong brand portfolio. The company offers a powerful portfolio
of beverages to its customers and consumers, and continuously explores
promising beverage categories to capture growth in its different markets. To get
closer to it’s customers and help them to satisfy consumers’ expanding needs,
Coca-Cola has become a one-stop shop for it’s retailers in Brazil by offering a
complete beverage portfolio - including carbonated soft drinks, bottled water,
packaged juices, and beer.
Innovative organizational, production processes. Coca-Cola’s versatile team
of people enables it to adapt its organizational and production processes to
address changing competitive, economic, and socio-political environments.
Innovative raw-materials management. The efficient use of raw materials
throughout the Coca-Cola franchise territories has enabled the company to
maintain relatively stable costs in spite of pressures and preserve its
environmental resources.
Continuing portfolio innovation. To stimulate and satisfy consumer demand
throughout its market territories, Coca-Cola continues to work closely with The
Coca- Cola Company to explore new lines of beverages, extend existing brands,
and participate in new beverage segments.
Collaborative customer relationships. The objective is to change the
transactional buy-sell paradigm to collaborative, multifunctional relationships
with clients. To this end, Coca-Cola is partnering with customers in the modern
sales channel on multiple fronts-from knowledge management and capabilities
development to go-to-market and point-of-sale execution-to ensure each and
every shopper’s trip counts.
Adaptive go-to-market strategy. Coca-Cola continually evolves the way it
goes to market in its franchise territories.
Advanced information management. State-of-the-art market intelligence
systems enable the company to execute and refine its channel-marketing and
multi-segmentation strategies, consistent with customers’ and consumers’
purchasing patterns and preferences.
Inventive business solutions. More with less is a key part of the Coca-Cola
FEMSA corporate culture. The company continually seeks to optimize
manufacturing and distribution capacity to maximize operating efficiency.
Flexible organizational structure. In response to the challenge of higher costs
and expenses across the industry value chain - from procurement to
manufacturing and distribution - the company rapidly assembled a diverse,
multi-functional task force of executives from multiple countries and
organizational levels.
Pioneering people. Talent management is a key element of Coca-Cola’s growth
strategy; the company is committed to fostering the development of quality
people at all levels of the organization. Coca-Cola shares knowledge and
managerial experience with and the Coca-Cola Company. The company also
offers ongoing management forums and training programs to enhance the
executives’ abilities and to exchange best practices and capabilities from a
growing pool of multinational talent.