Corporate strategy of Coca Cola in Kazakhstan

As I am not native, please comment if there is an error. Also, this strategy was held in 2015.

GROWTH

Coca-cola‘s strategy is Growth. For growth, coca-cola is using horizontal growth, related diversification, unrelated diversification.

1.horizontal growth(internal development)

Plant in Almaty is one of the most state-of-the-art beverage plants in the world, able to simultaneously produce almost any kind of packaging. It is an all-in-one model and is able to produce everything from glass bottles to cans, cartons, PET packages, and much more. The process is limited, however, by aspects such as land, energy, and logistics, with the latter being highly dependent on rail links. This is essentially why coca-cola decided to develop an alternative supply point. In 2013, coca-cola in Kazakhstan had more than 700 people. Given Kazakhstan's geographical conditions, Astana seemed like the best place to locate a new production facility. Accordingly, the company has purchased the land and is beginning to develop the details of the project.

It is certainly set to be a large investment and will be executed incrementally. It will have two lines, to begin with, and by 2020 will have become a mega plant. Eventually, it will be around the same size as the Almaty plant.

2. Related diversification

Coca-cola focused on consumer habits and preferences. Hot tea is very important in terms of beverage consumption, and surveys show that it is still considered part of a meal in Kazakhstani culture. This is a challenge for coca-cola as the company would like to see Coca-Cola viewed in the same light. In that respect, its long-term strategy is to continuously work on the “Coke & Meal" concept and provide more choice for consumers at the dinner table.

However, hot tea remains the greatest challenge to overcome. During the crisis of 2009, the consumption of local lemonades grew, but that trend has reversed over the past three years, with Coca-Cola having replaced those products as the sector's growth engine.

3. Unrelated diversification

A project that is important not only for Kazakhstan but also for all the countries is children's and youth football tournament. It is called «Coca-Cola Bylgary Dop ("leather ball"), which involved about 360 thousand Children. This project was recognized twice UE and FA as one of the best youth football tournaments in the world. In addition, last year Spain has held the first world tournament of Coca-Cola, which Kazakhstan team took third place.

4. BCG matrix-stars

 I think in the BCG matrix, which is one of the portfolio analyses, coca-cola is in stars.

 According to the latest retail audit, Coca-Cola Almaty Bottlers(KKAB) today occupies a leading position in the category of carbonated beverages. In 2012, the total volume of produced beverages totaled 400 million liters. This is the only huge Coca-Cola in Central Asia.

Coca-cola is on the verge of the next big step. The company has a plan to start the construction of a second plant in Astana.

 

This graph is increasing market share of Coca-Cola Icecek. Coca-cola Icecek is the leading soft drinks bottler and distributor based in Turkey, also operating in Pakistan, Iraq, Kazakhstan, and others. It became one of the first investors who came to Kazakhstan after the collapse of the Soviet Union, as well as the founder of the first FMCG-companies on its territory - "Coca-Cola Almaty Bottlers" (KKAB).  In 2005 it invested in the expansion of a plant in the Almaty region. Therefore if the first company operated a total of three production lines at the new plant is now running ten. Nowadays Coca-cola Icecek is still investing in coca-cola in Kazakstan.

Sources

http://www.investkz.com/journals/89/1092.html

https://www.thebusinessyear.com/kazakhstan-2014/pop-step-jump/interview

http://slideplayer.com/slide/6670998/