Coca Cola: Why Ireland

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Coca Cola Why Ireland ?
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Our team Tony Alex Linda Merry Simon
Life tastes good !
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Executive Summary
Policy Influence Market Strategies
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The key issues
Influence
Strategy
Policy
Market
Tri-angle model
Government incentives
Diamond model
Compass model
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• Competitive advantage
• ExportgtImport
• Unemployment 3.9
• Future workforce 36

Policy
Policy

• HIGH Market
• growth rate 7.8
• age over 25 61

• LOW cost
• Electricity 5.25P(M)
• Water 52.58(L)

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Manage your investment account what advantage
may you take from?
IDA grants
Competitive cost
Highest return on investment
Low unit costs
10 corporation tax
High productivity
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Government incentives
Tax Exemption

• Double tax agreement
• Patent royalty tax exemption
• Tax exempt government securities
• Capital allowances
• Industrial buildings
• Plant and machinery
• Expenditure on scientific research

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Average after tax return 25
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Corporation Tax Rates 10
Source Deloitte Touche 2000
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Invest in other European country?
Percentage increase in profit required to achieve
the same distributable income available in Ireland
source Deloitte Touche 1999
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10 corporate tax.
Ireland offers one of the most beneficial
corporate tax environments in the world. Profits
derived from eligible manufacturing and
qualifying services are subject to a tax rate of
10 until 31 December 2002. From 1 January 2003,
a corporation tax rate of 12.5 will apply to
trading profits in all sectors, including
manufacturing and international services.
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Financial grants

• Capital grant for setting up operation
• Cash grant for creating employment
• Training grant for the cost of major training
  initiatives.
• Research and Development Capability (RD) grants

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Market
POTERS DIAMOND OF COMPETITIVE ADVANTAGE
SOURCE Michael E. Porter ,1993
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Analysis of Coca-Cola According to Porters
Diamond

• 1. Factor conditions
• Impressive economic growth
• Favourable tax environment
• Competitive operating costs
• Productive and flexible workforce

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Average Growth in Real GDP 1995 - 1999
SourceOECD
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Cost of Payroll (Hourly compensation
including additional costs)
Source US Department of Labour, 2000
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Percentage population under 25 in the year 2000

Source United Nations
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The Educational System meets the needs of a
competitive economy (country score)
Source IMD World Competitiveness yearbook 1999
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• Good returns on investment
• Pro-business environment
• Full and fast access to world markets
• Inflows of high technology inward investment
• Increasing levels of export growth
• New confidence in Ireland's people and their
  capabilities

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• Demand Conditions
• Excellent quality of life
• offering duty free access to European consumers.

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• Related and Supporting Industries
• Network of world class suppliers and business
  supports
• Firm Strategy, Structure and Rivalry
• Seven-Up and Pepsi

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The strategy compass
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Competitive position
Relative Market Share No.1 Relative Product
Quality high, TQM, boosts rate of
return Innovation high Source of competitive
advantage the ahead position
of competition
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Patent/Market Control very well Branding
marketing DNA, company reputation
Coca-Cola most valuable brand Brand building
strategy support existing brands
broaden historical
portfolio
develop new brands
acquire global or local brand
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Markets Addressed

• Growth Rate high
• Concentration high
• more concentrated than
  fragment
• Logistics simplest

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Asset Utilization

• Productivity up gain 85-100
• Inventory level down reduce cycle time
  reduce cost
• Investment Intensity No.1 killer of profit
• Coca-Cola positioned to capitalize on profitable
  investment opportunities.
• New investment must enhance existing operation
  provide cash
  return at 11

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Leadership Behavior

• Vision, motivation, interpersonal behavior,
• process of communication
• Lighthouse in the ocean
• Harmony atmosphere
• Connected with people
• Team building
• A customer Centered Professional Selling
  System
• Entrepreneurial spirit

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strategies
1. Generic high Volume low cost
differentiation 2. Fundamental build growth
(organic, acquisition) Think local, act
local business strategy expanding from global
to local enhancing ability to operate
locally from solid global base
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Conclusion

• Both macro-environment and micro-market
  condition
• Both the government incentive and the coca-cola
  companys strategies effort.

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why the Coca-cola should locate in the Republic
of Ireland
1. Impressive economic growth 2. Well educated
workforce 3. Full and fast access to world
markets 4. Operate Competitively 5. Good returns
on investment 6. Pro-business environment 7.
Excellent quality of life