Coca Cola 2004 Annual Report Download - page 28

further strengthen our capabilities in serving our largest customers, we have established, at a senior level, a Chief
Customer Officer.
Executing with Excellence Globally. We have a very solid base of operations throughout the world, though
some regions have recently experienced inconsistent performance. While we are working hard to grow the
business throughout the world, we intend to focus specifically on performance improvement in two geographic
areas: North America and Germany.
In North America, together with our bottling partners, we will focus on continually balancing volume, price
and mix. In 2005, our plan in North America reflects a rigorous revenue growth management approach to our
pricing as well as enhanced marketing and additional innovation. We have worked very hard over the last few
months with our bottling partners to ensure that our paths and goals are aligned and that together we can
implement our growth plan. We are in agreement with our bottling partners with respect to our strategic future
and our mutual goals reflect a balanced volume and price growth plan for 2005.
In Germany, given the retail consolidation and rise of the discount chains, we are in the process of
consolidating our bottling system to improve efficiencies. Although the system has gone from 116 bottlers in
1974 to nine bottlers in 2004, we are working toward a single bottler system in the German market in order to
simplify our bottling and distribution operations. As a result, we have informed our independent bottling
partners in Germany that their bottlers’ agreements will not be renewed when they expire. Since the
independent bottlers’ agreements expire from 2007 through 2011, we do not expect a quick resolution; however,
we expect to move closer to our goal over the next two to three years.
Our business demands excellence in execution. Our business is not overly complicated but we operate in a
dynamic, fast-paced environment of global markets and competitive economies. Excellent execution requires
discipline, concrete objectives, routines, reporting, follow up, asking hard questions and the desire to take risks.
The beverage industry provides more than enough opportunities for growth, but it will take a relentless focus on
execution to capitalize on those opportunities.
We have identified several specific areas that provide opportunities for growth. We believe significant
growth potential exists in diet and light products and we intend to make investments to accelerate that growth.
We also believe that the immediate consumption channel offers significant growth potential and we plan to
expand the quality and quantity of our presence in this channel. As consumer preferences change, we must
ensure that our family of brands is selectively and profitably expanded to address these changing preferences. In
every market we must focus on the financial health of the entire Coca-Cola system. We must look for new
opportunities with each customer and allocate resources to maximize the impact on any customer opportunities.
We believe we can capture this growth by focusing on our core brands to maximize the potential of each brand
and through additional innovation.
Revitalizing the Organization. The organizational realignments of 2000 and 2003 negatively impacted the
trust within our Company and our system, that had been engendered over our 118-year history. Our goal is to
revive that trust. We also realize that our bench strength has been weakened as a result of these two
organizational realignments. Therefore, we are investing in capability and training while simplifying and
clarifying roles and responsibilities.
Value Drivers of Our Business
We believe that executing our strategic initiatives creates value. Consistent with a commitment to effective
execution, our Company focuses on three key value drivers: profitable growth, leveraging operating and
marketing investments and efficient capital structure.
Profitable Growth. We believe strong brands—properly supported by marketing and innovation, leveraged
across markets and targeted to a broad consumer base—drive profitable growth. Our Company continues to
broaden our family of brands. In particular, we are expanding and growing our noncarbonated offerings to
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