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COMPANY OVERVIEW

The Coca-Cola Company (Coca-Cola) is a leading manufacturer,


distributor and marketer of Non-alcoholic beverage concentrates
and syrups, in the world. The company owns or licenses more than
400 brands, including diet and light beverages, waters, juice and
juice drinks, teas, coffees, and energy and sports drinks. The
company operates in more than 200 countries. Approximately 74%
of its products are sold outside of the US. The company is
headquartered in Atlanta, Georgia and employs 71,000 people as of
September 2008.The company recorded revenues of $24,088 million
during the fiscal year ended December 2008, an increase of 4.3%
over 2007. The increase in revenue was primarily due to increase in
sales of Unit cases of company’s products from approximately 20.6
billion unit cases of the company’s Products in 2007 to
approximately 21.4 billion unit cases in 2008, the increase in the
Price and Product/geographic mix also boosted the revenue growth.
The company-wide gallon sales and unit case volume both grew 4%
in 2008 when compared to 2007. The operating profit of the
company was $6,308 million during fiscal year 2008, an increase of
3.7% over 2007. The net profit was $5,080 million in fiscal year
2008, an increase of 4.3% over 2007.

HISTORY OF COCA-COLA COMPANY


Coca-Cola was first introduced by John Smyth Pemberton, a
pharmacist, in the year 1886 in Atlanta, Georgia when he invented
caramel-colored syrup in a three-legged brass kettle in his backyard.
He first “distributed” the product by carrying it in a jug down the
street to Jacob’s Pharmacy and customers bought the drink for five
cents at the soda fountain. Carbonated water was teamed with the
new syrup, whether by accident or otherwise, producing a drink that
was proclaimed “delicious and refreshing”, a theme that continues
to echo today wherever Coca-Cola is enjoyed.

Dr. Pemberton’s partner and book-keeper, Frank M. Robinson,


suggested the name and penned “Coca-Cola” in the unique flowing
script that is famous worldwide even today. He suggested that “the
two Cs would look well in advertising.” The first newspaper ad for
Coca-Cola soon appeared in The Atlanta Journal, inviting thirsty
citizens to try “the new and popular soda fountain drink.” Hand-
painted oil cloth signs reading “Coca-Cola” appeared on store
awnings, with the suggestions “Drink” added to inform passersby
that the new beverage was for soda fountain refreshment.

By the year 1886, sales of Coca-Cola averaged nine drinks per day.
The first year, Dr. Pemberton sold 25 gallons of syrup, shipped in
bright red wooden kegs. Red has been a distinctive color associated
with the soft drink ever since. For his efforts, Dr. Pemberton grossed
$50 and spent $73.96 on advertising.

Dr. Pemberton never realized the potential of the beverage he


created. He gradually sold portions of his business to various
partners and, just prior to his death in 1888, sold his remaining
interest in Coca-Cola to Asa G. Candler, an entrepreneur from
Atlanta.

By the year 1891, Mr. Candler proceeded to buy additional rights


and acquire complete ownership and control of the Coca-Cola
business. Within four years, his merchandising flair had helped
expand consumption of Coca-Cola to every state and territory after
which he liquidated his pharmaceutical business and focused his full
attention on the soft drink. With his brother, John S. Candler, John
Pemberton’s former partner Frank Robinson and two other
associates, Mr. Candler formed a Georgia corporation named the
Coca-Cola Company. The trademark “Coca-Cola,” used in the
marketplace since 1886, was registered in the United States Patent
Office on January 31, 1893.

The business continued to grow, and in 1894, the first syrup


manufacturing plant outside Atlanta was opened in Dallas, Texas.
Others were opened in Chicago, Illinois, and Los Angeles, California,
the following year. In 1895, three years after The Coca-Cola
Company’s incorporation, Mr. Candler announced in his annual
report to share owners that “Coca-Cola is now drunk in every state
and territory in the United States.”

As demand for Coca-Cola increased, the Company quickly outgrew


its facilities. A new building erected in 1898 was the first
headquarters building devoted exclusively to the production of syrup
and the management of the business. In the year 1919, the Coca-
Cola Company was sold to a group of investors for $25 million.
Robert W. Woodruff became the President of the Company in the
year 1923 and his more than sixty years of leadership took the
business to unsurpassed heights of commercial success, making
Coca-Cola one of the most recognized and valued brands around the
world.

HISTORY OF BOTTLING
Coca-Cola originated as a soda fountain beverage in 1886 selling for
five cents a glass. Early growth was impressive, but it was only when
a strong bottling system developed that Coca-Cola became the
world-famous brand it is today.

Year 1894: A modest start for a bold idea

In 1894 the Coca-Cola Company is in a candy store in Vicksburg,


Mississippi, brisk sales of the new fountain beverage called Coca-
Cola impressed the store's owner, Joseph A. Biedenharn. He began
bottling Coca-Cola to sell, using a common glass bottle called a
Hutchinson. Biedenharn sent a case to Asa Griggs Candler, who
owned the Company. Candler thanked him but took no action. One
of his nephews already had urged that Coca-Cola be bottled, but
Candler focused on fountain sales.

In 21st century the Coca-Cola bottling system grew up with roots


deeply planted in local communities. This heritage serves the
Company well today as consumers seek brands that honor local
identity and the distinctiveness of local markets. As was true a
century ago, strong locally based relationships between Coca-Cola
bottlers, customers and communities are the foundation on which
the entire business grows.

1920s and 30s … 1950s … Packaging


International innovations
expansion
1916 …

Birth of the
contour bottle

VISION OF COCA-COLA COMPANY

Our mission declares our purpose as a company. It serves as the


standard against which we weigh our actions and decisions. It is the
foundation of our Manifesto.

• To refresh the world in body, mind and spirit


• To inspire moments of optimism through our brands and
our actions
• To create value and make a difference everywhere we
engage.

MISSION OF COCA-COLA COMPANY

To create consumer products, services and communications,


customer service and bottling system strategies, processes and
tools in order to create competitive advantage and deliver superior
value to;

• Consumers as a superior beverage experience


• Consumers as an opportunity to grow profits through the use
of finished drinks
• Bottlers as an opportunity to grow profits in volumes
• Bottlers as a trademark enhancement and positive economic
value added
• Suppliers as an opportunity to make reasonable profits when
creating real value-added in an environment of system-wide team
work, flexible business system and continuous improvement
• Indian society in the form of a contribution to economic and
social development.
• Refresh the World... In body, mind, and spirit
• Inspire Moments of Optimism... Through our brands and our
actions
• Create Value and Make a Difference... Everywhere we engage.

OBJECTIVES OF COCA-COLA
COMPANY
• To engage Coca-Cola in exploring the viability and options for
using their distribution networks in developing countries to
distribute ‘social products’ such as oral rehydration salts (ORS)
and related educational materials on health, hygiene and
sanitation.
• To help engage an appropriate international NGO, or NGOs, to
partner with Coca-Cola at a global level and local levels on this
initiative.
• To support Coca-Cola and its partners in modelling different
scenarios which combine Coca-Cola’s distribution network with
local health initiatives in order to achieve our aims.
• To support Coca-Cola and its partners in selecting the most
promising scenarios as the basis for field trials.
• To support the international NGO, or NGOs, to engage local
NGOs and local Health Institutions in order to undertake trials
linking this idea with local support infrastructure.
• To engage and inform as many people as possible,
encouraging them to support this campaign, managing
expectations and offers of help and promoting constructive
debate.
• To help gather and make available appropriate research
reports and opinion in this area, and ensure that the group and
its supporters are well-informed.
• To establish a core group of enablers and activists to lead on
the different aspects of this campaign.
• To monitor the progress of the campaign and ensure that any
trials and roll-outs are effectively monitored and evaluated

BRANDS OF COCA-COLA

Coca-Cola Zero® has been one of the most successful


product launch hes in Coca-Cola’s history. In 2007, Coca
Cola’s sold nearly 450 million cases globally. Put into
perspective, that's roughly the same size as Coca Cola’s
total business in the Philippines, one of our top 15
markets. As of September 2008, Coca-Cola Zero is available in
more than 100 countries.

Energy Drinks

For those with a high-intensity


approach to life, Coca Cola’s brands
of Energy Drinks contain ingredients
such as ginseng extract, guarana
extract, and caffeine and B vitamins.
Juices/Juice Drinks

We bring innovation to the goodness


of juice in Coca Cola’s more than 20
juice and juice drink brands, offering
both adults and children nutritious,
refreshing and flavorful beverages

Soft Drinks

Coca Cola’s dozens of soft drink


brands provide flavor and
refreshment in a variety of choices.
From the original Coca-Cola to most
recent introductions, soft drinks from The Coca-Cola Company are
both icons and innovators in the beverage industry.

Sports Drinks

Carbohydrates, fluids, and electrolytes


team together in Coca Cola’s Sports
Drinks, providing rapid hydration and
terrific taste for fitness-seekers at any
level
Tea and Coffee

Bottled and canned teas and coffees


provide consumers' favorite
drinks in convenient take-
anywhere packaging, satisfying
both traditional tea drinkers and today's growing coffee culture.

Water

Smooth and essential, our Waters and


Water Beverages offer hydration in
its purest form.

Other Drinks

So much more than soft drinks, Coca


Cola’s brands also include milk
products, soup, and more so you
can choose a Coca Cola
Company product anytime,
anywhere for nutrition, refreshment or other needs.

CONSUMER CHOICE AT A GLANCE


Limca Common Fanta Basically Preferred by Maaza also Ladies and
drink. Ladies and Kids. Kids

Sprite not clearly Kinley Soda Mostly those who


defines. consume liquor

COCA-COLA COMPANY, THE SWOT ANALYSIS

SWOT ANALYSIS

The Coca-Cola Company (Coca-Cola) is a leading manufacturer,


distributor and marketer of Non-alcoholic beverage concentrates
and syrups, in the world. Coca-Cola has a strong brand name and
brand portfolio. Business-Week and Inter brand, a branding
consultancy, recognize Coca-Cola as one of the leading brands in
their top 100 global brands ranking in 2008. The Business Week-
Interbred valued Coca-Cola at $67,000 million in 2008. Coca-Cola
ranks well ahead of its close competitor Pepsi which has a ranking of
22 having a brand value of $12,690 million The Company’s strong
brand value facilitates customer recall and allows Coca-Cola to
penetrate markets. However, the company is threatened by intense
competition which could have an adverse impact on the company’s
market share.
Analyzing the primary competitor and identifying their Strengths,
Weaknesses, Opportunities, and Threats (SWOT Analysis) help
determine target markets, marketing plan, and customer service,
sales forecasting and sales planning. Examining the following will
assist in the competitive analysis:

 Identify the level of rivalry among competing sellers in the


industry
 Review strategies of companies to encourage customers to
switch from a competitor
 Analyze ease of entry for new competitors
 Determine bargaining power for suppliers of key materials and
components
 Determine bargaining power for buyers of the product

SWOT Analysis represents the analysis of the following four things—

STRENGTHS

Distribution network: The Company has a strong and reliable


distribution network. The network is formed on the basis of the time
of consumption and the amount of sales yielded by a particular
customer in one transaction. It has a distribution network consisting
of a number of efficient salesmen, 700,000 retail outlets and 8000
distributors. The distribution fleet includes different modes of
distribution, from 10-tonne trucks to open-bay three wheelers that
can navigate through narrow alleyways of Indian cities and
trademarked tricycles and pushcarts.

Strong Brands: The products produced and marketed by the


Company have a strong brand image. People all around the world
recognize the brands marketed by the Company. Strong brand
names like Coca-Cola, Fanta, Limca, and Maaza add up to the brand
name of the Coca-Cola Company as a whole. The red and white
Coca-Cola is one of the very few things that are recognized by
people all over the world. Coca-Cola has been named the world's top
brand for a fourth consecutive year in a survey by consultancy Inter
brand. It was estimated that the Coca-Cola brand was worth
$70.45billion.

Low Cost of Operations: The production, marketing and


distribution systems are very efficient due to forward planning and
maintenance of consistency of operations which minimizes wastage
of both time and resources leads to lowering of costs.

WEAKNESSES

Low Export Levels: The brands produced by the company are


brands produced worldwide thereby making the export levels very
low. In India, there exists a major controversy concerning pesticides
and other harmful chemicals in bottled products including Coca-
Cola.

Small Scale Sector Reservations Limit Ability To Invest And


Achieve Economies Of Scale: The Company’s operations are
carried out on a small scale and due to Government restrictions and
‘red-tapism’, the Company finds it very difficult to invest in
technological advancements and achieve economies of scale.

OPPORTUNITIES
Large Domestic Markets: The domestic market for the products
of the Company is very high as compared to any other soft drink
manufacturer. Coca-Cola India claims a 58 per cent share of the soft
drinks market; this includes a 42 per cent share of the cola market.
Other products account for 16 per cent market share, chiefly led by
Limca. The company appointed 50,000 new outlets in the first two
months of this year, as part of its plans to cover one lakh outlets for
the coming summer season and this also covered 3,500 new
villages. In Bangalore, Coca-Cola amounts for 74% of the beverage
market.

Export Potential: The Company can come up with new products


which are not manufactured abroad, like Maaza etc and export them
to foreign nations. It can come up with strategies to eliminate
apprehension from the minds of the people towards the Coke
products produced in India so that there will be a considerable
amount of exports and it is yet another opportunity to broaden
future prospects and cater to the global markets rather than just
domestic market.

Higher Income among People: Development of India as a whole


has lead to an increase in the per capita income thereby causing an
increase in disposable income. Unlike olden times, people now have
the power of buying goods of their choice without having to worry
much about the flow of their income. The beverage industry can
take advantage of such a situation and enhance their sales.

THREATS
Imports: For example: As India is developing at a fast pace, the per
capita income has increased over the years and a majority of the
people is educated, the export levels have gone high. People
understand trade to a large extent and the demand for foreign
goods has increased over the years. If consumers shift onto
imported beverages rather than have beverages manufactured
within the country, it could pose a threat to the Indian beverage
industry as a whole in turn affecting the sales of the Company.

Tax and Regulatory Sector: The tax system in India is


accompanied by a variety of regulations at each stage on the
consequence from production to consumption. When a license is
issued, the production capacity is mentioned on the license and
every time the production capacity needs to be increased, the
license poses a problem. Renewing or updating a license every now
and then is difficult. Therefore, this can limit the growth of the
Company and pose problems.

Slowdown In Rural Demand: The rural market may be alluring


but it is not without its problems: Low per capita disposable incomes
that is half the urban disposable income; large number of daily wage
earners, acute dependence on the vagaries of the monsoon;
seasonal consumption linked to harvests and festivals and special
occasions; poor roads; power problems; and inaccessibility to
conventional advertising media. All these problems might lead to a
slowdown in the demand for the company’s products.

COCA-COLA COMPANY, THE PEST ANALYSIS

A scan of the external macro-environment in which the firm operates can be


expressed in terms of the following factors:

• Political
• Economic
• Social
• Technological

The acronym PEST (or sometimes rearranged as "STEP") is used to describe a


framework for the analysis of these macro environmental factors. A PEST
analysis fits into an overall environmental scan, which consists of significant
political, economic, social and technological analysis for a firm to reach their
desirable position or to attain the goals and objectives. For operating a business
worldwide it is too much important, because its analysis represent the overall
environmental scanning as shown in the following diagram:

Environmental Scan

/ \

External Analysis Internal Analysis

/ \

Macro environment Microenvironment

P.E.S.T.

Coca-Cola Company’s perform/ operate their business unit in different country


based on the developing of the PEST analysis. The PEST analysis of Coca-Cola
Company is as following—

Political Factors

It is one of the significant parts of a company where, in which country they


operate their business unit. Political factors include government regulations and
legal issues and define both formal and informal rules under which the firm
must operate. Some examples include:

• tax policy
• employment laws
• environmental regulations
• trade restrictions and tariffs
• political stability

Economic Factors

Another most imperative element for PEST analysis is economic factors.


Economic factor affects the purchasing power of potential customers and the
firm's cost of capital. The following are examples of factors in the macro-
economy:

• economic growth
• interest rates
• exchange rates
• inflation rate

Social Factors

Social factors include the demographic and cultural aspects of the external
macro environment. These factors affect customer needs and the size of
potential markets. Some social factors include:

• health consciousness
• population growth rate
• age distribution
• career attitudes
• emphasis on safety

Technological Factors

Technological factors can lower barriers to entry, reduce minimum efficient


production levels, and influence outsourcing decisions. Some technological
factors include:

• R&D activity
• automation
• technology incentives
• rate of technological change

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