Coca-Cola Company is a multinational company which is well known for production of soft drinks in the world. It has a variety of carbonated drinks and different brands of soda such as Fanta, Krest, Sprite and Coca cola which come in different flavors and sizes. The company is found virtually in almost all the countries in the world and has a large market for its products. (Murden 2).
a) Description and History of the company
(i) Size and scope of the company
The Coca-Cola Company owns four of the world’s top five non-alcoholic sparkling beverage brands in the world market; it has about 90,500 associates in the whole world and operates in more than two hundred countries. The company serves an estimate of 1.5 billion people (consumers) a day and has more than 2,800 products of beverage variety.
The company originated as a soda fountain beverage selling for five cents a glass in 1886. A store owner in Vicksburg Mississippi was impressed by the new fountain beverage called coca cola and he began bottling it to sell using a glass bottle referred to as Hutchinson. In 1899, young attorneys form Tennessee met with the company’s owner Griggs Candler and obtained exclusive rights
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However, a new bottle was approved in 1915 and introduced in 1916 after the bottlers worried that the straight-sided bottle for coca cola could be easily mistaken for the imitations which were beginning to hit the market. The new design ‘contour bottle’ was designed by Root Glass Company in Indiana and the unique shape remains even today. More than 1,000 coca cola bottlers in U.S were in operation by 1920s and eventually bottle sales exceed the fountain sales by the end of 1920s. In the 1920s and 1930s, the Coca-Cola Company began a major plan to establish the bottling operations outside United States and plants were opened in 44 countries among the Guatemala, Mexico, Spain, Australia and South Africa by the time of the World War II emergence.
64 plants were set during the war to tend troops which were involved in the fights and in 1950’s, consumers had a choice of coca cola packages, type and size due to the introduction of the same; cans were also introduced in 1960. New brands were introduced as from 1960s and as technology brought global economy, retailers who sold the beverage merged and developed into international mega chains and small and medium sized bottlers consolidated so as to be able to serve the customers in a better way.
In the 1990s, political and economic changes led to vast market openings and the company invested heavily to building plants in Eastern Europe after the fall of Berlin wall and at the close of the century, more than 1.5 billion dollars was used to start new bottling companies in the African continent. In the 21st century, the company grew up with deep roots in communities and strong local based relationships between bottlers, communities and customers are the foundation for the business growth. The business has since grown tremendously and more plans are being made to expand the market even further. (Tung 2).
b. Industry and Markets of the company.
(i) Industry in which the company operates
The beverage industry in which coca cola operates has a fear of Coca Cola Company because they take it as a vehicle for capitalist dominance. This is referred to as a meta-status and coca cola is one of the three or four commodities in the world markets which have reached this status. The term itself, ‘coca cola’ comes to stand not only for a specific soft drink, but for problematic nature of commodities in general. Coca cola operates through a powerful emotive and expressive foundation making it very hard for other companies to claim its status; it is not a material culture but a symbol that stands to be debated on in terms of materiality of culture which it portrays. (Buchli 247).
Coca-Cola Company has innovations in distribution, marketing, quality control, adaptability to change and development of human resources which have made a significant effort in solving environmental problems, it has helped in reducing solid waste and its packaging is recyclable. (Fisher 220-228).
The company is involved in many projects in the communities and carries out its corporate social responsibility well so as to fit well in the industry and the larger community. It operates locally, employs people and reflects people’s lifestyles and tastes. It makes genuine connection with its consumers and creates an environment where its impossible to escape it.
ii) Key markets of the company
Coca cola Company brands are known all over the world and have several key markets. These markets are found in China, Japan, Russia, Africa, East, South Asia, Pacific Rim, Europe and Latin America.
C. Chief Competitors and Positioning of the Company in the Market
(i) Description of key competitors
There are a number of competitors of coca cola beverage in the world’s one id Cadbury Schweppes PLC which produces soft drinks such as 7up, Canada dry, Schweppes soda and most juices. National Beverage Corp which produces Faygo, shanta, Bigshot and spring water and juice based drinks. (Padberg, Sporleder & Davis 109).
Another key competitor is Cott corp which produces private label brands like Sam’s American choice in U.S and Great value in Canada. The other is Jones soda company which makes and distributes now or alternative beverages like Jones soda, premium soda (Jones naturals a non-carbonated juice and tea drink) and Jones energy. Other competitors are Pepsi beverages, soft soda in Kenya, leading brands include: and Hansen Natural corp which engages in selling and marketing alternative beverages, fruit juices and Natural sodas, Groupe Danone world water division, Nestlaters, ITOEN, LTD, Red Bull Gmbtt, Cott Corporation, Britric Plc, constellation brands international and Ocean spay Cranberries.
ii) Position of the company
The Coca cola Company is the largest beverage company in the world, it is the largest manufacturer, marketer and distributor of non-alcoholic beverage syrups and concentrates in the world and is the one of the United States largest Corporations. It is best known for its coca cola product and currently offers nearly 400 brands in over 200 countries in the entire world. (Fisher, 220-228).
The coca cola company has a franchised distribution system which can be dated back to 1889 where TCCC produced syrups concentrates only and sold to several bottlers who have exclusive territories throughout the world. The company sells its beverage products in more than 312 countries and gets approximately 4.5 billion beverage sale daily out of the 90 billion beverage servings of all types in the world. It had gallon sales of 37% in United States, 43% in Mexico, Brazil, Japan and China and 20% in the rest of the world in 2007.
(iii) External influence on the industry and markets.
External business environment has general powerful forces that affect the entire industry, market and the economy at large.
Market analysis process by a company help to investigate the internal and external environments and their influence on the industry and market are used as decisive traits in relation to success and survival of a company such as coca cola. However, Coca cola itself has great influence on the environment and the beverage markets in the world. One of the influences it has on the market is competition; the company has a big influence on competitive factors in the beverage industry since it holds a competitive edge, due to this, other companies try to compete with it. This results to better quality products from the industry since companies will try to improve their quality to match up with Coca cola and therefore improve the quality of the industry and good competition in the markets. (Sergio, 24).
Coca-Cola maintains a local approach in its operations; it carries out several corporate social responsibilities and as a result improves the industry and the local society at large. Coca cola is also concern about safety of its employees, the environment and the entire society and due to this, other companies in the industry tend to follow suit and end up improving the community as well as the entire industry.
Coca-Cola influences consumer buying behavior; this is due to their advertisements which make consumers prefer Coca-Cola products more that other beverages and as a result the market is usually biased since they have an upper hand on the market.
Poor people in the third world countries are negatively affected by Coca-Cola brands; this is because they have neglected staple foods in preference for soft drinks such as coca cola. Cases of malnutrition of children in Zambia have been reported due to feeding of children with coke and fanta. Mothers in this country believe that the beverages are good for their children, thus led the Zambian government to ban fanta advertisements due to the negative influence on the poor people in their country. (Sergio, 24).
In conclusion, the coca cola company is one of the largest multinational companies in the world and produces and distributes all the coca cola beverage products in the world. Its branches are in many countries and employ a lot of people throughout the world. The company holds a large number of the soft drinks market in the world and is most trusted by people especially in the third world countries. The company has continued to grow significantly since its emergence in the 1980’s and it has brought many importance and significant improvement of the economy of the whole world. Read also about Ene Ticker
Daniel Padberg, Thomas Sporleder & Ernest Davis, mergers and the food industry structure, Texas A&M University (2000)
Fisher, the worlds most admired companies, fortune 136(8), 27th October (1997), 220-8.
Rosalie Tung, learning from world class companies, Thompson learning EMEA, ISBN: 1861526091, (2001), p 2.
Terry Murden, coke adds life to health drinks sector, Scotland on Sunday, Scotsman, January 30, 2005 retrieved on 2006-5-11.
Victor Buchi, the material culture reader, Beg publishers, ISBN: 1859735592. 2002,
Zyman Sergio, the end of marketing as we know it, New York, Harper business, (1999).
Coca-Cola is a carbonated soft drink sold in stores, restaurants and vending machines internationally. The coca-cola company head office is situated in Atlanta, Georgia and is often recognised as coke. It was invented by Dr John S Pemberton. Coca-cola enterprise is the world's largest marketer, producer, and distributor of coca-cola products. The company claims that the drink is sold in more than two hundred countries. Coca-cola company has got around seventy two thousand employs in Atlanta.
The company was formed in 1886 and it has produced different flavours and brands which are very popular across the world. The company and its subsidiaries employ nearly thirty one thousand people around the world. The coca-cola company manufactures syrups, concentrates and beverage bases for coca-cola. Thousands of consumers visit fast food restaurants every day and coke feels that it is very important to serve its drink in these outlets such as McDonalds, KFC, Burger king, Dominos Pizza etc.
The company primarily produces bottles and distributes the coca-cola trademark beverages such as coke, fanta, sprite, Dr Pepper and several other beverage brands. Coca-cola enterprises also consists of regular and zero calorie beverage catagories including energy drinks, still and sparkling waters, juices, sports drinks, milk based products, fruit drinks, coffee based beverages and teas.
Coca-cola enterprises run its business mainly with the agreements of coca-cola company. The company achieved exclusive rights with these agreements to market, produce and distribute beverage products of the coca-cola company in authorized containers in specified territories. Various other useful transactions and agreements with the coca-cola company include arrangements for cooperative marketing, advertising expenditures, purchase of sweeteners and acquisitions of bottling territories from time to time. The company has perpetual bottling rights within the US for products with the name coca-cola.
In North America, coca-cola enterprises deliver most of its product directly to retailers for sale to the ultimate consumers. In Europe, the company's product is principally distributed to its customer's central warehouses and through wholesalers who deliver to retailers.
Environments and impacts of the coca-cola company
As coca-cola operates in more than two hundred countries, the coke is in a position to contribute to the economic vitality of even the most remote communities around the world. During 2006-2008 the major areas of impact were the following sectors in billions. Income taxes were high in the year 2007 with 1.9billion when compared with years 2006 and 2008. It was 1.5billion in 2006 and 1.6billion in 2008.
Goods were purchased more in the year 2008 with 11.4billion. It was 8.2billion in 2006 and 10.4billion in 2007.
Local capital expenditures were high during 2008 with 2billion, however it was 1.6 in 2007 and 1.4billion in 2006 respectively.
With aspects of shareowner dividends it is 2.9billion in the year 2006, 3.1 in 2007 and maximum in 2008 with 3.5billion.
With regards to global salaries and benefits, it was maximum in the year 2008 with 4.3billion, 4.2 in 2007 and just 3.4billion in 2006.
The total indirect economic impacts of the coca-cola system are significantly greater than the figures present in 2008/2009 sustainability. The coca-cola system has more than nine hundred plants around the world with the usage of desirable ingredients and raw materials. It also accommodates employs with different communities and cultures, in addition bottling partners employ hundreds of people around the world and are committed to supporting community investment programs. The global business of coca-cola stimulates job creation through out the value cycle. The company contribute to the economic success of each community by employing local people, paying taxes to the government, paying suppliers for goods, services and capital equipment and supporting community investment programs.
Past independent studies on the economic impact of coca-cola business in Asia, Africa and Eastern Europe have consistently shown that for every job in the coca-cola system, an average of ten more jobs are supported in local communities.
Marketing is the process of planning and executing the conception, pricing, promotion and distribution of ideas, goods and services to create exchange and satisfy individual and organisational objectives (AMA, 1985).
With its marketing strategy coca-cola secured more than 20million customers around the world. Beverages are sold to the consumers through retailers, convenience stores, theatres, kiosks and vendors. Marketing includes four p's and seven p's which is called as marketing mix. Marketing mix is probably the most crucial stage of marketing planning process.
- Product- Products are the finished items that are marketed to the consumers. In marketing means product refers to services such as holidays or movie, where customer can enjoy the benefits without owing the result of the service. Consumers prefer coca-cola because of its high standards and high quality techniques. Coca-cola provides helpline and phone services to the consumers who are not satisfied with product and wishes to give feedback on it.
- Price- Price is the important part of the marketing mix as it can effect both the supply and demand for coca-cola. Price plays a vital role in the customer's decision to buy the product. Price strategies are important to coca-cola, because the price determines the amount of sales and profit per unit sold. Businesses have to set a price that is attractive to their customers and provides the business with good levels of profit. Pricing methods include cost based pricing, market based pricing and competition based pricing.
- Place- The place refers to the distribution of the product, the steps involved in taking the product to the market. The main step in this process is the respective distribution channels that coca-cola has elected to transport and sell its product. It is apparent from the popularity of coca-cola that the business in the past used the method of intensive distribution as the product is available at every possible outlet.
- Promotion- Promotion is the p of the marketing mix designed to inform the marketplace about who you are, how good the product is and where they can buy it. Promotion is also used to convince the customers to try a new product through personal selling; advertising etc. coca-cola has used media as the main form of promotion for extensive range of products.
- People- Appropriate staff and people are very essential for any service provision.
Selecting the suitable people for the jobs and training them effectively in the delivery of their service, so that the organisation can obtain a form of competitive advantage. Consumers make judgements and deliver perceptions of the service based on the employees they interact with.
- Process- It is linked with the systems, used to assist the organisation in delivering the service. Process that allows obtaining an efficient service delivery. For ex- Banks that send out credit cards automatically when their customer's old card expires, it needs an efficient process to identify expiry dates and renewal. Thereby it ensures consumer loyalty and confidence in the company.
- Physical evidence- Physical evidence is the element of the service mix which allows the consumer again to make judgements on the organisation. Physical evidence is concerned like when we walk into a restaurant we expect clean and friendly environment.
Competitors of Coca-cola:
The major competitors of Coca-Cola are
- Asahi Breweries,Ltd.
- Cadbury Schweppes plc,
- General Mills,Inc.
- Nestle S.A.
- Unilever and the other
Although coca-cola is very famous for its brand perspectives in the market environment, it has got number of competitors. One of the global competitors of coca-cola is the pepsi; it outsells coca-cola in some markets. Pepsi is usually second to coke in sales. French brand Mecca cola and British brand Qibla cola,
popular in the Middle East, are competitors to coca-cola. In Peru, Inca cola outsells coca-cola, which led the coca-cola company to purchase the brand in 1999. In India coca-cola ranked third behind pepsi and local drink Thumsup. The coca-cola company purchased Thumsup in 1993. In Slovenia, the locally produced cockta is a major competitor to coca-cola. In Israel RC cola is an inexpensive competitor. Classiko cola, made by Tiko group, the largest manufacturing company in Madagascar, is a serious competitor to coca-cola in many regions.
Partners of coca-cola
Coca-cola Company is linked with 300 bottling partners globally, together which is called the coca-cola system. Coca-cola companies business is concerned with creating and marketing the brands and trademarks, while coca-cola bottling companies produce and package the finished beverage products to sell and distribute them to retail and wholesale customers. Management of coca-cola bottling partners are separate from those of the coca-cola company.
Coca-cola enterprises are one of the largest marketer, distributor, and producer of bottle and can liquid non-alcoholic refreshment.
- Strong brand image increases customer base.
- Robust distribution and production facilities.
- Inorganic growth through acquisition.
- Owning Odwalla, natural juice company.
- Customer concentration could impact the bargaining power of the company.
- Most products of the coca-cola are seasonal.
- Sluggish performance in North America.
- Decline in cash from operating activities.
- Growing bottled water market.
- Operational initiative for cost saving.
- By increasing health consciousness, the company would increase demand for its low calorie products.
- Growing Hispanic population in US.
- Sluggish growth of carbonated beverages.
- Intense competition.
- Volatile economy could impact sales of the company's products.
- Stringent regulations and legislations.
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