The Coca-Cola Company is one of the largest producers of soft drinks and syrups, as well as the world's biggest producer of juice and juice-related products in over 200 countries. Coca Cola has around 93,000 employees and sells over 3,300 beverages. It has six operating segments: Eurasia, Africa, North America, Europe, Latin America, Pacific and bottling investments. One of its biggest segments of revenue is earned via its bottling operations. The original Coke formula was invented in 1886 in Georgia by the Eagle Drug and Chemical Company by a chemist named John Pemberton.
The original purpose behind Coca Cola's consumption was the belief that carbonated water was good for one's health reinforced by Pemberton's claims that Coca-Cola was able cure some diseases. The two key ingredients was also the reason for Coca Cola's name: coca leaf (cocaine) and kola nut (caffeine), the ‘k' was changed to ‘c' for marketing purposes.
Organization of the Coca Cola business and its diversity: Coca Cola Company is devised of two main parts: Coca Cola System and The Coca-Cola Company. The Coca-Cola Company's main focus is the production of syrups and marketing of the brands and trademarks, while Coca-Cola bottling partners produce and package the beverages and then distributes them to their retail and wholesale customers. Coca Cola Company works with over 300 bottling partners that range from big to small privately and publicly traded businesses worldwide.
Diversity of products and geographical strengths:
Coca-Cola's strategy is to utilize its brands, distribution system, and financial strength to achieve long-term sustainable growth. Coca Cola offers a variety of products from carbonated drinks to tea and water. Coca Cola's most profitable region is North America. During the current crisis, while economies are slowing down around the world, most markedly in North America, Coca-Cola is likely to offset specific region weakness with strengths in other geographies.
Coca-Cola's strategy is to utilize its brands, distribution system, and financial strength to achieve long-term sustainable growth. The Coke system incorporates 900 plants, 500,000 trucks, 10 million cold drink vending machines, and a $50 billion supply chain across over 200 countries with product availability in 20 million outlets.
Tags: The Coca-Cola Company,Coca Cola System,Eagle Drug and Chemical Company, beverage industry
[...] Legal aspect There is an increasing importance of anti-monopoly law (acquisition of Huiyuan by Coca-Cola failed) and the reporting and the accounting standards. Hence, there is a lack of modern financial reporting and on top of that, there is a small group of certified accounting professionals. On the other hand, there is a facilitation of FDI that allows clear and fast procedures and processes for foreign investments. But the Chinese government makes the beverage market very attractive to venture capitalists (for example, French company Danone with Chinese company Wahaha). [...]
[...] Challenges of doing ethical business in China The People's Republic of China (PRC) is one of the fastest growing economies in history and the largest recipient of foreign direct investment in the world. An increasing number of companies are moving production processes to China to take advantage of generous tax incentives, high productivity rates, and cheap labor. Companies capitalize on the fact that they need only pay workers in China the same amount annually what they would have to pay workers monthly in the US. [...]
[...] Also, the quality of lifestyle is increasing with the increase of purchasing power and educational level, and there is a decline in poverty (per capita income was $6,500 which is one of the highest in Asia in 2009). But the one child policy aims to reduce population rate and decrease the pressure on the resources of the country. Technological aspect There are a large number of R&D institutions: Coca-Cola opened its $90 million Innovation and Technology Center in Shanghai in 2009 and China produces the second largest number of science and engineering graduates. The increasing awareness of technology is also favorable (e.g. [...]
[...] Part III The company implementation The strategy of Coca-Cola in China The Coca Cola strategy is close to a “Cost Leadership” strategy, due to: - PRODUCT DIFFERENTIATION : Low - MARKET SEGMENTATION : Low Mass market - KEY FUNCTIONAL AREAS: Manufacturing and materials management Clearly, Coca Cola company seeks to fully implant operations in China by using Chinese manufacturing, distribution, raw material. Coca Cola´s investment plan Coca Cola, the world's biggest beverage maker, will begin operations at its largest bottling plant in China, a 900-million-yuan (132-million-US dollar) investment in Luohe City in central China's Henan province, by the end of October this year. [...]
[...] Marketing actions and image of Coca-Cola Coca Cola brand development strategy consists of redesigning its methods and techniques in a manner of aligning with the needs of its consumers. Earlier, Coca Cola believed in ability, availability, and acceptability. Now, Coke's strategy has been redeveloped to stress on price value, preference, and pervasive penetration. The brand development strategy of Coca Cola has been effective due to its ability to come up with ways to construct and maintain its brand image. Another reason Coca Cola has gained such acceptance worldwide is due to its ability to connect well with its consumers giving them the edge through brand loyalty. [...]
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