international business-coca cola

7/30/2019 International Business-Coca Cola

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INTRODUCTION

What is International Business

International business is a relatively new term, with quite a traditional concept as the

name was derived from international trade. Business transactions that take place

across national borders may be the simplest definition of International business.

However, Business Dictionary lists two definitions which are: the exchange of goods

and services among individuals and businesses in multiple countries and a specific

entity, such as a multinational corporation or international business company that

engages in business among multiple countries.

International business can be broken down into four types: foreign trade (movement of

tangible goods), trade in services (insurance, banking, hotels, consulting, and travel and

transportation), portfolio investments (financial investments made in foreign countries),

and direct investments (when a firm owns a foreign subsidiary entirely or has partial

control).

Measurable trends in international business activity include:

Growth in world trade and investment

due to Foreign Direct Investment.

Growth in cross-border mergers and acquisitions mostly in financial, insurance andtelecommunications services

Market liberalization increasing global competition, thus creating efficiency andeconomies of scale as Multi-national Enterprises shift production activities to cheaperlocations.

Increased regional trading agreements such as European Union, NAFTA (NorthAmerican Free Trade Association) making imports and exports within the blocs easierfor member countries.

International Business is increasing rapidly, resulting in many companies expanding theirmarkets internationally in order to achieve greater market share, growth and profits. The

process of international business has since shifted to a global level, i.e. globalization, wherebasically, the entire global market is accessible to companies and consumers.
http://www.businessdictionary.com/definition/exchange.htmlhttp://www.businessdictionary.com/definition/goods-and-services.htmlhttp://www.businessdictionary.com/definition/goods-and-services.htmlhttp://www.businessdictionary.com/definition/individual.htmlhttp://www.businessdictionary.com/definition/country.htmlhttp://www.businessdictionary.com/definition/country.htmlhttp://www.businessdictionary.com/definition/entity.htmlhttp://www.businessdictionary.com/definition/multinational-corporation-MNC.htmlhttp://www.businessdictionary.com/definition/international-business-company-IBC.htmlhttp://www.businessdictionary.com/definition/business.htmlhttp://www.businessdictionary.com/definition/business.htmlhttp://www.businessdictionary.com/definition/international-business-company-IBC.htmlhttp://www.businessdictionary.com/definition/multinational-corporation-MNC.htmlhttp://www.businessdictionary.com/definition/entity.htmlhttp://www.businessdictionary.com/definition/country.htmlhttp://www.businessdictionary.com/definition/individual.htmlhttp://www.businessdictionary.com/definition/goods-and-services.htmlhttp://www.businessdictionary.com/definition/goods-and-services.htmlhttp://www.businessdictionary.com/definition/exchange.html


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The theories briefly described hereunder are just a few that relates to International

Business and the birth of globalization resulting in the emergence of multinational

corporations and enterprises.

The researcher will examine the actual and potential impacts of globalization and

evaluate possible strategies going forward which the company might use to respond to

the impacts of globalization. The case study is the Coca Cola Company.

Adam Smith (1776) propounded the Theory of Absolute Cost Advantage based on the

assumption that a country can produce a good or service with fewer resources than can

another. The Theory of Comparative Cost Advantage Ricardo (1817) claims, that

countries have different opportunity costs of producing a good or service therefore, thecountry with the lowest opportunity cost has comparative advantage in that product or

service. Both outcomes result in economic gain from each other.

Vernon, 1966, based his International Product Life Cycle model (IPLC)on three stages of

a product. The first being the New Product produced and marketed solely at home.

Demands from external markets for this product now at the Mature Stage,opens up

doors for Foreign Direct Investment (FDI), where it is deemed more economical to be

manufactured abroad, due to reduced unit, labour and transport costs and may also

avoidtrade barrier issues. The final stage where the product becomes standardized is the

point where the market has become saturated with competitors further reducing the price

of the product. Firms exploit economies of scale and gain competitive advantage by

shifting production to locations where the elements of production are lowest.

Defining Globalization

Globalization is by no means new, people and later on, corporations, have for many

years been buying and selling to each other across the globe, for example, the famous

Silk Road spanning across Central Asia connected to China and Europe during the

Middle Ages.The process of globalization can be defined as the increased movement of

people, products, cash, ideas and knowledge across national borders, leading to


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increased economic, political, social and cultural interconnectedness amongst the

world's population, markets and businesses. The borderless community of internet

users sees millions of people from all over the world crossing national borders, 24 hours

a day, seven days a week. The major causes of globalization are trade, multinational

production, and advances in communication, information technology, transportation and

international finance.

The World Trade Organization (WTO) has, since 1945, made major reductions to the

barriers to trade, and this has led to an enormous increase in international trade

compared with domestic trade. Because world trade has consistently grown much faster

than world Gross Domestic Product (GDP), the proportions of domestic versus

international business have changed; much more of all countries business is now done

overseas than used to be the case.

Success of Globalization

Proponents of globalization claims that it leads to a greater understanding of other

cultures, raise the standards of living, increase purchasing power especially in the west

and allow democracy to triumph over communism. It therefore gives companiescompeting on a single global platform, access to wider markets and consumers access

to a greater variety of goods and services.The process allows companies to achieve the

best possible gains within an international network. Through increased employment and

technological advances, globalization encourages developing nations to catch up with

more industrialized nations.

Globalization, with the blessings of governments around the world seeks to create as

conducive as possible, an environment that would nurture the growth of its business thus

promoting worldwide economic development. Totally committed to the same goal are

regional groupings such as APEC (Asia-Pacific Economic Cooperation, a group of 21

countries that seeks to promote free trade and prosperity throughout the Asia-Pacific

region), GATT (General Agreement on Tariffs and Trade - a multilateral agreement


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regulating trade among 153 countries, its main purpose is the reduction of tariffs and

other trade barriers) and WTO (World Trade Organization - global international

organization dealing with the rules of trade between nations).

Factors Leading to Globalization

Globalization has led to the growth of Multinational Corporations/Enterprises (MNCs /

MNEs) embracing strategies such as Global, Multidomestic and Transnational activities

to enter foreign markets., Dunning (1993) defines the multinational as a firm that

engages in foreign direct investment and owns or controls value-adding activities in more

than one country. Playing an important role in this scenario are the international

institutions that oversee world trade and finance.We are also seeing an increasednumber of Joint Ventures, Mergers and Acquisitions as a result of the globalization

process.

There are several contributing factors towards the creation of a global village these

include: the substantial reduction of barriers of trade between countries through

technological advancements in communication and transportation; the increased

demand for products and services; the decline in institutional barriers to international

trade such as tariffs and quotas; the economies of scale achieved through technological

advances in product and process development and the improved quality of products due

to international competition.Foreign Direct Investment (FDI) has helped to reduce

poverty through the creation of jobs and improving incomes, it has strengthened the

middle class and acceleratedsocial mobility. Also, as human rights issues and public

accountability are brought to the fore.

The Paradox of Globalization

Opponents of globalization charge that there areconsequencesand negative effects of

globalization. (Farazmand, 2001)speaks of these effects with regards to national

economy, human values, and the benefits of democratic communities, national

government and especially on third world countries. Others claim that it is synonymous


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with imperialism, there is greater potential for conflict, unbridled corporate power and

disregard for people as corporations relocate factories to countries with the cheapest

labor.Despite these arguments there are no indications of reversibility of the process of

globalization in the short or medium term.

THE COCA-COLA STORY

Invented in 1886 by pharmacist John Stith Pemberton, incorporated in 1892 and best

known for its flagship product, Coca-Cola (also known as Coke), the Coca-Cola

Company is the worlds leading manufacturer, marketer, and distributor of non-alcoholic

beverage concentrates and syrups. The worlds headquarters are located in Atlanta,

Georgia, in the United States of America. With over 1.7 billion servings each day, thecompany currently offers more than 500 brands in over 200 countries via foreign direct

investment. Their portfolio of world class quality sparkling and still beverages include

over 400 soft drinks, juices, teas, coffees, waters, sports and energy juices. John

Pembertons bookkeeper, Frank Mason Robinson, in 1885 came up with the name and

chose the famous Coca-Cola logo's distinctive cursive script.Thecontour bottle design

was created in 1915 by bottle designer Earl R. Dean. In 2007, the company's logo on

cans and bottles were simplified but retained the red color and familiar typeface, plastic

bottles with screw caps were also designed similar to the glass ones.Coca-Cola was sold

in bottles for the first time in March 1894 and cans of Coke first appeared in 1955.

The aggressive marketing tactics of Atlanta entrepreneur Asa G. Candler, who acquired

complete ownership of the Coca-Cola business in 1891, led Coke to its dominance of the

world soft drink market throughout the 20th century making the product known well

throughout over 90% of the world population. These tactics has made Coke one of the

worlds most recognizable and widely sold commercial brands.

Operations

By the time of its 50th anniversary the drink had reached the status of a national symbol,

without a doubt, no beverage company compares to Coca Cola's social popularity status.
http://en.wikipedia.org/wiki/John_Stith_Pembertonhttp://en.wikipedia.org/wiki/John_Stith_Pemberton


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The saturation of local or home market the company saw potential for growth in

international markets evolving the company into a multinational organization with major

overseas operations. It now operates in five geographic areas, North and Latin America,

The Greater Europe Group, The Africa and Middle East Group and The Asia Pacific

Group thus ensuring that everyone around the world has access to Coca-Cola.

The Company operates a franchised distribution system and only produces syrup

concentrate which is then sold throughout the world to various bottlers who hold

territorially exclusive contracts with the company. The companys has three distinct

bottler systems: independently owned bottlers, in which there is no ownership interest;

bottlers in which the companies has invested and have a non-controlling ownership

interest; and bottlers in which the company has invested and have a controllingownership interest. This allows the company to conduct business on a global scale

whilst maintaining a local approach.

Through the successful cultivation of its international business, more than 70% of Coca-

Colas income originates from non-U.S sources. Various tactics were used by the

company to accomplish this including developing a global consumer market, establishing

transnational corporations to reduce production costs, product branding and positioning

and competition-based pricing.Coca-Cola has a long history of acquisitions, some of

which are listed in Table 1below.

COCA-COLA ACQUISITIONS

COMPANY / BRAND YEAR OF ACQUISITION OTHER INFORMATION

Minute Maid 1960 American orange juiceconcentrate

Thums Up 1993 Indian Cola Brand

Barq 1995 American Root Beer

Odwalla 2001 American band of fruit juices, smoothies and bars

Fuze Beverage 2007 American manufacturer ofteasand non-carbonated

fruit drinks

Source:http://en.wikipedia.org/wiki/The_Coca-Cola_Company#Products_and_brands
http://en.wikipedia.org/wiki/Franchisinghttp://en.wikipedia.org/wiki/Bottler_(company)http://en.wikipedia.org/wiki/Concentratehttp://en.wikipedia.org/wiki/Concentratehttp://en.wikipedia.org/wiki/Concentratehttp://en.wikipedia.org/wiki/Teahttp://en.wikipedia.org/wiki/Teahttp://en.wikipedia.org/wiki/Teahttp://en.wikipedia.org/wiki/The_Coca-Cola_Company#Products_and_brandshttp://en.wikipedia.org/wiki/The_Coca-Cola_Company#Products_and_brandshttp://en.wikipedia.org/wiki/The_Coca-Cola_Company#Products_and_brandshttp://en.wikipedia.org/wiki/The_Coca-Cola_Company#Products_and_brandshttp://en.wikipedia.org/wiki/Teahttp://en.wikipedia.org/wiki/Concentratehttp://en.wikipedia.org/wiki/Bottler_(company)http://en.wikipedia.org/wiki/Franchising


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Global Issues

Williamson (1975) argued that the transaction costs of writing, executing, and enforcing

contracts via the market are greater than the costs of internalizing the market .

Internalization theory reveals the economic rationale that was behind the changes in

Coca-Colas modes of entry as it moved from franchising to joint ventures (JVs) with

selected local partners, and more recently to the combination of JVs and franchising

(Asia Pacific Business Review, Vol. 9, No. 1, Autumn 2002, pp. 39-58.)

Coca-Colas represents one MNCs response to the growth opportunities that are

available hence their decision to invest in China. After the implementation of economic

reform in 1979 Coca Cola used three modes of entry into the China market. Firstly, only

concentrate was sold to its franchised Chinese-owned bottlers with local agents

responsible for production and distribution. Market agents were more interested in their

bottom lines which limited the expansion of Coca-Colas market share. The second

approach was to restrict the opportunistic behaviour of its local partners which involved

Coca-Cola buying equity shares in the bottling businesses. Finally, they (Coke) under a

franchise agreement, teamed up with two foreign bottlers. The company internalized

management control, procurement transactions and the labour section of its bottling

business by localizing its management team and upstream suppliers. This synergistic

effect brought revenue-enhancing and cost-reducing benefits to the company. Beamish

(1988: 98) suggests that Joint Ventures can mitigate the problem of opportunism via

mutual trust and forbearance.

This said,it does not mean it was smooth sailing for Coca-Cola after the first two high

transaction costschallenges were incurred through uncertainty in the market environment

and the opportunistic behaviour of market agents. Coca Cola was unable to appreciate

the financial difficulties faced by some it local partners that limited expanding business

operations and thus needed to change their operations in China. The company began to

see some measure of success through the internalization process and presently has

55.3 percent of the carbonated drinks market while PepsiCo has 33.1 percent, according

to data from Euromonitor International.


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Bloomberg News -Oct 31, 2010 reported that the worlds largest soft-drink maker, is

likely to increase spending in China on bottling plants, its distribution network and a $90

million research and development center. The company is also pursuing expansion in

Chinas less-developed areas as they see great potential for growth and ultimately

generate greater overall profit margins.

Until 1977, Coca-Cola was the leading soft drink brand in India, however, they refused to

reveal their formula and reduce their equity stake as was required under the Foreign

Exchange Regulation Act. This Act governed the operations of foreign companies in that

country, Cokes refusal resulted in the company being thrown out of India. After the

opening up of the Indian economy to foreign investments in 1991 under new regulations,

Coke re-entered the Indian market in 1993 through its wholly owned subsidiary, Coca-Cola India Private Limited and re-launched Coca-Cola. Cokes acquisition of local

popular Indian brands including Thums Up (the most trusted brand in India) Limca,

Maaza and Citra to name a few.

Through a model that supports bottling operations, both company owned as well as

locally ownedoperations have grown rapidly providing not only physical manufacturing,

bottling, and distribution assets. A strong consumer preference was created through the

combination of local and global brands enable Coca-Cola to exploit the benefits of global

branding and global trends in tastes, while also tapping into traditional domestic markets.

Coke has gone through a steep learning curve since its re-entry into the Indian market as

it overestimated the size of the market, misread consumers, and battled with PepsiCo

and the government which wanted Indians to have a substantial ownership stake in

Coke's local operation. The ensure Coca-Cola India grow its business the company has

made sustainability central to its business strategy and practice. This include: changes

in management, revamped pricing and advertising strategies, use more local materials

thus reducing import duties. They have also upgraded their bottling technology,

improved maintenance and training and are taking several other steps towards

environment preservation and community development.


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Indias market is quite unique in that the country has a population of over a billion people

with very low per-capita consumption of soft drinks as such; the rural market represented

a significant opportunity for penetration. Coca Cola recognized that competitive pricing

was essential in order to compete with traditional refreshments and launched a small

bottle priced at almost 50% of the traditional package. Coke is also branching out into

other products; Kinley bottled water was introduced in 2001 has grown to a leading

market share of 37% by building on Coke's distribution network to reach rural villages.

Forbes MagazineNov 14, 2011 reported that: Coca-Cola is planning to invest billions

in India over the next five years.The company reportedly said it plans to invest $2 billion

in India, along with its partners there, beginning in 2012.The investments will be in

infrastructure, brand building and other programs, and will be aimed at positioning thecompany to benefit from potential growth in the Indian non-alcoholic ready to-drink

market.

Framework and Theory

The Coca Cola companys entry and presence in the two countries described above are

amongst the hundreds of countries / regions the organization has extended its market

into through the globalization process. Its main methods of entry include franchising,mergers, joint ventures and acquisitions. The companys expansion into the global

market can be identified witha combination of different aspects from the Uppsala

Model,the Simultaneous Theory of Internationalization andDunnings Eclectic Theory.

The basic concept of the Uppsala Model suggests a sequential pattern of entry into

successive foreign markets, coupled with progressive deepening of commitment to each

market. The process consists of four stages, first with sporadic exports, second, export

via independent representatives, third, establishing licensing or franchises with local

firms and fourth, foreign direct investment. This model stands true for Small Medium

Enterprises wishing to get their feet wet in the global market, however, Coca Cola entry

into the global market began at the fourth stage of this model. Therefore this model may

not be applicable for standardized products such asCoca Cola.See Model 1.


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Model 1. The Uppsala Model, by Johanson and Vahlne, 1977.

On the other hand, the Simultaneous Theory of Internationalization indicates that due to

rapid global convergence of consumer tastes and buying habits, the purchases of

consumers all over the world are becoming increasingly common and a business can

sell much the same product in many different markets. Coca Cola and Pepsi have

leveraged on their brand image are examples of this global brand.

Using what are considered the best elements of all systems John Dunning (1993)hassought to combine three theories, namely,ownership (assets owned by the firm giving it

the competitive edge such as economies of scale), locational (whether labour, transport

and communication, raw materials etc, are cheaper and more available in host countries)

and internationalization (determining whether it is cost effective to operate through a

license or franchise rather than FDI). These three factors are the core ofhis eclectic

theory which suggests that the propensity of a firm to engage itself in international

production increases if the combined three theories are being satisfied.

Based on the above models, Coca Cola has to consider when entering international

markets, not only which countries offer the most attractive opportunities for its product

and services, but also how to enter the market and what are the costs and likely risks of

operating in that market. The macro-economic factors of the host country that will

require detailed analysis are: political and economic stability, labour, foreign exchange


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risk, management and other resource costs as well as the nature of the marketing

infrastructure are equally important in making entry decisions. Availability of potential

partners and collaborators at different stages of the value chain, as well as government

policy and attitudes towards foreign investment, are the how to enter the market

questions that should be considered. Markets are becoming more integrated as a result

of flows of goods and services across borders, as such; the company need to take this

into consideration when making decisions relating to expansion in international markets.

Government initiatives towards economic integration, as well as the linking of distribution

and communication infrastructures and organizational networks will also have to be

looked at.

Company Strategy

The Coca Cola Companys primary operative goals are productivity, efficiency and most

of all, profits. Their official goal is to dominate the global beverage market, continue

maintaining their market leadership position over Pepsi and other competitors. The

company is a highly formalized, centralized structured organization with a clear hierarchy

of authority and a mechanistic management process. They use very aggressive

marketing strategies and expansion plans as they become more and more global.

Cokes management operated with a high degree of efficiently and control through it

appropriate vertical structure. The company realizes economies of scale and low-cost

production through a globalization strategy which enables product design, manufacturing

and marketing to be standardized throughout the world. According to Porters model,

Cokes competitive strategy would be defined as broad differentiation - it distinguishes its

flagship cola product from its main competitor Pepsi, through standardized marketing

and advertising on a global scale.

The future

As people, goods and organizations move freely across national borders and

communications and physical distribution systems link markets, the relevant market area

is no longer synonymous with national boundaries(Craig and Douglas 1998). Rather,


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differences or similarities in customer tastes and preferences, customer networks that

span the world or the existence of global customers, define market areas .

Muhtar Kent, Chairman and Chief Executive Officer of the Coca Cola Company, said

China has the potential to become its (Coke) largest market., as the company will

soon have three new bottling plants in China, which it considers the worlds largest and

fastest growing markets. The investment involving US$2B is part of a three-year

expansion program, thus displaying the companys long term commitment to business in

China.

Kent in a speech at the Commonwealth Club of California on November 16, 2011 told his

audience that America can still be a leader in their quest to hold the work recover from

the economic downturn. He said that the best way to repair the damage to social

harmony and trust is to promote opportunity and entrepreneurship and spoke of the

environment and the good things Coca-Cola is doing to reduce its carbon footprint. Also

mentioned were their efforts in finding ways to conserve, filter, recycle and when

possible collect rainwater as they try to find ways to better manage water with their

water-neutrality approach.

Other projects which the coca Cola Company are getting involved in the future: Last Ice

Area (investing in millions of dollars over the next 5-years in helping to protect the white

bruins and other ice-dependent animals).

"We aim to reduce our absolute emissions from manufacturing operations in developed

countries by 5 percent," the Coca-Cola website says. "We are working to reduce the

greenhouse gas emissions resulting from our vending machines and coolers through the

installation of HFC-free systems and intelligent energy management devices. We are

also deploying hybrid-electric and alternative fuel vehicles to reduce greenhouse gas

emissions from our fleet."

Coca-Cola, as a major manufacturer is dependent upon other businesses to market its

products and services, thus helping others in their business efforts to build a future, and


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improve the quality of life. Although a mature company, they continue to

innovateaccording to their website: s they have replaced 80% of their fleet in Northern

California with hybrid trucks, also they have installed environmentally responsible blow

molding in their bottling plants and are using hydrogen cell technology in their pallet

jacks and forklifts. Another interesting innovation is the launch of Plant bottle, a

recyclable PET bottle made from up to 30% plant material. Of equal importance are

Cokes customers,a group which consists of all businesses that sell their product, from

shopkeepers to restaurant owners.

Cokes consumer base increases daily as their market expands and will more that likely

continue to expand into new area, that is, the creation of new products catering for every

age, race and lifestyle as stated in their Sustainability Report 2010 Every day, theactions taken by our Company and our bottling partners touch billions of lives.. Their

sustainability framework called Live Positively is built on the commitment to making a

positive difference in the worldthe framework is embedded in their business at every

level. See Excerpt and Model 2 below.

What is LIVE POSITIVELY ?

The LIVE POSITIVELY framework consists of seven core areas key to our businesssustainability: Beverage Benefits; Active Healthy Living; Community; EnergyEfficiency and Climate Protection; Sustainable Packaging; Water Stewardship; andWorkplace. LIVE POSITIVELY also is an integral component of our 2020 Vision our roadmap for winning together with our bottling partners and is a part of ourbusiness planning process. The only way we will meet the goals and growth targetsoutlined in our 2020 Vision is by creating and maintaining a sustainable business.

Excerpt from: Coca Cola 2009/2010 Sustainability Review


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Model2 Sourc e: Coca Cola 2009/2010 Sustainabi l i ty Review

Cokes roadmap into 2020 vision sees the need to create innovative new products,

packaging and systems; strengthen the worlds most advanced supply chain; enhance

our presence in communities and manage our impact on the worlds natural resources

as stated in the Sustainability review. They also see the need to manage issues, such

as the increasing concerns over obesity and seek solutions so they can enjoy another

125 years of business. The company has also progressed on their stustainability

campaign through launch of their PlantBottle packaging, in selected markets, this

technology reduces our use of petroleum-based materials in our PET packaging by up

to 30 percent and is the first PET plastic beverage bottle made from renewable

resources that can be recycled in the existing recycling infrastructure.

It is imperative that Coca Cola company understand and prioritize the issues it faces and

assess both the risks and opportunities they represent and map their stakeholders

against each issues.Table 2below provides full details on Cokes Live Positively 2020

Vision framework with regards to The Coca Cola Company future sustainability:


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CORE AREA DEFINED PRINCIPLES

Invest more than $50 mill ion in research by 2015.Innovate with natural sweeteners, which have the potential to lower

calories per serving.

List the calories/kilocalories/ki lojoules per serving for our beverage

products on the front of nearly all of our packaging worldwide by the end

of 2011.

Strive to have low- and no-calorie options and/or smaller portion sizes

available in communities where obesity is a significant problem.

Continue developing products fortified with additional nutrients to meet

global consumer needs.

Support at least one physical activity program in every country in which we

operate by the end of 2015.

Support the Healthy Weight Commitment Foundation in reducing the total

annual calories consumed in the U.S. by 1.5 trillion by the end of 2015.

Not directly market our beverages to children younger than the age of 12.Developing Economies

Through

Busines s and Partnership Form 1,300 to 2,000 new Micro Distribution Centers (MDCs) in Africa by the

end of 2010.Creating Opportunities for

Economic EmpowermentGive back at least 1% of our operating income annually to help develop and

sustain communities around the world.

Micro Distribution Center Empower 5 million women through the Coca?Cola system by 2020.Improve the quality of life in communities where we operate by

supporting key initiatives and responding to community needs through

financial contributions, in-kind donations and volunteer service.

Grow our business but not our systemwide carbon emissions from our

manufacturing operations emissions from our manufacturing operations

through 2015, compared wi th a 2004 baseline.

Reduce our absolute emissions from our manufacturing operations in

Annex 1 (developed) countries by 5% by 2015, compared with a 2004

baseline.Improve the energy efficiency of our cooling equipment by 40% by the end

of 2010, compared wi th a 2000 baseline.

Install 100,000 hydrofluorocarbon (HFC)-free coolers in the marketplace by

the end of 2010.

Phase out the use of HFCs in all new cold-drink equipmetn by the end of

2015.

GOALS

Advancing Energy Efficiency

and Clim ate Protection

Managing Carbon

Emmissions

Progress in Africa

Developing Sustainable

Agrculture Programs

Energy

Efficiency

and ClimateProtection

Aim to be the beverage industry leader in energy effi ciency and climate

protection.

Foster sustainable communities through economic development,

philanthropy and the creation of economic and social opportunities.

Strive to offer beverages for every li festyle and occasion while providing

quality that consumers trust.

Support active healthy lives through product variety, nutrition education and

physical activity programs.

Commitment to Active Hea lthy

Living

Energy Bal ance a nd ProductOptions

Providing Extensi ve Nutrition

Education

Beverage

Benefits

Active

Healthy

Living

Community

Quenching Consumers' Thirst

Innovating to Foster active

Heal thy living

Product Safety and Qual ity

Consumers Can Trust

Communicating Swee tener

Safety

Table 2 : Adapted from: 2009/2010 Sustainability Review


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CONCLUSION

Due to economic, political and social changes in recent years the global environment is

becoming more uncertain, therefore to maintain a competitive advantage, dominate the

global beverage market and maintain its market leadership position over other

competitors; Coke has to revaluate its strategy, structure and culture.

The company is a highly formalized, centralized organization with a clear hierarchy of

authority and a mechanistic management process. They have standardized global

marketing and advertising campaigns for their flagship product however, more emphasis

has to be placed on research and development with regards to consumer demands as

CORE AREA DEFINED PRINCIPLES

Improve packaging material efficiency per litre of product sold by 7% by

2015, compared with a 2008 basline.

Recover 50% of the equivalent bottles and cans used annually by 2015.

Source 25% of our polyethylene terephthalate (PET) plastic from recycledor renewable material by 2015.

Improve our water eff iciency by 20% by 2012, compared with a 2004

baseline.

Return to the environment, at a level that supports aquatic life, the water

we use in Coca-Cola system operations thrkough comprehensive

wastewater treatment by the end of 2010.

Assess the vulnerabilities of the quality and quantity of water sources for

each of our bottling plants and implement a source water protection plan

by 2013.

Replenish to nature and communities an amount of water equivalent to

what is used in our finished beverages by 2020.

Achieve a 98% performance level for company-owned and managed

facilities upholding the standards set in our Workplace Rights Policy by

2015.

Workplace

GOALS

Ensuring Workplace and

Human Rrights

Protecting Workplace and

Human Rights

Improving Hum an Rights

policies and Practices

Being a Great Place to Work

Crating an inclusive

Workplace

Managing Workplace Safety

Improving Our Water Use

and Efficiency

Recycling Water in Our

Operations

Source Water Use and

protection

Replenishing the Water We

Use

Create diverse, helathy and safe work environments aligned with

internationally respected human rights principles.

Creating Sustainable

Packaging

Increasing Renewable and

Recycled Material Use

Investing in RecyclingPrograms

Work to safely return to nature and communities an amount of water

equivalent to what we use in our beverages and their production.

Aspire to make our packaging a valuable resource for future use.

Sustainable

Packaging

Water

Stewardship


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we are seeing time where a lot more emphasis is being placed on health and wellness

and the need for more non-carbonated beverages with a more regional flavor.

In conclusion, The Coca Cola Company has responded to the drivers of globalization

thus successfully expanding in the global market and in response to global consumers

have developed strong and competitive global strategies.

(Word Count: 3000)


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