COCA COLA COMPANY

The Company Overview

The Coca-Cola Company is the world's largest beverage company, refreshing consumers
with more than 500 sparkling and still brands. Led by Coca-Cola, the world's most valuable
brand, the Company's portfolio features 15 billion dollar brands including Diet Coke, Fanta,
Sprite, Coca-Cola Zero, vitamin water, PowerAde, Minute Maid, Simply, Georgia and Del Valle.
Globally, the Company is the No. 1 provider of sparkling beverages, ready-to-drink coffees, and
juices and juice drinks. Through the world's largest beverage distribution system, consumers in
more than 200 countries enjoy The Coca-Cola Company’s beverages at a rate of 1.7 billion
servings a day – about 19,400 beverages every second.

With an enduring commitment to building sustainable communities, The Coca-Cola

Company is focused on initiatives that reduce its environmental footprint, support active, healthy
living, create a safe, inclusive work environment for associates, and enhance the economic
development of the communities where it operates.

While Coca-Cola is known and loved around the world today, it wasn’t always this way.
The first serving of Coca-Cola occurred on May 8, 1886 at a soda fountain in downtown Atlanta.
Just nine drinks a day were sold that year.

Today Coca-Cola – together with its global bottling partners – ranks among the world's
top 10 private employers with more than 700,000 system employees. It also continues to rank as
the world’s No. 1 brand page on Facebook with more than 36 million fans.

The Coca Cola Company Mission

Our mission is:

 To refresh the world in mind, body and spirit

 To inspire moments of optimism and happiness through our brands and actions
 To create value and make a difference.

The Coca Cola Company Vision

To achieve our mission, we have developed a set of goals, which we will work with our bottlers
to deliver:
People: Inspiring each other to be the best we can be by providing a great place to work
Portfolio: Offering the world a portfolio of drinks brands that anticipate and satisfy people's
desires and needs
Partners: Nurturing a winning network of partners and building mutual loyalty
Planet: Being a responsible global citizen that makes a difference by helping to build
and support sustainable communities
Profit: Maximizing long-term return to shareholders, while being mindful of our overall
responsibilities.
Productivity: Being a highly effective, lean and fast-moving organization.

Coca Cola was invented by Doctor John Pemberton a pharmacist from Atlanta, Georgia
in May, 1886. John Pemberton invented the Coca Cola formula in a three legged brass kettle in
his backyard. The name was a suggestion given by John Pemberton's bookkeeper Frank
Robinson. The soft drink was first sold to the public at the soda fountain in Jacob's Pharmacy in
Atlanta on May 8, 1886. About nine servings of the soft drink were sold each day. Sales for that
first year added up to a total of about $50. But it cost John Pemberton over $70 in expanses, so
the first year of sales were a loss. Until 1905, the soft drink, marketed as a tonic, contained
extracts of cocaine as well as the caffeine-rich kola nut. In 1887, another Atlanta pharmacist and
businessman, Asa Candler bought the formula for Coca Cola from inventor John Pemberton for
$2,300. By the late 1890s, Coca Cola was one of America's most popular fountain drinks, largely
due to Candler's aggressive marketing of the product. With Asa Candler, now at the helm, the
Coca Cola Company increased syrup sales by over 40% between 1890 and 1900.

On April 23, 1985, the trade secret "New Coke" formula was released. Today, products
of the Company are consumed at the rate of more than one billion drinks per day. Now company
produces more than 300 beverage brands. The corporate headquarters are in Atlanta, with local
operations in over 200 countries around the world. More than 70 percent of the income comes
from outside the U.S, but the real reason they are a truly global company is that the products
meet the varied taste preferences of consumers everywhere. But the Company has several issues
that influence its profits and position in the market. Such as still producing its Coca Cola Classic
product, which contains high levels of sugar and caffeine which is negatively impact costumers'
health. And it may reduce the demand for some of their products and impact customers' trust or
loyalty.

The second one is banned sales of Coke in its cafeteria by the Indian parliament. When
coca cola was tested, it was found that it includes high concentrations of pesticides and
insecticides, including lindane, DDT, malathion and chlorpyrifos. Some samples tested showed
the presence of these toxins to be more than 30 times the standard allowed by the European
Union. But the same drinks were found to be safe in US.

The third issue is boycott against the company's using huge amount of water from the
common groundwater source. And as a result of its operations the scarce water has been polluted
by Coca Cola (case study Coca Cola's strategy, www.thecoca-colacompany.com).
Company's Strategies

Brand development Strategy. P.Kotler and K.L.Keller (2009) suggest that brands signal
a certain level of quality so that satisfied buyers can easily choose the product again. So Coca
Cola Company to far reach and to manage remaining in the limelight it created Brand
development strategy. This strategy is effective as it has been able to construct, manage as well
as maintain its brand image since yesteryears. As Kotler et. al., (2009) argue, brand loyalty
provides predictability and security of demand for the company and creates barriers to entry that
make it for other firms to enter the market. The brand loyalty is the instrumental in keeping up
company's brand image. Over the years, Coca Cola has passed several tests of brand
enhancement and the company makes it a point that the products under the banner Coca Cola
continue to invade the minds of the consumers. It involves 4000 customers to test 20 brand
attributes every month.

With regard to the brand development of Coca Cola Zero, the company came out with an
advertisement, which was quite different from the conventional ones. In this regard, (no calorie
beverage), it has shelled out three types of products:

Coca Cola Classic;

Diet Coke;
Coca Cola Zero.

There are few experts who believe that when Coca Cola had the tag line of "The Real
Thing", it was really that but with the invention of various categories of coke, the "real thing"
changes to "many things", and the original flavor is usually lost. Hence, the brand building
strategies should be such that it does not confuse people and is able to retain consumers despite
the fact that several new non alcoholic beverage firms are on the (development strategy of Coca
Cola, finance.mapsofworld.com).

Business Intelligence Strategy. In order to know what consumers prefer it intends to use
Information technology (IT) to monitor the pulse of its customers. According to Information
Week article titled "Coke's RFID-Based Dispensers Redefine Business Intelligence", Coke plans
to roll out the Freestyle drink dispenser nationwide which is taking the concept of customer
choice to new heights, and the most interesting aspect is the technology it's built on. According
to Rainer and Turban (2009), business intelligence (BI) is applications and technologies for
consolidating, analyzing and providing access to vast amounts of data to help users make better
business and strategic decisions. Freestyle will become Coke's front-line robotic army for BI,
sending massive amounts of consumption data back to the beverage company's Atlanta
headquarters. The dispensers collect data on what customers are drinking and how much, and
transmit that information each night over a private Verizon wireless network to Coke's SAP data
warehouse system in Atlanta. Unique byproduct of this BI enabled dispenser is that Coke can try
out new flavors and get back almost real time feedback on the viability of its success. With a
competitive advantage like this, I think it's a good idea Coke store its IT details to develop its
recipe formula.

Price strategy. Sometimes Coca Cola Company changes their product prices according
to the season. Summer is supposed to be a good season for beverage industry in Pakistan. So in
winter they reduce their prices to maintain their sales and profit. But normally they reduce the
prices of their pet bottles or 1 litter glass bottle.

Promotion strategy. They get or purchase shelves in big departmental stores and display
their products in those shelves in that style which show their product clearer and more attractive
for the consumers (Coca cola's business intelligence strategy, www.itstrategyblog.com).

SWOT Analysis
Strengths:
1. Brand equity
2. Product distribution and worldwide network
3. Solid financial performance
4. One of the world's most recognized brand.
5. Innovation
Weaknesses:
1. Credit rating
2. Customer concentration, particularly in the US (Wal-Mart accounts for more than 10% of
Coca Cola's business in the US)
3. Does not enjoy the number one position in India, Pakistan.
Opportunities:
1. Possible growing demand.
2. Expansion - reaching all segments.
3. Globalization
4. Catering to Health Consciousness of People
5. Bottled water growth
Threats:
1. Health Drinks - Fruit Juice Companies
2. Key competitors (Pepsi, etc)
3. Commodity prices growth
4. Image perception in certain parts of the world (case study Coca Cola's strategy, www.thecoca-
colacompan).

Driving Forces
I think the first driving force for the company is customer demand. If there is no demand
it is meaning in producing the product. So for the Coca Cola, driving force is customer demand.
The second one is innovation. Nowadays companies have to be able to survive and grow
in an ever-changing market. In order to achieve these they should systematically innovate and
deliver new products. According to Company's late 90s' earnings growth of 15-20% per year,
turned in three straight years of falling profits. It was apparent that the market was changing and
for keeping up these changes, Coca-Cola had to move from a single core product to a total
beverage company. This was a major change because their past success was base on having one
successful core product. Now Coca-Cola offers nearly 400 different products in and is still
dominating the beverage industry.
The third driving force is globalization. Today's big business takes place on a global
scale, and Coca-Cola is no exception. Technology is continually changing business, and these
constant changes have been making it more feasible and profitable for businesses to expand their
operations globally in order to serve all different types of diverse markets around the world.
Coca-Cola is taking advantage of the large revenue opportunities made possible by participating
in a global market and now offers products in 200 countries around the world.

Issues
In my opinion the main issue of the Coca Cola Company is still producing its Coca Cola
Classic product, which contains high levels of sugar and caffeine is causing a recent uproar on
our increasingly health-conscience world. There is a possibility that obesity concerns may
reduce demand for some of their products. In addition, the most amounts of its products are
selling in the schools so this puts the pressure on Coke to provide healthier alternatives to their
drinks if they want to keep selling in schools.
The next problem is the Indian parliament has banned the sale of Coke products in its
cafeteria. The ban came as the result of tests, including those by the Indian government, which
found high concentrations of pesticides and insecticides, including lindane, DDT, malathion and
chlorpyrifos, in the colas, making them unfit for consumption. Some samples tested showed the
presence of these toxins to be more than 30 times the standard allowed by the European Union.
Tests of samples taken from the US of the same drinks were found to be safe.
As we know water is rare resource and today one of the main problems of the world is
water shortage. This creating the problems in most company's operations and Coca Cola is no
exception. The Company's bottling operations are facing severe shortages of water as a result of
the cola major sucking huge amounts of water from the common groundwater source. To add
insult to injury, the scarce water that remains has been polluted by Coca-Cola as a result of its
operations. It is resulting thousands of Indian people protesting against the company.

Conclusion and recommendations

Though Coca Cola is performing well and gaining trust of its consumers and obtaining
new consumers trust every day, it should act even better to keep its current position in beverage
industry and keep on growing. The Company should increase its shareholders wealth by
increasing its sales and decreasing the costs which will result higher earnings and net profit.
As conclusion of analysis I have done, I suggest the following recommendations for the
Coca Cola Company: Today everything is rapidly changing and companies for surviving should
go step by step with those changes. The innovation gives the company key advantage among its
rivals. So Coca Cola Company can introduce a new product, which many people will want to try.
Coca Cola needs to continuously strengthen its brand to maintain brand loyalty and differentiate
itself from its competitors, in order to maintain its strong market position.
Reason of not being popular in India is the utilization of rear water resources. This put
negative effect on the brand image, because of cola plant water level in the area decreases which
makes the resident life miserable. If the Company wants a number one position in India they
have to follow following criteria:
- Environmental due diligence before acquiring land or starting projects;
- Environmental impact assessment before commencing operations;
 - Ground water and environmental surveys before selecting sites.
Another major asset to a company of this size and clout is maintaining continuity among
the workforce. This is essential to keep the company in a positive direction, accomplishing
common goals and constantly setting new goals.

Coca Cola Business Model and their Competitive Advantage

We’ve seen that Competitive advantage in simple terminology is what your company is
best at. Why do your customers buy from you and not your competitors? What is the value that
the business can create for the customer?

Another look at competitive advantage allows us a different perspective into its

relationship with business models, innovation and information systems. A competitive
advantage is attainable if the current strategy is value-creating, and not currently being
implemented by present or possible future competitors. Sustaining a competitive advantage is
difficult and although a competitive advantage has the ability to become sustained, this is not
necessarily the case. A competing firm can enter the market with a resource that has the ability to
invalidate the prior firm’s competitive advantage, which results in reduced rents. Sustainability
in the context of a sustainable competitive advantage is independent with regard to the time
frame. Rather, a competitive advantage is sustainable when the efforts by competitors to render
the competitive advantage redundant have ceased. When the imitative actions have come to an
end without disrupting the firm’s competitive advantage, the firm’s strategy can be called
sustainable.
 After extensive reading, a link I keep seeing is the connection between innovation,
competitive advantage, information systems and business models. A few examples show this;

Dell became really successful by exploring the web as a distribution channel. Gillette has
made a fortune by establishing a continuous relationship with customers based on its disposable
razors. Apple resurged based on its core capacity of bringing design to computers and electronic
gadgets. Cisco became famous for its capacity of configuring activities in new and innovative
supply chains. Intel thrived for its capacity to get partners to build on its processing platform.
Google tapped in an innovative revenue streams by linking highly specific search results and
content with text ads. Wal-Mart became dominant by its ability to slash cost throughout its
business model.

Coca Cola is an example of a company with sustained competitive advantage, innovation,

an extensive business model and an intelligent and substantial distribution network. The best
example of a company with a sustainable competitive advantage is The Coca-Cola Company.
The Coca-Cola Company was incorporated in 1892 to produce the sweet fizzy drink – first
developed by a pharmacist – that has become the world’s most recognised brand.

Today, almost 120 years later, The Coca-Cola Company is still going strong and is one of
the most sought-after stocks on the New York Stock Exchange. Coca-Cola’s competitive
advantage has proven its sustainability over the last 100 years.
 This can be ascribed to:

o The secret recipe for Coca-Cola, which arguably tastes better than other cola drinks.
o Their ability to continue developing new products and re-inventing old ones – Coca-Cola
currently offers over 400 brands in 200 markets worldwide.
o The world’s most comprehensive distribution system has made Coca-Cola accessible to billions
of people worldwide. Coca-Cola is often available in ample supply to people in areas where
other consumer goods companies would never consider delivering their products. The African
continent is an excellent example – it’s fairly common to see a small shop selling cold Coke in
the middle of nowhere.
o Coca-Cola’s production techniques are so well developed that it costs a fraction of the selling
price to manufacture their product, resulting in high profit margins.