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International Business Activities Of Coca Cola company
 

International Business Activities Of Coca Cola company

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    International Business Activities Of Coca Cola company International Business Activities Of Coca Cola company Document Transcript

    • International Business Activities Supervisor: Ma‘am Zoya Khan Submitted by Muhammad Farhan Javed Syed Owais shah Irfan Mughal Subject: International BusinessFederal Urdu University of Arts, Science and Technology Islamabad1 Department Of Business Administration Federal Urdu University Islamabad.
    • ACKNOWLEDGMENTWe are thankful to the ALLAH ALMIGHTY, we have accomplished our Task. Wewould like to thank all of the people who directly or indirectly helped us to achievethis Target.Special Thanks to: Ma‘am Zoya KhanThis Report fabricates its foundation on numerous discussions among the panel(Group Members). Our conspirator‘s encouraging ideas and strengthening of ourthoughts are reflected in this comprehensive Report.All the stuff regarding this report has been explained marvelously and carefully. Thiswrite up is being demonstrated in easy mode which is understandable by the reader. Itwill provide the intramural and threshold aura to read and it will cover all therequisites and proviso about the topic under discussion. One of the aesthetic andcharming characteristics of this speculation is this, that it is easygoing and genial.2 Department Of Business Administration Federal Urdu University Islamabad.
    • ABSTRACTThis report delves into the role of International business activities for the coca cola co.and the promotion of organization, role of other departments in this process, internal& external support of different institution department in this process. The verdictabout Coca-Cola‘s marketing department process may facilitate policy makers,employment agencies, organization to ascertain and over and above existingcooperation‘s the genteel maneuver to improve the overall performance of thecompany, not only in India but also in all parts of the world.3 Department Of Business Administration Federal Urdu University Islamabad.
    • METHODOLOGYInformation has been congregated through different international business books,internet sites of Coca-Cola Company, articles and generals related to advertisementand promotion.Our foremost endeavor was to compile and evaluate all relevant information withreference to international business strategies in the host country and to judge againstthis information with standard set by international marketers.4 Department Of Business Administration Federal Urdu University Islamabad.
    • ContentsExecutive Summary................................................................................................................................ 6Brands ..................................................................................................................................................... 8The Coca-Cola Story .............................................................................................................................. 9New Coke to the Present ...................................................................................................................... 10COCA-COLA ....................................................................................................................................... 12Introduction .......................................................................................................................................... 13History ................................................................................................................................................... 13Brands ................................................................................................................................................... 14Bottling Information ............................................................................................................................ 14Mission, Vision & Values ..................................................................................................................... 15Our Mission........................................................................................................................................... 15Our Vision ............................................................................................................................................. 15Live Our Values .................................................................................................................................... 16Focus on the Market ............................................................................................................................. 16Employment/Economic Impact ........................................................................................................... 17Sponsorships ......................................................................................................................................... 17Marketing Involvement ........................................................................................................................ 17International Business Barrier Face For Coca Cola ......................................................................... 18Uncontrollable Elements ...................................................................................................................... 18Legal And Political Problems .............................................................................................................. 18Customer Market ................................................................................................................................. 20SWOT .................................................................................................................................................... 22ANALYSIS ............................................................................................................................................ 22Strengthes: ............................................................................................................................................ 23Weakness:.............................................................................................................................................. 24Opportunities: ....................................................................................................................................... 26Threats: ................................................................................................................................................. 27According His Competitor SWOT Analysis of Coca-Cola India ..................................................... 29International Elements Effects on International Business Activates ............................................... 32PEST ...................................................................................................................................................... 34ANALYSIS ............................................................................................................................................ 34Product Life Cycle ................................................................................................................................ 44Duties and Taxes Applied .................................................................................................................... 45Laws Abided By & Methods of Conflict Resolution .......................................................................... 45Methods of Conflict Resolution ........................................................................................................... 45Strategies to Reduce Political Vulnerability ....................................................................................... 46Current Strategies Regarding International Operations .................................................................. 46Adaption and cultural borrowing ....................................................................................................... 47Joint Venture ........................................................................................................................................ 48Beverage Partners Worldwide Joint Venture to Focus on Europe and Canada ............................ 48Coca-Cola Enterprises Joint Venture Set To Step Change Plastics Recycling In GB .................... 50 Monday, March 07, 2011 ................................................................................................................. 50Acquisitions ........................................................................................................................................... 54Coca-Cola, Monster Acquisition Rumors Denied By Soda Giant .................................................... 54Recommendations for More Improving Coca Cola International Business Activities ................... 57BIBLIOGRAPHY ................................................................................................................................ 605 Department Of Business Administration Federal Urdu University Islamabad.
    • Executive SummaryThis scope of this report is to discuss the international marketing mix of Coca Cola,which is one of the biggest brands in the world. The debate between the globalstandardization and local adaptation of the marketing mix has been going on for morethan four decades without a resolution and globalization trends starting in the early1980‘s has further fueled the debate .This has led the global companies to make thecritical trade-off decision between economies of scale resulting from standardizationand the cultural prerequisite of local adaptation. This essay looks at how one of themost successful brands, Coca Cola manages their marketing mix in a global context toget an insight into this debate.The Coca-Cola Company focuses on the non-alcoholic beverage market, producing arange of drinks around the world. It is the world‘s leading manufacturer, marketer anddistributor of non-alcoholic beverages, primarily carbonated soft drinks. The companyis active in more than 200 countries (Mintel, 2005), with the help of directlycontrolled subsidiaries, partnerships and franchising, thus making it a truly globalcompany. The company sells over six million beverages every day (Coca-Cola,2005).The financial situation of Coca-Cola can be commented by looking at the company‘sannual reports. For the year ended December 2004, the company generated revenuesof $21,962 million, an increase of 4.4% on the previous year (Coca-Cola, 2005). Thedistribution of this revenue under the five business units is: North America 30.1%;Africa 3.9%; Asia 24%; Eurasia 31.2% and Middle East 9.7%). The company‘sleading brands are Coca-Cola, Diet Coke, Sprite and Fanta.Coca-cola‘s headquarter is in USA and there are more than 200 countries in which itis acting as a host company. In India there are 9 plants and over 1800 employees, 8plants are functional and three plants in Lahore, Gujranwala and Rahimyar Khan haveachieved the Quality system award.Coca-cola with its 450 brands is claiming to be the world‘s best non-alcoholicbeverage maker and is yet proving his claim by having 63% share in the world marketand they are fulfilling their promise to maintain a standard and proving to become aquality symbol. And their aim is to serve the nation by making only non-alcoholicdrinks and to give the world a cool and fresh treat.6 Department Of Business Administration Federal Urdu University Islamabad.
    • IntroductionCoca-Cola (also known as Coke) is a popular carbonated soft drink sold in stores,restaurants and vending machines in over two hundred countries. It is produced byThe Coca-Cola Company, which is also occasionally referred to as Coca-Cola orCoke. It is one of the world‘s most recognizable and widely sold commercial brands.Cokes major rival is Pepsi. Although Coke has been the target of urban legendsdecrying the drink for its supposedly copious amounts of ―acid‖, or the "life-threatening" effects of its carbonated water but still it is the most in-style soft drink.About its safety and the ethics of the company that produces it, it is widely acceptedas the most dominant soft drink in the world today.Originally intended as a patent medicine when it was invented in the late 19thcentury, Coca-Cola was bought out by shrewd businessman Asa Griggs Candler,whose aggressive marketing tactics led Coke to its dominance of the world soft drinkmarket throughout the 20th century. Although faced with accusations of perverseside-effects on the health of consumers and monopolistic practices by its producingcompany, Coca-Cola has remained a popular soft drink well into the first decade ofthe 21st century.7 Department Of Business Administration Federal Urdu University Islamabad.
    • BrandsGlobally, the Coca-Cola Company owns or licenses nearly 450 brands in thenonalcoholic beverage business. Many of those brands are considered among theworlds most valuable. Some of these include:- Carbonated soft drinks Such as Coca-Cola, Diet Coke, Fanta, Sprite and Fresca- Juices and juice drinks Such as Minute Maid, Qoo, Fruitopia, Maaza and Bibo- Sports drinks Such as POWERade and Aquarius- Water products Such as Ciel, Dasani and Bonaqua- Teas Such as Sokenbicha and Marocha- Coffee Such as Georgia coffee, the best-selling noncarbonated beverage in Japan.8 Department Of Business Administration Federal Urdu University Islamabad.
    • The Coca-Cola StoryCoca-Cola was invented by John S. Pemberton in 1886 in Columbus, Georgia,originally as a coca-wine called Pembertons French Wine Coca. It was initially soldas a patent medicine for five cents a glass at soda fountains, which were popular inAmerica at the time thanks to a belief that carbonated water was good for the health.It was re-launched as a soft drink to counter Prohibition.The first sales were made at Jacobs Pharmacy in Atlanta, Georgia on May 8, 1886,and for the first eight months only thirteen drinks were sold each day. Pemberton thenran the first advertisement for the beverage on May 29 of the same year in the AtlantaJournal. Asa Griggs Candler bought out Pemberton and his partners in 1887 andbegan aggressively marketing the product — the efficacy of this concerted advertisingcampaign would not be realized until much later. By the time of its 50th anniversary,the drink had reached the status of a national symbol. Coca-Cola was sold in bottlesfor the first time on March 12, 1894 and cans of Coke first appeared in 1955.The first bottling of Coca-Cola occurred in Vicksburg, Mississippi at the BiedenharnCandy Company in 1891. Its proprietor was Joseph A. Biedenharn. The originalbottles were Biedenharn bottles, very different from the much later hobble-skirtdesign that is now so familiar. Asa Candler was tentative about bottling the drink, butthe two entrepreneurs who proposed the idea were so persuasive that Candler signed acontract giving them control of the procedure. However, the loosely-termed contractproved to be problematic for the company for decades to come. Legal matters werenot helped by the decision of the bottlers to subcontract to other companies — ineffect, becoming parent bottlers.When the United States entered World War II, Coke was provided free to Americansoldiers, as a patriotic drink. The popularity of the drink exploded in the wake ofWorld War II as American soldiers returned home, more grateful than ever to partakeof a beverage that had become synonymous with the American way of life.9 Department Of Business Administration Federal Urdu University Islamabad.
    • New Coke to the PresentIn 1985, Coca-Cola, amid much publicity, attempted to change the formula of thedrink. Some authorities believe that New Coke, as the reformulated drink was called,was invented specifically to respond to its commercial competitor, Pepsi. Double-blind taste tests indicated that most consumers preferred the taste of Pepsi (which hasmore lemon oil, less orange oil, and uses vanillin rather than vanilla) to Coke. NewCoke was reformulated in a way that emulated Pepsi. Follow-up taste tests revealedthat most consumers preferred the taste of New Coke to both Coke and Pepsi. Thereformulation was led by the then-CEO of the company, Roberto Goizueta, and thePresident Don Keough.It is unclear what part long-time company president Robert W. Woodruff played inthe reformulation. Goizueta claims that Woodruff endorsed it a few months before hisdeath in 1985; others have pointed out that, as the two men were alone when thematter was discussed, Goizueta might have misinterpreted the wishes of the dyingWoodruff, who could speak only in monosyllables. It has also been alleged thatWoodruff might not have been able to understand what Goizueta was telling him.The commercial failure of New Coke therefore came as a grievous blow to themanagement of the Coca-Cola Corporation. Coca-Cola management was unprepared,however, for the nostalgic sentiments the drink aroused in the American public; somecompared changing the Coke formula to rewriting the American Constitution.The new Coca-Cola formula subsequently caused a public backlash. Gay Mullins,from Seattle, Washington, USA, founded the Old Coke Drinkers of Americaorganization, which attempted to sue the company, and lobbied for the formula of OldCoke to be released into the public domain. This and other protests caused thecompany to return to the old formula under the name Coca-Cola Classic on July 10,1985. The company was later accused of performing this volte-face as an elaboratereuse to introduce a new product while reviving interest in the original. The companypresident responded to the accusation by declaring: "We are not that stupid, or thatsmart."The Coca-Cola Company is the worlds largest consumer of natural vanilla extract.When New Coke was introduced in 1985, the economy of Madagascar crashed —vanilla being a prime export — and recovered only after New Coke flopped, since10 Department Of Business Administration Federal Urdu University Islamabad.
    • New Coke used vanillin, a less-expensive synthetic substitute. Purchases of vanillamore than halved during this period.Meanwhile, the market share for New Coke had dwindled to only 3% by 1986. Thecompany renamed the product "Coke II" in 1992 (not to be confused with "Coke C2",a reduced-sugar cola launched by Coca-Cola in 2004). However, sales falloff caused asevere cutback in distribution. By 1998, it was sold in only a few places in theMidwestern U.S.11 Department Of Business Administration Federal Urdu University Islamabad.
    • COCA-COLA IN INDIA12 Department Of Business Administration Federal Urdu University Islamabad.
    • IntroductionThe Coca-Cola Company is a global company with some of the worlds most widelyrecognized brands, the Coca-Cola business in India has completed its 50 years of operation.The beverages are produced locally, employing Indian citizens. And their product range andmarketing reflects Indian tastes and lifestyles, and they are deeply involved in the life of thelocal communities in which they operateHistoryThe Coca-Cola Company re-entered India through its wholly owned subsidiary, Coca-Cola India Private Limited and re-launched Coca-Cola in 1993 after the opening up ofthe Indian economy to foreign investments in 1991. Since then its operations havegrown rapidly through a model that supports bottling operations, both companyowned as well as locally owned and includes over 7,000 Indian distributors and morethan 1.7 million retailers. Today, our brands are the leading brands in most beveragesegments. The Coca-Cola Companys brands in India include Coca-Cola, FantaOrange, Limca, Sprite, Thums Up, Burn, Kinley, Maaza, Minute Maid Pulpy Orange,Minute Maid Nimbu Fresh and the Georgia Gold range of teas and coffees andVitingo (a beverage fortified with micro-nutrients).In India, the Coca-Cola system comprises of a wholly owned subsidiary of The Coca-Cola Company namely Coca-Cola India Pvt Ltd which manufactures and sellsconcentrate and beverage bases and powdered beverage mixes, a Company-ownedbottling entity, namely, Hindustan Coca-Cola Beverages Pvt Ltd; thirteen authorizedbottling partners of The Coca-Cola Company, who are authorized to prepare, package,sell and distribute beverages under certain specified trademarks of The Coca-ColaCompany; and an extensive distribution system comprising of our customers,distributors and retailers. Coca-Cola India Private Limited sells concentrate andbeverage bases to authorized bottlers who are authorized to use these to produce ourportfolio of beverages. These authorized bottlers independently develop local marketsand distribute beverages to grocers, small retailers, supermarkets, restaurants andnumerous other businesses. In turn, these customers make our beverages available toconsumers across India.The Coca-Cola Company has invested nearly USD 2 billion in its operations in Indiasince its re-entry back into India in 1992. The Coca-Cola system in India directly13 Department Of Business Administration Federal Urdu University Islamabad.
    • employs over 25,000 people including those on contract. The system has createdindirect employment for more than 1,50,000 people in related industries through itsvast procurement, supply and distribution system. We strive to ensure that our workenvironment is safe and inclusive and that there are plentiful opportunities for ourpeople in India and across the world.The beverage industry is a major driver of economic growth. A National Council ofApplied Economic Research (NCAER) study on the carbonated soft-drink industryindicates that this industry has an output multiplier effect of 2.1. This means that ifone unit of output of beverage is increased, the direct and indirect effect on theeconomy will be twice of that. In terms of employment, the NCAER study notes that"an extra production of 1000 cases generates an extra employment of 410 man days."As a Company, our products are an integral part of the micro economy particularly insmall towns and villages, contributing to creation of jobs and growth in GDP. Coca-Cola in India is amongst the largest domestic buyers of certain agricultural products.BrandsCoca-Cola,Diet Coke,Thums Up,Sprite,Fanta,Limca,Maaza,Maaza, MilkyDelite,Minute, Maid Pulpy,Orange,Minute Maid, Nimbu Fresh,Burn,KinleyWater,Kinley Soda,Schweppes,GEORGIA GoldBottling InformationIn India, the Coca-Cola system comprises of a wholly owned subsidiary ofThe Coca-Cola Company namely Coca-Cola India Pvt Ltd which manufactures andsells concentrate and beverage bases and powdered beverage mixes, a Company-owned bottling entity, namely, Hindustan Coca-Cola Beverages Pvt Ltd; thirteenauthorized bottling partners of The Coca-Cola Company, who are authorized toprepare, package, sell and distribute beverages under certain specified trademarks ofThe Coca-Cola Company; and an extensive distribution system comprising of ourcustomers, distributors and retailers. Coca-Cola India Private Limited sellsconcentrate and beverage bases to authorized bottlers who are authorized to use theseto produce our portfolio of beverages.These authorized bottlers independently developlocal markets and distribute beverages to grocers, small retailers, supermarkets,14 Department Of Business Administration Federal Urdu University Islamabad.
    • restaurants and numerous other businesses. In turn, these customers make ourbeverages available to consumers across India.. Mission, Vision & Values The world is changing all around us. To continue to thrive as a business overthe next ten years and beyond, we must look ahead, understand the trends and forcesthat will shape our business in the future and move swiftly to prepare for whats tocome. We must get ready for tomorrow today. Thats what our 2020 Vision is allabout. It creates a long-term destination for our business and provides us with a "Roadmap" for winning together with our bottling partners.Our MissionOur Road map starts with our mission, which is enduring. It declares our purpose as aCompany and serves as the standard against which we weigh our actions anddecisions. To refresh the world... To inspire moments of optimism and happiness... To create value and make a differenceOur VisionOur vision serves as the framework for our Road map and guides every aspect of ourbusiness by describing what we need to accomplish in order to continue achievingsustainable, quality growth. People: Be a great place to work where people are inspired to be the best they can be Portfolio: Bring to the world a portfolio of quality beverage brands that anticipate and satisfy people‘s desires and needs Partners: Nurture a winning network of customers and suppliers, together we create mutual, enduring value Planet: Be a responsible citizen that makes a difference by helping build and support sustainable communities Profit: Maximize long-term return to share owners while being mindful of our overall responsibilities Productivity: Be a highly effective, lean and fast-moving organization15 Department Of Business Administration Federal Urdu University Islamabad.
    • Our Winning CultureOur Winning Culture defines the attitudes and behaviors that will be required of us tomake our 2020 Vision a reality.Live Our ValuesOur values serve as a compass for our actions and describe how we behave in theworld. Leadership: The courage to shape a better future Collaboration: Leverage collective genius Integrity: Be real Accountability: If it is to be, it‘s up to me Passion: Committed in heart and mind Diversity: As inclusive as our brands Quality: What we do, we do wellFocus on the Market Focus on needs of our consumers, customers and franchise partners Get out into the market and listen, observe and learn Possess a world view Focus on execution in the marketplace every day Be insatiably curiousWork Smart Act with urgency Remain responsive to change Have the courage to change course when needed Remain constructively discontent Work efficientlyAct Like Owners Be accountable for our actions and in actions Steward system assets and focus on building value Reward our people for taking risks and finding better ways to solve problems Learn from our outcomes -- what worked and what didn‘tBe the Brand Inspire creativity, passion, optimism and fun16 Department Of Business Administration Federal Urdu University Islamabad.
    • Employment/Economic ImpactIn India it employs 1,800 people. In India it has invested over $130 million (U.S.).SponsorshipsCoca-Cola is the official soft drink of many collegiate football teams throughout thenation, partly due to Coca-Cola providing those schools with upgraded athleticfacilities in exchange for Coca-Colas sponsorship. This is especially prevalent at thehigh school level, which is more dependent on such contracts due to tighter budgets.Coca-Cola was one of the official sponsors of the 1996 Cricket World Cup held onthe Indian subcontinent. Coca Cola is also one of the associate sponsor of DelhiDaredevils in Indian Premier League.The Company sponsors Indias leading pop group and organizes concerts throughoutthe country for teenagers and underprivileged children.It sponsors Indias No. 1 solo artist, who will participate in concerts and charity eventsorganized by The Coca-Cola Company in India. The Company has signed asponsorship agreement with eight of Indias national cricket players for promotionaland advertising use.The Coca-Cola System in India is the exclusive supplier for India Railways, servingsoft drinks in stations, platforms and on trains. The Company will be undertaking abeautification program of stations and platforms.Marketing InvolvementCoca-Cola Corporation is a multinational organization. And it is indulged in theinternational marketing .The brands and basic strategies are made in the home countrybut the local strategies are defined in the host countries. Also the 4P‘s are madeaccording to the demographics and taste of the people of the host country.In India the Coca-Cola Company maps the strategies and the brands by looking intothe environment in which it is working. The brands are produced locally. And theproduct, price promotion and placement are planned with respect to the controllablevariables and uncontrollable variables.17 Department Of Business Administration Federal Urdu University Islamabad.
    • International Business Barrier Face For Coca ColaUncontrollable ElementsWhenever any business start operating in two or more than two countries, it comeacross some of the problems which are beyond the control of business , like legalrestraints, government controls, weather, consumer behavior, economic conditions ofthe host country, social and cultural factors, geography & infrastructure, channel ofdistribution available, level of technology and competitive forces. These problems aredifferent in all the countries in which business starts its operations. So business has todesign a separate framework for each country to overcome these problems.Coke is one of the oldest companies which are in international business; they have avast experience of controlling these elements. They heavily rely on research toovercome these problems.Legal And Political ProblemsThey perform thorough study of legal and political problems to decide to enter intoany country. They track the previous record of the ruling party and policies. They alsokeep in mind the attitude of other opposition parties about foreign companies. If anyproblem arises regarding political or legal issues, they don‘t sacrifice their policiesand secrecies, as we have a case of COKE AND INDIAN GOVERNMENT. WhenIndian Government asked to have formula for the concentrate and they deny and leftthe huge Indian market.Social And Cultural FactorsSocial and Cultural factors have a very vital impact on the business in the hostcountry. Although this is the most difficult task to understand the culture of the hostcountry but business has to do reasonable care to understand this problem.Coke performs research to understand these issues and design their strategiesaccordingly. They design their products, prices, place, promotion and customerservice according to the culture of the country. As we see that coke has 400 brandsallover the world but in India we have only 4 brands and in India which is a market of1.1 billion people coke has 15 brands. This is because of cultural differences that theycannot introduce all the brands in all the countries.18 Department Of Business Administration Federal Urdu University Islamabad.
    • Geography & InfrastructureIf any business wants to start its business in any other country, it also studies thegeography and infrastructure of the host country. That is if feasible for doing businessor not. They decide the channel of distribution, modes of transportation and there costto make decisions regarding prices and designing strategies.In India Coke found a reasonable infrastructure to do business, which is continuouslyimproving to facilitate distribution system.Economic factorsDifferent counties have different economic conditions at a time so Coke designsdifferent strategies to handle these conditions. As Coke is one of the largestbusinesses in the world, they have a strong financial background to overcome theseeconomic problems. In host countries they change their prices, investment andpenetration strategies to overcome economic factors.Competitive ForcesWhenever any business enters into any other country they face competition with somelocal and international brands. Coke Combat this problem with their qualitycommitment and continuously providing its customers with quality product, servicesand entertainment.Methods of Doing BusinessDiverse structure, management attitude, and behavior encounter in internationalbusiness, they are behaviors encountered in international business, and there isconsiderable latitude in the ways business is conducted. Coca-Cola Company hadtaken into the consideration these facts that a certain amount of cultural shock occurswhen differences in contract level, communications emphasis, tempo, and formalityof foreign business are encountered. Ethical standards are likely to be different as wellas negotiation emphasis.Coca Cola Company determines the prominence of status and position combine toinfluence the authority structure of business. It adopts low value that they could takethe suggestion of his employees to make a right decision at a right time, which coulddeal with of the customer; also they could take the suggestion of his customers about19 Department Of Business Administration Federal Urdu University Islamabad.
    • its taste, branding and other related features which could enhance its efficiency ofsales and promotion.As its business grows and professional management develops, their is shift towardsdecentralized management decision management. They are making their decisionseither in committees or meeting. Committee may operate on a centralized ordecentralized basis, but the concept of committee management implies some thingquite different from individualized functioning.Coca Cola Company is doing its business allover the world they hire locals whereverthey do business and take their suggestions in designing their strategies. Becausecompany is very much well aware of the fact that local know their social culture verywell and help company to design effective and efficient strategies. Coca cola make Target Market for going international: o Upper upper class o Upper middle class o Upper lower class o Middle upper class o Middle middle class o Middle lower classThey mainly emphasize on students and teenagers, they gain their attraction byindulging into the activities like: Becoming a partner at the Basant Promoting new age music and hiring pop stars into their promotion Compaign.Customer MarketDemographic FactorsPeople of all ages and gender use Coca-Cola. Educated people belonging to upper andmiddle-income groups also commonly use Coca-Cola. Major emphasis of Coca-Colais to attract teenagers.Life Style PatternThe Taste and quality conscious people Drink Coca-Cola brands especially Coca-Cola. Diet Coca-Cola offered by Company is Very popular among diabetic patients.20 Department Of Business Administration Federal Urdu University Islamabad.
    • Preference for Specific BenefitsFor over 51 years Coca-Cola Corporation has maintained a tradition of producingonly the Quality drinking beverages. That is why it continues to be a familiar andtrusted household name in India. Today, Coca-Cola‘s lives up to its well earnedreputation as market leader by insuring that consumers get the best carbonating drink.The best of nature, technology and human resource have together contributed toCoca-Cola‘s reputation for unparalleled quality- a standard now recognizedinternationally. Above all, the entire process is overseen by a professionalmanagement and trained workforce.21 Department Of Business Administration Federal Urdu University Islamabad.
    • SWOT ANALYSIS22 Department Of Business Administration Federal Urdu University Islamabad.
    • Strengthes:  World’s Leading BrandCoca-Cola has strong brand recognition across the globe. The company has a leadingbrand value and a strong brand portfolio. Business-Week and Inter-brand, a brandingconsultancy, recognize. Coca-Cola as one of the leading brands in their top 100 globalbrands ranking in 2006.The Business Week-Inter-brand valued Coca-Cola at $67,000million in 2006. Coca-Cola ranks well ahead of its close competitor Pepsi which has aranking of 22 having a brand value of $12,690 million Furthermore; Coca-Cola ownsa large portfolio of product brands. The company owns four of the top five soft drinkbrands in the world: Coca-Cola, Diet Coke, Sprite and Fanta.Strong brands allow the company to introduce brand extensions such as Vanilla Coke,Cherry Coke and Coke with Lemon. Over the years, the company has made largeinvestments in brand promotions. Consequently, Coca-cola is one of the bestrecognized global brands. The company‘s strong brand value facilitates customerrecall and allows Coca-Cola to penetrate new markets and consolidate existing ones.  Large Scale Of OperationsWith revenues in excess of $24 billion Coca-Cola has a large scale of operation.Coca-Cola is the largest manufacturer, distributor and marketer of non-alcoholicbeverage concentrates and syrups in the world. Coco-Cola is selling trademarkedbeverage products since the year 1886 in the US. The company currently sells itsproducts in more than 200 countries. Of the approximately 52 billion beverageservings of all types consumed worldwide every day, beverages bearing trademarksowned by or licensed to Coca-Cola account for more than 1.4 billion.The company‘s operations are supported by a strong infrastructure across the world.Coca-Cola owns and operates 32 principal beverage concentrates and/or syrupmanufacturing plants located throughout the world.In addition, it owns or has interest in 37 operations with 95 principal beveragebottling and canning plants located outside the US. The company also owns bottled23 Department Of Business Administration Federal Urdu University Islamabad.
    • water production and still beverage facilities as well as a facility that manufacturesjuice concentrates. The company‘s large scale of operation allows it to feed upcomingmarkets with relative ease and enhances its revenue generation capacity.  Robust Revenue Growth In 3 SegmentsCoca-Cola‘s revenues recorded a double digit growth, in three operating segments.These three segments are Latin America, ‗East, South Asia, and Pacific Rim‘ andBottling investments. Revenues from Latin America grew by 20.4% during fiscal2006, over 2005. During the same period, revenues from ‗East, South Asia, andPacific Rim‘ grew by 10.6% while revenues from the bottling investments segment by19.9%.Together, the three segments of ―Latin America‖, ―East, South Asia‖ and ―PacificRim‖ bottling investments, accounted for 34.8% of total revenues during fiscal 2006.Robust revenues growth rates in these segments contributed to top-line growth forCoca-Cola during 2006.Weakness:  Negative PublicityThe Coca-Cola Company has been involved in a number of controversies and lawsuitsrelated to its relationship with human rights violations and other perceived unethicalpractices. There have been continuing criticisms regarding the Coca-Cola Companysrelation to the Middle East and U.S. foreign policy. The company received negativepublicity in India during September 2006.The company was accused by the Centre forScience and Environment (CSE) of selling products containing pesticide residues.Coca-Cola products sold in and around the Indian national capital region contained ahazardous pesticide residue.On 10 December 2008, the US Food and Drug Administration (FDA) wrote to Mr.Muhtar Kent, President and Chief Executive Officer, to warn him that the FDA had24 Department Of Business Administration Federal Urdu University Islamabad.
    • concluded that Coca-Colas product Diet Coke Plus 20 FL OZ was is in violation ofthe Federal Food, Drug, and Cosmetic Act.In January 2009, the US consumer group the Centre for Science in the Public Interestfiled a class-action lawsuit against Coca-Cola. The lawsuit was in regards to claimsmade, along with the companys flavours, of Vitamin Water. Claims say that the33 grams of sugar are more harmful than the vitamins and other additives are helpful.  Sluggish Performance In North AmericaCoca-Cola‘s performance in North America was far from robust. North America isCoca-Cola‘s core market generating about 30% of total revenues during fiscal 2006.Therefore, a strong performance in North America is important for the company.In North America the sale of unit cases did not record any growth. Unit case retailvolume in North America decreased 1% primarily due to weak sparkling beveragetrends in the second half of 2006 and decline in the warehouse-delivered water andjuice businesses. Moreover, the company also expects performance in North Americato be weak during 2007. Sluggish performance in North America could impact thecompany‘s future growth prospects and prevent Coca-Cola from recording a morerobust top-line growth.  Decline In Cash From Operating ActivitiesThe company‘s cash flow from operating activities declined during fiscal 2006. Cashflows from operating activities decreased 7% in 2006 compared to 2005. Net cashprovided by operating activities reached $5,957 million in 2006, from $6,423 millionin 2005. Coca-Cola‘s cash flows from operating activities in 2006 also decreasedcompared with 2005 as a result of a contribution of approximately $216 million to atax-qualified trust to fund retiree medical benefits.The decrease was also the result of certain marketing accruals recorded in2005.Decline in cash from operating activities reduces availability of funds for thecompany‘s investing and financing activities, which, in turn, increases the company‘sexposure to debt markets and fluctuating interest rates.25 Department Of Business Administration Federal Urdu University Islamabad.
    • Opportunities:  AcquisitionsDuring 2006, its acquisitions included Kerry Beverages, (KBL), which was subsequently,reappointed Coca-Cola China Industries (CCCIL). Coca-Cola acquired a controllingshareholding in KBL, its bottling joint venture with the Kerry Group, in Hong Kong.The acquisition extended Coca-Cola‘s control over manufacturing and distribution jointventures in nine Chinese provinces.In Germany the company acquired Apollinaris which sells sparkling and still mineral water.Coca-Cola has also acquired a 100% interest in TJC Holdings, a bottling company in SouthAfrica. Coca-Cola also made acquisitions in Australia and New Zealand during 2006. Theseacquisitions strengthened Coca-Cola‘s international operations.These also give Coca- Cola an opportunity for growth, through new product launch or greaterpenetration of existing markets. Stronger international operations increase the company‘scapacity to penetrate international markets and also gives it an opportunity to diversity itsrevenue stream. On 25 February 2010, Coco cola confirms to acquire the Coca colaenterprises (CCE) one the biggest bottler in North America. This strategy of coca colastrengthens its operations internationally.  Growing Bottled Water MarketBottled water is one of the fastest-growing segments in the world‘s food and beverage marketowing to increasing health concerns. The market for bottled water in the US generatedrevenues of about $15.6 billion in 2006.Market consumption volumes were estimated to be 30 billion litres in 2006. The marketsconsumption volume is expected to rise to 38.6 billion units by the end of 2010. Thisrepresents a CAGR of 6.9% during 2005-2010.In terms of value, the bottled water market is forecast to reach $19.3 billion by the end of2010. In the bottled water market, the revenue of flavoured water (water-based, slightlysweetened refreshment drink) segment is growing by about $10 billion annually. Thecompany‘s Dasani brand water is the third best-selling bottled water in the US. Coca-Colacould leverage its strong position in the bottled water segment to take advantage of growingdemand for flavoured water.26 Department Of Business Administration Federal Urdu University Islamabad.
    •  Growing Hispanic Population In U.SHispanics are growing rapidly both in number and economic power. As a result, theyhave become more important to marketers than ever before. In 2006, about 11.6million US households were estimated to be Hispanic. This translates into a Hispanicpopulation of about 42 million.The US Census estimates that by 2020, the Hispanic population will reach 60 millionor almost 18% of the total US population. The economic influence of Hispanics isgrowing even faster than their population. Nielsen Media Research estimates that thebuying power of Hispanics will exceed $1 trillion by 2008- a 55% increase over 2003levels.Coca-Cola has extensive operations and an extensive product portfolio in the US. Thecompany can benefit from an expanding Hispanic population in the US, which wouldtranslate into higher consumption of Coca-Cola products and higher revenues for thecompany.Threats:  Intense CompetitionCoca-Cola competes in the non-alcoholic beverages segment of the commercial beveragesindustry. The company faces intense competition in various markets from regional as well asglobal players. Also, the company faces competition from various non-alcoholic sparklingbeverages including juices and nectars and fruit drinks. In many of the countries in whichCoca-Cola operates, including the US, PepsiCo is one of the company‘s primary competitors.Other significant competitors include Nestle, Cadbury Schweppes, Groupe DANONE andKraft Foods.Competitive factors impacting the company‘s business include pricing, advertising, salespromotion programs, product innovation, and brand and trademark development andprotection. Intense competition could impact Coca-Cola‘s market share and revenue growthrates.  Dependence On Bottling Partners27 Department Of Business Administration Federal Urdu University Islamabad.
    • Coca-Cola generates most of its revenues by selling concentrates and syrups to bottlers inwhom it doesn‘t have any ownership interest or in which it has no controlling ownershipinterest. In 2006, approximately 83% of its worldwide unit case volumes were produced anddistributed by bottling partners in which the company did not have any controlling interests.As independent companies, its bottling partners, some of whom are publicly tradedcompanies, make their own business decisions that may not always be in line with thecompany‘s interests. In addition, many of its bottling partners have the right to manufacture ordistribute their own products or certain products of other beverage companies.If Coca-Cola is unable to provide an appropriate mix of incentives to its bottling partners,then the partners may take actions that, while maximizing their own short-term profits, maybe detrimental to Coca-Cola. These bottlers may devote more resources to businessopportunities or products other than those beneficial for Coca-Cola. Such actions could, in thelong run, have an adverse effect on Coca-Cola‘s profitability.In addition, loss of one or more of its major customers by any one of its major bottlingpartners could indirectly affect Coca-Cola‘s business results. Such dependence on thirdparties is a weak link in Coca-Cola‘s operations and increases the company‘s business risks.Sliggish Growth of Carbonated BeveragesUS consumers have started to look for greater variety in their drinks and are becomingincreasingly health conscious. This has led to a decrease in the consumption ofcarbonated and other sweetened beverages in the US. The US carbonated soft drinksmarket generated total revenues of $63.9 billion in 2005, this representing acompound annual growth rate (CAGR) of only 0.2% for the five-year period spanning2001-2005. The performance of the market is forecast to decelerate, with ananticipated compound annual rate of change (CAGR) of -0.3% for the five-yearperiod 2005-2010 expected to drive the market to a value of $62.9 billion by the endof 2010.Moreover in the recent years, beverage companies such as Coca-Cola have beencriticized for selling carbonated beverages with high amounts of sugar andunacceptable levels of dangerous chemical content, and have been implicated forfacilitating poor diet and increasing childhood obesity. Moreover, the US is thecompany‘s core market. Coca-Cola already expects its performance in the region to28 Department Of Business Administration Federal Urdu University Islamabad.
    • be sluggish during 2007. Coca-Cola‘s revenues could be adversely affected by aslowdown in the US carbonated beverage market. According His Competitor SWOT Analysis of Coca-Cola IndiaStrengths:Distribution NetworkThe Company has a strong and reliable distribution network. The network is formedon the basis of the time of consumption and the amount of sale yielded by a particularcustomer in one transaction. It has a distribution network consisting of a number ofefficient salesmen, 700,000 retail outlets and 8000 distributors. The distribution fleetincludes different modes of distribution, from 10 tonne to open bay three wheelersthat can navigate the narrow alleyways of Indian cities – constantly keep Coca-Colabrands available in every nook and corner of the Country‘s remotest areas.  Strong Brand ImageCoke has its history of about more than a century and this prolonged sustenance hasdefinitely added to the brand image in the minds of the consumers and to its wallet.The products produced and marketed by Coca-Cola India have a strong brand image.Strong brand names like Coca-Cola, Fanta, Thums up, Limca and Maaza add up tothe brand name of Coca-Cola Company as a whole. Coca Cola India for the first timehas come out with corporate campaign in India targeting its stakeholders. Themultimedia campaign ―Little Drops of Joy " is aimed at raising the corporate brandimage of the company which took a heavy beating with a number of controversies itfaced in different domains.The new campaign is a part of a complete restructuring exercise in the Indian arm ofthis global change. Coca Cola recently announced its new corporate strategy calledthe ―5 Pillar" strategy. The company has identified the 5 pillars as People.29 Department Of Business Administration Federal Urdu University Islamabad.
    • Planet. Portfolio. Partners. Performance.  Low Cost of OperationsIn light of the company‘s Affordability Strategy, Coca-Cola went about bringing acost-focus culture in the company. This included procurement Efficiencies – throughfocus on key input materials, trade discipline and control and proactive taxmanagement through tax incentives, excise duty reduction and creating marketingcompanies. These measures have reduced the costs of operations and increased profitmargins.Weaknesses:  Health Care IssuesIn India, there exists a major controversy concerning pesticides and other harmfulchemicals in bottled products including Coca-Cola. In 2003, the Centre for Scienceand Environment (CSE), a non- governmental organization in New Delhi, said aeratedwaters produced by soft drinks manufacturers in India, including multinational giantsPepsiCo and Coca-Cola, contained toxins including lindane, DDT, malathion andchlorpyrifos - pesticides that can contribute to cancer and a breakdown of the immunesystem.  Small Scale Sector Reservations30 Department Of Business Administration Federal Urdu University Islamabad.
    • The Company‘s operations are carried out on a small scale and due to Governmentrestrictions and ‗red-tapism‘, the Company finds it very difficult to invest intechnological advancements and achieve economies of scale.Opportunities:  Large Domestic MarketsThe domestic market for the products of the Company is very high as compared toany other soft drink manufacturer. Coca-Cola India claims a 58 per cent share of thesoft 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. Thecompany appointed 50,000 new outlets in the first two months of this year, as part ofits plans to cover one lakh outlets for the coming summer season and this also covered3,500 new villages. In Bangalore, Coca-Cola amounts for 74% of the beveragemarket.  Export PotentialThe 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 toeliminate apprehension from the minds of the people towards the Coke productsproduced in India so that there will be a considerable amount of exports and it is yetanother opportunity to broaden future prospects and cater to the global markets ratherthan just domestic market.  Higher Income Among PeopleDevelopment of India as a whole has lead to an increase in the per capita incomethereby causing an increase in disposable income. Unlike olden times, people nowhave the power of buying goods of their choice without having to worry much aboutthe flow of their income. Coca-Cola Company can take advantage of such a situationand enhance their sales.31 Department Of Business Administration Federal Urdu University Islamabad.
    • Threats:  ImportsAs India is developing at a fast pace, the per capita income has increased over theyears and a majority of the people are educated, the export levels have gone high.People understand trade to a large extent and the demand for foreign goods hasincreased over the years.If consumers shift onto imported beverages rather than have beverages manufacturedwithin the country, it could pose a threat to the Indian beverage industry as a whole inturn affecting the sales of the Company.  Tax & Regulatory SectorThe tax system in India is accompanied by a variety of regulations at each stage onthe consequence from production to consumption. When a license is issued, theproduction capacity is mentioned on the license and every time the productioncapacity needs to be increased, the license poses a problem. Renewing or updating alicense every now and then is difficult. Therefore, this can limit the growth of theCompany and pose problems.  Slowdown In Rural DemandThe rural market may be alluring but it is not without its problems: Low per capitadisposable incomes that is half the urban disposable income; large number of dailywage earners, acute dependence on the vagaries of the monsoon; seasonalconsumption linked to harvests and festivals and special occasions; poor roads; powerproblems; and inaccessibility to conventional advertising media. All these problemsmight lead to a slowdown in the demand for the company‘s products. International Elements Effects on International Business ActivatesPost 9/11 Effects32 Department Of Business Administration Federal Urdu University Islamabad.
    • After 9/11 incident Coca-cola suffered a loss due to boycott of religious activists at alarger scale. The market share and market value was dropped down to several points.Price competition was started after this incident. Due to sanctions imposed on Indiaafter May5, 1995 taxes were to be paid in high amount thus increasing the cost ofproduction and price offered to consumers and decreasing the buying powers ofcustomers. So any of the activists behavior can cause decline in the production andsale of coke and other cold beverage company.Intellectual Property RightsCoke is one of the biggest brands in the world, and its brand value is approximately 4billion $. It is said that the most common word to speak in this world is ―OK‖ andafter this the second most common in this whole world is ―COKE‖. Sometimesdifferent people and organizations used their names to make money, in the form offake bottling.The main threat to the company is the production of fake bottles. Fake bottling isgrowing day by day Fake bottles problem for a company comes under the ―act ofunfair practices‖. In a black marketing aspect whole sellers and retailer could take thefake bottles at a low price for selling at the price of original bottles which could beharm full for the health of consumers. Coca Cola Company could create a check andbalance to meet the need of time, which in turn could help to increase its marketshare. It already had made several steps to prevent fake bottling and production offake coke but due to mushrooming industry the laws and management of thecorporation is failed to stop this industry from flourishing. The government is also notof great help to the company in solving this main issue.33 Department Of Business Administration Federal Urdu University Islamabad.
    • PEST ANALYSIS34 Department Of Business Administration Federal Urdu University Islamabad.
    • PESTEL ANALYSIS OF COCA-COLA INDIAPESTLE stands for Political, Economic, Social, Technological, Legal andEnvironmental. It is a tool that helps the organizations for making strategies and toknow the EXTERNAL environment in which the organization is working and is goingto work in the future.Political Factors:  HistoricalCoca Cola India was the leading soft drink brand in India till 1977 when it left ratherthan revealing its formula to the government. They re-entered the country in 1993.However, the primary barrier for Coca-Cola‘s entry into the Indian market was itspolitical environment. Despite the liberalization of the Indian economy in 1991 andintroduction of the New Industrial Policy to eliminate barriers such as bureaucracyand regulation, there was still a lot of protectionism. India‘s past promotion of―Indigenous availability‖ or ―Swadeshi movement‖ depicted its affinity for localproducts. Due to India‘s suspicion of foreign business entering Indian markets, CocaCola received alien status its re-entry. This and some of the policies imposed onforeign enterprises proved as a hindrance to the growth of the company in the country.To make things worse, the policies were neither clear nor unchanging.For example, foreign businesses were not allowed to market their products under thesame name if selling within the Indian market. Thus, Coca Cola had to be changed toCoca Cola India (and Pepsi had to be renamed to Lehar Pepsi). However, the mostcontroversial, and by far, the most damaging was when Coca-Cola was forced to signan agreement to sell 49% of its equity in order to buy out Indian bottlers. Due to thelack of consistency in the legal aspects, more importance was being given to lobbyingthe politicians.Recent ScenarioDuring recent times, Coca Cola India has faced its fair share of problems. On August5th 2003, The Centre for Science and Environment (CSE), an activist group in Indiafocused on environmental sustainability issues (specifically the effects ofindustrialization and economic growth) issued a press release stating: "12 major cold35 Department Of Business Administration Federal Urdu University Islamabad.
    • drink brands sold in and around Delhi contain a deadly cocktail of pesticide residues".According to tests conducted by the Pollution Monitoring Laboratory (PML) of theCSE from April to August, three samples of twelve PepsiCo and Coca-Cola brandsfrom across the city were found to contain pesticide residues surpassing globalstandards by 30-36 times.This had an adverse impact on the sales of Coca Cola, with a drop of almost 30-40%1in only two weeks on the heels of a 75% five-year growth trajectory. Many leadingclubs, retailers, restaurants, and college campuses across the country had stoppedselling Coca-Cola. This threatened the newly achieved leadership attained over Pepsidue to a successful marketing campaign.But this was not the end of Coca Cola‘s troubles. There was widespread discontentaround many of their plants. For example, in Plachimada, Kerala, the communities inand around the Coca Cola plant blamed the factory for their water problems. Due tothis, the local Panchayat decided not to renew the license issued to Coca Cola to―protect public interest". The company has also been accused of illegally occupying aportion of the village property resources in Mehdiganj, near Varanasi. However, thereare certain positives as well, with a 22 percent increase in its unit case volume lastquarter.Economic Analysis:The Indian economy sustained the global economic slowdown in the previous yearand has shown a tremendous economic growth. It showed 8.6% of growth in the lastquarter of 2009-10 as compared to 5.8% same time in the previous year. It hasemerged as an attractive economy to invest in as many opportunities has beenrecognized.Economic growthIndia is ranked second in economic growth, just behind China. Analysts have said thatIndia will be the third biggest economy of the world in the coming year behind Chinaand USA. With economic growth many opportunities have been seen, which haveattracted many foreign investor to the company.36 Department Of Business Administration Federal Urdu University Islamabad.
    • Coca cola India returned to the country in 1993, despite few problems in the start theyhave emerged as the king of soft drink industry in India. The strong economic growthof India has resulted in coca cola to invest heavily in sales and distributive channels. Ithas introduced two new products, Nimbu Fresh and an energy drink ‗Burn‘.Coca cola registered 22% growth in their unit case volume in the second quarter(April-June). It is the 16th consecutive quarter of such growth out of which 13 aredouble digit. Coca cola India‘s growth is in contrast to its overall performance, thebeverage king reported a growth of just 5% (worldwide) in the same quarter.Inflationary effectsInflation is one of the main problems that Indian economy has been facing for a yearnow. Rising prices in the food and other products doesn‘t only effect the consumers italso has an adverse effect on a company. The inflation rate for the year 2009 wasrecorded to be 11.49%. As prices have gone up in India for various products,especially oil, there has been uncertainty in decision making of almost everycompany. Coca cola India has also been affected by the same; it has been forced tothink about their input costs, as they have been rising due to inflation. Theirexpenditure has been rising, with more costs in salaries, distribution channels andother operating costs. Beverage industry being price competitive market, they havenot revised their product prices.Exchange rateThe exchange rate of rupee to US Dollar has been stable but in the previous monthsthe rate has had a tumultuous period. Exchange rate determines at what price will thecompany export its products and import whatever is required by it. The previous year,the rate of rupee to USD touched 44, on an average it has been around 47, so theexports earned less and the imports cost more. Therefore, coca cola India had to bearsome low profitable times. However, in the present scenario rates have reached astable level and exports are on an increasing trend.37 Department Of Business Administration Federal Urdu University Islamabad.
    • Social Analysis:Coca- Cola returned to India in 1993 after a 16 year hiatus, amidst competition fromLeher Pepsi which had the advantage of entering the country 7 years earlier. Initially,it struggled to find acceptance as there were already other brands such as Parle‘sThums Up which existed in the market. Coca-Cola had earlier focussed more on theAmerican way of life in their advertising campaigns, which the Indian consumerscould not identify with. Also, they did not focus on competition from otheralternatives such as lemonade, Lassi etc.These products had been around for centuries, and were also cheaper alternatives toCoca-Cola. However, things were brought under control when Thums Up was boughtover by Coca Cola, and more attention was paid by the company on their marketingmix.With the lowering of their prices by almost 15-20%, introduction of newer productswhich appealed to the Indian tastes, more investment in market research andfocussing on the target group of 18-24 year olds, they were able to increase theirmarket share and build brand loyalty.Coca Cola today, has made significant investments to build its business in India. It hasalso generated employment for almost 1,25,000 people in related industry through itsprocurement, supply and distribution cycles.The soft drink industry today is growing steadily due to the booming economy,strengthened middle class and low per capita consumption. With the increase in healthconsciousness among the urban consumers, the company has introduced newerproducts such as Diet Coke, which contain lesser calories than ordinary Coca Cola.This is also responsible for the company shifting focus from carbonated drinks toFruit Drinks / Juices and bottled water.The rural market had also been identified by Coca-Cola India as an attractive target,with almost 70% of the country‘s population. The company has recorded significantgrowth in recent years38 Department Of Business Administration Federal Urdu University Islamabad.
    • Coca Cola India has also taken many initiatives as a responsible corporate citizen, bytying up with many NGOs such as BAIF (or Bharatiya Agro Industries Foundation),SOS Children‘s Villages and Save the Children. It has also taken initiatives topromote education in rural areas.Technological Analysis:Coca-Cola has started operations of its R&D facility in India, with the view oflocalizing its product portfolio. The major focus would be on non carbonated drinksand flavours. The company‘s R&D team has already rolled out drinks such as Maazaaam panna and also a Maaza mango milk drink, and is exploring options to enter newcategories in India such as juices in localised flavours, energy drinks, sports drinksand flavoured water. These initiatives are being taken by the company to furtherexpand their product portfolio.With the increasing importance of 360 degree media tools and overall ad spend onsocial media sets likely to grow by almost 44%, Coca-Cola has increased ad spend onthe internet. Case in point is the recent 2009 Sprite campaign, which was firstlaunched on the internet.Environmental Analysis:Coca Cola has earned a title of environment friendly company and Coca Cola Indiatoo has followed in the footsteps. Coca Cola India‘s Corporate Social Responsibility(CSR), is an initiative that prioritizes many social and environmental issues; one ofthem being ‗water conservation‘. They support many community based rainwaterharvesting projects and help lending conservation education.The company has made sure that the following ideas are considered during theiroperations: 1. Environmental due diligence before acquiring land 2. Environmental impact assessment before commencing project 3. Ground water and environment survey before selecting the site 4. Ban on purchasing CFC emitting refrigerating equipment 5. Waste water treatment facilities39 Department Of Business Administration Federal Urdu University Islamabad.
    • 6. Compliance with all regulatory environmental requirements 7. Energy conservation programsBy following these guidelines Coca-Cola India has helped the environment withconsistent profits and success. They seek to provide leadership in three different areas,these are as follows: 1. Water efficiency and water quality 2. Energy efficiency 3. Eliminating or minimizing solid waste.Though being an environmental friendly company, Coca Cola India had to face itsshare of controversies. On 4th February, 2003, Centre of Science and Environment inIndia, released a report based on experiment done by Pollution MonitoringLaboratory. In the experiment, they tested 17 packaged drinking water brands andfound that, Coca Cola‘s Kinley has 15 times more pesticide residual levels than thestipulated norms, Bisleri had 59 times and Aquaplus had 109 times.The main law governing the food safety is the 1954 Prevention of food alteration act,which stated that pesticides should not be present in any food item but did not havelaw against pesticides being present in soft drinks. However, the Food ProcessingOrder 1955 stated that the main ingredient used in soft drinks must be ‗potable water‘but the Bureau of Indian Standards had no prescribed standards for pesticides inwater.But later it was found that BIS had stated that pesticides should not be present or itshould not exceed 0.001 part per million. Further, the health ministry of Indiaadmitted that ‗there were lapses in PFA regarding carbonated drinks‘.40 Department Of Business Administration Federal Urdu University Islamabad.
    • GRAPH OF PESTICIDES IN SOFT DRINKS IN INDIALegal Analysis:As the Indian consumer is getting more educated, the government is also payingspecial attention to consumer laws. In the past, there were not so many lawsprotecting the benefits to the consumer but now every business has to go by the lawand fix their operations, strategies so as to satisfy their consumers, and employees.Keeping in mind the consumer laws, employment laws, antitrust law, discriminationlaws etc. a business should plan out everything.Consumer LawsIn the present scenario, consumer is the king, if a product is defective, not meeting thestated standards a consumer can complain against the manufacturer. Complaining andgetting the verdict the court has made very fast and efficient as government of Indiahas installed new consumers courts. Their main job is to see that the consumerbenefits are being met or not. When producing their beverages, Coca Cola India has tomake sure that they have written price, manufacturing date, expiry date, batch no,nutritional facts are written on the packed product.Employment Laws41 Department Of Business Administration Federal Urdu University Islamabad.
    • Ministry of Labour makes the laws for proper employment in the country. They havestipulated norms on employing people from the country and getting expatriates in thecompany as well. India has strict laws against employing child labour. Being a maledominated society, the ministry has made sure that female employees are treated withrespect and given equal importance at the work place. Every field of work has got itsown wage, these are to meet the norms and laws set by the labour ministry. Whenemploying anyone, coca cola India cannot discriminate on social, regional or anyracists‘ basis. If it is found that the company has been violating the law, it has to facestrict action and fines.Health and safety lawsAs coca cola produces a product that is consumed by the consumer as a food item,there are laws that the company must abide by when producing it. Ministry of FoodProcessing Industries makes and oversees the laws and norms for the food processingindustries.The Indian Parliament has recently passed the Food Safety and Standards Act, 2006that overrides all other food related laws.It will specifically repeal eight laws: The Prevention of Food Adulteration Act, 1954. The Fruit Products Order, 1955. The Meat Food Products Order, 1973. The Vegetable Oil Products (Control) Order, 1947. The Edible Oils Packaging (Regulation) Order, 1998. The Solvent Extracted Oil, De oiled Meal, and Edible Flour (Control) Order, 1967. The Milk and Milk Products Order, 1992. Essential Commodities Act, 1955 relating to food.From now on, the act establishes a regulatory body, the Food Safety and StandardsAuthority of India. Anything that coca cola makes, have to make accordingly to thelaws. They have to check the weight, volume and ingredients of the product. Theexport or the import of the products by the company has to meet the quality standardsstipulated by the law.Anti-trust law42 Department Of Business Administration Federal Urdu University Islamabad.
    • The Competition Commission of India was made under the Indian Competition Act2002, Monopolies Restrictive and Trade Practices Act 1969 was replaced by it. Thiscommittee looks after all the issues regarding unethical means of doing business,competition issues and any dispute between two different business entities. CLGcompetition and antitrust practices are as follows: Representing clients before the MRTP Commission in ‗monopolistic and restrictive trade practices‘ and ‗unfair trade practices‘ matters. Legal Advice and sophisticated insight into the international best practices on competition law. Consultancy services on specific issues - supply and distribution, pricing and marketing, ‗promotional materials‘, mergers, acquisitions, amalgamation, licensing, joint operation and research, joint buying, ‗dominant-firm‘ status etc. Competition Audit and Due Diligence for developing appropriate guidelines for employees, distributors, agents, franchisees etc. Legal Due Diligence on anti-competition, unfair and restrictive market practices. Drafting claims, counter-claims, replies, rejoinders, representations etc. on Competition Law and related legal issues. Strategic policing on anti-competition market practices and trends. Policy due diligence for mergers, acquisitions, joint ventures with appropriate anti-trust safeguard measures and policy.All these laws help Coca Cola India to maintain its own brand and values. Any otherbusiness trying to copy the brand of coca cola will face the strict action against itself.These laws help every business to compete in a fair environment. As it is known thatthe coca cola and Pepsi are the fiercest rivals in the beverage industry, the CCI makessure that either of them does not indulge in unfair means to make profits and hurt eachother‘s business.43 Department Of Business Administration Federal Urdu University Islamabad.
    • Product Life Cycle O LA AC C OC INT ODU OR R CT Y GROWTH MAT Y URIT DECLINECoca-cola is in a stage of growth according to a product life cycle analysis. It is recovering itsmarket share very quickly which it had lost in previous years although there is goodcompetition in market but it is still recovering and enjoying healthy profits. There are nobarriers for new entrants, and many companies are entering in this industry because of healthygrowth.44 Department Of Business Administration Federal Urdu University Islamabad.
    • Duties and Taxes AppliedDuties and Taxes are the tariff barriers for any company to import or exportsomething to other country. The most important component of coke is theirconcentrate which is provided allover the world from USA. Indian Government treatstheir concentrate under the head of luxuries and applied second highest duty aftertobacco. According to their spokesman if this duty is removed, then price of coke‘s250ml bottle can be lessened up to Rs.5.Laws Abided By & Methods of Conflict ResolutionCoca-cola is one of the oldest multinational corporation, they have a vast experienceof dealing with different governments and different organizations allover the world.When ever they enter into some country they made a thorough research work. Theyanalyze the political restrictions, rules and regulations of doing business, politicalparties which can affect policies and policy making authorities. They respect the lawsof host country and design their framework according to the rules and regulations ofthe host country.Methods of Conflict ResolutionWorld wide Coca-cola tries to solve any disputes which may arise througharbitration and they mention this clause in contract that if any dispute arises, they willgo for arbitration but if arbitration does not solve the problem then they refer theirdispute to litigation. They prefer arbitration because litigation is very expensive andlengthy process; there is fear of poor image and damaging public relations, fear ofunfair treatment in host country and fear of loss of confidentiality.As far as India is concerned up till now no such dispute has arisen in which they needto go for arbitration. But they go for litigation against those firms which are involvedin using their brand name for fake bottling.45 Department Of Business Administration Federal Urdu University Islamabad.
    • Strategies to Reduce Political VulnerabilityNowadays political governments are very conscious about foreign businesses andforeign investments, so they usually have standardized policies for all the competingbusinesses; there is no biasness in dealing with different competing business. Butsometimes a situation may arise due to some political reasons that may create someproblems, so coke deals with such problems strategically.As we have a example, when Pepsi launch their tin can at Rs.10/-they got specialpermission to manufacture tin cans and that was the only plant which got permissionto manufacture cans, as we know that time Pepsi and Coke are bitter competitors soCoke must go with guns and guns with Pepsi, they tried to get permission but theyfailed. So they imported Coke cans from Dubai at Rs.13/- and sell it for Rs.10/- tocompete in the market. So if some problem arises which can affect their image andthat cannot be solved due to some political and legal problems they solve thisstrategically.As we know that nowadays Pepsi in India is under the administration and control ofFederal Trade Minister of India, but nowadays policies are standardized so it doesn‘tcreate any problems. Current Strategies Regarding International OperationsOne of the reasons of losing their market share in India in last few years was theirquality. In India they were operating as franchisee but now Company has acquiredmost of the plants except from Deli and Rujan plant now they are very muchconscious about their quality standards and the quality of other two is being controlledby Coca Cola Exports Corporation.Another reason was that their backup was not as strong as Pepsi. They were notgetting any kind of help regarding financial problems, management problems fromCoca Cola International. But now most of the plants are under the control ofCompany itself and Coke International is also very keen to raise its market share inIndia so they are fully supporting Coca Cola Beverages India and Coca Cola ExportsCorporation India.In India their main focus is on standardized products as Coca Cola, Sprite, Fanta, andthey are going to launch some of new products in next 2 or 3 years.46 Department Of Business Administration Federal Urdu University Islamabad.
    • Adaption and cultural borrowingAdaption is a key concept in international marketing, and willing to adapt is a crucialattitude .Adaptation, or at least accommodation, is required on small matters as wellas large ones. Coca-Cola Company recognizes the need of affirmative action, that is,open tolerance of concept ―different and equal‖. Coca-Cola company feels thatessential to effective to Adaption is awareness of its own culture and recognize thatdifferences in others can cause anxiety, frustration and misunderstanding of the hostintention .The self reference criterion (SRC) is specially operative in business custombut Coca-Cola company could not indulge its own (SRC) in others culture it try toadopt the strategies of the host countries where they are doing business around theworld ,it reduce the (SRC) to lower the barriers of cultural differences . Coca-ColaCompany develops an understanding and willingness to accommodate the differencesthat exists. Company is doing a successful business internationally since 1953.And operating in a home country for more than 50 years it have set up its strategies tomeet the needs of required customer in every way possible where it is doing businessit aware of the possibility of cultural differences and the probable differences,consequences of failure to adapt, or accommodate, the seemingly and less variety ofcustoms must be assessed.Coca-Cola Company business customs includes imperatives and adiaphora. Culturalimperatives are the business customs and exceptions that must be met and conformedto or avoided if relationship is to be successful. Company knows the best how to dothe business at their best. Human relation, friend ships and or attaining the level oftrust are right tricks to do a business in a home country as well as in a host country.They that there is no substitute for establishing friend ship in some cultures beforeeffective business negotiation can begin.Company motivate their local agents to make more sales and the friendship helpsestablish the right relationship with end users that to more sales over a longer periodof time.Culture adiaphora relates to the area of behavior or to customs that cultural aliens maywish to conform or to participate in but that are not required.They have adapted their company culture according to the external environment asthey are indulge in many community programs such as scholarship and school47 Department Of Business Administration Federal Urdu University Islamabad.
    • funding programs and they have borrow the culture of Indians. They hire localemployees and plan according to the local environment Joint Venture Beverage Partners Worldwide Joint Venture to Focus on Europe and CanadaATLANTA and VEVEY, Switzerland, Jan. 6, 2012 - The Coca-Cola Company andNestlé S.A. today announced that they have agreed to focus the geographic scope oftheir ready-to-drink tea joint venture, Beverage Partners Worldwide (BPW), onEurope and Canada. In Taiwan and Hong Kong, The Coca-Cola Company will enterinto a license agreement with Nestlé for the NESTEA brand. In all other territories thejoint venture will be phased out in a transition to be completed by the end of 2012,subject to any regulatory approval. In addition, the current NESTEA license grantedby Nestlé to The Coca-Cola Company in the United States will terminate at the end of2012.Over the past 10 years, BPW has delivered consistent growth to its parent companiesand has expanded the NESTEA brand across Europe, Canada and other markets. Bothpartners believe a concentrated focus on Europe and Canada will accelerate thegrowth and bolster the market presence of BPW where the joint venture is mosteffective. Both parent companies will be free to independently explore and maximizeopportunities for growth in the ready-to-drink tea category in other markets.AboutBeverage Partners Worldwide, a 50-50 joint venture focused on the ready-to-drink teacategory held by Nestlé S.A. and The Coca-Cola Company, was created in 2001,following a period of 10 years during which Nestlé and The Coca-Cola Companycooperated in a joint venture called Coca-Cola and Nestlé Refreshments.Coca-Cola India Launches The Globally Successful Ready To Drink Iced Tea -NESTEA® – in the countryCoca-Cola India announced the launch of the globally successful ready-to-drink icedtea brand NESTEA® in the country. The latest offering promises to uniquely refresh48 Department Of Business Administration Federal Urdu University Islamabad.
    • the consumers with its lemony, light flavor allowing them to enjoy the deliciousgoodness of tea. The innovative consumer proposition of NESTEA® is best explainedby the brands tagline –Lighten Up ; with Refreshingly Light Lemon Iced Tea!Ricardo Fort, Vice-President Marketing, Coca-Cola India and Milind Pingle, RegionVice President, Hindustan Coca-Cola Beverages Pvt. Ltd at the launch of Nestea inMumbai cityAccording to Ricardo Fort, Vice President, Marketing, Coca-Cola India, "As abeverage company, our aim is to be able to offer a beverage for every lifestyle andoccasion, which also aids long term, sustainable business growth. We are thereforeconstantly working on high-quality additions to our portfolio. Our entry into ready-to-drink Iced tea segment with the globally successful NESTEA® now provides theconsumers with a convenient on-the-go option which is in keeping with evolvingconsumer lifestyle."The product is being rolled out in phases and is first being made available toconsumers through select channels and outlets in Mumbai. This will be followed by apan India launch of the product next year. In the initial phase, NESTEA® is beingmade available in lemon flavor in an on-the-go 400 ml innovative Ice-rock design49 Department Of Business Administration Federal Urdu University Islamabad.
    • PET bottle, affordably priced at Rs. 25. It is targeted at energetic on-the-go youngadults who are always on the lookout for naturally refreshing beverage options.The refreshing offering contains no added preservatives or colors and will bemanufactured at the Hindustan Coca-Cola bottling plant located at Atmakuru inGuntur, Andhra Pradesh.According to Milind Pingle, Region Vice President, Hindustan Coca-Cola BeveragesPrivate Limited, "The launch of ready-to-drink Iced tea NESTEA® complements ourlong term growth strategy of offering choice to consumers. Over the next 4 months,NESTEA® would be retailed across 8,000 outlets in Mumbai, supported by strongconsumer activation including extensive experiential and focused consumercommunication. We expect this offering to catalyze the growth of the entire categorythereby contributing to the growth of the overall packaged beverage market."NESTEA® is the worlds leading ready-to-drink tea brand is available in over 60countries. Globally it is available in several flavours and has a strong presence incountries such as United States, Canada, Australia, Taiwan, Italy, Spain, Switzerland,Germany, China etc. NESTEA® -the brand - is licensed to Beverage PartnersWorldwide (BPW), a 50:50 Joint Venture between The Coca-Cola Company andNestle S.A.Coca-Cola in India has drawn up an aggressive consumer activation campaign tomarket NESTEA® in selected channels and outlets in Mumbai. The marketingcommunication plan focuses on Out-of-Home media complimented by a rangeactivities including radio and print advertising, road shows, extensive experientialsampling, presence in engaging touch points etc. The entire brand campaign, bestexplained by the tagline Lighten Up; with Refreshingly Light Lemon Iced Tea! hasbeen developed and executed by Pickle Lintas, the new age communication agencyfrom the Lintas Group. Coca-Cola Enterprises Joint Venture Set To Step Change Plastics Recycling In GB Monday, March 07, 201150 Department Of Business Administration Federal Urdu University Islamabad.
    • CCE invests £5m in new plant to more than double GB production of food graderecycled PET.Coca-Cola Enterprises Ltd (CCE) today announces a joint venture withECO Plastics to develop a new purpose built recycling facility in Lincolnshire. Thedeal marks a step change in the GB plastic reprocessing industry.Around 35,000 tones of PET bottles were reprocessed in GB last year. The newfacility will increase this total to more than 75,000 tones when it is fully operational -more than doubling the amount of high quality PET (PET that is recycled to makefood grade, sustainable packaging) currently produced in Britain.The state-of-the-art plastics reprocessing plant will also supply CCE with enough GB-sourced, high-quality PET to achieve CCEs target of including 25% PET in all itsplastic packaging in GB by 2012. This represents an important milestone in CCEsongoing work to develop the most sustainable packaging possible.CCE GB Managing Director, Simon Baldry said: "CCE is committed to transformingrecycling in Great Britain. Our investment in this project with ECO Plastics will startto address the recycling challenges in this country. British PET bottles will berecycled for re-use in packaging that will be sold from the shelves of British retailers."The amounts of high quality PET produced in GB will more than double, enablingCCE to meet our ambitious target of incorporating 25% rPET in all our plastic bottlesby 2012. At the same time, we are working with our customers to encourage shoppersto recycle more as part of our wider sustainability efforts."CCE has signed a ten-year joint venture deal with ECO Plastics that guarantees anannual supply of rPET to CCE. CCE is making a £5 million equity investment tosupport construction of the new facility, with ECO Plastics raising an additional £10million to complete funding for the project.The deal is a first for the British drinks manufacturing industry. It will bringrecycling in GB full circle, as used British packaging will be recycled in Lincolnshirefor re-use in packaging that will then be sold in Britain. Currently, CCE sources foodgrade rPET from continental Europe, while around two thirds of used GB plasticspackaging is exported for reprocessing.51 Department Of Business Administration Federal Urdu University Islamabad.
    • The new recycling facility will be built on ECO Plastics current site in Lincolnshire,and will be operational next year. The joint venture will create 15 jobs during theconstruction phase and up to 30 new jobs once the site is operational.ECO Plastics existing facility is already the largest in Europe, capable of processingmore than 100,000 tones of waste plastic or 2 billion bottles a year. Independentresearch has shown that products made with recycled plastic from the ECO Plasticssite are 68% less carbon intensive than packaging made with virgin materials.Jonathan Short, Managing Director, and ECO Plastics, said: "ECO Plastics has madehuge strides in developing our business in recent years, to become the UKs leadingplastic recycler. We are delighted to be partnering with a company of the caliber ofCoca-Cola Enterprises and view this pioneering agreement as the next important stepfor our own business and the industry as a whole."Demand for sustainable packaging in the UK has gathered pace in recent years,whilst the UK supply of recycled plastics has grown significantly. Coca-ColaEnterprises has recognized these trends and has taken positive action that will helpaccelerate UK plastics recycling. This is the low carbon economy in practice."Having recently re-opened Europes largest and most technically advanced plasticsrecycling facility and chosen a new name for a new chapter in our growth, we arethrilled to further expand operations through this joint venture."Commenting on the Joint Venture between CCE and Eco Plastics, DEFRA WasteMinister, Lord Henley said: "This investment builds on the publics enthusiasm forrecycling and will make it easier for them to buy recycled plastic products such as thefamous Coca-Cola bottle. It more than doubles the UKs ability to turn used drinksbottles into new ones, which reduces the carbon footprint of every bottle made,compared with using virgin material."Coca-Cola and ECO Plastics efforts are an innovative blueprint for the future, andshow how producers can take responsibility to step up to this challenge."Notes to editorsDEFRA is the UK Government Department for Environment, Food and Rural Affairs.About Coca-Cola Enterprises:52 Department Of Business Administration Federal Urdu University Islamabad.
    • Coca-Cola Enterprises, Inc. is the worlds third-largest independent Coca-Colabottler. CCE is the sole licensed bottler for products of The Coca-Cola Company(TCCC) in Belgium, continental France, Great Britain, Luxembourg, Monaco, theNetherlands, Norway, and Sweden.Todays announcement represents an important milestone as part of CCEs widerleadership approach on corporate responsibility and sustainability (CRS). CCE isworking to achieving a range of important CRS targets. The Joint Venture with EcoPlastics in GB demonstrates CCEs commitment to achieving ambitious goals toreduce the impact of our packaging, maximize our use of renewable, reusable, andrecyclable resources, and recover the equivalent of 100% of our packaging.In Great Britain (GB) Coca-Cola Enterprises Ltd (CCE) employs around 4,500 peopleacross England, Scotland, and Wales at manufacturing sites, regional offices, anddepots.CCE is committed to minimising the environmental impact of its products andoperations, with a particular focus on sustainable packaging and recycling, waterstewardship, and energy and climate protection.CCEs manufacturing sites meet ISO14001 certification, the highest internationalstandard for environmental management. CCE has reduced its energy usage ratioacross manufacturing operations in GB by 21% since 2001 and more than 99% ofwaste at its sites is now recovered or recycled.All of CCEs glass bottles are 100% recyclable and contain an average of 30%recycled materials; all plastic bottles are made from PET (polyethylene teraphthalate)and are 100% recyclable; and all CCE cans used in GB are made from 100%recyclable aluminum and contain around 50% recycled aluminum.CCE calculates and publishes the CO2 emissions resulting from the manufacture anddistribution of all its brands, and in 2007 CCE partnered with the Carbon Trust tomeasure all greenhouse gas emissions embodied within selected products in theportfolio. For further information please visitwww.cokecce.co.uk.About ECO Plastics:ECO Plastics is Europes leading ethical plastic bottle recycler. ECO Plastics beganre-processing post consumer plastics in 2006 and has over the past five years53 Department Of Business Administration Federal Urdu University Islamabad.
    • quadrupled its processing capacity, tripling the factory footprint. ECO Plastics £17million facility is now the largest and most sophisticated in Europe, capable ofprocessing 100,000 tons of waste plastic a year. ECO Plastics superior cleaningtechnology allows the company to make the most use of the plastic it sorts, producing11 different streams of plastic, including food grade PET. Virtually no waste is leftover. Independent research has shown that ECO Plastics process is 68% less carbonintensive than using virgin plastics for packaging. AcquisitionsThe company has a long history of acquisitions. Coca-Cola acquired Minute Maid in1960, the Indian cola brand Thums Up in 1993, and Barqs in 1995. In 2001, itacquired theOdwalla brand of fruit juices, smoothies and bars for $181 million. In2007, it acquired Fuze Beverage from founder Lance Collins and Castanea Partnersfor an estimated $250 million. The companys 2009 bid to buy a Chinese juice makerended when China rejected its $2.4 billion bid for the Huiyuan Juice Group on thegrounds that it would be a virtual monopoly. Nationalism was also thought to be areason for aborting the deal. In 1982, Coca-Cola made its only non-beverageacquisition, when it purchased Columbia Pictures for $693 million. It sold the moviestudio to Sony for $1.5 billion in 1989 Coca-Cola, Monster Acquisition Rumors Denied By Soda GiantMonster Beverage Corp.s shares soared on Monday following a report that Coca-ColaCo. was considering buying the energy drink maker, but the worlds biggest soft drinkmaker later denied the discussions are under way.The Wall Street Journal cited unnamed people in reporting that Coca-Cola was intalks to buy Monster. If a deal transpired, Monster would be Coca-Colas largest brandacquisition ever.Coca-Cola said late Monday that no such discussion is in process.Monster declined to discuss the matter, citing company policy.54 Department Of Business Administration Federal Urdu University Islamabad.
    • The companies have a distribution relationship in many markets so they always are insome contact."At this time, we are not in discussions to acquire the Monster Beverage Corporation.We continue to review the best ways to maximize the value of our relationship,"Coca-Cola said in a statement.The deal didnt seem farfetched to investors because Coca-Cola is constantly lookingbeyond soda for growth and has seen some success in energy drinks. In its fiscal firstquarter, for instance, it sold 4 percent more Coca-Cola around the world than a yearearlier, while it sold 15 percent more bottled water and 25 percent more energydrinks.Coca-Colas Energy Drinks Include Full Throttle, Fuze, Burn And Gladiator.Monster Beverage, based in Corona, Calif., sells juices, sodas and other drinks underbrands such as Monster Energy and Hansens. Its net income rose 35 percent in its lastfiscal year to $286.2 million.Formerly known as Hansen Natural Corp. and known for its juices and naturalbeverages, the company released Monster Energy in 2002. The drinks tremendouspopularity ultimately redefined the company, and it renamed itself Monster inJanuary.It says its energy drink sales are growing faster than the category as a whole, whichincludes Red Bull, Rockstar and other competitors. Monster now offers a variety ofenergy drinks around the globe. This year, it entered new markets including Polandand Japan.Monsters stock was one of the top gainers on the Nasdaq early Monday onspeculation about a possible acquisition. The Nasdaq paused the stocks trading threetimes by midday based on the activity.Shares of Monster spiked to a record high of $83.96, which was 27 percent abovetheir previous 52-week trading high of $65.94, reached last week. But they closeddown 53 cents at $65.Shares of Coca-Cola, based in Atlanta, fell 31 cents to close at $76.32.Problems Being Faced By Coca-Cola CompanyThere are some problems being faced by a company which affects its business strategies. It isdifficult to know where to begin and isolate the events which shape the business environment.55 Department Of Business Administration Federal Urdu University Islamabad.
    • DistributionCoca-Cola Company is facing a problem of distribution, as distributors are expectingmore from coco cola to provide an extra distribution channels which could help themto spread their products at large .Coca-cola products are some where not available inrural area due to inefficient distribution system.InvestmentCoca-Cola Company is now facing a problem regarding investment, like investmentin distribution system, to make it efficient. They need investment to encourageretailers to provide space to their products, in the form of providing coolers. Companyis not in a situation to provide it to all its retailing stores while its competitor providesit to its distributors to promote his products in the market which is their competitiveedge to increase it s share in the market. It creates an attraction to its distributors totake its products more to take incentives of special discounts provided by thecompany to its distributors, wholesaler, and retailers. This is a relatively a long termprocess to penetrate in the market and gain market share.Brand AwarenessHaving low promotional strategies that most of their customers are unaware of theirbrands mostly they mix their brands with Pepsi, they feel that Sprit and Fanta are thebrands of Pepsi but in actual these are the brands of Coca-Cola Company they arefacing these problems due to having low promotional strategy so that the unaware ofits brands.Low value of shareCoca-Cola company having a share of about 27% which is lower than its competitorsi.e. Pepsi having market share of 68% involve in more promotional strategies ascompared to Coca-Cola.Fake BottlingFake bottling in India is one of the major problems being faced by the company. Thisproblem not only affects the sale volume and profit margins but also brand value andloyalty of the customers. The profitability which company gain, ultimately that part ofgain goes to fake bottle producers, who running their business in the name ofcompany56 Department Of Business Administration Federal Urdu University Islamabad.
    • Recommendations for More Improving Coca Cola International Business ActivitiesDistributionProducts of the company must be physically transported from its warehouse where theproducts are needed. Company must add value to its products that eventually boughtby individuals in order to create a viable ―value chain‖ model to create a relationshipof distribution management and select other facilitating organizations as a member ofvalue chain .so the distributors within a marketing mix is getting the product to itstarget Market .the most important activity in getting the coco cola company productsto the target market is arranging for its sales and transfer of a product to its finalcustomer by assuming its financial risks. for ultimate selling company try to carry outthe functions in exchange for the order and payment from the customer by providingmore easily available products at a required place. Company try to carry out thefunctions in exchange for the order and payment form the customer by providingmore easily available products at required places.Companies try to hire Agent middle man who works as their own to distribute itsproducts at various locations.As the middle man could not be disinter mediate from the process although some ofunnecessary or redundant functions which cause the lost of financial resources.Company create assortment and storing products can be shifted from one party toanother in order to increase efficiency.Designing Distribution Channel Specify role of distribution. Select the distribution channel Determine the intensity of distribution Choose specific channel membersMarket Segmentation57 Department Of Business Administration Federal Urdu University Islamabad.
    • With different wants, buying preferences or product use behavior relatively minor andbenefits sought by the customer can be satisfied with single marketing mix .as a resultsegments must be targeted individually and alternative marketing mix is required.The process of market segmentation Identify the current and potential wants that exist within a market Identify characteristics that distinguish among the segments Determine the size of segment and how well they are being satisfiedNew Product DevelopmentTo achieve strong sale and healthy profits company should have an explicit strategywith respect to developing and evaluating new products. This could also help it todefend its market share. Stages in product development which could enhance businessactivities. Gathering new product ideas Screening of ideas Business analysis Prototype development Market test. Commercialization.Dispose of Used ProductsConsumers desire for convenience in the form of throw away containers conflict withtheir stated desire for clean environment .some discard packages wind up little ,otheradd to solid waste in land fills. So the coco cola company recycles its disposablebottles and cans to recycle so the cost of production could be minimized to deal withother financial resources.Promotional ProgramsPromotion, in some where it takes, is an attempt to influence so the company couldhold a defined marketing promotional mix so that the consumer could be aware of itsbrand at large. They adopt the strategy by the following methods: Personal selling. Advertising.58 Department Of Business Administration Federal Urdu University Islamabad.
    • Sale promotion. Public relations.Company sells its products by creating an attraction for the customers by adoptingthese strategies.Formation of WebsiteWeb ushered in another level of networking of marketers. E-information form ofnetworking involves creating a corporate website and posting information on it .Firmsare able to make vast amount of information available on their website .Theinformation ranges from product description and invitations to suppliers to submit bitson planned purchases to product operation instruction and information aboutcontracting sale personnel. So the coco Cola Company must be create its website thatthe ultimate customer could know about the product available in the market .Theymust create a web sit which could fall in the categories of Background and general information Current business operations Links Attraction and entertainment features Contact pointThe impacts of internet marketing create an opportunity to increase its wellbeing inthe market place so opportunity of dealing in a host country as well as in theinternational marketing could increase.Establishing the BudgetOnce the promotional budget has been established, it must be allocate among thevarious activities comprising the overall promotional program .One method that thecoco cola company use to extend their budget ―cooperative corporative ads which is ajoint effort two or more firms intended to benefit each of the participant. So thecompany could use any of the two strategies of corporative ads i.e. vertical andhorizontal. In vertical corporative ads Coco cola Company could share the cost of adswith the retailers or by giving a special discount to the retailers, to encourage theretailer advertise?59 Department Of Business Administration Federal Urdu University Islamabad.
    • BIBLIOGRAPHYReference Books John Bratt, Jeffzay Gold, 2003, Human Resource Management (Theory & Practice), 3rd, Plagrave Mecmiilan. Will Rowan, 2002, Digital Marketing (Using New Technologies to Get Closer to Your Customers), 1st, Kogan Page Limited. David Jobber & Geoff Lancaster, 2004, Selling and Sales Management, 6th, Pearson Education Singapore Pte. Ltd. Peter Rix, 2001, Marketing (A Practical Approach), 4th, McGraw-Hill Book Company Australia Pty Limited. Dillon, Madden, Firtle, 1994, International Business, 3rd, McGraw-Hill Book Company Australia Pty Limited. Hawkins, Best, Coney, 2004, Consumer Behavior (Building Marketing Strategy), 9th, McGraw-Hill Book Company Australia Pty Limited.Reference Sites www.coca-cola.com www.cocacola.co.in www.coca-cola.co.uk www.cokebuddy.co.au www.cocacola.co.jp www.cokecce.com www.google.com www.woccatlanta.com60 Department Of Business Administration Federal Urdu University Islamabad.