Coca Cola has had a presence in China since 1927 and has grown significantly over the decades since re-entering the market in 1979 after opening trade relations. It now operates 45 plants, has a 40% market share, and has invested $9 billion in the country. Coca Cola uses various entry strategies including exporting, franchising, joint ventures, and wholly owned operations to establish its brand and distribution network in China. It faces competition from PepsiCo and local brands, and employs over 30,000 people with a hybrid organizational structure and global staffing approach to manage its large operations and continue growing in the expanding Chinese market.

1. Coca Cola in China

2. History
• 1886 Invented by Doctor. S Pemberton in Atlanta
• 1927 Introduced to China
• 1930 First plants in Tianjin and Shanghai
• 1979 Re-entered as wholesaler
• 1979 First shipment in was 28 boxes
• 1981 Built first bottling factory, state-owned
• 1986 Wholly -owned first concentrate factory to protect IP
• 2000 Owned 40% of soft drink market share

3. Company overview
• Company value $179.9 Billion
• 94% of world population recognise
their white and red logo
• 500 brands worldwide; Soft
drinks, tea, juices, bottled water,
coffee &energy drinks
• Operates in more than 200
countries
• 9 Billion investment in China
• 45 plants in China, over 30.000
bottler employees

4. Vision
• Profit
• People
• Partners
• Planet
• Productivity
• Portfolio- new
billion dollars brand

5. Mission
Mission Statement in China: to
provide quality range of flavoured
drinks for all individuals tastes and
lifestyles.
• To refresh in mind, body and spirit
• To inspire moments of optimism
and happiness through brands and
actions
• To create value and make a
difference

6. Reasons for entering Chinese market
• Large market, expanding middle class
• First – mover advantage
• Low competition
• Access to low cost materials and cheap
labour
• Political and economical stability-Open
door policy, FDI, WTO
• Financial incentives, corporation tax
reduction

7. Entry Strategy in China
Year Mode of entry Advantage Disadvantage
1979 Exporting Access to a new market High operation and
distribution costs, reduced
revenue
1979-1984 Franchising First contact with Chinese
market, establish
relationships with
Government
Opportunistic behaviour of
agents, uncertainty for
long term development,
inexistent or very
disorganised distribution
system.
1985-1992 Joint ventures Acquire management right
for bottling companies,
direct involvement in
operations and marketing
Limited number of
ventures, excessive
bureaucracy
1992-2015 Hybrid mode; Franchising,
JV, Partnerships, Wholly
owned
Access to partners
resources; HR, Capital,
Distribution
Tall organisational
structure, centralisation of
power

8. Competition analysis
• Coca Cola 63% market
share
• PepsiCo 30% market share
• Future Cola (nurtured as
local brand) targeting rural
areas
• Other

9. Organisational Structure
• David Brooks, President, Greater
China & Korea
• Martin Jansen, Operational
Leadership(BIG) China, Malaysia
and Singapore

10. Corporate Governance
Initiatives and goals for maintaining a clean
environment
• 75% recovery from recycling
• Improve water efficiency by 25%
• Source key agricultural ingredients
sustainably
• Reduce Carbon footprint by 25%
• Compliance to environmental requirements

11. Staffing Policy
• It used a Ethnocentric approach
when first entered and moved to
Polycentric(local) while
establishing
• Uses a Geocentric(global)
staffing approach, managers are
appointed based on their
qualifications regardless of
nationality or ethnic background

12. Motivation and Leadership
• Coca Cola uses Herzberg's
Motivation-Hygiene system

13. Operations and Management Control
The Coca-Cola system has a global reach, with a network of over 250 bottling
partners, including company-owned, controlled and independent bottling
partners. The system has 700,000 over employees.

14. Recommendations
• Target rural areas / improve distribution
• Decentralise, empower local teams
• Increase the number of local partners
• Continue innovation and acquisition strategy
• Understand consumer
• Be cost-innovative and value focused
• Find new channels to communicate