The Coca Cola CompanyA Case Study

April 27th, 2010by Don Merlin

Coke is a Global Brand

1.6 Billion servings sold each day

Sold in over 200 Countries

World Wide Brand Recognition

A Brief History of Coke

Founded in 1886 by John Pemberton

Sold at Jacob's Pharmacy in Atlanta,Georgia

Sold as a “Health Elixir”

A Brief History of Coke

Bought by Asa Griggs Candler in 1888-1891

In 1900 there were two bottling plants

By 1920 there were over 1,000 bottling plants

A Few Fun Facts About CokeFrom Coke's Website

Served aboard the Space Shuttle

Coke is not an effective pesticide

Coke is not an aphrodesiac

Coke's Products

Coke sells syrup to its franchisees who bottle the product

Coke maintains control of marketing and all trademarks

Coke sells and markets soft and hard beverages

Coke Brands

A&W Dasani water Minute Maid Bacardi Powerade And 3,000 other

brands

Pepsi is a Substitute to Coke

Coke competes in a global market with many substitutes for its products

Coke buys up competing foreign brands to maintain Market Dominance

Coke is an Oligopoly

Coke's only serious competitor is Pepsico

In 2005 Pepsi passed Coke in overall market value for the first time in 112 years

Pepsi made $43.7bn in 2009 in the US

Coke made $38.1b in 2009 in the US

Coke's Labor Market

Coke has 92,400 employees with 86% employed outside the US

Coke claims 30% Unionization

Additional 708,000 System Associates working for Franchisees

What Coke Pays its Hourly US Employees

$12.22 Merchandiser $19.72 Truck Driver Average Management

Salary $101K Pepsi pays

Merchandisers - $10.41 Truckers - $17.41 and avg salary is $141,738

Coke's Opportunity Costs

Coke spends over 2.8 Billion Dollars a year on Advertising

More than the GDP of 49 Nations

No upgrades to Bottlers

Less money spent on selling safe products

Coke's International Trade

The franchise system limits actual trade of products except Syrup

Franchisees supply water and sweeteners

Coke imports Coca base for flavoring

Coke Imports Coca Leaves

Coke imports Coca leaves as a flavor ingredient after the cocaine is removed

The Stepan Company is the only legal source of Coca in the US

Coke's Negative Impact

Coke is accused of lowering aquifers

Accused of selling contaminated products

Accused of stifling labor organizing

Coke products are linked to negative health effects like diabetes and obesity

Coke's Long term Goals

Increase Shareholder Value

Increase international and domestic market share

Coke's Short Term Goals

Increase market share of bottled water

Increase sustainability through recycling

“Live Positively” campaign to increase healthy living

Returning water to communities

Coke and Micro Economics Class

Coke is not in a monopolistic competition but is an Oligopoly with Pepsi

Coke and Pepsi are “Price Makers”

Coke uses the “Kinked Demand Curve” and its demand is inelastic

The Future of Coke

Coke's future is assured by its global brand recognition

Coke continues to expand its markets into India, Brazil and China

Works Cited

http://heritage.coca-cola.com/2 http://www.thecoca-colacompany.com/contactus/myths_rumors/packaging3

http://www.coca-colaconversations.com/my_weblog/2008/02/coke-in-space.html4 http://www.btimes.co.za/97/1228/comp/comp.htm5

http://www.thecoca-colacompany.com/brands/product_list_p.html6

Tucker, Irvin, and Cram101 Reviews. Outlines and Highlights for Microeconomics for Today by Irvin B Tucker, Isbn. South-Western Pub, 2009. 262-263. Print. 7

http://www.thecoca-colacompany.com/ourcompany/index.html1

http://www.pepsico.com/Company/Our-Brands.html8 http://www.pepsico.com/Company/PepsiCo-Values-and-Philosophy.html9

http://www.flex-news-food.com/pages/28924/Coca/coca-cola-bottling-q4-profit-rises.html10 http://www.istockanalyst.com/article/viewarticle/articleid/3362077

http://www.thecoca-colacompany.com/ourcompany/meet_our_people.html http://www.payscale.com/research/US/Employer=Coca_Cola_Enterprises_Inc/Hourly_Rate

http://www.salarylist.com/all-real-jobs-salary-at-the-coca-cola-company.htm http://www.payscale.com/research/US/Employer=Pepsi_Bottling_Group/Hourly_Rate http://www.salarylist.com/all-real-jobs-salary-at-pepsico-beverages-international.htm

http://www.adbrands.net/us/cocacola_us.htm https://www.cia.gov/library/publications/the-world-factbook/index.html

http://www.indiaresource.org/campaigns/coke/index.html http://internationaltrade.suite101.com/article.cfm/cocacola_drinks_in_mexico_india20

http://www.thecoca-colacompany.com/presscenter/viewpoints_kent_uscib.html http://www.alacrastore.com/company-snapshot/The_Coca_Cola_Export_Corporation-1089128