The Coca Cola Company A Case Study Paper
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Published: Mon, 5 Dec 2016
Coca-Cola known as best taste of the world has taken birth on May 8, 1886 in Atlanta, Georgia. Coca-Cola is world’s leading manufacturer, distributer and marketer company of non-alcoholic beverage concentrates. It is also famous to manufacture more than 400 beverage brands. Additionally it also produces sports drinks, tea and coffee. The Coca-Cola Company began building its global network in 1920s and now operating in more than 200 countries. A simple formula is applied by the Coca-Cola Company on global scale to provide the refreshment to consumers by the expense of a very small amount of money billion times a day. Coca-Cola Company has a well organized, pervasive production and distribution system in the world. However the entire system of the Coca-Cola Company requires more improvement to strength its structure. The organizational structure needs more management work to achieve the desired results. Aim of Coca-Cola Company is to increase the shareowner value over time. The business partners of the Coca-Cola Company are accomplished to provide the satisfaction and value to its customers through the superior brands and services.
History of Coca-Cola Company
Coca-Cola was first time introduced by a pharmacist professional named John Syth Pemberton in Atlanta, Georgia in 1886. John Syth processed the caramel-colored syrup in his backyard by a three-legged brass kettle. He distributed the product keeping in jug to Jacob’s pharmacy and customers. After this delicious and refreshing drink was produced by an accident and resulting the carbonated water teamed with new syrup. The name of Company as Coca-Cola was suggested by Dr. Pemberton’s partner and book-keeper M. Robinson. He named it with Cs suggesting as it would look well in advertising. The Atlanta Journal published the advertisement of Coca-Cola to attract the customers to use the Coca-Cola products.
By the year of 1886, the use of Coca-Cola products increased as Dr, Pemberton made his full efforts to sell the portions of his business to various partners prior to his death in 1988. Remaining assets of Coca-Cola Company were sold to Asa G. Candler, an entrepreneur from Atlanta. Mr. Candler tried to get full rights of the Coca-Cola Company and expanded the consumption of the Coca-Cola products to every state and territory after which he liquidated his another pharmaceutical business. Mr. Candler with his brother John S. Candler, John Pemberton’s former partner named Frank Robinson and other two associates formed a Georgia Corporation that was named as Coca-Cola Company. The trademark Coca-Cola was registered in U.S patent office on January 31, 1893.
As the demand of the cold drinks increased the Company decided to outgrow its facilities quickly. In 1919 the Coca-Cola Company was sold to group of investors for $25 million. Robert W. Woodruff became the president of the Company in 1923 and nearly sixty years of leadership took the business to unsurpassed heights of commercial success and made the Coca-Cola Company as world’s most recognized and valued brands.
Coca-Cola Company Organizational Structure
The organizational structure of the Coca-Cola Company is flexible to meet both global and local needs. At the top of the structure is the corporate segment who gives support and direction to make new strategic decisions. There is 12-member Executive committee and each member is assigned a specific region. The Coca-Cola Company has five geographic segments called the strategic business units. Each unit covers the specific world region and further unit is subdivided into smaller regions. Locally management is divided into functional subunits such as marketing and finance. The main focus of the Coca-Cola Company is its teamwork and empowerment. The purpose of focusing on teamwork is to operate at global as well as local level. In case of Coca-Cola Company it is needed to focus on the local market and look at the global picture balancing the central directions with local direction to make new decisions.
Continental Europe Division
North Europe Division
North America Division
Fig 1: Divisional Structure
Fig. 1 presents the divisional structure of the Company and it is developed in response of the problems associated with functional structures. What is advantage of this division structure for the Coca-Cola Company? Each division is defined with its major functions for the Company and improved decision-making. However many difficulties are faced when there exist a confusion about the specific role of each division. Other disadvantage of this structure is the lost of economies of scales and rivalry among the division is fostered.
Coca-Cola Main Products
The Coca-Cola Company produces more than 400 brands of non-alcoholic beverage including both carbonated and non-carbonated drinks. The 400 brands consist of more than 3000 different beverage products. A few brands of the Carbonated and Non-carbonated soft drinks are given in the following table.
Dasani bottled water
Glace Vitamin Water
PowerAde sports drinks
Minute Maid and Minute Maid To Go Juices
Aquarius sports drinks
Barq’s Root Beer
Table 1: Main products of the Coca-Cola Company
Coca-Cola Company is main producer of the soft drinks in marketplace. We have seen that Coke has a 50% shares in the global carbonated soft-drink industry. Coke appears to have a sustainable scale advantages over its competition. Pepsi is also internationally known for its Pepsi, Mountain Dew and other brands in the world. Pepsi also sells and distributes the juices under several Tropicana trademark. In addition PepsiCo is also engaged in snack foods segment through the domestic and international Frito Lay business. PepsiCo has attempted to move into faster growing non-carbonated beverage segments with its recent acquisition of South Beach Beverage Company. PepsiCo is also enjoying the joint ventures with Starbucks and Lipton to sell its best brands of ready-to-drink coffees and teas.
Another competitor to Coca-Cola is National Beverage Company (FIZ). A series of key ratios from Coca-Cola’s most known competitors is given in following chart.
Price Sale Ratio of Coca-Cola Company can be given in following table 2.
PepsiCo, Inc (PEP)
Cadbury Schweppes plc
Cot. Corporation (COTT)
National Beverage Corp (FIZ)
P/S Ratio Estimate $22.7 = $8.07*2.81
Table 2: Price Sales ratio of Competitors to Coca-Cola
Three companies of the world have prominent presence in the soft drinks industry. Three companies are as Coca-Cola Company, PepsiCo and Cadbury Schweppes.
Other than soft drinks substitute products of Coca-Cola Company are bottled water, coffee, sports drinks and tea. Bottled water and sports drinks are more important with trend to be a more health conscious consumer.
Marketing strategy in Coca-Cola Company
Coca-Cola Company works at global level and makes every effort to adhere, political, cultural, local and political requirement in every market of the world. Coca-Cola encourages the parents to use their products for their growing children by giving them information on product’s labels and online. For this purpose the Coca-Cola Company’s policy is applied to all channels of advertising available: radio, print, television and internet. The Coca-Cola Company avoids to directly targeting the children where parents may not be present to look after them. Coca-Cola Company is obliged to follow the guidelines consistent with this policy adopted by the International Council of Beverage Association. To implement this policy Coca-Cola Company requires a mechanism together with other partners, competitors and peers.
Coca-Cola Company distributes its products through a network of bottling companies. Coca-Cola uses its own network of wholesalers for their fountain syrup distribution.
Coca-Cola Company’s relation with customers
Coca-Cola Company is enjoying its business with more than 120 years of history. Coca-Cola Company has given the necessary attention to balance the demand of three main business drivers: operating efficiency, product innovation and focusing on customer. Our concern is to focus on the customer demands and provision of the products at reasonable prices in more than 200 countries of the world. To continue the profitability and growth Coca-Cola Company is facing the ongoing challenges of enhancing the relationship between sellers and buyers of products. Relationship marketing ensures the trust of the customers in Coca-Cola Company. The product value is added through the added goods and services to provide the product warranties to customers.
Due to change of the taste of the customer the competitive advantage of the Coca-Cola Company will be endured. What are the elements of the competitive advantage of Coca-Cola Company? These include the brand, pricing power and quality of products.
Future Prospects of Coca-Cola Company
Coca-Cola Company is competing through the differentiation in market. The Coca-Cola Company is producing many brands for the customers which prefer the consumers and want to pay a premium for. This preference can be enhanced through advertising and it spends $ 2.8B on advertising.
This case study answers the all questions provided to be answered. In this paper we have presented the history of the Coca-Cola Company and its rise in the world of the cold drinks. We have focused to answer the all key questions about the Organizational structure of the Coca-Cola Company. Products of the Company are also discussed in this case study paper. Finally the Company’s customer focus and future prospects of are described.
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