Introduction:

The Coca-Cola Company is a beverage company, manufacturer, distributor, and marketer

of non-alcoholic beverage concentrates and syrups. The company is best known for its
flagship product Coca-Cola, invented by pharmacist John Stith Pemberton in 1886. The
Coca-Cola formula and brand was bought in 1889 by Asa Candler who incorporated The
Coca-Cola Company in 1892. Besides its namesake Coca-Cola beverage, Coca-Cola
currently offers more than 400 brands in over 200 countries or territories and serves 1.6
billion servings each day.

The company operates a franchised distribution system dating from 1889 where The
Coca-Cola Company only produces syrup concentrate which is then sold to various
bottlers throughout the world who hold an exclusive territory.

The Coca-Cola Company is headquartered in Atlanta, Georgia. Its stock is listed on the
NYSE and is part of DJIA, S&P 500 Index, the Russell 1000 Index and the Russell 1000
Growth Stock Index. Its current chairman and CEO is Muhtar Kent.
Mission, Vision & Values
The world is changing all around us. To continue to thrive as a business over the next ten
years and beyond, we must look ahead, understand the trends and forces that will shape
our business in the future and move swiftly to prepare for what's to come. We must get
ready for tomorrow today. That's what our 2020 Vision is all about. It creates a long-term
destination for our business and provides us with a "Roadmap" for winning together with
our bottling partners.

Our Mission

Our Roadmap starts with our mission, which is enduring. It declares our purpose as a
company and serves as the standard against which we weigh our actions and decisions.

• To refresh the world...

• To inspire moments of optimism and happiness...
• To create value and make a difference.

Our Vision
Our vision serves as the framework for our Roadmap and guides every aspect of our
business by describing what we need to accomplish in order to continue achieving
sustainable, 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 shareowners while being mindful of our
overall responsibilities.
• Productivity: Be a highly effective, lean and fast-moving organization.

(http://www.thecoca-colacompany.com/ourcompany/mission_vision_values.html)
 Coca-Cola's Mission Statement Analysis
In general, firms have two mission statements. One is an internal guide for employees to
understand what the company does, how it is done, and who it is done for. This internal
mission statement keeps the employees focused on the realistic goals of the firm. The
other mission statement is broadcast externally. An outline for customers, investors, and
business partners, the external mission statement lists who the firm is, what it does, how
it does what it does, and how it does what it does better than anyone else. This broader
statement contains guidance for those outside of the firm who are interested in doing
business with the organization, and it contains broader, inspirational goals, for members
of the organization.

The broadness of the Coca-Cola Company’s external mission statement is no exception to

the general rule. In fact, it is not an exaggeration to state that every living person on the
planet is a potential customer, partner, or recipient, directly and indirectly, of a product,
opportunity, service, or other benefit that Coca-Cola may offer. The mission statement is
divided into three sections: mission, vision, and values. And each of the sections
references ideals that the company espouses.
The goals of the company, as defined by the first section of the mission statement, are
many:

“To Refresh the World” -- This is a statement that suggests that Coca-Cola produces
some sort of food item, which it does, of course.
“To Inspire Moments of Optimism” -- This statement is unclear and does nothing to
differentiate Coca-Cola from any other food producer. One of the goals of every firm is
to inspire optimism.
“To Create Value and Make a Difference” -- Likewise, this statement, while better
defined than the prior statement, simply plays on the reader’s emotions and adds nothing
substantive.

The second section of the mission statement, entitled vision, defines the company and the
competition much better than the first. And it defines exactly the product that the
company makes. This section lists Coca-Cola’s goals to encourage a happy workforce, to
be responsible environmentally, to carry refreshing beverages, to be a good business
partner, all while completing its responsibilities to its shareholders.

The last section of the mission statement, named “values,” gives the reader an idea of the
qualities that Coca-Cola expects of its employees: leadership, passion, integrity,
accountability, collaboration, innovation, and quality, all indicate that the company’s
expectations of its employees, and likely its business partners, are high.

Overall, Coca-Cola’s mission statement defines its goals, policies, and values and defines
the competency of the company. It indicates the company’s scope; the reach of Coca-
Cola is world-wide. It does not, however, do a good job of stating why its operation is
better than anyone else’s. As a result, it does not define the competitive environment.
Most of the ideals that Coca-Cola lists are generic -- every firm wants to do good by its
shareholders and its customers. Consequently, the mission statement needs refined if it is
to be taken seriously.

Vision and Mission statement of Coca-Cola

The mission statement is divided into two sections: mission, vision And each of the
sections references ideals that the company espouses.

The Mission statements having declared the three major goals

1- To Refresh the world

This statement clearly indicates that this is talking about some drinks or related to
beverages.

2- To inspire moments of optimism and happiness

This statement doesn’t tell us about the product, market or any other factor so its
seems to be very unclear because the most of the purpose of statements are same
nothing distinctive

3- To create value and make a difference

This statement tell about the emotional attachment to the consumer of the
products

Second part of the mission statement is entitled vision which contains the
information, about the company and the competition. And it defines exactly the
product that the company makes

• 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 shareowners while being mindful of our
overall responsibilities.
• Productivity: Be a highly effective, lean and fast-moving organization.
 The above section clearly defined us about the mission statement of the CocaCola and
it covers all the major components of Mission statements excluding the customer
information that for which customer they are making about the product the general
concept has been taken from the statements that it covers the entire beverage and the
general customer as well.

COCA COLA Value Chain Analysis

Value Chain Analysis:

A value chain is a model used to disaggregate a firm into its strategically relevant value
generating activities, in order to evaluate each activity's contribution to the firm's
performance (Terms V 2006). Through the analysis of this model we can gain insight as
to how a firm creates their competitive advantage and shareholder value.
The value chain of the nonalcoholic beverage industry contains five main activities.
These include inbound logistics (suppliers), operations, outbound logistics (buyers/
customers), marketing and sales, and service.
Inbound Logistics (Suppliers):
Some of Coca Cola's most notable suppliers include Spherion, Jones Lang LaSalle, IBM,
Ogilvy and Mather, IMI Cornelius and Prudential. These companies provide Coca Cola
with materials such as ingredients, packaging and machinery. Coca-cola has put certain
standards in place which these suppliers must stick to (The Supplier Guiding Principles)
to ensure that these materials are in satisfactory condition. These principles include:
• It is necessory to falling in line with laws and standards

• Following laws and regulations

• Freedom of association and collective bargaining

• Forced and child labor are strictly not allowed

• No mistreatment with labor

• Avoid unfairness in overall system

• Rules reagarding wages and benefits to the employees

• Standard work hours and maximum overtime that an employee or labor can avail.

• Carefully following health and safety standards

 • Environment

• Expression of fulfillment is also its part.

Outbound Logistcs(Buyer/Customer):

Coca-Cola seek to better understand the impact of the its business by the side of its
whole value cycle and partner with its customers to deal with areas of concern and add
value ahead of its beverage products. Large international chains of retailers and
restaurants and small independent businesses and grocery stores are its customers. Coca-
Cola believe in work with its customers equally to create mutual benefit. The Coca-cola
serves its customers through account management teams, providing services and support
tailored to their needs. Coca-Cola is continually looking for ways to reduce costs,
improve sales and profits, and deliver better-quality, more diverse products to consumers
by interacting with its customers. Coca-cola is working to create additional value for its
customers by anticipating its demands and interests and to proactively deliver possible
solutions for the businesses.

Marketing and Sales:

Overall, Coca-Cola has sustained an overall market Share lead by 43% versus 31% of
Pepsi and 18% of cadberry. Coke is often ahead of PepsiCo. Internationally.

Coke maintains a virtually equal portion of this market. Pepsi has strong sales through the
restaurant chains it owns.

Brand loyalty is major strength for Coca-Cola. The net result was greater market share
and profitability for Coke as it realized the depth of its brand loyalty.
Support Activities:
Procurement:
Coca-Cola has followed a strategy of increased ownership of bottling
operations worldwide as a way to make its operations more efficient and also to improve
product availability as well as marketing focus. In some cases, investments represent
minority shares in the bottling company, wherein Coca-Cola is able to help focus and
improve sales and marketing programs, assist in the development of effective business
and
information systems and provide operating expertise.
Coca-Cola focused on route-to-market design and optimization of infrastructure in
bottling operations. Coke recently aqured Kerry Beverages and Apollinaris GmbH.
Long term strategy of the coke is to reduce the bottling cost and bottlers’ power.

Human Resource management:

 Coke has strong leasdership team under the leadership of CEO Isadell.Regarding with
human resource management, Coca-Cola Company has a very loyal workforce. Coke
places a lot of emphasis on having its people "think globally but act locally, respond daily
to competitive situations, serve customers and consumers with apassion".

Technology development:
The world is getting smaller and smaller. Ease of travel and increasingly sophisticated,
direct worldwide communication capabilities drive this phenomenon. With its global
scope and the power of the world's most everywhere trademark, the Coca-Cola system is
uniquely equipped to market to this group.

Infrastructure:

Coca-cola has strong departments like accounting, marketing and finance department. Its
team working under the CEO isadell is very strong and competent. Coca-cola believes in
maintaining quality and standards in product as well as in its internal system regarding
working standards and employee ethics and rights.

Porter’s Five Force Model

1. Soft Drink Industry Five Forces Analysis:

Soft drink industry is very profitable, more so for the concentrate producers than the
bottler’s. This is surprising considering the fact that product sold is a commodity which
can even be produced easily. There are several reasons for this, using the five forces
analysis we can clearly demonstrate how each force contributes the profitability of the
industry.

Barriers to Entry:

The several factors that make it very difficult for the competition to enter the soft drink
market include:

• Bottling Network: Both Coke and PepsiCo have franchisee agreements with their
existing bottler’s who have rights in a certain geographic area in perpetuity. These
agreements prohibit bottler’s from taking on new competing brands for similar
products. Also with the recent consolidation among the bottler’s and the backward
 integration with both Coke and Pepsi buying significant percent of bottling
companies, it is very difficult for a firm entering to find bottler’s willing to
distribute their product.

The other approach to try and build their bottling plants would be very capital-intensive
effort with new efficient plant capital requirements in 1998 being $75 million.

• Advertising Spend: The advertising and marketing spend (Case Exhibit 5 & 6) in
the industry is in 2000 was around $ 2.6 billion (0.40 per case * 6.6 billion cases)
mainly by Coke, Pepsi and their bottler’s. The average advertisement spending
per point of market share in 2000 was 8.3 million (Exhibit 2). This makes it
extremely difficult for an entrant to compete with the incumbents and gain any
visibility.

• Brand Image / Loyalty: Coke and Pepsi have a long history of heavy advertising
and this has earned them huge amount of brand equity and loyal customer’s all
over the world. This makes it virtually impossible for a new entrant to match this
scale in this market place.

• Retailer Shelf Space (Retail Distribution): Retailers enjoy significant margins

of 15-20% on these soft drinks for the shelf space they offer. These margins are
quite significant for their bottom-line. This makes it tough for the new entrants
to convince retailers to carry/substitute their new products for Coke and Pepsi.

• Fear of Retaliation: To enter into a market with entrenched rival behemoths like
Pepsi and Coke is not easy as it could lead to price wars which affect the new
comer.

Suppliers:

• Commodity Ingredients: Most of the raw materials needed to produce

concentrate are basic commodities like Color, flavor, caffeine or additives, sugar,
packaging. Essentially these are basic commodities. The producers of these
products have no power over the pricing hence the suppliers in this industry are
weak.

Buyers:

The major channels for the Soft Drink industry (Exhibit 6) are food stores, Fast food
fountain, vending, convenience stores and others in the order of market share. The
profitability in each of these segments clearly illustrate the buyer power and how
different buyers pay different prices based on their power to negotiate.

• Food Stores: These buyers in this segment are some what consolidated with
several chain stores and few local supermarkets, since they offer premium shelf
 space they command lower prices, the net operating profit before tax (NOPBT)
for concentrate producer’s in this segment is $0.23/case

• Convenience Stores: This segment of buyer’s is extremely fragmented and hence

have to pay higher prices, NOPBT here is $0.69 /case.

• Fountain: This segment of buyer’s are the least profitable because of their large
amount of purchases hey make, It allows them to have freedom to negotiate. Coke
and Pepsi primarily consider this segment “Paid Sampling” with low margins.
NOPBT in this segment is $0.09 /case.

• Vending: This channel serves the customer’s directly with absolutely no power
with the buyer, hence NOPBT of $0.97/case.

Substitutes: Large numbers of substitutes like water, beer, coffee, juices etc are
available to the end consumers but this countered by concentrate providers by huge
advertising, brand equity, and making their product easily available for consumers, which
most substitutes cannot match. Also soft drink companies diversify business by offering
substitutes themselves to shield themselves from competition. Rivalry:

The Concentrate Producer industry can be classified as a Duopoly with Pepsi and Coke as
the firms competing. The market share of the rest of the competition is too small to cause
any upheaval of pricing or industry structure. Pepsi and Coke mainly over the years
competed on differentiation and advertising rather than on pricing except for a period in
the 1990’s. This prevented a huge dent in profits. Pricing wars are however a feature in
their international expansion strategies.

2. Economics of Bottling vs Concentrate Business

Factor Bottling Business Concentrate Business

(Data from Exhibit 5)

As the above table indicates concentrate business is highly profitable compared to the
bottling business. The reasons for this are:

• Higher number of bottler’s when compared to the concentrate producer’s which

fosters competition and reduces margins in the bottling business
• Huge capital costs to set up an efficient plant for the bottlers while the capital
costs in concentrate business are minimal
• Costs for distribution and production account for around 65% of sales for bottler’s
while in the concentrate business its around 17%
• Most of the brand equity created in the business remains with concentrate
producer’s

Possible Reasons for Vertical Integration:

 • With the decrease in the number of bottler’s from 2000 in 1970 to less than 300 in
2000, the concentrate producers were concerned about the bottler’s clout and
started acquiring stakes in the bottling business.
• They could offer attractive packaging to the end consumer.
• To preempt new competition from entering business if they control the bottling.

3. Effect of competition between Coke and Pepsi on industry profits:

During the 1960’s and 70’s Coke and Pepsi concentrated on a differentiation and
advertising strategy. The “Pepsi Challenge” in 1974 was a prime example of this strategy
where blind taste tests were hosted by Pepsi in order to differentiate itself as a better
tasting product from Coke.
However during the early 1990’s bottler’s of Coke and Pepsi employed low priced
strategies in the supermarket channel in order to compete with store brands, This had a
negative effect on the profitability of the bottlers. Net profit as a percentage of sales for
bottlers during this period was in the low single digits (-2.1-2.9% Exhibit 4) Pepsi and
Coke were however able to maintain the profitability through sustained growth in Frito
Lay and International sales respectively. The bottling companies however in the late 90’s
decided to abandon the price war, which was not doing industry any good by raising the
prices.
Coke was more successful internationally compared to Pepsi due to its early lead as Pepsi
had failed to concentrate on its international business after the world war and prior to the
70’s. Pepsi however sought to correct this mistake by entering emerging markets where it
was not at a competitive disadvantage with respect to Coke as it failed to make any heady
way in the European market.

4. Can Coke and Pepsi sustain their profits in the wake of flattening demand and
growing popularity of non-carbonated drinks?
Yes Coke can Pepsi can sustain their profits in the industry because of the following
reasons:

• The industry structure for several decades has been kept intact with no new
threats from new competition and no major changes appear on the radar line

• This industry does not have a great deal of threat from disruptive forces in
technology.

• Coke and Pepsi have been in the business long enough to accumulate great
amount of brand equity which can sustain them for a long time and allow them to
use the brand equity when they diversify their business more easily by leveraging
the brand.
 • Globalization has provided a boost to the people from the emerging economies to
move up the economic ladder. This opens up huge opportunity for these firms

• Per capita consumption in the emerging economies is very small compared to the
US market so there is huge potential for growth.

• Coke and Pepsi can diversify into non–carbonated drinks to counter the flattening
demand in the carbonated drinks. This will provide diversification options and
provide an opportunity to grow.

5.Impact of globalization on Industry structure:

Globalization provides Coke and Pepsi with both unique challenges as well as
opportunities at the same time. To certain extent globalization has changed the industry
structure because of the following factors.

• Rivalry Intensity: Coke has been more dominant (53% of market share in 1999).
in the international market compared to Pepsi (21% of market share in 1999) This
can be attributed to the fact that it took advantage of Pepsi entering the markets
late and has set up its bottler’s and distribution networks especially in developed
markets. This has put Pepsi at a significant disadvantage compared to the US
Market.

Pepsi is however trying to counter this by competing more aggressively in the

emerging economies where the dominance of Coke is not as pronounced, With
the growth in emerging markets significantly expected to exceed the developed
markets the rivalry internationally is going to be more pronounced.

• Barriers to Entry: Barriers to entry are not as strong in emerging markets and it
will be more challenging to Coke and Pepsi, where they would have to deal with
regulatory challenges, cultural and any existing competition who have their
distribution networks already setup. The will lack the clout that have with the
bottler’s in the US.

• Suppliers: Since the raw material’s are commodities there should be no problems
on this front this is not any different

• Customers: Internationally retailers and fountain sales are going to be weaker as

they are not consolidated, like in the US Market. This will provide Coke and
Pepsi more clout and pricing power with the buyers

• Substitutes: Since many of the markets are culturally very different and vast
numbers of substitutes are available, added to the fact that carbonated products
 are not the first choices to quench thirst in these cultures present additional
significant challenges.

The consumption is very low in the emerging markets is miniscule

compared to the US market. A lot more money would have to be spent on
advertising to get people used the carbonated drinks.

PORTER FIVE FORCES ANALYSIS

Bargaining power of Buyers (High):

The buyers’ power of Coca-Cola is high. The buyers of cock and other famous soft drinks
are mainly restaurants, large grocery stores and markdown stores. The soft drink
companies distribute their beverages to these stores for resale to the consumer and end
consumers too. The bargaining power of the buyers is very obvious and well-built. Large
grocery stores and markdown stores buy large volumes of the soft drinks which make
them in power to buy at lower price. The interesting shift in buyer demand is because of
increased demand for a healthy drinks has determined the market share of substitute
drinks. Consumers are focusing more on healthy beverages and buying healthy drinks
from well known stores. This fact is due to health and wellness trend sweeping across the
global beverage market. Soft drink consumers are moving from regular carbonated drinks
to low-calorie carbonates, bottled water, sport drinks, juice, teas and coffee.

Threat of Suppliers (Strong):

Suppliers to Coca-Cola are bottling device manufacturers and secondary packaging
suppliers. Coca-Cola outsources bottles but the company owns about 36 % of Coca-Cola
Enterprises. The remaining of Coca-Cola Enterprises is a publicly traded company. This
is the largest bottler in the world (The Coca Cola Company 2006). Since Coca-Cola owns
the majority of the bottler so we can say that particular suppliers don’t hold bargaining
power to a great extent. Rising prices of sugar and packaging material have a direct
impact on the profitability of the Coca-Cola's products. The Coca-Cola Enterprises
controls 80% of the US market as well as parts of Europe. It is introducing new product
at a considerable price. The operational and distributional complexity due to new product
introduction is affecting the bottlers. Even some bottlers have even refused to take new
product. This clash with the bottlers can be a major threat for Coca-Cola but number of
suppliers for Coca-Cola is in market so it is rather easy for it to switch to other suppliers.
This takes away much of the suppliers' bargaining power.

Competitive rivalry (High):

The Coca-Cola has greatest rivalry pressure from PepsiCo. and Cadbury globally as they
are the largest competitors in this industry with global presence. The top five soft drink
brands of Coca-Cola are (Coca-Cola, Diet Coke, Sprite and Sprite). Coca-Cola had fewer
sales in 2006 as compare to PepsiCo as in 2006, PepsiCo. achieved North America
market with sales of $22 billion on the other hand Coca-Cola had only about $7 billion
sales that more of these sales were coming from overseas. But globally, Coca-Cola has
higher sales than PepsiCo. PepsiCo is the main competitor of Coca-Cola and these two
brands have been in a power struggle since more than a century. Brand loyalty is also
competitive pressure for Coca-Cola as Diet Pepsi ranked 18 while Diet Coke ranked 47
as they have more loyalty from customers. The summarized KSF for the aggressive
rivalry are global presence, size and brand image. The recognition of the strength of these
forces helps to see where Coca-Cola stands in the industry. In a nut shell Rivalry threat is
high for Coca-Cola is high as PepsiCo. is in its competition and end consumers
sometimes mix these two brands when they ask for carbonated drink.

Threat of new entrants (Low):

The soft drink industry is fully saturated so the threat of new entrants in this industry is
low as Coca-Cola and PepsiCo lead this industry because of their well-built brand names
and greater distribution channels. It is very tricky for new entrants to start competing with
the available established firms. The high fixed costs for warehouses, transportation, labor
and economies of scale are big barriers for new companies who ant to enter this industry.
New entrants cannot compete on price without economies of scale. It needs heavy
investment to start business in this industry to compete Coca-Cola and PepsiCo. so threat
from new entrants is of very low potential.

Threat of Substitutes (Very Strong)

Threat of substitutes is very strong here as substitutes for Coca-Cola products are sports
drinks, coffee, tea and bottled water. Soft drinks can be substituted with coffee as blend
coffees are also becoming more popular with the increasing number of Starbucks stores
that offer many different flavors to attract consumers’ markets. Now people are becoming
more health conscious so bottled water and sports drinks are trendier. There are a
growing number and varieties of water and sports drinks that appeal to different
consumers who like different tastes. Coffee and tea are supposed competitive substitutes
because they also provide caffeine to our body. Switching cost is low so it makes the
threat of substitute products very strong.

PEST Analysis of Coca-Cola

PEST Analysis

The reason of doing PEST Analysis is to examine the macro-environment of Coca-Cola

operations.

Political
Coca-Cola is monitoring the policies and regulations set by the government. There are no
political issues in this instance in this industry except some. They can’t advertise their
product in schools as this policy been regulated by European Union.

Economic
There is low growth in the market for carbonated drinks, especially in Coca-Cola’s
main market. The raised prices of raw material for Coca-Cola such as corns, fuel,
electricity and oranges affected this industry negatively.

Social
There are changes in consumers’ lifestyles. Consumers are more health conscious.
This affects the Coca-Cola’s sales of the carbonated drinks as consumers prefer
non-carbonated drinks such as tea, juices and bottled drinks. Demand for
carbonated drinks decreases and this leads to a decrease in Coca-Cola’s revenues for its
carbonated drinks.
Technological
As the technology advances, Coca-Cola introduces new products in the market. It also
entered in diet coke, Sports drinks, Energy drinks, tea and coffee etc. But the main brand
for the company is still coca-cola.

Value Chain Analysis

Introduction

Coca Cola markets nearly 2,400 beverages products in over 200 geographic locations. As
a result development of a superior value system is imperative to their operations.
Throughout this paper we will analyze their value system by using Michael Porter’s value
chain analysis model. In an attempt to paint a current picture of the non-alcoholic
beverage industry we will assess the market activity by using mergers, acquisitions and
IPO’S as our benchmarks to determine if the market is growing or contracting.

Value Chain Analysis

A value chain is a model used to disaggregate a firm into its strategically relevant value
generating activities, in order to evaluate each activity's contribution to the firm's
performance (Terms V 2006). Through the analysis of this model we can gain insight as
to how a firm creates their competitive advantage and shareholder value.

The value chain of the nonalcoholic beverage industry contains five main activities.
These include inbound logistics (suppliers), operations, outbound logistics (buyers/
customers), marketing and sales, and service.

Inbound Logistics (Suppliers)

Some of Coca Cola’s most notable suppliers include Spherion, Jones Lang LaSalle, IBM,
Ogilvy and Mather, IMI Cornelius, and Prudential. These companies provide Coca Cola
with materials such as ingredients, packaging and machinery. In order to ensure that these
materials are in satisfactory condition, Coca-cola has put certain standards in place which
these suppliers must adhere to (The Supplier Guiding Principles). These include:
compliance with laws and standards, laws and regulations, freedom of association and
collective bargaining, forced and child labor, abuse of labor, discrimination, wages and
benefits, work hours and overtime, health and safety, environment, and demonstration of
compliance (Coca Cola 2006).
See Appendix for additional information:
From time to time, Coca-Cola uses third parties to assess their suppliers by having
interviews with employers and contract workers. If a supplier has issues about the
supplier guiding principles, they are usually given a certain amount of time to take
corrective measures; if not, Coca-Cola has the right to terminate their contract with these
suppliers.

Operations

Coca Cola’s core operations consist of Company-owned concentrate and syrup

production (Coca Cola 2006). According to their website, some of the main
environmental impacts of their business occur further along the value chain through
system's bottling operations, distribution networks, and sales and marketing activities
(Coca Cola 2006). Management of these operations across the business value chain tends
to be more challenging outside of the core operations. According to Coca Cola, they
continue to address this by working with their partners to reduce the effects at every level
of the manufacturing process by enlarging their comprehension of the complete
environmental impact of their business through the entire lifecycle of their products from
ingredient procurement to production, delivery, sales and marketing, and post-consumer
recycling (Coca Cola 2006).
Please see Appendix for additional information.

Outbound Logistics (Buyers/ Customers)

The activities required to get finished products to customers include warehousing, order
fulfillment, transportation, and distribution management. Coca Cola has the world’ss
largest distribution system. They own, lease, and operate in over 800 plants around the
world (Coca Cola 2006). The 2,400 beverage products which they market reach
consumers in more than 200 different geographic locations (Coca Cola 2006). Grocery
stores such as Sobeys, fast food restaurants such as McDonalds (fountain sodas), and
vending machines are just a few of the distribution units used to ultimately reach
consumers.

Coca Cola has over 300 bottling partners which range from publicly traded businesses to
small family owned operations (Coca Cola 2006). They have implemented the Coca Cola
System in which they work cohesively with their partners in order to develop strategies
aimed to meet the needs of all their customers.

Examples of their commitment to these strategies are seen in their plant in Indonesia,
where boats are used to transport the products between hundreds of islands throughout
the Amazon. This is often because waterways are often the main way to access these
remote islands. In some of the higher elevations of in the Andes, Coca Cola products are
sometimes transported by four-legged power. Across much of Africa, bottlers deliver to
thousands of family-run kiosks and home-based stores.

Marketing and Sales

Out of approximately 2,400 products, Coca Cola markets four of the worlds top sales
drink brands. Although the industry is relatively small and they only directly compete
with two companies, creativity is a vital marketing strategy to Coca Cola.

Coca Cola’s ultimate goal is to deepen their brands’ connection with consumers. As a
result, they have to constantly reinvent their product (Coca Cola 2006). The marketing
strategy they use is directly linked to the consumer; from advertising, to point of sale, to
ultimately opening and consuming a Coca Cola beverage. Techniques which they have
used to achieve this include developing new products and brands, changing the design of
their packaging, and designing various new advertising campaigns (Coca Cola 2006).

On October 19th, Coca Cola reported their earnings for the third quarter. Earnings per
share are up which results in higher benefits for shareholders. According to Neville
Isdell, CEO of Coca Cola, they have experienced a growth in sales of five percent
compared to the same quarter last year. This is as a result of balancing performance
across their global markets and their product portfolio (Coca Cola 2006).

Service

Activities that maintain and enhance a product’s value include customer support, repair
services, installation and training.

Coca Cola’s customers range from large international retailers and restaurants to smaller
independent businesses and vendors. As a result, they provide services tailored to meet
their customer’s needs.

Coca Cola also supports their customer’s by providing them with the training necessary
to help their businesses become more effective and profitable. They have established
Customer Development and Training Centers which are available to mor...