Coca-Cola Essay, Research Paper
History
"Coca-Cola enterprises Incorporated, employees 66,199 operates, 444
facilities, 47,235 vehicles, 1.9 million pieces of cold drink equipment and sold
3.8billion unit cases in 46 states in the united states, all 10 provinces of
Canada and portions of Europe including Belgium, France, Great Britain,
Luxembourg and the Netherlands" (Coca-Cola facts 99). An, Atlanta
Pharmacist Dr. John Slyth Pemberton founded Coca-Cola on May 8, 1886. The carmel
colored ingredients, Coca leaves and kola nuts. Later the drink was striped of
narcotics. The drink was first designed as a drug that will help people feel
better. Pemberton sold his new drink for 5 cents a glass. Some time later
carbonated water was added to the syrup and that is how Coca-Cola was invented.
Dr. Pemberton sold Coca-Cola out of the pharmacy he worked at. The pharmacy was
owned by, a man named Frank M. Robinson. Robinson suggested
"Coca-Cola" as a name for Pemberton’s drink. The two men took an old
oilcloth sing and hung it in the window saying "Drink Coca-Cola". They
averaged nine glasses sold a day. In 1886 Pemberton became sick he sold some of
his portions of his interest too Asa G. Candler. In 1888 Pemberton died, and Asa
Candler began buying all the out standing shares of Coca-Cola. Candler was and
Atlanta druggist and businessman. Candler knew Coke was going to be something
big. He then had complete control by 1891 for $2,300. In 1892, Candler and his
brother John Candler, Frank Robinson and two other associates formed
"Coca-Cola Company" in Georgia. Candler was a master at marketing. He
handed out coupons for one free glass of Coca-Cola. He also promoted the
beverage by painted walls, Clocks, outdoor posters, serving trays and fountain
urns. Candler marketing stragety worked Coke was available everywhere. The sales
took off. People started calling Coca-Cola "Coke" They urged the
customers to call it by its full name, but "Coke" just stuck. "In
1894, the company opened its first syrup manufacturing plant outside Atlanta in
Dallas Texas. The following year plants opened in Chicago and Los Angeles. Three
years after the Coca-Cola Company’s incorporation Candler announced in the
annual report: "Coca-Cola in the now drunk in every state and territory in
the United States" (History of Coca-Cola Company). Joseph A. Biedenharn, of
Vicksburg, Mississippi installed bottler machinery in his candy store in 1894
and became the first Coca-Cola bottler in the United States. Benjamin F. Thomas
and Joseph B. Whithehead of Chatttanooga, Tennesse bought Coca-Cola from Asa
Candler for one dollar. He got all right to Coca-Cola he thn opened the first
bottling plant in Chattanooga that year. Candler sold the Coca-Cola Company in
1919 for $25 million to an Atlanta banker named Ernest Woodruff and investor
group he had organized. In 1923 E. Woodruff’s 33-year-old son Robert Woodruff
was elected president of Coca-Cola Company. "The Business was
re-incorporated as a Delaware corporation, and 500,000 shares of common stock
were sold publicly for $40 per shares." Robert Woodruff bought Coca-Cola
Company to even greater highs for more then six decades. "Fundamental to
his success was a commitment to the highest standards for product quality a
commitment that remains a hallmark for the Coca-Cola system today". 1981
Roberto Goizueta a Cuban born chemical engineers who rejuvenated the business.
Although Coca-Cola had dabbled on several industries over the years, Goizueta
engineered the largest of this diversification, the $700 million acquisition of
Columbia pictures in 1982. In 1985, Coke changed its original recipe for a
"New Coke". Market shares had fallen so Guizueta thought that
Coca-Cola needed a change his change was "New Coke" the consumers
rejected it. The company changed back to the original recipe. In 1986, it
consolidated the U.S. bottling operation it owned into Coca-Cola Enterprises and
sold 51% of the new company to the public. In 1960, the Coca-Cola Company
purchased minute Maid Corporation; adding frozen citrus juice concentrates and
adds, along with the trademarks minute maid and Hi-C, the company’s beverage
line. The company later acquired Duncan foods, a coffee producer, and formed the
Coca- Cola company foods Division in 1967, now known as the Minute Maid
Company". From 1977-1983 the company produced and marketed wine in the
United States. In 1982 Coca -Cola company bought Belmont Spring Water company
Incorporated. Coca- Cola thought the Entertainment business would be good for
them so in 1982 the company acquisition to Columbia Pictures Industries, Inc,
which joined Tri Star Pictures in 1987, to form the independent corporation
Columbia Pictures Entertainment, Inc. Coca-Cola then sold Belmont Springs Water
Company, Inc. 1989, closing out a decade of accelerated growth and change. In
1997, Robert Goizueta died of lung Cancer. While Robert was in the company the
value rose from 4 billion dollars to 145 billion dollars. Douglas Ivester, the
architect of Coca-Cola’s restructured bottling operations, took over the company
when Guizueta past away. Coca- Cola and Investor ran into some legal problems
when Invester took over. In 1997, the French government blocked the company
tried to buy Orangina from Peknod Ricard. Then in 1998, an antitrust lawsuit
from Pepsi – Cola challenged Coca-Cola’s dominance in the U.S. fountain -drink
business. In June of 1999, products bottled where shut down for two weeks
because some of the bottles where contaminated in Belgium and France. This was
the company largest product recall in the company’s history. Corporate Culture
The Coca-Cola Company provides assistance to American Red Cross and Big Brother
Big Sister. These are just a few of the noble acts the Coca-Cola Company has
become involved in over the years. Coca-Cola is a leading company, which will
continue to grow in all respects. Most importantly, it will grow because of the
company’s value system, and quality for not only its product but also life.
Benefits 401k Company Paid Coverage Coca-Cola offers a full range of benefit
options. The first benefit that may attract an employee to work for Coke is
their company-paid coverage. This would include basic life insurance, basic
long-term disability and health insurance. Retirement, Pension, and Other Post
Retirement Benefit Plans For retirement, the company offers a 401(k) savings
plan with matching company contributions, an employee pension plan, and retiree
medical and life insurance. Paid Time Off The company offers all of their
employees some paid time off. This time off would include sick pay or short-term
disability, vacations, and holidays. Flexible Benefits The company also provides
an opportunity for employees to receive flexible benefits. These options would
be medical coverage, including vision and prescription drugs, dental coverage,
health care and dependent care reimbursement accounts, supplemental long-term
disability insurance and supplemental and dependent life insurance. Coca-Cola
also provides educational assistance and employee assistance programs. Employees
have access to a variety of health management programs such as on site health
club, cholesterol/blood pressure screenings and other wellness programs. Pension
Coca-Cola provides a variety of benefit pension plans covering all of its
employees in North America and Europe. Additionally, the company is involved in
a number of multi-employer pension plans worldwide. Coca-Cola also sponsors a
post-retirement plan that covers substantially all of American and Canadian
employees who qualify before retirement or terminated. In European Countries,
primarily government-sponsored programs cover retired Workers. The total pension
expenses for all benefit plans, including post-retirement health care and life
insurance benefit plans, amounting to approximately $119 million in 1998. In
addition, they also contribute to a voluntary beneficiary association trust,
which will be used to partially fund health care benefits for future retired
employees. Seeing how Coca-Cola employs 30,000 people worldwide, they try to
increase scouting their young employee’s talent for potentially higher
positions. These people start their jobs in front line beverage sales,
distribution, production, or service positions. "The biggest thing Coke is
looking for is long term thinkers," says one insider, "They don’t want
cowboys. They want conservative people who are into adding shareholder
values" (Coke insider, Investors Business Daily Coca-Cola). In 1994, the
Coca-Cola Company was awarded the Optimas Award for global outlook in success
for developing the standardized corporate culture. The company maintained a
long-standing commitment to equal opportunity, affirmative action, and valuing
the diversity of their consumers. The company’s aim to create a working
environment free of discrimination and harassment with respect to race, sex,
color, national origin, religion, age, sexual orientation, disability, being a
special disabled veteran. They also have commitment to make reasonable
accommodations in the employment of men and women who are qualified with
disabilities In addition, to trying to create a working environment free of
discrimination and harassment with respect to sex and sexual orientation, to
prohibit such discrimination and harassment provide a complaint mechanism to
ensure compliance. Even more important, the company maintains an open door
policy where employee related issues could be raised freely. The whole idea of
the open door policy is to provide an effective and timely means for all company
associates to find solutions to work related questions, problems, and concerns
that may effect the culture of the organization. The company has management
programs for potential management and people already in the management program.
Managers and associates work together on the development process. This process
includes determining development needs and agreeing on the development methods.
The approach to development may include on-the-job experience, specific training
programs, and other approaches to the development of the company. Feedback is an
essential factor in the appraisal process. It will prepare the associates for
future business needs. This is all part of there equal Opportunity Policy,
Employees are trained extensively nation wide. Coke provides its South African
divisions with programs to university students with the opportunity to learn new
business skills by working within the company. These specific programs allow
employees to further build new skills, while it also allows employees to build
skills for the first time. The skills the employee’s posses aid the company in
shareowner value National Distribution The Coca-Cola Company is the world’s
largest bottler of liquid nonalcoholic refreshment in which they produce,
market, and distributes their products in nearly 200 countries throughout the
world. Each day these countries consume 100 billion servings of Coca-Cola
products which stresses the importance of the invaluable service that
Coca-Cola’s distribution and bottling centers provide for the company. The
World’s most effective and pervasive distribution system is broken up into two
different sectors which are then divided even further into subunits such as the
following: 1.) The North American Sector – Coca-Cola USA [which operates in the
U.S.] – Coca-Cola LTD [responsible for soft drink operations in Canada.] -
Houston Base Coca-Cola Foods [produces and markets juices and juice like
drinks.] 2.) The International Business Sector – The Greater Europe Group
[manages the regions that are part of the European Union.] * Central &
Eastern Europe * Scandinavia * Soviet Union – The Latin American Group Overseas
* Mexico * Central & South America – The Middle and Far East Group * Asia
& Pacific Rim * Middle East – The Sub Sahara African Group * Manages any
countries below the Sahara Desert. This distribution system provides the
backbone needed to support the company and help them remain competitive in the
cold-beverage industry. The company is always striving to maintain quality
products while maximizing customer satisfaction. Distribution has become an
intricate part of the companies success in being able to successfully produce
quality products that are delivered and sold around the globe in a cost
effective and time efficient manner. Coca-Cola’s North American Distribution
Sector deserves to be mentioned first, because this is the region in the world
where the Coca-Cola empire first evolved and continues to prosper and grow. Coke
has become an American icon that has managed to transform itself from a
profitable fountain soda into a generational product that Americans have grown
to love. The North American Sector operates under DSD policies (Direct Store
Delivery) inwhich the products are delivered to the store directly from the
distribution center. This is in an effort to maximize profits and maintain a
quality image for their products "freshness". "By contract with
the Coca-Cola Company or it’s local subsidiaries, local businesses are
authorized to bottle and sell company soft drinks within certain territorial
boundaries and under conditions that ensure the highest standards of quality and
uniformity". This affiliation is being created by Coca-Cola’s "Project
Infinity", which is being implemented by upper management to consolidate
independent bottlers in an effort to cut costs, pool resources, generate more
buying power, improve overall communication throughout the organization, and
increase profits. This strategic alliance allows the company to produce products
that taste consistently good, contain the same amount of ingredients, are
packaged interchangeable, and are stocked and served to the customer in a
systematic way all across the country. One of the main components of Project
Infinity is an application for sales and distribution that Coca-Cola built for
the bottling companies years ago, called Basis (Beverage, Analytical, Sales,
Information, Systems), which is used for routing delivery trucks and determining
specific customer needs in terms of volume. In addition Basis serves other
functions as well including such responsibilities as accounting, logging in
order entries, and payments. Basis is the central piece of Coca-Cola’s
distribution center because it is used primarily as their dispatching and
replenishing system. Without Basis Coca-Cola would be unable to keep track of
their inventory and supplies, which would eventually have a dissolving effect on
their overall internal structure. Unfortunately, Coke realizes that their
dominance in the cold-beverage industry will not continue unless they come up
with new innovative ways to remain competitive in a global market. Therefore
Coca-Cola is installing a massive integrative system called SAP Applications
(Strategic Alliance Program) which will eventually replace the outdated Basis.
This program is designed to share knowledge with each bottler and set up common
systems and applications that are integrated with each and every bottler within
the Coca-Cola organization. SAP is in the beginning stages of development, b
Coca-Cola plans on using SAP for multi purposes which include keeping track of
their financial data, purchasing, human-resources management, project-management
applications, production and materials management, quality management and plant
maintenance, as well as sales and distribution management. Initially around
5,000 users will have access to SAP applications which will eventually increase
to 25,000 users throughout Coca-Cola. Rick Engum, VP of Information Services at
Coca-Cola Enterprises Inc. in Atlanta states the following in regards to SAP :
"These applications will speed the process of doing business with our
suppliers and give us better management of our overall supply chain. By using
common applications all of us in the Coca-Cola system will provide a consistent
level of service [such as timely deliveries] to customers. We could do this to
some extent with the old systems, but it’s far easier to do with shared
technology". SAP Applications provides Coca-Cola Enterprises and it’s
management even further incite on understanding the business on a daily basis
and how to go about making appropriate changes or adjustments at a moments
notice. This project is particularly beneficial to the many large bottlers that
have acquired smaller bottlers in an effort to strengthen the bottling system,
because SAP will allow Coca-Cola management to run all the plants as one big
unified company. Furthermore there is an eminent awareness throughout management
to remain focused on the customer and their needs. SAP enables the company to do
this through shared knowledge between each and every bottler. Coca-Cola has also
installed ATLAS (Analysis, Tools, Logistics, And Sales) which will eventually
replace Basis, for creating and organizing delivery routes for each distribution
center. In the long-run Coca-Cola feels as though SAP & ATLAS will help the
entire organization become more efficient while minimizing costs. Another aspect
involving Coca-Cola’s distribution system is the companies’ ambitious product
line. The Coca-Cola Company successfully markets and sells over 160 beverages to
a variety of customers throughout their delivery channels. These beverages are
classified into four separate groups, which consist of the following: * CSD
(Carbonated Soft Drinks) – Coke, Sprite, Surge, Dr. Pepper etc…. * No Carb-
Nestea, juices, Fruitopia etc…. * IcoTonics – Powerade * Water – Desani
(filtered water), and Evian (pure spring water which is imported from Sweden.)
The company’s core brands are Coca-Cola Classic, Diet Coke, and Sprite, which
rank first, third, and fifth among all carbonated soft drinks in North America.
Coca-Cola’s customers are mainly retail outlets, restaurants, grocery stores, or
any other operation that buys their products, and in return sells or serves
these products to consumers. The North American Sector’s major customers are
Burger King, Mcdonald’s, Subway, Wendy’s, and many airlines and hotels
throughout North America and Canada. Coca-Cola’s primary focus with these
products is "instant consumption", because that is an area in the
market that has the biggest growth potential. What instant consumption means is
that Coca-Cola is trying to create product accessibility for the consumer in an
effort to increase their sales volume without compensating the level of quality.
Vending machines help accomplish this goal, because they provide ice-cold
Coca-Cola products to consumers in a variety of locations. Recently Coca-Cola
began offering the 20 once soda beverage in their vending machines, which
instantly became a wise profitable decision. The advantage is that consumers end
up spending more on the 20 once containers then they do with the canned soda,
which in the long run increases company profits. Full-service drivers check and
stock vending machines on regular routes, in a conscious effort to maintain
fully replenished machines. Furthermore the drivers are trained by the company
to focus on product presentation in which they are to follow strict company
policies on how to properly stock Coca-Cola products in retail outlets, as well
as grocery stores throughout the country. The drivers begin each day at 6:00 in
the morning by meeting with sales managers, account representatives, and
merchandisers to plan out exactly how the products will be delivered and sold
throughout the day. Employees at all levels throughout the distribution system
take an extremely aggressive approach to producing and delivering Coca-Cola
products in "real time" without jeopardizing the quality of each and
every product item. This shared dedication to the company is what has enabled
Coca-Cola to saturate the national market and begin its quest for global
dominance. International Distribution Internationally Coca-Cola Company
distributes 160 beverage varieties in nearly 200 countries worldwide. Coca-Cola
owns 50% of the international soft drink market. Coca-Cola works extremely hard
to be one of the few companies in the world to successfully reach literally
billions of consumers. Coca-Cola’s international distribution is the backbone to
the their global approach. "About two-thirds of Coca-Cola’s sales come from
outside North America, making the company sensitive to global economic turmoil.
On the other hand, that turmoil has enabled the company to make inexpensive
international investments. Coca-Cola’s affiliates have been purchasing numerous
bottlers in the U.S. and around the world to recognize its global bottling
system into major anchors in prime markets" (Coca-Cola Overview, 1).
International distribution for Coca-Cola began when they decided to introduce
Coke to Canada and Mexico in 1898. Within that same time period Coca-Cola
expanded across the Atlantic Ocean to Europe. The man responsible for this was
Charles Howard Candler, the oldest son of Coca-Cola’s founder Asa Candler.
Charles brought with him a gallon of the secret syrup and sold it to an American
owner of a London soda fountain. The Coca-Cola syrup made an immediate impact in
Europe, which called for orders of five-gallon drums to Germany, Jamaica, and
Panama. In 1906, the international bottling and distributing plants were
established in Panama and Cuba. Then in 1926, Coca-Cola’s international
distribution began to expand even more with the help of a man named Earnest
Woodruff. He worked with his associates and Coca-Cola on organizing
international expansion by creating a Foreign Department. In 1930, the Foreign
Department became a subsidiary called The Coca-Cola Export Corporation
distributing in only a few European countries and Canada. By 1940, Coca-Cola’s
sales began to increase with the expansion of bottlers in forty-five
international countries. To this day Woodruff’s theory is still being
implemented as part of Coca-Cola’s strategic global approach. As a result of
this strategy, 80% of Coca-Cola’s operating income was coming from outside the
United States by the 1990’s. In 1993, there was concern with expanding
Coca-Cola’s international distribution due to a competitive global market.
"In 1993, more than 6.3 billion unit cases of Coke and Coke Classic were
sold worldwide, in more than 195 countries. Diet Coke was also the number one
low-calorie soda in the world, available in 117 countries" (Global
Dominance, 3). Along with the expansion came problems for the Coke brands such
as Fanta, Sprite, and Minute Maid. Coca-Cola didn’t want to rely on its bottlers
to distribute and market their products. So, Coca-Cola and a regional manager in
the Phillippines came up with a new strategy model for international expansion.
"When entering a new market, the Company would seek to establish
distribution of Coke products in key population centers and develop
relationships with the important retail channels" (Global Dominance, 4).
Coca-Cola is divided into four international geographic operating units and one
national operating unit. The four international geographic operating groups are
the Greater Europe Group, the Latin America Group, the Middle and Far East
Group, and the Africa Group. The Greater Europe Group operates in Western Europe
and is also growing in the eastern parts of Europe. The Latin America Group
covers from Tijuana, Mexico, in the north to Tierra del Fuego in the south,
which also includes operations in Central and South America. The Middle and Far
East Group operates in the most populated areas of the world. This group manages
the countries of the Pacific and Middle East. These countries consist of Japan,
Australia, China and India. The last group is the African Group, which operates
in the countries that make up the sub-Saharan Africa. "The Company and its
geographic operating units are led by a management team of seasoned soft drink
business veterans from every corner of the globe" (Facts, Figures, and
Features, 10). The Coca-Cola Company has too many countries to that they
distribute too, and it would be impossible to list and explain each and every
country. Japan, Argentina, Denmark, France, Belgium and China are six of
Coca-Cola’s major distribution countries. The Coca-Cola Japan Company is a
complete beverage corporation that has accomplished leadership by continually
providing customers with beverages of the finest quality. Japan is highly
ambitious in the beverage market. Boasting more than seven thousand different
soft drinks to choose from, the CCJC is extremely competitive. In their vast
market, there are five hundred different manufacturers. Approximately one
thousand new types of beverages are introduced annually. The CCJC offers more
than twenty-five brands and sixty flavors. Fifty percent of all soft drink sales
are made through vending machines making them an important part of sales at the
CCJC. The CCJC maintains nine hundred thirty thousand machines, more than twice
the amount of the closest competitor. In 1942, Coca-Cola production began in
Argentina. Coca-Cola began flying off the shelves the day it was introduced. A
total of seven twenty-four bottle cases and eighteen single 185-milliliter
bottles were sold that day. Sales in Argentina climbed up to 300,000 cases by
the end of 1943. Coca-Cola de Argentina S.A. currently sells approximately 1,000
times more beverages annually than that historic year when it all started in
1942. They accomplish these goals by using a fleet of 3,000 trucks and 18,000
reliable employees who see to it those Coca-Cola products are readily available
in every corner of the country. In the 1930’s Coca-Cola was imported into
Denmark. An estimated forty-percent of Coca-Cola products are consumed by about
5.2 million Danes. In 1933, Coca-Cola was introduced to France. Making its first
appearance at the "Caf? de l’Europe" in Paris, Coca-Cola has been the
number one beverage in France since 1966. The total amount of sales has doubled
in eight years. Coca-Cola France has made more than 1,000 jobs available since
1989. Also, three billion francs have been invested in France since 1989. The
French consumers currently drink roughly 88 servings of Coca-Cola products
annually. The most popular brands in France are Schweppes, Canada Dry, and Dr.
Pepper. In 1927, Belgium was introduced to Coca-Cola. Due to the popularity of
Coca-Cola in Belgium, it is one of the top 20 countries in terms of consumption.
The Coca-Cola Company employs about 2,000 people and supplies up to 30,000
restaurants in Belgium. Recently, in Belgium there had been a contamination
scare which cost Coca-Cola and its bottlers over $60 million in sales. Coca-Cola
recalled about 14 million cases after E. coli bacteria got into their products
and caused approximately 200 people to become ill. It was said that bacteria
from the pallets got onto the cases of Coke. Then the people who drank the soda
ingested the E. coli bacteria and got sick. There also had been a health scare
with mineral water and the report of E. coli bacteria contamination in Poland.
This problem only happened with brands distributed in Europe. Coca-Cola entered
China’s market in 1927 and is known as one of the largest soft drink markets in
the world. Coca-Cola’s operations in China are a huge part of their success for
their global approach. China’s population is about 1.2 billion and Coca-Cola
covers approximately 900 million of their total population. Coca-Cola is still
trying to reach more consumers in China, so they’re establishing a new
distribution strategy to reach the other 300 million people in less-populated
and distant areas. They want to develop a direct distribution system through
route sales and opening more sales centers in the smaller cities. Coca-Cola’s
main focus in China is to create affordable packaging and improving
distribution. China’s consumers prefer to drink Coke out of non-returnable
plastic bottles or cans. Coca-Cola has twenty-three operating plants throughout
China, but many of the western provinces, still do not have franchises. Hong
Kong, which is southeast of China, is home to the world’s tallest bottling
plant, which measures fifty-seven stories. Future success for Coca-Cola in China
depends on its main competitor Pepsi Co. Coca-Cola’s key strategy for success in
the world is investing in infrastructure. Coca-Cola invests billions of dollars
to consolidate and develop new markets. "The Coca-Cola system has
successfully applied a simple formula on a global scale: Provide a moment of
pleasure of refreshment for a small amount of money-hundreds of millions of
times a day" (Chronicle of CC, 22). The Coca-Cola Company’s overseas
distribution is an around-the-clock operation to get the consumers their
product. Coca-Cola in Europe has different types of delivery systems to their
customers. International warehouses use larger truckloads for bulk orders to
distribute to customer warehouses. They also use smaller trucks for local
deliveries. Also, in "North America and Belgium, drivers use side-loaded
trucks to deliver 400 or more cases of product each day. In other European
locations, delivery is typically handled by third-party distributors"
(Facts 1999, 11). Coca-Cola’s target areas are grocery stores, recreational
areas, shops, malls and sporting events. The mass of distribution to cus
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