The Coca-Cola Company Analysis.
Introduction
Coca-Cola is the biggest soft drink and beverage manufacturing company. The company operates globally, and its products are massively consumed by their clients daily. The company has been in operation for 130 years, and it has managed to retain relevance in the market and remain top among its competitors (Room, 1998). This paper analyses the history, a recent story, its international markets, economic portfolio, interesting Coca-Cola facts, and the company’s Chinese environment.
History of Coca-Cola Company
Coca-Cola is a Soda Company based in Georgia, United States, and was formed in 1886. The founder of the multinational company is Dr. John Pemberton, who first operated in Atlanta, Georgia and, sold the products at Jacob’s pharmacy. John was a pharmacist in Georgia, and Coca-Cola was initially meant to be used for medicinal purposes as, in those times, carbonated water was believed to have medicinal purposes (Room, 1998). At Jacob’s pharmacy, the initial drink went for only five cents a glass. The beverage was thought to cure many diseases such as impotence, headaches, ingestion, morphine addiction, and nerve disorders. Frank Robinson came up with the brand’s name and logo for promotion purposes (The Coca-Cola Company, 2020). The name was derived from its ingredients: coca leaves and kola nuts, which has caffeine. In 1889 Mr. Candler bought the company’s formula and brand to sell and advertise the product as a beverage. Under Candler’s leadership, the company expanded beyond Georgia (Elmore, 2013).
The company has been in existence for over a century, and today is the largest beverage company worldwide. Coca-Cola operates in over 200 countries, and each day, over one billion drinks are served. Some of the beverages sold include; Fanta, diet coke, minute maid, vitamin water, PowerAde, Coca-Cola zero, Del Valle, and Georgia. The company is also the number one provider of ready to drink coffee, juice drinks, and spackling beverages worldwide (Elmore, 2013). The company has over 250 bottlers worldwide acquired through franchise partnerships between the bottling companies and Coca-Cola (The Coca-Cola Company, 2020). Over time, the company has changed the bottle design several times, trying to achieve uniqueness as most competitors tried to copy their design (Room, 1998).
Coca Cola leadership style is that of Laissez-Faire (hands-off) type of leadership. The leaders’ delegates tasks to the employees but issues little or no guidelines. Currently, the chief executive officer is James Quincey since 2017 and has helped the company evolve massively. In 2019, he also became the board chairman. The company has employed over 700,000 people worldwide in bottling companies (The Coca-Cola Company, 2020). This has helped the company take part in environmental conservation by recycling bottles to reduce waste. The company itself has over 10,000 employees, which has helped create economic opportunities for people worldwide. The company’s mission is enduring. The mission states the company’s purpose and acts as the standards by which they weigh their actions against decisions (The Coca-Cola Company, 2020). “To refresh the world… To inspire moments of optimism and happiness. To create value and make a difference.”
Plastic Pollution.
One of the most critical global issues in the world is plastic pollution. Last year, the company was named one of the top contributors to plastic pollution worldwide (Petter, 2019). A vast number of beverages produced by Coca-Cola are sold in plastic all around the world. Last year September, Coca-Cola carried out a beach clean-up exercise in over 50 countries. The activity took place in 484 beaches, and out of the total plastic found, they collected 11732 Coca-Cola pieces (Petter, 2019). The company claimed that they would address the issue, but so far, nothing has been done. The environmentalists worldwide emphasize the need to address the matter urgently because it is a global crisis. The primary blame goes to giant corporations such as Coca-Cola for their packaging.
Locations of the internationally
Coca-Cola products are sold all over the world except in two countries; North Korea and Cuba. The main reason why these two countries are exempted is due to political interference. The company has office branches in 111 countries worldwide, several being around the United States (The Coca-Cola Company, 2020). The headquarters are located in Atlanta, the U.S.A., where the company started. One of the highest Coca-Cola consumers worldwide is China (Kraus, 2019). For over 130 years now, the product has managed to stay on top of the market despite massive competition. Some of the primary reasons why the company has been successful are originality and excellent marketing skills.
Economic portfolio
In terms of finances, the company gets its revenues from various business segments. In 2019, the total revue last year was 37.3 billion dollars, which was a sharp rise from 31.9 billion dollars in the previous year (Craft, 2020). The company got most of its revenue (30%) from North America. The second highest income source for Coca-Cola is bottling investments (19.3%). This is followed closely by Europe, the Middle East, and Africa’s revenue at 18.3%, followed by others. Only 31.4% of revenue is acquired from within the United States, and the rest (68.6%) is from other countries and the bottling partnerships (Cch Group, 2020).
Comparing the company’s data from 2017 to 2019, there were significant variations in the income received. In 2017, the company had a net gain of 1.3 billion dollars (SEC.gov, 2018). The following year, 2018, Coca-Cola had a net income of 6.5 billion dollars, a remarkable improvement (Craft, 2020). In 2019, the company then earned a net income of 9.0 billion dollars. From a summary of the three years, the company seems to be doing better as time goes by.
The company is currently worth 217 billion dollars in the market, and the stock prices stand at 53.13 prices per share. Also, checking on the unit cases sold since 2015, the company has increased cumulatively over time from 29.2 billion dollars to 30.30 billion dollars in 2019 (Craft, 2020). From the above information, the company has been growing its profit while serving globally. However, due to the coronavirus pandemic, its revenue may go down this year as the sales may be down. Yet, the company has beaten significant political barriers and continues to enjoy a global outreach.
Interesting Facts about the Company
From the time Coca-Cola was launched, it has been noticed for innovativeness and unique marketing strategies. As stated earlier, the company has had significant changes in its bottle’s shape to maintain originality (Elmore, 2013). As a beverage company, Coca-Cola Company offers a variety of soft drinks all over the world. This measure keeps off competitors since most of them stick to one or two types of soft drinks. The main reason for the company’s success is mainly attributed to its marketing strategies. The company is known to use different advertisements measures in other countries depending on ads’ suitability in the area. As a result, the people living in the area can relate to the ad directly.
Another measure is personalization. Many companies have attempted to use of personalization of ads as a marketing strategy. Some get good results, while others don’t. However, some years back, Coca Cola surprised people with its personalized ads going all the way. In some countries, the company had people’s names printed on the Coca-Cola bottles’ stickers (Fetisova, 2015). The company could catch its clients’ attention through this move, especially young people, which increases sales significantly. In other areas, the company useThe but used famous persons’ names in other areas on the stickers (Fetisova, 2015). When it comes to marketing the product, the company goes all the way. Their ads are also very well created and strategic such that people all over the world are aware of their products.
Coca-Cola in China.
Coca-Cola has been operating in China for over forty years now. Before this, it was unimaginable that a western brand would become embraced today in China, one of the essential communist markets. Some of the barriers included political barriers, culture, and legal barriers (Daniels et al., 2017). In 1949 when the Coca-Cola brand went international, Chairman Mao Zedong called the drink a’ bourgeois concoction’ (Fahs, 2019). However, this changed in the 1970s when Deng Xiaoping opened China’s economy. Coca-Cola took the chance eagerly since its competitor Pepsi had won the bid on Soviet nations. An agreement was signed in December 1978. However, due to political issues, the deal was not publicized until two days later, when the U.S. U.S. and China’s presidents re-established their diplomatic relationship.
Coca-Cola became the first company to venture into China’s market. The first lot was only sold to tourists within China and under strict supervision by Chinese officials. The company was also restricted from publicizing the product within China’s streets for a year due to illegal promotion (Fahs, 2019). Later on, in 1988, the company created a joint co-operative in Shanghai, China, and it was allowed to have full access to China’s market. One of the most accepted drinks in the market was the minute maid, which entered China in 2004. Its success resulted in the rising of many copy cats. The company had to protect its trademark by watching out for counterfeits in the market. The company further hired Chinese employees in its company and formed alliances with other companies to make it easier to access the market and resources.
Despite the challenges, Coke kept on marketing their product consistently until China’s market opened its doors. As the first company, Coca-Cola struggled to convince the people and form alliances to penetrate the market (Kraus, 2019). Chinese Communist party did not like Coca-Cola because they tried to argue against communism in China. As a western company, the company had a hard time competing with local beverages and others that supported communism. However, with time and strong alliances formed, Coca-Cola was accepted in China’s market, and today China is one of the largest markets for Coca-Cola products (Kraus, 2019).
Conclusion
Coca-Cola is the largest producer of soft drinks worldwide in terms of quantity and variety. The company has been in existence for over 130 years and has managed to penetrate the global market despite the varying political and cultural climate. By producing various products and befitting marketing strategies to suit the location, the company has managed to get people to like and trust their products. China did not accept Coca-Cola to penetrate their market easily, but with persistence and marketing, the company made it through. Today, China is a big market for Coca-Cola products. However, the company has been involved in polluting the environment through their plastic packaging. The company has promised to work on it by enhancing recycling its plastics all over the world.
References
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