Complete Coca Cola

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SALMAN AHMED

Transcript of Complete Coca Cola

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Introduction:

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1: History of Coca-Cola:

Coca-Cola Enterprises was established in 1986 is a young company by the standards of the Coca-Cola system. Yet each of its franchises has a strong heritage in the traditions of Coca-Cola that is the foundation for this Company.

The Coca-Cola Company traces it’s beginning to 1886, when an Atlanta pharmacist, Dr. John Pemberton, began to produce Coca-Cola syrup for sale. However the bottling business began in 1899 when two Chattanooga businessmen, Benjamin F. Thomas and Joseph B. Whitehead, secured the exclusive rights to bottle and sell Coca-Cola for most of the United States from The Coca-Cola Company.

The Coca-Cola bottling system continued to operate as independent, local businesses until the early 1980s when bottling franchises began to merge. In 1986, The Coca-Cola Company merged some of its company-owned operations with two large ownership groups that were for sale, the John T. Lupton franchises and BCI Holding Corporation's bottling holdings, to form Coca-Cola Enterprises Inc. The Company offered its stock to the public on November 21, 1986, at adjusted prices of $5.50 a share. On an annual basis, total unit case sales were 880,000 in 1986.In December 1991; a merger between Coca-Cola Enterprises and the Johnston Coca-Cola Bottling Group, Inc. (Johnston) created a larger, stronger Company, again helping accelerate bottler consolidation. As part of the merger, the senior management team of Johnston assumed responsibility for managing the Company, and began a dramatic, successful restructuring in 1992.Unit case sales had climbed to 1.4 billion, and total revenues were $5 billion at the year-end. Presently The Coca-Cola Company is the largest soft drink company in the world. Every year 800,000,000 servings of just "Coke" are sold in the U.S alone.

Coke History in Pakistan

“56 Years of dedicated service”

The Coca-Cola Company began operating in Pakistan in 1953. Coke, Fanta and Sprite are the brands with whom Coca-Cola is operating in Pakistan. The Coca-Cola System in Pakistan operates through eight bottlers, four of which are majority-owned by Coca-Cola Beverages Pakistan Limited (CCBPL). The CCBPL plants are in Karachi, Hyderabad, Sialkot, Gujranwala, Faisalabad, Rahimyar Khan, Multan and Lahore. The remaining two plants, independently owned, are in Rawalpindi and Peshawar. The Coca-Cola System in Pakistan

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serves 70,000 customers/retail outlets. The Coca-Cola System in Pakistan employs 1,800 people working constantly for the company. During the last two years, The Coca-Cola Company in Pakistan has invested over $130 million (U.S) and coke has successfully provided 56 years of dedicated service to its customers in Pakistan. Since the beginning of Coke Company the firm has been continuously changing its slogans and that’s a very creative idea to get the attentionof the customers. Here we would like to include some of the popular slogans of coke since the coke journey started.

1886 Drink Coca-Cola 1908 Get the genuine 1923 Enjoy thirst 1934 When it's hard to get started, start with a Coca-Cola 1942 The only thing like Coca-Cola is Coca-Cola itself 1956 The friendliest drink on earth 1963 Things go better with Coke 1993 Always. Coca-Cola 2001 Life is Good 2003 Jo Chaho Ho Jaye Coca Cola Enjoy 2009 Khaa Ley Pee Ley Gee Ley Coca Cola

2: MISSION AND VISION STATEMENT

OUR MISSION:Mission statement is a statement of organization’s purposes that what it wants to achieve. Our Roadmap starts with our mission, which is lasting. 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. Customer is king; Customer demand drives everything we do. Brand Coca Cola is the core of our business. We will serve consumers a broad selection of the nonalcoholic

ready-to–drink beverages they want to drink throughout the day. We will be the best marketers in the world.

The ultimate objective of our business strategy is to increase volume, expand our share of worldwide nonalcoholic beverages sale and to maximize our long-term cash flows. We keenly focus on enhancing value for our customers and helping them grow their beverage business. We strive to understand each customer’s business and needs, whether that customer is a

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sophisticated retailer in a developed market or a kiosk owner in an emerging market.Ultimately, our success in achieving our mission depends on our ability to satisfy more of their beverage consumption demands and our ability to add value for customers. We achieve this when we place the right products in the right markets at the right time. The basic proposition of our business is simple and solid that is we want to bring refreshment, value, joy and fun to all our consumers. For that we strongly believe to protect our brands, particularly Coke.

OurVision: 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.

3: Personality Profile of Leaders at the organization:

Muhtar Kent, who was named by The Coca-Cola Company today as its next chief executive officer - exactly a year to the day the Turkish-born 55-year-old was appointed president and chief operating officer -will need to squarely confront three critical issues when he takes over from the current CEO, E. Neville Isdell, in July 2008. Taken together, how he deals with these issues will determine whether Coke, which has a market cap of $144 billion and 71,000 employees worldwide or its archrival PepsiCo - whose market cap is $130 billion, and 168,000 employees globally, One issue concerns his personal ethics. In 1996, Kent - who's worked for Coke on and off since 1978 -- was judged guilty of insider trading in civil court in Australia, where he held a senior-level position at Coca-Cola Amatil Ltd.a regional bottler based in Sydney. He was required not only to give up the profit he made of $324,000, but also pay $30,000 to cover the cost of an investigation by the Australian

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Securities Commission. Kent has since claimed that his then financial adviser sold short some 100,000 shares of the company on Kent's behalf a mere hours before the profit announcement. In the event, the Australian controversy continued to dog him because two years later - in 1998 - Kent resigned from Coca-ColaAmatil-Europe.

Kent has said that there was no wrongdoing on his part in Australia. He told reporters who'd asked about the timing of his stock sale that it was a "bad coincidence." Isdell - who was on the Australian company's board at the time of the Kent situation - has said that the episode "was a small mistake," and that "We need to consign it to history." And a Coke spokesman said not long ago that the incident did not constitute insider trading or a violation of company rules. Nevertheless, Coke's critics are likely to continue to ask: If there was no guilt involved, why return the huge profit and also pay a fine?

Kent has been making several public appearances of late, highlighting the linkages between the business community in a world of galloping globalization, and consumer constituencies. Isdell has repeatedly characterized Kent as an effective spokesman and good will ambassador for the company - not an undeserved characterization in view of Kent's congenial and emollient personality.The second issue that will most certainly hound Coke - and Kent - concerns globalization. For many critics in developing countries, Coke is a symbol of a multinational corporation that has benefited from globalization, generally defined as the free flow of capital, goods, services, people and ideas across increasingly porous borders and the anti-Coke campaign is demanding that Coke must admit liability for the long-term consequences of exposure to toxic waste and pesticide-laden beverages in India. None of these proposed measures is cheap, and it's doubtful if the critics are truly seeking a practical remedy. The battle has become political.Kent's origins in the developing world could certainly help in dealing with the Indian critics, not the least because Turkey and India have had historical trade and political ties. If Kent is able to alleviate - if not eliminate - the anti-Coke movement in countries such as India, CEO Isdell would certainly be a grateful beneficiary.From Isdell's perspective, a smooth transition to the next generation of Coke's leadership can be a major legacy. After all, there hasn't been a smooth transition since 1997, when then CEO Robert Goizueta died unexpectedly. CEOs such as M. Douglas Ivester and Douglas Daft came and went without putting in place a secure transition plan. Neither man distinguished himself at Coke, nor, moreover, neither was fully embraced by Coke board.The fact that Coke's board trusts Kent was evident when it named him president and COO in December 2006. He filled a position that has been vacant since 2004. That was when the occupant, Steven Heyer - formerly with Turner Broadcasting - left the company after being passed over for the CEO's job when Douglas Daft unexpectedly resigned. The job went to Isdell, a Coke veteran who'd already retired and was living in Barbados.

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The Board believes Neville and Muhtar have both a shared vision and a solid working relationship," James D. Robinson III, chairman of the Board Committee on Directors and Corporate Governance, said at the time. "They represent a strong team that will drive growth and shareholder value."The team will be in place even after Kent becomes CEO in July next year because Isdell has been asked by Coke's board to stay on as chairman until April 2009, presumably to ensure a smooth transition and to oversee Kent's performance.Kent's appointment as the next CEO at Coke - which sells nearly 400 beverage brands in 200 countries, at a rate exceeding 1.3 billion servings each day - raises a third issue, that of growth and competition in an increasingly tough global environment for the beverage industry. Kent is surely conscious that before his mentor, Isdell, bows out of Coke for the second time, he wants to implement his "Manifesto for Growth." The plan calls for boosting Coke's core carbonated soft drink business, particularly in the United States and Western Europe, where sales have been sluggish. Isdell wants the company to focus more on diet and light drinks. He also wants accelerate the development of new drinks that appeal to changing tastes and health-conscious consumers. Coca-Cola has been known to prize brand loyalty - and executive loyalty. Although he's had a few forays into the corporate world outside Coke, Kent returned to Coke in May 2005 as president and chief operating officer of the North Asia, Eurasia and Middle East Group, and was named president, Coca-Cola International in January 2006. After joining Coke in his native Turkey in 1978, and has held a variety of marketing and operational roles through his career. In 1985, he was appointed general manager of Coca-Cola Turkey and Central Asia. From 1989 to 1995, Kent was president of the East Central Europe Division and senior vice president of Coca-Cola International, overseeing 23 countries. From 1995 to 1998, Kent was managing director of Coca-Cola Amatil - Europe, with bottling operations in 12 countries. From 1999 until his return to the Coca-Cola Company, he was president and chief executive officer of Efes Beverage Group, , Kent led the Efes group to triple digit revenue growth and a 250 percent increase in market capitalization. Kent holds a Bachelor of Science degree in Economics from Hull University, England and a Master of Science degree in Administrative Sciences from London City University. His rival, Indra Nooyi born in the southern city of Chennai, India, and holds Masters degrees from Yale University and the elite Indian Institute of Management. Before joining Pepsi as senior vice president of strategic planning 16 years ago, Nooyi - who became Pepsi's CEO in October 2006 - held strategy-oriented executive positions at Asea Brown Boveri, Motorola Inc. and the Boston Consulting Group.Nooyi has driven the company's stock up 22 percent in the 12 months through December 4, near a 52-week high. Last May, the company increased its dividend 25 percent and boosted its share buyback goal to $4.3 billion from $3.3 billion. Revenue is expected to rise more than 10 percent this year.So it's going to be a lively competition between the Indian maharani and the Turkish pasha. Stay tuned for the Battle of the Beverages.

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4: The structure of Coca-Cola CompanyDEPATMENTALIZATION, SPAN OF CONTROL, FORMALIZATION AND CHAIN OF COMMAND

Tribal structure of Flight Centre

Tribal’ organizational structure that facilitates easy replication and fuels organic growth. The Brisbane-based travel agency is organized into families, villages and tribal countries.

Division of labor

• Subdivision of work into separate jobs assigned to different people• Potentially increases work efficiency• Necessary as company grows and work becomes more complex

Forms of work coordination

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• Informal communication– sharing information– High media-richness– Important in teams• Formal hierarchy– Direct supervision– Common in larger firms– Problems - costly, slow, less popular with young staff• Standardization– Formal instructions– Clear goals/outputs– Training/skills

Elements of organizational structure

Span of control• Number of people directly reporting to the next level

• Assumes coordination through direct supervision

ORGANIZATION STRUCTURE ELEMENTS

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• Wider span of control possible when– used with other coordinating methods– Subordinates’ tasks are similar– Tasks are routine

• Flatter structures require wider span (if same number of people in the firm)

The decentralization of Coca-Cola

Coca-Cola decentralized its organizational structure by cutting half of the staff at its Atlanta headquarters and moving the regional chieftains closer to their local markets. In India, decision making has been moved further down to different areas of that diverse country.

Forces for decentralizationCenterlization:

Organizational crises Management desire for control Increase consistency, reduce costs

Decentralizations Complexity-size, diversity Desire for empowerment

Mechanistic vs. organic structures

Mechanistic Organic • High formalization• Narrow span of control• High

• Low formalization• Wide span of control• Low centralization

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Effects of departmentalization• Establishes work teams and supervision structure• Creates common resources, measures of performance, etc• Encourages informal communication among people and subunits

Functional organizational structureOrganizes employees around skills or other resources (marketing, production)

Divisionalised structureOrganizes employees around geographic areas,products or clients

Features of team-based structures• Self-directed work teams• Teams organized around work processes• Very flat span of control• Very little formalization• Usually found within divisionalised structure

CHIEF EXECUTIVE

FINANCE PRODUCTION

MARKETING

CHIEF EXECUTIVE

ENTERPRISE SYSTEM

LASERJET SOLUTION

CONSUMER PRODUCTS

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Network organizational structure

Types of organizational technology

Org environment and structure

CoreCompany

CALL CENTER COMPANY( N

Z)

MANUFACTURING CO. (MALAYSIA)

DISTRIBUTION CO.

(SINGAPORE)

ACCOUNTING CO.

(AUSTRALIA)

PRODUCT DVELOPMENT CO.(AMERICA)

HighAnalyzability

LowAnalyzability

AssemblyLine

EngineeringProjects

SkilledTrades

ScientificResearch

DYNAMIC STABLE

COMPLEX SIMPLE

• High rate of change• Use organic structure

• Steady conditions,Predictable change• Use

• Many elements (such asStakeholders)• Decentralize

• Few environmentalElements• Less need to decentralize

LOW VARIETY HIGH VARIETY

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Org environment and structure (cont)

5: Challenges and issues:

Despite the fact that Coke leads the global beverage market, in Pakistan the situation has been quite contrary. Here PEPSI leads the market with almost 67% of the total market share whereas Coke operates in the remaining 33% which too plays host to numerous other local and foreign brands. Both leading brandsAs any company in a highly competitive environment faces, Coca-Cola has faced many organizational problems. The biggest threat faced by this company is the entry of many new, strong competitors in the soft-drink and related beverages industry. For example, PepsiCo is one of Coca-Cola's toughest competitors that offer the same range of products at the same prices. This threat is significant because it cannot be eliminated just be producing a better quality product at a lower price."Target the same market of customers between the ages of 13-25 years. Since long Coke has been trying to know its customers and live up to its reputation of leading brand, yet more than 50 years after its launch it still is number two in the race. While PEPSI tingles the taste buds of the “Generation Next” Coke wants to focus on the mindset of its customers in terms of their likes and dislikes, their shopping behavior etc. Acidity and tooth decay numerous court cases have been filed against the Coca-Cola Company since the 1940s alleging that the acidity of the drink is dangerous. In some of these cases, evidence has been presented showing Coca-Cola is no more harmful than comparable

DIVERSE INTEGRATED

HOSTILE MANIFICIENT

HOSTILE MANIFICIENT

• Variety of products,Clients, locations• Divisional form aligned

• Single product, client,Location• Don’t need divisional form

• Competition and resourceScarcity• Use organic structure for

• Plenty of resources andProduct demand• Less need for organic

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soft drinks or acidic fruit juices. Frequent exposure of teeth to acidic drinks affects the likelihood of tooth decay through caries development.

High fructose corn syrup:

It was rapidly introduced in many processed foods and soda drinks in the US over the period of about 1975–1985. Since 1985 in the U.S., Coke has been made with high fructose corn syrup instead of sucrose to reduce costs. One of the reasons this has come under criticism is because the corn used to produce corn syrup often comes from genetically altered plants. Some nutritionists also caution against consumption of high fructose corn syrup because of possible links to obesity and diabetes. High fructose corn syrup has been shown to be metabolized differently than sugar by the human body. This causes problems with Coke's distribution and bottling network, because specific franchise districts are guaranteed an exclusive market area for Coke products. Mexican-made Coca-Cola may often be found for sale in stores catering to the Hispanic immigrant community. Kosher for Passover Coke is also made with cane sugar, rather than corn syrup, due to the special dietary restrictions for observant Jews. Some Orthodox Jews do not consume corn during the holiday. Bottled with yellow caps, this variant can be found in some areas of the US

Before and during World War II:

Coca-Cola adopted an apparent policy of ignoring the practice of eugenics and anti-Semitism by Nazi Germany

When the United States entered World War II, Coke began to represent its product in the US as a patriotic drink by providing free drinks for soldiers of the United States Army, thus allowing the company to be exempt from sugar rationing.

The United States Army permitted Coca-Cola employees to enter the front lines as "Technical Officers" when in reality they rarely if ever came close to a real battle. Instead, they operated Coke's system of providing refreshments for soldiers, who welcomed the beverage as a reminder of home. As the Allies of World War II advanced, so did Coke, which took advantage of the situation by establishing new franchises in the newly occupied countries?

The popularity of the drink exploded as US soldiers returned home from the war with a taste for the drink

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Philippine unfair competition case:On January 21, 2008, the Philippines National Bureau of Investigation per search warrant issued by Judge Reynaldo Ros, Manila Regional Trial Court Branch 33, raided three warehouses owned by Coca-Cola soft drink products distributors in Valenzuela, Caloocan and Meycauayan, Bulacan, due to hoarding imported bottles of a competitor, RC Cola. Asia Wide Refreshment Corporation (AWRC), makers of RC Cola, filed the complaint for unfair competition

Pesticide use:In 2003, the Centre for Science and Environment (CSE), a non-governmental organization in New Delhi, said aerated waters produced by soft drinks manufacturers in India, including multinational giants Pepsi co and Coca-Cola, contained toxins including lindane, DDT,malathion and chlorpyrifos — pesticides that can contribute to cancer and a breakdown of the immune system.Water use:In March 2004, local officials in Kerala shut down a $16 million Coke bottling plant blamed for a drastic decline in both quantity and quality of water available to local farmers and villagers.

Guatemala:In the 1970s, a Coca-Cola franchised bottling plant in Guatemala suffered a spate of mysterious murders of union-affiliated employees leading to the non-renewal of the bottling plant's license in 1981. "Coca-Cola found a new owner, and following repair work and construction on the plant, work resumed at the Guatemala bottling plant on March 1, 1985." [39] The Company's decisions were made after pressure from several groups, including a shareholder resolution filed in 1979Shareholders resolution attempt (2002):In 2002, Christian Brothers Investment Services, Inc. submitted, along with other co-filers, a shareholder resolution that called for Coca-Cola to adopt a code of conduct on bottling practices and employee relations. Problems in Colombia were cited, but the proposal called for "clear standards for its suppliers, vendors and bottlers."[44] The resolution received support from Coca-Cola unions in Colombia, Guatemala, Zimbabwe, the Philippines, and the United States.

Israel and Middle East controversies:In 1949, Coca-Cola attempted to open a plant in Israel but was refused a permit. Eager to avoid the Arab League boycott and sell to the much larger Arab market, Coca-Cola was content not to sell in Israel. In 1961 the issue came up again when an Egyptian civil servant mistook Amharic writing on a Coca-Cola bottle for Hebrew, and accused Coca-Cola of doing business with

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Israel. The manager of Egypt's Coca-Cola bottling operations quickly informed the press that Coca-Cola would never do business with Israel;

Boycotts: The boycott example which started in Ireland has continued to spread across the world, with the National Union of Students in Britain voting to support the boycott in April 2005.UNISON, the largest trade union in the UK, also voted to support the boycott at its 2004 National Delegate Conference. ECOSY, the European Young Socialists, a federation of youth wings of all the mainstream socialist and social democratic parties in the EU, voted to support the boycott in March 2005 following a motion from the Irish Labor Youth delegation. Campuses and labor and trade unions in the United States, Italy, France and Canada, amongst others, are also campaigning for the boycott to spread. The University of Michigan and New York University banned Coke products from their campuses, bringing the number to over 23. Several US universities have switched to Pepsi

6: Our Winning Culture

Our Winning Culture defines the attitudes and behaviors that will be required of us to make our 2020 Vision a reality.Our values serve as a compass for our actions and describe how we behave in the world.

Leadership: The courage to shape a better future

Collaboration: Leverage collective genius

Integrity: Be real

Accountability: If it is to be, it's up to me

Passion: Committed in heart and mind

Diversity: As inclusive as our brands

Quality: What we do, we do well

Focus on the Market Focus on needs of our consumers, customers and franchise partners

Get out into the market and listen, observe and learn

Possess a world view

Focus on execution in the marketplace every day

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Be insatiably curious

Work Smart

Act with urgency

Remain responsive to change

Have the courage to change course when needed

Remain constructively discontent

Work efficiently

Act like Owners

Be accountable for our actions and inactions

Steward system assets and focus on building value

Reward our people for taking risks and finding better ways to solve

problems

Learn from our outcomes -- what worked and what didn’t

Be the Brand

Inspire creativity, passion, optimism and fun

7: Our Competitive strategiesThe Coca-Cola Company is one of the largest, most successful and most widely recognized corporations in existence.  Coca-Cola is a dominating force in the beverage industry and sets a very high standard of competition.  Research shows that its trademark is recognized by over 94% of the world’s population. There are many factors contributing to Coca-Cola’s success, however, we believe that their key success factors are Marketing, Innovation, and Globalization.Marketing:Coca-Cola is seen as one of the founding fathers of the modern day marketing model.  They were among the pioneers of advertising techniques and styles used to capture an audience.  They were also one of the first companies to offer a gimmick with their product, this being a mini yo-yo.  It was around 1900 when Coca-Cola began presenting their signature drink as a delicious and refreshing formula.  This slogan has been repeated for over the last 100 years selling Coke all over the world.  Through its intense marketing campaigns, Coke has developed an image that is reflected in what we think of when we buy Coke and what we associate with drinking

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Coke.  This image has been subconsciously installed in our brain by the advertising campaigns that show Coca-Cola associated with “good times.”Innovation:Coca-Cola has been able to survive and grow in an ever-changing market because of its ability to systematically innovate and deliver new products.  In the late 90s the company, typically showing earnings growth of 15-20% per year, turned in three straight years of falling profits.  It was apparent that the market was changing and in order to keep up with these changes, Coca-Cola had to move from a single core product to a total beverage company. This was a major change because their past success was base on having one successful core product.  Coca-Cola began to employ a strategy referred to as “play to win innovation.”  The company began operating in a decentralized environment that was unfeasible in previous years.  Now Coca-Cola offers nearly 400 different products in and is still dominating the beverage industry.  This is made possible by the company’s ability to innovate and adapt to changing markets.Globalization:Today’s big business takes place on a global scale, and Coca-Cola is no exception.  Technology is continually changing business, and these constant changes have been making it more feasible and profitable for businesses to expand their operations globally in order to serve all different types of diverse markets around the world.  This global view is reflected in Coke’s recent “I’d like to teach the world to sing” commercial.  Coca-Cola is taking advantage of the large revenue opportunities made possible by participating in a global market and now offers products in 200 countries around the world.

8: Stakeholders

Who are our stakeholders?Our many stakeholders include all those who are most affected by or who most affect the way we do business. Our stakeholder research has also helped us to refine our future strategy on social and environmental issues. On each key issue we include ‘Next Steps’ – the actions we’ll take in the next year to ensure that our business continues to make a positive impact.

Since publishing our last Corporate Responsibility Review in 2006, we have conducted several feedback sessions with many internal and external stakeholders. Our stakeholders include shareowners, associates, bottling partners, governments, NGOs, suppliers, customers, and consumers. We have used their feedback to help shape the report and our website.

Following are the main areas noted for improvement from these various stakeholders:

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Better

demonstrate the

integration of

corporate

responsibility into

business strategy

Explain The Coca-

Cola Company

franchise system-

bottlers and the

Company

Align

performance with clearly articulated internal and external standards or

frameworks

Include more third-party input and feedback

Balance reporting-include the good and the bad

How do we engage our stakeholders?

We regularly engage with our main stakeholders as shown in Diagram

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In addition, we carried out specific research in March 2007 to identify the main areas of concern for our stakeholders. This involved a series of focus groups with consumers aged 18 and over and with employees of both CCE and CCGB. It also included interviews with customers, non-governmental organizations and the media.

Financial Overview

Unit Case Data

Year Ended December 31,

2008 2007 20062005

2004

Unit Case Volume (in billions)

23.7 22.7 21.4 20.6 19.8

Selected Financial Data

Year Ended December 31,

2008 20071 20062 20053 20043,4

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(in millions except per share data)

SUMMARY OF OPERATIONS

Net operating revenues $31,944 $

28,857

$24,088

$23,104

$21,742

Cost of goods sold

11,374

10,406

8,1648,195

7,674

Gross profit20,570

18,451

15,924

14,909

14,068

Selling, general and administrative expenses

11,774

10,945

9,4318,739

7,890

Other operating charges

350 254 185 85 480

Operating income

8,446

7,252 6,3086,085

5,698

Interest income 333 236 193 235 157

Interest expense

438 456 220 240 196

Equity income (loss)—net

(874) 668 102 680 621

Other income (loss)—net

(28) 173 195 (93) (82)

Gains on issuances of stock by equity investees

— — — 23 24

Income before income taxes

7,439

7,873 6,5786,690

6,222

Income taxes1,632

1,892 1,4981,818

1,375

Net income $5,807 $5,981 $5,080 $4,872 $4,847

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Average shares outstanding

2,315

2,313 2,3482,392

2,426

Average shares outstanding assuming dilution

2,336

2,331 2,3502,393

2,429

PER SHARE DATA

Basic net income

$2.51 $2.59 $2.16 $2.04 $2.00

Diluted net income

2.49 2.57 2.16 2.04 2.00

Cash dividends 1.52 1.36 1.24 1.12 1.00

Closing market price on December 31

45.27

61.37 48.2540.31

41.64

TOTAL MARKET VALUE OF COMMON STOCK

$104,683

$142,289

$111,857

$95,504

$100,325

BALANCE SHEET DATA

Cash, cash equivalents and current marketable securities

$4,979 $4,308 $2,590 $4,767 $6,768

Property, plant and equipment—net

8,326

8,493 6,9035,831

6,091

Depreciation 993 958 763 752 715

Capital expenditures

1,968

1,648 1,407 899 755

Total assets40,519

43,269

29,963

29,427

31,441

Long-term debt 2,78 3,277 1,314 1,15 1,157

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1 4

Shareowners' equity

20,472

21,744

16,920

16,355

15,935

NET CASH PROVIDED BY OPERATING ACTIVITIES

$7,571 $7,150 $5,957 $6,423 $5,968

9: Success of coca cola and management gimmicks:

The Coca-Cola Company is one of the largest, most successful and most widely recognized corporations in existence.  Coca-Cola is a dominating force in the beverage industry and sets a very high standard of competition.  Research shows that its trademark is recognized by over 94% of the world’s population. There are many factors contributing to Coca-Cola’s success, however, we believe that their key success factors are Marketing, Innovation, and Globalization.Marketing:                        Coca-Cola is seen as one of the founding fathers of the modern day marketing model.  They were among the pioneers of advertising techniques and styles used to capture an audience.  They were also one of the first companies to offer a gimmick with their product, this being a mini yo-yo.  It was around 1900 when Coca-Cola began presenting their signature drink as a delicious and refreshing formula.  This slogan has been repeated for over the last 100 years selling Coke all over the world.  Through its intense marketing campaigns, Coke has developed an image that is reflected in what we think of when we buy Coke and what we associate with drinking Coke.  This image has been subconsciously installed in our brain by the advertising campaigns that show Coca-Cola associated with “good times.” 

Innovation:            Coca-Cola has been able to survive and grow in an ever-changing market because

of its ability to systematically innovate and deliver new products.  In the late 90s the company, typically showing earnings growth of 15-20% per year, turned in three straight years of falling profits.  It was apparent that the market was changing  and in order  to keep up with these changes, Coca-Cola had to move from a single core product to a total beverage company. This was a major change because their past success was base on having one successful core product.  Coca-Cola began to employ a strategy referred to as “play to win innovation.”  The company began operating in a decentralized environment that was unfeasible in previous years.  Now Coca-Cola offers nearly 400 different products in and is still dominating the beverage industry.  This is made possible by the company’s ability to innovate and adapt to changing markets,

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 Globalization:

                        Today’s big business takes place on a global scale, and Coca-Cola is no exception.  Technology is continually changing business, and these constant changes have been making it more feasible and profitable for businesses to expand their operations globally in order to serve all different types of diverse markets around the world.  This global view is reflected in Coke’s recent “I’d like to teach the world to sing” commercial.  Coca-Cola is taking advantage of the large revenue opportunities made possible by participating in a global market and now offers products in 200 countries around the world.  Despite the major international success of the Coca-Cola Company, they also possess some weakness factors that can be detrimental to the success of the organization.   We believe that the three weakness factors that affect the company the most are poor communication, lack of continuity of the workforce, and negative publicity.           

Negative Publicity:Despite Coke’s reputation of continuing innovation and recent product line

expansion, the company is still best represented by its flagship product, Coca-Cola Classic.  This product, know to contain high levels of sugar and caffeine is causing a recent uproar on our increasingly health-conscience world.  One of Coca-Cola’s major concerns is the very real possibility that obesity concerns may reduce demand for some of their products.  In addition, lawyers are threatening to go to court over alleged deceptive practices involving contracts to sell soft drinks in schools.  This puts the pressure on Coke to provide healthier alternatives to their carbonated drinks if they want to keep selling in schools.

 Poor Communication:            Coca-Cola is an extremely large company with thousands of people working on

many different levels in the organization.  One of the most important tools essential to this type of organization is good communication between all levels, and some Coke employees are saying that it could and should be better.  Some workers describe the communication as disorganized, saying how difficult it is to exchange information with superiors and convey ideas about fixing problems that may occur on the “street level” of day to day operations. 

 Continuity of Workforce:            Another major asset to a company of this size and clout is maintaining continuity

among the workforce.  This is essential to keep the company rolling smoothly in a positive direction, accomplishing common goals and constantly setting new goals.  Constant firing and re-hiring tends to disrupt this forward motion and this is exactly what seems to be going on in certain levels of the company.  According to five year employee Kyle Hughes, Coke has a frustratingly high turnover rate, leading to loss of momentum and lost time due to retraining.