CocaCola Essay Research Paper History

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, but

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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