Coca-Cola 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 "Café 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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Contents

Introduction

Obesity in recent times has incredibly risen to the frontline of health challenges within the American society and many other parts of the world (Ali, 2012). More and more efforts have been established by medical professionals to finding a solution to the fact that 54 percent of adults and 33 percent of children on a global scale within developed countries are obese or suffer from some form of unhealthy dietary or nutritional challenge brought about by what they consume (Ali, 2012). While it can be said that there are a broad range of factors that contribute to the above mentioned statistics, many studies and researches as well as leading medical personnel such as Barry Popkin and even former New York Mayor Bloomberg have pointed to the notion that soft drink consumption is a leading cause of obesity and some other forms of health challenges centered on nutrition around the world. The largest source contributor of sugary carbonated drinks in the world is Coca-Cola with over Two hundred brands of carbonated beverages sold globally (Farrel, Farrel & Fraedrich, 2011). Sugary beverages over time have been frequently attacked and labelled as a leading contributor to health issues, and the soft drink industry has faced intense criticism and scrutiny. With the world population moving towards a more health conscious paradigm within the context of what they consume, soft drink industry leaders, Coca-Cola was forced to join in the campaign in the fight against poor health, and obesity or risk being labeled as a contributor or propagator of ill health within society.

Coca-Cola in 2013 finally began its good health and anti-obesity campaign by launching its “Coming Together” communications campaign. The campaign though primarily focused on the challenges of addressing obesity was generally initiated to put Coca-Cola as a societal health conscious firm (Hellmich, 2013). The campaign called for the general public to come together in a bid to fight health challenges such as obesity. Another goal of the campaign was to inform the general public about the soft drink industry’s leading firm’s initiatives in its efforts towards social responsibility. The “Coming Together” campaign initiated by Coca-Cola could be summarized in the following phrases “Beating obesity and calorie related health challenges would require the action of all of society based on a simple common sense ideology; that all calories matter, regardless of where they came from, including through the consumption of Coca-Cola and every other thing else with calories.” The Coca-Cola health awareness campaign was immediately followed two days later with a “Be Ok” video which was bordered on the concept that a can of Coca-Cola provided “about 140 calories for consumers to expend on extra happy activities” (the Coca-Cola Company, 2013).

A media campaign aimed at portraying a positive light on an issue that was detrimental to public health did not in any way go down well with numerous health agencies, professionals and the media. These bodies immediately spoke against such deceptive campaign, dismissing it as an insincere and scrupulous attempt for Coca-Cola to position itself as well as portray the brand as a solution to a societal problem it has played a significant role in creating and propagating. The Center for Science in Public Interest was in the forefront of the charge against the “Coming Together” campaign. The agency released several press releases and presented negative translations of Coca-Cola’s campaign via the use of legal processes and social media. They pointed to the fact that the campaign, was a foiled attempt Coca-Cola to address damage control within a society that was beginning to understand the benefits of healthy consumption. Many critics continue to point to the fact that the Coca-Cola campaign was a further move of the firm to recover from declining product sales across the world as health consciousness had begun to compel once loyal customers to adopt tea, or healthier beverages (Hellmich, 2013). However, Coca-Cola stood its ground by issuing a statement centered on the notion that there was no evidence whatsoever to prove that its products were associated or linked to poor health or problems of obesity. Several suits and counter suits were filed and some dropped.

This paper analyzes some of the legal issues Coca-Cola as a firm has had to face in recent times. The above illustration depicts one of such issues and how the firm was able to get past the challenge of legal outburst and utterances of groups within society as well as how such issues have affected the firm. In the preceding parts of this literature, we will evaluate more comprehensively legal issues linked to the Coca Cola Company and establish a critical analysis of the issue.

Brief Overview: Coca-Cola’s International Perspective

With the consistent sales of over four hundred brands cut across 200 or more countries, Coca-Cola is said to be one of the most successful firms in the world (Banutu-Gomez, 2012). The firm’s international success has propelled the Coca-Cola brand to be perceived as one of the most globally recognized brands. The last fifty years has witnessed significant expansions of the Coca-Cola brand, thus positioning itself as a market pioneer in the soda and beverage industry.

Via the use of increasing product mixes, the Coca-Cola brand’s core marketing strategy is its ability to respond to the beverage needs of local consumers all over the world. This initiative of identifying what every stipulated society desires in terms of soft drinks is significantly responsible for the brands unrivaled success. Coca Cola’s production and distribution processes take on an international dimension with the firm’s structured franchising operational mode. The brand trades it beverage bases, concentrates, and syrups to bottlers in possession of the Coca-Cola franchise across specific geographic regions all over the world. The final products are then produced using sweeteners and filtered water. Coca Cola’s bottling partners distribute these branded products to middle men who finally distribute to end consumers. This channeling and distribution technique has been characterized as a strong globalization strategy that has yielded significant results for the firm. The Coca-Cola brand implements its international marketing schemes in two practical dimensions. Firstly it makes use of the horizontal international marketing approach via the establishment of six operating groups in different regions of the world: North America, Eurasia, the Pacific, Latin America, Africa, and Europe, with these regions employing a significantly large associate base (approximately 146,200 associates). The second implementation of the brands international marketing scheme is implemented on a vertical scale along its supply chain and in line with the relative importance of its franchising system.

A key success attributed to the Coca-Cola brand is its understanding that strong international marketing can significantly enhance the total operational competency of any business (Banutu-Gomez, 2012). Due to the challenges international marketing exposes firms to, businesses have to brace up to these challenges and deliver quality across multiple geographical zones. The Coca-Cola brand, with the notion of conquering the various challenges posed by international marketing has structured its organizational culture to adapt to the underlying structures of its international marketing strategies. From the firm’s outsourcing policies, the way and manner in which it processes new resources such as raw materials and low cost labor, to the firm’s implementation of new management skills such as its tax aligned supply chain management approach which aid in the reduction of the firm’s incurred total landed cost, a majority of the firm’s viable culture and day to day running of business are based on the framework and structured on the organization’s international marketing strategies.

Notable Legal Controversies

Failure of the New Coke brand: An attempt to secure competitive edge over close and rising rivals within the soft drink industry PepsiCo, facilitated the need to create a new product. The New Coke brand was introduced into the market. Coca-Cola called it the new improved smother, rounder, yet bolder drink. This particular brand of soft drink was tipped and intended to replace the traditional Coke brand. This was Coca Cola’s first content formula change in over ninety nine years. However, in spite of the aggressive media campaigns and promotions embarked upon, as well as extensive taste test by the firm to get its new brand into the market, consumers refused to accept the new Coke brand and clamored that the old brand remained their preference. Certain consumers went as far as stocking the old brand before it was phased out of the market, others simply filed complaints. Coca Cola received over a thousand more calls than usual on a daily basis as regards the matter. Protest groups were even formed in a tense effort to preserve the old brand and formula (Ogden et al. 2012).

Coca-Cola was swift to respond to growing consumer complaints and threats by returning the classic or traditional brand to the market within months of intense legal debates. What was remarkable was that though consumers had been outraged by what they perceived as the firm’s insensitivity to consumer choice, which many thought would bear a significant implication on future success of the firm, Coca-Cola, with its more traditional brand saw gains soar in the preceding market year after the New Coke saga. The situation was a phenomenon that has led Coca-Cola to commit to meeting consumer demands and set organizational strategies to be centered on the consumers.

Coca-Cola’s Channel stuffing case: A lawsuit was filed against Coca-Cola in 2000 accusing the firm of coercing bottlers in outside regions of the USA into the purchase of hundreds of million dollars’ worth of surplus beverage concentrates in a bid to seemingly make sales seem higher than was true. Channel stuffing as this case is called presents artificially inflated sales deemed at deceiving investors to affirm that the company was doing better than it actually was. It gave investors a false understanding of the firm’s success (Ogden et al. 2012). Coca-Cola had earlier gotten off with a warning pertaining a similar lawsuit. United States Security and Exchange Commission was quoted to have said the firm misled investors into putting funds into the firm using falsified figures to lure investors as the firm failed to disclose end of period practices that truly depicted operational results of the firm. Coca-Cola immediately initiated its Ethics and Compliance committee to discuss concerns focusing on compliance with the organization’s Code of Business Conduct. Investor trust was significantly diminished and in 2008 Coca-Cola settled a channel stuffing lawsuit for close to 135.5 million dollars (Reuters). The firm however issued a statement emphasizing that the settlement was not a confession of wrong doing or an act of guilt rather the firm said the settlement was a strategic move to avoid a full drawn out legal battle that would further put the firm in more bad light.

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Another legal issue that has been significantly linked with the Coca-Cola brand and one which this literature deems to analyze is the case that focuses on health and obesity. Many people have tagged this legal case against Coca-Cola as the “deceptive vitamin water marketing lawsuit of 2009” The Center for Science in Public Interest (CSPI) as well as a body of New York and California consumers filed a lawsuit against the firm accusing the brands vitamin water product of deceptive and untrue labeling and marketing. The Center for Science in Public Interest investigated Coca Cola’s claims that their vitamin water product reduced the risk of eye diseases and boosted the immune system and asserted that the Coca Cola’s claims on the product were misleading and inaccurate. Coca Cola’s team of attorneys were quick to issue a statement pointing to the fact no consumer could be reasonably misled or deceived into thinking vitamin water was a healthy beverage.”

In 2010, Coca-Cola had its attempt to have the CSPI’s lawsuit against it dismissed, and in July of 2013, the lawsuit was voted to proceed as a class action. The case has not been resolved till date.

Prior to the Coca-Cola “Coming Together” campaign, CSPI lead the charge of criticism against organizations who were perceived as manufactures of products associated with ill health. So with the launch of the Coca-Cola campaign, the advocacy group immediately swung into action to condemn the campaign. On January 2013, CSPI released a translated version of the campaign slogan. Their version of the campaign uses clips from the original video coupled with photographs of obese individuals consuming the brand and their own version of the original statement “if you gain weight, remember it’s your fault and not ours.

The Center for Science in the Public Interest consistently tweeted its utter most distaste for Coca Cola’s new campaign. Head of CSPI, Jacobson M, in a statement acknowledged that the campaign was a mere damage control strategy by Coca-Cola to continue to deceive the public. He further emphasized that the entire soft drink industry was attempting to hold back a credible and sensible policy maker initiative for the public to reduce the intake of sugary beverages and help promote a healthier society. CSPI further noted that it had no bias against Coca-Cola and that all the advocacy group was trying to do, contrary to claims from Coca-Cola that the body was trying to eliminate them from the market, CSPI said, it was advocating that soft drinks should be consumed the way it was in the 50s where it was perceived as a special treat and consumed in smaller quantities with no risk to human health and wellbeing.

After a series of suits and counter suits and dismissals of lawsuits the SCPI was able to get a lawsuit to stick when Coca Cola launched its Vitamin water brand with what the SCPI claimed was bogus nutritional benefits. The firm’s marketing of the Vitamin water brand stresses that the drinks were fortified with vitamins. A careful analysis of extensive literature on this subject matter points to the fact that this to some certain degree is true. Certain chemically synthesized vitamins were indeed added to the drink, however the said vitamins within the drink in their capacity would be of no significant effect to the human body (Patterson, 2013). In light of the fact that the vitamins in the drinks held no health benefit, was free of color, did not have flavor and in no way did the vitamins alter the viscosity or consistency of the drink over time, it is believed that the sole purpose for adding them to the drink was so that Coca Cola could erroneously market them to the public as a sort of delicious over the counter health supplement. The fact that the Vitamin water brand of course was not deemed poisonous, many health professionals stressed that it was just a bright looking soda just without the element of carbonation. Again, critical analysis of literature on the subject matter virtually recognizes that Coca Cola in its legal defense did not in any deny these findings.

Impact on Coca-Cola

Coca-Cola has always boasted of leading market shares, holding a 42 percent market share within the global carbonated drink industry (Banutu-Gomez, 2012). Its leading global brands such as Diet Coke, and the Classic Coke we all have come to know and enjoy are top selling beverages all over the world. However, a combination of accusations and consumer skepticism over the dangers of carbonated sweetened soft drinks has resulted in a minute decline in industry sales. The industry saw a 3.4 percent decline in carbonated drink sales with diet focused soft drink sale further plunging in sales at a faster rate than all other soft drinks within the market (Hellmich, 2013).

A month after the launch of the “Coming Together” campaign, Coca-Cola posted a net revenue increase of 3 percent and a fourth quarter 4 percent increase in total revenue. However, as soon as the criticisms and law suits commandeered by the Center for Science in the Public Interest began to come to light the firm reported its first quarter revenue decline of 1 percent. Approximately two months later, Coca-Cola again a 3 percent second quarter decline in revenue and in October the same year, Coca-Cola again reported a 3 percent decline in annual revenue. Coca-Cola issued a statement claiming that much of the fall in revenue was as a result of poor weather conditions in multiple markets, claiming that people consumed less drinks in the rainy season. Many however, point to increasing health awareness on the part of consumers while others point to all the negative publicity surrounding the firm and its involvement in negative health issues. Industry competitors such PepsiCo reported revenue increase of about 2 percent within the same period Coca Cola witnessed a decline in revenue. Dr. Pepper Snapple equally reported gains within the stipulated period (CBS).

Stock values of the firm remained inconsistent throughout the period of its faceoff with the Center for Science in the Public Interest. This inconsistency in stock value showed an indication that were becoming uncertain about the firm’s strategies and were worried about the media backlashing the firm was involved in du to the legal confrontations it was undergoing with the Center for Science in the Public Interest. Coca Cola’s slip form leading brand to a third place position in the inter brand’s “best global brands” ranking reflects the effects of lawsuits and legal battles can have on a brand’s reputation (Hellmich, 2013)

Conclusion

Coca-Cola with the legal battles and consistent criticism from advocacy groups and skepticism from a society that is shifting to a more health conscious paradigm in what they consume, products sales and firm revenue has seen a steady decline in numbers. The lawsuits have not helped either as the negative media portrayal of the firm as an insensitive element towards public health isn’t healthy for the firm’s reputation.

Coca-Cola faces the challenge of finding a balance between supporting health awareness campaigns while selling products that many claim to contribute to the very issue they are taking efforts to eliminate. In light of the link many pro-health groups and the general media have established between Coca Cola’s products, obesity and other health associated issues, the public seemingly has begun to see the firm’s anti-obesity campaigns as a disingenuous effort at damage control with the hop of keeping the brand strong.

If Coca-Cola is to continue to maintain its strong leadership status in the soft drink industry, then it is recommended that the firm begin to initiate and engage in discussions that are centered on scientific studies on brand product nutrition. This initiative will be utterly essential in ensuring that consumers begin to see the firm as a transparent and genuinely concerned brand with the wellbeing of its consumer on the top of its priorities.

References

Ali, N. (2012). The obesity reality. Lanham, Maryland: Rowan and Littlefield Publishers, Inc.55

Banutu-Gomez, M. (2012). COCA COLA: International Business Strategy for Globalization. International Trade and Academic Research Conference.

Coca-Cola Company. (Producer) (2013). Coming together [Video file]. Retrieved from http://www.youtube.com/watch?v=SKi2A76YJlc

CBS News. (2013, July 19). Vitamin water lawsuit over health claims to proceed as class action. CBS News.

Ferrell, O., Ferrell, L., & Fraedrich, J. (2011). Business ethics: Ethical decision making and cases. (9th ed., p. 461). Mason, OH: South-Western.

Hellmich, N. A. (2013, January 14). Critics attack coke’s anti-obesity ad. USA Today.

Patterson, N. (2013, July 11). Prof: Diet drinks are not the sweet solution to fight obesity, health problems. Purdue News.

Reuters. (2008, July 7). Coca-cola agrees to settlement in shareholder lawsuit. Reuters. Retrieved from


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