COCA-COLA IN AFRICA
THE DECISION
Table of Content
Integrative Cases Study – Page 3
Case Study Analyses – Page 4
References – Page 6
Integrative Case 1.1
Coca-Cola in Africa
1. Why is Coca-Cola so interested in Africa, which is typically regarded as part of the base of the global economic pyramid?
Coca-Cola is an organization that has been around since 1892. Coca-Cola is looking for new emerging growth markets and Africa has proven to be that. Combined, 12 of the African countries have a GDP greater than that of Chine. Coca-Cola has 29% of the market share in Africa.
2. What unique resources and capabilities does Coca-Cola have that will help it compete well in Africa?
Coca-Cola has the
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Sales in the United States are declining due to the public concern over sugar. Sales in Europe and Japan are flat, while markets in China and India offer up strong completion for Coca-Cola. Africa’s middle class population is growing at a steady rate, so the disposable income is increasing. This creates an opportunity for Coca-Cola to tap into growth opportunities (Natalia Cheverri 2012).
How does it work?
Although there are areas in Africa lacking infrastructure, Coca-Cola operates in every country. Coca-Cola utilized a franchising manufacturing model that works perfectly for operating in Africa. Coca-Cola partnered with local licensed bottling groups to help create the product. Coca-Cola manufactures the syrup concentrate and sells to the bottlers. The bottlers add filtered water, carbonation, and sweetener to make the final product. With this model, Coca-Cola is sharing the wealth with local investors/community members. This creates sustainable business and improves community buy-in with Coca-Cola’s existence in Africa (Maritz Jaco 2010). Because partnerships are formed with local bottlers and local members of the community, there is a vested interest by the locals to keep Coca-Cola’s business successful. Through these partnerships, Coca-Cola is able to help build the socio-economic system in different towns.
Distribution
Coca-Cola was having difficulty distributing product to different area of Africa with no roads. In
The company known as Coca-Cola today was started in September of 1919, but the first Coke brand was served as early as 1886. Since that time it has grown to be one of the most globally recognized brand names with a stock value of $167 billion. Coke’s plan has always been developed with the future in mind. Right away the company realized that it was more profitable to manufacture the concentrate used to make carbonated drinks than to bottle it. From that point on they saw the entire world, not simply the originating country, as their desired market. It seems only practical that the company should pursue this agenda until conquered then focus the effort on expanding into different product lines. This logical
“Citizen Coke: The Making of Coca-Cola Capitalism” by Bartow J. Elmore tells a story of how Coca- Cola have changed its industry as well as the globe by utilizing natural resources. To start on his journey about Coca-Cola, Elmore questions the success of the company behind selling Coke, a low-priced mixture of “sugar, water, and caffeine, packed in glass, plastic, or aluminum” (Elmore 8). Elmore discovers that even though advertising plays an essential key in selling products, Coca-Cola is mostly profitable from outsourcing the supply (Elmore 9). Besides explaining his research on the Coca-Cola capitalism, Elmore also emphasizes on the ecological evidences that support it, which make this book an environmental history of Coca-Cola capitalism (Elmore 14).
When Coca cola bring refreshment, value, joy and fun to their stakeholders, then they successfully nurture and protect their brands, particularly Coca-Cola that is the key to fulfilling our ultimate obligation to provide consistently attractive returns to the owners of our business. Marketing positioning Local marketing strategy enables Coke to listen to all the voices around the world asking for beverage that span the entire spectrum of tastes and occasions. What people want in a beverage is a reflection of who they are, where they live, how they work and play, and how they relax and recharge. Whether you’re a student in the United States enjoying are freshing Coca –Cola a woman in Italy taking a tea break , a child in Peru asking for a juices drink, or a couple in Korea buying bottled water after a run together, “Coca cola is there for you. Coca cola are determined not only to make great drinks, but also to contribute to communities around the world through our commitments to education, health, well ness, and diversity. Coke Strives to be a good neighbor, consistently shaping business decisions to improve the quality of life in the communities in which coke does business. It’s a special thing to have billions of friends around the world, and coke never forgets it.
The Coca-Cola Company has built an extensive network of distributors that partner with local retailers to ultimately reach their final consumers. They understand their target market and the logistics required to have their products reach their customers around the world. Their success is due to their continual efforts to reduce cost and increase profits, while delivering quality, diverse products to their customers and consumers. Coca-Cola anticipates their customers’ interests and proactively delivers viable solutions for their businesses (The Coca-Cola Company, 2014).
Today Coca-Cola is viewed as one of the most successful corporations all around the world. Melinda French Gates Co-Chair of “The Bill and Melinda Gates Foundation” sates “Non-profit should learn from mega corporations like Coca-Cola, whose global network of marketers and distributors ensure that every remote village wants and
1. What aspects of U.S. culture and of Indian culture may have been causes of Coke’s difficulties in India?
The Coca Cola company is perceived to be the most famous trademark on the globe, and it is equally so. The company claims more than 400 brands that appeal to a wide range of individuals throughout the world. They are in a position to fulfill needs of every one of their buyers making their experience with their beverages a better one. The entity’s drinks entice a lot of people across all races, age, and gender. Coca Cola is outstanding for its overall popularity as its items are sold in over four hundred countries in the world, while major contenders like Pepsi are just available in very few countries. Such a competitive advantage has placed
Mace, T., & Stretcher, R. (2003, January). THE COCA-COLA COMPANY. Allied Academies International Conference. International Academy for Case Studies. Proceedings (Vol. 10, No. 1, p. 71). Jordan Whitney Enterprises, Inc.
Firstly we start with the sociological or also known as demography. This is the study of human population from many perspective such as race, ethnicity, gender and many other. For Coca Cola to serve in different country require a many marketing research to be done. Coca Cola currently serves in 6 different region which is the North America, Latin America, Europe Eurasia, Africa, and Asia Pacific. Different country has different type of demand for Coca Cola. As consumer now become more health conscious, they have started to develop product such as coke light, coke zero which contain zero sugar content. This is a reactive approach taken by Coca Cola to adapt to the ever changing environment in order to stay competitive in the industry.
The brand Coca-Cola has been around for over 130 years. Coca-Colas inventor, John Pemberton has marketed his creation from the very beginning as a product that can serve others beneficially. Perbertons “brain tonic” later turned into a global empire of Coca-Cola. Professor Bartow J. Elmore’s book Citizen Coke: the Making of Coca-Cola Capitalism explores in detail about Cokes formula and how it is made and how it affects individuals and the planet in which we live. Elmore discuses how Coca-Cola has sold its low-price syrup while unloading expenses and risks onto their suppliers, franchisees, and the government. Elmore makes a compelling argument throughout the book that Coca-Cola trademarks it self as a device of economical expansion and a charitable force, however Cokes initiative for growth has made it damage the health of both the public and the planet. Elmore explains each ingredient in the Coca-Cola formula and how it has affected others, business and the environment.
Coca Cola’s international achievement can be attributed to numerous of things, but in order to think globally one must first think locally. This is the main message that Coca Cola Company place huge emphasis on whenever they are entering a country. (Miller) Coca Cola has formatted its approach strategically using a tactical method, this is done to provide the appropriate marketing activities and beverage to its customers. As part of Coca Cola vision to taste the same around the world, they have chosen to standardize its product and manufacturing process. In Trinidad and Tobago the local name for Coca Cola is “Coke”. From the perspective of consumers the key conceptual categories are not the flavours and colas that marketer hold in high regard, but what we refer to locally as the ‘black’ sweet drink. (Miller) Trinbagonian’s are particularly fond of sugar and sweet products this is linked to the days of the sugar cane field. Coke came into Trinidad in 1939, while under the British Government. (Miller)
The reason of choosing United States because of its size, population, growth in the economy and technology that become huge opportunities and beneficial for operation of Coca Cola’s markets in the following years.
These two-company’s economic characteristic include their market size and growth rate from the early 2000’s to 2010. Coke and Pepsi have struggled for years in the carbonated and non-alcoholic sector. According to Barbara Murray (2006c) "But as the pop fight has topped out, the industry 's giants have begun relying on new product flavors and looking to noncarbonated beverages for growth.” (Murry, 2006). For instance, Coke boasts in the advertisement as the king of the soft drink; as a consumer of both products, I agree. About 15 years ago, I was selected to participate in a critiquing of Coke and Pepsi products. Additionally, my travel to Africa in 2007 and 2010 provided the same raving review for the Coke Cola products. Apparently, Coke and Pepsi have been rivals for ages locally, regionally, nationally, multinational, and globally, therefore, one expects them to have an on-going rivalry when marketing the high-energy beverages.
them to identify their best resources and capabilities to continue to advance the company. Coca-Cola’s resources have contributed to the competitive advantages and are important in the company’s future strategies. Gamble (2011) states, “Even though Cola-Cola was the worldwide leader in carbonate soft drink sales, it had struggled to build market share in alternative beverages and trailed PepsiCo by a significant margin worldwide in energy drinks, sports drinks, and vitamin-enhanced beverages. Asia was the only geographic market where Coca-Cola’s sales of alternative exceeded the sales of PepsiCo’s energy drinks, sports drinks, and vitamin-enhanced beverages. In the United States, Coca-Cola was the third-largest seller of alternative beverages, with its combined sales of Powerade, Full Throttle, Nos, Rehab, TaB, and Vault energy drinks; glaceau vitaminwater; and Fuze vitamin-enhanced drinks, falling just short of the sales of Red Bull energy drink (p.273)”. Coca-Cola resources and capabilities have to be strengthened and nurtured to remain competitive in the energy and sports drink industry.
It comes to no surprise that sustainability is the newest trend and many companies want to be in style. Due to the ferocity of competing amongst other leading companies, an abundance of corporations have intently fixated their attentions on their enterprises and actions involving sustainable efforts. The Coca-Cola Company is a globally prominent beverage industry. With an all-encompassing acknowledgement, their sustainable efforts are substantially striking. Coca-Cola has various geographical domains that have diverse leaderships to help the world, particularly poverty stricken communities. The United State’s most recent Coca-Cola sustainability pledge called “Me, We, World” generated the objectives for social value and making a positive difference for the consumers and communities they provide for (Manufacturing Close Up, 2013). The major component for this commitment is to increase sustainability in protecting the environment or “World.” Competition drives success; with Coca-Cola leading the nation’s largest beverage company, their sustainable efforts are essential that aim to replenish 100% of water used in their products, reduce carbon footprint, and initiate climate protection.