Coca Cola in Africa Essay

683 Words3 Pages
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

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