Economic Aspects of Coca Cola

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Introduction

Coca-Cola is a carbonated soft drink which is sold in more than 200 countries across the world. Its brand is the most well-known brand which is shown by the clothing company pays the licensing fee for it in order to use its name on the product. In 1886, it originated as a soda fountain drink and started bottling. Its most important step was during WW2 when the CEO declared that the American militaries would be able to get Coca-Cola anywhere they were at 5 cents a bottle. Owing to his declaration, the company could get all the sugar as it wanted as well as it got a permission to set up 64 its bottling plants across the world during the war. After the war, the company was known globally. Nowadays, it has the biggest share in the market of soft drink and over its 16000 beverages are consume every single seconds around the world.

Coca Cola & its globalization

Coca cola started its international expansion in the 1900’s. Robert woodruff who was a long time leader of the company initiated the push to establish bottling operations outside the U.S plants. Therefore plants were opened in France, Mexico, Belgium, Italy, Peru, Spain, and Australia & South Africa. By the time the World War II began, Coca cola was being bottled in 44 countries.

The major reason for globalization was, firstly coca cola could access to different goods, in terms of material required to make the final product, from different countries. Secondly, expansion to other countries helped the company to increase their profits by almost 70% and today coca cola is the worlds most recognized company. Thirdly, as competition increased due to global expansion the demand also increased. Consumers started becoming aware of the different brands of drinks available in the market. International expansion also led to the economic growth in terms of improvement in productivity and producing more goods and services. It also created more jobs in other countries and helps in reducing monopoly and initiates trade which becomes beneficial for developing countries. Coca cola’s innovating marketing strategies creates an impact on the consumers and therefore it is the company’s duty to fulfill the demand and stay ahead of competition.

Since coca cola globalize, the advantages that the other party’s such as the bottlers have are, firstly, as the company keeps innovating new products and promoting their brands through developing various ad campaigns, the demand for their product increases which means more bottles of coke are being sold and that is an advantage for the bottlers. Secondly, Coca Cola Company takes strict measures in quality control; therefore the bottling company does not have to look into that matter. Lastly, all the bottling company that work under coca cola can gain advantage from each other in terms of knowledge, innovation, efficiency etc because they are not in competition with each other.

The Coca Cola system

With its headquarters in Atlanta, around 1200 bottlers, hundreds of suppliers, 140000 company associates, Coca Cola definitely is a network like no other. To have this unique network work they have come up with a unique working system that they call the Coca Cola system. The Coca-Cola Company and more than 300 worldwide bottling partners work together as the Coca-Cola system to deliver daily refreshment and drive their global success. Ranging from small family-owned businesses to large international publicly traded companies, Coca Cola’s bottlers produce, package, distribute and merchandise their products worldwide. Made up of grocery stores, restaurants and mass merchandisers -- among others -- their customers sell our products to consumers in local communities around the globe. Made up of shoppers like us the world over, their consumers enjoy 1.7 billion servings of Coca-Cola products daily. Now that’s one big, happy, totally refreshed family.

Competition

Its most important competitor is PepsiCo which is on the second...
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