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CocaCola Essay Research Paper History (стр. 2 из 2)

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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"Coke Insider." Investors Business Daily. Mahoney, Ed. Distribution

Manager for Coca-Cola Enterprises. Group Interview. 4 November 1999. Pendergrast,

Mark. For God, Country, and Coca-Cola. New York, N.Y.: Charles Scribner’s Son

Publishing Co., 1993. The Coca-Cola Company. "Facts, Figures, and

Features." Atlanta: The Coca-Cola Company, 1996. "The Coca-Cola

Company Overview." Hoover’s Company Profiles. wysiwyg://

bodyframe.14/http://ehostweb14.epnet.com/fulltext.asp (23 Sept. 1999). "The

Coca-Cola Company." Profiles. http://www.coca-colacompany.com/ world/world.html

(10 Nov. 1999). The Coca-Cola Company. "The Chronicle of Coca-Cola: Since

1886." Atlanta: The Coca-Cola Company, 1950.