International Business Activities Of Coca Cola company

International Business Activities

Supervisor:

Ma‘am Zoya Khan

Submitted by

Muhammad Farhan Javed

Syed Owais shah

Irfan Mughal

Subject:
International Business

Federal Urdu University of Arts, Science and Technology Islamabad

1 Department Of Business Administration
Federal Urdu University Islamabad.

ACKNOWLEDGMENT

We are thankful to the ALLAH ALMIGHTY, we have accomplished our Task. We
would like to thank all of the people who directly or indirectly helped us to achieve
this Target.
Special Thanks to:

Ma‘am Zoya Khan

This Report fabricates its foundation on numerous discussions among the panel
(Group Members). Our conspirator‘s encouraging ideas and strengthening of our
thoughts are reflected in this comprehensive Report.
All the stuff regarding this report has been explained marvelously and carefully. This
write up is being demonstrated in easy mode which is understandable by the reader. It
will provide the intramural and threshold aura to read and it will cover all the
requisites and proviso about the topic under discussion. One of the aesthetic and
charming characteristics of this speculation is this, that it is easygoing and genial.


ABSTRACT

This report delves into the role of International business activities for the coca cola co.
and the promotion of organization, role of other departments in this process, internal
& external support of different institution department in this process. The verdict
about Coca-Cola‘s marketing department process may facilitate policy makers,
employment agencies, organization to ascertain and over and above existing
cooperation‘s the genteel maneuver to improve the overall performance of the
company, not only in India but also in all parts of the world.


METHODOLOGY

Information has been congregated through different international business books,
internet sites of Coca-Cola Company, articles and generals related to advertisement
and promotion.
Our foremost endeavor was to compile and evaluate all relevant information with
reference to international business strategies in the host country and to judge against
this information with standard set by international marketers.


Contents
Executive Summary................................................................................................................................ 6
Brands ..................................................................................................................................................... 8
The Coca-Cola Story .............................................................................................................................. 9
New Coke to the Present ...................................................................................................................... 10
COCA-COLA ....................................................................................................................................... 12
Introduction .......................................................................................................................................... 13
History ................................................................................................................................................... 13
Brands ................................................................................................................................................... 14
Bottling Information ............................................................................................................................ 14
Mission, Vision & Values ..................................................................................................................... 15
Our Mission........................................................................................................................................... 15
Our Vision ............................................................................................................................................. 15
Live Our Values .................................................................................................................................... 16
Focus on the Market ............................................................................................................................. 16
Employment/Economic Impact ........................................................................................................... 17
Sponsorships ......................................................................................................................................... 17
Marketing Involvement ........................................................................................................................ 17
International Business Barrier Face For Coca Cola ......................................................................... 18
Uncontrollable Elements ...................................................................................................................... 18
Legal And Political Problems .............................................................................................................. 18
Customer Market ................................................................................................................................. 20
SWOT .................................................................................................................................................... 22
ANALYSIS ............................................................................................................................................ 22
Strengthes: ............................................................................................................................................ 23
Weakness:.............................................................................................................................................. 24
Opportunities: ....................................................................................................................................... 26
Threats: ................................................................................................................................................. 27
According His Competitor SWOT Analysis of Coca-Cola India ..................................................... 29
International Elements Effects on International Business Activates ............................................... 32
PEST ...................................................................................................................................................... 34
ANALYSIS ............................................................................................................................................ 34
Product Life Cycle ................................................................................................................................ 44
Duties and Taxes Applied .................................................................................................................... 45
Laws Abided By & Methods of Conflict Resolution .......................................................................... 45
Methods of Conflict Resolution ........................................................................................................... 45
Strategies to Reduce Political Vulnerability ....................................................................................... 46
Current Strategies Regarding International Operations .................................................................. 46
Adaption and cultural borrowing ....................................................................................................... 47
Joint Venture ........................................................................................................................................ 48
Beverage Partners Worldwide Joint Venture to Focus on Europe and Canada ............................ 48
Coca-Cola Enterprises Joint Venture Set To Step Change Plastics Recycling In GB .................... 50
Monday, March 07, 2011 ................................................................................................................. 50
Acquisitions ........................................................................................................................................... 54
Coca-Cola, Monster Acquisition Rumors Denied By Soda Giant .................................................... 54
Recommendations for More Improving Coca Cola International Business Activities ................... 57
BIBLIOGRAPHY ................................................................................................................................ 60


Executive Summary

This scope of this report is to discuss the international marketing mix of Coca Cola,
which is one of the biggest brands in the world. The debate between the global
standardization and local adaptation of the marketing mix has been going on for more
than four decades without a resolution and globalization trends starting in the early
1980‘s has further fueled the debate .This has led the global companies to make the
critical trade-off decision between economies of scale resulting from standardization
and the cultural prerequisite of local adaptation. This essay looks at how one of the
most successful brands, Coca Cola manages their marketing mix in a global context to
get an insight into this debate.
The Coca-Cola Company focuses on the non-alcoholic beverage market, producing a
range of drinks around the world. It is the world‘s leading manufacturer, marketer and
distributor of non-alcoholic beverages, primarily carbonated soft drinks. The company
is active in more than 200 countries (Mintel, 2005), with the help of directly
controlled subsidiaries, partnerships and franchising, thus making it a truly global
company. The company sells over six million beverages every day (Coca-Cola,
2005).
The financial situation of Coca-Cola can be commented by looking at the company‘s
annual reports. For the year ended December 2004, the company generated revenues
of $21,962 million, an increase of 4.4% on the previous year (Coca-Cola, 2005). The
distribution of this revenue under the five business units is: North America 30.1%;
Africa 3.9%; Asia 24%; Eurasia 31.2% and Middle East 9.7%). The company‘s
leading brands are Coca-Cola, Diet Coke, Sprite and Fanta.
Coca-cola‘s headquarter is in USA and there are more than 200 countries in which it
is acting as a host company. In India there are 9 plants and over 1800 employees, 8
plants are functional and three plants in Lahore, Gujranwala and Rahimyar Khan have
achieved the Quality system award.
Coca-cola with its 450 brands is claiming to be the world‘s best non-alcoholic
beverage maker and is yet proving his claim by having 63% share in the world market
and they are fulfilling their promise to maintain a standard and proving to become a
quality symbol. And their aim is to serve the nation by making only non-alcoholic
drinks and to give the world a cool and fresh treat.

Introduction
Coca-Cola (also known as Coke) is a popular carbonated soft drink sold in stores,
restaurants and vending machines in over two hundred countries. It is produced by
The Coca-Cola Company, which is also occasionally referred to as Coca-Cola or
Coke. It is one of the world‘s most recognizable and widely sold commercial brands.
Coke's major rival is Pepsi. Although Coke has been the target of urban legends
decrying the drink for its supposedly copious amounts of ―acid‖, or the "life-
threatening" effects of its carbonated water but still it is the most in-style soft drink.
About its safety and the ethics of the company that produces it, it is widely accepted
as the most dominant soft drink in the world today.
Originally intended as a patent medicine when it was invented in the late 19th
century, Coca-Cola was bought out by shrewd businessman Asa Griggs Candler,
whose aggressive marketing tactics led Coke to its dominance of the world soft drink
market throughout the 20th century. Although faced with accusations of perverse
side-effects on the health of consumers and monopolistic practices by its producing
company, Coca-Cola has remained a popular soft drink well into the first decade of
the 21st century.


Brands
Globally, the Coca-Cola Company owns or licenses nearly 450 brands in the
nonalcoholic beverage business. Many of those brands are considered among the
worlds most valuable. Some of these include:

- Carbonated soft drinks
Such as Coca-Cola, Diet Coke, Fanta, Sprite and Fresca
- Juices and juice drinks
Such as Minute Maid, Qoo, Fruitopia, Maaza and Bibo
- Sports drinks
Such as POWERade and Aquarius
- Water products
Such as Ciel, Dasani and Bonaqua
- Teas
Such as Sokenbicha and Marocha
- Coffee
Such as Georgia coffee, the best-selling noncarbonated beverage in
Japan.


The Coca-Cola Story
Coca-Cola was invented by John S. Pemberton in 1886 in Columbus, Georgia,
originally as a coca-wine called Pemberton's French Wine Coca. It was initially sold
as a patent medicine for five cents a glass at soda fountains, which were popular in
America at the time thanks to a belief that carbonated water was good for the health.
It was re-launched as a soft drink to counter Prohibition.
The first sales were made at Jacob's Pharmacy in Atlanta, Georgia on May 8, 1886,
and for the first eight months only thirteen drinks were sold each day. Pemberton then
ran the first advertisement for the beverage on May 29 of the same year in the Atlanta
Journal. Asa Griggs Candler bought out Pemberton and his partners in 1887 and
began aggressively marketing the product — the efficacy of this concerted advertising
campaign would not be realized until much later. By the time of its 50th anniversary,
the drink had reached the status of a national symbol. Coca-Cola was sold in bottles
for the first time on March 12, 1894 and cans of Coke first appeared in 1955.
The first bottling of Coca-Cola occurred in Vicksburg, Mississippi at the Biedenharn
Candy Company in 1891. Its proprietor was Joseph A. Biedenharn. The original
bottles were Biedenharn bottles, very different from the much later hobble-skirt
design that is now so familiar. Asa Candler was tentative about bottling the drink, but
the two entrepreneurs who proposed the idea were so persuasive that Candler signed a
contract giving them control of the procedure. However, the loosely-termed contract
proved to be problematic for the company for decades to come. Legal matters were
not helped by the decision of the bottlers to subcontract to other companies — in
effect, becoming parent bottlers.
When the United States entered World War II, Coke was provided free to American
soldiers, as a patriotic drink. The popularity of the drink exploded in the wake of
World War II as American soldiers returned home, more grateful than ever to partake
of a beverage that had become synonymous with the American way of life.


New Coke to the Present
In 1985, Coca-Cola, amid much publicity, attempted to change the formula of the
drink. Some authorities believe that New Coke, as the reformulated drink was called,
was invented specifically to respond to its commercial competitor, Pepsi. Double-
blind taste tests indicated that most consumers preferred the taste of Pepsi (which has
more lemon oil, less orange oil, and uses vanillin rather than vanilla) to Coke. New
Coke was reformulated in a way that emulated Pepsi. Follow-up taste tests revealed
that most consumers preferred the taste of New Coke to both Coke and Pepsi. The
reformulation was led by the then-CEO of the company, Roberto Goizueta, and the
President Don Keough.
It is unclear what part long-time company president Robert W. Woodruff played in
the reformulation. Goizueta claims that Woodruff endorsed it a few months before his
death in 1985; others have pointed out that, as the two men were alone when the
matter was discussed, Goizueta might have misinterpreted the wishes of the dying
Woodruff, who could speak only in monosyllables. It has also been alleged that
Woodruff might not have been able to understand what Goizueta was telling him.
The commercial failure of New Coke therefore came as a grievous blow to the
management of the Coca-Cola Corporation. Coca-Cola management was unprepared,
however, for the nostalgic sentiments the drink aroused in the American public; some
compared changing the Coke formula to rewriting the American Constitution.
The new Coca-Cola formula subsequently caused a public backlash. Gay Mullins,
from Seattle, Washington, USA, founded the Old Coke Drinkers of America
organization, which attempted to sue the company, and lobbied for the formula of Old
Coke to be released into the public domain. This and other protests caused the
company to return to the old formula under the name Coca-Cola Classic on July 10,
1985. The company was later accused of performing this volte-face as an elaborate
reuse to introduce a new product while reviving interest in the original. The company
president responded to the accusation by declaring: "We are not that stupid, or that
smart."
The Coca-Cola Company is the world's largest consumer of natural vanilla extract.
When New Coke was introduced in 1985, the economy of Madagascar crashed —
vanilla being a prime export — and recovered only after New Coke flopped, since


New Coke used vanillin, a less-expensive synthetic substitute. Purchases of vanilla
more than halved during this period.
Meanwhile, the market share for New Coke had dwindled to only 3% by 1986. The
company renamed the product "Coke II" in 1992 (not to be confused with "Coke C2",
a reduced-sugar cola launched by Coca-Cola in 2004). However, sales falloff caused a
severe cutback in distribution. By 1998, it was sold in only a few places in the
Midwestern U.S.


COCA-COLA
IN
INDIA


Introduction
The Coca-Cola Company is a global company with some of the world's most widely
recognized brands, the Coca-Cola business in India has completed its 50 years of operation.
The beverages are produced locally, employing Indian citizens. And their product range and
marketing reflects Indian tastes and lifestyles, and they are deeply involved in the life of the
local communities in which they operate

History
The Coca-Cola Company re-entered India through its wholly owned subsidiary, Coca-
Cola India Private Limited and re-launched Coca-Cola in 1993 after the opening up of
the Indian economy to foreign investments in 1991. Since then its operations have
grown rapidly through a model that supports bottling operations, both company
owned as well as locally owned and includes over 7,000 Indian distributors and more
than 1.7 million retailers. Today, our brands are the leading brands in most beverage
segments. The Coca-Cola Company's brands in India include Coca-Cola, Fanta
Orange, Limca, Sprite, Thums Up, Burn, Kinley, Maaza, Minute Maid Pulpy Orange,
Minute Maid Nimbu Fresh and the Georgia Gold range of teas and coffees and
Vitingo (a beverage fortified with micro-nutrients).
In India, the Coca-Cola system comprises of a wholly owned subsidiary of The Coca-
Cola Company namely Coca-Cola India Pvt Ltd which manufactures and sells
concentrate and beverage bases and powdered beverage mixes, a Company-owned
bottling entity, namely, Hindustan Coca-Cola Beverages Pvt Ltd; thirteen authorized
bottling partners of The Coca-Cola Company, who are authorized to prepare, package,
sell and distribute beverages under certain specified trademarks of The Coca-Cola
Company; and an extensive distribution system comprising of our customers,
distributors and retailers. Coca-Cola India Private Limited sells concentrate and
beverage bases to authorized bottlers who are authorized to use these to produce our
portfolio of beverages. These authorized bottlers independently develop local markets
and distribute beverages to grocers, small retailers, supermarkets, restaurants and
numerous other businesses. In turn, these customers make our beverages available to
consumers across India.

The Coca-Cola Company has invested nearly USD 2 billion in its operations in India
since its re-entry back into India in 1992. The Coca-Cola system in India directly

employs over 25,000 people including those on contract. The system has created
indirect employment for more than 1,50,000 people in related industries through its
vast procurement, supply and distribution system. We strive to ensure that our work
environment is safe and inclusive and that there are plentiful opportunities for our
people in India and across the world.

The beverage industry is a major driver of economic growth. A National Council of
Applied Economic Research (NCAER) study on the carbonated soft-drink industry
indicates that this industry has an output multiplier effect of 2.1. This means that if
one unit of output of beverage is increased, the direct and indirect effect on the
economy will be twice of that. In terms of employment, the NCAER study notes that
"an extra production of 1000 cases generates an extra employment of 410 man days."
As a Company, our products are an integral part of the micro economy particularly in
small towns and villages, contributing to creation of jobs and growth in GDP. Coca-
Cola in India is amongst the largest domestic buyers of certain agricultural products.

Brands
Coca-Cola,Diet Coke,Thums Up,Sprite,Fanta,Limca,Maaza,Maaza, Milky
Delite,Minute, Maid Pulpy,Orange,Minute Maid, Nimbu Fresh,Burn,Kinley
Water,Kinley Soda,Schweppes,GEORGIA Gold

Bottling Information
In India, the Coca-Cola system comprises of a wholly owned subsidiary of
The Coca-Cola Company namely Coca-Cola India Pvt Ltd which manufactures and
sells concentrate and beverage bases and powdered beverage mixes, a Company-
owned bottling entity, namely, Hindustan Coca-Cola Beverages Pvt Ltd; thirteen
authorized bottling partners of The Coca-Cola Company, who are authorized to
prepare, package, sell and distribute beverages under certain specified trademarks of
The Coca-Cola Company; and an extensive distribution system comprising of our
customers, distributors and retailers. Coca-Cola India Private Limited sells
concentrate and beverage bases to authorized bottlers who are authorized to use these
to produce our portfolio of beverages.These authorized bottlers independently develop
local markets and distribute beverages to grocers, small retailers, supermarkets,


restaurants and numerous other businesses. In turn, these customers make our
beverages available to consumers across India..

Mission, Vision & Values
The world is changing all around us. To continue to thrive as a business over
the next ten years and beyond, we must look ahead, understand the trends and forces
that will shape our business in the future and move swiftly to prepare for what's to
come. We must get ready for tomorrow today. That's what our 2020 Vision is all
about. It creates a long-term destination for our business and provides us with a "Road
map" for winning together with our bottling partners.
Our Mission
Our Road map starts with our mission, which is enduring. It declares our purpose as a
Company and serves as the standard against which we weigh our actions and
decisions.
To refresh the world...
To inspire moments of optimism and happiness...
To create value and make a difference
Our Vision
Our vision serves as the framework for our Road map and guides every aspect of our
business by describing what we need to accomplish in order to continue achieving
sustainable, quality growth.
People: Be a great place to work where people are inspired to be the best they
can be
Portfolio: Bring to the world a portfolio of quality beverage brands that
anticipate and satisfy people‘s desires and needs
Partners: Nurture a winning network of customers and suppliers, together we
create mutual, enduring value
Planet: Be a responsible citizen that makes a difference by helping build and
support sustainable communities
Profit: Maximize long-term return to share owners while being mindful of our
overall responsibilities
Productivity: Be a highly effective, lean and fast-moving organization


Our Winning Culture
Our Winning Culture defines the attitudes and behaviors that will be required of us to
make our 2020 Vision a reality.
Live Our Values
Our values serve as a compass for our actions and describe how we behave in the
world.
Leadership: The courage to shape a better future
Collaboration: Leverage collective genius
Integrity: Be real
Accountability: If it is to be, it‘s up to me
Passion: Committed in heart and mind
Diversity: As inclusive as our brands
Quality: What we do, we do well
Focus on the Market
Focus on needs of our consumers, customers and franchise partners
Get out into the market and listen, observe and learn
Possess a world view
Focus on execution in the marketplace every day
Be insatiably curious
Work Smart
Act with urgency
Remain responsive to change
Have the courage to change course when needed
Remain constructively discontent
Work efficiently
Act Like Owners
Be accountable for our actions and in actions
Steward system assets and focus on building value
Reward our people for taking risks and finding better ways to solve problems
Learn from our outcomes -- what worked and what didn‘t
Be the Brand
Inspire creativity, passion, optimism and fun


Employment/Economic Impact
In India it employs 1,800 people. In India it has invested over $130 million (U.S.).

Sponsorships
Coca-Cola is the official soft drink of many collegiate football teams throughout the
nation, partly due to Coca-Cola providing those schools with upgraded athletic
facilities in exchange for Coca-Cola's sponsorship. This is especially prevalent at the
high school level, which is more dependent on such contracts due to tighter budgets.
Coca-Cola was one of the official sponsors of the 1996 Cricket World Cup held on
the Indian subcontinent. Coca Cola is also one of the associate sponsor of Delhi
Daredevils in Indian Premier League.
The Company sponsors India's leading pop group and organizes concerts throughout
the country for teenagers and underprivileged children.
It sponsors India's No. 1 solo artist, who will participate in concerts and charity events
organized by The Coca-Cola Company in India. The Company has signed a
sponsorship agreement with eight of India's national cricket players for promotional
and advertising use.
The Coca-Cola System in India is the exclusive supplier for India Railways, serving
soft drinks in stations, platforms and on trains. The Company will be undertaking a
beautification program of stations and platforms.
Marketing Involvement
Coca-Cola Corporation is a multinational organization. And it is indulged in the
international marketing .The brands and basic strategies are made in the home country
but the local strategies are defined in the host countries. Also the 4P‘s are made
according to the demographics and taste of the people of the host country.
In India the Coca-Cola Company maps the strategies and the brands by looking into
the environment in which it is working. The brands are produced locally. And the
product, price promotion and placement are planned with respect to the controllable
variables and uncontrollable variables.


International Business Barrier Face For Coca Cola
Uncontrollable Elements
Whenever any business start operating in two or more than two countries, it come
across some of the problems which are beyond the control of business , like legal
restraints, government controls, weather, consumer behavior, economic conditions of
the host country, social and cultural factors, geography & infrastructure, channel of
distribution available, level of technology and competitive forces. These problems are
different in all the countries in which business starts its operations. So business has to
design a separate framework for each country to overcome these problems.
Coke is one of the oldest companies which are in international business; they have a
vast experience of controlling these elements. They heavily rely on research to
overcome these problems.

Legal And Political Problems
They perform thorough study of legal and political problems to decide to enter into
any country. They track the previous record of the ruling party and policies. They also
keep in mind the attitude of other opposition parties about foreign companies. If any
problem arises regarding political or legal issues, they don‘t sacrifice their policies
and secrecies, as we have a case of COKE AND INDIAN GOVERNMENT. When
Indian Government asked to have formula for the concentrate and they deny and left
the huge Indian market.

Social And Cultural Factors
Social and Cultural factors have a very vital impact on the business in the host
country. Although this is the most difficult task to understand the culture of the host
country but business has to do reasonable care to understand this problem.
Coke performs research to understand these issues and design their strategies
accordingly. They design their products, prices, place, promotion and customer
service according to the culture of the country. As we see that coke has 400 brands
allover the world but in India we have only 4 brands and in India which is a market of
1.1 billion people coke has 15 brands. This is because of cultural differences that they
cannot introduce all the brands in all the countries.


Geography & Infrastructure
If any business wants to start its business in any other country, it also studies the
geography and infrastructure of the host country. That is if feasible for doing business
or not. They decide the channel of distribution, modes of transportation and there cost
to make decisions regarding prices and designing strategies.
In India Coke found a reasonable infrastructure to do business, which is continuously
improving to facilitate distribution system.

Economic factors
Different counties have different economic conditions at a time so Coke designs
different strategies to handle these conditions. As Coke is one of the largest
businesses in the world, they have a strong financial background to overcome these
economic problems. In host countries they change their prices, investment and
penetration strategies to overcome economic factors.
Competitive Forces
Whenever any business enters into any other country they face competition with some
local and international brands. Coke Combat this problem with their quality
commitment and continuously providing its customers with quality product, services
and entertainment.
Methods of Doing Business
Diverse structure, management attitude, and behavior encounter in international
business, they are behaviors encountered in international business, and there is
considerable latitude in the ways business is conducted. Coca-Cola Company had
taken into the consideration these facts that a certain amount of cultural shock occurs
when differences in contract level, communications emphasis, tempo, and formality
of foreign business are encountered. Ethical standards are likely to be different as well
as negotiation emphasis.

Coca Cola Company determines the prominence of status and position combine to
influence the authority structure of business. It adopts low value that they could take
the suggestion of his employees to make a right decision at a right time, which could
deal with of the customer; also they could take the suggestion of his customers about


its taste, branding and other related features which could enhance its efficiency of
sales and promotion.
As its business grows and professional management develops, their is shift towards
decentralized management decision management. They are making their decisions
either in committees or meeting. Committee may operate on a centralized or
decentralized basis, but the concept of committee management implies some thing
quite different from individualized functioning.

Coca Cola Company is doing its business allover the world they hire locals wherever
they do business and take their suggestions in designing their strategies. Because
company is very much well aware of the fact that local know their social culture very
well and help company to design effective and efficient strategies.
Coca cola make Target Market for going international:
o Upper upper class
o Upper middle class
o Upper lower class
o Middle upper class
o Middle middle class
o Middle lower class
They mainly emphasize on students and teenagers, they gain their attraction by
indulging into the activities like:
Becoming a partner at the Basant
Promoting new age music and hiring pop stars into their promotion
Compaign.

Customer Market
Demographic Factors
People of all ages and gender use Coca-Cola. Educated people belonging to upper and
middle-income groups also commonly use Coca-Cola. Major emphasis of Coca-Cola
is to attract teenagers.
Life Style Pattern
The Taste and quality conscious people Drink Coca-Cola brands especially Coca-
Cola. Diet Coca-Cola offered by Company is Very popular among diabetic patients.

Preference for Specific Benefits
For over 51 years Coca-Cola Corporation has maintained a tradition of producing
only the Quality drinking beverages. That is why it continues to be a familiar and
trusted household name in India. Today, Coca-Cola‘s lives up to its well earned
reputation as market leader by insuring that consumers get the best carbonating drink.
The best of nature, technology and human resource have together contributed to
Coca-Cola‘s reputation for unparalleled quality- a standard now recognized
internationally. Above all, the entire process is overseen by a professional
management and trained workforce.


SWOT
ANALYSIS


Strengthes:
 World’s Leading Brand

Coca-Cola has strong brand recognition across the globe. The company has a leading
brand value and a strong brand portfolio. Business-Week and Inter-brand, a branding
consultancy, recognize. Coca-Cola as one of the leading brands in their top 100 global
brands ranking in 2006.The Business Week-Inter-brand valued Coca-Cola at $67,000
million in 2006. Coca-Cola ranks well ahead of its close competitor Pepsi which has a
ranking of 22 having a brand value of $12,690 million Furthermore; Coca-Cola owns
a large portfolio of product brands. The company owns four of the top five soft drink
brands in the world: Coca-Cola, Diet Coke, Sprite and Fanta.

Strong brands allow the company to introduce brand extensions such as Vanilla Coke,
Cherry Coke and Coke with Lemon. Over the years, the company has made large
investments in brand promotions. Consequently, Coca-cola is one of the best
recognized global brands. The company‘s strong brand value facilitates customer
recall and allows Coca-Cola to penetrate new markets and consolidate existing ones.

 Large Scale Of Operations

With revenues in excess of $24 billion Coca-Cola has a large scale of operation.
Coca-Cola is the largest manufacturer, distributor and marketer of non-alcoholic
beverage concentrates and syrups in the world. Coco-Cola is selling trademarked
beverage products since the year 1886 in the US. The company currently sells its
products in more than 200 countries. Of the approximately 52 billion beverage
servings of all types consumed worldwide every day, beverages bearing trademarks
owned by or licensed to Coca-Cola account for more than 1.4 billion.

The company‘s operations are supported by a strong infrastructure across the world.
Coca-Cola owns and operates 32 principal beverage concentrates and/or syrup
manufacturing plants located throughout the world.

In addition, it owns or has interest in 37 operations with 95 principal beverage
bottling and canning plants located outside the US. The company also owns bottled


water production and still beverage facilities as well as a facility that manufactures
juice concentrates. The company‘s large scale of operation allows it to feed upcoming
markets with relative ease and enhances its revenue generation capacity.

 Robust Revenue Growth In 3 Segments

Coca-Cola‘s revenues recorded a double digit growth, in three operating segments.
These three segments are Latin America, ‗East, South Asia, and Pacific Rim‘ and
Bottling investments. Revenues from Latin America grew by 20.4% during fiscal
2006, over 2005. During the same period, revenues from ‗East, South Asia, and
Pacific Rim‘ grew by 10.6% while revenues from the bottling investments segment by
19.9%.

Together, the three segments of ―Latin America‖, ―East, South Asia‖ and ―Pacific
Rim‖ bottling investments, accounted for 34.8% of total revenues during fiscal 2006.
Robust revenues growth rates in these segments contributed to top-line growth for
Coca-Cola during 2006.

Weakness:

 Negative Publicity

The Coca-Cola Company has been involved in a number of controversies and lawsuits
related to its relationship with human rights violations and other perceived unethical
practices. There have been continuing criticisms regarding the Coca-Cola Company's
relation to the Middle East and U.S. foreign policy. The company received negative
publicity in India during September 2006.The company was accused by the Centre for
Science and Environment (CSE) of selling products containing pesticide residues.
Coca-Cola products sold in and around the Indian national capital region contained a
hazardous pesticide residue.

On 10 December 2008, the US Food and Drug Administration (FDA) wrote to Mr.
Muhtar Kent, President and Chief Executive Officer, to warn him that the FDA had


concluded that Coca-Cola's product Diet Coke Plus 20 FL OZ was is in violation of
the Federal Food, Drug, and Cosmetic Act.

In January 2009, the US consumer group the Centre for Science in the Public Interest
filed a class-action lawsuit against Coca-Cola. The lawsuit was in regards to claims
made, along with the company's flavours, of Vitamin Water. Claims say that the
33 grams of sugar are more harmful than the vitamins and other additives are helpful.

 Sluggish Performance In North America

Coca-Cola‘s performance in North America was far from robust. North America is
Coca-Cola‘s core market generating about 30% of total revenues during fiscal 2006.
Therefore, a strong performance in North America is important for the company.
In North America the sale of unit cases did not record any growth. Unit case retail
volume in North America decreased 1% primarily due to weak sparkling beverage
trends in the second half of 2006 and decline in the warehouse-delivered water and
juice businesses. Moreover, the company also expects performance in North America
to be weak during 2007. Sluggish performance in North America could impact the
company‘s future growth prospects and prevent Coca-Cola from recording a more
robust top-line growth.

 Decline In Cash From Operating Activities

The company‘s cash flow from operating activities declined during fiscal 2006. Cash
flows from operating activities decreased 7% in 2006 compared to 2005. Net cash
provided by operating activities reached $5,957 million in 2006, from $6,423 million
in 2005. Coca-Cola‘s cash flows from operating activities in 2006 also decreased
compared with 2005 as a result of a contribution of approximately $216 million to a
tax-qualified trust to fund retiree medical benefits.
The decrease was also the result of certain marketing accruals recorded in
2005.Decline in cash from operating activities reduces availability of funds for the
company‘s investing and financing activities, which, in turn, increases the company‘s
exposure to debt markets and fluctuating interest rates.


Opportunities:
 Acquisitions
During 2006, its acquisitions included Kerry Beverages, (KBL), which was subsequently,
reappointed Coca-Cola China Industries (CCCIL). Coca-Cola acquired a controlling
shareholding in KBL, its bottling joint venture with the Kerry Group, in Hong Kong.
The acquisition extended Coca-Cola‘s control over manufacturing and distribution joint
ventures in nine Chinese provinces.

In Germany the company acquired Apollinaris which sells sparkling and still mineral water.
Coca-Cola has also acquired a 100% interest in TJC Holdings, a bottling company in South

Africa. Coca-Cola also made acquisitions in Australia and New Zealand during 2006. These
acquisitions strengthened Coca-Cola‘s international operations.

These also give Coca- Cola an opportunity for growth, through new product launch or greater
penetration of existing markets. Stronger international operations increase the company‘s
capacity to penetrate international markets and also gives it an opportunity to diversity its
revenue stream. On 25 February 2010, Coco cola confirms to acquire the Coca cola
enterprises (CCE) one the biggest bottler in North America. This strategy of coca cola
strengthens its operations internationally.

 Growing Bottled Water Market

Bottled water is one of the fastest-growing segments in the world‘s food and beverage market
owing to increasing health concerns. The market for bottled water in the US generated
revenues of about $15.6 billion in 2006.

Market consumption volumes were estimated to be 30 billion litres in 2006. The market's
consumption volume is expected to rise to 38.6 billion units by the end of 2010. This
represents a CAGR of 6.9% during 2005-2010.

In terms of value, the bottled water market is forecast to reach $19.3 billion by the end of
2010. In the bottled water market, the revenue of flavoured water (water-based, slightly
sweetened refreshment drink) segment is growing by about $10 billion annually. The
company‘s Dasani brand water is the third best-selling bottled water in the US. Coca-Cola
could leverage its strong position in the bottled water segment to take advantage of growing
demand for flavoured water.

 Growing Hispanic Population In U.S

Hispanics are growing rapidly both in number and economic power. As a result, they
have become more important to marketers than ever before. In 2006, about 11.6
million US households were estimated to be Hispanic. This translates into a Hispanic
population of about 42 million.

The US Census estimates that by 2020, the Hispanic population will reach 60 million
or almost 18% of the total US population. The economic influence of Hispanics is
growing even faster than their population. Nielsen Media Research estimates that the
buying power of Hispanics will exceed $1 trillion by 2008- a 55% increase over 2003
levels.

Coca-Cola has extensive operations and an extensive product portfolio in the US. The
company can benefit from an expanding Hispanic population in the US, which would
translate into higher consumption of Coca-Cola products and higher revenues for the
company.

Threats:
 Intense Competition

Coca-Cola competes in the non-alcoholic beverages segment of the commercial beverages
industry. The company faces intense competition in various markets from regional as well as
global players. Also, the company faces competition from various non-alcoholic sparkling
beverages including juices and nectars and fruit drinks. In many of the countries in which
Coca-Cola operates, including the US, PepsiCo is one of the company‘s primary competitors.
Other significant competitors include Nestle, Cadbury Schweppes, Groupe DANONE and
Kraft Foods.

Competitive factors impacting the company‘s business include pricing, advertising, sales
promotion programs, product innovation, and brand and trademark development and
protection. Intense competition could impact Coca-Cola‘s market share and revenue growth
rates.

 Dependence On Bottling Partners


Coca-Cola generates most of its revenues by selling concentrates and syrups to bottlers in
whom it doesn‘t have any ownership interest or in which it has no controlling ownership
interest. In 2006, approximately 83% of its worldwide unit case volumes were produced and
distributed by bottling partners in which the company did not have any controlling interests.
As independent companies, its bottling partners, some of whom are publicly traded
companies, make their own business decisions that may not always be in line with the
company‘s interests. In addition, many of its bottling partners have the right to manufacture or
distribute their own products or certain products of other beverage companies.

If Coca-Cola is unable to provide an appropriate mix of incentives to its bottling partners,
then the partners may take actions that, while maximizing their own short-term profits, may
be detrimental to Coca-Cola. These bottlers may devote more resources to business
opportunities or products other than those beneficial for Coca-Cola. Such actions could, in the
long run, have an adverse effect on Coca-Cola‘s profitability.
In addition, loss of one or more of its major customers by any one of its major bottling
partners could indirectly affect Coca-Cola‘s business results. Such dependence on third
parties is a weak link in Coca-Cola‘s operations and increases the company‘s business risks.

Sliggish Growth of Carbonated Beverages

US consumers have started to look for greater variety in their drinks and are becoming
increasingly health conscious. This has led to a decrease in the consumption of
carbonated and other sweetened beverages in the US. The US carbonated soft drinks
market generated total revenues of $63.9 billion in 2005, this representing a
compound annual growth rate (CAGR) of only 0.2% for the five-year period spanning
2001-2005. The performance of the market is forecast to decelerate, with an
anticipated compound annual rate of change (CAGR) of -0.3% for the five-year
period 2005-2010 expected to drive the market to a value of $62.9 billion by the end
of 2010.

Moreover in the recent years, beverage companies such as Coca-Cola have been
criticized for selling carbonated beverages with high amounts of sugar and
unacceptable levels of dangerous chemical content, and have been implicated for
facilitating poor diet and increasing childhood obesity. Moreover, the US is the
company‘s core market. Coca-Cola already expects its performance in the region to


be sluggish during 2007. Coca-Cola‘s revenues could be adversely affected by a
slowdown in the US carbonated beverage market.

According His Competitor SWOT Analysis of Coca-Cola India

Strengths:
Distribution Network

The Company has a strong and reliable distribution network. The network is formed
on the basis of the time of consumption and the amount of sale yielded by a particular
customer in one transaction. It has a distribution network consisting of a number of
efficient salesmen, 700,000 retail outlets and 8000 distributors. The distribution fleet
includes different modes of distribution, from 10 tonne to open bay three wheelers
that can navigate the narrow alleyways of Indian cities – constantly keep Coca-Cola
brands available in every nook and corner of the Country‘s remotest areas.

 Strong Brand Image

Coke has its history of about more than a century and this prolonged sustenance has
definitely added to the brand image in the minds of the consumers and to its wallet.
The products produced and marketed by Coca-Cola India have a strong brand image.

Strong brand names like Coca-Cola, Fanta, Thums up, Limca and Maaza add up to
the brand name of Coca-Cola Company as a whole. Coca Cola India for the first time
has come out with corporate campaign in India targeting its stakeholders. The
multimedia campaign ―Little Drops of Joy " is aimed at raising the corporate brand
image of the company which took a heavy beating with a number of controversies it
faced in different domains.

The new campaign is a part of a complete restructuring exercise in the Indian arm of
this global change. Coca Cola recently announced its new corporate strategy called
the ―5 Pillar" strategy. The company has identified the 5 pillars as

People.

Planet.
Portfolio.
Partners.
Performance.

 Low Cost of Operations

In light of the company‘s Affordability Strategy, Coca-Cola went about bringing a
cost-focus culture in the company. This included procurement Efficiencies – through
focus on key input materials, trade discipline and control and proactive tax
management through tax incentives, excise duty reduction and creating marketing
companies. These measures have reduced the costs of operations and increased profit
margins.

Weaknesses:

 Health Care Issues

In India, there exists a major controversy concerning pesticides and other harmful
chemicals in bottled products including Coca-Cola. In 2003, the Centre for Science
and Environment (CSE), a non- governmental organization in New Delhi, said aerated
waters produced by soft drinks manufacturers in India, including multinational giants
PepsiCo and Coca-Cola, contained toxins including lindane, DDT, malathion and
chlorpyrifos - pesticides that can contribute to cancer and a breakdown of the immune
system.
 Small Scale Sector Reservations


The Company‘s operations are carried out on a small scale and due to Government
restrictions and ‗red-tapism‘, the Company finds it very difficult to invest in
technological advancements and achieve economies of scale.

Opportunities:
 Large Domestic Markets

The domestic market for the products of the Company is very high as compared to
any other soft drink manufacturer. Coca-Cola India claims a 58 per cent share of the
soft drinks market; this includes a 42 per cent share of the cola market.

Other products account for 16 per cent market share, chiefly led by Limca. The
company appointed 50,000 new outlets in the first two months of this year, as part of
its plans to cover one lakh outlets for the coming summer season and this also covered
3,500 new villages. In Bangalore, Coca-Cola amounts for 74% of the beverage
market.

 Export Potential

The Company can come up with new products which are not manufactured abroad,
like Maaza etc and export them to foreign nations. It can come up with strategies to
eliminate apprehension from the minds of the people towards the Coke products
produced in India so that there will be a considerable amount of exports and it is yet
another opportunity to broaden future prospects and cater to the global markets rather
than just domestic market.

 Higher Income Among People

Development of India as a whole has lead to an increase in the per capita income
thereby causing an increase in disposable income. Unlike olden times, people now
have the power of buying goods of their choice without having to worry much about
the flow of their income. Coca-Cola Company can take advantage of such a situation
and enhance their sales.

Threats:
 Imports

As India is developing at a fast pace, the per capita income has increased over the
years and a majority of the people are educated, the export levels have gone high.
People understand trade to a large extent and the demand for foreign goods has
increased over the years.
If consumers shift onto imported beverages rather than have beverages manufactured
within the country, it could pose a threat to the Indian beverage industry as a whole in
turn affecting the sales of the Company.

 Tax & Regulatory Sector

The tax system in India is accompanied by a variety of regulations at each stage on
the consequence from production to consumption. When a license is issued, the
production capacity is mentioned on the license and every time the production
capacity needs to be increased, the license poses a problem. Renewing or updating a
license every now and then is difficult. Therefore, this can limit the growth of the
Company and pose problems.

 Slowdown In Rural Demand

The rural market may be alluring but it is not without its problems: Low per capita
disposable incomes that is half the urban disposable income; large number of daily
wage earners, acute dependence on the vagaries of the monsoon; seasonal
consumption linked to harvests and festivals and special occasions; poor roads; power
problems; and inaccessibility to conventional advertising media. All these problems
might lead to a slowdown in the demand for the company‘s products.

International Elements Effects on International Business Activates

Post 9/11 Effects


After 9/11 incident Coca-cola suffered a loss due to boycott of religious activists at a
larger scale. The market share and market value was dropped down to several points
.Price competition was started after this incident. Due to sanctions imposed on India
after May5, 1995 taxes were to be paid in high amount thus increasing the cost of
production and price offered to consumers and decreasing the buying powers of
customers. So any of the activists behavior can cause decline in the production and
sale of coke and other cold beverage company.

Intellectual Property Rights
Coke is one of the biggest brands in the world, and its brand value is approximately 4
billion $. It is said that the most common word to speak in this world is ―OK‖ and
after this the second most common in this whole world is ―COKE‖. Sometimes
different people and organizations used their names to make money, in the form of
fake bottling.
The main threat to the company is the production of fake bottles. Fake bottling is
growing day by day Fake bottles problem for a company comes under the ―act of
unfair practices‖. In a black marketing aspect whole sellers and retailer could take the
fake bottles at a low price for selling at the price of original bottles which could be
harm full for the health of consumers. Coca Cola Company could create a check and
balance to meet the need of time, which in turn could help to increase its market
share. It already had made several steps to prevent fake bottling and production of
fake coke but due to mushrooming industry the laws and management of the
corporation is failed to stop this industry from flourishing. The government is also not
of great help to the company in solving this main issue.


PEST
ANALYSIS


PESTEL ANALYSIS OF COCA-COLA INDIA
PESTLE stands for Political, Economic, Social, Technological, Legal and
Environmental. It is a tool that helps the organizations for making strategies and to
know the EXTERNAL environment in which the organization is working and is going
to work in the future.

Political Factors:
 Historical

Coca Cola India was the leading soft drink brand in India till 1977 when it left rather
than revealing its formula to the government. They re-entered the country in 1993.
However, the primary barrier for Coca-Cola‘s entry into the Indian market was its
political environment. Despite the liberalization of the Indian economy in 1991 and
introduction of the New Industrial Policy to eliminate barriers such as bureaucracy
and regulation, there was still a lot of protectionism. India‘s past promotion of
―Indigenous availability‖ or ―Swadeshi movement‖ depicted its affinity for local
products. Due to India‘s suspicion of foreign business entering Indian markets, Coca
Cola received alien status its re-entry. This and some of the policies imposed on
foreign enterprises proved as a hindrance to the growth of the company in the country.
To make things worse, the policies were neither clear nor unchanging.
For example, foreign businesses were not allowed to market their products under the
same name if selling within the Indian market. Thus, Coca Cola had to be changed to
Coca Cola India (and Pepsi had to be renamed to Lehar Pepsi). However, the most
controversial, and by far, the most damaging was when Coca-Cola was forced to sign
an agreement to sell 49% of its equity in order to buy out Indian bottlers. Due to the
lack of consistency in the legal aspects, more importance was being given to lobbying
the politicians.
Recent Scenario

During recent times, Coca Cola India has faced its fair share of problems. On August
5th 2003, The Centre for Science and Environment (CSE), an activist group in India
focused on environmental sustainability issues (specifically the effects of
industrialization and economic growth) issued a press release stating: "12 major cold


drink brands sold in and around Delhi contain a deadly cocktail of pesticide residues".
According to tests conducted by the Pollution Monitoring Laboratory (PML) of the
CSE from April to August, three samples of twelve PepsiCo and Coca-Cola brands
from across the city were found to contain pesticide residues surpassing global
standards by 30-36 times.

This had an adverse impact on the sales of Coca Cola, with a drop of almost 30-40%1
in only two weeks on the heels of a 75% five-year growth trajectory. Many leading
clubs, retailers, restaurants, and college campuses across the country had stopped
selling Coca-Cola. This threatened the newly achieved leadership attained over Pepsi
due to a successful marketing campaign.

But this was not the end of Coca Cola‘s troubles. There was widespread discontent
around many of their plants. For example, in Plachimada, Kerala, the communities in
and around the Coca Cola plant blamed the factory for their water problems. Due to
this, the local Panchayat decided not to renew the license issued to Coca Cola to
―protect public interest". The company has also been accused of illegally occupying a
portion of the village property resources in Mehdiganj, near Varanasi. However, there
are certain positives as well, with a 22 percent increase in its unit case volume last
quarter.
Economic Analysis:

The Indian economy sustained the global economic slowdown in the previous year
and has shown a tremendous economic growth. It showed 8.6% of growth in the last
quarter of 2009-10 as compared to 5.8% same time in the previous year. It has
emerged as an attractive economy to invest in as many opportunities has been
recognized.
Economic growth

India is ranked second in economic growth, just behind China. Analysts have said that
India will be the third biggest economy of the world in the coming year behind China
and USA. With economic growth many opportunities have been seen, which have
attracted many foreign investor to the company.


Coca cola India returned to the country in 1993, despite few problems in the start they
have emerged as the king of soft drink industry in India. The strong economic growth
of India has resulted in coca cola to invest heavily in sales and distributive channels. It
has introduced two new products, Nimbu Fresh and an energy drink ‗Burn‘.

Coca cola registered 22% growth in their unit case volume in the second quarter
(April-June). It is the 16th consecutive quarter of such growth out of which 13 are
double digit. Coca cola India‘s growth is in contrast to its overall performance, the
beverage king reported a growth of just 5% (worldwide) in the same quarter.
Inflationary effects
Inflation is one of the main problems that Indian economy has been facing for a year
now. Rising prices in the food and other products doesn‘t only effect the consumers it
also has an adverse effect on a company. The inflation rate for the year 2009 was
recorded to be 11.49%. As prices have gone up in India for various products,
especially oil, there has been uncertainty in decision making of almost every
company. Coca cola India has also been affected by the same; it has been forced to
think about their input costs, as they have been rising due to inflation. Their
expenditure has been rising, with more costs in salaries, distribution channels and
other operating costs. Beverage industry being price competitive market, they have
not revised their product prices.
Exchange rate
The exchange rate of rupee to US Dollar has been stable but in the previous months
the rate has had a tumultuous period. Exchange rate determines at what price will the
company export its products and import whatever is required by it. The previous year,
the rate of rupee to USD touched 44, on an average it has been around 47, so the
exports earned less and the imports cost more. Therefore, coca cola India had to bear
some low profitable times. However, in the present scenario rates have reached a
stable level and exports are on an increasing trend.


Social Analysis:
Coca- Cola returned to India in 1993 after a 16 year hiatus, amidst competition from
Leher Pepsi which had the advantage of entering the country 7 years earlier. Initially,
it struggled to find acceptance as there were already other brands such as Parle‘s
Thums Up which existed in the market. Coca-Cola had earlier focussed more on the
American way of life in their advertising campaigns, which the Indian consumers
could not identify with. Also, they did not focus on competition from other
alternatives such as lemonade, Lassi etc.

These products had been around for centuries, and were also cheaper alternatives to
Coca-Cola. However, things were brought under control when Thums Up was bought
over by Coca Cola, and more attention was paid by the company on their marketing
mix.
With the lowering of their prices by almost 15-20%, introduction of newer products
which appealed to the Indian tastes, more investment in market research and
focussing on the target group of 18-24 year olds, they were able to increase their
market share and build brand loyalty.

Coca Cola today, has made significant investments to build its business in India. It has
also generated employment for almost 1,25,000 people in related industry through its
procurement, supply and distribution cycles.

The soft drink industry today is growing steadily due to the booming economy,
strengthened middle class and low per capita consumption. With the increase in health
consciousness among the urban consumers, the company has introduced newer
products such as Diet Coke, which contain lesser calories than ordinary Coca Cola.
This is also responsible for the company shifting focus from carbonated drinks to
Fruit Drinks / Juices and bottled water.
The rural market had also been identified by Coca-Cola India as an attractive target,
with almost 70% of the country‘s population. The company has recorded significant
growth in recent years


Coca Cola India has also taken many initiatives as a responsible corporate citizen, by
tying up with many NGOs such as BAIF (or Bharatiya Agro Industries Foundation),
SOS Children‘s Villages and Save the Children. It has also taken initiatives to
promote education in rural areas.
Technological Analysis:
Coca-Cola has started operations of its R&D facility in India, with the view of
localizing its product portfolio. The major focus would be on non carbonated drinks
and flavours. The company‘s R&D team has already rolled out drinks such as Maaza
aam panna and also a Maaza mango milk drink, and is exploring options to enter new
categories in India such as juices in localised flavours, energy drinks, sports drinks
and flavoured water. These initiatives are being taken by the company to further
expand their product portfolio.
With the increasing importance of 360 degree media tools and overall ad spend on
social media sets likely to grow by almost 44%, Coca-Cola has increased ad spend on
the internet. Case in point is the recent 2009 Sprite campaign, which was first
launched on the internet.

Environmental Analysis:
Coca Cola has earned a title of environment friendly company and Coca Cola India
too has followed in the footsteps. Coca Cola India‘s Corporate Social Responsibility
(CSR), is an initiative that prioritizes many social and environmental issues; one of
them being ‗water conservation‘. They support many community based rainwater
harvesting projects and help lending conservation education.
The company has made sure that the following ideas are considered during their
operations:
1. Environmental due diligence before acquiring land

2. Environmental impact assessment before commencing project

3. Ground water and environment survey before selecting the site

4. Ban on purchasing CFC emitting refrigerating equipment

5. Waste water treatment facilities


6. Compliance with all regulatory environmental requirements

7. Energy conservation programs

By following these guidelines Coca-Cola India has helped the environment with
consistent profits and success. They seek to provide leadership in three different areas,
these are as follows:
1. Water efficiency and water quality

2. Energy efficiency

3. Eliminating or minimizing solid waste.

Though being an environmental friendly company, Coca Cola India had to face its
share of controversies. On 4th February, 2003, Centre of Science and Environment in
India, released a report based on experiment done by Pollution Monitoring
Laboratory. In the experiment, they tested 17 packaged drinking water brands and
found that, Coca Cola‘s Kinley has 15 times more pesticide residual levels than the
stipulated norms, Bisleri had 59 times and Aquaplus had 109 times.
The main law governing the food safety is the 1954 Prevention of food alteration act,
which stated that pesticides should not be present in any food item but did not have
law against pesticides being present in soft drinks. However, the Food Processing
Order 1955 stated that the main ingredient used in soft drinks must be ‗potable water‘
but the Bureau of Indian Standards had no prescribed standards for pesticides in
water.
But later it was found that BIS had stated that pesticides should not be present or it
should not exceed 0.001 part per million. Further, the health ministry of India
admitted that ‗there were lapses in PFA regarding carbonated drinks‘.


GRAPH OF PESTICIDES IN SOFT DRINKS IN INDIA

Legal Analysis:
As the Indian consumer is getting more educated, the government is also paying
special attention to consumer laws. In the past, there were not so many laws
protecting the benefits to the consumer but now every business has to go by the law
and fix their operations, strategies so as to satisfy their consumers, and employees.
Keeping in mind the consumer laws, employment laws, antitrust law, discrimination
laws etc. a business should plan out everything.
Consumer Laws
In the present scenario, consumer is the king, if a product is defective, not meeting the
stated standards a consumer can complain against the manufacturer. Complaining and
getting the verdict the court has made very fast and efficient as government of India
has installed new consumers courts. Their main job is to see that the consumer
benefits are being met or not. When producing their beverages, Coca Cola India has to
make sure that they have written price, manufacturing date, expiry date, batch no,
nutritional facts are written on the packed product.
Employment Laws

Ministry of Labour makes the laws for proper employment in the country. They have
stipulated norms on employing people from the country and getting expatriates in the
company as well. India has strict laws against employing child labour. Being a male
dominated society, the ministry has made sure that female employees are treated with
respect and given equal importance at the work place. Every field of work has got its
own wage, these are to meet the norms and laws set by the labour ministry. When
employing anyone, coca cola India cannot discriminate on social, regional or any
racists‘ basis. If it is found that the company has been violating the law, it has to face
strict action and fines.
Health and safety laws
As coca cola produces a product that is consumed by the consumer as a food item,
there are laws that the company must abide by when producing it. Ministry of Food
Processing Industries makes and oversees the laws and norms for the food processing
industries.
The Indian Parliament has recently passed the Food Safety and Standards Act, 2006
that overrides all other food related laws.
It will specifically repeal eight laws:
The Prevention of Food Adulteration Act, 1954.
The Fruit Products Order, 1955.
The Meat Food Products Order, 1973.
The Vegetable Oil Products (Control) Order, 1947.
The Edible Oils Packaging (Regulation) Order, 1998.
The Solvent Extracted Oil, De oiled Meal, and Edible Flour (Control) Order,
1967.
The Milk and Milk Products Order, 1992.
Essential Commodities Act, 1955 relating to food.
From now on, the act establishes a regulatory body, the Food Safety and Standards
Authority of India. Anything that coca cola makes, have to make accordingly to the
laws. They have to check the weight, volume and ingredients of the product. The
export or the import of the products by the company has to meet the quality standards
stipulated by the law.

Anti-trust law

The Competition Commission of India was made under the Indian Competition Act
2002, Monopolies Restrictive and Trade Practices Act 1969 was replaced by it. This
committee looks after all the issues regarding unethical means of doing business,
competition issues and any dispute between two different business entities. CLG
competition and antitrust practices are as follows:

Representing clients before the MRTP Commission in ‗monopolistic and
restrictive trade practices‘ and ‗unfair trade practices‘ matters.
Legal Advice and sophisticated insight into the international best practices on
competition law.
Consultancy services on specific issues - supply and distribution, pricing and
marketing, ‗promotional materials‘, mergers, acquisitions, amalgamation,
licensing, joint operation and research, joint buying, ‗dominant-firm‘ status
etc.
Competition Audit and Due Diligence for developing appropriate guidelines
for employees, distributors, agents, franchisees etc.
Legal Due Diligence on anti-competition, unfair and restrictive market
practices.
Drafting claims, counter-claims, replies, rejoinders, representations etc. on
Competition Law and related legal issues.
Strategic policing on anti-competition market practices and trends.
Policy due diligence for mergers, acquisitions, joint ventures with appropriate
anti-trust safeguard measures and policy.

All these laws help Coca Cola India to maintain its own brand and values. Any other
business trying to copy the brand of coca cola will face the strict action against itself.
These laws help every business to compete in a fair environment. As it is known that
the coca cola and Pepsi are the fiercest rivals in the beverage industry, the CCI makes
sure that either of them does not indulge in unfair means to make profits and hurt each
other‘s business.


Product Life Cycle

O LA
AC
C OC

INT ODU OR
R CT Y GROWTH MAT Y
URIT DECLINE

Coca-cola is in a stage of growth according to a product life cycle analysis. It is recovering its
market share very quickly which it had lost in previous years although there is good
competition in market but it is still recovering and enjoying healthy profits. There are no
barriers for new entrants, and many companies are entering in this industry because of healthy
growth.


Duties and Taxes Applied
Duties and Taxes are the tariff barriers for any company to import or export
something to other country. The most important component of coke is their
concentrate which is provided allover the world from USA. Indian Government treats
their concentrate under the head of luxuries and applied second highest duty after
tobacco. According to their spokesman if this duty is removed, then price of coke‘s
250ml bottle can be lessened up to Rs.5.

Laws Abided By & Methods of Conflict Resolution
Coca-cola is one of the oldest multinational corporation, they have a vast experience
of dealing with different governments and different organizations allover the world.
When ever they enter into some country they made a thorough research work. They
analyze the political restrictions, rules and regulations of doing business, political
parties which can affect policies and policy making authorities. They respect the laws
of host country and design their framework according to the rules and regulations of
the host country.

Methods of Conflict Resolution
World wide Coca-cola tries to solve any disputes which may arise through
arbitration and they mention this clause in contract that if any dispute arises, they will
go for arbitration but if arbitration does not solve the problem then they refer their
dispute to litigation. They prefer arbitration because litigation is very expensive and
lengthy process; there is fear of poor image and damaging public relations, fear of
unfair treatment in host country and fear of loss of confidentiality.
As far as India is concerned up till now no such dispute has arisen in which they need
to go for arbitration. But they go for litigation against those firms which are involved
in using their brand name for fake bottling.


Strategies to Reduce Political Vulnerability
Nowadays political governments are very conscious about foreign businesses and
foreign investments, so they usually have standardized policies for all the competing
businesses; there is no biasness in dealing with different competing business. But
sometimes a situation may arise due to some political reasons that may create some
problems, so coke deals with such problems strategically.
As we have a example, when Pepsi launch their tin can at Rs.10/-they got special
permission to manufacture tin cans and that was the only plant which got permission
to manufacture cans, as we know that time Pepsi and Coke are bitter competitors so
Coke must go with guns and guns with Pepsi, they tried to get permission but they
failed. So they imported Coke cans from Dubai at Rs.13/- and sell it for Rs.10/- to
compete in the market. So if some problem arises which can affect their image and
that cannot be solved due to some political and legal problems they solve this
strategically.
As we know that nowadays Pepsi in India is under the administration and control of
Federal Trade Minister of India, but nowadays policies are standardized so it doesn‘t
create any problems.

Current Strategies Regarding International Operations
One of the reasons of losing their market share in India in last few years was their
quality. In India they were operating as franchisee but now Company has acquired
most of the plants except from Deli and Rujan plant now they are very much
conscious about their quality standards and the quality of other two is being controlled
by Coca Cola Exports Corporation.
Another reason was that their backup was not as strong as Pepsi. They were not
getting any kind of help regarding financial problems, management problems from
Coca Cola International. But now most of the plants are under the control of
Company itself and Coke International is also very keen to raise its market share in
India so they are fully supporting Coca Cola Beverages India and Coca Cola Exports
Corporation India.
In India their main focus is on standardized products as Coca Cola, Sprite, Fanta, and
they are going to launch some of new products in next 2 or 3 years.


Adaption and cultural borrowing
Adaption is a key concept in international marketing, and willing to adapt is a crucial
attitude .Adaptation, or at least accommodation, is required on small matters as well
as large ones. Coca-Cola Company recognizes the need of affirmative action, that is,
open tolerance of concept ―different and equal‖. Coca-Cola company feels that
essential to effective to Adaption is awareness of its own culture and recognize that
differences in others can cause anxiety, frustration and misunderstanding of the host
intention .The self reference criterion (SRC) is specially operative in business custom
but Coca-Cola company could not indulge its own (SRC) in others culture it try to
adopt the strategies of the host countries where they are doing business around the
world ,it reduce the (SRC) to lower the barriers of cultural differences . Coca-Cola
Company develops an understanding and willingness to accommodate the differences
that exists. Company is doing a successful business internationally since 1953.
And operating in a home country for more than 50 years it have set up its strategies to
meet the needs of required customer in every way possible where it is doing business
it aware of the possibility of cultural differences and the probable differences,
consequences of failure to adapt, or accommodate, the seemingly and less variety of
customs must be assessed.
Coca-Cola Company business customs includes imperatives and adiaphora. Cultural
imperatives are the business customs and exceptions that must be met and conformed
to or avoided if relationship is to be successful. Company knows the best how to do
the business at their best. Human relation, friend ships and or attaining the level of
trust are right tricks to do a business in a home country as well as in a host country.
They that there is no substitute for establishing friend ship in some cultures before
effective business negotiation can begin.
Company motivate their local agents to make more sales and the friendship helps
establish the right relationship with end users that to more sales over a longer period
of time.
Culture adiaphora relates to the area of behavior or to customs that cultural aliens may
wish to conform or to participate in but that are not required.
They have adapted their company culture according to the external environment as
they are indulge in many community programs such as scholarship and school


funding programs and they have borrow the culture of Indians. They hire local
employees and plan according to the local environment

Joint Venture
Beverage Partners Worldwide Joint Venture to Focus on Europe and Canada

ATLANTA and VEVEY, Switzerland, Jan. 6, 2012 - The Coca-Cola Company and
Nestlé S.A. today announced that they have agreed to focus the geographic scope of
their ready-to-drink tea joint venture, Beverage Partners Worldwide (BPW), on
Europe and Canada. In Taiwan and Hong Kong, The Coca-Cola Company will enter
into a license agreement with Nestlé for the NESTEA brand. In all other territories the
joint venture will be phased out in a transition to be completed by the end of 2012,
subject to any regulatory approval. In addition, the current NESTEA license granted
by Nestlé to The Coca-Cola Company in the United States will terminate at the end of
2012.

Over the past 10 years, BPW has delivered consistent growth to its parent companies
and has expanded the NESTEA brand across Europe, Canada and other markets. Both
partners believe a concentrated focus on Europe and Canada will accelerate the
growth and bolster the market presence of BPW where the joint venture is most
effective. Both parent companies will be free to independently explore and maximize
opportunities for growth in the ready-to-drink tea category in other markets.

About

Beverage Partners Worldwide, a 50-50 joint venture focused on the ready-to-drink tea
category held by Nestlé S.A. and The Coca-Cola Company, was created in 2001,
following a period of 10 years during which Nestlé and The Coca-Cola Company
cooperated in a joint venture called Coca-Cola and Nestlé Refreshments.

Coca-Cola India Launches The Globally Successful Ready To Drink Iced Tea -
'NESTEA®' – in the country
Coca-Cola India announced the launch of the globally successful ready-to-drink iced
tea brand 'NESTEA®' in the country. The latest offering promises to uniquely refresh

the consumers with its lemony, light flavor allowing them to enjoy the delicious
goodness of tea. The innovative consumer proposition of NESTEA® is best explained
by the brand's tagline –'Lighten Up '; with Refreshingly Light Lemon Iced Tea!

Ricardo Fort, Vice-President Marketing, Coca-Cola India and Milind Pingle, Region
Vice President, Hindustan Coca-Cola Beverages Pvt. Ltd at the launch of Nestea in
Mumbai city
According to Ricardo Fort, Vice President, Marketing, Coca-Cola India, "As a
beverage company, our aim is to be able to offer a beverage for every lifestyle and
occasion, which also aids long term, sustainable business growth. We are therefore
constantly working on high-quality additions to our portfolio. Our entry into ready-to-
drink Iced tea segment with the globally successful NESTEA® now provides the
consumers with a convenient on-the-go option which is in keeping with evolving
consumer lifestyle."

The product is being rolled out in phases and is first being made available to
consumers through select channels and outlets in Mumbai. This will be followed by a
pan India launch of the product next year. In the initial phase, NESTEA® is being
made available in lemon flavor in an 'on-the-go' 400 ml innovative Ice-rock design


PET bottle, affordably priced at Rs. 25. It is targeted at energetic on-the-go young
adults who are always on the lookout for naturally refreshing beverage options.
The refreshing offering contains no added preservatives or colors and will be
manufactured at the Hindustan Coca-Cola bottling plant located at Atmakuru in
Guntur, Andhra Pradesh.
According to Milind Pingle, Region Vice President, Hindustan Coca-Cola Beverages
Private Limited, "The launch of ready-to-drink Iced tea NESTEA® complements our
long term growth strategy of offering choice to consumers. Over the next 4 months,
NESTEA® would be retailed across 8,000 outlets in Mumbai, supported by strong
consumer activation including extensive experiential and focused consumer
communication. We expect this offering to catalyze the growth of the entire category
thereby contributing to the growth of the overall packaged beverage market."
NESTEA® is the world's leading ready-to-drink tea brand is available in over 60
countries. Globally it is available in several flavours and has a strong presence in
countries such as United States, Canada, Australia, Taiwan, Italy, Spain, Switzerland,
Germany, China etc. NESTEA® -the brand - is licensed to Beverage Partners
Worldwide (BPW), a 50:50 Joint Venture between The Coca-Cola Company and
Nestle S.A.
Coca-Cola in India has drawn up an aggressive consumer activation campaign to
market NESTEA® in selected channels and outlets in Mumbai. The marketing
communication plan focuses on Out-of-Home media complimented by a range
activities including radio and print advertising, road shows, extensive experiential
sampling, presence in engaging touch points etc. The entire brand campaign, best
explained by the tagline 'Lighten Up'; with Refreshingly Light Lemon Iced Tea! has
been developed and executed by Pickle Lintas, the new age communication agency
from the Lintas Group.
Coca-Cola Enterprises Joint Venture Set To Step Change Plastics Recycling In
GB
Monday, March 07, 2011


CCE invests £5m in new plant to more than double GB production of food grade
recycled PET.Coca-Cola Enterprises Ltd (CCE) today announces a joint venture with
ECO Plastics to develop a new purpose built recycling facility in Lincolnshire. The
deal marks a step change in the GB plastic reprocessing industry.
Around 35,000 tones of PET bottles were reprocessed in GB last year. The new
facility will increase this total to more than 75,000 tones when it is fully operational -
more than doubling the amount of high quality PET (PET that is recycled to make
food grade, sustainable packaging) currently produced in Britain.

The state-of-the-art plastics reprocessing plant will also supply CCE with enough GB-
sourced, high-quality PET to achieve CCE's target of including 25% PET in all its
plastic packaging in GB by 2012. This represents an important milestone in CCE's
ongoing work to develop the most sustainable packaging possible.

CCE GB Managing Director, Simon Baldry said: "CCE is committed to transforming
recycling in Great Britain. Our investment in this project with ECO Plastics will start
to address the recycling challenges in this country. British PET bottles will be
recycled for re-use in packaging that will be sold from the shelves of British retailers.
"The amounts of high quality PET produced in GB will more than double, enabling
CCE to meet our ambitious target of incorporating 25% rPET in all our plastic bottles
by 2012. At the same time, we are working with our customers to encourage shoppers
to recycle more as part of our wider sustainability efforts."

CCE has signed a ten-year joint venture deal with ECO Plastics that guarantees an
annual supply of rPET to CCE. CCE is making a £5 million equity investment to
support construction of the new facility, with ECO Plastics raising an additional £10
million to complete funding for the project.

The deal is a first for the British drinks manufacturing industry. It will bring
recycling in GB full circle, as used British packaging will be recycled in Lincolnshire
for re-use in packaging that will then be sold in Britain. Currently, CCE sources food
grade rPET from continental Europe, while around two thirds of used GB plastics
packaging is exported for reprocessing.


The new recycling facility will be built on ECO Plastics' current site in Lincolnshire,
and will be operational next year. The joint venture will create 15 jobs during the
construction phase and up to 30 new jobs once the site is operational.

ECO Plastics' existing facility is already the largest in Europe, capable of processing
more than 100,000 tones of waste plastic or 2 billion bottles a year. Independent
research has shown that products made with recycled plastic from the ECO Plastics
site are 68% less carbon intensive than packaging made with virgin materials.

Jonathan Short, Managing Director, and ECO Plastics, said: "ECO Plastics has made
huge strides in developing our business in recent years, to become the UK's leading
plastic recycler. We are delighted to be partnering with a company of the caliber of
Coca-Cola Enterprises and view this pioneering agreement as the next important step
for our own business and the industry as a whole.

"Demand for sustainable packaging in the UK has gathered pace in recent years,
whilst the UK supply of recycled plastics has grown significantly. Coca-Cola
Enterprises has recognized these trends and has taken positive action that will help
accelerate UK plastics recycling. This is the 'low carbon economy' in practice.

"Having recently re-opened Europe's largest and most technically advanced plastics
recycling facility and chosen a new name for a new chapter in our growth, we are
thrilled to further expand operations through this joint venture."

Commenting on the Joint Venture between CCE and Eco Plastics, DEFRA Waste
Minister, Lord Henley said: "This investment builds on the public's enthusiasm for
recycling and will make it easier for them to buy recycled plastic products such as the
famous Coca-Cola bottle. It more than doubles the UK's ability to turn used drinks
bottles into new ones, which reduces the carbon footprint of every bottle made,
compared with using virgin material.
"Coca-Cola and ECO Plastics' efforts are an innovative blueprint for the future, and
show how producers can take responsibility to step up to this challenge."

Notes to editors
DEFRA is the UK Government Department for Environment, Food and Rural Affairs.

About Coca-Cola Enterprises:


International Business Activities Of Coca Cola company

International Business Activities Of Coca Cola company

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