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Business Plan on Coca-Cola Ltd. | 8/8/2010
The Coca-Cola Company is the world's largest beverage company, largest manufacturer, distributor and marketer of non-alcoholic beverage concentrates and syrups in the world and is one of the largest corporations in the United States. The company is best known for its flagship product Coca-Cola, invented by pharmacist John Stith Pemberton in 1886. The CocaCola formula and brand was bought in 1889 by Asa Candler who incorporated The Coca-Cola Company in 1892. Besides its namesake Coca-Cola beverage, Coca-Cola currently offers nearly 400 brands in over 200 countries or territories and serves 1.5 billion servings each day. The company operates a franchised distribution system dating from 1889 where The Coca-Cola Company only produces syrup concentrate which is then sold to various bottlers throughout the world who hold an exclusive territory. The Coca-Cola Company is headquartered in Atlanta, Georgia. Its stock is listed on the NYSE and is part of DJIA and S&P 500. Its current chairman and CEO is Muhtar Kent.
Business Plan on Coca-Cola Ltd. | 8/8/2010
Table of Contents
01. Coca Cola International A. Summary B. Vision 02. Management 03. Marketing A. Market Analysis. B. Competitive Analysis C. SWOT Analysis D. Strategy Planning E. Product & Services F. Market & Sales
04. Operation A. Key Professionals B. Organizational Structure C. Human Resource Management D. Product & Service Delivery E. Customer & Service Support F. Facilities
05. Financial Data A. B. Company Statement Profit & Loss Statement
C. Balance Sheet D. Break Eve Analysis
Business Plan on Coca-Cola Ltd. | 8/8/2010
01. COCA COLA INTERNATIONAL
Coca-Cola Enterprises, established in 1986, is a young company by the standards of the Coca-Cola system. Yet each of its franchises has a strong heritage in the traditions of Coca-Cola that is the foundation for this Company. The Coca-Cola Company traces it‘s beginning to 1886, when an Atlanta pharmacist, Dr. John Pemberton, began to produce Coca -Cola syrup for sale in fountain drinks. However the bottling business began in 1899 when two Chattanooga businessmen, Benjamin F. Thomas and Joseph B. Whitehead, secured the exclusive rights to bottle and sell Coca-Cola for most of the United States from The Coca -Cola Company. Coca-Cola bottling system continued to operate as independent, local businesses until the early 1980s when bottling franchises began to co nsolidate. In 1986, The Coca -Cola Company merged some of its company-owned operations with two large ownership groups that were for sale, the John T. Lupton franchises and BCI Holding Corporation's bottling holdings, to form Coca-Cola Enterprises Inc. The Company offered its stock to the public on November 21, 1986, at a split -adjusted price of $5.50 a share. On an annual basis, total unit case sales were 880,000 in 1986. In December 1991, a merger between Coca -Cola Enterprises and the Johnston Coca Cola Bottling Group, Inc. (Johnston) created a larger, stronger Company, again helping accelerate bottler consolidation. As part of the merger, the senior management team of Johnston assumed responsibility for managing the Company, and began a dramatic, successful restructuring in 1992.Unit case sales had climbed to 1.4 billion, and total revenues were $5 billion Business Plan on Coca-Cola Ltd. | 8/8/2010
Business Plan on Coca-Cola Ltd. We will serve consumers a broad selection of the nonalcoholic ready-to–drink beverages they want to drink through out the day. whether that customer is a sophisticated retailer in a developed market a kiosk owner in an emerging market. The Coca Cola Company creates value by executing comprehensive business strategy guided by six key beliefs: 1.B. we must create value for all the constraints we serve. We will be the best marketers in the world. including our consumers. We strive to understand each customer‘s business and needs. Brand Coca Cola is the core of our business 3. 2. Ultimately. There are nearly 6 million people in the world who are potential consumers of our company‘s product. our success in achieving our vision depends on our ability to satisfy more of their beverage consumption demands and our ability to add value for customers. our bottlers. and create economic value added by improving economic profit. We keenly focus on enhancing value for these customers and helping them grow their beverage businesses. | 8/8/2010 The Coca Cola system has more than 16 million customers around the world that sells or serves our products directly to consumers. We achieve this when we place the right products in the right markets at the right time. 5. and our communities. our customers. expand our share of worldwide nonalcoholic ready to drink beverages sales. We will lead as a model corporate citizen. Consumer demand drives everything we do. We will think and act locally. . THE VISION STATEMENT OF COCA-COLA COMPANY Our vision statement is to maximize shareowner value over time. 6. In order to achieve this vision. The ultimate objectives of our business strategy are to increase volume. 4. maximize our long-term cash flows.
02. Business Plan on Coca-Cola Ltd. MARKET ANALYSIS: THE OVERALL MARKET: Being the biggest company in the soft drink industry. MARKETING A. Coca Cola enjoys the largest market share. This company controls about 59% of the world market. | 8/8/2010 . 03. MANAGEMENT: The hierarchy of Coca Cola Company is as follows.
the company grew their carbonated soft-drink business by nearly 250 million unit cases and generated record volumes. that is why they are focusing more on this and they are continually increasing the pace because they know that accelerating this pace is crucial to their future success. Business Plan on Coca-Cola Ltd.CHANGES IN THE GLOBAL MARKET: The following table can show the worldwide operating segments. | 8/8/2010 (Figure) . Unit case growth Nonalcoholic drink All commercial Beverages 10 year compound annual growth Company Industry 5-year compound annual growth Company Industry 2009 annual growth 2009 20009 Company Industry Company share Company share Company per capita Income 6% 5% 5% 5% 4% 4% 18% 9% 70 This shows that the market of the company is geographically vast and it is controlling it with great success. Thus they are increasing their market day by day. The operation income earned by Coca Cola Company can be illustrated by the following pie chart. In 2002. Because carbonated soft drinks are the largest growth segment within the nonalcoholic ready-to-drink beverage category measured by volume.
worldwide innovative Cola. The main reason behind this relationship is to continue realizing shared opportunities for growth. logistics and production. The results in 2009 reflect this steadily improving and mutually constructive relationship between the Company and their bottling partners. which has deepened the relationship of the customers and Coca financial health and success of their bottling partners is a critical component of The Company's ability to build and deliver leading brands. with closer coordination of operations including customer relationships. The global unit sale of the Coca Cola Company is increasing from the last ten years.This strategy has worked a lot and it has helped them to become the World‘s leading Soft Drink Company. the company had worked with their bottlers to turn good intentions into reality by improving the system economics. The data of the global unit sale of the Coca Cola Company can be represented by following chart. This is only due to the marketing programmers. (Figure) 12 10 8 6 4 2 0 1971 1981 1991 2009 unit sale in billions In 2009. There is a volume increase by 4% with strong international growth of 5%. The Coca-Cola . | 8/8/2010 So there is positive growth in the market of the Coca Cola Company. Business Plan on Coca-Cola Ltd.
The operation review according to the segments is as follows. sold beverages. The world wide total is about 17. Unit case equals 24 eight-ounce servings. as estimated by the Company based on available industry sources. | 8/8/2010 ASIA . as estimated by the Company based on available industry sources. Operation Review (2002 worldwide unit case volume by operating segment) NORTH AMERICA LATIN AMERICA EUROPE & MIDDLE EAST ASIA AFRICA 30% 25% 22% 17% 6% NORTH AMERICA LATIN AMERICA EUROPE & MIDDLE EAST AFRICA So the volume is least in the Africa and most in the North America. Business Plan on Coca-Cola Ltd. The above table shows the geographical earning of the Coca Cola Company and from this data. we can find out that the customers of Coca Cola are increasing which is shown by the company‘s per capita income. which shows the non-alcoholic beverages consist of commercially.MARKET SHARE BY AREA: Coca Cola is the world-renowned soft drink and the company is currently operating through out the world. The column. The data about the market share of this company area wise is given in the following table. The country column is derived from The Company's unit case volume while the industry column includes nonalcoholic ready-to-drink beverages only.8 billion.
Country Unit case growth Nonalcoholic Drinks All commercial Beverages 10 year compound annual growth 5-year compound annual growth 2009 annual growth 2009 2009 Company Industry Company Industry Company Industry Company share Company share Company per capita Income North America 4 5 3 3 2 2 22 15 398 United States 4 5 3 3 2 2 23 16 419 Latin America 6 7 6 6 3 4 24 15 205 Argentina 7 4 6 2 7 2 20 10 236 Brazil 5 5 3 6 3 5 23 13 144 Chile 9 6 5 3 (2) 3 56 23 336 Mexico 7 10 8 9 2 5 22 18 462 Europe & Middle East 6 3 5 3 2 4 12 6 72 Eurasia 17 8 6 5 (14) 1 14 5 39 France 8 3 9 3 7 3 9 5 110 Germany 1 2 (1) 1 (6) 1 14 7 193 Great Britain 8 2 11 2 8 3 17 6 193 Italy 1 3 4 3 2 2 9 6 104 Middle East 12 12 7 5 4 8 8 3 17 Spain 6 4 8 5 4 4 17 12 264 Business Plan on Coca-Cola Ltd. | 8/8/2010 .
the company has achieved volume growth of 10 percent in 2002. | 8/8/2010 . sales of Coca-Cola increased 6 percent. which is the satisfied customer of Coca Cola. and the company is building an exciting family of beverage brands in addition to expanding the popularity of our core brands. (Figure) So the company is emphasizing more in this area and is trying to develop a strategy. for example. is approximately 3. India and Bangladesh are those countries where the average consumption is increasing day by day. Japan has the highest percentage. led by Coca-Cola.2 billion and the average consumer enjoys close to two servings of our products each month. Pakistan. which is about 29%. innovation and new beverages. Among others. With developing economies and populations.Asia 7 6 6 7 10 7 14 5 23 Africa 7 6 8 3 10 6 34 11 34 (Table) In Asian population. Among the countries of Asia. In China. Through an intense focus on Coca-Cola. this region has strong long-term potential. The total unit case sale of Coca Cola in Asia can be shown by the following pie chart. which can increase the growth of the consumption of Coca Cola by the people of Asia. Business Plan on Coca-Cola Ltd.
Their salesman and mechanics regularly visit all the shops where coke has its infrastructure to check that either it is in proper condition or not. TARGET MARKET & CUSTOMER: Coke‘s commercials basically based on young generations. So. | 8/8/2010 . If Coca-Cola increase their price even 0. so. In other words. they don‘t care before drinking that whether it is ―Pepsi‖ or ―coke‖. their basic segments are those people who take this drink regularly.MARKET SEGMENTS: Market segments are basically those people who take this drink daily and those areas where the demands is higher then the other areas. There are so many people who take this drink daily and those people who take weekly and those who take less often are always there as well. They provide this infrastructure free of cost just to provide child coke to their customer. Customer must go for another brand like Pepsi or else For this reason Coca-Cola have provided their coolers and freezers in the market. the young generation is the target market of Coke because they want to represent Coke with the youth and energy but they also consider about the old people they take then as a co-target market. if not then they immediately change or repair it. They have maximum number of coolers and freezers in the market. They don‘t actually differentiate between these two brands in order to their tastes. Business Plan on Coca-Cola Ltd. a) Customer Characteristics: First of all the majority don‘t care that what they are going to have. They believe on “WHAT COULD THEY SOLD” Consumer‘s availability in brands is basically works like Push availability Pull consumer‘s demand. b) Customer Needs: Consumers basically drink what they get. c) Customer Buying Decision: Majority of the customer buys what‘s price is low.10 cents then their sales will decrease. which they want to be purchase.
When they motivate to any other brand or on Coke it‘s in instinct basically that based on messages derive certain feelings. Many of PepsiCo's brand names are over 100-years-old. Pepsin .B. MAJOR COMPETITOR PEPSI INTERNATIONAL Business Plan on Coca-Cola Ltd. is derived from the two of the principle ingredients. the beverage businesses of Pepsi-Cola North America. COMPETITIVE ANALYSIS COMPETITORS Coke‘s major competitor is ―PEPSI‖ and there is no hesitation to say this because every one knows that and all the other cold drinks and water. new coming Beverages. tea is the competitors. Then they compete brands with each other. Tropicana was acquired in 1998 and PepsiCo merged with The Quaker Oats Company. | 8/8/2010 HISTORY PepsiCo is a world leader in convenient foods and beverages. including Gatorade. Like they compete Coke with Pepsi and Sprite with 7up and team. Gatorade/Tropicana North America and PepsiCo Beverages International. But Coca Cola thinks in a different way.000 employees. The new name. manufacturer and marketer of ready-to-eat cereals and other food products. coffee. with revenues of about $27 billion and over 143. in 2001.would entertain the listener with the latest musical selections rendered by violin or piano or both. ―Pepsi Cola‖. The company consists of the snack businesses of Frito-Lay North America and Frito-Lay International. but the corporation is relatively young. PepsiCo was founded in 1965 through the merger of Pepsi-Cola and Frito-Lay. So the major competitor of Coke is Pepsi. and Quaker Foods North America. and all juices. PepsiCo brands are available in nearly 200 countries and territories. even they take water and tea as their competitors. they believe that RC Cola. MAJOR COMPETITORS Consumers firstly decide that they are going to have a soft drink.
Today Lipton is the biggest selling ready-to-drink tea brand in the United States. PEPSI’S PRODUCTS Pepsi Teem Miranda Pepsi Max Pepsi Lemon Pepsi Blue Business Plan on Coca-Cola Ltd. Pepsi-Cola beverages are available in more than 190 countries and territories. At that time. the popularity of Pepsi increase. In 1992 Pepsi-Cola formed a partnership with Thomas J. Uh-Huh!‖ With the extensive usage of the stars in the ads. Outside the United States. ―You got the right one baby. Lipton Co. invigorating. aids digestion‖. 1990-2002 The advertisement of the Pepsi changes to. | 8/8/2010 Mountain Dew 7up . Pepsi-Cola Company's soft drink operations include the business of Seven-Up International.and Kola Nuts. It was first used on the August 28. Braham‘s advertising praises his drink as ―Exhilarating.
CocaCola is the largest manufacturer. Coca-Cola owns and operates 32 principal beverage concentrates and/or syrup manufacturing plants located throughout the world. Coca-Cola as one of the leading brands in their top 100 global brands ranking in 2006. The company‘s strong brand value facilitates customer recall and allows Coca-Cola to penetrate new markets and consolidate existing ones. beverages bearing trademarks owned by or licensed to Coca-Cola account for more than 1. Coca-Cola is one of the best recognized global brands. Cherry Coke and Coke with Lemon. In addition. The company‘s operations are supported by a strong infrastructure across the world. Sprite and Fanta. Strong brands allow the company to introduce brand extensions such as Vanilla Coke. The company owns four of the top five soft drink brands in the world: Coca-Cola.SWOT Analysis: STRENGTH WORLD’S LEADING BRAND Coca-Cola has strong brand recognition across the globe. Business Plan on Coca-Cola Ltd. Business-Week and Interbred. distributor and marketer of nonalcoholic beverage concentrates and syrups in the world. The company‘s large scale of operation allows it to feed upcoming markets with relative ease and enhances its revenue generation capacity. The company has a leading brand value and a strong brand portfolio. the company has made large investments in brand promotions. Over the years.4 billion. The company also owns bottled water production and still beverage facilities as well as a facility that manufactures juice concentrates.The Business Week-Interbred valued Coca-Cola at $67. Diet Coke. The company currently sells its products in more than 200 countries. recognize. Coca-Cola owns a large portfolio of product brands. Of the approximately 52 billion beverage servings of all types consumed worldwide every day. LARGE SCALE OF OPERATIONS With revenues in excess of $24 billion Coca-Cola has a large scale of operation. it owns or has interest in 37 operations with 95 principal beverage bottling and canning plants located outside the US. Coca-Cola ranks well ahead of its close competitor Pepsi which has a ranking of 22 having a brand value of $12. | 8/8/2010 . Coco-Cola is selling trademarked beverage products since the year 1886 in the US.000 million in 2006.690 million Furthermore. Consequently. a branding consultancy.
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. WEAKNESSES NEGATIVE PUBLICITY The company received negative publicity in India during September 2006. and Pacific Rim‘ and bottling investments. the company also expects performance in North America to be weak during 2007. Therefore. in three operating segments. over 2005. South Asia. damage the nervous and reproductive systems and reduce bone mineral density. and Pacific Rim‘ and Bottling investments. Robust revenues growth rates in these segments contributed to topline growth for Coca-Cola during 2006. These three segments are Latin America. During the same period. Coca-Cola products sold in and around the Indian national capital region contained a hazardous pesticide residue. | 8/8/2010 .ROBUST REVENUE GROWTH IN THREE SEGMENTS Coca-Cola‘s revenues recorded a double digit growth.6% while revenues from the bottling investments segment by 19. Such negative publicity could adversely impact the company‘s brand image and the demand for CocaCola products. Business Plan on Coca-Cola Ltd.The Company was accused by the Center for Science and Environment (CSE) of selling products containing pesticide residues.4% during fiscal 2006. ‗East. the three segments of Latin America. North America is CocaCola‘s core market generating about 30% of total revenues during fiscal 2006. In North America the sale of unit cases did not record any growth. These pesticides included chemicals which could cause cancers. accounted for 34. South Asia.8% of total revenues during fiscal 2006. This could also have an adverse impact on the company‘s growth prospects in the international markets. and Pacific Rim‘ grew by 10. SLUGGISH PERFORMANCE IN NORTH AMERICA Coca-Cola‘s performance in North America was far from robust. Revenues from Latin America grew by 20.9%. revenues from ‗East. South Asia. Together. 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. a strong performance in North America is important for the company. ‗East. Moreover.
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. After paying all these expenses Coke‘s margin squeezed and consumers have to pay for increasing tariffs. . OPPORTUNITIES If Coke is considered a luxury product. So these are the threats in increasing prices.DECLINE IN CASH FROM OPERATING ACTIVITIES The company‘s cash flow from operating activities declined during fiscal 2006. Decline in cash from operating activities reduces availability of funds for the company‘s investing and financing activities. in turn. Business Plan on Coca-Cola Ltd. Then there is the tax rate system 15% . | 8/8/2010 These are the opportunities through which we can increase the price and can get profits. which. The decrease was also the result of certain marketing accruals recorded in 2005.sales tax 20% . Because same problem of substitute. from $6. If Coke increase the price lets say 1 rupee. Net cash provided by operating activities reached $5.957 million in 2006. Coke will lose the margin of its profit and can face loss.423 million in 2005. We have to spend on distributions.excise duty 27% . Then people definitely won‘t go for coke. THREATS & RISKS There are much more threats in increasing prices.goes to government 03% .In making Budget After paying all these taxes coke has to pay electricity charges. increases the company‘s exposure to debt markets and fluctuating interest rates. Cash flows from operating activities decreased 7% in 2006 compared to 2005. They have the best substitute of Coke that is Pepsi.
the company had a great success. Return on capital increased from 16 percent in 2000 to 27 percent in 2001. company accomplished the crust of its strategy as Worldwide volume increased by 4 percent with strong international growth of 5 percent and clear signs that our North American business is growing solidly and predictable. led by Coca-Cola.8 billion in 2000. The strategy for the future of the company is very straightforward. up from $2. Drive efficiency and cost-effectiveness everywhere.1 billion. Accelerate carbonated soft-drink growth. as the strategy worked which resulted in making Coca Cola Company the world‘s leading company.STRATEGIC PLANNING In the year 2002. as we delivered on our commitment to create volume growth while aggressively Return on common equity grew from 23 percent in 2000 to 38 percent this year. Direct investments to highest potential areas across markets. a clear indication of its underlying financial strength. Selectively broaden the family of beverage brands to drive profitable growth. Serve customers with creativity and consistency to generate growth across all channels. The company has generated free cash flow of $3. Business Plan on Coca-Cola Ltd. Earnings per share grew by 82 percent. Grow system profitability and capability together with our bottling partners. | 8/8/2010 . The marketing strategy for the year 2002 is as follows. In 2001.
5 litter plastic bottle) (2. | 8/8/2010 Diet Coke.5 PET 2.0 litter plastic bottle) (tin pack 330 ml) . which are currently in use through out the world. Fanta. And company offers their products in different bottle sizes these include: SSRB LRB NRB PET 1.0 CAN (standers size returnable bottle) (litter returnable bottle) (no return bottle or disposable bottle) (1. While launching its product. Business Plan on Coca-Cola Ltd. the marketing team considers the culture of the country. Sprite.C. This company not only deals in the carbonated drinks but also other drinks. PRODUCTS: There are different brands of the Coca Cola Company. MAJOR BRANDS OF COCA COLA Coke Sprite Fanta Diet coke Coke classic MARKET POSITIONING PRODUCT RANGE The total range of Coca Cola Company in Worldincludes: Coke.
PACKING Coca cola products are available in different packing 24 regular bottle shell 6 bottle pack for 1. And positive feeling felling with the brand.\ Business Plan on Coca-Cola Ltd. 3...5 pets 12 bottles in a pack for disposable bottle 24 cans in one pack. And when we take it as a global level it is $ I billion. which they used to have Coke wants to advertise their products heavily in the coming year. Loyal consumers are important for company‘s success. They should know how much to for the brand activities. They should also know that how much to do with the promotion activities for brand. EXPECTATIONS FOR THE COMING YEAR Every thing starts from the attitude of consumer‘s behavior. For gaining success in coming year they have to have some important things like: 1. And the basic key to attract the consumers is to throw the ―money away‖. Coming year is the challenging year for the industry of Coke. And it will take the 10% of their profits. 4. Workers should be the brand centric not the promotion centric. | 8/8/2010 . They have to take lots of decisions that how to increase the production and where they have to spend money. 2.
a woman in Italy taking a tea break. how they work and play. wellness. watched & played game in World. or a couple in Korea buying bottled water after a run together. It has ranged from tobacco to lubricants to communication companies to banks to airlines & lately to the beverage industry. What people want in a beverage is a reflection of who they are. where they live. These bold steps taken by the Coca-Cola marketing unit acclaimed them many acknowledgements across the board. Business Plan on Coca-Cola Ltd. a child in Peru asking for a juice drink. It's a special thing to have billions of friends around the world. Coca-Cola signed a sponsorship agreement with eight of Pakistan‘s National cricket players.D. and we never forget it. This campaign helped Coca-Cola to establish its association with the game & the player. The competition has become tougher & tougher as the time has progressed. MARKETING & SALES MARKETING STRATEGY Our local marketing strategy enables Coke to listen to all the voices around the world asking for beverages that span the entire spectrum of tastes and occasions. health. Coke strives to be a good neighbor. | 8/8/2010 . we're there for you. Whether you're a student in the United States enjoying a refreshing CocaCola. Coca-Cola realizing the fact that cricket is a very strong element by which it can reach it consumers & masses invested in the opportunity and launched a massive campaign on mass media showing all these cricket stars endorsing & complimenting Coca-Cola brand. but also to contribute to communities around the world through our commitments to education. consistently shaping our business decisions to improve the quality of life in the communities in which we do business. The Coca-Cola Company developed three TV commercials & four testimonial ads with the player & ran them on the national net work during various cricket matches. SALES PROMOTION ACTIVITIES COCA-COLA CRICKET Cricket the most sought after. and how they relax and recharge. We are determined not only to make great drinks.the game of cricket has been owned by various brands in the industry for the promotion of their products over a period of time. and diversity.
highlighting the winners over whelmed in the magical delight of their favorite beverage Coca-Cola.A treat for the family. .Go out & get some COCA-COLA RAMZAN CAMPAIGN Business Plan on Coca-Cola Ltd.COCA-COLA CONCERTS The TVC campaign focused on the hectic lifestyle of a pop star who found respite & relief through Coca-Cola in short moments that he had to himself during a concert.5 liter PET bottle & the 1 liter bottle with a super price-off promotion. | 8/8/2010 A very special occasion for the people of World Ramzan saw another very special Coca-Cola‘s promotion. The emphasis on enjoying Coca-Cola at ―Iftar‖ with friends & family. CocaCola‘s ―GO-RED‖ teams went out into the cities main quadrants to ―serve & refresh‖ on the spot with ice-cold Coca-Colas at discounted prices backed by a heavy FM announcement campaign the ―GO-RED‖ stall. The promotion saw avid consumer collecting Coca-Cola ‗Crown caps‘ & sparked a keen response from the public . soul & mind were captured accurately in the TVC & depicted aptly how the drink completes the moment for Aurar. served well to promote the Coca-Cola industry. rendering an outstanding testimonial campaign in the second phase. Coca-Cola went ahead with the idea of giving consumer chances to win fabulous. COCA-COLA WONDER OF THE WORLD PROMOTION In July 2000.5 liter Pet contour bottle for the first time in World.The promotion gave consumers a chance to win free drink. . live music. Coca-Cola‘s 1. pedestrians & passerby‘s during hottest summer season. COCA-COLA GO-RED Quenching the thirst of motorist. The in augural event proved so popular that it is now set to become an annual fixture. a resounding success with tempting discounts. Coca-Cola set the stage of the grand UTC promotion. Targeting house wives & family home. Coca-Cola launched 1. magical ―dream vacation‖ to numerous ―wonder destination‖ throughout the world on every purchase of a 250 ml RGB bottle of Coca-Cola. & Fanta. COCA-COLA PET PROMOTION In 1996. great prizes & fire works. Coca-Cola‘s brand positioning of providing deep down refreshment for the body. took the limelight & gained momentum with a campaign promoting the unique packaging and its numerous consumer benefits . Sprite. marketing the popular 1. COCA-COLA SHOPPING FESTIVAL Coca-Cola hosted ―The Coca-Cola Shopping Festival‖ Lahore‘s first shopping festival. SINGAPORE & CAIRO along with airfare & four nights free stay in these dream lands. HOLLYWOOD. a trip to PARIS.5 liter Pet bottle. Liberty marketing Gulberg was a hive of activity during the weeklong shopping extravaganza. NEWYORK. Coca-Cola‘s PET was offered through a ―price-off‖ promotion that said……….
| 8/8/2010 After the acquisition of the individual local franchise bottling facilities in 1996. the consumers in Worldwitnessed a soft launch in essence. the new under-the-crown promotion ―Nikla Kiya?‖(What have u won) was launched in collaboration with Chimera Nokia. Branded Coca-Cola with ‗caught red handed‘ team in them went to Lahore & Karachi for three days. On the Go Packs‖ flaunting the innovative packaging convenience. Caught red handed become a huge success among the masses as it was one to one interaction between the Coca-Cola brand & the consumers. but the major hit was thematic fashion shows in restaurants. for the first time in almost 3 years. The promotion kicked off with pos material (Danglers. & Fanta. Bunting etc) displayed at all MC Donald‘s restaurants along with a special offer for coke & fries. which are the key accounts of the company as this has been never done before in Pakistan. COCA COLA TV MAZZA The coca cola new campaign is coca cola tv mazza. the company has successfully launched its first new product.Sprite. . Fanta & Sprite are sure to enjoy considerable success in World DIET COKE Business Plan on Coca-Cola Ltd. COCA-COLA & MAC DONALD’S Coca-Cola & key account of MC Donald‘s launched the ―we go together‖ joint promotion to reinstate amongst consumers a real sense of the affinity that. both shares globally. The was linked with three fashion shows as Diet Coke is related to fashion & fitness.The other highlight of promotion was the “Caught Red Handed” campaign. This activity helped billed confidence and brand loyalty among core consumers. diet coke. FANTA & SPRITE LAUNCHED In November 2000moving on to the Sprite & Fanta brands. it is a utc scheme in which people are getting television sets of different sizes.The promotion gave consumer a chance to win thousand‘s of Coca-Cola branded Nokia 3310 cellular phones on every purchase of 750ml RGB bottle of Coca-Cola . These days this scheme is very popular among the people. with target that anyone being caught drinking Coca-Cola will be awarded a nokia 3310 mobile phone & if someone is caught talking on a nokia mobile will win free supply of Coca-Cola. The Coca-Cola Company declared the new ―Non-Returnable‖ bottles of Sprite & Fanta as the ―New.COCA-COLA & NOKIA In August 2001.
POS MATERIAL Pos material mean point of sale material this includes: posters and stickers display in the stores and in different areas. TV COMMERCIALS As everybody know that TV is a most common entertaining medium so TV commercials is one of the most attractive way of doing advertisement. They have so many sites in different locations for their billboards. They have a separate department for print media.ADVERTISEMENT Coca cola company use different mediums Print media Pos material Tv commercial Billboards and holdings PRINT MEDIA They often use print media for advertisement. BILLBOARDS AND HOLDINGS Business Plan on Coca-Cola Ltd. DISTRIBUTION CHANNELS Coca Cola Company makes two types of selling Direct selling Indirect selling . So Coca Cola Company does regular TV commercials on different channels. | 8/8/2010 Coca cola is very much conscious about their billboards and holdings.
DIRECT SELLING In direct selling they supply their products in shops by using their own transports. Because it is very difficult for them to cover all area of Worldby their own so they have so many whole sellers and agencies to assure their customers for availability of coca cola products. coca cola often do this type of scheme and they offer very handy prizes in it. Operations: A. caps. Chairman and Chief Executive Officer * Gary P. EYE CATCHING POSITION Salesman of the coca cola company positions their freezers and their products in eyecatching positions. tv sets. PROMOTION STRATEGIES GETTING SHELVES They gets or purchase shelves in big departmental stores and display their products in that shelves in that style which show their product more clear and more attractive for the consumers. Fayard. INDIRECT SELLING They have their whole sellers and agencies to cover all area. Like once they offer bicycles. They have almost 450 vehicles to supply their bottles. cash prizes etc. KEY PERSONNEL : * E. This scheme is very much popular among children Business Plan on Coca-Cola Ltd. In this type of selling company have more profit margin. UTC SCHEME UTC mean under the crown scheme. President of Latin America . Normally they keep their freezers near the entrance of the stores. SALE PROMOTION Company also do sponsorships with different college and school‘s cafes and sponsors their sports events and other extra curriculum activities for getting market share. | 8/8/2010 4. Chief Financial Officer * Jose Octavio Reyes. Neville Isdell.
Tax and Treasury. Business Development. safe and comfortable manner. Financial Analysis.It‘s a multi-billion dollar challenge.B. Regardless of your background or level of experience. We have opportunities available in Accounting. you‘ll like what you find at The Coca-Cola Company. It takes thousands of people working together to keep our multi-billion dollar operation running smoothly. Facilities Management. . guests and others around the world in an expeditious. our people make a difference everywhere we work. Audit. At The Coca-Cola Company. FINANCE . BUSINESS MANAGEMENT – It‘s the strategy that drives our future. and we operate in over 200 countries around the world. BUSINESS/ADMINISTRATIVE SERVICES – It‘s the business of running our business. ORGANIZATIONAL STRUCTURE: AVIATION – It's creating the best of the best. Are you ready to share your ideas with some of the best thinkers in business? Opportunities are available in Strategic Planning and Business Development. Business Plan on Coca-Cola Ltd. this may be the perfect place to share your talent with the world. we know just how valuable your efforts are to our continued success. Presentation Graphics and Archives/Records Maintenance. Here we take on big challenges and make bold plans for the future. We never stop looking for the best and the brightest. Opportunities are available in Administration. From Atlanta to London to Bangkok to Santiago. | 8/8/2010 Where is the next big opportunity for The Coca-Cola Company? What will our competitors be doing next week…next year…in the next decade? Your insights and analysis will help find the answers. The Finance function at The Coca-Cola Company offers challenges and opportunities that are simply world-class. If you want a career that can take you places. The Coca-Cola Company is a truly global company. Here we have the opportunity to make a difference and create ways to connect our executives. That‘s why we offer opportunities that recognize your contributions and reward your efforts.
which is why we have one of the most robust departments you‘ll find just about anywhere. we know the importance of technology. If you can keep our people out in front. Infrastructure Systems Support. INNOVATION – It‘s about the next big idea. If you want your talent to make a global impact. Database Management and Technical Training. What will be our next success story? A new product? A new packaging system? Something so new the world has never seen anything like it? At The Coca-Cola Company. Employee Relations and Compliance and Occupational Health. | 8/8/2010 INFORMATION TECHNOLOGY – It‘s keeping The Coca-Cola Company a few steps beyond the cutting-edge. . At The Coca-Cola Company. We have opportunities in Application Development and Support. we can offer you a career with endless potential. Opportunities include Generalist. SAP. we understand the importance of Human Resources. Operations. Organizational Development. D. That‘s why we‘re almost Business Plan on Coca-Cola Ltd. PRODUCTS & DELIVERY SERVICE: FACILITATING THE PRODUCT BY INFRASTRUCTURE: For providing their product in good manner company has provided infrastructure these includes: Vizi cooler Freezers Display racks Free empty bottles and shells for bottles As one of the best known brands on the planet. Network Management. Staffing. IT Architecture. It‘s been the same story from day one. Business Systems Planning. Compensation and Benefits. this may be your opportunity.C. your ideas will make the difference. That‘s why we‘re always thinking about what‘s now and what‘s next and investing in the people and the technologies that will power our company for years to come. We‘re always searching for what‘s next. HUMAN RESOURCES: The key to our success is our people. Training.
It‘s an amazing challenge. If you‘re ready to make a breakthrough. At The Coca-Cola Company. Creating some of the best selling beverages in the world takes some of the best technology around and some of the very best people in the business. Procurement. Research & Development and SRA/Environmental. We have opportunities available in Account Management. Are you up to the challenge? We have opportunities available in Engineering and Quality Assurance. SALES AND ACCOUNT MANAGEMENT – It‘s representing The Coca-Cola Company to the world. That‘s why at The Coca-Cola Company. Marketing Asset Management. Operations Management. Network Account Management and Sales Analysis/Decision Support. At The Coca-Cola Company. our Manufacturing and Maintenance teams are beyond compare.always ready to talk to someone like you. Creative Services. The strength of our brands is tied directly to the people behind them. with equally amazing opportunities for top performers TECHNICAL FUNCTION – It‘s making the best even better. we have even bigger plans for the future. our beverages are enjoyed by billions of people…billions of times. We have opportunities available in Distribution and Logistics. MARKETING – It‘s driving the success of the one of the world‘s best known brands. Operating a global business places tremendous demands on the supply chain. | 8/8/2010 SUPPLY CHAIN FUNCTION – its ensuring customers everywhere stay refreshed. Category Management. We have opportunities available in New Products/Services Development. Are you ready to make your mark? We have opportunities available in Brand Management. we give our people the resources they need to build longterm relationships with customers. year after year. Millions of servings a day. At The Coca-Cola Company. you‘ll find the very best people answering the call everywhere we do business. That‘s where you come in. Laboratory Analysis. this could be the break you‘ve been seeking. Business Plan on Coca-Cola Ltd. How can we improve our manufacturing. And after more than a century of success. we continuously strive for better ways to create our products. this may be your opportunity to put your talent in a multi-billion dollar spotlight. That‘s why. Just because you‘re the very best. Equipment Services and Customer Service. . Promotions and Merchandising/Licensing. billions of dollars a year. Marketing Research. Media. It‘s your ideas and innovative thinking that make The Coca-Cola Company a global powerhouse. packaging and more? It‘s up to you. Channel and Customer Marketing. MANUFACTURING – It‘s helping to quench the thirst of the world. Advertising. And behind every sale is someone like you. If you have the ability. you can‘t simply stand still. raw materials. Bring us your ideas and watch how far they can take you.
AVAILABILITY We place our range of products within easy reach of consumers in the right package.E. at the right time. The goal of this approach is to create value for our customers. This aims to facilitate a cross-functional approach to planning for the purpose of better aligning our organization with the way our customers do business. AFFORDABILITY Business Plan on Coca-Cola Ltd. premium quality products. in the right location. we aim to reach as many consumers as possible while taking into account the differing levels of purchasing power in the countries in which we operate. In doing so. highly visible and readily accessible wherever and whenever consumers may desire a non-alcoholic beverage. ACCEPTABILITY We supply an extensive and growing range of products that meet the highest quality standards in each country. customer service and efficient distribution. . are examples of what we believe will bring additional value to our customer relationships. Combined with our experience in quality control. inventory management and customer-specific cooler placement strategies. in packages appropriate for the occasion. affordability. In serving consumers our blueprint can be summarized in four words: availability. We initiate a number of customer-specific programmed. Customer service : The second key element of our business imperatives is to develop each of our markets by providing superior customer service and quality products. we are able to reach out to customers and consumers in each of our markets and meet their demands. at the right price. | 8/8/2010 We offer a wide variety of desirable. acceptability and activation. We have a detailed understanding of consumer needs and access to the most effective communications channels. Improved preparation of joint annual plans encompassing promotional planning and revenue growth initiatives. increasing their acceptability to consumers. We focus on developing strong relationships with our customers to ensure that the right products are in stock. In Coca-Cola Hellenic we work hard to adapt our business to the changing needs of our customers.
Since it is operating through out the world that is why the number of employees and the bottling equipment‘s is highest among the other bottling companies. which shows the success of Coca Cola brands. Coca Cola Company is increasing its volume day by day. There is a constant increase in every aspect when we compare the statistics of 2001 and the statistics of 2009. We achieve this in close cooperation with our customers through: * the placement of cold drink equipment.000 . FINANCIAL DATA COMPANY STATISTICS: The statistics of this company is impressive. The statistics is as follows. such as coolers and vending machines * the provision of signage and other point-of-sale materials * the implementation of local marketing and promotional initiatives 5. (Table) 2009ª 2008 Business Plan on Coca-Cola Ltd. This is because. results in the percentage change in the statistics of the two years. | 8/8/2010 Equivalent cases Bottle and cans Fountain Employees 4.000 3. The expansion of this company.2 billion 87% 13% 72.8 billion 87% 13% 67.ACTIVATION We motivate consumers to choose our products by improving product availability and attractiveness at the point of purchase and by building brand strength in our local markets.
4 million 52.000 2.3 million 25 385 53 463 80% 46 25 361 50 436 72% 46 44% 52% 4% 45% 51% 4% Business Plan on Coca-Cola Ltd.000 2.3% 59% 3 6.Vehicles Cold drink equipment‘s Facilities Production only Distribution Combination Total Percent of North America population coverage Number of States of Operation Bottle and can equivalent case package distribution Cans Non-refillable bottles Refillable bottles Capital structure Net debt to total capital ratio EBITDA interest coverage Weighted average cost of debt Key Statistics 54. | 8/8/2010 63% 3 6.8% .
taxes.18 8% 74% EBITDA is the Earnings before interest.Constant territory bottle and can volume growth Bottle and can net revenues per case change Bottle and can cost of sales per physical case change Reported EBITDA (in billions) Reported EBITDA change Capital expenditures( in billions) %-age of net operating revenues Coverage of North American Can/bottle volume 3% Flat 1 $1.97 6% 83% ½% 2% ½% $2.95 (18)% $0. | 8/8/2010 . Business Plan on Coca-Cola Ltd. depreciation. and other non-operating items.39 9% $1. Net Debt is the Long-term debt plus current portion of long -term debt less cash and marketable securities. Equivalent Case or Unit Case is the physical case and fountain gallons converted to a standard unit of measure defined as 24 eight -ounce servings or 192 ounces per equivalent case sold by Coca -Cola Enterprises. and amortization.
(In millions except per share data.685) (133) 2.352 3.147 26.601 1.5% 19.791) (277) 3.110 (963) (1. (Table) Year Ended December 31.601 4.1% 1% 45% 82% 82% 82% 15% Business Plan on Coca-Cola Ltd.882 3.PROFIT & LOSS STATEMENT: This company is financially very strong.6% 38. ratios and growth rates) 2009 2008 Percentage change Net operating revenues Operating income Net income Net income per share (basic) Net income per share (diluted) Net cash provided by operating activities Business reinvestment Dividends paid Share repurchase activity Free cash flow Return on capital Return on common equity 20.2% 23.691 2.177 0. the company is still surviving the ups and down of the business world.092 5. It is due to the strong finances. The financial report of Coca Cola Company of the year 2001 and 2000 along with the percentage change is as follows.889 3.969 1.585 (779) (1.882 0.806 16. | 8/8/2010 24% 6% 108% 12% - .
05 per share after income taxes related to the settlement terms of a discrimination lawsuit. and $.3 17. $.04 per share after income taxes related to benefits from a tax rate reduction in Germany and from favorable tax planning strategies.8 11. 2002 basic and diluted net income per share includes the following charges: $.. manufacturing and intangible assets.A.02 per share after taxes.9 5.05 per share after income taxes related to the merger of Coca-Cola Beverages plc.1 5% 2% 4% 2002 basic and diluted net income per share includes a non-cash gain of $.5 5.Unit case sales (in billions) International operations North America operations Worldwide 12. $. $.24 per share after income taxes related to an organizational Realignment. which was recognized on the issuance of stock by Coca-Cola Enterprises Inc.2 17.16 per share after income taxes related to the impairment of certain bottling. $. .19 per share after income taxes related to the Company's portion of charges recorded by the investors of the company. Business Plan on Coca-Cola Ltd.01 per share after income taxes related to incremental marketing expenses in Central Europe. one of the equity investors of this company. and Hellenic Bottling Company S. | 8/8/2010 These charges are partially offset by a gain of $.
In 2002.714 INVESTMENTS Equity method investments: Business Plan on Coca-Cola Ltd.816 .139 2. Shareowners also may purchase Company stock through voluntary cash investments of up to $125.000 per year.198 14.DIVIDEND AND CASH INVESTMENT PLAN: The Dividend and Cash Investment Plan permits shareowners of record to reinvest dividends from Company stock in shares of The Coca-Cola Company. less allowances Inventories Prepaid expenses and other assets TOTAL CURRENT ASSETS 263 3. shareowners invested $36 million in dividends and $31 million in cash in the Plan BALANCE SHEET The Coca-Cola Company and Subsidiaries Condensed Consolidated Balance Sheets 2009 (In millions except par value) April 3. All shareowners of record are eligible to participate. 76 percent of the Company's shareowners of record were participants in the Plan. 2009 ASSETS CURRENT ASSETS Marketable securities Trade accounts receivable. | 8/8/2010 Cash and cash equivalents $ 6. At year-end. economical and systematic method of acquiring additional shares of our common stock. The Plan provides a convenient.298 2.
384 TOTAL ASSETS $ 43.651 .B. PLANT AND EQUIPMENT — net TRADEMARKS WITH INDEFINITE LIVES GOODWILL OTHER INTANGIBLE ASSETS 1.017 2.103 LIABILITIES AND EQUITY CURRENT LIABILITIES Loans and notes payable Current maturities of long-term debt Accrued income taxes TOTAL CURRENT LIABILITIES 6. S.793 8.757 OTHER ASSETS PROPERTY. Coca-Cola FEMSA. | 8/8/2010 Accounts payable and accrued expenses $ 5.A. Coca-Cola Amatol Limited Coca-Cola Enterprises Inc.A.386 840 680 2.V.988 2. principally bottling companies TOTAL INVESTMENTS 1. de C.169 LONG-TERM DEBT OTHER LIABILITIES DEFERRED INCOME TAXES 5.Coca-Cola Hellenic Bottling Company S. Other.425 6.042 3.410 441 5. principally bottling companies and joint ventures Other investments.701 461 356 13.944 865 Business Plan on Coca-Cola Ltd.
021 38.103 Note: The financial information included in this section should be read in conjunction with Management's Discussion and Analysis of Financial Condition and Results of Operations and Notes to Consolidated Financial Statements contained in our Company's 2009 Quarterly Report on Form 10-Q and 2008 Annual Report on Form 10-K.THE COCA-COLA COMPANY SHAREOWNERS' EQUITY Common stock. BREAKEVEN ANALYSIS AT COCA-COLA COMPANY I. syrups as well as concentrates. distributes and markets non-alcoholic drinks. this beverage organization is the leading name in its line of business that manufactures. $0.25 par value.600 shares Capital surplus Reinvested earnings Accumulated other comprehensive income (loss) Treasury stock. It is a very successful organization that almost everyone knows with an asset in the preceding year reaching at least $43 billion in its 2007 consolidated financial statements.108 TOTAL LIABILITIES AND EQUITY $ 43. THE ORGANIZATION: COCA-COLA COMPANY Who does not know this leading beverage company? In terms of market share and brand exposure. As stated in its 2007 Financial report. at cost EQUITY ATTRIBUTABLE TO SHAREOWNERS OF THE COCA-COLA COMPANY EQUITY ATTRIBUTABLE TO NONCONTROLLING INTERESTS TOTAL EQUITY 880 8.911 (2.207) 20.712 396 21. Authorized — 5. | 8/8/2010 . Its products bearing the Coca-Cola brand and other brand names under the organization's trademarks have Business Plan on Coca-Cola Ltd.893) (24. Coca-Cola (hereinafter referred to as the Company or the Organization) has the ―say‖. Moreover. the net worth of this company is accounted at $27 billion.
Certainly. One of the notable and fresh acts that the organization has decided is in its promotional activities. This means that Coca-Cola realized that with Memo. and to identify some needed information in making the breakeven analysis a usable tool. The annual Financial information of the organization is available at its website. It can be specifically found at the following url: http://www. Revenue gained through the partnership: Estimated $48 million in sales of memorabilia and more sales of Coca-Cola branded products in Latin America are. but since there are more than 200 countries to consider. To give detail to the said decision. the following are identified: 2. http://www. Last November 11. In each of its activity. | 8/8/2010 1. Any planned activity must be properly analyzed as to its cost versus its benefit. Unit of measurement used for the partnership with Memo: This is the length of time the partnership lasts and the extent of activities Memo has to do such services for the Company such as autograph signing. 3. A company or an organization like Coca-Cola will not succeed to its current status if its decisions are not based on solid profitable grounds. a multi-billion dollar company such as Coca-Cola has a long list of activities. are currently being sold in more than 200 countries worldwide.thecocacolacompany.been sold in the United states since 1886 and with great success.com. promotions to customers and other promotional procedures in favor of the Organization and its products: . Each promotional month is estimated to gain $4 million. a proper analysis must be taken into account in pursuing an activity or not. it can increase its sales and turn it into profit. also known by his complete name as Francisco Guillermo Ochoa. ACTIVITIES OF THE ORGANIZATION: Generally. 2008 Coca-Cola has issued a press release on its partnership with the soccer superstar Memo. this move of the Organization is not a decision that took over for a single night but a long process of research and analysis if this would be of good returns to the Company. no matter how small it can be in a unit basis. Daily. Coca-Cola is serving 1.pdf) II. The organization was incorporated as early as 1919 under the guiding laws of the United States of America.thecocacolacompany. This is where breakeven analysis comes in.com/investors/pdfs/form_10K_2007. specifically in the state of Delaware. Variable cost of the partnership: Incremental costs for the following: (a) customer appearance (b) Autograph signing Business Plan on Coca-Cola Ltd.5 billion of non-alcoholic drinks to its thirsty customers.
No activity. and their respective relevant and irrelevant costs are shown in the following matrix: Possible Decisions --> Type of Activities Relevant activities and their costs Contracting every bottling activities out of the company or outsourcing them instead of bottling the products themselves. once the company recovers the $15 million fixed cost.000 per hour of any of these activities. which is the contract price with Memo and the variables costs that it would incur. Corporate main office lighting and other minor utilities (estimated annual cost.e. III. One of the possible decisions that it might make. The cost of direct materials in making bottles such as glasses. chemicals. ( estimated annual cost.) $5. Fixed cost for the period of partnership: the Contract of partnership for a year amounting to $15 million. $360 thousand) . Salary of the janitors who cleans the main office building (estimated annual cost. Still. Although these are estimations. The current cost of workers' salaries and wages within the bottling division in the Coca-Cola company's premises (estimated annual cost. water.(c) Printed and media promotions (i. Coca-Cola will be breaking even with its expense already. the contract of partnership between memo and Coca-Cola proves profitable. at the end of the year. no cost to incur. $120 thousand) 2. $130 million) 2. FUTURE ACTIVITIES: Coca-Cola surely has lots of plans. (d) Production cost of the memorabilia related to Memo that are sold (e) Production cost of the additional sales or Coca-Cola branded products resulted by the partnership with memo 4. That means after breaking even it has to pay only per activity that it must require Memo to perform and the variable cost of the memorabilia and additional product sales. etc. and 1. $63 million) Business Plan on Coca-Cola Ltd. | 8/8/2010 Irrelevant activities and their costs 1.
these will be the direct bases of decisions the Company may make and these costs will be the determining factor if the organization would go on with the plan to outsource or maintain its current activity of having the bottling department in-house. However many propose the activity-based costing to be more effective because every department has a cost driver that can be considered a fairer valuation of cost for a certain cost center. Say. allocating the cost of non-revenue generating finance and marketing to the production department that mainly generates the sales is viewed as a fair policy. such as light. the finance and marketing departments are only supporting the production department. in terms of production overhead. | 8/8/2010 . it may as well be fair to allocate the costs incurred by these support departments to the main department. In this case. What is the implication of this? This means that if the cost is not allocated to the production. Thus. not used in decision making as the name suggests. utility and other allocable overhead costs. it is allocated as part of the inventory under ―normal capacity‖ (The Coca-Cola. On the other hand. Its idle capacity. the same amount will be generated for the bottom amount which is operating income. the irrelevant costs are the ones that are committed by the entire organization but these costs are not in any way directly related to the issue at hand: the plan to outsource the bottling plants. But in the long run.The above matrix indicates the kind of costs that Coca-Cola have. these irrelevant costs might be allocated in some way or another in other earning departments. Coca-Cola uses a peanut-butter costing spreading the costs that are not directly identifiable to those products that could take these costs. Irrelevant costs are not used in the costvolume-profit analysis or break-even analysis and eventually. the money cannot be generated as well. Just like most of the companies. there are non-earning departments and these departments are only supporting the main function of the organization. 2008) of production facilities The company has a cost of goods sold amounting to $2 billion and allocable total allocable cost is estimated at 10% of the goods sold which means it would reach up to $200 million. the production department cannot do anything to earn that money. The main function is the department ―working for the money‖ but obviously without the support. The relevant costs. Business Plan on Coca-Cola Ltd. without the help of finance to properly manage the assets and without the marketing department making the products interesting and salable. which means. However. ALLOCATION OF INDIRECT COSTS SFAS 151 is adopted by the Coca-Cola company in treating the costs to be allocated. it is ―irrelevant‖. In a certain organization. It is the production that ―creates‖ money for the organization. freight and handling costs together with other allocable costs such as spoilage and loss from wastage in production/raw materials are deducted as period costs. IV. they would be expensed outright and would not wait until the goods are sold before they can be accounted for. in some cases. It is then a production cost rather than a period cost that is outright expensed. they are expensed outright without getting through the inventory stage. just like Coca-Cola. But as mentioned. However.
This means that the cost driver for this ―T-Shirt with Memo's image‖ activity would be the number of T-shirts printed. Say.5 million payments from Coca-Cola.000 per hour and that would be $300. Estimates number of T-shirts is 5 Million and Memo charges $1. | 8/8/2010 .V. Business Plan on Coca-Cola Ltd. The above situations. the Organization partnering with Memo has many costs and cost drivers. Autograph signing: the very obvious cost driver for this would be the time spent by Memo in signing the autographs of his fans while promoting the Coca-Cola products at the same time. activities and their costs simply indicate the use of ABC depicts a more accurate result than simply spreading the costs arbitrarily on the products. proponents of ABC argue that this costing system is more useful. analysis and understanding of the company's activities. if not all of its activities has cost drivers if they need to have a cost. As presented.the Activity Based Costing As mentioned. Another cost that Memo can cause the organization would be on memorabilia sales. Costing a product requires a thorough examination.50 per shirt in using his name and image and thus he is entitled 7. many. 2. one might use cost allocation technique or activity based costing. These are the two good examples: 1. As for Coca-Cola company. memo can bill Coca-Cola for it based on the volume of T-shirts printed and sold/given by the company.000 and this is only for autograph signing.The Use of ABC. Talking back about the real situation presented in the firth part (I). Estimated cost of autograph signing in a year can total to 60 hours paying Memo $5. a T-shirt with his various poses endorsing Coca-Cola branded products.
Cricket matches concerts and many other social occasions. Coca-Cola is one of the leaders in sponsoring the most important. END Business Plan on Coca-Cola Ltd. Event at the present they are organizing a Basant festival for which they busily organizing stuff. | 8/8/2010 .g. E. thrilling events.CONCLUSION: Coca-Cola no doubt come the heart beat of Pakistanis.