Company:Coca Cola

Subject: Global business managment

Group Members:
Laiba Emaan (FA19-BBA-103) Section:

Muhammad Fahad (FA19-BBA-145) BBA 6’C

Muhammad Bilal (FA19-BBA-144)

Moatasim Abbasi (FA19-BBA-128)

COMPANY:
COCA COLA

Table of content
[i]
 Company:Coca Cola

 Executive summary……………………………………………………………… iii

 Introduction……………………………………………………………………… iv

History……………………………………………………………………………….. iv

SWOT…………………………………………………………………………………..v, vi

PESTEL, …………………………………………………………………………….. vi, vii

Porter’s Diamond (home country) ……………………………………………….. viii, ix,x

 International Expansion Pattern ……………………………………………………… xi

Global strategies (Internationalization, Localization, Globalization, and

Transnational) …………………………………………………………………………………………… xi

Sources of Competitive Advantage ………………………………………………………………..xii,xiii

 Entry Mode (Export, Franchising, Licensing, Joint Ventures, and FDI ………xiv

Visible and Nonvisible Barriers in Home and Host Countries…………………….xiv

Hedging Techniques used for Foreign Exchange Risk ………………………………. xv

 Positive and Negative effects of Hedging Techniques ………………………….. xv

Conclusion ……………………………………………………………………………….. xvi

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 Company:Coca Cola

EXECUTIVE SUMMARY

The Coca-Cola Company is an American multinational beverage corporation, best known

as the producer of Coca-Cola. The sugary drink was invented in 1886 by pharmacist John
Stith Pemberton. The Coca-Cola Company also manufactures, sells, and markets
other non-alcoholic beverage concentrates and syrups, and alcoholic beverages. The
company's stock is listed on the NYSE and is part of DJIA and the S&P 500 and S&P
100 indexes
Coca Cola is affected by water accessibility. Water is necessary for soft drink
development. But should something happen, like climate change, the company may be
under fire.This affects their competitor, Pepsi, as well. But since Coca Cola’s products
are primarily soft drinks, with a water accessibility issue, the company will suffer
losses.Coca Cola can create new products and diversifies their current offerings. They
have the brand identify, customers, manufacturing, and evaluation to back this up. It’s
possible to find niches untouched by Pepsi to develop products, especially in the health
food spaces. This way they branch out from soft drinks

Coca-Cola’s strategy is to focus on customers to provide them with high-quality

products that offer continually consistent quality and taste in the offering. Coca-Cola
promises value for money and satisfaction to customers and designs its strategic focus
and decisions in the same manner – to allow maximization of value for money to
customers through efficient processes that also lead to cost-saving for the
company.Coca Cola products are at the mercy of the FDA. They must meet regulations,
given by the government, to put products on store shelves.hanges in established laws
may prevent Coca Cola from distributing drinks. Accounting, taxes, internal marketings,
and changes in labor laws can affect Coca Cola in this way.

Brand loyalty is also an important advantage for Coca Cola. As a highly popular beverage
brand, it enjoys superior customer loyalty. Several of the beverage brands by Coca Cola
have acquired market leading positions based on their popularity.  Apart from its pricing
strategy, large product range and diverse flavours have helped it acquire a large
customer base and retain its popularity

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 Company:Coca Cola

INTRODUCTION
The Coca-Cola Company is an American multinational beverage corporation, best known
as the producer of Coca-Cola. The sugary drink was invented in 1886 by pharmacist John
Stith Pemberton. The Coca-Cola Company also manufactures, sells, and markets
other non-alcoholic beverage concentrates and syrups, and alcoholic beverages. The
company's stock is listed on the NYSE and is part of DJIA and the S&P 500 and S&P
100 indexes.
At the time of its invention, the product contained cocaine from coca leaves
and caffeine from kola nuts which together acted as a stimulant. The coca and the kola
are the source of the product name, and led to Coca-Cola's promotion as a "healthy
tonic". In 1889, the formula and brand were sold for $2,300 (roughly $71,000 in 2022)
to Asa Griggs Candler, who incorporated the Coca-Cola Company in Atlanta in 1892. The
company has operated a franchised distribution system since 1889. The company largely
produces syrup concentrate, which is then sold to various bottlers throughout the world
who hold exclusive territories. The company owns its anchor bottler in North America,
Coca-Cola Refreshments.

HISTORY
In July 1886, pharmacist John Stith Pemberton from Columbus, Georgia invented the
original Coca-Cola drink, which was advertised as helpful in the relief of headache, to be
placed on sale primarily in drugstores as a medicinal beverage Pemberton had made
many mixing experiments and reached his goal during the month of May, but the new
product was as yet unnamed and uncarbonatedPemberton's bookkeeper, Frank M.
Robinson, is credited with naming the product and creating its logoRobinson chose the
name Coca-Cola because of its two main ingredients (coca leaves and kola nuts) and
because it is an alliteration. John Pemberton had taken a break and left Robinson to
make, promote, and sell Coca-Cola on his own. Robinson promoted the drink with the
limited budget that he had, and succeeded
In 1889, American businessman Asa Griggs Candler completed his purchase of the Coca-
Cola formula and brand from Pemberton's heirs] In 1892, the Coca-Cola Company was
formally founded in Atlanta by Candler. By 1895, Coca-Cola was being sold in every state
in the union In 1919, the company was sold to Ernest Woodruff's Trust Company of
Georgia

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 Company:Coca Cola

SWOT ANALYSIS

1. Strengths

Coca Cola has an incredible brand identity. It’s a home name by millions around the
world. You’ll come across at least one of their product in over 200 countries.Because of
their known name, they have strong customer loyalty. The particular taste of Coca Cola
makes it easy to identify and hard to find a substitute for their customers.

Coca Cola has a nearly $80 billion company evaluation. Sales saw an increase when they
launched their campaign of putting customer names on their bottles. Prompting
consumers to buy the product, take photos next to the bottles, and post the photos
onto social media sites.

2. Weaknesses

Coca Cola’s major competitor is Pepsi. But unlike Pepsi, which has branched away from
the Soda-only model of revenue, Coca Cola has yet to develop a food or snack. This puts
them behind Pepsi in terms of competition since Pepsi has Lays chips and other foods
under their belt.

People have become concerned with obesity and diabetes. Carbonated drinks are a big
influencer of these health complications. Coca Cola, as a major carbonated drink
manufacturer, can contribute to the obesity epidemic. They haven’t addressed or found
a healthier solution yet.

3. Opportunities

Coca Cola can create new products and diversifies their current offerings. They have the
brand identify, customers, manufacturing, and evaluation to back this up. It’s possible to
find niches untouched by Pepsi to develop products, especially in the health food
spaces. This way they branch out from soft drinks.

Coca Cola is in hundreds of countries. They could focus on moving into developing
countries with humid temperatures. These countries will enjoy the treat of Coca Cola in
a way developed countries, already accustomed to the choice, may not.

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 Company:Coca Cola

4. Threats

Coca Cola was suspected of using pesticides in their water. But water is also becoming
limited because of climate change. Considering Coca Cola needs plenty of water to
create their soft drink empire, should water become scarce, they would be in
trouble.This is why creating new products is important. Pepsi would also be affected if
water became difficult to come by, but they still have other markets to use and develop.
Coca Cola does not.

Additionally, the trends and development of cafes can threaten Coca Cola’s livelihood.
Smoothies, healthy tonics, and teas are taking over. People are looking for healthy
alternatives to less sugar. With these shops, especially Starbucks, it could dampen Coca
Cola’s sales if they don’t act quickly.

PESTLE ANALYSIS

 Political factors

Coca Cola products are at the mercy of the FDA. They must meet regulations, given by
the government, to put products on store shelves.

Changes in established laws may prevent Coca Cola from distributing drinks. Accounting,
taxes, internal marketings, and changes in labor laws can affect Coca Cola in this way.

 Economical factors

Coca Cola products are distributed to hundreds of countries. These countries have
different customs, cultures, tastes, and desires. Coca Cola has changed and updated
how it handles its products by creating new flavors to accommodate these customers.

They have $80+ billion worth of equity. The majority of that comes from the beverage
industry. And their income (roughly 70%) is from countries outside the United States.But
people are looking for healthy alternative drinks. Coca Cola is making minimal efforts to
move in that direction.

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 Company:Coca Cola

 Social factors

Coca Cola distributes the majority of its products in cultured countries. And they meet
the demands of these customers. In Japan, they created 30 alternative flavors to appeal
to Japanese consumers. In China, they are making similar efforts.

But in America, people focus on their health. They’re swapping sugary drinks for waters
and teas. Because these drinks are better for their health. Coca Cola needs to respond to
these needs by creating a product the healthy American public will respond to.

 Technological factors

Machinery have helped Coca Cola manufacture products in better and higher quantities.
Coca Cola has factories in Britain with top of the name machinery to ensure fast delivery
times and quality product development.

Coca Cola has used social media technology to connect with audiences. When they
launched their name campaign — putting real names on their bottles — customers lined
up to take photos of bottles with their name on it. These photos trended on social
media sites like Facebook, providing social proof and encouraging Coca Cola sales.

 Legal factors

Coca Cola retains all rights related to their business, including past and future products
developed with a patented process.

 Environmental factors

Coca Cola is affected by water accessibility. Water is necessary for soft drink
development. But should something happen, like climate change, the company may be
under fire.This affects their competitor, Pepsi, as well. But since Coca Cola’s products
are primarily soft drinks, with a water accessibility issue, the company will suffer losses.

Coca Cola has to adhere to environmental laws as they manufacture their products. If
anything is amiss, it can affect how they distribute products — or stop production
completely.

.
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 Company:Coca Cola

Porter diamond model

1:Factor conditions

Factor conditions are elements and aspects that provide a competitive advantage to the
industry and its firms. However, unlike natural resources, factor conditions are usually
developed by the country at large. For Coca-Cola, the factor conditions include the
following

 Natural resources:These are the natural resources available to Coca-Cola in its

home country, as well as in the countries where it has set up operational and
production plants. These include, for example, the presence of natural resources
such as water channels. These natural resources are available to a firm because
of its location and are relatively cheaper for the firm to access. They do not need
to be developed or created but refined for usage generally. 
 Human resources:This includes the skill levels, and performance of the human
resources at the Coca-Cola. It also involves the training programs and all other
investment programs undertaken by Coca-Cola in relation to its human
resources and employees across the globe. It also includes all human resource
functions from recruitment to performance management which work towards
employee development and growth.
 Capital resources:These include the financial resources that are available to
Coca-Cola. For Coca-Cola, these are available through equity capital resources
and debt financial resources. Equity-based capital is largely generated within the
company, using internal resources and channels only. Debt-based capital, on the
other hand, involves debt taking from external sources and organizations.

2:Related and supporting industries

The presence of supporting and competing players in

the industry provide positive pressure and encourage mantra to players in the industry
towards excelling and expanding through innovation and internationalization. For Coca-
Cola, the supporting and related industries have also been particularly helpful in leading
the brand into achieving new heights with every passing year.

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 Company:Coca Cola

 The presence of related industries in domestic and international markets has

also been a source of growth and development in terms of expansion and
internationalization for Coca-Cola. This is because related industries have helped
Coca-Cola in the business operations by providing support materials needed for
successful operational excellence. Coca-Cola, for example, has been able to
source packaging materials, and raw materials locally in different consumer
markets, which have helped it control costs and expenses, and achieve
economies of scale.

 The presence of supporting industries is a facilitator for Coca-Cola in growing and

expanding its business. This is true for the presence of supporting industries in
domestic as well as international markets. In domestic markets, supporting
industries have helped the development of the overall industry, which in turn
has also allowed firms like Coca-Cola in progressing and developing in business
operations and attracting consumers and creating awareness in customer
markets for product awareness and recognition

3:Strategy, structure, and rivalry

This refers to the company’s strategic focus and its managerial and organizational
structure and architecture. The organizational leadership and set up is important for
determining the international expansion of the company and firm. For Coca-Cola the
organizational structure, and set up as well as the strategic vision and decisions have
been important in facilitating the company’s international growth and expansion.
 Coca-Cola’s strategy is to focus on customers to provide them with high-quality
products that offer continually consistent quality and taste in the offering. Coca-
Cola promises value for money and satisfaction to customers and designs its
strategic focus and decisions in the same manner – to allow maximization of
value for money to customers through efficient processes that also lead to cost-
saving for the company.

 -Cola is a flatter organization that supports open and free communication. The
company offers easy and quick access to managers and supervisors, and thus
allows a creative and trusting organizational culture that helps in the growth and

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 Company:Coca Cola

progress of the company. Moreover, the flatter organization also allows

employees at Coca-Cola to easily approach and discuss matters with the
leadership at Coca-Cola.

 managerial system at Coca-Cola is supportive that works towards employee

growth and development. Supervisors and managers work continually with
employees to help them develop personally and professionally. Coca-Cola has
designed a number of different training programs for the same purpose, and
employees have suggested these programs based on their skill gaps, and
performance levels. 

4: Government
This refers to how governments can influence firm performance and its growth plan
through its various policies as well as border relations with other countries one global
front. For Coca-Cola, government policies and structures across different countries have
been particularly favorable. 
 Government policies have supported Coca-Cola in its expansion and growt plans
and opportunities. Coca-Cola has received support from its home country for
expanding production capacities, and also from foreign governments in setting
up plants and gaining access to import and export quotas for different regions.
Moreover, the government trade policies between different countries have also
benefited Coca-Cola in expanding its business internationally.

 The industry regulations for Coca-Cola have also been supportive of the firm in
maintaining and developing its competitive advantage towards sustainability.
Industry regulations for Coca-Cola also ensure the consistent maintenance of
quality in Coca-Cola products. Moreover, industry regulations have also allowed
Coca-Cola to develop efficiency in its products through technological
advancement, and the development of scientific and technological knowledge
for supporting business advancement. 

International Expansion Pattern

 They began building global network in the 1920s. Their global growth expanded
during World War II when Coca-Cola President Robert Woodruff believed that

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 Company:Coca Cola

every American service man and woman should have a Coke at their disposal, no
matter where they were or the cost to the company. Woodruff’s vision during
this critical period in American history helped establish Coke as a global
corporation by introducing the product to different markets.

 Now operating in more than 200 countries and producing nearly 500 brands, our
system has successfully applied a simple formula on a global scale: provide a
moment of refreshment for a very little amount of money -- a billion times a
day.

Global strategies (Internationalization, Localization,

Globalization, and Transnational)

 Coca-Cola pursues an assumed global strategy, allowing for differences in

packaging, distribution, and media that are important to a particular country or
geographical area. Hence, the global strategy is localized through a specific
geographic marketing plan.
 Hence, the global strategy is localized through a specific geographic marketing
plan. Instead of applying a global strategy, it is likely to be a strategy of thinking
globally, but acting locally

Sources of Competitive Advantage

1. Brand equity:

Brand equity is the most important strength for any large company. Coca Cola is a
strong brand because of its strong brand equity. Overtime, the company’s customer
base has grown very large globally. Around the world, millions trust the Coca Cola
brand. While the company has faced several troubles due to water management
and  product quality related issues, still it is loved globally by millions. The popularity of

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 Company:Coca Cola

Coca Cola and its brands is very high around the globe and  a main reason behind its
high net sales every year

2. Pricing strategy:

Coca Cola’s pricing strategy is also a major source of competitive advantage. Despite the
high popularity of the brand, it has priced its products competitively. While competition
is an important factor behind the pricing strategy along with market dynamics, another
important reason is that it has made its products more affordable and accessible. This
gives the brand access to a very large customer base throughout the globe. Its products
are available in various packages suited to various types of needs from 500ml to large 2
and 2.5 litre family packs. Larger packs mean higher savings. 

3. Product portfolio:

Coca Cola has a large product portfolio of which several are billion dollar brands
which earn it more than a billion each year. Many of them are market leading brands
that enjoy very high level popularity. A larger product portfolio caters to the taste
and preferences of various customer segments. Coca Cola’s large product portfolio
includes sparkling soft drinks; water, enhanced water and sports drinks; juice, dairy
and plant-based beverages; tea and coffee; and energy drinks. It is mainly the
modern generation of millennial consumers which is the largest part of Coca Cola’s
customer base.  However, Coca Cola has a large number of fans across the other age
groups as well.

4. Marketing :

Marketing is also a major strength of Coca Cola which has helped the brand earn a
competitive advantage by building a strong image. Each year, the brand spends billions
on advertising and promotions. This is done in order to churn demand and attract new
customers as well as retain existing ones. Growing competition in the Coca Cola industry
has also led to higher expenditure on marketing and advertising  to acquire new
customers and retain old ones. Apart from attractive packaging and promotion of
individual brands, the company also spends a large sum each year on advertising. In
2017, the company spent around 4 Billion dollars on advertising. Its main rival Pepsi also
spends a huge sum on advertising each year which is about the same as Coca Cola’s
advertising expenditure

5. Customer loyalty:

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 Company:Coca Cola

Brand loyalty is also an important advantage for Coca Cola. As a highly popular beverage
brand, it enjoys superior customer loyalty. Several of the beverage brands by Coca Cola
have acquired market leading positions based on their popularity.  Apart from its pricing
strategy, large product range and diverse flavours have helped it acquire a large
customer base and retain its popularity. Increased competition and growth of digital
technology have led to an intensifying fight for customer acquisition among food and
beverage brands. Coca Cola and its rivals are using a mix of techniques including
marketing, diverse product range, competitive pricing and attractive packaging as well
as technology for customer engagement and to build customer loyalty. Since, it is easy
for customers to switch brands in the soda industry, customer loyalty is a major focus
for these businesses. Coca Cola has a strong advantage in this area which it is trying to
strengthen by investing in marketing, product innovation and corporate social
responsibility.

6. HR management:

Human capital is also a source of competitive advantage in the 21st century. Coca Cola
has also acquired a competitive advantage by focusing on strategic human resource
management. Apart from competitive salaries and non financial incentives, it has also
focused on performance management as well as training for staff motivation and career
development. Career development is an important focus at Coca Cola and therefore it
has implemented several training programs that help it increase its employees’
productivity. Using technology and modern methods of performance management, the
company has managed staff performance, training and staff motivation. Attractive
packages and an excellent work environment that offers opportunities for a shining
career, attracts young aspirants every year in large numbers.

Entry Mode (Export, Franchising, Licensing, Joint

Ventures, and FDI (Merger, Acquisition or Green Field))

o Entry mode: Coca Cola Company entered into the global market using various
modes of entry. The most common modes are exporting, licensing and
franchising. Besides exporting beverages and its special syrups, Coca cola also
exporting its merchandises to foreign distributors and companies.

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 Company:Coca Cola

o FDI: Coca-Cola has been on an acquisition spree: buying coffee shop chain

Costa, French fruit drink Tropico, and Australian kombucha Mojo; alongside
minority investments in sports brand Bodyarmor and smoothie and juice
company Made Group

Visible and Nonvisible Barriers in Home and Host

Countries

o Visible Barrier
Visible barriers are taxation rules for different countries, corruption,
an increase in social media use, improvement in production and
communication technologies, the power of buyers and the power of
sellers as well as overall growth in incomes and the size of the middle
class

o Non-visible Barrier Government regulations that do not directly

restrict trade, but indirectly impede free trade by imposing excessive
or obscure requirements on goods sold within a country, especially
imported goods.

Hedging Techniques used for Foreign Exchange Risk

o Hedging: Hedging is a risk management strategy employed to offset losses in

investments by taking an opposite position in a related asset. The reduction in
risk provided by hedging also typically results in a reduction in potential profits.

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 Company:Coca Cola

o The Company uses cross-currency swaps to hedge the changes in cash flows of

certain of its foreign currency denominated debt and other monetary assets or
liabilities due to changes in foreign currency exchange rate

Positive and Negative effects of Hedging Techniques

Positive effects
1. The advantage of currency swaps is that they bring together two parties
who each have an advantage in a particular market.
2. The arrangement enables each party to exploit a comparative
advantage.
3. For example, a domestic company might be able to borrow on more
favorable terms than a foreign company in a particular country. It
therefore would make sense for the foreign company entering that
market to look for a currency swap.
Negative effect:
1. Costs that might arise for an enterprise looking for a foreign currency
swap include the expense of finding a willing counterparty.
2. This might be done through the services of an intermediary or by direct
negotiation with the other party.
3. The process might be expensive in terms of fees charged by an
intermediary or the cost of management time in negotiation. There also
will be legal fees for drawing up the currency swap agreement.

Conclusion

Coca-Cola enjoys a favorable position in its market globally. With a highly valued
brand and extensive distribution networks that are innovative, it is in a position to
use its strengths to take advantage of opportunities that arise. However, in its
main beverage segment of soft drinks as well as juices, the market in most
countries is mature. Growth comes from taking other companies market share,
and that requires aggressive marketing campaigns. This report recommends that
Coca-Cola continues to enhance its dominant market position by using its

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 Company:Coca Cola

strengths to capture new opportunities in both emergent marketing at its

dominant North American market.

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