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Business Expansion 1

Business Expansion Lekia Richards ORG 581 December 24, 2012 Professor Lois Whittaker

Business Expansion 2 Coca Cola is the world's leading manufacturer, marketer and distributor of nonalcoholic beverage concentrates and syrups. Being the world's best known brand, The Coca Cola Company markets four of the world's top-five soft drink brands, including Diet Coke, Fanta and Sprite. Throughout the world, there is no other brand that is an immediately recognizable as Coca Cola. With operations in more than 200 countries, a diverse workforce comprised of more than 200 different nationalities, communicating in more than 100 different languages, The Coca Cola Company is part of the fabric of life in each of the communities they serve throughout the world. Coca Cola operates as a local business partner, providing quality in the marketplace, enhancing the workplace, preserving the environment and strengthening the community. (Coca Cola, 2012) On May 8, 1886, Coca Cola was invented by Dr. John Smith Pemberton. In Jacobs pharmacy in Atlanta, Georgia, Dr. Pemberton mixed together a carbonated water with syrup and came up with the first glass of Coca Cola. Dr. Pemberton also worked with a partner, his bookkeeper, Frank Robinson. From 1886 to 1887 Dr. Pemberton advertised the drink as a health tonic which was only sold at local pharmacies. Dr. Pemberton never got a chance to see the success of Coca Cola because he died in 1888 shortly after he invented the drink. Coca Cola was able to continue selling after Dr. Pembertons death although he sold portions of his business to various people but namely a businessman name Asa Candler. Mr. Candler wanted to make the drink more accessible to people who did not live in Georgia, therefore he had to figure a way to make the drink more popular. He first began

Business Expansion 3 giving away coupons for the drink. With Mr. Candler in charge, Coca Cola began to expand beyond Georgia by installing fountains throughout the United States. In 1894, a businessman from Mississippi, installed a bottling machine in the back of his soda fountain and became the first person to bottle Coca Cola. Although he didnt work for the company, he made one of the greatest achievements in the companys history. Coca-Cola began by selling just one beverage. That one beverage became biggest selling soft drink and the best know product in the world. Due to its success, Coca-Cola was able to afford to buy or create hundreds of new beverages. Today Coca-Cola sells over 3,500 beverages. From sparkling water, to chemical filled energy drinks, to healthy teas and juices to sugary sodas. These drinks can be found in many places across the world. In the 1980s the idea of making a new formula for the Coke beverage was thought up. This product was called New Coke and replaced that of the original Coca-Cola formula. However due to protests by consumers the original Coke was brought back. And quickly, it seems as though people could barely stand the new formula and new unfamiliar packaging. Perhaps one of Cokes advantages is that almost everyone has tasted it. People have grown up drinking it, theyre familiar with it. New Coke has been called by critics, the biggest marketing blunder ever. However another product that Coke made which became extremely popular was the diet form of Coca-Cola: Coke Zero. This was Coca-Colas second best selling beverage, right behind Coca-Cola itself.

Business Expansion 4 By leveraging technology, creating alignment across business units and achieving economies of scale, Coca Cola is able to operate with more efficiency. To maximize profits enables the company to enhance the business, to expand the business, allow business to take over another business, buy new machineries, and pay more dividends to the shareholders. Enhancing the business means to upgrade the business in a sense that a business buys new Computers, new office equipments, new furniture, expand the office, employee more labor etc. These six objectives are just not the businesses objectives but they provide the framework for the company's success. They achieve these goals very successfully by striving for carrying out against a crystal clear strategy for success, and by doing so with an unwavering commitment to quality. In 1978, Coca Cola became the only company that was allowed to sell packaged cold drinks in China. It invested more than $1.3 billion in the Chinese market, with an additional $2 billion more planned as part of its global vision. By 2020, the company wants to double its revenue and its bottlers. (Coca Cola, 2011) China's soft drinks market has maintained double-digit growth for more than 10 years. However, some experts predict growth may slow down in the future because of increasing market saturation. (Zhang, 2011)

In 2006-2010, sales of soft drinks in China, including soda, juice and bottled water, almost doubled to 270 billion yuan ($41.5 billion), according to Euromonitor International, a market research firm. (Zhang, 2011)

Business Expansion 5 John Farrell, vice-president in strategic planning at Coca-Cola, recognizes the competition in the Chinese market but he does not see it as a negative element. (Zhang, 2011)

"The great thing about China is it has a lot of competition which helps create the industry. When you are building non-alcoholic ready-to-drink beverages, which are commercial beverages, the more competition you have, the better, as far as developing industry growth in more consumer-participated, high-quality beverages," said Farrell, one of the creators of Diet Coke. (Zhang, 2011)

Coca-Cola has put a lot of effort into advertising in China and is heavily involved in China's festival celebrations such as those during Chinese New Year. It was also the first international company to sponsor both the Beijing Olympics and Shanghai World Expo.

Coca Cola is committed to local markets, paying attention to what people from different cultures and backgrounds like to drink, and where and how they want to drink it. The company reaches out to local communities it serves, believing that Coca Cola exists to benefit and refresh everyone it touches.

In the beginning, when only nine drinks a day were served, Coca Cola has grown to the worlds most known brand with more that 1.7 billion beverage servings sold each day. Each time a person reaches for a Coca Cola brand, the Company wants that choice to be exciting and satisfying each time.

Coca Cola Company has been able to employ various international market entry strategies to expand its business and remain profitable even under heavy global

Business Expansion 6 challenges. In China the company has realized constant growth with joint venture market entry methods, especially with government agencies. Coca Cola remains one of the most successful companies in the domestic and the international markets.

Business Expansion 7


(2011) The Coca Cola Company Heritage Timeline. Retrieved from www.heritage.coca-cola.com (2012) The Coca Cola Company. Retrieved from www.coca-cola.com Zhang Y. (2011) Coke to beef up China Expansion. Retrieved from www.europe.chinadaily.com.cn