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executive flew to Brussels yesterday to try to solve the growing public relations problem that
began a week ago when Belgians fell ill after drinking Coke.
M. Douglas Ivester, the chairman and chief executive of the Coca-Cola Company, arrived in the
Belgian capital to assure the public and Government officials that Coke's products were safe to
drink. But the company is being criticized as slow to respond to a crisis, one that increasingly
appears to be born of panic rather than reports of serious illness. At risk is the reputation of the
world's best-known brand.
''This is like the worst of all worlds for them,'' said Emanuel Goldman, a global consumerproducts analyst for Merrill Lynch. ''Coke is associated with purity. You go to a third-world
country where you're not sure of the water, and you drink Coca-Cola.''
Germany warned consumers yesterday to avoid any Coke products not manufactured in
Germany in case some from bottling plants in Belgium or France, where the problems began,
had crossed the border, Bloomberg Business News said.
Spain took stronger action, as regional health officials removed cans and bottles of imported
Coca-Cola products from stores. Coca-Cola Espana, the company's division in Spain, took out
full-page newspaper advertisements saying the products made in Spain ''have a full health
guarantee and pose no risk for consumers.''
The Spanish Health Ministry insisted that Coke products manufactured in Spain were safe to
drink, but the regional actions suggest that officials are not convinced that the problems in
Belgium have been eliminated. Meanwhile, Bloomberg also cited reports that the original illness
among Belgian schoolchildren who drank Coke might have been caused by some other food
contamination or something other than the defective carbon dioxide cited by Coke.
On Monday, the Belgian Government, already skittish after a dioxin scare over animal feed
helped defeat the Prime Minister last weekend, ordered Coca-Cola to recall all its products. More
than 50 people, including 31 schoolchildren, had complained of headaches, nausea and vomiting
after drinking Coke the previous week. The company said soon afterward that it had traced the
problems to two bottling plants, one in Antwerp and the other in Dunkirk, France.
On Tuesday, the Government of Luxembourg imposed its own ban, and health officials in France
told Coke to recall all canned soft drinks produced in Dunkirk. The Netherlands also ordered a
recall of any Coke products that had been distributed through Belgium.
Belgium and France have lifted the ban on most Coke products but not on Coca-Cola, Sprite and
Fanta -- the company's biggest sellers. France has also asked Coke to provide more data that
flawed carbon dioxide caused the problems at the Antwerp plant and that a substance on wooden
pallets used to transport cans of Coke was at fault in the bottling plant in Dunkirk, whose
products show up across Europe.
Rob Baskin, a spokesman for Coca-Cola in Atlanta, its home base, said research by the company
''indicates that consumers understand the situation and are acting far less irrationally than some
of the press reports might seem to indicate.'' He added that products made in Belgium were rarely
shipped to Spain.
Mr. Goldman of Merrill Lynch said: ''You want things pan-European, but clearly there's a
downside. The good news is, the products go all over. The bad news is, the products go all over.''
Absent reports of serious illness, Coke's biggest problem becomes isolating the public relations
damage. ''Their worry is image, and a spillover to other countries,'' Mr. Goldman said. ''More
than anything, the company needs to make sure people view this as an aberration.''
Mr. Baskin said some of the recalled cans and bottles were being destroyed. ''There are some
markets where we've been asked to take product off the shelf and destroy it, and that's what we're
doing,'' he said. ''In other markets, we've been asked not to ship product.'' He said he did not
know which policy was in practice in which markets. He added that the company would
reimburse anyone whose doctor indicated that an illness was caused by drinking Coca-Cola. He
said he did not know if anyone had been reimbursed.
Coca-Cola Enterprises, the giant Coke bottler that controls production in Belgium, Luxembourg
and the Netherlands as well as most of France, has been noticeably silent. Several telephone
messages left for a company spokeswoman at the Atlanta headquarters were not returned this
week, and statements have been almost entirely limited to Coca-Cola employees.
Perhaps signaling a shift, Dominique Reineiche, the president of the bottler's French unit, held a
news conference yesterday in Paris. ''We still haven't estimated the cost to us in lost sales, but it
will be considerable,'' Ms. Reineiche said, according to The Associated Press.
Coca-Cola Enterprises, spun off as a public company in 1986, is about 40 percent owned by
Coca-Cola and has been acquiring bottlers rapidly in recent years. Coca-Cola makes the
concentrate that is used to make soft drinks, but the drinks are produced and distributed by CocaCola Enterprises and other bottlers.
Mr. Baskin, the Coke spokesman, said he could not comment on what Coca-Cola Enterprises
was doing. But he noted that ''it's one system, and the trademarks are the property of the CocaCola Company.''
Several analysts said it was appropriate for Coca-Cola to take the lead in managing the crisis.
''You have to come out with one voice for the Coke system,'' said Bill Pecoriello of Sanford C.
Bernstein & Company.
Still, there may have been an early breakdown in communications between the two companies
that caused a delay in the corporate response.
Yesterday, shares of Coca-Cola fell $1.125, to $63.4375, and shares of Coca-Cola Enterprises
slipped $1.25, to $32.125.
Coca-Cola Enterprises will bear the brunt of expenses associated with the recall. ''They have
indicated there will be charges against earnings,'' Mr. Goldman said, adding that he did not know
the amount. Coca-Cola's earnings are unlikely to be affected unless the ban is prolonged.
Mr. Pecoriello said Coca-Cola would have to move into high marketing gear once its products
are for sale everywhere again. ''The business is still very seasonal in Europe, but this is the peak
season,'' he said. ''These are very important months for the company.''
Photos: Shoppers walked by shelves empty of Coca-Cola products this week at a supermarket in
Brussels. On Monday, the Belgian Government ordered the company to recall all its products
because of health concerns. (Associated Press)(pg. C2); M. Douglas Ivester, chief of Coca-Cola
Company, flew to Brussels yesterday. (Don Hogan Charles/The New York Times)(pg. C1)
International business is a very broad term to illustrate. In general words
international businessmeans doing business out of national boundaries through
export-import, licensing,multinational firms, totally owned facilities etc.First of all we
have adorned our report with a great overview on international business througha
well known company, The Coca-Cola Company. In the very first beginning an
introduction tothe report has been prepared for showing a clear overview to cocacola company. Then wehave written a procedure section. In the next part we also
tried to show the illustratedoverview on the company covering some important
strategy about Coca-Cola Co. Ltd. Whilepreparing this part we have researched on
the acquisition of the company, revenue earned,stock, lobbying system, bottlers of
the company. Moreover we have a great analysis on theconsumer relation of cocacola, civil rights, probable competitors in the international market,advertising
system that the company applies to overcome the different difficult situation
andcompetition. After that a proper analysis has been made on the company
through a very wellknown system known as SWOT analysis. We have also shown
some ingredients name andmanufacturing system of a product of The Coca-Cola
Company. After researching on theproblems and benefits, a recommendation on the
problems has been given in the last part ofthe body of the report. In this report
there are some words that may be difficult inunderstanding at the first sight. We
have prepared a glossary section for that part as well as anappendix. The
information sources are also provided in the bibliography section.In this total report
we have focused on the major key requirements of our teacher. We havetried heart
and soul to make this assignment informative. When preparing this assignment
wehave also focused on better presentation and got much cooperation from our
honorable courseteacher Mrs. Bilkis Aktar through her precious lectures and
advices. So, we would like to bethankful to our honorable course teacher for being
so cooperative and helpful to us.
One of The Coca-Cola Companys headquarters buildings inAtlantaThe Coca-Cola
Company (NYSE: KO) is an Americanmultinational beverage corporation and
also other products, which include Capri Sun, Friutiser, monster Appletiser and some sparkling
fruit juices.
The strategic management policy of the Coca-Cola Company focused toward imprisoning the
national and international market for the purpose of quality improvement, developing strength in
the international market at the same time holding accountability of environmental strategy on the
ground of business operations, performance management and developing environmental standard
in an international scale. There is a rapid change in the economic environmental structure over
the years; in the year 2005 there was high marketing strategy that was why distribution of
products was being done through advertising campaign. This got success and yield to 35%
increase in international sales force in the year 2006 while in the preceding year sale strategy was
included through promotion techniques in the international market which also yield to an
increase in sales with 39.5% more than the previous year.
Globalization:
As defined by McGrew (2014) in the general scale globalization is a way of eliminating the
difference between different countries, continent and
18 economy so as to make it easier to trade and conduct transactions within and between every
nations there by putting the whole world under the same umbrella called GLOBALIZATION.
This process has been going on over a century particularly in the 1945, but the process has been
moving on a slow rate until in the last 20 year when it became much more faster due to
development and order forces which will be discuses letter on.
Brief history of Globalization
According to James and Peck (1998) Globalization started in the 17
th
century with the inventions of new ships which gave Europeans avenue to trade with other
centuries on a large scale, comparing to agriculture trade was still a tiny part of the economy as
of then. With the recent development and innovations in transport sector such as rails, steam
ships and Airplanes. These developments contributed hugely in the sense it shrinks the world and
make it more convenient and faster for people to travel across the world and carry out trade, with
the presence of the Internet it makes it even much more easier to communicate internationally.
Decline in barriers to trade between different countries increase international trade that
makes the worlds GDP
increasing in a steady rate.
Benefits of Globalization
Increase in economic integration can be seen to be on of the major benefit gain from the
umbrella term Globalization as asserted by Jeffrey (2003). Economy used to be self-contained in
the sense that import and export are mostly independent but rather now with integration between
countries
19 economies are closely dependent in the sense that importing raw materials
for a production. This is why recession in an economy of ones country affect
the others. However, consumer markets are considered to be more important in the economy, as
there is convergence globally in customer tastes and purchasing habit. Hence, businesses operate
and productions are mostly on global preference example is CocaCola. Companys operating in that scale are
known as multinational companies, these companies have been existing in small number until
recently with the advance in technology and they have brought a great positive change to world
GDP as mentioned earlier.
Factors affecting Globalization
A later study (Jeffrey, 2003) shows that fluctuations of monetary capital exchange between
countries: This has to do with the policies and regulation concerning transfer of funds between
different countries, with this barriers in some countries it makes transactions unattractive in the
region but with
free movement of funds like in the 90s huge amount of funds enter United
Kingdom form the United State of America. This is what is known as deregulation, which is also
a factor that affects globalization. Its started in th
e UK in the 80s when many policies and rules
regarding foreign business ownership where removed and privatization took place, this prompt
foreign investors to carry out their businesses across the world. A clear example is the one that
took place in the UK, many of their utilities which used to be own by the government are now
owned by local and foreign investors.
20 Rapid development in technological and communication sector is another major driving force
of globalization, this development made information open and accessible to everyone and
anywhere. This gives investors all over the world a chance to search and take chance of new
business opportunities. This is visible due to the presence of faster and cheaper transportation
medium. Transportation medium is now much faster and cheaper, aside from airplanes,
containerisation that was developed in the 50s
was a major drive in transporting heavy and huge goods. However, there was a continuous
enhancement to shipping technology ever since.
Extent of Globalization on Coca-Cola Company
According to Coca-Cola Companys report (2006)
The name Coca-Cola is one of the must popular brands in the world and the company is ranked
the largest company in beverages industry today. This is so because the Coca-Cola Company
continuer to gain growth due to the prompt expanding across the world, the Company operate
presently in more than 200 countries with
84,000 suppliers this makes 70% of the companys turn over to be from other
foreign country. This is possible due to globalization; John Pemberton founds the company in
the 1880s in United State of America with a good reputation
of consistency and high quality, in the early stage storekeepers requested for an attractive
package with brand recognition. The Coca-Cola Company focus and meets those requests with a
brand name Coca-Cola and a red and white attractive .