C o laC o c a

P R E SE N E T E D T O :
M r. A SI F I Q B A L
P r esen ted
b y:
H A FI Z SA L M A N A H M E D
M B A EXEC U T IV E
R O L L N O : -10314
M BE
Introduction:
1: History of Coca-Cola:
Coca-Cola Enterprises was 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. 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.
The Coca-Cola bottling system continued to operate as independent,
local businesses until the early 1980s when bottling franchises
began to merge. 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 adjusted prices 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 at the year-end. Presently The Coca-
Cola Company is the largest soft drink company in the world. Every year
800,000,000 servings of just "Coke" are sold in the U.S alone.

Coke History in Pakistan

“56 Years of dedicated service”

The Coca-Cola Company began operating in Pakistan in 1953. Coke, Fanta

and Sprite are the brands with whom Coca-Cola is operating in Pakistan. The
Coca-Cola System in Pakistan operates through eight bottlers, four of which
are majority-owned by Coca-Cola Beverages Pakistan Limited (CCBPL). The
CCBPL plants are in Karachi, Hyderabad, Sialkot, Gujranwala, Faisalabad,
Rahimyar Khan, Multan and Lahore. The remaining two plants, independently
owned, are in Rawalpindi and Peshawar. The Coca-Cola System in Pakistan
serves 70,000 customers/retail outlets. The Coca-Cola System in Pakistan
employs 1,800 people working constantly for the company. During the last
two years, The Coca-Cola Company in Pakistan has invested over $130
million (U.S) and coke has successfully provided 56 years of dedicated
service to its customers in Pakistan. Since the beginning of Coke Company
the firm has been continuously changing its slogans and that’s a very
creative idea to get the attentionof the customers. Here we would like to
include some of the popular slogans of coke since the coke journey started.
• 1886 Drink Coca-Cola
• 1908 Get the genuine
• 1923 Enjoy thirst
• 1934 When it's hard to get started, start with a Coca-Cola
• 1942 The only thing like Coca-Cola is Coca-Cola itself
• 1956 The friendliest drink on earth
• 1963 Things go better with Coke
• 1993 Always. Coca-Cola
• 2001 Life is Good
• 2003 Jo Chaho Ho Jaye Coca Cola Enjoy
• 2009 Khaa Ley Pee Ley Gee Ley Coca Cola

2: MISSION AND VISION STATEMENT

OUR MISSION:
Mission statement is a statement of organization’s purposes that what it
wants to achieve. Our Roadmap starts with our mission, which is lasting. It
declares our purpose as a company and serves as the standard against
which we weigh our actions and decisions.
• To refresh the world...
• To inspire moments of optimism and happiness...
• To create value and make a difference.
• Customer is king; Customer demand drives everything we do.
• Brand Coca Cola is the core of our business.
• We will serve consumers a broad selection of the nonalcoholic
ready-to–drink beverages they want to drink throughout the day.
• We will be the best marketers in the world.

The ultimate objective of our business strategy is to increase volume,

expand our share of worldwide nonalcoholic beverages sale and to maximize
our long-term cash flows. We keenly focus on enhancing value for our
customers and helping them grow their beverage business. We strive to
 understand each customer’s business and needs, whether that customer is a
sophisticated retailer in a developed market or a kiosk owner in an emerging
market.
Ultimately, our success in achieving our mission depends on our ability to
satisfy more of their beverage consumption demands and our ability to add
value for customers. We achieve this when we place the right products in the
right markets at the right time. The basic proposition of our business is
simple and solid that is we want to bring refreshment, value, joy and fun to
all our consumers. For that we strongly believe to protect our brands,
particularly Coke.
OurVision:
Our vision serves as the framework for our Roadmap and guides every
aspect of our business by describing what we need to accomplish in order to
continue achieving sustainable, quality growth.
• People: Be a great place to work where people are inspired to be the best
they can be.
• Portfolio: Bring to the world a portfolio of quality beverage brands that
anticipate and satisfy people's desires and needs.
• Partners: Nurture a winning network of customers and suppliers, together
we create mutual, enduring value.
• Planet: Be a responsible citizen that makes a difference by helping build
and support sustainable communities.
• Profit: Maximize long-term return to shareowners while being mindful of
our overall responsibilities.

3: Personality Profile of Leaders at the

organization:

Muhtar Kent, who was named by The Coca-Cola Company today as its next
chief executive officer - exactly a year to the day the Turkish-born 55-year-
old was appointed president and chief operating officer -will need to squarely
confront three critical issues when he takes over from the current CEO, E.
Neville Isdell, in July 2008. Taken together, how he deals with these issues
will determine whether Coke, which has a market cap of $144 billion and
71,000 employees worldwide or its archrival PepsiCo - whose market cap is
$130 billion, and 168,000 employees globally, One issue concerns his
personal ethics. In 1996, Kent - who's worked for Coke on and off since 1978
-- was judged guilty of insider trading in civil court in Australia, where he held
a senior-level position at Coca-Cola Amatil Ltd.a regional bottler based in
Sydney. He was required not only to give up the profit he made of $324,000,
but also pay $30,000 to cover the cost of an investigation by the Australian
Securities Commission. Kent has since claimed that his then financial adviser
sold short some 100,000 shares of the company on Kent's behalf a mere
hours before the profit announcement. In the event, the Australian
controversy continued to dog him because two years later - in 1998 - Kent
resigned from Coca-ColaAmatil-Europe.

Kent has said that there was no wrongdoing on his part in Australia. He told
reporters who'd asked about the timing of his stock sale that it was a "bad
coincidence." Isdell - who was on the Australian company's board at the time
of the Kent situation - has said that the episode "was a small mistake," and
that "We need to consign it to history." And a Coke spokesman said not long
ago that the incident did not constitute insider trading or a violation of
company rules. Nevertheless, Coke's critics are likely to continue to ask: If
there was no guilt involved, why return the huge profit and also pay a fine?

Kent has been making several public appearances of late, highlighting the
linkages between the business community in a world of galloping
globalization, and consumer constituencies. Isdell has repeatedly
characterized Kent as an effective spokesman and good will ambassador for
the company - not an undeserved characterization in view of Kent's
congenial and emollient personality.The second issue that will most certainly
hound Coke - and Kent - concerns globalization. For many critics in
developing countries, Coke is a symbol of a multinational corporation that
has benefited from globalization, generally defined as the free flow of capital,
goods, services, people and ideas across increasingly porous borders and the
anti-Coke campaign is demanding that Coke must admit liability for the long-
term consequences of exposure to toxic waste and pesticide-laden
beverages in India. None of these proposed measures is cheap, and it's
doubtful if the critics are truly seeking a practical remedy. The battle has
become political.Kent's origins in the developing world could certainly help in
dealing with the Indian critics, not the least because Turkey and India have
had historical trade and political ties. If Kent is able to alleviate - if not
eliminate - the anti-Coke movement in countries such as India, CEO Isdell
would certainly be a grateful beneficiary.From Isdell's perspective, a smooth
transition to the next generation of Coke's leadership can be a major legacy.
After all, there hasn't been a smooth transition since 1997, when then CEO
Robert Goizueta died unexpectedly. CEOs such as M. Douglas Ivester and
Douglas Daft came and went without putting in place a secure transition
plan. Neither man distinguished himself at Coke, nor, moreover, neither was
fully embraced by Coke board.The fact that Coke's board trusts Kent was
evident when it named him president and COO in December 2006. He filled a
position that has been vacant since 2004. That was when the occupant,
Steven Heyer - formerly with Turner Broadcasting - left the company after
being passed over for the CEO's job when Douglas Daft unexpectedly
resigned. The job went to Isdell, a Coke veteran who'd already retired and
was living in Barbados.
The Board believes Neville and Muhtar have both a shared vision and a solid
working relationship," James D. Robinson III, chairman of the Board
Committee on Directors and Corporate Governance, said at the time. "They
represent a strong team that will drive growth and shareholder value."The
team will be in place even after Kent becomes CEO in July next year because
Isdell has been asked by Coke's board to stay on as chairman until April
2009, presumably to ensure a smooth transition and to oversee Kent's
performance.Kent's appointment as the next CEO at Coke - which sells
nearly 400 beverage brands in 200 countries, at a rate exceeding 1.3 billion
servings each day - raises a third issue, that of growth and competition in an
increasingly tough global environment for the beverage industry. Kent is
surely conscious that before his mentor, Isdell, bows out of Coke for the
second time, he wants to implement his "Manifesto for Growth." The plan
calls for boosting Coke's core carbonated soft drink business, particularly in
the United States and Western Europe, where sales have been sluggish.
Isdell wants the company to focus more on diet and light drinks. He also
wants accelerate the development of new drinks that appeal to changing
tastes and health-conscious consumers. Coca-Cola has been known to prize
brand loyalty - and executive loyalty. Although he's had a few forays into the
corporate world outside Coke, Kent returned to Coke in May 2005 as
president and chief operating officer of the North Asia, Eurasia and Middle
East Group, and was named president, Coca-Cola International in January
2006. After joining Coke in his native Turkey in 1978, and has held a variety
of marketing and operational roles through his career. In 1985, he was
appointed general manager of Coca-Cola Turkey and Central Asia. From
1989 to 1995, Kent was president of the East Central Europe Division and
senior vice president of Coca-Cola International, overseeing 23 countries.
From 1995 to 1998, Kent was managing director of Coca-Cola Amatil -
Europe, with bottling operations in 12 countries. From 1999 until his return to
the Coca-Cola Company, he was president and chief executive officer of Efes
Beverage Group, , Kent led the Efes group to triple digit revenue growth and
a 250 percent increase in market capitalization. Kent holds a Bachelor of
Science degree in Economics from Hull University, England and a Master of
Science degree in Administrative Sciences from London City University. His
rival, Indra Nooyi born in the southern city of Chennai, India, and holds
Masters degrees from Yale University and the elite Indian Institute of
Management. Before joining Pepsi as senior vice president of strategic
planning 16 years ago, Nooyi - who became Pepsi's CEO in October 2006 -
held strategy-oriented executive positions at Asea Brown Boveri, Motorola
Inc. and the Boston Consulting Group.Nooyi has driven the company's stock
up 22 percent in the 12 months through December 4, near a 52-week high.
Last May, the company increased its dividend 25 percent and boosted its
share buyback goal to $4.3 billion from $3.3 billion. Revenue is expected to
rise more than 10 percent this year.So it's going to be a lively competition
between the Indian maharani and the Turkish pasha. Stay tuned for the
Battle of the Beverages.

4: The structure of Coca-Cola Company

DEPATMENTALIZATION, SPAN OF CONTROL, FORMALIZATION AND
CHAIN OF COMMAND

➢ Tribal structure of Flight Centre

Tribal’ organizational structure that

facilitates easy replication and fuels organic growth. The Brisbane-based
travel agency is organized into families, villages and tribal countries.
➢ Division of labor

• Subdivision of work into separate jobs assigned to different people

• Potentially increases work efficiency
• Necessary as company grows and work becomes more complex

➢ Forms of work coordination

• Informal communication
– sharing information
– High media-richness
– Important in teams
• Formal hierarchy
– Direct supervision
– Common in larger firms
– Problems - costly, slow, less popular with young staff
• Standardization
– Formal instructions
– Clear goals/outputs
– Training/skills

➢ Elements of organizational structure

➢ Span of control
• Number of people directly reporting to the next level

• Assumes coordination through direct supervision

• Wider span of control possible when

– used with other coordinating methods
– Subordinates’ tasks are similar
– Tasks are routine

• Flatter structures require wider span (if same number of people in the firm)

➢ The decentralization of Coca-Cola

 Coca-Cola decentralized its organizational structure by
cutting half of the staff at its Atlanta headquarters and moving the regional
chieftains closer to their local markets. In India, decision making has been
moved further down to different areas of that diverse country.

➢ Forces for decentralization

Centerlization:

• Organizational crises
• Management desire for control
• Increase consistency, reduce costs
Decentralizations
• Complexity-size, diversity
• Desire for empowerment

➢ Mechanistic vs. organic structures

Mechanistic Organic
• High • Low
formalization formalization
• Narrow span of • Wide span of
control control
• High • Low

➢ Effects of departmentalization
• Establishes work teams and supervision structure
• Creates common resources, measures of performance, etc
• Encourages informal communication among people and subunits

➢ Functional organizational structure

Organizes employees around skills or other resources (marketing,
production)

➢ Divisionalised structure
Organizes employees around geographic areas,
products or clients

➢ Features of team-based structures

• Self-directed work teams
• Teams organized around work processes
• Very flat span of control
• Very little formalization
• Usually found within divisionalised structure

➢ Network organizational structure

➢ Types of organizational technology

High Assembly Engineering
Analyzability Line Projects

Skilled Scientific
Trades Research
➢ Org environmentSTABLE
Low DYNAMIC
and structure
Analyzability
LOW VARIETY HIGH VARIETY

• High rate of • Steady

COMPLEX
change SIMPLE
conditions,
• Use organic Predictable
structure change
• Use
 • Many elements • Few
(such as environmental
Stakeholders) Elements
• Decentralize • Less need to
decentralize

➢ Org environment and structure (cont)

DIVERSE INTEGRATED
• Variety of • Single product,
products, client,
Clients, locations Location
• Divisional form • Don’t need
aligned
HOSTILE divisional form
MANIFICIENT

HOSTILE MANIFICIENT
• Competition and • Plenty of
resource resources and
Scarcity Product demand
• Use organic • Less need for
structure for organic

5: Challenges and issues:

Despite the fact that Coke leads the global beverage market, in Pakistan the
situation has been quite contrary. Here PEPSI leads the market with almost
67% of the total market share whereas Coke operates in the remaining 33%
which too plays host to numerous other local and foreign brands. Both
leading brands
As any company in a highly competitive environment faces, Coca-Cola has
faced many organizational problems. The biggest threat faced by this
company is the entry of many new, strong competitors in the soft-drink and
related beverages industry. For example, PepsiCo is one of Coca-Cola's
toughest competitors that offer the same range of products at the same
prices. This threat is significant because it cannot be eliminated just be
producing a better quality product at a lower price."Target the same market
of customers between the ages of 13-25 years. Since long Coke has been
trying to know its customers and live up to its reputation of leading brand,
yet more than 50 years after its launch it still is number two in the race.
While PEPSI tingles the taste buds of the “Generation Next” Coke wants to
focus on the mindset of its customers in terms of their likes and dislikes,
their shopping behavior etc. Acidity and tooth decay numerous court cases
have been filed against the Coca-Cola Company since the 1940s alleging
that the acidity of the drink is dangerous. In some of these cases, evidence
has been presented showing Coca-Cola is no more harmful than comparable
soft drinks or acidic fruit juices. Frequent exposure of teeth to acidic drinks
affects the likelihood of tooth decay through caries development.
High fructose corn syrup:
It was rapidly introduced in many processed foods and soda drinks in the US
over the period of about 1975–1985. Since 1985 in the U.S., Coke has been
made with high fructose corn syrup instead of sucrose to reduce costs. One
of the reasons this has come under criticism is because the corn used to
produce corn syrup often comes from genetically altered plants. Some
nutritionists also caution against consumption of high fructose corn syrup
because of possible links to obesity and diabetes. High fructose corn syrup
has been shown to be metabolized differently than sugar by the human
body. This causes problems with Coke's distribution and bottling network,
because specific franchise districts are guaranteed an exclusive market area
for Coke products. Mexican-made Coca-Cola may often be found for sale in
stores catering to the Hispanic immigrant community. Kosher for Passover
Coke is also made with cane sugar, rather than corn syrup, due to the special
dietary restrictions for observant Jews. Some Orthodox Jews do not consume
corn during the holiday. Bottled with yellow caps, this variant can be found in
some areas of the US
Before and during World War II:
Coca-Cola adopted an apparent policy of ignoring the practice
of eugenics and anti-Semitism by Nazi Germany
When the United States entered World War II, Coke began to represent its
product in the US as a patriotic drink by providing free drinks for soldiers of
the United States Army, thus allowing the company to be exempt from sugar
rationing.
The United States Army permitted Coca-Cola employees to enter the front
lines as "Technical Officers" when in reality they rarely if ever came close to
a real battle. Instead, they operated Coke's system of providing
refreshments for soldiers, who welcomed the beverage as a reminder of
home. As the Allies of World War II advanced, so did Coke, which took
advantage of the situation by establishing new franchises in the newly
occupied countries?
The popularity of the drink exploded as US soldiers returned home from the
war with a taste for the drink

Philippine unfair competition case:

On January 21, 2008, the Philippines National Bureau of
Investigation per search warrant issued by Judge Reynaldo
Ros, Manila Regional Trial Court Branch 33, raided three warehouses owned
by Coca-Cola soft drink products distributors in Valenzuela, Caloocan and
Meycauayan, Bulacan, due to hoarding imported bottles of a competitor, RC
Cola. Asia Wide Refreshment Corporation (AWRC), makers of RC Cola, filed
the complaint for unfair competition
Pesticide use:
In 2003, the Centre for Science and Environment (CSE), a non-governmental
organization in New Delhi, said aerated waters produced by soft drinks
manufacturers in India, including multinational giants Pepsi co and Coca-
Cola, contained toxins
including lindane, DDT,malathion and chlorpyrifos — pesticides that can
contribute to cancer and a breakdown of the immune system.
Water use:
In March 2004, local officials in Kerala shut down a $16 million Coke bottling
plant blamed for a drastic decline in both quantity and quality of water
available to local farmers and villagers.
Guatemala:
In the 1970s, a Coca-Cola franchised bottling plant in Guatemala suffered a
spate of mysterious murders of union-affiliated employees leading to the
non-renewal of the bottling plant's license in 1981. "Coca-Cola found a new
owner, and following repair work and construction on the plant, work
resumed at the Guatemala bottling plant on March 1, 1985." [39] The
Company's decisions were made after pressure from several groups,
including a shareholder resolution filed in 1979
Shareholders resolution attempt (2002):
In 2002, Christian Brothers Investment Services, Inc. submitted, along with
other co-filers, a shareholder resolution that called for Coca-Cola to adopt a
code of conduct on bottling practices and employee relations. Problems in
Colombia were cited, but the proposal called for "clear standards for its
suppliers, vendors and bottlers."[44] The resolution received support from
Coca-Cola unions in Colombia, Guatemala, Zimbabwe, the Philippines, and
the United States.
Israel and Middle East controversies:
In 1949, Coca-Cola attempted to open a plant in Israel but was refused a
permit. Eager to avoid the Arab League boycott and sell to the much larger
Arab market, Coca-Cola was content not to sell in Israel. In 1961 the issue
came up again when an Egyptian civil servant mistook Amharic writing on a
Coca-Cola bottle for Hebrew, and accused Coca-Cola of doing business with
Israel. The manager of Egypt's Coca-Cola bottling operations quickly
informed the press that Coca-Cola would never do business with Israel;

Boycotts:
The boycott example which started in Ireland has continued to spread across
the world, with the National Union of Students in Britain voting to support the
boycott in April 2005.UNISON, the largest trade union in the UK, also voted to
support the boycott at its 2004 National Delegate Conference. ECOSY, the
European Young Socialists, a federation of youth wings of all the
mainstream socialist and social democratic parties in the EU, voted to
support the boycott in March 2005 following a motion from the Irish Labor
Youth delegation. Campuses and labor and trade unions in the United
States, Italy, France and Canada, amongst others, are also campaigning for the
boycott to spread. The University of Michigan and New York
University banned Coke products from their campuses, bringing the number
to over 23. Several US universities have switched to Pepsi

6: Our Winning Culture

Our Winning Culture defines the attitudes and behaviors that will be required
of us to make our 2020 Vision a reality.
Our values serve as a compass for our actions and describe how we behave
in the world.
• Leadership: The courage to shape a better future
• Collaboration: Leverage collective genius
• Integrity: Be real
• Accountability: If it is to be, it's up to me
• Passion: Committed in heart and mind
• Diversity: As inclusive as our brands
• Quality: What we do, we do well

Focus on the Market

• Focus on needs of our consumers, customers and franchise partners
 • Get out into the market and listen, observe and learn

• Possess a world view

• Focus on execution in the marketplace every day

• Be insatiably curious

Work Smart
• Act with urgency
• Remain responsive to change
• Have the courage to change course when needed
• Remain constructively discontent
• Work efficiently

Act like Owners

• Be accountable for our actions and inactions
• Steward system assets and focus on building value
• Reward our people for taking risks and finding better ways to solve
problems
• Learn from our outcomes -- what worked and what didn’t

Be the Brand
• Inspire creativity, passion, optimism and fun

7: Our Competitive strategies

The Coca-Cola Company is one of the largest, most successful and most
widely recognized corporations in existence. Coca-Cola is a dominating force
in the beverage industry and sets a very high standard of
competition. Research shows that its trademark is recognized by over 94%
of the world’s population. There are many factors contributing to Coca-Cola’s
success, however, we believe that their key success factors are Marketing,
Innovation, and Globalization.
Marketing:
Coca-Cola is seen as one of the founding fathers of the modern day
marketing model. They were among the pioneers of advertising techniques
and styles used to capture an audience. They were also one of the first
companies to offer a gimmick with their product, this being a mini yo-yo. It
was around 1900 when Coca-Cola began presenting their signature drink as
a delicious and refreshing formula. This slogan has been repeated for over
the last 100 years selling Coke all over the world. Through its intense
marketing campaigns, Coke has developed an image that is reflected in what
we think of when we buy Coke and what we associate with drinking
Coke. This image has been subconsciously installed in our brain by the
advertising campaigns that show Coca-Cola associated with “good times.”
Innovation:
Coca-Cola has been able to survive and grow in an ever-changing market
because of its ability to systematically innovate and deliver new products. In
the late 90s the company, typically showing earnings growth of 15-20% per
year, turned in three straight years of falling profits. It was apparent that the
market was changing and in order to keep up with these changes, Coca-Cola
had to move from a single core product to a total beverage company. This
was a major change because their past success was base on having one
successful core product. Coca-Cola began to employ a strategy referred to
as “play to win innovation.” The company began operating in a
decentralized environment that was unfeasible in previous years. Now Coca-
Cola offers nearly 400 different products in and is still dominating the
beverage industry. This is made possible by the company’s ability to
innovate and adapt to changing markets.
Globalization:
Today’s big business takes place on a global scale, and Coca-Cola is no
exception. Technology is continually changing business, and these constant
changes have been making it more feasible and profitable for businesses to
expand their operations globally in order to serve all different types of
diverse markets around the world. This global view is reflected in Coke’s
recent “I’d like to teach the world to sing” commercial. Coca-Cola is taking
advantage of the large revenue opportunities made possible by participating
in a global market and now offers products in 200 countries around the
world.

8: Stakeholders
Who are our stakeholders?
Our many stakeholders include all those who are most affected by or who
most affect the way we do business. Our stakeholder research has also
helped us to refine our future strategy on social and environmental issues.
On each key issue we include ‘Next Steps’ – the actions we’ll take in the next
year to ensure that our business continues to make a positive impact.

Since publishing our last Corporate Responsibility Review in 2006, we have

conducted several feedback sessions with many internal and external
stakeholders. Our stakeholders include shareowners, associates, bottling
partners, governments, NGOs, suppliers, customers, and consumers. We
have used their feedback to help shape the report and our website.
Following are the main areas noted for improvement from these various
stakeholders:
• Better

demonstrate the

integration of

corporate

responsibility

into business

strategy

• Explain

The Coca-

Cola Company

franchise

system-bottlers

and the Company

• Align performance with clearly articulated internal and external standards

or frameworks

• Include more third-party input and feedback

• Balance reporting-include the good and the bad

How do we engage our stakeholders?

We regularly engage with our main stakeholders as shown in Diagram
 In addition, we
carried out specific
research in March
2007 to identify the
main areas of
concern for our
stakeholders. This
involved a series of
focus groups with
consumers aged 18
and over and with
employees of both
CCE and CCGB. It
also included
interviews with
customers, non-
governmental
organizations and
the media.

Financial Overview
Unit Case Data
Year Ended 200
2008 2007 2006 2004
December 31, 5

Unit Case
Volume (in 23.7 22.7 21.4 20.6 19.8
billions)

Selected Financial Data

Year Ended 2005
2008 20071 20062 20043,4
December 31, 3
(in millions except per share data)

SUMMARY OF OPERATIONS
Net operating 28,85 24,08 23,10
revenues
$31,944 $
7
$
8
$
4
$21,742

Cost of goods 11,3 10,40 8,19

8,164 7,674
sold 74 6 5

20,5 18,45 15,92 14,9

Gross profit 14,068
70 1 4 09
Selling, general
and 11,7 10,94 8,73
9,431 7,890
administrative 74 5 9
expenses
Other operating
350 254 185 85 480
charges

Operating 8,44 6,08

7,252 6,308 5,698
income 6 5
Interest income 333 236 193 235 157
Interest
438 456 220 240 196
expense
Equity income
(874) 668 102 680 621
(loss)—net
Other income
(28) 173 195 (93) (82)
(loss)—net
Gains on
issuances of
— — — 23 24
stock by equity
investees

Income before 7,43 6,69

7,873 6,578 6,222
income taxes 9 0
1,63 1,81
Income taxes 1,892 1,498 1,375
2 8

Net income $5,807 $5,981 $5,080 $4,872 $4,847

Average shares 2,31 2,39
2,313 2,348 2,426
outstanding 5 2
Average shares
outstanding 2,33 2,39
2,331 2,350 2,429
assuming 6 3
dilution

PER SHARE DATA

Basic net
$2.51 $2.59 $2.16 $2.04 $2.00
income
Diluted net
2.49 2.57 2.16 2.04 2.00
income
Cash dividends 1.52 1.36 1.24 1.12 1.00
Closing market
45.2 40.3
price on 61.37 48.25 41.64
7 1
December 31

TOTAL MARKET
VALUE OF 104,6 142,2 111,8 95,50
COMMON $ $ $ $ $100,325
83 89 57 4
STOCK

BALANCE SHEET DATA

Cash, cash
equivalents and
current $4,979 $4,308 $2,590 $4,767 $6,768
marketable
securities
Property, plant
8,32 5,83
and equipment 8,493 6,903 6,091
6 1
—net
Depreciation 993 958 763 752 715
Capital 1,96
1,648 1,407 899 755
expenditures 8
40,5 43,26 29,96 29,4
Total assets 31,441
19 9 3 27
2,78 1,15
Long-term debt 3,277 1,314 1,157
1 4
Shareowners' 20,4 21,74 16,92 16,3
15,935
equity 72 4 0 55

NET CASH
PROVIDED BY
$7,571 $ 7,150 $5,957 $6,423 $5,968
OPERATING
ACTIVITIES

9: Success of coca cola and management

gimmicks:
The Coca-Cola Company is one of the largest, most successful and most widely
recognized corporations in existence. Coca-Cola is a dominating force in the beverage industry
and sets a very high standard of competition. Research shows that its trademark is recognized by
over 94% of the world’s population. There are many factors contributing to Coca-Cola’s success,
however, we believe that their key success factors are Marketing, Innovation, and Globalization.
Marketing:
Coca-Cola is seen as one of the founding fathers of the modern day marketing
model. They were among the pioneers of advertising techniques and styles used to capture an
audience. They were also one of the first companies to offer a gimmick with their product, this
being a mini yo-yo. It was around 1900 when Coca-Cola began presenting their signature drink
as a delicious and refreshing formula. This slogan has been repeated for over the last 100 years
selling Coke all over the world. Through its intense marketing campaigns, Coke has developed
an image that is reflected in what we think of when we buy Coke and what we associate with
drinking Coke. This image has been subconsciously installed in our brain by the advertising
campaigns that show Coca-Cola associated with “good times.”

Innovation:
Coca-Cola has been able to survive and grow in an ever-changing market because
of its ability to systematically innovate and deliver new products. In the late 90s the company,
typically showing earnings growth of 15-20% per year, turned in three straight years of falling
profits. It was apparent that the market was changing and in order to keep up with these
changes, Coca-Cola had to move from a single core product to a total beverage company. This
was a major change because their past success was base on having one successful core
product. Coca-Cola began to employ a strategy referred to as “play to win innovation.” The
company began operating in a decentralized environment that was unfeasible in previous
years. Now Coca-Cola offers nearly 400 different products in and is still dominating the
beverage industry. This is made possible by the company’s ability to innovate and adapt to
changing markets,

Globalization:
 Today’s big business takes place on a global scale, and Coca-Cola is no
exception. Technology is continually changing business, and these constant changes have been
making it more feasible and profitable for businesses to expand their operations globally in order
to serve all different types of diverse markets around the world. This global view is reflected in
Coke’s recent “I’d like to teach the world to sing” commercial. Coca-Cola is taking advantage
of the large revenue opportunities made possible by participating in a global market and now
offers products in 200 countries around the world. Despite the major international success of the
Coca-Cola Company, they also possess some weakness factors that can be detrimental to the
success of the organization. We believe that the three weakness factors that affect the company
the most are poor communication, lack of continuity of the workforce, and negative publicity.

Negative Publicity:
Despite Coke’s reputation of continuing innovation and recent product line
expansion, the company is still best represented by its flagship product, Coca-Cola Classic. This
product, know to contain high levels of sugar and caffeine is causing a recent uproar on our
increasingly health-conscience world. One of Coca-Cola’s major concerns is the very real
possibility that obesity concerns may reduce demand for some of their products. In addition,
lawyers are threatening to go to court over alleged deceptive practices involving contracts to sell
soft drinks in schools. This puts the pressure on Coke to provide healthier alternatives to their
carbonated drinks if they want to keep selling in schools.

Poor Communication:
Coca-Cola is an extremely large company with thousands of people working on
many different levels in the organization. One of the most important tools essential to this type
of organization is good communication between all levels, and some Coke employees are saying
that it could and should be better. Some workers describe the communication as disorganized,
saying how difficult it is to exchange information with superiors and convey ideas about fixing
problems that may occur on the “street level” of day to day operations.

Continuity of Workforce:
Another major asset to a company of this size and clout is maintaining continuity
among the workforce. This is essential to keep the company rolling smoothly in a positive
direction, accomplishing common goals and constantly setting new goals. Constant firing and
re-hiring tends to disrupt this forward motion and this is exactly what seems to be going on in
certain levels of the company. According to five year employee Kyle Hughes, Coke has a
frustratingly high turnover rate, leading to loss of momentum and lost time due to retraining.