HISTORY

Coca-Cola originated as a soda fountain beverage in 1886 selling for five cents a glass. Early growth was impressive, but it was only when a strong bottling system developed that Coca-Cola became the world-famous brand it is today. 1894 A modest start for a bold idea In a candy store in Vicksburg, Mississippi, brisk sales of the new fountain beverage called Coca-Cola impressed the store's owner, Joseph A. Biedenharn. He began bottling Coca-Cola to sell, using a common glass bottle called a Hutchinson. Biedenharn sent a case to Asa Griggs Candler, who owned the Company. Candler thanked him but took no action. One of his nephews already had urged that CocaCola be bottled, but Candler focused on fountain sales. 1899 The first bottling agreement Two young attorneys from Chattanooga, Tennessee believed they could build a business around bottling Coca-Cola. In a meeting with Candler, Benjamin F. Thomas and Joseph B. Whitehead obtained exclusive rights to bottle Coca-Cola across most of the United States (specifically excluding Vicksburg) -- for the sum of one dollar. A third Chattanooga lawyer, John T. Lupton, soon joined their venture. 1900-1909 Rapid growth The three pioneer bottlers divided the country into territories and sold bottling rights to local entrepreneurs. Their efforts were boosted by major progress in bottling technology, which improved efficiency and product quality. By 1909, nearly 400 Coca-Cola bottling plants were operating, most of them family-owned businesses. Some were open only during hot-weather months when demand was high. 1916 Birth of the contour bottle Bottlers worried that the straight-sided bottle for Coca-Cola was easily confused with imitators. A group representing the Company and bottlers asked glass manufacturers to offer ideas for a distinctive bottle. A design from the Root Glass Company of Terre Haute, Indiana won enthusiastic approval in 1915 and was introduced in 1916. The contour bottle became one of the few packages ever granted trademark status by the U.S. Patent Office. Today, it's one of the most recognized icons in the world - even in the dark!

 1920s Bottling overtakes fountain sales As the 1920s dawned, more than 1,000 Coca-Cola bottlers were operating in the U.S. Their ideas and zeal fueled steady growth. Six-bottle cartons were a huge hit after their 1923 introduction. A few years later, open-top metal coolers became the forerunners of automated vending machines. By the end of the 1920s, bottle sales of Coca-Cola exceeded fountain sales.

1920s and 30s International expansion Led by longtime Company leader Robert W. Woodruff, chief executive officer and chairman of the Board, the Company began a major push to establish bottling operations outside the U.S. Plants were opened in France, Guatemala, Honduras, Mexico, Belgium, Italy, Peru, Spain, Australia and South Africa. By the time World War II began, Coca-Cola was being bottled in 44 countries.

1940s Post-war growth During the war, 64 bottling plants were set up around the world to supply the troops. This followed an urgent request for bottling equipment and materials from General Eisenhower's base in North Africa. Many of these war-time plants were later converted to civilian use, permanently enlarging the bottling system and accelerating the growth of the Company's worldwide business.

1950s Packaging innovations For the first time, consumers had choices of Coca-Cola package size and type -- the traditional 6.5-ounce contour bottle, or larger servings including 10-, 12- and 26-ounce versions. Cans were also introduced, becoming generally available in 1960.

1960s New brands introduced Following Fanta in the 1950s, Sprite, Minute Maid, Fresca and TaB joined brand Coca-Cola in the 1960s. Mr. Pibb and Mello Yello were added in the 1970s. The 1980s brought diet Coke and Cherry Coke, followed by POWERADE and DASANI in the 1990s. Today hundreds of other brands are offered to meet consumer preferences in local markets around the world.

1970s and 80s Consolidation to serve customers As technology led to a global economy, the retailers who sold Coca-Cola merged and evolved into international mega-chains. Such customers required a new approach. In response, many small and medium-size bottlers consolidated to better serve giant international customers. The Company encouraged and invested in a number of bottler consolidations to assure that its largest bottling partners would have capacity to lead the system in working with global retailers. 1990s New and growing markets Political and economic changes opened vast markets that were closed or underdeveloped for decades. After the fall of the Berlin Wall, the Company invested heavily to build plants in Eastern Europe. And as the century closed, more than $1.5 billion was committed to new bottling facilities in Africa. 21st Century The Coca-Cola bottling system grew up with roots deeply planted in local communities. This heritage serves the Company well today as people seek brands that honor local identity and the distinctiveness of local markets. As was true a century ago, strong locally based relationships between Coca-Cola bottlers, customers and communities are the foundation on which the entire business grows.

Mission, Vision & Values

The world is changing all around us. To continue to thrive as a business over the next ten years and beyond, we must look ahead, understand the trends and forces that will shape our business in the future and move swiftly to prepare for what's to come. We must get ready for tomorrow today. That's what our 2020 Vision is all about. It creates a long-term destination for our business and provides us with a "Roadmap" for winning together with our bottling partners. Our Mission Our Roadmap starts with our mission, which is enduring. 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.

Our Vision 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. be. People: Be a great place to work where people are inspired to be the best they can

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. Productivity: Be a highly effective, lean and fast-moving organization.

Our Winning Culture Our Winning Culture defines the attitudes and behaviors that will be required of us to make our 2020 Vision a reality. Live Our Values 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 didnt

Be the Brand Inspire creativity, passion, optimism and fun

OPERATIONS OF COCA COLA

Introductions of Business Operations Business operations are those ongoing recurring activities involved in the running of a business for the purpose of producing value for the stakeholders. They are contrasted with project management, and consist of business processes. The outcome of business operations is the harvesting of value from assets owned by a business. Assets can be either physical or intangible. An example of value derived from a physical asset like a building is rent. An example of value derived from an intangible asset like an idea is a royalty. The effort involved in "harvesting" this value is what constitutes business operations. Business operations encompass three fundamental management imperatives that collectively aim to maximize value harvested from business assets (this has often been referred to as "sweating the assets"):

1. Generate recurring income. 2. Increase the value of the business assets. 3. Secure the income and value of the business. Main source of income/Revenue of Coca Cola General Operation: In general, The Coca-Cola Company (TCCC) and/or subsidiaries only produces (or produce) syrup concentrate which is then sold to various bottlers throughout the world who hold a Coca-Cola franchise.

Coca-Cola bottlers, who hold territorially exclusive contracts with the company, produce finished product in cans and bottles from the concentrate in combination with filtered water and sweeteners. The bottlers then sell, distribute and merchandise the resulting Coca-Cola product to retail stores, vending machines, restaurants and food service distributors.

One notable exception to this general relationship between TCCC and bottlers is fountain syrups in the United States, where TCCC bypasses bottlers and is responsible for the manufacture and sale of fountain syrups directly to authorized fountain wholesalers and some fountain retailers. Coca Cola plans own sales, distribution operations

Coca-Cola Company on Monday announced plans to commence its own sales and distribution operations in Bangladesh. The company earlier submitted a proposal to the government for setting up a manufacturing plant in the country to have direct presence on the local market. Coca Cola products have been prepared, packaged and sold in Bangladesh for around 50 years. But it has been marketing its products through local representatives. With the imminent launch of sales and distribution operations, the company will distribute its flagship products- Coca-Cola, Sprite and Fanta- to the local market directly. Company sources told BSS today that the Coca Cola was expecting a positive response shortly to its proposal for setting up a plant jointly with the government.

Tabani beverage, a state-owned company, used to bottle and market Coca Cola products in Bangladesh until September last year. But Tabani stopped its operation in September when Coca Cola made a partnership with a private company for bottling and marketing of its products. The plan for setting up a plant and commence own sales and distributions showed the company's keen interest in boosting its business and investment in Bangladesh. The sales and distribution operations will shortly be launched in Dhaka and Rajshahi, the company said in a press release. "The launch of our sales and distribution operations in Dhaka and Rajshahi is a reaffirmation of this commitment," the press release quoted Debasish Deb, country manager, Coca-Cola Far East Limited as saying. The commencement of sales and distribution operations in Dhaka and Rajshahi is also expected to generate direct and indirect employment in the country for over 2500 people Coca-Cola to acquire operations of largest bottler

Coca-Cola plans to buy the North American operations of its largest bottler in an effort to put more new drinks on shelves more quickly to keep up with changing tastes. The move comes just days before main rival PepsiCo is expected to complete a similar deal. The Coca-Cola deal marks a change in strategy -- at least publicly -- for Coca-Cola Co., which has defended its arrangement of being separate from its bottlers ever since PepsiCo announced its $7.8 billion deal to buy its two biggest North American bottlers in August. Both companies want to control distribution in their domestic market, where soft drink sales are slumping as people switch to juices and teas or skip purchases to save money. The shift means shoppers will see more new drinks -- like coconut water, exotic teas and sports beverages -- on store shelves. Products that don't sell will disappear more quickly. And shoppers may not find the same choices in the same places because Coca-Cola will have more control over where products appear, right down to the shelf, and how much they cost. Coca-Cola's deal calls for the maker of Sprite, Coke and other beverages to give up its 34 percent stake in bottler Coca-Cola Enterprises Inc., worth $3.4 billion, and assume $8.88 billion in debt.

In a separate deal, Coca-Cola will sell its own Norwegian and Swedish bottling operations to Coca-Cola Enterprises for $822 million. Coca-Cola Enterprises also gets an option to buy Coca- Cola's 83 percent stake in its German bottling operations. Coca-Cola Enterprises shareholders will get one share of a new Coca-Cola Enterprises company focused only on European bottling and a one-time $10-per-share payment. The company plans to issue debt to finance this payment and the European acquisition. It had 490 million shares outstanding at the end of fiscal 2009, so taking out Coca-Cola's stake, cash payouts should be about $3.2 billion to shareholders. The Coca Cola Company (KO: 54.106 -0.084 -0.16%) intends to buy the North American operations of its biggest bottler, Coca Cola Enterprises (CCE: 27.98 -0.12 -0.43%). Although the exact value of the deal is not yet finalized, the transaction is expected to be valued at approximately $15 million, including debt. This move by Coca Cola follows a similar deal signed by its biggest rival PepsiCo (PEP: 65.04 -0.94 -1.42%), who aims to close the acquisition of its two biggest bottlers, Pepsi Bottling Group Inc. (PBG: 0.00 N/A N/A) and Pepsi Americas Inc. this week. This deal was announced in August 2009. Once the deal is finalized, Coca Cola would buy the North American operations of Coca Cola Enterprises and some of the assets in Scandinavia and Germany. However, the operations of the rest of the bottling company will remain the same. The North American operations represent the major part of Coca Cola Enterprises business, contributing about 70% of the net operating revenue in 2009, according to the Wall Street Journal. This move by both the companies is believed to be a response to falling soft-drink sales. Over the past one year or so, the beverage industry, especially in North America, is witnessing declining carbonated beverage sales. This has prompted the companies to increase control over the costs and the distribution system. On February 18, 2010, Coca Cola raised its quarterly dividend by 7.3% to 44 cents. Recently, Coca Cola reported fourth-quarter results with a 5.4% increase in revenues and 5% growth in worldwide unit case volume Coca-Cola Company agreed to acquire bottling operations of Coca-Cola Enterprises Inc that values the deal at $12.3 billion and all debts.The statement released by Coca-Cola said that the company will also assume $8.9 billion in debt and all assets and liabilities of its North American Operations. In cashless transaction the company will acquire 75% of U.S. bottler delivered volume and entire delivered volume in Canada. After the acquisition Coca-Cola will control 90% of total North American volume.

Coca-Cola Enterprises shareholders will receive $10 in cash and one share in new entity that will control operations in Europe. Coca-Cola will not have any stake in the newly formed entity which will retain its current name Coca-Cola Enterprises. The Coca-Colas acquisition of all assets and liabilities of CCE''s North American business includes consideration of the current 34% equity ownership in CCE, valued at $3.4billion. In addition, consideration includes the assumption of $8.9 billion of CCE debt and all of the North American assets and liabilities, including CCE''s accumulated benefit obligation for North America of $580 million as of December 2009. Coca-Cola Enterprises surged 27% to $24.18 in the early trading and Coca-Cola edged up a fraction. Coca-Cola and Pepsi have been bringing back their bottling operations in their control as U.S. consumers reduce their soda consumption and prefer water and fruit juice and other beverages. Both beverage companies have been diversifying their portfolio of beveragesandarefacingrisingcostsofpackinganddistributing.Coca-Cola Enterprises also agreed to acquire for $882 million bottling operations in Sweden and Norway from CocaCola and will have the right to acquire 83% of its German bottling operations in the next 18to36months.Coca-Cola Enterprises will convert to a new company that will hold its European operations. Public shareholders will exchange each CCE share for a new share inthenewentityandcontrol100%ofthecompany.After the transaction CCE will initiate stock repurchase program of $1 billion and pay annual dividend of 50 cents a share subject to boards discretion.

OPERATIONAL EFFICIENCY
Operational Efficiency is - what occurs when the right combination of people, process, and technology come together to enhance the productivity and value of any business operation, while driving down the cost of routine operations to a desired level. The end result is that resources previously needed to manage operational tasks can be redirected to new, high value initiatives that bring additional capabilities to the organization. Higher operational efficiency helps boost profitability Greater efficiency is a prime goal for all businesses, nowhere more so than in the intensely competitive and rapidly changing environment.

Our primary challenges: Three principal environmental challenges demand our attention because they are where our business has the greatest impact: 1) water, 2) packaging and 3) energy and climate protection. We set performance targets for our core operationsthe 25 Company-owned concentrate Facilitiesin the areas of water, energy and climate, as well as solid waste and recycling. Plant capacity utilization: Key Data: Filtration System Capacity 9,600m/day Operational Bottling Plant Supply Demand 400m/h Water Quality Turbidity < 0.2 NTU Total Chlorine Content < 0.05mg/litre Storage Tanks 2 850m Activated Carbon Tanks 4 Full specifications Coca-Colas Wakefield facility is the largest of six major bottling plants the company operates in the UK. The plant recently completed an upgrade of its water treatment facility with Severn Trent and Norit working to provide a comprehensive purification and recovery system which increased influent quality and upped supply capacity by over 30%. In addition, the solution selected membrane ultra-filtration (UF) represents a significant departure from the companys traditionally established multi-barrier approach to water purification. The project increased water treatment peak capacity from an hourly 300 m/hr to 400m/hr, improved efficiency to approaching 99% and achieved a tenfold reduction in wastewater generation down to an average 60m/day. The total project cost was 1.6m to design, manufacture and install the new filtration and wash-water recovery system.

BACKGROUND "The total project cost was 1.6m to design, manufacture and install the new filtration and wash-water recovery system." Housing nine production lines, with the capacity to produce 4,000 330ml cans and 3,200 PET bottles per minute ranging from 500ml to 3l and home to one of the fastest twolitre filling lines in the world, the Wakefield plant is also a regional distribution depot for the UK. 25,000 pallets are stored at the facility and as many as 250 lorries leave daily. The pre-existing water treatment system was built in 1989, in accordance with the then standard Coca-Cola multi-barrier policy, using polyamide coagulation and sand filtration, with de-chlorination achieved through carbon filtration. When the decision was made to upgrade the facility, in addition to providing the improved capacity, the new system was required to meet the standards laid down in the Coca-Cola red book which applies to the raw water input at all of the companys factories worldwide. This sets exacting quality requirements including a total chlorine content of less than 0.05 mg/litre and turbidity below 0.2 NTUs.

THE PLANT

The Wakefield plant is mains-fed from a Yorkshire Water surface WTP. The influent is stored in two 850m storage tanks before being pumped to four activated carbon tanks

and then passing through an ion exchange unit which forms the facilitys organics scavenging system organic content being a key parameter in product make-up water. From here, the water flows to the ultra filtration system, consisting of four skids with the capacity to process 9,600m/day with a combined normal throughput capacity of 400m/hour. Each skid comprises six tubular modules, holding 24 of the 1.5m 250mm membrane cartridges, the 0.8mm diameter hollow fibres contained within having a filtration pore size of 0.03 microns. With over 10,000 fibres per cartridge, the effective filtration surface area of each is 40m. Every three hours each of the skids in turn is automatically taken out of service and back-washed, with the flow rate through the other skids increased to 133m/hour to maintain the required supply to the plant. "The project increased water treatment peak capacity from an hourly 300 m/hr to 400m/hr." The backwash is based on double forward flow over a 30-second cycle, regularly putting around 250m/hour through the skid; the backwash water is then itself cleaned for reuse via a recovery UF system. Once every six days each of the skids also receives a chemically-enhanced back-wash, with a ten-minute period of soaking. The UF permeate subsequently passes to semi-treated water tanks and then undergoes a final treatment process of de-aeration, cartridge filtration and UV sterilization prior to supplying the bottling lines.

Control is SCADA-based, a single-screen system displaying all the relevant operational information, including flow, temperature, pressure, pH, turbidity and chlorine levels across all stages of the process. Operational efficiency and maintenance considerations have also been taken into account during the plant design with all the pipe-work and valves being located at low level. In addition, each membrane is automatically tested each day and can be isolated for repair as necessary without compromising the rest of the plants operation. Whereas the previous plant achieved around 90% wastewater recovery generating some 700m/day of waste, the new system achieves significantly higher efficiency and has reduced the effluent to routinely less than 60 m/day. This represents both major operational advantages and considerable cost savings over the year. Environmental Performance Tracking Across the Coca-Cola System Our operations: The environmental impact of our business occurs within plant operations, distribution networks and from sales and marketing equipment. We have more than 300 bottling partners globally. Because much of the environmental impact of our business occurs beyond Company-owned facilities, we work closely with our bottling partners to improve our systems overall performance. We take a system wide view of our environmental impact, and collectively develop strategies and share best practices. The Coca-Cola Environmental Council includes senior environmental managers from the Company, our Company-owned bottling plants and six of our largest bottling partners, who together own and operate more than 200 production facilities (representing approximately 47 percent of global unit case volume). The six bottling partners are Coca-Cola Enterprises, Coca-Cola FEMSA, Coca-Cola Hellenic Bottling Company, SABMiller, Coca-Cola Amatil and Coca-Cola West Japan. The operations of these bottling partners cover significant portions of North America, Europe and Eurasia, Latin America, Africa, Australia and Japan. Our tracking systems The Coca-Cola Quality System (TCCQS) is our quality management system, integrating our approach to managing quality, the environment, and health and safety. Through continuous improvement, our system strives to meet the most stringent, up-to-date global requirements governing food safety, as well as quality management standards. The environmental component of TCCQS, known as the eKOsystem, reflects the international environmental management system standard ISO 14001, while including additional requirements tailored to our business.

GLOBAL CONCERNS
THE COCA-COLA COMPANY AND COCA-COLA ENTERPRISES STRATEGICALLY ADVANCE AND STRENGTHEN THEIR PARTNERSHIP The Coca-Cola Company to Acquire CCE's North American Bottling Business CCE Has Agreed in Principle to Buy The Coca-Cola Company's Bottling Operations in Norway and Sweden, and to Obtain the Right to Acquire the German Bottler

Advancement fully aligns with the Coca-Cola system's 2020 Vision and drives longterm value for all shareowners Evolves The Coca-Cola Company's North American business to more profitably deliver the world's greatest brands in the largest NARTD profit pool in the world The Coca-Cola Company will generate immediate efficiencies with expected operational synergies of $350 million over four years, and the transactions, which are substantially cashless, are expected to be accretive to EPS on a fully diluted basis by 2012 . The Coca-Cola Company and the Beijing 2008 Olympic Games

With the Beijing 2008 Olympic Games in full swing, see what Coca-Cola has rolled out for the athletes and fans from around the world attending the historic global event in China. Catch up on the excitement at the Coca-Cola Shuang Zones at both "The Place" and Chao Yang Park, as well as the interactive attractions in the Coca-Cola Shuang Experience Center on the Olympic Green. Find out who is being honored with the daily Coca-Cola "Live Positively Award" and be among the first to view the full-length student film documentary, "Environmental Champions." Learn about the other far-reaching programs we've launched for the Olympic Games, including WE8, Design the World a Coke, Delicious Happiness, global advertising, our presentation of the Beijing 2008 Olympic Torch Relay, our environmental initiatives for the Olympic Games, and more.

Coca Cola vs. Indian Farmers: Luxury vs. Necessity Coca Cola (Coke for short) companys activities in India highlighted problems also seen around the world. Because Coke had been pumping water from local wells and aquifers, this led to farmers digging deeper and deeper to search for water, sometimes under

dangerous conditions. Some farmers were digging as deep as 450 feet without finding water. The documentary noted that they wanted Coke to leave for they brought them nothing but misery. Indeed, earlier in 2000, violent protests by farmers in the state of Kerala led to the closure of Coke there. Coke also claimed that government figures showed they did not cause the drop in water levels, yet those figures showed otherwise. They also noted that agriculture is responsible for more water usage than Coca Cola. While this is partly correct, this applies more to industrial agribusinesses, not small farmers. Coke, typical of many global companies, have used the lands (and, in this case, water) of the poor countries, to produce products to be mainly consumed by people in wealthy countries. The Facts: The Coca-Cola Company and Colombia

The Coca-Cola Company and our bottling partners have conducted business in Colombia for more than 70 years. More than 2,000 Colombians are employed by CocaCola bottlers in Colombia. Bottling plants distribute beverages to approximately 500,000 retailers, creating additional jobs in sales, marketing and shipping. Over the past several decades, Colombia has experienced much internal conflict, which affects trade union leaders and other people from all walks of life. . We share global concerns regarding the unfavorable labor environment in Colombia. Coca-Cola has supported programs that aid children, promote education, and bring relief to victims of the country's ongoing conflict. Earlier this year, we provided $10 million to start the Colombian Foundation for Education and Opportunity, an organization that addresses the needs of victims of violence and is run by a group of well-respected Colombians, including Mr. Carlos Rodriguez (president of the Colombian United Confederation of Workers).

The Coca-Cola Company is the world's largest beverage company, refreshing consumers with nearly 500 sparkling and still brands. Through the world's largest beverage distribution system, consumers in more than 200 countries enjoy the Company's beverages at a rate of nearly 1.6 billion servings a day. With an enduring commitment to building sustainable communities, our Company is focused on initiatives that protect the environment, conserve resources and enhance the economic development of the communities where we operate. For more information about our Company, please visit our website at www.thecoca-colacompany.com.

COMPETITORS ANALYSIS
Product: Coca-Cola. Its a simple idea, really. Drinking a Coke makes people happy. It tastes good. And its an invitation to live on the positive side of life.Thats the message behind The Coke Side of Life, brand Coca-Colas overarching marketing platform. It has been created to invite people to create their own positive reality, be spontaneous, listen to their hearts, and live in full color. Coca-Cola has always been at its best when it reflects the simple, optimistic moments in life.The Coke Side of Life recognizes that the most universal experiences are those where Coca-Cola is refreshingly honest and uplifting. Coca-Cola has been able to diversify its products to include carbonated drinks such as Coke Classics and other soda products such as Sprite, Fanta, Barqs Root Beer and Dr. Pepper as well as bottled water, RTD tea drinks and juice drinks under the brand names Qoo, Sensation, Tianyudi and SMART. The diversification to other soft drink sectors was influenced by the growing demand for healthy beverages in its targeted market. The diversity of the quantity of demand and the cost of packaging has also affected the products of the company. The companies packaged their products in glass bottles of different sizes and shapes. However, after the development of plastic containers the packaging shifted to plastic containers especially for larger volumes of soda making it lighter when carried. At present, the demand for better convenience resulted to the packaging of sodas in cans. Coca-Cola products are sold in glass bottles, plastic containers and cans. RECENT DEVELOPMENTS As part of a continuous stream of innovation, Coca-Cola continues to expand its Broad beverage portfolio to meet the ever-evolving Needs of consumers who seek choice and Variety in the beverages they drink. Diet Coke Plus: Diet Coke Plus is a sparkling, calorie-free beverage with vitamins and minerals. In addition to providing great, refreshing taste, Diet Coke Plus is a good source of vitamins B3, B6, and B12, and the minerals zinc and magnesium. Enviga: Enviga, a new sparkling beverage innovation proven to burn calories is available in three flavors green tea, berry, and peach. Enviga, which contains the optimum blend of green tea extracts, caffeine, and naturally active plant micronutrients, is designed to work with the body to increase calorie burning by gently boosting the drinkers metabolism. Vault Red Blitz:

Vault, the hybrid energy soda that was introduced in 2006, has added a new flavor to the lineup with Vault Red Blitz. With its vivid red color, bold Vault graphics, and a new berry-injected flavor, Vault Red Blitz broadens the Vault trademark to attract noncitrus drinkers to the hybrid energy soda segment created by Vault. Full Throttle Blue Demon: For the latest flavor of Full Throttle, the brand is unleashing the power of Mexican luchador (wrestler) and movie legend, the Blue Demon. The new energy drink features the exotic taste of Blue Agave flavoring and is the first product from Coca-Cola America to feature fully bilingual packaging, including labeling and nutritional information. Marketing for FullThrottle Blue Demon emphasizes the lucha libre aspect of the brand and targets Mexican American males 2030 years old who understand the character and revere him. For non-Hispanic consumers, the Blue Agave flavor and Blue Demon name has more intrinsic value as a descriptor for the Full Throttle line extension. TaB Energy: While TaB Energy shares the brand name of the iconic diet sparkling beverage, TaB, it is not a cola.TaB Energy is a completely new and innovative energy drink created especially for women. The deliciously crisp and lightly carbonated pink beverage is sugar-free, with only five calories in each eye-catching, fashion-ably pink 10.5-ounce can. Minute Maid Enhanced Juices: Two new 100 percent orange juice products with health benefits from added nutrients and functional ingredients were added to the Minute Maid Enhanced Juices lineup. New Minute Maid Multi-Vitamin contains 16 essential vitamins and minerals to help consumers get nutrition along with the great Minute Maid Premium orange juice taste, and with 750 mg of Glucosamine HCl per 8fluid-ounce serving, Minute Maid Active helps sup-port healthy joints. . THE MARKET The Coca-Cola Company is the worlds largest beverage company. Along with Coca-Cola, recognized as the worlds most valuable brand, the company markets four of the worlds top-five nonalcoholic sparkling beverage brands, including Diet Coke, Fanta,and Sprite, and a wide range of other beverages, including diet and light beverages, waters, juices and juice drinks, teas, coffees, and energy and sports drinks. Through the worlds largest beverage distribution sys-tem, consumers in more than 200 countries enjoy the companys beverages at a rate exceeding 1.4 billion servings each day.

Packaging: Packaging is always going to have a huge impact on brand awareness and expansion. Neville Isdell, The Coca-Cola Company, outlines his manifesto for growth and shows that, even for the biggest players in manufacturing and retail, the quest for value is relentless. Classic packaging. The Coca-Cola bottle. The equally famous Coca-Cola bottle, called the "contour bottle" within the company, but known to some as the "hobble skirt" bottle, was created in 1915 by bottle designer Earl R. Dean. In 1915, the Coca-Cola Company launched a competition among its bottle suppliers to create a new bottle for the beverage that would distinguish it from other beverage bottles, "a bottle which a person could recognize even if they felt it in the dark, and so shaped that, even if broken, a person could tell at a glance what it was." Earl R. Dean's original 1915 concept drawing of the contour Coca-Cola bottle Chapman J. Root, president of the Root Glass Company, turned the project over to members of his supervisory staff, including company auditor T. Clyde Edwards, plant superintendent Alexander Samuelsson, and Earl R. Dean, bottle designer and supervisor of the bottle molding room. Root and his subordinates decided to base the bottle's design on one of the soda's two ingredients, the coca leaf or the kola nut, but were unaware of what either ingredient looked like. Dean and Edwards went to the Emeline Fairbanks Memorial Library and were unable to find any information about coca or kola. Instead, Dean was inspired by a picture of the gourd-shaped cocoa pod in the Encyclopedia Britannica. Dean made a rough sketch of the pod and returned back to the plant to show Mr. Root. He explained to Root how he could transform the shape of the pod into a bottle. Chapman Root gave Dean his approval.[47] The prototype never made it to production since its middle diameter was larger than its base, making it unstable on conveyor belts. Faced with the upcoming scheduled maintenance of the mold-making machinery, over the next 24 hours Dean sketched out a concept drawing which was approved by Root the next morning. Dean then proceeded to create a bottle mold and produced a small number of bottles before the glass-molding machinery was turned off. Chapman Root approved the prototype bottle and a design patent was issued on the bottle in November, 1915. The prototype never made it to production since its middle diameter was larger than its base, making it unstable on conveyor belts. Dean resolved this issue by decreasing the bottle's middle diameter.

During the 1916 bottler's convention, Dean's contour bottle was chosen over other entries and was on the market the same year. By 1920, the contour bottle became the standard for the Coca-Cola Company. Today, the contour Coca-Cola bottle is one of the most recognized packages on the planet..."even in the dark!" As a reward for his efforts, Dean was offered a choice between a $500 bonus or a lifetime job at the Root Glass Company. He chose the lifetime job and kept it until the OwensIllinois Glass Company bought out the Root Glass Company in the mid-1930s. Dean went on to work in other Midwestern glass factories. Although endorsed by some this version of events is not considered authoritative by many who consider it implausible. One alternative depiction has Raymond Loewy as the inventor of the unique design, but, while Loewy did serve as a designer of Coke cans and bottles in later years, he was in the French Army the year the bottle was invented and did not emigrate to the United States until 1919. Others have attributed inspiration for the design not to the cocoa pod, but to a Victorian hooped dress. In 1944, Associate Justice Roger J. Traynor of the Supreme Court of California took advantage of a case involving a waitress injured by an exploding Coca-Cola bottle to articulate the doctrine of strict liability for defective products. Traynor's concurring opinion in Escola v. Coca-Cola Bottling Co. is widely recognized as a landmark case in U.S. law today Until the mid-1950s, the contour bottle and bell-shaped fountain glass defined packaging for Coca-Cola. But as people demanded a wider variety of choices, the company responded with innovative packaging, new technology, and new products. In 1955, king-size and family-size glass bottles were introduced with immediate success, followed by cans in the U.S. market in 1960. The company then marked several firsts in the soft-drink industry: lift-top cans and bottles with lift-top crowns in 1964, and a 24-pack Cluster-Pak of cans and tin-free steel cans in 1969. After more than $250,000 in development costs and rigorous testing by NASA, the Coke Space Can was accepted for its first mission in outer space in 1985. In 1994, the company introduced a new generation to the famous contour bottle in a plastic version, first in a 20-ounce size and later in 1-liter and 12-ounce packages. In 1997, Coca-Cola also introduced a "contour can," similar in shape to its famous bottle, on a few test markets, including Terre Haute, Indiana.[52] The new can has never been widely released. A new slim and tall can began to appear in Australia as of December 20, 2006, it cost AU$1.95. The cans have a distinct resemblance to energy drinks that are popular with teenagers. The cans were commissioned by Domino's Pizza and are available exclusively at their restaurants.

 In January 2007, Coca-Cola Canada changed "Coca-Cola Classic" labeling, removing the "Classic" designation, leaving only "Coca-Cola." Coca-Cola stated this is merely a name change and the product remains the same. The cans still bear the "Classic" logo in the United States.

The original Coca-Cola logo, trademarked at the USPTO, and used by Coca-Cola Enterprises In 2007, Coca-Cola introduced an aluminum can designed to look like the original glass Coca-Cola bottles. In 2007, the company's logo on cans and bottles changed. The cans and bottles retained the red color and familiar typeface, but the design was simplified, leaving only the logo and a plain white swirl (the "dynamic ribbon"). In 2008, in some parts of the world, the plastic bottles for all Coke varieties (including the larger 1.25- and 2-liter bottles) was changed to include a new plastic screw cap and a contoured bottle shape designed to evoke the old glass bottles.

New brands: In past decades, The Coca-Cola Company has created new brands to meet the desires of consumers, Starting with Fanta in. Sprite was launched in 1961, Followed by TaB the com-panysfirst low-calorie drinks in 1963. The debut of Diet Coke in 1982 marked the first extension of the Coca-Cola trademark to another product. And the development of new products, such as Coca-Cola Zero, Vault, and Full Throttle continues today, adding to the companys portfolio of nearly 400 brands. The latest accomplishment for The Coca-Cola Company is the May 2007 opening of the new World of Coca-Cola. Located in the heart of Down town Atlanta, the 92,000-square-foot facility is the only place where people can explore the complete story Past, present, and future behind the worlds best-known brand. From a thrilling, multisensory 4-D theater, to an art gallery dedicated to Coca-Cola and pop culture featuring the works of AndyWarhol, to a tantalizing tour of almost 70 different beverage products, to more than 1,200 artifacts from across the globe, around every corner there is something new and inviting to experience. For the past 117 years through its ads that brought the world together, packaging innovations, and the introduction of new products

to fit the tastes of consumers wherever they may be, whatever they may be doing CocaCola has become a part of the lives of people around the world PROMOTION Coca-Cola applies consistency and dependability even in its promotional activities. The company actually makes use of pattern advertising ( 2003). The company develops advertisements containing its determined marketing communications message. The manner of advertising adheres to various specific audiences. However, despite the consistency of its advertising framework for its different markets around the world, CocaCola also implements local adjustments. The adjustments cover the translation of words and lyrics in the local dialect of particular markets and delivered in a manner appropriate and acceptable to the local culture, basic adjustments to the advertising format such as the use of locally significant words, phrases, messages and the arrangement of these elements to deliver a cohesive promotional campaign aligned with the basic marketing communications message of the company; Audio-visual adjustments made to the advertising format such as colour scheme, character selection, video stream and other audio-visual aspects of the campaign. Apart from pattern advertising, Coca-Cola also adheres to product differentiation by withdrawing from the explicit cola war with Pepsi. The cola war persisted until the late 1900s with taste-tests and celebrity endorsements of competing personalities. In succeeding years Coca-Cola reverted to its marketing strategy of appealing to the stability and consistency found in the value accorded to family and friendship differentiating the company, product and brand from its competitors. Advertising A 1890s advertisement showing model Hilda Clark in formal 19th century attire. The ad is titled Drink Coca-Cola Coca-Cola ghost sign in Fort Dodge, Iowa. Note older Coca-Cola ghosts behind Borax and telephone ads.

Coca-Cola hoarding in Lahore, Pakistan

 Cola's advertising has significantly affected American culture, and it is frequently credited with inventing the modern image of Santa Claus as an old man in a redand-white suit. Although the company did start using the red-and-white Santa image in the 1930s, with its winter advertising campaigns illustrated by Haddon Sundblom, the motif was already common.[60] Coca-Cola was not even the first soft drink company to use the modern image of Santa Claus in its advertising: White Rock Beverages used Santa in advertisements for its ginger ale in 1923, after first using him to sell mineral water in 1915. Before Santa Claus, Coca-Cola relied on images of smartly-dressed young women to sell its beverages. Coca-Cola's first such advertisement appeared in 1895, featuring the young Bostonian actress Hilda Clark as its spokeswoman. 1941 saw the first use of the nickname "Coke" as an official trademark for the product, with a series of advertisements informing consumers that "Coke means Coca-Cola". In 1971, a song from a Coca-Cola commercial called "I'd Like to Teach the World to Sing," produced by Billy Davis, became a hit single. Coke's advertising is pervasive, as one of Woodruff's stated goals was to ensure that everyone on Earth drank Coca-Cola as their preferred beverage. This is especially true in southern areas of the United States, such as Atlanta, where Coke was born.

Coca-Cola sales booth on the Cape Verde island of Fogo in 2004. Some of the memorable Coca-Cola television commercials between 1960 through 1986 were written and produced by former Atlanta radio veteran Don Naylor (WGST 19361950, WAGA 19511959) during his career as a producer for the McCann Erickson advertising agency. Many of these early television commercials for Coca-Cola featured movie stars, sports heroes and popular singers. During the 1980s, Pepsi-Cola ran a series of television advertisements showing people participating in taste tests demonstrating that, according to the commercials, "fifty percent of the participants who said they preferred Coke actually chose the Pepsi." Statisticians were quick to point out the problematic nature of a 50/50 result: most likely, all the taste tests really showed was that in blind tests, most people simply cannot tell the difference between Pepsi and Coke. Coca-Cola ran ads to combat Pepsi's ads in an incident sometimes referred to as the cola wars; one of Coke's ads compared the so-called Pepsi challenge to two chimpanzees deciding which tennis ball was furrier. Thereafter, Coca-Cola regained its leadership in the market.

 Selena was a spokesperson for Coca-Cola from 1989 till the time of her death. She filmed three commercials for the company. In 1994, to commemorate her five years with the company, Coca-Cola issued special Selena coke bottles. The Coca-Cola Company purchased Columbia Pictures in 1982, and began inserting Coke-product images in many of its films. After a few early successes during Coca-Cola's ownership, Columbia began to under-perform, and the studio was sold to Sony in 1989. Coca-Cola has gone through a number of different advertising slogans in its long history, including "The pause that refreshes," "I'd like to buy the world a Coke," and "Coke is it" (see Coca-Cola slogans).

Holiday campaigns The "Holidays are coming!" advertisement features a train of red delivery trucks, emblazoned with the Coca-Cola name and decorated with electric lights, driving through a snowy landscape and causing everything that they pass to light up and people to watch as they pass through. The advertisement fell into disuse in 2001, as the Coca-Cola Company restructured its advertising campaigns so that advertising around the world was produced locally in each country, rather than centrally in the company's headquarters in Atlanta, Georgia.[67] However, in 2007, the company brought back the campaign after, according to the company, many consumers telephoned its information center saying that they considered it to mark the beginning of Christmas. The advertisement was created by U.S. advertising agency Doner, and has been part of the company's global advertising campaign for many years. Keith Law, a producer and writer of commercials for Belfast CityBeat, was not convinced by Coca-Cola's reintroduction of the advertisement in 2007, saying that "I don't think there's anything Christmassy about HGVs and the commercial is too generic." In 2001, singer Melanie Thornton recorded the campaign's advertising jingle as a single, Wonderful Dream (Holidays are Coming), which entered the pop-music charts in Germany at no. 9. In 2005, Coca-Cola expanded the advertising campaign to radio, employing several variations of the jingle.

Sports sponsorship Coca-Cola was the first commercial sponsor of the Olympic games, at the 1928 games in Amsterdam, and has been an Olympics sponsor ever since.[73] This corporate sponsorship included the 1996 Summer Olympics hosted in Atlanta, which allowed Coca-Cola to spotlight its hometown. Most recently, Coca-Cola has released localized commercials for the 2010 Olympics in Vancouver; one Canadian commercial referred to Canada's hockey heritage and was modified after Canada won the gold medal game on February 28, 2010 by changing the ending line of the commercial to say "Now they know whose game they're playing".[74] Since 1978, Coca-Cola has sponsored each FIFA World Cup, and other competitions organised by FIFA. In fact, one FIFA tournament trophy, the FIFA World Youth Championship from Tunisia in 1977 to Malaysia in 1997, was called "FIFA Coca Cola Cup". In addition, Coca-Cola sponsors the annual Coca-Cola 600 and Coke Zero 400 for the NASCAR Sprint Cup Series at Charlotte Motor Speedway in Concord, North Carolina and Daytona International Speedway in Daytona, Florida. Coca-Cola has a long history of sports marketing relationships, which over the years have included Major League Baseball, the National Football League, National Basketball Association and the National Hockey League, as well as with many teams within those leagues. Coca-Cola is the official soft drink of many collegiate football teams throughout the nation. Coca-Cola was one of the official sponsors of the 1996 Cricket World Cupheld on the Indian subcontinent. Coca Cola is also one of the associate sponsors of Delhi Daredevils in Indian Premier League. In England, Coca-Cola is the main sponsor of The Football League, a name given to the three professional divisions below the Premier League in football (soccer). It is also responsible for the renaming of these divisions until the advent of Coca-Cola sponsorship, they were referred to as Divisions One, Two and Three. Since 2004, the divisions have been known as The Championship (equiv. of Division 1), League One (equiv. of Div. 2) and League 2 (equiv. of Division 3). This renaming has caused unrest amongst some fans, which see it as farcical that the third tier of English Football is now called "League One." In 2005, Coca-Cola launched a competition for the 72 clubs of the football league it was called "Win a Player".

In mass media Coca-Cola has been prominently featured in countless films and television programs. It was a major plot element in films such as One, Two, Three, The Coca-Cola Kid, and The Gods Must Be Crazy. It provides a setting for comical corporate shenanigans in the novel Syrup by Maxx Barry. And in music, in the Beatles' song, "Come Together", the lyrics said, "Coca-Cola. In 2006, Coca-Cola introduced My Coke Rewards, a customer loyalty campaign where consumers earn points by entering codes from specially-marked packages of Coca-Cola products into a website. These points can be redeemed for various prizes or sweepstakes entries. My Coke Rewards is an online mega-rewards program across all brands of the Coca-Cola Trademark and is the leading, year-round promotional platform for Coca-Cola . In April 2007, the program was expanded beyond Coca-Cola brands to incorporate multiple other brands, including Sprite, Fanta, Dasani, POWERade, and Minute Maid, to name a few. The pro-gram pool of experiences, rewards, and prizes that only Coca-Cola can offer and features rewards from some of the worlds best brands. Through May 2007, more than 5.1 million people have joined the My Coke Rewards pro-gram and have redeemed more than 2.4 million rewards. Participating in My Coke Rewards is easy. Consumers find unique codes under caps or inside packages for participating brands. At www.mycokerewards.com, consumers can create an account where they can enter and collect codes. When they have collected enough points to redeem their desired reward, consumers simply select the rewards and the points are deducted from their accounts. My Coke Rewards has partnered with some of the worlds favorite brands to offer consumers unique and exciting rewards including Toshiba flat-screen televisions; Nintendo DS and Wii products from Nintendo; AMC Theaters movie tickets; appliances from Cuisinart and Kitchen-Aid; Sky Miles from Delta Air Lines; Priority Club Rewards points from InterContinental Hotels Group; Blockbuster movie rentals; gift certificates from Adidas, Sephora, and Taylor-Made magazines from Hearst Magazines; and tickets to Six Universal Orlando, and Universal Studios Hollywood to name a few. Through My Coke Rewards, consumer are also offered offer exclusive merchandise and experiences tied to programs such as NASCAR.

BRAND VALUES Today, Coca-Cola North America provides consumers with the broadest selection of brands for every taste, lifestyle, and occasion to hydrate, energize, nourish, relax, or simply enjoy every drop of life. Coca-Cola Company believes it has a responsibility to support programs that provide nutrition and physical education. In the United States, more than 4 million kids participate in and receive information on programs that are designed to encourage physical fitness and overall well-being. Beginning in 2006, the company began to provide consumers with more useful information about its beverages and their ingredients beyond the label on the package. Its information is to help people decide which of its products fit best with the individual and the family. The company also is committed to following responsible marketing and advertising practices. Parents prefer to be the gatekeeper when it comes to what to serve their children. For over 50 years, The Coca-Cola Company has adhered to a policy that prohibits marketing full-sugar sparkling beverages on television programs primarily viewed by children. The Coca-Cola Company's 'Manifesto for Growth' is the operating framework we have established to return The Coca-Cola Company to sustainable growth in the future, with specific and measurable goals for people, our portfolio of brands, our partners, the planet and, of course, profit. In short, we have a clear path forward. And our call to action is made with humble confidence which recognises that we have sometimes acted with arrogance in the past, vis--vis the market and our customers. Retailers and food and beverage companies need each other more than ever before. As retailers look for ways to distinguish themselves in the eyes of consumers, they need good, strong brands to help bring shoppers through the doors and improve the shopping experience. And as tastes continue to fragment and consumers become more demanding, food and beverage companies need insights about shoppers that only retailers possess. Ultimately, what is needed is a partnership between food and beverage companies and retailers to jointly improve our understanding of, and connection with, consumers. DIVERSE PRODUCT OFFERINGS For more than half its history, The Coca-Cola Company sold exactly one product, in exactly one package. Today, in Europe alone, we offer more than 130 beverage brands double the number we had just eight years ago. Counting all the different flavours, sweeteners and packages, the Coca Cola system in Europe produces around 3,500 StockKeeping Units (SKUs). And the number keeps growing: in the late 1990s, Coca-Cola in Europe launched around 200 new products and line extensions annually. Last year, we launched more than 600.

"We are seeing enormous demand for low- and no-calorie drinks." We are not alone, of course. In the EU, there are nearly 2,000 different non-alcoholic beverage brands. Counting the different flavours, there are about 10,000 products. Counting the different combinations of packaging materials and sizes, there are 100,000 distinct beverage options for European consumers. The Coca-Cola Company does not offer 400 brands because retailers have millions of kilometres of shelf space that otherwise would remain empty. And retailers do not offer all that shelf space to accommodate our thousands of SKUs. We all of us in manufacturing exist to create value. We also need to continue to respond to consumers' needs and to innovate. It was coined by Coca-Cola board member Warren Buffett, the man who runs Berkshire Hathaway and who also has a pretty nice way with words: 'Price is what you pay,' he said. 'Value is what you get.' In the UK, the light version of Coca-Cola's flagship brand outsells the 'regular' version in supermarkets. With the increasing interest in health and wellness in Europe and around the world, consumers are increasingly demanding hydration, refreshment, taste and functionality without the calories. The demand is unprecedented, and we see it every day in our sales numbers. But it is not especially surprising, as consumers become aware of the role of calories consumed and calories burned in the obesity equation. CONSUMER REQUIREMENTS Obviously, food and beverage manufacturers have much deeper and more extensive obligations to consumers than simply informing them of ingredient and calorie contents. The beverage industry, for example, through UNESDA and CIAA, is participating in the EU Platform for Action on Diet, Physical Activity and Health launched by Commissioner Kyprianou. In Germany it is participating in a joint government-industry initiative called the Platform for Nutrition and Exercise. Both are fundamentally important. The Coca-Cola Company aspires to offer a beverage for every occasion and every need state. Health and wellness is enormously important, but it's still only one specific requirement. This means that you can expect still more categories, brands, flavours, sweeteners, packages and SKUs from The Coca Cola Company.

'RELATIONSHIP-VIEW' However, making this work throughout the industry will take an entirely new worldview let's call it a new 'relationship-view' for manufacturers and retailers. First, we manufacturers are going to have to move our focus from selling into retailers' back doors to helping retailers sell out their front door. Business with retailers must be seen not simply as moving inventory from plants to stores but, instead, as truly creating value for shoppers and consumers. Second, to accomplish this, we have to remove the barriers that keep food manufacturers from collaborating effectively with retail merchants on a real-time basis. This is especially true as we move to address major trends such as health and wellness. In North America, that information-sharing led to an entirely new product Diet Coke Sweetened with Splenda after an important customer demonstrated that a range of Splenda-sweetened products had all reached strong, double-digit growth rates. Third, food and beverage manufacturers and retailers will have to transform IT capabilities, along with culture and processes to better manage all data, in order to collaborate to identify the insights and to take action in the marketplace together. This may seem obvious or it may make manufacturers and retailers a little bit nervous. Even so, I believe it is essential that we make this transition, because data and information empowered by new and energetic collaboration will be a very important source of new ideas, new value and growth for retailers and food and beverage companies alike for many years to come. EFFECTIVE COLLABORATION Partnerships can be more effective throughout our industry. We all need to increase the frequency and quality of company-to-company dialogue about potential growth opportunities before we have something to sell. This should be a multi-year dialogue that focuses on opportunities and emerging ideas about how to capture them. Retailers and food and beverage companies need more freely to share data and information about every aspect of our businesses. I understand that there is a very important distinction between raw data and value-added insights and analysis. Clearly there is a role for value-added services in the data-analysis arena. But best-practice companies are already sharing transaction data freely and openly. However, while they have removed the obstacles to free information exchange, they are expecting and getting something even more powerful from their efforts: collaborative, real-time analysis and insights translated into actions to drive the common scorecard that the data represents.

Finally, we all need to adopt the data standards and processes advocated by ECR, GCI, GS1 and other leading industry groups. The initiatives and standards they are advocating will help to drive much more effective and efficient supply chains, reduce non-valueadded costs and enable reinvestment to create value for shoppers and consumers. Ultimately, this creates business results for all of us. None of these recommendations is completely new, but they do represent a three-step execution plan that we should continue to discuss and act upon. The real reason to act is that the best among us the companies with the healthiest and most competitive businesses are already doing so. If we don't join them together we will not be as successful as we want to be in the future. Local competitors Pepsi is usually second to Coke in sales, but outsells Coca-Cola in some markets. Around the world, some local brands compete with Coke. In South and Central America Kola Real, known as Big Cola in Mexico, is a fastgrowing competitor to Coca-Cola On the French island of Corsica, Corsica Cola, made by brewers of the local Pietra beer, is a growing competitor to Coca-Cola. In the French region of Bretagne, Breizh Cola is available. In Peru, Inca Kola outsells Coca-Cola, which led The Coca-Cola Company to purchase the brand in 1999. In Sweden, Julmust outsells Coca-Cola during the Christmas season.[56] In Scotland, the locally-produced Irn-Bru was more popular than Coca-Cola until 2005, when Coca-Cola and Diet Coke began to outpace its sales.[57] In India, Coca-Cola ranked third behind the leader, Pepsi-Cola, and local drink Thums Up. The Coca-Cola Company purchased Thums Up in 1993.[58] As of 2004, Coca-Cola held a 60.9% market-share in India.[59] Tropicola, a domestic drink, is served in Cuba instead of Coca-Cola, due to a United States embargo. French brand Mecca Cola and British brand Qibla Cola, popular in the Middle East, is competitors to Coca-Cola. In Turkey, Cola Turka is a major competitor to Coca-Cola. In Iran and many countries of Middle East, Zam Zam Cola and Parsi Cola are major competitors to Coca-Cola. In some parts of China Future cola is a competitor. In Slovenia, the locallyproduced Cockta is a major competitor to Coca-Cola, as is the inexpensive Mercator Cola, which is sold only in the country's biggest supermarket chain, Mercator. In Israel, RC Cola is an inexpensive competitor.

 Classiko Cola, made by Tiko Group, the largest manufacturing company in Madagascar , is a serious competitor to Coca-Cola in many regions. Laranjada is the top-selling soft drink on the Portuguese island of Madeira.

Coca-Cola has stated

Robinsons drinks

that Pepsi was not its main rival in the UK, but rather

Pricing
The pricing strategy of Coca-Cola is based on the pricing dynamics relative to its competitors as well as the value of its products. In the international market, the fiercest competitor of Coca-Cola is Pepsi so that pricing is in a way influenced by the interplay of these competitors in a given market. However, Coca-Cola holds the advantage in pricing because it had a head start of several years giving the company a stable market share relative to Pepsi, which suffered several bankruptcies. The product price of Coca-Cola became the industry benchmark. The strategy of Pepsi then was to sell its products at half the price of Coca-Cola. The company was able to gain a share in the market. ( 2003). This pricing dynamics between Coca-Cola and Pepsi continue today. In supermarkets, the price of coke is still higher by 15 to 20 cents when compared to Pepsi. The higher price given by Coca-Cola to its products is supported by the value of the brand equity of its different soft drink products. Coca-cola was able to sell at a higher price than its competitors because of its stable share market share due to its marketing communications message linked to brand equity of product stability. This makes Coca-Cola a true leader in the industry due to its ability to determine the industry pricing benchmark. Despite its slightly higher pricing, it is still able to maintain a market share by establishing a high value for its products through associations with consistency and dependability. Price is not just a number tag. Price comes in many forms and performs many functions. It is one of the factors that affect the sales in a drastic ways.

PEPSI PRICING STRATEGY Pepsi gained popularity following the introduction in 1936 of a 12-ounce bottle. Initially priced at 10 cents, sales were slow, but when the price was slashed to five cent, sales increased substantially. Pepsi encouraged price-watching consumers to switch referring the coca cola standard of six ounces a bottle for the price of five cents (a nickel), instead of the 12-ounces Pepsi sold at the same price. In 1936 alone 500 million bottles of Pepsi were consumed. For 1936 to 1939, Pepsi profit doubled and there is also a dramatic

increase in sales of Pepsi. This case of Pepsi presents the live example how the pricing makes difference in marketing process of a firm.

PRICING MIX (COCA COLA AND PEPSI) There is the time (2002-2003) when Coca cola and Pepsi tried to appeal to the masses through a 200ml bottle priced at Rs.5. It brought down the average price of its product to Rs.5 thereby bridging the gap between soft drink and other local option like tea, milk, and sugarcane juice or lemon water and it also make the price point of the soft drink within the reach of high potential rural market. Coca cola and Pepsi in the market place now start with the basic introductory pack, which is a 200 ml returnable glass bottle priced at Rs.8 and is available across low income and rural areas. The next pack size is 300 ml at Rs.10 and is focused on those willing to pay more within the immediate consumption arena. Coca cola and Pepsi recently introduced an on-the-go pack as research showed it that the next pack of 600ml (mobile) was too much to consume on the go. The new on-the-go consumption pack is called the express pack and doing well in channels such as travel, malls, so on, where people want a single serve and it is priced at Rs.20. Can packing (250 ml) of Coca cola and Pepsi is priced at Rs.15. The company also introduced the party pack of 2 liter of the consumption in the party and is priced at Rs.55. The average price of this packing is cheap than other packing as to increase the consumption of soft drink in the market. PepsiCo India priced SoBe Adrenaline Rush (premium product) at Rs.75 for the can of 245ml.

Place/physical distribution All the soda brands are marketed in the common channels of distribution except in the exclusive retail venues that companies bid to have. In supermarkets, these brands are sold side by side in the display shelf not giving a single brand any edge relative to the buyer. The rivalry over the channels of distribution was elevated to obtaining exclusive selling contracts in restaurants, places for vending machines, recreation areas, and popular events. The focus of Coca-Cola is in direct-to-retail distribution through the establishment of a minimum of one sales centre in cities with a total population of 1 million. The sales centres that also serve as warehouses are completely owned and agreement. For logistics support, delivery trucks numbering around twenty in large cities are on standby in the sales centres to cater to retail orders. Apart from its own distribution centres, Coca-Cola also partners with large wholesalers with valuable experience in the area of retailing and independent wholesalers able to reach out to local communities. Apart from this, Coca-Cola also builds strong partnerships with government units by sponsoring welfare programs.

Pepsi-Cola Brands Pepsi has been bringing fun and refreshment to consumers for over 100 years.

Pepsi-Cola Brands

International Brands Mirinda 7UP (International) Pepsi Limn Kas Teem Pepsi Max Pepsi Light Manzanita Sol Paso de los Toros Fruko Evervess Yedigun Shani Fiesta D&G (License) Mandarin (License) Radical Fruit

Promotion: Pepsi promotes its products by personal selling, advertising, and sales promotion. For advertising, and sales promotion it used printed and electronic media. Every newspaper and magazine carry Pepsi advertisements. Advertisement of Pepsi are eye catching and attractive. Through advertising it informs the consumer about new brands and flavours. Pepsi designs its sales promotion strategies and advertisement campaign focusing strictly on the target markets. Pepsi has been catching the trends of society. National songs by bands like Vital Signs, Awaaz, Junoon and Strings were the keys in their advertisement campaign. Sponsoring the pop industry and the cricketing team helped Pepsi hit right on target of their primary market which consists of teenagers. Pricing: The management of PEPSI uses both the skimming and penetration pricing strategy. The brands, which has price greater than Pepsi beverage is skimming pricing strategy, and brands having prices less than one can of Pepsi adopted penetration-pricing strategy. By adopting skimming they are earning more profit and by penetration they attract the customers and consolidating position in the market. They have to adopt both strategies because they are facing established competition in the market, e.g. In beginning the main competitors for Pepsi are Coca cola & RC, now their Lucrative Markets and the Strategies adopted by the Cola giants:

Chinese Market: The Chinese soft drink market is one of the fastest growing and both the cola makers have tailored their strategies to make the most of this boom. Coca-Colas long time strategy has been to make its product inexpensive, widely available and tasty. As far as taste is concerned, the company had to develop various drinks tailored to Chinese palates. During the China International Beverage Festival held in September, Coca-Cola invited Chinese folk artists to make paper-cuts and mold clay dolls, so as to better combine traditional Chinese art with a foreign brand. Pepsi also developed its market strategy according to the unique tastes of Chinese customers. They spent huge amounts of money to invite famous singers, stars and soccer players to promote its products. The company called this its soccer & music promotional strategy.

The Chinese market presents unique problems. For example, 2,800 local soft-drink bottlers, many of whom are state-owned, control nearly 75% of the Chinese market. Those bottlers located in remote areas have virtual monopolies. The battle for China will take place in the interior regions. These areas are unpenetrated as most of the foreign soft-drink producers have set up in the booming coastal cities. China's high transportation and distribution costs mean that plants must be located close to their markets. Otherwise, in a country of China's size, Coca-Cola and Pepsi risk pricing their products as luxury items. In China, it is easier and politically safer to expand through joint ventures with local bottlers. It is expected that, in China, the company that wins the cola war will win based on the locations of their bottling plants and the quality of the partners they choose. Australian Market: Pepsi has scored a marketing coup in the battle of the lemon in Australia by getting its new Pepsi Twist product in consumers hands ahead of Coca-Colas planned launch of its own lemon-flavoured cola product. When Coke announced plans to have its Diet Coke with Lemon product on Australian supermarket shelves it served as a blow to Pepsi, whose plans to launch into the Australian market before Coke had been hampered by production hurdles. But in an aggressive strategy deliberately aimed at pre-empting Cokes entry, PepsiCo Australia launched a major coming soon public relations campaign and sampling promotion to raise awareness of its product ahead of its roll-out in stores, supermarkets and in the route trade. Coke and Pepsi in Russia: In 1972, Pepsi signed an agreement with the Soviet Union, which made it the first Western product to be sold to consumers in Russia. This gave Pepsi the first-mover advantage. Presently, Pepsi has 23 plants in the former Soviet Union and is the leader in the soft-drink industry in Russia. Pepsi outsells Coca-Cola by 6 to 1 and is seen as a local brand. Also, Pepsi must counter trade its concentrate with Russia's Stolichnaya vodka since rubles are not tradable on the world market. However, Pepsi has also had some problems. There has not been an increase in brand loyalty for Pepsi since its advertising blitz in Russia, even though it has produced commercials tailored to the Russian market and has sponsored television concerts. On the positive side, Pepsi may be leading CocaCola due to the big difference in price between the two colas. Coca-Cola, on the other hand, only moved into Russia 2 years ago and is manufactured locally in Moscow and St. Petersburg under a license. Despite investing $85 million in these two bottling plants, they do not perceive Coca-Cola as a premium brand in the Russian market. Moreover, they see it as a "foreign" brand in Russia. Coke and Pepsi in Romania: Romania is the second largest central European market after Poland, and this makes it a hot battleground for Coca-Cola and Pepsi. When Pepsi established a bottling plant in Romania in 1965, it became the first U.S. product produced and sold in the region. Pepsi began producing locally during the communist period and has recently decided to

reorganize and retrain its local staff. Pepsi entered into a joint venture with a local firm, Flora and Quadrant, for its Bucharest plant, and has 5 other factories in Romania. Quadrant leases Pepsi the equipment and handles Pepsi's distribution. In addition, Pepsi bought 500 Romanian trucks, which are also used for distribution in other countries. Moreover, Pepsi produces its bottles locally through an investment in the glass industry. While the price of Pepsi and Coca-Cola are the same, some consumers drink Pepsi because Pepsi sent Michael Jackson to Romania for a concert. Another reason for drinking Pepsi is that it is slightly sweeter than Coca-Cola and is more suited for the sweet-toothed Romanians. Lastly, some drink Pepsi because, in the past, only top officials were allowed to drink it, but now everyone can. Coca-Cola only began producing locally in November 1991, but it is outselling all of its competitors. In 1992, Coca-Cola saw an increase in Romania of sales by 99.2% and outsold Pepsi by 6 to 5. While Pepsi preferred to buy its equipment from Romania, Coca-Cola preferred to bring equipment into Romania. Also, Coca-Cola brought 2 bottlers to Romania. One is the Leventis Group, which is privately owned. Coca-Cola has invested almost $25 million into 2 factories. These factories are double the size of the factory Pepsi has in Bucharest. Moreover, CocaCola has a partnership with a local company, Ci-Co, in Bucharest and Brasov. Ci-Co has planned an aggressive publicity campaign and has sponsored local sporting and cultural events. Lastly, Romanians drink Coke because it is a powerful western symbol, which was once forbidden. Coke and Pepsi in The Czech Republic: The key to success in the Czech Republic is for both Coca-Cola and Pepsi to increase the annual consumption of soft drinks. Per capita consumption of beer, the national drink in the Czech Republic, exceeds that of soft drinks by 3 to 1(165 liters of beer per capita of beer versus 50 liters of soft-drinks). Both companies are trying to increase their market share because distribution for both products is no longer as limited as it was in 1989. Coca-Cola and Pepsi face stiff competition from domestic producers, whose products are lower-priced. Because of this, domestic producers have a market share of about 60%. Coca-Cola and Pepsi each have a market share between 10%-25%. Another problem in the Czech Republic is that many people think that the same company produces Coca-Cola and Pepsi. Recently, Pepsi opened an office in Prague. Coca-Cola, on the other hand, has been trying to convince local shop owners to stock and circulate its product. The main apprehension may be that the price of Coke is twice the price of locally produced colas and a little higher than Pepsi. Coca-Cola has arrangements with 4 domestic bottling companies and acquired a new plant in 1992 in which it has invested almost $20 million. This may be one reason why Coca-Cola is closing in on Pepsi's lead in the Czech Republic.

Coke and Pepsi in Poland: Poland, with a population of 38 million people, is the biggest consumer market in central and eastern Europe. Coca-Cola is closing in on Pepsi's lead in this country with 1992 sales of 19.5 million cases versus Pepsi's sales of 26.5 million cases. The main problems in this area are the centralized economy, the lack of modern production facilities, a non-

convertible local currency, and poor distribution. However, since the zloty is now convertible, Coca-Cola realizes the growth potential in Poland. After Fiat, Coca-Cola is now the second biggest investor in Poland. Coca-Cola has developed an investment plan, which includes direct investment and joint ventures/investments with European bottling partners. Its investments may exceed $250 million, and it has completed the infrastructure building. Coca-Cola has divided Poland into 8 regions with strategic sites in each of these areas. Moreover, it has organized a distribution network to make sure its products are widely available. This distribution network, which Coca-Cola has spent a lot of money organizing, is extremely important to challenge Pepsi's market share and to maintain a high level of customer service. Also, Coca-Cola, like Pepsi, signed counter trade agreements with Poland. Both trade their concentrate for Polish beer. All of this has helped Coca-Cola to close in on Pepsi's lead in Poland. Coke and Pepsi in Saudi Arabia:

In Saudi Arabia, Pepsi is the market leader and has been for nearly a generation. Part of this is due to the absence of its archrival, Coca-Cola. For nearly 25 years, Coke has been exiled from the desert kingdom. Coca-Cola's presence in Israel meant that it was subject to an Arab boycott. Because of this, Pepsi has an 80% share of the $1 billion Saudi softdrink market. Saudi Arabia is Pepsi's third largest foreign market, after Mexico and Canada. In 1993, almost 7% of Pepsi-Cola International's sales came from Saudi Arabia alone. The environment in Saudi Arabia makes the country very conducive to soft-drink sales: alcohol is banned, the climate is hot and dry, the population is growing at 3.5% a year, and the Saudis' oil-based wealth "make it the most valuable market in the Middle East". Coca-Cola, long known as "red Pepsi", has finally started to fight back. The battle for Saudi Arabia actually began 6 years ago, when the Arab boycott collapsed and CocaCola began to make inroads into the Gulf, Egypt, Lebanon, and Jordan. The start of the Gulf War, however, temporarily stunted Coca-Cola's growth in the region. Pepsi's 5 Saudi factories worked 24 hours a day to keep the troops refreshed. The most significant blow to Coca-Cola's return to the desert, however, came at the end of the war, when General Norman Schwarzkopf was shown signing the cease-fire with a can of diet Pepsi in his hand. Coca-Cola aims to control 35% of the Saudi market by the year 2000. Coca-Cola, which plans to pour over $100 million into the Saudi market, is focusing on marketing to get there. Recently, it shipped some 20,000 red coolers into Saudi Arabia over the last 9 months. Also, Coca-Cola put $1 million into sponsoring the Saudi World Cup soccer team. This alone has doubled Coca-Cola's market share to almost 15%. America's Reynolds Company is among the investors looking to cash in on Coca-Cola's return to Saudi Arabia. The company is among the investors in a new factory, which, by 1996, will be producing 1.2 billion Coca-Cola cans per year. This equates to nearly 100 cans for every Saudi in the country. Pepsi, trying to fight off the Coca-Cola onslaught, has responded with deep discounting.

Coke and Pepsi in India:

Coca-Cola controlled the Indian market until 1977, when the Janata Party beat the Congress Party of then Prime Minister Indira Gandhi. To punish Coca-Cola's principal bottler, a Congress Party stalwart and longtime Gandhi supporter, the Janata government demanded that Coca-Cola transfer its syrup formula to an Indian subsidiary. Coca-Cola balked and withdrew from the country. India, now left without both Coca-Cola and Pepsi, became a protected market. In the meantime, India's two largest soft-drink producers have gotten rich and lazy while controlling 80% of the Indian market. These domestic producers have little incentive to expand their plants or develop the country's potentially enormous market. Some analysts reason that the Indian market may be more lucrative than the Chinese market. India has 850 million potential customers, 150 million of whom comprise the middle class, with disposable income to spend on cars, VCRs, and computers. The Indian middle class is growing at 10% per year. To obtain the license for India, Pepsi had to export $5 of locally made products for every $1 of materials it imported, and it had to agree to help the Indian government to initiate a second agricultural revolution. Pepsi has also had to take on Indian partners. In the end, all parties involved seem to come out ahead: Pepsi gains access to a potentially enormous market; Indian bottlers will get to serve a market that is expanding rapidly because of competition; and the Indian consumer benefits from the competition from abroad and will pay lower prices. Even before the first bottle of Pepsi hit the shelves, local soft drink manufacturers increased the size of their bottles by 25% without raising costs.

Dr. Snapple pepper 2nd competitors:

DPS, like other soft drink makers in the United States is facing a marketplace where demand has seen lukewarm growth since 2002 as consumers shift towards healthier sports drinks, energy drinks, and/or cheaper drinks such as bottled or tap water. Along these lines, in the third quarter of 2008 consumption of soft drinks declined by 3% while sales of water filters increased by 16% The most dramatic manifestation of consumer health concerns regarding soft drinks, though, has been a proposal put forth in the state of New York that would impose an 18% excise tax on all non-diet soda sales. Other firms, such as Coca-Cola Company (KO), have been able to mitigate the effects of a declining US market through expansion of their sales abroad in regions such as Asia, where demand is still growing and consumers' are not as sensitive towards health. Due to a lack of operations outside of North America and decreased consumption of soft drinks in North America, DPS will face a distinct competitive disadvantage as competitors solidify market share in markets abroad.

Larger firms are also able to invest more money in R&D and, in 2008, both Pepsico (PEP) and Coca-Cola Company (KO) announced the FDA approval of a new zero calorie sweetner that is aimed towards winning back consumers who may have stopped drinking Pepsi or Coke for health reasons. Company Overview DPS is organized into four main segments that are delineated primarily along the lines of the products that each segment manufactures and sells. In order to measure the performance of each segment Dr. Pepper and other carbonated beverage firms uses two main metrics: Net sales and Underlying Operating Pr=fit (UOP). Performan=e Metrics Definitio= Net Sales 2008 2007

Similar to gross revenues, net sales measures, in dollar terms, the 4,369 4,347 amount of products that is sold by DPS over a certain time period. UOP is a measure of income from operations that excludes certain additional accounting expenses that are unique to the beverage industry b=t not reflective of future firm performance. One 668 example is the exclusion of the impairment expense related to a firm's intangible assets.

Underlying Operating Profit

731

Since the bottling group garners business not only from the bottling of DPS owned brands but also third party clients it makes up the largest segment of revenue for the firm

The Beverage division remains the most profitable division within DPS due to the low marginal cost associated with the production of soft drinks

Beverage Concentrates
The Beverage Concentrates division of DPS is responsible for the manufacturing =f the syrups and concentrates used to make fountain drinks, and consists primarily of carbonated soft drink brands such as Dr. Pepper, Canada Dry, 7UP, and A&W Root Beer. In 2008, the fastest growing bran= was Canada Dry which saw sales growth of 8% following the launch of Canada Dry Green Tea. Sales of Dr. Pepper remained relatively flat while sales of 7UP declined by 3%. Overall, the Beverages Concentrate is the most profitable division within DPS accounting for less than one-fifth of sales but more than two-thirds of profits as a result of the low marginal cost associated with the ongoing production of soft drinks.

Finished Goods
The Finished goods division of DPS is responsible for the actual production of the products that originated in the Beverage Concentrates division and also includes many of the non carbonated, or juice brands managed by Dr. Pepper such as Hawaiian , Mott's, and Snapple.

In 2008, the highest performing brand in this divisonwas Hawaiian Punch which saw double digit increases in sales due to a newly crafted promotional campaign.

 The worst performing brand turned out to be Snapple which saw sales decline 10% as DPS decided to cut and completely revamp its advertising surrounding this brand during the economic downturn. Overall, while this divsion is neither the largest or most profitable division in DPS it is the fastest growing, experiencing a growth rate of 5% in 2008.

Bottling Group
This division is responsible not only for the manufacture, bottling, and/or distribution of finished beverages managed by DPS but also third party owned brands seeking a distribution platform. Overall sales in the division declined by 4% in 2008 but this was offset slightly due to greater intersegment sales as DPS sought to increase the manufacturing of company owned brands by the division. In 2008, DPS also lost a distribution agreement with Hansen Natural Corporation which had been responsible for almost 10% of revenues prior to its contract termination.The bottling division the highest proportion of revenues and lowest proportion of sales due to the low profit margins and high capital expenditures associated with the bottling and distribution of soft drinks. Trends and Forces As consumers become more health conscious and rein in spending amidst the economic crisis, beverage companies, such as DPS, are faced with conditions that force them to market and launch new products meant to entice customers even as credit and cash become scarce. Moreover, sales of carbonated beverages have declined since 2002 as consumers are increasingly monitoring their diets and consumption of sugar Development of a zero calorie sweetner by Coca-Cola Company (KO) In December of 2008, the FDA approved a new zero-calorie sweetner, derived from the stevia plant, which has long been viewed as the holy grail in the manufacturing of carbonated soft drinks. Unfortunately, DPS did not play any role in the development of this new sweetener, which will be marketed by Coca-Cola Company (KO) and In any case, the introduction of a zero calorie naturally derived sweetner gives DPS a distinct technological disadvantage that will hurt sales moving forward as consumers look for healthier products that do not sacrifice taste. Concentration of sales in only North America will hurt revenue growth as competitors enter foreign markets

DPS is unique amongst its competitors in that it sells all of its products in the United States, Mexico, and the Carribbean. However, while it is possible to find Dr. Pepper and Snapple on store shelves around the world, none of the money from these sales benefits DPS, since the rights to DPS's brands abroad are effectively owned by Coca-Cola Enterprises (CCE) and Pepsi Bottling Group (PBG). Both companies originally purchased the Dr. Pepper trademark from Cadbury Schweppes (CSG), allowing them to distribute the soda using their more extensive manufacturing and distribution networks. Such licensing agreements involve one time payments, valid for a set time period, and do not typically include provisions that would allow the original seller to gain a proportion of any future income. As a result, DPS is less effectively able to compensa=e for declines in demand since it sells a majority of its products in only one market. In the long run, this approach places DPS at a competitive disadvantage, as both Coca-Cola Company (KO) and Competitive Analysis The carbonated soft drink industry is driven largely along the lines of both brand loyalty and price with consumers rarely shifting from one brand of soft drink to another. As a result, firms in this industry typically unveil multi-million dollar global ad campaigns in an attempt to increase consumption amongst established customers and gain market share amongst those individuals who may have never tried their product.

Market Share Analysis

A significant majority of the beverage industry is controlled by Coca-Cola Company (KO) and Dr Pepper Snapple Group (DPS) Cadbury Schweppes (CSG) largely capturing the rest of the market. Due to a lag in the release of data, the annual market share information for 2008 will not be available until the end of the first quarter in 2009. As a result, it is impossible to segregate the market share that solely belongs to DPS since it became its own independent company in the second quarter of 2008. However, it is possible to rank the brands owned by each company in terms of market share and in 2007 Dr. Pepper ranked 6th in the world.

2007 Global Market Share By Company % of Mark=t Dr Pepper Snapple Group (DPS)=Cadbury Schweppes 15.0 (CSG) Coca-Cola Company (KO) Pepsico (PEP) Cott (COT) 42.8 31.1 4.8 Number of=Cases (millions) 1491.3 4241.1 3082.8 476.6

2007 Glob=l Market Share By Brand % of Mark=t Number of=Cases (millions) Coke Classic Pepsi-Cola 17.2 10.7 1707.3 1059.8 659.6 585.9

Mountain Dew (Owned by Pepsi) 6.6 Dr. Pepper 5.9

Internal external aspects:

External Audit Opportunities 1. Bottled water consumption has increased 11 percent. 2. According to the S&P Industry Survey, consumers are drawn to new smaller beverage brands that are not sold on a mass scale. 3. Word Economic Forums annual Davos, Switzerland gathering grants international voice. 4. Less developed countries are in desperate need to improve community water supplies. 5. Energy drink sales are expected to increase 7 to 8 percent in 2007. 6. Disposable income has increased 6.2 percent. 7. Consumers are striving to drink and eat their way to better health than pervious generations. 8. EPS is expected to rise 7 to 8 percent in 2007.

Threats 1. Consumption of American beverages is denounced by foreign officials in areas where conflicting interest exist. 2. Multiple lawsuits against the new Enviga beverage for calorie burning claims in advertising 3. Smaller, lesser known brands are turning to major beer distributors for bottling. 4. Overall carbonated drink sales have been flat due to links of sugar to obesity and high fructose corn syrup to heart disease. 5. Pepsi is more diversified offering beverage and food products. 6. High cost of commodities such as sugar, and metals used in production of cans. 7. Many smaller companies are fierce competitors around the world in their local markets.

CPM Competitive Profile Matrix

Coca-Cola Critical Success Factors Market Share Price Comp Financial Position Product Quality Product Lines Customer Loyalty Employees Marketing Weigh t Rating Weight ed Score 0.60 0.30 0.48 0.45 0.60 0.60 0.33 0.21 3.71

Pepsi Ratin g Weighte d Score

Cadbury Schweppes Rating Weighte d Score

0.15 0.10 0.12 0.15 0.15 0.15 0.11 0.07 1.00

4 3 4 3 4 4 3 3

3 3 4 3 4 4 3 3

0.45 0.30 0.48 0.45 0.60 0.60 0.33 0.21 3.56

2 0.30 3 0.30 3 0.36 3 0.45 3 0.45 3 0.45

Total

3 0.33 3 0.21

2.85

External Factor Evaluation (EFE) Matrix

Key External Factors Opportunities 1. Bottled water consumption has increased 11 percent. 2. According to the S&P Industry Survey, consumers are drawn to new smaller beverage brands that are not sold on a mass scale. 3. Word Economic Forums annual Davos, Switzerland gathering grants international voice. 4. Less developed countries are in desperate need to improve community water supplies. 5. Energy drink sales are expected to increase 7 to 8 percent in 2007. 6. Disposable income has increased 6.2 percent. 7. Consumers are striving to drink and eat their way to better health than pervious generations. 8. EPS is expected to rise 7 to 8 percent in 2007. Threats

Weight

Rating

Weighted Score

0.06

0.24

0.05 0.02

2 2

0.10 0.04

0.02

0.04

0.06 0.05 0.07

3 3 3

0.18 0.15 0.21

0.07

0.28

1. Consumption of American beverages is denounced by foreign officials in areas where conflicting interest exist. 2. Multiple lawsuits against the new Enviga beverage for calorie burning claims in advertising 3. Smaller, lesser known brands are turning to major beer distributors for bottling. 4. Overall carbonated drink sales have been flat due to links of sugar to obesity and high fructose corn syrup to heart disease. 5. Pepsi is more diversified offering beverage and food products. 6. High cost of commodities such as sugar, and metals used in production of cans. 7. Many smaller companies are fierce competitors around the world in their local markets. TOTAL

0.02

0.06

0.04 0.06

2 2

0.08 0.12

0.10 0.20 0.10

2 3 3

0.20 0.60 0.30

0.08

0.24

1.00

2.84

E.

Internal Audit Strengths 1. 2. 3. 4. 5. 6. 7. Product line has over 400 brands. Strong global presence, located in over 200 countries. Long history has built excellent brand recognition. Partnership longevity with established sporting events including the Olympics. Industry leader in market capitalization with $112 billion. Return on Equity yielded 30 percent in 2006. Leader of dividend yields of 2.6 percent. The company has had 43 consecutive years of an annual dividend increase. 8. Joint venture between The Coca Cola Company and Nestle has resulted in the establishment of Beverage Partners Worldwide (BPW). 9. Coca-Cola has formed a strong partnership with McDonalds, with McDonalds becoming their largest customer.

Weaknesses 1. Product line is limited to beverages. 2. A failed $16 billion acquisition of Quaker Oats hinders long-term growth. 3. Negative publicity in India because of water issues, has led to poor brand image and hindered growth there. 4. Lack of management willingness to place foreign products into American markets. 5. Marketing deficiencies due to turnover in leadership and a 16 percent decrease in advertising spending. 6. Coca Colas inventory turnover is only 5.4 compared to Pepsi Co.s 8.0.

FINANCIAL ANALYSIS

Growth Rates % Sales (Qtr vs year ago qtr) Net Income (YTD vs YTD) Net Income (Qtr vs year ago qtr) Sales (5-Year Annual Avg.) Net Income (5-Year Annual Avg.) Dividends (5-Year Annual Avg.) Price Ratios Current P/E Ratio P/E Ratio 5-Year High P/E Ratio 5-Year Low

Coca Cola 19.20 8.30 13.30 6.54 5.01

Industry 22.20 25.70 30.00 8.45 9.38

SP-500 11.60 17.10 9.30 13.09 19.82

11.49

12.61

10.00

25.4 NA NA

26.2 49.9 20.7

20.3 26.8 6.8

Price/Sales Ratio Price/Book Value Price/Cash Flow Ratio Profit Margins Gross Margin Pre-Tax Margin Net Profit Margin 5Yr Gross Margin (5-Year Avg.) 5Yr PreTax Margin (5-Year Avg.) 5Yr Net Profit Margin (5-Year Avg.) Financial Condition Debt/Equity Ratio Current Ratio Quick Ratio Interest Coverage Leverage Ratio Book Value/Share Investment Returns % Return On Equity Return On Assets Return On Capital

5.00 6.97 21.10

3.96 5.71 19.60

2.37 3.45 10.70

64.2 26.0 19.8 64.4

52.7 17.5 14.2 59.1

34.5 17.8 12.6 34.3

27.9

20.1

16.4

21.1

14.9

11.4

0.49 0.8 0.6 55.1 2.1 8.52

0.69 1.0 0.7 41.0 2.5 10.25

1.06 1.1 0.9 31.8 3.7 18.53

28.9 14.9 22.6

22.0 11.2 16.9

24.9 7.6 10.2

Return On Equity (5-Year Avg.) Return On Assets (5-Year Avg.) Return On Capital (5-Year Avg.) Management Efficiency Income/Employee Revenue/Employee Receivable Turnover Inventory Turnover Asset Turnover

32.0

25.4

18.5

16.7

12.6

6.4

24.6

18.2

8.6

76,690 386,732 9.8 5.4 0.8

56,327 360,922 10.1 6.8 0.8

92,892 806,706 14.3 7.8 0.8

Adapted from www.moneycentral.msn.com Date Avg. P/E Price/Sales Price/Book Net Profit Margin (%) 21.1 21.1 22.3 20.8 20.3

12/06 12/05 12/04 12/03 12/02

20.30 21.00 23.30 25.00 31.10

4.71 4.18 4.65 5.99 5.56

6.61 5.84 6.29 8.79 9.18

Date

Book Value/ Share $7.30 $6.90 $6.61 $5.77 $4.78

Debt/Equity

ROE (%) 30.0 29.8 30.4 30.9 33.7

ROA (%) 17.0 16.6 15.4 15.9 16.3

Interest Coverage 28.7 25.4 29.1 29.3 27.4

12/06 12/05 12/04 12/03 12/02

0.27 0.35 0.45 0.38 0.45

Adapted from www.moneycentral.msn.com

Net Worth Analysis (December 2006 in millions)

1. Stockholders Equity + Goodwill = 17,000 + 1,400 2. Net income x 5 = $5,000 x 5= 3. Share price = $58.00/EPS 2.34 =$24.78 x Net Income $5,000= 4. Number of Shares Outstanding x Share Price = 1,600 x $58.00 = Method Average Internal Factor Evaluation (IFE) Matrix

$ 18,400 $ 25,000 $ 123,931 $ 92,800 $65,032

Key Internal Factors

Weight

Rating

Weighted Score

Strengths 1. Product line has over 400 brands. 2. Strong global presence, located in over 200 countries. 0.09 0.10 4 4 0.36 0.40

3. Long history has built excellent brand recognition. 4. Partnership longevity with established sporting events including the Olympics. 5. Industry leader in market capitalization with $112 billion. 6. Return on Equity yielded 30 percent in 2006. 7. Leader of dividend yields of 2.6 percent. The company has had 43 consecutive years of an annual dividend increase. 8. Joint venture between The Coca Cola Company and Nestle has resulted in the establishment of Beverage Partners Worldwide (BPW). 9. Coca-Cola has formed a strong partnership with McDonalds, with McDonalds becoming their largest customer. Weaknesses 1. Product line is limited to beverages. 2. A failed $16 billion acquisition of Quaker Oats hinders long-term growth. 3. Negative publicity in India because of water issues, has led to poor brand image and hindered growth there. 4. Lack of management willingness to place foreign products into American markets. 5. Marketing deficiencies due to turnover in leadership and a 16 percent decrease in advertising spending. 6. Coca Colas inventory turnover is only 5.4 compared to Pepsi Co.s 8.0. TOTAL

0.06 0.05 0.12 0.04

4 4 4 4

0.24 0.20 0.48 0.12

0.04

0.16

0.06

0.24

0.10

0.40

0.09 0.10 0.03

1 1 2

0.09 0.10 0.06

0.02 0.05

2 2

0.04 0.10

0.05 1.00

0.10 3.09

F.

SWOT Strategies SO Strategies 1. Improve environmental awareness with community involvement (S2, S4, O2, O3). 2. Market new diet drinks that have healthier sugar substitutes (S5, O7). WO Strategies 1. Market international beverages to American consumers (W4, O2, O6, O7). 2. Increase marketing efforts for bottled water (W5, W6, O1). ST Strategies 1. Acquire Krispy Kreme (KKD) to help diversify the product line (S5, T5). 2. Acquire Golden Enterprises (GLDC) to help diversify the product line (S5, T5).

WT Strategies 3. Acquire Krispy Kreme (KKD) to help diversify the product line (W1, T5). 4. Acquire Golden Enterprises (GLDC) to help diversify the product line (W1, T5).

G.

SPACE Matrix

Conservative

FS 6 5 4 3 2 1

Aggressive

CA

-6

-5

-4

-3

-2

-1 -1 -2 -3 -4 -5 -6

IS

Defensive

ES

Competitive

Financial Strength (FS) Return on Assets (ROA) Leverage Net Income Income/Employee Inventory Turnover Financial Strength (FS) Average

6 6 6 6 3 5.4

Environmental Stability (ES) Rate of Inflation Technological Changes Price Elasticity of Demand Competitive Pressure Barriers to Entry into Market Environmental Stability (ES) Average

-3 -2 -2 -6 -3 -3.2

Competitive Advantage (CA) Market Share Product Quality Customer Loyalty Technological know-how Control over Suppliers and Distributors Competitive Advantage (CA) Average

-1 -1 -1 -2 -2

Industry Strength (IS) Growth Potential Financial Stability Ease of Entry into Market Resource Utilization Profit Potential

5 6 4 5 5 5.0

-1.4 Industry Strength (IS) Average

x-axis: -1.4 + 5.0 = 3.6 y-axis: 5.4 + -3.2 = 2.2 Coordinate: (3.6, 2.2) H. Grand Strategy Matrix

Rapid Market Growth Quadrant II Quadrant I

Weak Competitive Position

Strong Competitive Position

Quadrant III Slow Market Growth

Quadrant IV

I.

The Internal-External (IE) Matrix

The IFE Total Weighted Score

Strong 3.0 to 4.0 High 3.0 to 3.99 I

Average 2.0 to 2.99 II

Weak 1.0 to 1.99 III

Medium The EFE Total Weighted Score 2.0 to 2.99

IV

VI

Coca Cola

Low 1.0 to 1.99

VII

VIII

IX

Grow and Build

Divisions North America Bottling Investments North Asia, Eurasia & Middle East European Union Latin America Africa East, South Asia & Pacific Rim Corporate

Percent Revenue 2006 29.1 21.2 16.5 14.6 10.3 4.6 3.3 0.4

J.

QSPM

Strategic Alternatives Acquire KKD and GLDC Produce new diet drinks that have healthier sugar substitutes AS 4 --4 --TAS 0.36 --0.24 ---

Key Internal Factors Weight Strengths 1. Product line has over 400 brands. 2. Strong global presence, located in over 200 countries. 3. Long history has built excellent brand recognition. 4. Partnership longevity with established sporting events including the Olympics. 5. Industry leader in market capitalization with $112 billion. 6. Return on Equity yielded 30 percent in 2006. 0.09 0.10 0.06 0.05 AS 2 --2 --TAS 0.18 --0.12 ---

0.12 0.04

4 4

0.48 0.16

3 3

0.36 0.12

7. Leader of dividend yields of 2.6 percent. The company has had 43 consecutive years of an annual dividend increase. 8. Joint venture between The Coca Cola Company and Nestle has resulted in the establishment of Beverage Partners Worldwide (BPW). 9. Coca-Cola has formed a strong partnership with McDonalds, with McDonalds becoming their largest customer. Weaknesses 1. Product line is limited to beverages. 2. A failed $16 billion acquisition of Quaker Oats hinders long-term growth. 3. Negative publicity in India because of water issues, has led to poor brand image and hindered growth there. 4. Lack of management willingness to place foreign products into American markets. 5. Marketing deficiencies due to turnover in leadership and a 16 percent decrease in advertising spending. 6. Coca Colas inventory turnover is only 5.4 compared to Pepsi Co.s 8.0. SUBTOTAL

0.04

---

---

---

---

0.06

---

---

---

---

0.10

---

---

---

---

0.09 0.10

4 ---

0.36 ---

1 ---

0.09 ---

0.03 0.02

-----

-----

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-----

0.05 0.05 1.00

--4

--0.20 1.50

--1

--0.05 1.22

Key External Factors Weight

Acquire KKD and GLDC

Produce new diet drinks that have healthier sugar substitutes AS --TAS ---

Opportunities 1. Bottled water consumption has increased 11 percent. 2. According to the S&P Industry Survey, consumers are drawn to new smaller beverage brands that are not sold on a mass scale. 3. Word Economic Forums annual Davos, Switzerland gathering grants international voice. 4. Less developed countries are in desperate need to improve community water supplies. 5. Energy drink sales are expected to increase 7 to 8 percent in 2007. 6. Disposable income has increased 6.2 percent. 7. Consumers are striving to drink and eat their way to better health than pervious generations. 8. EPS is expected to rise 7 to 8 percent in 2007. Threats 1. Consumption of American beverages is denounced by foreign officials in areas where conflicting interest exist. 2. Multiple lawsuits against the new Enviga beverage for calorie burning claims in advertising 3. Smaller, lesser known brands are turning to major beer distributors for bottling. 4. Overall carbonated drink sales have been flat due to links of sugar to obesity and 0.06

AS ---

TAS ---

0.05 0.02

1 ---

0.05 ---

3 ---

0.15 ---

0.02

---

---

---

---

0.06 0.05 0.07

----2

----0.14

----4

----0.28

0.07

0.28

0.21

0.02 0.04

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-----

-----

-----

0.06

---

---

---

---

high fructose corn syrup to heart disease. 5. Pepsi is more diversified offering beverage and food products. 6. High cost of commodities such as sugar, and metals used in production of cans. 7. Many smaller companies are fierce competitors around the world in their local markets. SUB TOTAL SUM TOTAL ATTRACTIVENESS SCORE

0.10 0.20 0.10 0.08

2 4 -----

0.20 0.80 -----

4 2 -----

0.40 0.40 -----

1.47 2.97

1.44 2.66

Recommendations
The QSPM strategies assessed whether acquiring KKD and GLDC (a potato chip and snack food company) was a better option than producing a new diet soda line made form more healthy sugar alternatives. Both scores on the QSPM are relatively close and given the financial condition of KKD and GLDC, it is recommended Coca Cola undertake both strategic alternatives. The Net Worth of both companies is provided below. It is estimated it would cost $200 million to research, produce and market the new diet drinks.

Krispy Kreme (KKD) Net Worth January 2008 (in millions).

1. Stockholders Equity + Goodwill = 79 + 28 2. Net income x 5 = $-42 x 5= 3. Share price = $2.73/EPS -0.94 = NAx Net Income $-42= 4. Number of Shares Outstanding x Share Price = 65 x $2.73 = Method Average

$ 107 $ NA $ NA $ 177 $142

Golden Enterprises (GLDC) Net Worth January 2008 (in millions).

1. Stockholders Equity + Goodwill = 19.4 + 0 2. Net income x 5 = $1.2 x 5= 3. Share price = $2.95/EPS 0.19 =$15.52 x Net Income $1.2= 4. Number of Shares Outstanding x Share Price = 11.2 x $2.95 = Method Average

$ 19.4 $ 6.0 $ 18.6 $ 33.0 $19.3

L.

EPS/EBIT Analysis $ Amount Needed: 360M Stock Price: $58 Tax Rate: 35% Interest Rate: 5% # Shares Outstanding: 1,600M
Common Stock Financing Recession Normal Boom 4,000,000,000 6,000,000,000 8,000,000,000 0 0 0 4,000,000,000 6,000,000,000 8,000,000,000 1,400,000,000 2,100,000,000 2,800,000,000 2,600,000,000 3,900,000,000 5,200,000,000 1,606,206,897 1,606,206,897 1,606,206,897 1.62 2.43 3.24 Debt Financing Normal 6,000,000,000 18,000,000 5,982,000,000 2,093,700,000 3,888,300,000 1,600,000,000 2.43

EBIT Interest EBT Taxes EAT # Shares EPS

Recession 4,000,000,000 18,000,000 3,982,000,000 1,393,700,000 2,588,300,000 1,600,000,000 1.62

Boom 8,000,000,000 18,000,000 7,982,000,000 2,793,700,000 5,188,300,000 1,600,000,000 3.24

EBIT Interest EBT Taxes EAT # Shares EPS

70 Percent Stock - 30 Percent Debt Recession Normal Boom 4,000,000,000 6,000,000,000 8,000,000,000 5,400,000 5,400,000 5,400,000 3,994,600,000 5,994,600,000 7,994,600,000 1,398,110,000 2,098,110,000 2,798,110,000 2,596,490,000 3,896,490,000 5,196,490,000 1,604,344,828 1,604,344,828 1,604,344,828 1.62 2.43 3.24

70 Percent Debt - 30 Percent Stock Recession Normal Boom 4,000,000,000 6,000,000,000 8,000,000,000 12,600,000 12,600,000 12,600,000 3,987,400,000 5,987,400,000 7,987,400,000 1,395,590,000 2,095,590,000 2,795,590,000 2,591,810,000 3,891,810,000 5,191,810,000 1,601,862,069 1,601,862,069 1,601,862,069 1.62 2.43 3.24

Epilogue U.S. sales of both Coca-Cola and Pepsi-Cola are declining sharply. In the first nine months of 2007, sales of cases of Coca-Cola Classic declined 5.6%, while PepsiCola's volume slid 8.3%, according to Beverage Digest, an industry publication. Both companies are suffering from the broader decline in soda sales as more people switch to water and juices. Coke and Pepsi are beginning to advertise more and to aim ads at each other. Historically, ad wars between Coke and Pepsi have benefited both firms.

The Coca-Cola company has been examining Hansen Natural (NASAQ:HANS) as a possible new acquisition. Analysts say such an acquisition would save $500M in manufacturing immediately. Analysts believe a potential sale is more likely in the $80-$100 range rather than lower speculation of $60. KO views recent weakness in HANS as a buying opportunity.

KO is expanding its tea business and will look at acquisitions to improve its position. "Tea is a priority area," Chief Executive Neville Isdell told Reuters on the sidelines of the World Economic Forum. "Tea is one area where we've seen our performance has not been as good as we would like it to be." He declined to confirm or deny recent reports that Coca-Cola might buy or make an investment in Honest Beverages, a privately-held maker of Honest Tea. "The honest answer is we look at everything and when we decide that we are going to do something we will let you know," Isdell said. Both Coca-Cola and PepsiCo Inc. have suffered a domestic slowdown in sales of its traditional soft drinks as health-conscious consumers opt for bottled water or tea, which they view as healthier. Pepsi already has a strong position in water, where it

ranks third in the world, helped by last year's acquisition of vitamin-water maker Glaceau. KOs Isdell, who will hand over the CEO job to Chief Operating Officer Muhtar Kent in July 2008, says Coca-Cola is not interested in large-scale M&A deals. "We will be acquiring bolt-on but no major acquisitions," he said. On January 30, 2008, PepsiAmericas (PAS), the No. 2 Pepsi bottler, reported a 60 percent jump in fourth-quarter net income helped by acquisitions, volume growth in Central Europe and a weaker U.S. dollar, but forecast fiscal 2008 profit below expectations. PAS forecasts fiscal 2008 earnings per share of $1.77 a share to $1.83 a share, short of analysts' expectations of $1.89 a share for the same period. Based in Minneapolis, PepsiAmericas has pursued deals in Central and Eastern Europe in an effort to capture a share of the rapidly growing markets in these regions. The company earned $42 million, or 32 cents a share, for the quarter, versus $26.1 million, or 20 cents a share, a year earlier. The current quarter included a charge of 1 cent a share. Volume growth in the United States continued to decline this quarter but a net pricing growth of 3.8 percent helped sales growth. Central European volume grew 56.1 percent. Net sales in the U.S., which were about 71 percent of the company's total for the quarter, rose 4 percent to $812.2 million.