ICCT Colleges Foundations, Inc.

V.V. Soliven II Ave.

Cainta, Rizal

College of Business and Accountancy

MANUFACTURING COMPANY CASE STUDY

(The Coca - Cola Company)

Submitted by: Group 1

 ICCT Colleges Foundations, Inc.
V.V. Soliven II Ave.
Cainta, Rizal

College of Business and Accountancy

I. COMPANY NAME

The Coca-Cola Company

II. POINT OF VIEW

The analysis, alternative courses of action, recommendations and action plans in this
paper were proposed while under the point of view of a market researcher/practitioner.

III. TIME CONTEXT

(Coca-Cola logos throughout history)

The problems the proponents will be addressing in this case study has existed for a long
time but this was brought into the attention of the Coca-Cola Company in the different parts of
the world such as Indonesia, Philippines, Haiti and US , last year, 2018.
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V.V. Soliven II Ave.
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College of Business and Accountancy

IV. SHORT HISTORICAL BACKGROUND

(Dr. John
S.
Pemberton, the founder of Coca-Cola)

The Coca-Cola Company is an American multi-national corporation and manufacturer,

retailer, and marketer of nonalcoholic beverage concentrates and syrups. Coca-Cola's history
began in 1886 when an Atlanta pharmacist, Dr. John S. Pemberton, created a distinctive tasting
soft drink that could be sold at soda fountains. Pemberton was actually trying to concoct a
headache remedy, but once he mixed his special syrup with carbonated water, and a few
customers tasted the result, he realized that he had the makings of a popular soda fountain
beverage. The name Coca-Cola was coined by Pemberton's bookkeeper, Frank Robinson.

Prior to his death in 1888, just two years after creating what was to become the world ’s
#1-selling sparkling beverage, Dr. Pemberton sold portions of his business to various parties,
with the majority of the interest sold to Atlanta businessman, Asa G. Candler. In 1889, Asa G.
Candler completed his purchase of the Coca-Cola formula and brand from Pemberton's heirs. In
1892, the Coca-Cola Company was formally founded in Atlanta by Candler. Under Mr. Candler’s
leadership, distribution of Coca-Cola expanded to soda fountains beyond Atlanta. In 1894,
Joseph Biedenharn installed bottling machinery in the rear of his Mississippi soda fountain,
becoming the first to put Coca-Cola in bottles. By 1895, Coca-Cola was being sold in every state
in the union.
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College of Business and Accountancy

Beginning in 1899, independent bottling companies were licensed to bottle Coca-Cola; a

practice that is still in use today by the soft drink industry. In 1919, the company was sold to
Ernest Woodruff's Trust Company of Georgia. Years later, Plants had already been built in
France, Cuba, Panama, Canada, Puerto Rico, the Philippines and Guam. As of 1948, Coca-Cola
had claimed about 60% of its market share.

In 1955 Coca-Cola was first put into cans for military personnel in Japan and the Pacific,
but bottlers did not embrace this new container until 1960. The now world-famous drink was
also now offered in 10-, 12- and 26-ounce bottles. The first plastic 2-liter bottle was introduced
in 1977. By 1984, The Coca-Cola Company's market share decreased to 21.8% due to new
competitors, namely Pepsi.

Today, Coca-Cola offers more than 800 beverages in more than 200 countries and rates as
one of the most recognizable trademarks in the world.

(Coca-Cola Product Offerings)

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V.V. Soliven II Ave.
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College of Business and Accountancy

V. STATEMENT OF THE PROBLEM

The Coca-Cola Company has been successful and established ever since. It has topped
the beverage industry for many years and is known as the largest beverage company in the world.
It has constantly dominated big portions of market in different countries. However, the company
has forgotten one of its obligations, which is to be a socially responsible company.

Since the early 2000s, the criticisms over the use of Coca-Cola products as well as the
company itself, escalated with concerns over health effects, environmental issues, animal
testing/abuse, and employee issues. The Coca-Cola Company has been faced with multiple
lawsuits concerning these various criticisms. The most popular issue that has occurred only last
year 2018, was the #ZeroRights; an international campaign against the Company. Mass protests
were seen all over the world due to its allegedly human rights violation against its workers across
the globe, worth to mention are Haiti, Indonesia, Philippines, Ireland, and US. The protest was
organized by the International Union of Food Workers (IUF), an international federation of trade
unions representing workers involved in the food and beverage preparation and manufacturing
industry. The Protest involved international coalition of over 100 trade unions and Coca-Cola
union members in 32 countries.

PHILIPPINES: The Coca-Cola FEMSA in the Philippines had faced backlash due to its
decision to lay off about 600 employees and its refusal to comply with the order of the
Department of Labor and Employment (DOLE) to regularize all 675 employees who has
still been considered contractual despite being in the service for 18 years.

INDONESIA: Workers at Coca-Cola Amatil Indonesia are deprived of their right to form,
join and be represented by a union for collective bargaining. The said company has
reacted to the formation of independent unions at two company locations by terminating,
forcefully transferring, harassing members, and suspending two union leaders to prevent
them to carry out their roles as union presidents. Members of the new, independent
unions were systematically harassed. And when 150 workers at the Surabaya plant signed
a petition expressing their lack of confidence in the Suharto-era worker organization
which CCA insists on imposing, they were pressured by the management to withdraw
their signatures.

These piles of issues the company has been facing throughout its operations worldwide
has reached a catastrophic result and affected the company negatively.
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College of Business and Accountancy

Will Coca-Cola Company be able to successfully address these issues at hand?

What necessary adjustments do they need to do in order to regain the trust of the general
public?

VI. AREAS OF CONSIDERATION (SWOT ANALYSIS)

STRENGTHS

 Strong brand identity

 Greatest brand association and customer loyalty
 Largest Brand Valuation
 Dominant Market Share
 Unparalleled distribution system

WEAKNESSES:

 Competitive Pressures from its rival brand Pepsi

 Low Presence in Health drinks
 Low Product Diversification
 Water Management Issues

OPPORTUNITIES:

 Introduce New Products and Diversify its Segments

 Increase Presence in Developing Nations.
 Bring Advanced Supply-Chain System

THREATS:
 Potential for more Negative Media Coverage and Continuing Lawsuits
 Increasing New Competition in the Market
 The Rising Costs of Production and Labor
 Water Scarcity
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Cainta, Rizal

College of Business and Accountancy

VII. ALTERNATIVE COURSES OF ACTION

The proponents propose the following methods as a solution for the issues Coca-Cola
Company has faced and might face again in the future:

For Labor Issues particularly lay-offs

1. Employee Regularization. Employees who has been working in the company for 1 year must
be regularized.

Pros. This could mend the company's relationship with its workers (for the company has lots of
issues related to labor). The employees will feel secured in the company once they have been
regularized.

Cons. This signify additional labor costs for the company.

2. Negotiate pay. Unless in a set contract, it may be beneficial to consider lowering employee
pay for a certain amount of time until the company get through this economic downturn. The
company may consider offering repayments or bonuses when business picks back up.

Pros. Lesser pay would be better for the workers than no pay at all.

Cons. The employees would be angry over these and many would not favor this decision.
However, they might change their mind in the end.

3. Encourage Communication. Communicating with the workers is very important during this
time. They are well aware of the economic conditions and probably fear layoffs. The company
should be open and honest with them. The workers may offer ideas or even cut backs that the
company hadn’t considered. Both sides must be open to the ideas of each other.

Pros. Good communication will lead both parties into win-win situation.

Cons. There are instances that one of the parties would be deaf towards the ideas of the other.

For Water Management Issues

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College of Business and Accountancy

4. The Company must engage into water conservation practices for all its plantations.

Pros. This will cool down the issue and will contribute to the environment positively

Cons. None

5. Venture into other industries that doesn't use large amount of water.

Pros. This will mean increased diversification for the company

Cons. This will require huge budget and additional resources and expertise.

Animal Cruelty Issues

6. Be a Vegan company. This has already been a trend in the beauty and personal products
industry. If these companies has successfully developed products without using animals for
testing so can other companies. Also, sponsoring shows or other activities that involves animal
cruelty such as rodeo (an event in which people compete at riding horses and bulls or catch
animals using rope) is not good for both the company and the animals.

Pros. These measure will be beneficial for the animals and different animal advocates will be
very positive about the company.

Cons. For stopping animal testing, these will require intensive research.

Health Issues

7. The business should focus more on its products that are healthy for the consumers. It
should soon make additional healthier products.

Pros. More product portfolio will be beneficial for the company in times of economic recession.

Cons. This will require intensive study because the company is not familiar with the production
and nature of other products.

8. Reduce the harmful product contents.

Pros. This will be good for the consumers.

 ICCT Colleges Foundations, Inc.
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Cainta, Rizal

College of Business and Accountancy

Cons. It may result in the change of taste of the product

VIII. CONCLUSIONS AND RECOMMENDATIONS

CONCLUSIONS

While making profit for the company is important for its shareholders, the company
should never ever forget its underlying responsibilities to its workers, the government, and the
environment. The employees of a company comprise the biggest portion of the organization.
Without them, no product will be brought into completion and would be available in the market.
The company should always keep in its mind the dependents of these workers relying in its
compensation and how will they be affected with the company's decisions. Lay-offs and unfair
termination should never be an option for the company. Instead, it should find better ways to
keep these valuable resources. It should also remember that it is every employees’ right to be
represented in a union and they should always be given the freedom and right to speak about
their concerns. Aside from these, the company should also look for ways for its product to
become eco-friendly and avoid unsanitary measures that could harm the environment.

Coca - Cola company must always remember that their success has been made possible
not only through the company's effort, but through the collective efforts of all the people within
the entity; its owners, management, and especially, its workers, who have dedicated their time,
effort, and labor. Furthermore, the company must always think of what's better not only for the
entity, but for the Society as a whole. No company is perfect, but those who acknowledge their
flaws and are quick to provide solutions, can be considered halfway to perfection.

RECOMMENDATIONS

The proponents recommend the following alternative courses of action.

 ICCT Colleges Foundations, Inc.
V.V. Soliven II Ave.
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College of Business and Accountancy

Alternative course of Action no. 1

The proponents believe that it is every employee’s right to be regularized when he/she has
served the company for long period of time. This right is stated in the Labor Code of the
Philippines article 280.

Alternative course of Action no. 2 and 3

Communication and Negotiation is almost the same thing. Communication is always

important in every organization because through it, the concerns of both parties will be clear and
solutions could be decided on. The proponents believe that these actions will prevent disputes
between the company and its workers taking into consideration the open mindedness of both
parties. Because if one or both the parties are closed minded, no solution will ever be enough to
address their problems.

Alternative course of action no. 4 and 6

Whatever is good for the environment, as long as it is feasible and could be attained,
these actions should always be considered as an option.

Alternative course of Action no. 5 and 7

Diversifying the company's products will bring good effects to the company. Since sodas
and other sugary drinks are unhealthy and consumes large amount of water, other products must
be ventured into for the company's continuity and sustainability.

REFERENCES

https://www.rappler.com/nation/196192-coca-cola-workers-lay-off-train
 ICCT Colleges Foundations, Inc.
V.V. Soliven II Ave.
Cainta, Rizal

College of Business and Accountancy

https://www.bulatlat.com/2018/03/27/coca-cola-workers-demand-regularization-call-public-
support/

https://www.sunstar.com.ph/article/1774893

https://www.sozofirm.com/10-ways-to-prevent-layoffs/

http://www.iuf.org/show-ccww.php

https://workers-iran.org/iuf-international-delegation-brings-the-coca-cola-zero-rights-

https://www.foodnavigator-asia.com/Article/2018/09/19/Coca-Cola-stands-firm-amid-criticism-
of-human-rights-violations-in-South-East-Asia

https://ethicalfootprint.wordpress.com/2010/04/28/unethical-companies-coca-cola/

https://en.m.wikipedia.org/wiki/Coca-Cola

https://www.strategicmanagementinsight.com/swot-analyses/coca-cola-swot-analysis.html

https://notesmatic.com/2016/08/coca-cola-swot-2016-strengths-and-weaknesses/

https://www.streetdirectory.com/food_editorials/beverages/beverages/a_brief_history_about_coc
a_cola.html

https://www.worldofcoca-cola.com/about-us/coca-cola-history/

https://blog.retroplanet.com/coca-cola-company-history-in-brief/