This is an International Business Strategy assignment on Coca Cola for Indian Institute for Foreign Trade.

1. Presentation Identifier Goes Here 1
COCA-COLA CASE STUDY
International Business Strategy
Submitted to Dr. K Rangarajan
Submitted by Group: 1

2. STATISTICS AND FACTS ON LIQUID
REFRESHMENT BEVERAGE BRANDS
The liquid refreshment beverage (LRB) market encompasses CSDs, bottled water, ready-to-drink
(RTD) coffee and tea, fruit beverages, energy drinks and sports beverages. Based on sales, Coca-Cola,
Pepsi, Mountain Dew, Dr Pepper and Gatorade were the leading liquid refreshment beverage (LRB)
brands in the United States in 2013. All five brands combined, held a market share of over 42 percent
in the U.S. in 2013. Especially to be emphasized is the performance of the carbonated soft drink Coca-
Cola, which accounted for a U.S. market share of 18.1 percent alone. Coca-Cola is owned by The
Coca-Cola Company, which is headquartered in Atlanta, GA. The brands’ outstanding performance is
more than present among all regions and channels. Coca-Cola is not only listed as the leading LRB in
the U.S., it also topped the list of soft drinks brands worldwide in 2014, based on brand value.
Additionally, the soft drink brand had the second highest number of fans on its Facebook site.
A big competitor of the Coca-Cola Company in the liquid refreshment beverage business is
undoubtedly PepsiCo, Inc., which is based in Purchase, NY. The company owns, among others, the
soft drink brands Pepsi and Mountain Dew and the sports drink Gatorade, which were ranked second,
third and fifth in the market share ranking of LRB.
2
SoftSrinks Off-Trade
RTD Volume 534.8
Billion Litres
Carbonates 169.5
billion liters
Fruit/Vegetables
Juice 62 billion liters
Bottlked water 205.1
billion liter
Sporys and Energy
Drinks 16.
Concentrates 43.7
billion liter
RTD TEA 30.1
Billion Liters
RTD Coffe 4.5 Billion
liters

3. COCA-COLA
3
Name The Coca Cola Company
Logo
Industries served Beverages
Geographic areas served Worldwide
Headquarters U.S.
Current CEO Muhtar Kent
Revenue $ 48.01 billion (2012)
Profit $ 9.01 billion (2012)
Employees 146,200 (2012)
Main Competitors
PepsiCo Inc., Dr Pepper Snapple Group, Inc.,
Unilever, Groupe Danone, Kraft Foods Inc.,
Nestlé S.A. and many others.
Coca-Cola is a carbonated soft drink sold in stores, restaurants, and vending machines
throughout the world. It is produced by The Coca-Cola Company of Atlanta, Georgia,
and is often referred to simply as Coke (a registered trademark of The Coca-Cola
Company in the United States since March 27, 1944). Originally intended as a patent
medicine when it was invented in the late 19th century by John Pemberton, Coca-Cola
was bought out by businessman Asa Griggs Candler, whose marketing tactics led Coke
to its dominance of the world soft-drink market throughout the 20th century.

4. Company & Brand Facts Values
Global net operating revenue of Coca-Cola Co.
$46,854
m
Revenue distribution share of North America 46.1%
Product portfolio distribution share of juices/juice drinks 38%
Advertising spending of Coca-Cola Co. in TV segment $231.5m
Volume of Coca-Cola Co. in the U.S.
2,322.1
m gal
Company Overview Values
Number of Facebook fans of Coca-Cola (Coke) 93.3m
Brand value of Coca-Cola
$79.21b
n
Coca-Cola Company’s market share in soft drinks market 25.9%
Coca-Cola Company’s market share in the U.S. 42.2%
Sustainability Values
PET largest part of packaging distribution mix 56.6%
System energy use of Coca-Cola Co. worldwide
63.2bn
MJ
Charitable contributions of Coca-Cola Co. to local community initiatives $28m
COCA-COLA COMPANY FACTS:
4

5. COCA- COLA FINANCIAL RATIO
ANALYSIS
5
Ratio data TTM as of 12/31/2014
Profitability - Coca-Cola Co/The (KO)
Return on Assets
Industry Comparison
7.22%
Return on Equity
Industry Comparison
22.26%
Return on Capital
Industry Comparison
9.21%
Margin Analysis - Coca-Cola Co/The (KO)
Gross Margin
Industry Comparison
61.11%
Levered Free Cash Flow Margin
Industry Comparison
12.14%
EBITDA Margin
Industry Comparison
27.18%
SG&A Margin
Industry Comparison
37.43%
Asset Turnover- Coca-Cola Co/The (KO)
Total Assets Turnover
Industry Comparison
0.5x
Accounts Receivables Turnover
Industry Comparison
9.9x
Fixed Assets Turnover
Industry Comparison
3.1x
Inventory Turnover
Industry Comparison
5.6x

6. COCA- COLA FINANCIAL RATIO
ANALYSIS
6
Credit Ratios - Coca-Cola Co/The (KO)
Current Ratio
Industry Comparison
1.0x
Quick Ratio
Industry Comparison
0.8x
Long-Term Solvency - Coca-Cola Co/The (KO)
Total Debt/Equity
Industry Comparison
136.60%
Total Liabilities/Total Assets
Industry Comparison
66.79%
Growth Over Prior Year - Coca-Cola Co/The (KO)
Total Revenue
Industry Comparison
-1.83%
Tangible Book Value
Industry Comparison
-29.02%
EBITDA
Industry Comparison
-4.61%
Gross Profit
Industry Comparison
-1.14%
Receivables
Industry Comparison
-8.35%
Inventory
Industry Comparison
-5.40%
Diluted EPS Before Extra
Industry Comparison
-15.79%
Capital Expenditures
Industry Comparison
-5.65%

7. THE COCA-COLA COMPANY'S NET
OPERATING REVENUES WORLDWIDE
FROM 2007 TO 2013 (IN BILLION U.S.
DOLLARS)
28.86
31.94
30.99
35.12
46.54
48.02
46.85
0
10
20
30
40
50
60
2007 2008 2009 2010* 2011* 2012 2013
RevenuesinbillionU.S.dollars
8

8. MARKET SHARE OF THE COCA-COLA
COMPANY AND OTHER SOFT DRINK
COMPANIES WORLDWIDE IN 2011, BASED
ON SALES VALUE
25.9%
11.5%
3%
59.6%
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
70.0%
The Coca-Cola Co. PepsiCo Inc Nestlé SA Other
Globalmarketshare
9

9. CONSUMPTION SHARE OF FULL-CALORIE AND
DIET SOFT DRINKS WORLDWIDE IN 2013, BY
REGION
10
3.1%
3.3%
4.2%
4.8%
7%
24.5%
31%
35.3%
14.1%
96.9%
96.7%
95.8%
95.2%
93%
75.5%
69%
64.7%
85.9%
0.0% 20.0% 40.0% 60.0% 80.0% 100.0% 120.0%
Asia
Eastern Europe
Southern Africa
MENA*
Latin America
Western Europe
North America
Australasia
Worldwide
Consumption share
Diet soft drinks Full calorie soft drinks

10. COCA-COLA BRANDS
Aquapure
Aquarius
Bacardi Mixers *
Bacardi Premium Mixers *
Barq's
Barrilitos
Beverly
Bright And Early
Caffeine-free Barq's
Caffeine-free Coca-Cola
Caffeine-free Diet Coke
Cascal
cherry Coke
Chippewa
Citra
Coca-Cola
Coca-Cola Black Cherry Vanilla
Coca-Cola Cherry Zero
Coca-Cola Zero
Coca-Cola Zero Caffeine-Free
Cumberland Gap
DANNON *
DASANI
Delaware Punch
diet Barq's
Diet cherry Coke
Diet Coke
Diet Coke Black Cherry Vanilla
Diet Coke with Lime
Diet Coke with Splenda
Diet Fuze Tea
diet Inca Kola
Diet Master Pour
Diet Northern Neck
Diet Sprite
Diet Sprite Zero
Dr Pepper*
Evian *
Fanta
Fanta Sugar Free
Fanta Zero
Five Alive
Flavor Rage
Fresca
Fruitopia
Full Throttle
FUZE
FUZE TEA
Georgia
glacéau fruitwater
glacéau smartwater
glacéau vitaminenergy
glacéau vitaminwater
glacéau vitaminwater zero
Gold Peak
H2OK
Hi-C
Honest Ade
Honest Fizz
Honest Kids
Honest Tea
Honest Tea Zero
Illy *
Inca Kola
Java Monster*
Jericho
Kinley
Krest
Lift
Master Chill
Master Pour
Mello Yello
Mello Yello Zero
Mezzo Mix
Minute Maid
Minute Maid Enhanced
Minute Maid Fruit Falls
Minute Maid Juices To Go
Minute Maid Light
Minute Maid Orchards
Monster *
Northern Neck
NOS
Odwalla
Peace Tea *
Pepe Rico
Pibb Xtra
Pibb Zero
POWERADE
POWERADE PLAY
POWERADE ZERO
Red Flash
Schweppes
Simply
Southern Sun
Spring!
Sprite
Sprite Zero
Sugar Free Full Throttle
Sugar Free NOS
Sugar Free Sprite
Sunfill
Surge
TaB
Vanilla Coke
Vanilla Coke Zero
VAULT
Vault Zero
Vegibeta
Vegitabeta
Worx Energy *
Zico *
11

11. COCA-COLA VISION AND
MISSION
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.
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.
• People: Be a great place to work where people are inspired to be the best they can be.
• Portfolio: Bring to the world a portfolio of quality beverage brands that anticipate and
satisfy people's desires and needs.
• Partners: Nurture a winning network of customers and suppliers, together we create
mutual, enduring value.
• Planet: Be a responsible citizen that makes a difference by helping build and support
sustainable communities.
• Profit: Maximize long-term return to shareowners while being mindful of our overall
responsibilities.
• Productivity: Be a highly effective, lean and fast-moving organization.
12

12. POTER 5 FORCES ANALYSIS
Presentation Identifier Goes Here
13
Coca-Cola Five ForcesAnalysis
Threat of Substitutes
The threat of substitute products is quite high for Coca-Cola Bottling Co.
Consolidated. There are all types of beverages out there forconsumers to purchase.
There are numerous companies out there that sell water, juices, energy drinks,
carbonatedbeverages,andteas. Whena customer walks down an aisle at a grocery
store there is usually an aisle full of different types of beverages that they can
purchase. There is an aisle just for carbonated beverages and then there is another
aisle for water, juices, energy drinks, and tea. They have over a hundred different
choices to make andseveral different brands to choose from.Most of them are also
aroundthe same price point, thus the customer chooses whatis their most favorite.
Competitive Rivalry
The competitive rivalry within the beverage industry, particullarly in soft drinks,
is extremely high for COKE. Large competitors such as Pepsiand the Dr. Pepper
Snapple Group both have a world-wide presence and are extremely competetive
over every fraction of market share. Many of these companies are consistently
finding new ways to introduce new products to the beverage industry including
soft drinks, sports drinks and energy drinks. There is a history within the industry
of intense product line buyouts and as the worldmarket becomes more
accesible,rivalry will continue to grow withinthe industry.
Bargaining power of buyers
The bargaining power of one
buyer is low. If one customer
switches brands, for example
fromCoca-Colato Pepsi,it is not
going to have a huge affect on
the company. One customer is
usually not purchasingmillions of
dollars of Coca-Colaproducts a
year. They are only purchasing
aroundseveral hundred dollars
worth. If Coca-Cola were to raise
their prices than a customer
couldjust easily switchto
another brand because there are
several other choices that they
are able to choose from.
However,as a whole if customers
were not satisfiedthenit could
do major damage to the
company. Currently,there are 1.4
billion servings of Coca-Cola
beverages per day.
Bargaining power of
suppliers
The bargaining power of
suppliers is quite low for
CCBCC. As the United States
second large bottler, CCBCC
has the resources to shop
around for the best
resources and best prices.
CCBCC is also taking the
initiative of constantly
innovating their bottling
methods and methods of
distribution. This dedication
to innovation will surely
guard their profits from any
future price spikes from
suppliers within the industry.
Threat of New Entrants
There are not very many barriers to entry in the beverage industry. It is easy fora
company to start theirowncompany andsell beverages to customers. However,
it may be difficult to standout because there are already so many different
brands and products of beverages out there forcustomers to choose from.The
per capita soft drink consumptionrate is the highest forCoca-ColaBottling
Company Consolidatedinthe world. Inaddition, it has a consumer base of over
eighteen millionpeople.

13. COCA-COLA VALUE CHAIN
14
Coca-Cola Value Chain
SupportActivities
Firms
Infrastructure
Financial & Accounting
Services, Legal Services,
Quality Management
IT Services
Human
Resource
Management
Recruiting
Payroll
Education & Training,
Benefits Administration
Compensation
Technology
Development
Product Development,
Process development,
Market Research
Procurement Billing Systems,
Supplier Vendor relationship.
Information System
about raw material
ERP Systems
PrimaryActivities
Warehouse,
Storage
Control
Consumer
Group
Bottling,
Operations,
Canning
Operations,
Packaging,
Water
Stewardship,
Recycling.
Customer
Order
Management,
Inventory
Control,
Warehousing,
Storage,
Transportation,
Retails
Advertising,
Promotion,
Product
Mix,
Pricing,
Distribution
Customer
Service
Inbound
Logistics
Operations, Outbound
Logistics
Marketing
& Sales Services
MARGIN

14. Weakness
Threat
Opportunity
Strength SWOT
1. The best global
brand in the
world in terms of
value ($77,839
billion)
2. World’s largest
market share in
beverage
3. Strong marketing
and advertising
4. Most extensive
beverage
distribution
channel
5. Customer loyalty
6. Bargaining power
over suppliers
7. Corporate social
responsibility
1. Bottle water consumption
Growth.
2. Increase in demand of
healthy food and
beverages.
3. Growing Beverages
consumption in emerging
markets.
4. Growth through
acquisition.
COCA-COLA SWOT ANALYSIS
ANALYSIS
1. Significant focus on carbonated drinks
2. Undiversified product portfolio
3. High debt level due to acquisitions
4. Negative publicity
5. Brand failures or many brands with insignificant
amount of revenues
1. Changes in consumer preferences
2. Water scarcity
3. Strong dollar
4. Legal requirements to disclose negative information on product labels
5. Decreasing gross profit and net profit margins
6. Competition from PepsiCo
7. Saturated carbonated drinks market

15. SWOT
1.The best global brand in the world in terms of value. According to Interbrand, The
Coca Cola Company is the most valued ($77,839 billion) brand in the world.
2.World’s largest market share in beverage. Coca Cola holds the largest beverage
market share in the world (about 40%).
3.Strong marketing and advertising. Coca Cola’ advertising expenses accounted for
more than $3 billion in 2012 and increased firm’s sales and brand recognition.
4.Most extensive beverage distribution channel. Coca Cola serves more than 200
countries and more than 1.7 billion servings a day.
5.Customer loyalty. The firm enjoys having one of the most loyal consumer groups.
6.Bargaining power over suppliers. The Coca Cola Company is the largest beverage
producer in the world and exerts significant power over its suppliers to receive the
lowest price available from them.
7.Corporate Social Responsibility (CSR). Coca Cola is increasingly focusing on CSR
programs, such as recycling/packaging, energy conservation/climate change, active
healthy living, water stewardship and many others, which boosts company’s social
image and result in competitive advantage over competitors.
16
STRENGTHS

16. SWOT
1.Significant focus on carbonated drinks. The business is still focusing on selling Coke, Fanta,
Sprite and other carbonated drinks. This strategy works in short term as consumption of
carbonated drinks will grow in emerging economies but it will prove weak as the world is fighting
obesity and is moving towards consuming healthier food and drinks.
2.Undiversified product portfolio. Unlike most company’s competitors, Coca Cola is still focusing
only on selling beverage, which puts the firm at disadvantage. The overall consumption of soft
drinks is stagnating and Coca Cola Company will find it hard to penetrate to other markets
(selling food or snacks) when it will have to sustain current level of growth.
3.High debt level due to acquisitions. Nearly $8 billion of debt acquired from CCE’s acquisition
significantly increased Coca Cola's debt level, interest rates and borrowing costs.
4.Negative publicity. The firm is often criticized for high water consumption in water scarce
regions and using harmful ingredients to produce its drinks.
5.Brand failures or many brands with insignificant amount of revenues. Coca Cola currently sells
more than 500 brands but only few of the brands result in more than $1 billion sales. Plus, the
firm’s success of introducing new drinks is weak. Many of its introduction result in failures, for
example, C2 drink.
17
WEAKNESS

17. SWOT
1.Bottled water consumption growth. Consumption of bottled water is
expected to grow both in US and the rest of the world.
2.Increasing demand for healthy food and beverages. Due to many
programs to fight obesity, demand for healthy food and beverages has
increased drastically. The Coca Cola Company has an opportunity to
further expand its product range with drinks that have low amount of
sugar and calories.
3.Growing beverages consumption in emerging markets. Consumption
of soft drinks is still significantly growing in emerging markets,
especially BRIC countries, where Coca Cola could increase and
maintain its beverages market share.
4.Growth through acquisitions. Coca Cola will find it hard to keep
current growth levels and will find it hard to penetrate new markets
with its existing product portfolio. All this can be done more easily
through acquiring other companies.
18
OPPORTUNITIES

18. SWOT
1. Changes in consumer tastes. Consumers around the world become more health conscious
and reduce their consumption of carbonated drinks, drinks that have large amounts of
sugar, calories and fat. This is the most serious threat as Coca Cola is mainly serving
carbonated drinks.
2. Water scarcity. Water is becoming scarcer around the world and increases both in cost and
criticism for Coca Cola over the large amounts of water used in production.
3. Strong dollar. More than 60% of The Coca Cola Company income is from outside US. Due to
strong dollar performance against other currencies firm’s overall income may fall.
4. Legal requirements to disclose negative information on product labels. Some Coca Cola’s
carbonated drinks have adverse health consequences. For this reason, many governments
consider to pass legislation that requires disclosing such information on product labels.
Products containing such information may be perceived negatively and lose its customers.
5. Decreasing gross profit and net profit margins. Coca Cola’s gross profit and net profit
margin was decreasing over the past few years and may continue to decrease due to higher
water and other raw material costs.
6. Competition from PepsiCo. PepsiCo is fiercely competing with Coca Cola over market
share in BRIC countries, especially India.
7. Saturated carbonated drinks market. The business significantly relies on the carbonated
drinks sales, which is a threat for the Coca Cola as the market of carbonated drinks is not
growing or even declining in the world.
19
THREAT

19. PESTEL ANALYSIS
20
Political and Economical
Political Analysis and Factors
The Food and Drug Administration (FDA) regards non-alcoholic beverages such as Coca-Cola as within the food category. The government regulates the manufacturing
procedure of these products. Companies that fail to meet the government's standards are subject to fines. Coca-Cola is also subject to the Occupational Safety and Health Act
and to local, state, federal, and foreign environmental regulation. Following are some of the factors that are influencing Coca-Cola's operations:
1. Changes in laws and regulations—changes in accounting standards, taxation requirements (tax rate changes, modified tax law interpretations, entrance of new tax
laws), and environmental laws either in domestic or foreign authorities.
2. Changes in non-alcoholic business era—competitive product and pricing policy pressures and ability to maintain or earn share of sales in worldwide market compared
to rivals.
3. Political conditions, specifically in international markets—civil conflict, governmental changes, and restrictions concerning the ability to relocate capital across
borders.
4. Ability to penetrate emerging and developing markets—this also relies on economic and political conditions, such as civil conflict and governmental changes, as well
as Coca-Cola's ability to form effectively strategic business alliances with local bottlers, and to enhance their production amenities, distribution networks, sales equipment,
and technology.
Economic Analysis and Factors
Operating in International Markets involves exposure to volatile movements in foreign exchange rates. The economic impact of foreign exchange rates movements on the
company is complex because such changes are often linked to variability in real growth. Coca Cola Company is subject to other economical factors like money supply, energy
availability and cost, business cycles, etc (Varadharajan, Vikkraman, 2010, 18-25).
During the recession of 2001, the US government took aggressive actions to turn the economy around by 2002. Coca-Cola took note of this, and realized that loan interest
rates would likely rise as the economy returned. Thus, they took out low-cost loans in 2001 to fund growth in 2002. They used the loans for research and development on new
products to capitalize on in a strong 2002 economy. Currently, as global growth is slowing, Coca-Cola may be watching for a similar opportunity.
The Coca Cola Company (2006-2011) stated that they are the largest beverages company, serving 1.6 billion people globally in 200 countries. The company has large scale
of distribution channels and operation centres in all over the world. Industry analysis of S&P stated that economic improvement in international markets helps to enhance the
stability of the multinational companies. The non-alcoholic beverage industry has high sales in countries outside the U.S. According to the Standard and Poor's Industry
surveys, "For major soft drink companies, there has been economic improvement in many major international markets, such as Japan, Brazil, and Germany." These markets
will continue to play a major role in the success and stable growth for a majority of the non-alcoholic beverage industry. There is a low growth in the market for carbonated
drinks, especially in Coca Cola’s main market, North America. The market growth recorded at only 1% in 2004 for North America.

20. PESTEL ANALYSIS
21
Political and Economical
Social Analysis and Factors - The sales of the company's product highly depend upon the lifestyle changes, due to which it design it campaigns such that it addresses the
lifestyle changes. There are specific kinds of people who are more inclined to drink Pepsi and another kind who prefer drinking Coca Cola. Taking into account that Coca Cola
is trying to introduce itself in underdeveloped markets, they have to be careful with the possible problems with the governments of these countries (Waldemer, 2008, 97).
Social factors that affect the sales of Coca-Cola's products include the following:
1. The majority of people in the US are showing increasing interest in healthy lifestyles. That has strongly influenced the sales within non-alcoholic beverage sector as many
customers switch to bottled water and diet colas such as Coca-Cola Light or Zero.
2. Time management is a concern for 43 percent of all households, a percentage that has increased over the years.
3. Customers from ages 37 to 55 are concerned with their nutrition. Also, a large portion of the population are baby boomers. As they become seniors, they are more
concerned about life choices that will impact their life expectancy. That will continue to affect the non-alcoholic beverage sector by increasing the demand for healthier
drinks.
Technological Analysis and Factors - Some factors that cause a company's actual results to vary from expected results include:
1. The efficiency of a company's advertising, marketing, and promotional programs—For example, television, web, and social media advertising are constantly
evolving. The ability of a company to effectively promote their products through these channels impacts sales.
2. Packaging design—In the past, the introduction of cans and plastic bottles increased sales volume for the company due to how easy these containers were to carry and
dispose.
3. New equipment—Because the technology is continuously advancing, new equipment is constantly being introduced. Because of these new technologies, Coca-Cola's
production volume has increased sharply compared to that of a few years ago.
4. New factories—Coca-Cola Enterprises (CCE) has six factories in Britain that use modern technology to ensure the quality and speedy delivery of product. In 1990, CCE
opened one of Europe's largest soft drinks factories in Wakefield, Yorkshire. The factory has the ability to produce cans of Coca-Cola at a faster rate than a machine gun
can fire bullets.
Legal - Finally, legal factors reflect the laws and regulations relevant to the region and the organization. Legal factors can include whether the rule of law is well established,
how easily or quickly laws and regulations may change, and what the costs of regulatory compliance are. For example, Coca-Cola's market share in Europe is greater than 50
percent; as a result, regulators have asked that the company give shelf space in its coolers to competitive products in order to provide greater consumer choice.
Many of the PESTEL factors are interrelated. For instance, the legal environment is often related to the political environment, where laws and regulations can only change
when they're consistent with the political will.

21. SUMMARY
Coca cola desires to increase sales in Europe through following
steps:
PR Strategy “Act Local, Think Local”.
Different in Consumption between USA & EU.
- US –190 12 –ounce servicing per annum.
- EU – Germany – 111, Great Britain – 61, France 35 Servicing per 12 -
Ounce
Concern expressed by various government agencies (EU, UK, Italy)
Coke is focused to increase in market and wining preposition.
Formation of European Union has helped coke to give cheaper and
rapid offering due to elimination of Tariff between EU countries.
22
Coca Cola in 90’s

22. QUESTION:
Why and how coke is making FDI in Europe?
MNE features of coke.
IB challenges facing coke.
23
Case Study discussion:

23. 24
WHY AND HOW IS COKE
MAKING FDI IN EUROPE

24. WHY AND HOW IS COKE MAKING
FDI IN EUROPE
Why:
Market Potential and Share
• European market has great potential and Cokes Market Share in Europe is low as compared to its
competitors.
Improve Market Position :
• Coke made these investments in order to improve its market position. This is being done in Four
ways.
• First, the construction of new bottling plants is helping the company produce a low-cost product.
• Second, marketing expenditures are helping the firm gain the product recognition needed for growth.
• Third, direct investments in facilities closer to the market are reducing delivery time and eliminating
associated expenses.
• Fourth, relook at it existing Franchise distribution network and realign or replace the same with
more effective and market driven sellers.
Formation of European Union:
• It was the period were Formation of European Union was to take place and this would lead to no
tariff between EU countries and hence making it possible for coke to utilize it Manufacturing and
bottle assets and partners to efficiently supply its products to retailers taking into consideration that
it was cheapest and most rapidly available factors.
25
Why did Coke engage is foreign direct investment in Europe:

25. WHY AND HOW IS COKE
MAKING FDI IN EUROPE
• Coke opened its first bottling plant in Europe in Paris and Bordeaux in
1919
• The first bottling plants are opened in Europe in Paris and Bordeaux.
• This was through acquisition “backward vertical FDI”.
• Coca-Cola has also used Network Model(Alliance and Joint Ventures)
Mode of Entry:
Assembling Assembling is a compromise between exporting and foreign
manufacturing. The firm produces domestically all or most of the
components or ingredients of its product and ships them to foreign
markets to be put together as a finished product. By shipping completely
knocked down (CKD), the firm is saving on transportation costs and also
on custom tariffs which are generally lower on unassembled equipment
than on finished products (Lambin, 2007). Another benefit is the use of
local employment which facilitates the integration of the firm in the
foreign market. Coca-Cola ships its syrup to foreign markets where local
bottle plants add the water and the container (Soto, 2000).
Licensing Licensing is another way to enter a foreign market with a
limited degree of risk. Coca-cola had licensed bottlers in Europe and UK.
26
How is Coke making FDI in Europe.

26. WHY AND HOW IS COKE MAKING
FDI IN EUROPE
The company do this in three ways.
• First, the construction of new bottling plants is helping the company
produce a low cost product.
• Second, marketing expenditures are helping the company to gain
the product recognition needed for growth.
• Third, direct investments in facilities closer to the market are
reducing delivery time and eliminating import duties.
The Coca-Cola company is having extensive production abroad
with foreign direct investment and all functions like exporting and
importing and also franchasing. For example in Turkey Coca-Cola
gives first franchising to IMSA(Has Group) in 1964. Coke is making
FDI in order to improve its market position especially in Europe.
27
How is Coke Making FDI in Europe?

27. 28
MNE FEATURES OF
COKE.

28. MNE FEATURES OF COKE.
The Coca-Cola Company indeed is an MNE because it operates a headquarters
in Atlanta, Georgia with other local operations in nearly 200 countries around
the world. Coke succeeded as a multinational because of its understanding and
appeal to global commonalities (Rugman, A. M. & Collinson, S., 2006).
- Standardization in terms process and quality.
-Modification of operations to meet local need local needs & marketing
strategies developed per country.
-Have international network of franchise and partners that help them run the
operation and sales.
-Its is Global -> the US and Canada occupy 1/3 of the revenues.
-Whereas EU & Asia ( even they occupy less of the revenue) they are equally
important for the company.
-There revenue is more from outside US and the revenue is spread among all
continents
-> Global View and Global Strategy.
29

29. MNE FEATURES OF COKE.
• Coke is an multinational enterprise because it conducts
production and distribution activities in nations other than its
home country.
• In terms of strategy and management orientation, the firm does
three things that illustrates its multinational nature.
- First, Coca-Cola adjusts its operations to meet local needs. The
firm markets on a country-by-country basis.
- Second, Coke has international partners who help to run the
operation and do not report directly to the company on day-to-day
matters.
- Third, the organization relies heavily on team work by all involved
parties and service more as a coordinator and leader for the product
than as an on-site manager.
30

30. MNE FEATURES OF COKE.
46.1%
11.5%
10.1% 9.9%
5.9%
16.2%
0.3%
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
35.0%
40.0%
45.0%
50.0%
North America Pacific Latin America Europe Eurasia/Africa Bottling Investments Corporate
Revenuedistributionshare
31
Revenue distribution share of the Coca-Cola Company worldwide in 2013, by operating segment

31. 32
IB CHALLENGES FACING
COKE.

32. IB CHALLENGES FACING COKE.
• Some countries prohibited the used of Coca-Cola products with the
assertion that the products are health threatening and cheering obesity,
which are two major concern for people nowadays.
• Aside from these assertions so many suits had been filed against the
Coca-Cola Company with the allegation of “child labour sweatshops”
other countries suits the Company for being selective in providing
healthcare to their workers.
• Some government agencies and companies are concerned about the
way in which Coca-Cola is pushing aside those who are unable to lower
costs and generate more business. The British Monopolies and
Mergers Commission is investigating possible anti-competitiveness in
Coke’s joint venture with Schweppes in England. In Italy, San
Pellegrino, the mineral water company, has filed a complaint with the
Commission of the European Communities, contending that Coca-Cola
has abused its dominant position by giving discounts to Italian retailers
who promise to stock only Coke.
• Another major challenged faced by the Company was the infiltration of
the beverages market by other strong Companies such as Pepsi and co
33
The road to success has never been smooth and easy. For Coca-Cola
Company the phrase seems perfectly matched, the Company faced a lot
of challenges in some countries as it was trying to globalize.

33. IB CHALLENGES FACING COKE.
• Fluctuation of monetary capital exchange between countries:
This was due to the policies and regulation concerning
transfer of funds between different countries, with barriers in
some countries it makes transactions unattractive.
• Health Concern raised and Negative Publicity: In 2003, the
Centre for Science and Environment (CSE),a non-
governmental organisation in New Delhi, said aerated waters
produced by soft drinks manufacturers in India, including
multinational giants PepsiCo and Coca-Cola, contained toxins
including lindane, DDT, malathion and chlorpyrifos —
pesticides that can contribute to cancer and a breakdown of
the immune system. Tested products included Coke, Pepsi,
and several other soft drinks (7Up, Mirinda, Fanta, Thums Up,
Limca, Sprite), many produced by The Coca-Cola Company.
• In March 2004, local officials in Kerala shut down a $16
million Coke bottling plant blamed for a drastic decline in both
quantity and quality of water available to local farmers and
villagers.
34

34. 35
Thank you