Coca Cola

Integrative Case 1.1

COCA-COLA IN AFRICA

Case Discussion Questions

1. Why is Coca-Cola so interested in Africa, which is typically regarded as the base of the global economic pyramid?

Coca-Cola needs to seek new opportunities for earnings growth due to the fact that many of its markets outside of Africa are mature, saturated, declining or experiencing increased competition. Africa’s income, infrastructure, and to some extent governments are improving. Its population generally gets too few calories and the population is young.

2. What unique resources and capabilities does Coca-Cola have that will help it compete well in Africa?

Its global brand is already popular on the continent. It has significant resources to deploy and has built a base involving distribution capabilities and a direct workforce of 65,000 and indirectly a million people.

3. What are the drawbacks of making such large-scale commitments to Africa?

In spite of improvements, poverty, government corruption and inefficiency, and infrastructure are negatives. Also, the war and strife create uncertainty.

4. Do stakeholders in the United States and Africa who criticize Coca-Cola have a reasonable case against it?

Student answers to this question may be influenced by the level of risk that they would accept and their health and environmental concerns. As indicated in question three above, Africa has certain risks and limitations that it would be likely to encounter in the U.S. Health is a mixed issue in which (unlike many other markets) people actually need extra calories but critics might argue that they should get them through other means. Also, there is the concern about water usage and the impact of refrigeration. Not all students will necessarily agree with the criticisms or feel that they significant enough to oppose Coca-Cola’s focus on Africa.