Coca Cola

IE Business School

Marketing Management Course – Corporate MBA 2014 Intake

Professor Jose Ignacio Gafo

Brief Presentation of the Company and Industry

Company: The Coca-Cola Company (TCCC) is the world’s largest beverage company with more than 500 nonalcoholic sparkling and still brands, led by Coca-Cola but including Diet Coke, Fanta, Sprite, Coca-Cola Zero, Powerade, Minute Maid, etc. More than 1.9 billion daily servings are consumed in more than 200 countries, when only 9 servings of “coke” were sold at 5 cents a glass as a cough tonic in Jacob’s Pharmacy in 1886. Advertising remains a critical factor in the success of TCCC which aims to double in size of revenue for 2010- 2020. TCCC began very early selling the caramel-colored syrup to independent bottling companies licensed to sell the drink, which did not have bubble at that time, and the US soft drink industry is still organized on this principle till today. The contour bottle introduced in 1916 globally became synonymous of happiness, refreshing drink and thirst quencher in the mind of consumers; it made a significant impact on American culture and served as a disseminating vehicle worldwide. TCCC is organized in a regional and decentralized manner with a central management playing a key role for branding and strategic orientations (Annex-1). Around 70% of volumes are concentrates and 30% finished products, while concentrates bring 38% of total net operating revenues. It posted in 2013 revenues of US $ 46.8 billion and net income of US $ 11.5 billion (Annex-2). Muhtar Kent, who started with the company in 1978, is now Chairman of the Board and Chief Executive Officer.

Competitors: In the 1980s Pepsi-Cola television ads, “the Pepsi Challenge”, showed people expressing taste preference of Pepsi over Coke. It triggered a “soda war” ultimately putting Coca-Cola in its global leadership position by end of 2006. TCCC has higher sales globally and owns four of the top five soft drink brands but PepsiCo...