According to the company's website, a pharmacist named John Pemberton developed a syrupy, brown, carbonated beverage named Coca Cola in 1886. As of 2011, the company's portfolio consists of over 3,300 beverages including Odwalla, Minute Maid, Dasani and Dr. Pepper. The Bloomberg Businessweek website states that in the first quarter of 2010, the company earned £1.0 billion in net income. Coca-Cola's success is due to achieving its business objectives.
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Coca-Cola's goal is to increase the public's consumption of its products. This objective is accomplished in part by offering its products in a variety of outlets and through aggressive branding. Schools purvey Coke products in the cafeteria and in vending machines. Major grocery stores, restaurants and gas stations carry its beverages. Coke also partners with several prominent fast-food chains, including McDonald's. Adbrands.net estimates Coke's advertising budget in 2009 was a whopping £1.5 billion, which the company spent on commercials, print ads, Internet banners, sponsorships and product placements.
Despite Coca-Cola sticking with its classic beverage formula, the company modifies its business model to adapt to industry trends. The business objective of staying atop business trends is accomplished by acquiring new companies. For instance, Odwalla's drinks appeal to health-conscious consumers desiring a more nutritious alternative to soda.
A business objective of the company is increasing its presence overseas. Coca-Cola has a history of taking risks to improve brand recognition abroad. For instance, Charles Wheelan states in his book "Naked Economics" how the former CEO of Coke decided to distribute beverage for free to the citizens in East Germany in 1989 before the fall of the Berlin Wall. These free samples caused the beverage to skyrocket in popularity. Coca-Cola achieves brand recognition on several continents through a tightly-linked distribution network, aggressive marketing, sponsorships of foreign athletic teams and modifying beverages to fit the taste preferences of audiences. The company also adapts to the limitations of poorer, rural nations: Franchise owners in Africa, for instance, sometimes rely on shipping the beverage through the use of donkeys and pushcarts.
The Forbes website explains Coke's profit margin for its name-brand beverages stays between 63 to 66 per cent. However, a change in the cost of main ingredients, including corn and aluminium, could significantly affect profit margins. Thus, a business objective of Coca Cola is securing the cost of materials and keeping them relatively consistent. Coke achieves these objectives by engaging in long-term contracts with farmers and providers of raw materials. The company also achieves cost competitiveness by streamlining its operations and outsourcing labour manufacturing overseas to countries including Columbia, Guatemala, Turkey and China.
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