.. project-management applications, production and materials management, quality management and plant maintenance, as well as sales and distribution management. Initially around 5,000 users will have access to SAP applications which will eventually increase to 25,000 users throughout Coca-Cola. Rick Engum, VP of Information Services at Coca-Cola Enterprises Inc. in Atlanta states the following in regards to SAP : These applications will speed the process of doing business with our suppliers and give us better management of our overall supply chain. By using common applications all of us in the Coca-Cola system will provide a consistent level of service [such as timely deliveries] to customers.
We could do this to some extent with the old systems, but it’s far easier to do with shared technology. SAP Applications provides Coca-Cola Enterprises and it’s management even further incite on understanding the business on a daily basis and how to go about making appropriate changes or adjustments at a moments notice. This project is particularly beneficial to the many large bottlers that have acquired smaller bottlers in an effort to strengthen the bottling system, because SAP will allow Coca-Cola management to run all the plants as one big unified company. Furthermore there is an eminent awareness throughout management to remain focused on the customer and their needs. SAP enables the company to do this through shared knowledge between each and every bottler. Coca-Cola has also installed ATLAS (Analysis, Tools, Logistics, And Sales) which will eventually replace Basis, for creating and organizing delivery routes for each distribution center.
In the long-run Coca-Cola feels as though SAP & ATLAS will help the entire organization become more efficient while minimizing costs. Another aspect involving Coca-Cola’s distribution system is the companies’ ambitious product line. The Coca-Cola Company successfully markets and sells over 160 beverages to a variety of customers throughout their delivery channels. These beverages are classified into four separate groups, which consist of the following: CSD (Carbonated Soft Drinks) – Coke, Sprite, Surge, Dr. Pepper etc.
— No Carb- Nestea, juices, Fruitopia etc. — IcoTonics – Powerade Water – Desani (filtered water), and Evian (pure spring water which is imported from Sweden.) The company’s core brands are Coca-Cola Classic, Diet Coke, and Sprite, which rank first, third, and fifth among all carbonated soft drinks in North America. Coca-Cola’s customers are mainly retail outlets, restaurants, grocery stores, or any other operation that buys their products, and in return sells or serves these products to consumers. The North American Sector’s major customers are Burger King, Mcdonald’s, Subway, Wendy’s, and many airlines and hotels throughout North America and Canada. Coca-Cola’s primary focus with these products is instant consumption, because that is an area in the market that has the biggest growth potential.
What instant consumption means is that Coca-Cola is trying to create product accessibility for the consumer in an effort to increase their sales volume without compensating the level of quality. Vending machines help accomplish this goal, because they provide ice-cold Coca-Cola products to consumers in a variety of locations. Recently Coca-Cola began offering the 20 once soda beverage in their vending machines, which instantly became a wise profitable decision. The advantage is that consumers end up spending more on the 20 once containers then they do with the canned soda, which in the long run increases company profits. Full-service drivers check and stock vending machines on regular routes, in a conscious effort to maintain fully replenished machines. Furthermore the drivers are trained by the company to focus on product presentation in which they are to follow strict company policies on how to properly stock Coca-Cola products in retail outlets, as well as grocery stores throughout the country. The drivers begin each day at 6:00 in the morning by meeting with sales managers, account representatives, and merchandisers to plan out exactly how the products will be delivered and sold throughout the day.
Employees at all levels throughout the distribution system take an extremely aggressive approach to producing and delivering Coca-Cola products in real time without jeopardizing the quality of each and every product item. This shared dedication to the company is what has enabled Coca-Cola to saturate the national market and begin its quest for global dominance. International Distribution Internationally Coca-Cola Company distributes 160 beverage varieties in nearly 200 countries worldwide. Coca-Cola owns 50% of the international soft drink market. Coca-Cola works extremely hard to be one of the few companies in the world to successfully reach literally billions of consumers.
Coca-Cola’s international distribution is the backbone to the their global approach. About two-thirds of Coca-Cola’s sales come from outside North America, making the company sensitive to global economic turmoil. On the other hand, that turmoil has enabled the company to make inexpensive international investments. Coca-Cola’s affiliates have been purchasing numerous bottlers in the U.S. and around the world to recognize its global bottling system into major anchors in prime markets (Coca-Cola Overview, 1). International distribution for Coca-Cola began when they decided to introduce Coke to Canada and Mexico in 1898. Within that same time period Coca-Cola expanded across the Atlantic Ocean to Europe.
The man responsible for this was Charles Howard Candler, the oldest son of Coca-Cola’s founder Asa Candler. Charles brought with him a gallon of the secret syrup and sold it to an American owner of a London soda fountain. The Coca-Cola syrup made an immediate impact in Europe, which called for orders of five-gallon drums to Germany, Jamaica, and Panama. In 1906, the international bottling and distributing plants were established in Panama and Cuba. Then in 1926, Coca-Cola’s international distribution began to expand even more with the help of a man named Earnest Woodruff. He worked with his associates and Coca-Cola on organizing international expansion by creating a Foreign Department.
In 1930, the Foreign Department became a subsidiary called The Coca-Cola Export Corporation distributing in only a few European countries and Canada. By 1940, Coca-Cola’s sales began to increase with the expansion of bottlers in forty-five international countries. To this day Woodruff’s theory is still being implemented as part of Coca-Cola’s strategic global approach. As a result of this strategy, 80% of Coca-Cola’s operating income was coming from outside the United States by the 1990’s. In 1993, there was concern with expanding Coca-Cola’s international distribution due to a competitive global market. In 1993, more than 6.3 billion unit cases of Coke and Coke Classic were sold worldwide, in more than 195 countries.
Diet Coke was also the number one low-calorie soda in the world, available in 117 countries (Global Dominance, 3). Along with the expansion came problems for the Coke brands such as Fanta, Sprite, and Minute Maid. Coca-Cola didn’t want to rely on its bottlers to distribute and market their products. So, Coca-Cola and a regional manager in the Phillippines came up with a new strategy model for international expansion. When entering a new market, the Company would seek to establish distribution of Coke products in key population centers and develop relationships with the important retail channels (Global Dominance, 4). Coca-Cola is divided into four international geographic operating units and one national operating unit.
The four international geographic operating groups are the Greater Europe Group, the Latin America Group, the Middle and Far East Group, and the Africa Group. The Greater Europe Group operates in Western Europe and is also growing in the eastern parts of Europe. The Latin America Group covers from Tijuana, Mexico, in the north to Tierra del Fuego in the south, which also includes operations in Central and South America. The Middle and Far East Group operates in the most populated areas of the world. This group manages the countries of the Pacific and Middle East. These countries consist of Japan, Australia, China and India. The last group is the African Group, which operates in the countries that make up the sub-Saharan Africa.
The Company and its geographic operating units are led by a management team of seasoned soft drink business veterans from every corner of the globe (Facts, Figures, and Features, 10). The Coca-Cola Company has too many countries to that they distribute too, and it would be impossible to list and explain each and every country. Japan, Argentina, Denmark, France, Belgium and China are six of Coca-Cola’s major distribution countries. The Coca-Cola Japan Company is a complete beverage corporation that has accomplished leadership by continually providing customers with beverages of the finest quality. Japan is highly ambitious in the beverage market.
Boasting more than seven thousand different soft drinks to choose from, the CCJC is extremely competitive. In their vast market, there are five hundred different manufacturers. Approximately one thousand new types of beverages are introduced annually. The CCJC offers more than twenty-five brands and sixty flavors. Fifty percent of all soft drink sales are made through vending machines making them an important part of sales at the CCJC. The CCJC maintains nine hundred thirty thousand machines, more than twice the amount of the closest competitor.
In 1942, Coca-Cola production began in Argentina. Coca-Cola began flying off the shelves the day it was introduced. A total of seven twenty-four bottle cases and eighteen single 185-milliliter bottles were sold that day. Sales in Argentina climbed up to 300,000 cases by the end of 1943. Coca-Cola de Argentina S.A.
currently sells approximately 1,000 times more beverages annually than that historic year when it all started in 1942. They accomplish these goals by using a fleet of 3,000 trucks and 18,000 reliable employees who see to it those Coca-Cola products are readily available in every corner of the country. In the 1930’s Coca-Cola was imported into Denmark. An estimated forty-percent of Coca-Cola products are consumed by about 5.2 million Danes. In 1933, Coca-Cola was introduced to France.
Making its first appearance at the Caf de l’Europe in Paris, Coca-Cola has been the number one beverage in France since 1966. The total amount of sales has doubled in eight years. Coca-Cola France has made more than 1,000 jobs available since 1989. Also, three billion francs have been invested in France since 1989. The French consumers currently drink roughly 88 servings of Coca-Cola products annually. The most popular brands in France are Schweppes, Canada Dry, and Dr.
Pepper. In 1927, Belgium was introduced to Coca-Cola. Due to the popularity of Coca-Cola in Belgium, it is one of the top 20 countries in terms of consumption. The Coca-Cola Company employs about 2,000 people and supplies up to 30,000 restaurants in Belgium. Recently, in Belgium there had been a contamination scare which cost Coca-Cola and its bottlers over $60 million in sales.
Coca-Cola recalled about 14 million cases after E. coli bacteria got into their products and caused approximately 200 people to become ill. It was said that bacteria from the pallets got onto the cases of Coke. Then the people who drank the soda ingested the E. coli bacteria and got sick.
There also had been a health scare with mineral water and the report of E. coli bacteria contamination in Poland. This problem only happened with brands distributed in Europe. Coca-Cola entered China’s market in 1927 and is known as one of the largest soft drink markets in the world. Coca-Cola’s operations in China are a huge part of their success for their global approach.
China’s population is about 1.2 billion and Coca-Cola covers approximately 900 million of their total population. Coca-Cola is still trying to reach more consumers in China, so they’re establishing a new distribution strategy to reach the other 300 million people in less-populated and distant areas. They want to develop a direct distribution system through route sales and opening more sales centers in the smaller cities. Coca-Cola’s main focus in China is to create affordable packaging and improving distribution. China’s consumers prefer to drink Coke out of non-returnable plastic bottles or cans.
Coca-Cola has twenty-three operating plants throughout China, but many of the western provinces, still do not have franchises. Hong Kong, which is southeast of China, is home to the world’s tallest bottling plant, which measures fifty-seven stories. Future success for Coca-Cola in China depends on its main competitor Pepsi Co. Coca-Cola’s key strategy for success in the world is investing in infrastructure. Coca-Cola invests billions of dollars to consolidate and develop new markets. The Coca-Cola system has successfully applied a simple formula on a global scale: Provide a moment of pleasure of refreshment for a small amount of money-hundreds of millions of times a day (Chronicle of CC, 22).
The Coca-Cola Company’s overseas distribution is an around-the-clock operation to get the consumers their product. Coca-Cola in Europe has different types of delivery systems to their customers. International warehouses use larger truckloads for bulk orders to distribute to customer warehouses. They also use smaller trucks for local deliveries. Also, in North America and Belgium, drivers use side-loaded trucks to deliver 400 or more cases of product each day. In other European locations, delivery is typically handled by third-party distributors (Facts 1999, 11). Coca-Cola’s target areas are grocery stores, recreational areas, shops, malls and sporting events. Coca-Cola From a Nickel a Cup – To a Powerful Giant Josh Krapf Economics Bibliography Bibliography Associated Press.
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