The Coca-Cola Company

FOUN DED: 1892

OVERVIEW
The Coca-Cola Company is the largest soft drink
Contact Information: marketer in the world, holding 47 percent of the global
HEADQUARTERS: 1 Coca-Cola Plz. market for soft drinks. It also produces other beverage
Atlanta, GA 30313 and food products. About 90 percent of the company’s
PHONE: (404)676-2121 revenues come from sales of beverages and 10 percent
FAX: (404)676-6792 from food products. The Coca-Cola Company is very
URL: http://www.cocacola.com active internationally. While the company has very
http://www.coke.com strong sales in the United States, 68 percent of its soft
drink products are sold outside of North America. The
Coca-Cola Company is regarded as one of the best man­
aged companies in the world: in Fortune magazine’s
fifteenth Annual Survey of corporate reputations, pub­
lished in March 1997, The Coca-Cola Company was
ranked first based on its strong marketing skills, the
quality of its products and services, financial soundness,
corporate and environmental responsibility, and overall
business performance.

COMPANY FINANCES
In its earnings statement, Coca-Cola reported an­
other year of record volume and earnings per share in
1997. Earnings per share increased 19 percent in 1997.
Revenue for 1997 totaled $18.87 billion and has risen
steadily over the years. In 1993 total revenue was $13.96
billion, and rose in 1994 to $16.17 billion. In 1995 total
revenue jumped to $18.02 billion and 1996 saw total rev­
enue at $18.55 billion.
Worldwide, Coca-Cola’s unit case volume increased
14 percent and gallon shipments grew 15 percent in the

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first quarter of 1998. Some revenue increases were off­

set significantly by the impact of a stronger U.S. dollar.
The U.S. dollar in 1997-98 was about 10 percent stronger
than a weighted average of foreign currencies in 1996.
Excluding the impact of non-recurring items, oper­
ating income grew 10 percent. Additionally, on a local
currency basis, Coca-Cola continued to invest aggres­
sively in volume-building marketing initiatives.
Coca-Cola purchased approximately 20 million
shares of its own common stock in 1997. In the first quar­
ter of 1998 it purchased another 4 million shares. Since
January 1984, Coca-Cola has repurchased 31 percent of
its outstanding common shares to create a cumulative to­
tal of more than 1 billion shares, at an average cost of
approximately $11 per share.

ANALYSTS' OPINIONS
The Coca-Cola Company has long been a favorite
of stock market analysts, and many were recommending
that investors buy its stock in the mid-1990s. Prudential
Securities stated that the company was “being extremely
aggressive in certain markets in an effort to capitalize on
PepsiCo’s vulnerability and overall strategy of shrinking
its international soft drink business.”
Wheat, First Securities also recommended that
clients buy Coca-Cola stock (as of October 1996), citing
the continued strength of its marketing programs, partic­
ularly the Olympics, innovative packaging initiatives,
and the introduction of new products worldwide. Wheat,
First Securities also said that The Coca-Cola Company
also benefited from strong volume growth produced by
solid increases in unit sales of its major brands. The in­
creases were the result of innovative packaging and ef­
fective promotional support.

HISTORY
As a company Coca-Cola has grown consistently for
more than 100 years. From one soft drink sold in an At­
lanta pharmacy, The Coca-Cola Company has grown into
an enormous worldwide marketer of many brands of soft famous “Coca-Cola formula” has been a closely-guarded
drinks and food products. If all the Coca-Cola ever pro­ secret ever since, held in a bank vault.
duced were placed in regular size bottles and lined up to In 1891 Asa Candler acquired total control of Coca-
form a four-lane highway, that road would wrap around Cola. The following year Candler and several partners
the earth more than 81 times. formed The Coca-Cola Company. The new company
Coca-Cola was first produced in Atlanta, Georgia, used advertising and promotion to make Coca-Cola avail­
on May 8, 1886, when pharmacist Dr. John Styth Pem­ able everywhere, a strategy still used today.
berton mixed a caramel-colored syrup in a three-legged In 1894 the first bottled Coca-Cola was sold. Bot­
brass kettle in his backyard. After it was combined with tling operations were soon established throughout the
carbonated water, Pemberton began selling the product United States. Since then The Coca-Cola Company has
as a fountain drink at Jacob’s Pharmacy in Atlanta. The sold its products in two main ways: through fountain

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(post-mix) operations, such as those found at movie the­ As a global company, Coca-Cola adjusts its adver­
aters and fast food restaurants, and through sales of bot­ tising and marketing programs for different regions of
tled and canned products in stores and vending machines. the world. For example, in new markets such as Poland
In 1919 The Coca-Cola Company was sold by the and India, the company focuses on setting up bottling
Candler group for $25 million to Atlanta banker Ernest systems. In emerging markets, the company works to
Woodruff. Four years later Ernest Woodruff’s son, build enough bottling plants to meet the rapidly growing
Robert Woodruff, was elected president of the company. demand for its products. In highly developed markets,
He would lead the company for more than six decades. such as Europe and North America, the company focuses
on developing new products, such as low-calorie and “al­
The Coca-Cola Company first moved outside the soft ternative” beverages.
drink industry when it bought the Minute Maid Company The heart of the Coca-Cola business strategy is its
in 1960. Other food companies were acquired and merged bottler system, which the company says is the single fac­
into what is now Coca-Cola Foods. Today the company tor most responsible for the global popularity of its prod­
is still based in Atlanta, where in 1996 it opened a new ucts. Many Coca-Cola bottling plants are locally owned
tourist attraction, “The World of Coca-Cola Pavilion.” and operated by independent business people who hold
licenses to bottle and sell Coca-Cola products. However,
the largest U.S. bottler—Coca-Cola Enterprises—is 44-
percent owned by The Coca-Cola Company. Coca-Cola
STRATEGY Enterprises controls 2,500 local bottlers and accounts for
about 55 percent of all U.S. bottling volume.
The Coca-Cola Company’s business strategy is sim­
ple: make its products available everywhere in the world
and trigger purchases (through advertising and promo­
tion) as often and in as many ways as possible. This strat­ INFLUENCES
egy is clearly successful: in the late 1990s Coca-Cola was
one of the world’s most recognized brand names and was The Coca-Cola Company has enjoyed an almost
available in almost 200 countries. The company is fa­ continuous history of success and growth. From 1886 to
mous for its advertising, which has always followed new 1960 it marketed only Coca-Cola, but did so very suc­
trends. cessfully. In 1960 it introduced its first non-cola prod­

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ucts, the Fanta line of flavors, which were followed by

other new soft drinks in the 1960s and 1970s. In 1982 it
launched diet Coke, the first extension of the Coca-Cola
brand name. Diet Coke was extremely successful, and
within one year of being introduced was the largest sell­
ing low-calorie soft drink in America.
Even Coca-Cola’s biggest marketing mistake turned
into a success. In 1985, after extensive taste testing, the FAST FACTS:
company announced that it had reformulated its main
Coca-Cola brand. Thousands of Coca-Cola drinkers
About The Coca-Cola Company
protested the change, and after extensive publicity and Ownership: The Coca-Cola Company is a publicly
media coverage, the company re-introduced the “old” owned company traded on the New York Stock Ex­
Coca-Cola as Coca-Cola classic. The new product was change.
re-named Coke II. Coca-Cola classic continues to be the Ticker symbol: KO
top selling soft drink in the United States.
It took 22 years for the Coca-Cola Company to sell Officers: M. Douglas Ivester, Chmn. & CEO, 50,
the first billion servings of Coca-Cola. In 1998 they were $2,856,250; Charles S. Frenette, Senior VP, Chief
selling a billion drinks a day. Marketing Officer, 45; James E. Chestnut, Sr. VP &
CFO, 47
Employees: 29,500 (1997)
Principal Subsidiary Companies: The Coca-Cola
CURRENT TRENDS Company operates subsidiaries including Coca-Cola
Nearly 775 million servings of Coca-Cola products Foods and Coca-Cola Enterprises.
are consumed around the world each day. The com­ Chief Competitors: Because of its global approach to
pany’s goal is to increase that number in three ways: by the beverage market, Coca-Cola competes with a va­
bringing Coca-Cola products to the few places on earth riety of companies. Some primary competitors in­
where it is not available; increasing consumption of clude: Chiquita Brands; Cadbury Shwepppes; Cott;
Coca-Cola products where they are available; and de­ Philip Morris; Ocean Spray; PepsiCo Inc.; Seagram;
veloping new products. While North America still ac­ Procter & Gamble; Triarc; and Unilever.
counts for one-third of the company’s business, in the
mid- to late 1990s much of the company’s sales growth
has come from overseas.
To expand global distribution of its products, the
company is aggressively developing bottling networks caffeine free diet Coke, Sprite, diet Sprite, Cherry Coke,
worldwide through new agreements and joint ventures. diet Cherry Coke, Barq’s, Coca-Cola, Fanta, Fresca,
The Coca-Cola Company has also developed new prod­ Fruitopia, Hi-C fruit drinks, Mello Yello, Minute Maid
ucts to challenge rivals in other beverage areas. For ex­ and diet Minute Maid soft drinks, Minute Maid juices,
ample, in 1994 the company introduced Fruitopia to com­ Mr. PiBB, Powerade, Surge, and TAB.
pete with Snapple’s successful “new age” beverages, and The Coca-Cola Company was also able to breathe
its POWERade beverage competes with Quaker’s new life into its older products in the mid-1990s. In 1996
Gatorade brand. Sprite was the fastest-growing soft drink brand in the
The result of all these trends is that The Coca-Cola United States and became the fourth best selling brand,
Company continues to expand not only in international due mostly to a sarcastic ad campaign that made fun of
markets, but in the United States as well. For example, the “hype” in other soft drink ads. Sprite’s slogan was
in the first six months of 1996, the company accounted “Image is nothing. Thirst is Everything. Obey your
for 80 percent of the total soft drink industry expansion thirst.”
in the United States, according to an analysis by the Mor­ In early 1997 The Coca-Cola Company introduced
gan Stanley Company. The Coca-Cola Company’s goal Surge, a highly caffeinated citrus beverage designed to
is to account for 50 percent of the U.S. soft drink mar­ compete with Pepsi’s Mountain Dew. As of April 1997
ket by 2001. the company had spent $13 million to advertise the prod­
uct. However, R.J. Corr Naturals Inc. was suing Coca-
Cola over its advertising theme, “Feed the Rush.” Corr
said that the advertising infringes on one of its products,
PRODUCTS Ginseng Rush.
Products of The Coca-Cola Company include: Coca- Citra, a thirst-quenching citrus soft drink, was na­
Cola classic, caffeine free Coca-Cola classic, diet Coke, tionally launched after successful initial regional market

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CORPORATE CITIZENSHIP
The Coca-Cola company believes it is appropriate
to give back to the communities in which they do busi­
ness. This concept of mutual benefit has resulted in cul­
tural exchanges, sports sponsorships, financial support,
and technological support in developing nations.
CHRONOLOGY: In all of Coca-Cola’s sports affiliations, its support
Key Dates for The Coca-Cola Company for the International Olympic Games is most visible and
historic. Coca-Cola has been supplying its products to
1886: John Pemberton invents Coca-Cola the Olympics since 1928, and is the official soft drink
1891: Asa Candler buys Coca-Cola from Pemberton supplier.
1899: Candler sells bottling rights to Benjamin In 1984 The Coca-Cola Company created the Coca-
Thomas and John Whitehead Cola Foundation to increase its ongoing aid for educa­
tional excellence. The Coca-Cola Foundation’s mission
1894: The first bottled Coca-Cola is sold is to nurture and promote a favorable environment by
1916: Candler retires globally supporting educational and related community
1919: Company is sold to Ernest Woodruff for $25 needs. Through its scholarships and minority education,
million the Foundation helps students to increase their chances
of getting a college education. And because Coca-Cola
1923: Ernest’s son Robert Woodruff becomes president believes the arts add value to a total public school cur­
1928: Coca-Cola begins supplying Coke to the riculum, the Foundation also supports education in the
Olympic Games arts for both teachers and students. The Foundation also
1940: Coca-Cola is bottled in 45 countries supports interdisciplinary educational programs that pro­
vide multilingual and multicultural experiences. Some of
1941: Introduces the slogan “It’s the Real Thing” the global programs provided by the Coca-Cola Founda­
1960: Buys Minute Maid Company; introduces Fanta tion include the Coca-Cola World Fund at Yale, the King
Juan Carlos I Center for Spanish Studies at New York
1961: Introduces Sprite University, and a consortium of three universities: Clark
1963: Introduced Tab Atlanta University, University of Nairobe in Kenya, and
1967: Forms the Coca-Cola Company Foods Division the University of Zimbabwe in Harare.
1972: Introduces Mr. PiBB Concerned with the environment, the Coca-Cola
Company has adopted a set of environmental policies.
1979: Introduces Mello Yello An environmental management system ensures imple­
1981: Roberto Goizueta becomes president mentation of the policies to protect and preserve the en­
1982: Introduces Diet Coke; acquires Columbia Pictures vironment in such areas as recycling, source reduction,
water and energy conservation, and wastewater quality.
1984: Creates the Coca-Cola Foundation
Coca-Cola introduced the first two-liter plastic
1985: Changes the Coca-Cola recipe; introduces bottle made with 25 percent recycled plastics after win­
Cherry Coke ning rare FDA approval to package food in recycled
1990: Introduces POWERaDE packaging. Coca-Cola also uses recycled aluminum;
1994: Introduces Fruitopia both are important practices that reduce waste and con­
serve energy.
1995: Buys Barq’s root beer Coca-Cola was criticized in the early 1990s for its
1996: Opens “The World of Coca-Cola Pavillion” plan to construct plantations for its Minute Maid prod­
1997: Introduces Surge; Goizueta dies and is replaced ucts on land that was a tropical rain forest in Belize. Im­
by Douglas Ivester mediately Coca-Cola sold some of the land and set aside
1998: Company sells one billion drinks per day the rest for environmental conservation.

GLOBAL PRESENCE
testing, and is available in nearly 50 percent of the United Global markets are key to The Coca-Cola Com­
States. A multi-dimensional marketing campaign featur­ pany’s continued growth. The company’s first venture
ing Citra’s “No Thirst is Safe” theme was launched at into international markets was in the early 1900s, when
the beginning of 1998. Coca-Cola was introduced in Canada. In the 1920s the

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company made its first serious effort to expand sales of

Coca-Cola around the world. Overseas sales climbed
rapidly and by 1940 Coca-Cola was botled in more than
45 countries. Coca-Cola’s global business was helped
greatly by the company’s commitment to supply U.S. ser­
vicemen with Coca-Cola during World War II. After the
war, distribution systems were in place in many coun­
tries to market Coca-Cola. By the mid-1970s more than FLUID INTAKE
half of Coca-Cola’s global sales came from outside the STRATEGIES
United States.
The Coca-Cola Company’s global presence is By the mid-1990s, the average American was drink­
strong and growing. Unit case sales increased 10 per­ ing 343 eight-ounce servings of Coke products per year.
cent in 1993, including strong growth in China and Mexico followed, with 322 Cokes per year, and Australia
Mexico. The company’s international soft drink oper­ beat out Norway by gulping down 292 Cokes per year.
ating income was up 18 percent in 1994. In 1997 The At the other end of the spectrum, the average Chinese
Coca-Cola Company was propelled to a strong world­ person drank only four Cokes, and the average Indian
wide unit case volume gain of 8 percent, which amounts drank only two Cokes annually. It’s easy to see why Coke
to over 600 million additional cases. Sprite also con­ has targeted China and India as areas where the company
tinued its explosive global growth with worldwide unit can expand significantly. In their 1995 annual report,
case sales advancing 13 percent. Coke sketched out their corporate strategy by asking the
In the mid-1990s Coca-Cola expanded further into question, “What’s our most underdeveloped market?”
Central China, forming a partnership with several private Their answer is quite simple, “The human body.” As
and state-owned Chinese firms to build a new bottling Coke explained to its shareholders, “We’re focused on
plant in Zhengzou. That plant opened in 1996. Coca-Cola expanding our share of every human being’s fluid intake
products were available to 80 percent of China’s 1.2 bil­ . . . as long as people consume approximately 64 ounces
lion people as of 1996. In 1997 Coca-Cola’s sales vol­ of fluid per day, our growth opportunities will be virtu­
ume grew 30 percent. ally unlimited.”
Much of Coca-Cola’s international success in the
mid-1990s came at the expense of its biggest rival, Pep­
siCo, which in 1996 suffered large declines in its soft
drink product sales. In 1996 The Coca-Cola Company
scored a major gain when it convinced the Cisneros
Group in Venezuela to stop bottling Pepsi products and
begin bottling Coca-Cola products.
Volume growth is a primary measure of the health
of Coca-Cola’s global business. In Latin America, unit
case volume increased 12 percent and gallon shipments
grew 9 percent in 1997. In the Middle East and Far East,
unit case volume increased 10 percent and gallon ship­ A COKE BY ANY OTHER
ments grew 14 percent in 1997. In eastern Europe the
company expanded its market share in the mid-1990s, NAME?
and in 1996 it controlled 65 percent of the market in Ro­ Coca-Cola is a company whose products are known
mania, more than 50 percent in Hungary, more than 30 and sold throughout the world; in fact it is probably one
percent in the Ukraine, and 37 percent in Poland. of the most recognizable “symbols” of America. How­
ever, for all its marketing and distribution efforts, it has
run into some problems in overseas markets. For exam­
ple, when Coca-Cola was first shipped to China, the
EMPLOYMENT company wanted to name the product something that,
The Coca-Cola Company maintains a long-standing when pronounced, sounded like “Coca-Cola.” The only
commitment to equal opportunity and affirmative action. problem was that the characters they decided to use
The company values the diversity of its employees and meant “bite the wax tadpole,” in Chinese. The company
strives to create a working environment that is free from later changed to a set of characters that translates to
“happiness in the mouth.” It wasn’t pronounced like
discrimination and harassment with respect to race, sex, Coca-Cola, but at least it meant something a bit more
color, national origin, religion, age, and sexual orienta­ pleasant.
tion. Coca-Cola also makes reasonable accomodations to
qualified individuals with disabilities.

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Coca-Cola fosters the growth of minority and Sellers, Patricia. “How Coke Is Kicking Pepsi’s Can (Competi­
women-owned businesses through its targeted purchas­ tion Between Coca-Cola and PepsiCo).” Fortune, 28 October
ing programs. Two women and 2 people of color sit on 1996.
the 14 member board of directors. Also, there are 4 Prendergast, Mark. “For God, Country and Coca-Cola: The
women and 6 people of color among the top 38 officers Unauthorized History of the Great American Soft Drink and the
at Coca-Cola. Company That Makes It.” New York: Scribners, 1993.

For an annual report:

SOURCES OF INFORMATION on the Internet at: http://www.cocacola.com/profile/report/in-
dex.html or write: The Coca-Cola Company, 1 Coca-Cola Plz.,
Bibliography Atlanta, GA 30313
Coca-Cola Company 1995 Annual Report. Atlanta, GA: The
Coca-Cola Company, 1996. For additional industry research:
Coca-Cola Company 1997 Annual Report. Atlanta, GA: The Investigate companies by their Standard Industrial Classification
Coca-Cola Company, 1997. Codes, also known as SICs. Coca-Cola’s primary SICs are:
Coca-Cola Company 1998 First Quarter Financial Statement. At­ 2033 Canned Fruits, Vegetables, Preserves, Jams & Jellies
lanta, GA: The Coca-Cola Company, 1998. 2086 Bottled & Canned Soft Drinks and Carbonated Waters
Gleason, Mark. “Sprite Is Riding Global Ad Effort to No. 4 Sta­ 2087 Flavoring Extracts and Flavoring Syrups, NEC
tus.” Advertising Age, 18 November 1996.
McBride, Sandra. “News from China: The World’s Largest Pop­
ulation Meets the World’s Two Greatest Soft Drink Marketers.”
Beverage World, September 1996.

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 Colgate-Palmolive
Company
FOUNDED: 1806
OVERVIEW
Colgate-Palmolive is the nation’s leading manufac­
turer of toothpaste, with a strong presence in the personal Contact Information:
care, household cleaning, and pet food sectors as well. HEADQUARTERS: 300 Park Ave.
The company’s Colgate brand toothpaste moved into the New York, NY 10022
number one position in 1997, displacing Procter & Gam­ PHONE: (212)310-2000
ble’s Crest brand, while Palmolive leads in the liquid FAX: (212)310-3405
dishwashing detergent field. Ajax, the company’s long­ URL: http://www.colgate.com
time abrasive cleanser, is literally a household word, and
various Colgate-Palmolive brands such as Murphy Oil
cleaning products and Irish Spring soap have benefited
from popular advertising campaigns. Fab laundry deter­
gent and Mennen deodorant (a brand acquired in 1992)
are also among the leading competitors in their areas, and
Science Diet is the top seller among premium pet foods.
The company has an enormous global presence with
plants in 75 countries and products available in virtually
every nation in the world, including Australia, Brazil,
Canada, China, Colombia, France, Italy, Mexico, Thai­
land, and the United Kingdom.

COMPANY FINANCES
Colgate-Palmolive posted a net income of $740 mil­
lion on revenue of $9.06 billion in 1997, compared with
a net of $635 million on sales of $8.75 billion in 1996.
Net income rose more than 16 percent between 1996 and
1997. Colgate reported net earnings of $172 million on
worldwide sales of $8.36 billion in 1995, compared with
net income of $580 million on sales of $7.14 billion in
1994. The company reports that it has paid dividends on

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