Q1- Introduction, business profile of Coca-Cola, and its historical prospective.
In May 1886, Coca-Cola was invented by Doctor John Pemberton a pharmacist from Atlanta, Georgia. The name was a suggestion given by John Pemberton’s bookkeeper Frank Robinson who was the first to script “Coca-Cola” into the flowing letters which has become the famous logo of today. Until 1905, the soft drink, marketed as tonic, contained extracts of cocaine as well as the caffeine-rich kola nut.
As we know, every new product in its introductory stage faces a certain loss due to higher cost relatively to the revenue generated after sales, and that was the case when Pemberton started the selling process on May 8 of that same year, where he ended up with a loss of $20 as a result of costs equal to $70 and revenues equal to $50.
By the late 1890s, Coca-Cola was one of America’s most popular fountain drinks. With another Atlanta pharmacist, Asa Griggs Candler, the Coca-Cola Company increased sales by over 4000% between 1890 and 1900. Advertising was an important factor in Pemberton and Candler’s success. And by the turn of the century, the drink was sold across the United States and Canada. In addition, the company began selling syrup to independent bottling companies licensed to sell the drink.
After 19 years of the invention date, the Coca-Cola Company started operating internationally and it became the world’s largest bottle of liquid, nonalcoholic refreshment.
It took the company about 119 years to turn the $20 loss in 1886 into $596 million profit in 2004, and that implies a successful business strategy followed by the company.
Coca-Cola Enterprises is the world’s largest Coca-Cola bottler, selling approximately 43 billion bottles and cans each year. The company markets, distributes and produces beverage products of Coca-Cola Company and its subsidiaries. The products include Coca-Cola Classic, caffeine free Coca-Cola classic, diet Coke, Sprite, Cherry Coke, and Fanta. The company conducts its business primarily under agreements with The Coca-Cola Company, which own around 37% of the company's common stock.
These agreements give it the exclusive right to market, distribute and produce beverage products in specified territories. This also provide the Coca-Cola Company with the ability to establish prices, terms of payment and other terms and conditions for the purchase of concentrates and syrups, in addition to other significant transactions and agreements including acquisitions of bottling territories, arrangements for cooperative marketing, advertising expenditures, purchases of sweeteners and strategic marketing initiatives.