3.1 Case Study - Coca Cola

Question 1

Brief statistics

Answer 1

• Every day, 1.9 billion products made by the Coca-cola brand are consumed globally.
• As a global product, it is arguable one of the world most recognizable brands.
• Coca-Cola now has 20 main brands that generate over US$45 billion a year in revenue and sales in nearly 200 countries.

Question 2

How many countries is Coca Cola sold in?

Answer 2

Almost 200

Question 3

Background of Coca Cola

Answer 3

• It is the number one manufacture of soft drinks in the world
• Their headquarters are situated in Atlanta, USA
• 70% of its sales are generated outside the USA

Question 4

Growth of Coca Cola

Answer 4

• First sold in Jacob’s Pharmacy in Atlanta on May 8th, 1886. By 1985, Asa Griggs Candler (the owner) had built syrup plants in Chicago, Dallas and Los Angeles
• Grew rapidly as it moved to other countries such as Canada, Cuba and France
• In 1900 there were two bottlers of Coca Cola; by 1920 there were about 1000
• Expansion overseas took place in 1923 and 1928 when Coca Cola was introduced to the Olympic games with the US team
• They had 70 years of success with one brand then expanded to new flavours e.g. Fanta and Sprite

Question 5

Spatial organisation of Coca Cola

Answer 5

• The Coca Cola Europe group employs approximately 70,000 people.
• Coca Cola don’t always own their factories - they subcontract them with other companies to save money
• Coca Cola manufactures their drink concentrate in America

Question 6

Social benefits of Coca Cola (name 2)

Answer 6

• Coca Cola offers training and education to those who have received little already
• Joined forces with celebrities and national events to spread the importance of recycling for a sustainable future
• Run community schemes in LEDCs e.g. the ‘empowering 5 million women entrepreneurs by 2020’

Question 7

Social costs of Coca Cola (name 2)

Answer 7

• In Rajasthan, Northern India, Coke have lowered the water table, leaving the area dry and farmers having to shut farms
• Working conditions in the bottling firms can be very harsh and those in tropical countries are without air conditioning facilities
• Charges of murder, rape and torture of union leaders and their families against Coca Cola and co in Guatemala = corrupt
• The workers have very poor pay and do not receive benefits meaning they have to pay for health treatment from their low pay (10$ a day)

Question 8

Economic benefits of Coca Cola (name 2)

Answer 8

• Coca Cola have invested $1.5 billion in the Russian economy, this includes the constructing of manufacturing plants and improving infrastructure
• Many of the bottling firms are local companies so all profit stays in the host country
• Created many jobs in LEDCs e.g. the $200 million bottling plant in Burma = 22,000 jobs

Question 9

Economic costs of Coca Cola (name 2)

Answer 9

• LEDCs rely too much on Coca Cola who could just leave suddenly = unemployment
• LEDC workers work long hours for very little pay - $10 per day
• Profits return to shareholders = very little of the money remains in host countries (economic leakage)

Question 10

Environmental benefits of Coca Cola (2)

Answer 10

• Coca Cola Africa Foundation is provided at least 2 million people across Africa with safe water by 2015 they also fund projects to improve sanitation and hygiene
• 85% products are in recyclable bottles and cans

Question 11

Environmental costs of Coca Cola (1)

Answer 11

• Depletion of the local ground water due to the utilisation of natural water resourced by the company pose serious threat to many communities
  
  • In March 2004, local offices in Kerala, India shut down a $16 million coke bottling plant blamed for the drastic decline in both quantity and quality of water available for locals.