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Geography > Case Study Coca-Cola > Flashcards

Case Study Coca-Cola Flashcards

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1
Q

Location?

A

Eastern Germany and Mehdiganj, Uttar Pradesh, India

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2
Q

Founded?

A

1886

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3
Q

Operates? Employs?

A

In over 200 countries around the world

Employs 139,600 people making over 3,500 different products

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4
Q

Reasons for investment in Germany: European market?

A
  • The reunification of Germany opened up new markets in Eastern Europe to popular western brands
  • They avoided import tariffs because product was NOT made outside EU and imported
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5
Q

Reasons for investment in Germany: Gov incentives?

A
  • Coca-Cola given €3.5m to operate in Stralsund for 10 years

- This helped to minimise start-up costs

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6
Q

Reasons for investment in Germany: established infrastructure?

A
  • Heavy western investment in East German transport, communication and industry straight after the fall of Communism in 1989
  • Coca-Cola consolidated European operations by moving its HQ to Berlin
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7
Q

Effect of exit from Germany: jobs?

A
  • 2,000 jobs lost
  • Outmigration of unemployed led to knock on effects on local supporting businesses who lost contracts w Coca-Cola
  • Shops and services lost customers who no longer had wages to spend
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8
Q

Effects of exit from Germany: Factory abandonment in Stralsund?

A
  • Poor environmental quality would have put off in-migrants and left a legacy of waste and possible pollution from unused brownfield sites
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9
Q

Effects of exit from Germany: government funds?

A
  • No further grants were being paid to Coca-Cola to stay any longer than 10 years, freeing up money to be spent on infrastructure and local development
  • More sustainable investment in local industry was possible
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10
Q

Reasons for investment in Mehdiganj: labour?

A
  • V cheap labour as typical wage was less than £1/day and wage levels in Germany had gone up
  • This enabled lower manufacturing costs and higher profits
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11
Q

Reasons for investment in Mehdiganj: Water supply?

A
  • Water is free in most of India so manufacturing costs are lower for MNCs who use it as a raw material
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12
Q

Reasons for investment in Mehdinganj: emerging middle class consumers?

A

Increasing no.s of India’s pop. can afford western luxuries such as coca-Cola as Undua develops rapidly as a NIC

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13
Q

Effects of investment in Mehdinganj: environmentally - water misuse?

A
  • 1LITRE water used per 0.33L bottle made
  • Drop in water table by 60m up to 3km from the bottling plant
  • Only subclimax vegetation with long roots is able to reach the groundwater and grow
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14
Q

Effects of investment in Mehdiganj: environmentally - waste?

A
  • Crops cannot be grown in any great quantity as the area is already water-poor and reaches 47 degrees C In the summer
  • toxicity of waste water
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15
Q

Effects of investment in Mehdiganj: socially - farmers?

A
  • Crushing blow to former wealthy land owners in a caste society
  • Now wealthy farm owners lose income, land and status and live as much less ‘important’ members of communities
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16
Q

Effects of investment in Mehdiganj: socially - peaceful protesters?

A
  • Beaten by police
  • Women jailed for days, suffer broken bones after protesting against use of water
  • Women are only ones who can get near plant as men are instantly turned away by guards
17
Q

Effects of investment in Mehdiganj: economically - harvests?

A
  • Harvests decline
  • Rice and grain yields down by 40%
  • Most available water is contaminated
18
Q

Effects of investment in Mehdiganj: economically - wages?

A
  • Wages v low and little job security
  • Only a few 1000 permanent staff get £1/8hr shift
  • Majority are day labourers on less than 70p for 12 hrs
  • Injured workers are sacked and compensation is impossible to seek
19
Q

Sustainability of investment: benefits to Germany?

A

Investment can now be focused on more sustainable German businesses to benefit local communities and workers.
Stralsund no longer associated w negative image of Coca Cola

20
Q

Sustainability of investment: costs to Germany?

A
  • Job losses in low skill industries are often hard to replace as ‘filtering down’ is v common
  • The legacy of abandoned industrial sites can be costly and hard to clear up and can be left for year s before political will is sufficient to do anything about it
21
Q

Sustainability of investment: benefits to India?

A
  • Jobs in Mehdiganj plant provides income and chance of education drew
  • MNCs can provide a boost to infrastructure improvements e.g. roads needed for transporting products
22
Q

Sustainability of investment: costs to India?

A
  • Use of Uttar Pradesh’s groundwater supply is unsustainable
  • Quantity and quality is being adversely affected by the wasteful production
  • Locals are negatively affected in their livelihoods (farming) and their daily lives (pollution of and pressure on water supplies)
  • Environmental damage impossible to avoid given extreme climate in Uttar Pradesh with some unreliable rainfall

Geography (15 decks)

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