coca cola

How Did Coca-Cola Become What It Is? [Business Case Study]

It is a genuine flummox when you think of Coca-Cola occupying the soft drinks market space for such a long period of time. Other brands have come up, some of them have vanished and some of them are still hanging on right out there. but nothing compared to Coca-Cola. To feed this inner inquisitive monster I tried to discover the reasons and here’s my take on which business decisions over the last 130 years transformed Coca-Cola from a start-up beverage served in a small Atlanta pharmacy to one of the world’s most recognizable brands. It is time to dive down the lanes of history to figure this out!!!

 1. Humble origin

Coca-Cola went from a cocaine-infused elixir in 1886 to a ubiquitous sugary drink by 1929. Coca-Cola history began in 1886 when the curiosity of an Atlanta pharmacist, Dr. John S. Pemberton, led him to create a distinctive tasting soft drink that could be sold at soda fountains. He created a flavored syrup, took it to his neighborhood pharmacy, where it was mixed with carbonated water and deemed “excellent” by those who sampled it. Dr. Pemberton’s partner and bookkeeper, Frank M. Robinson, is credited with naming the beverage “Coca‑Cola” as well as designing the trademarked, distinct script, still used today.

2. The first cash in

The first bottles of Coca-Cola were sold for 5 cents a bottle. In the first year, sales averaged a modest nine servings per day in Atlanta. Today, the average intake of Coca-Cola drinks is estimated at 1.9 billion worldwide.

 3. Here’s our take on the top 10 decisions that changed the game for Coca-Cola

 

3.1.  1886-1940s: Coke for a Nickel

To ensure that Coca-Cola was inexpensive and available all over the country, the early leaders of Coca-Cola kept the price of Coke to five cents for more than 50 years. This steady price led to a rise in market demand for the product, which in turn forced bottlers to purchase more syrup to manufacture the drug.

 

3.2.  1894: Invention of the Sample Coupon

In 1894, the presence of Coca-Cola was unknown to many consumers outside the south-eastern United States. Giving away the commodity was a new idea in the late 19th century, and it succeeded. Free samples caught the attention of the public and gave Coca-Cola momentum.Between 1894 to 1913, more than 8.5 million free Coca-Cola samples were redeemed. At that time, one of every nine Americans had tried Coca-Cola.

 

3.3.   1899: Birth of the Coca-Cola System

In 1899, the bottling rights for Coca-Cola were sold for $1 by the then owner of the company, Asa Candler – a businessman who went on to become mayor of Atlanta, Georgia, where the company is headquartered, from 1916 to 1919 – creating what is now known as the Coca-Cola brand. The Coca-Cola company has expanded its reach to more than 200 countries around the world. A franchise agreement between The Coca-Cola Corporation and more than 250 bottlers worldwide has expanded Coca-Cola’s scope well beyond what Candler has ever dreamed with sales in more than 200 countries.

 

3.4.   1915: Launch of the Iconic ‘Contour’ Bottle

In order to counter counterfeit goods, Coca-Cola challenged glassmakers to develop a new bottle design that was so distinct that it could still be easily recognizable when broken on the ground or by contact in the night.

3.5.  1940s: Coca-Cola During Wartime

Throughout World War II, a group of workers known as “Professional Observers” were sent to the United States Army to set up, administer and control the activity of bottling units that would supply Coca-Cola to US soldiers overseas. It was a simple act that would help to create Coke as a global company by taking the commodity to countries around the world.

 3.6.  1960s: Diversification

The acquisition of the Minute Maid Company in 1960 marked the company’s first venture outside carbonated drinks. The investment was a crucial move for Coca-Cola to grow and diversify its portfolio in the years to come.

By then, the Coca-Cola Company has expanded to sell more than 3800 (Three thousand eight hundread ) beverages in a wide variety of categories.

 3.7.  1982: Diet Coke

At the end of the 1970s, Coca-Cola started creating a new drink that would reinvigorate the selling of cola and fulfill the growing market demand for low-calorie beverages. In 1982, the company launched “Diet Coke” as the first expansion of the Coca-Cola trademark.

3.8.  1985: New Coke

To revitalize the cola market in 1985, the Coca-Cola Corporation made the first formula change to Coca-Cola in 99 years. While the invention of New Coke was originally considered a business blunder of the century, some observers found it an unintended stroke of a marketing genius.

Initially called the business blunder of the century, the change of approach quickly became an unexpected stroke of marketing genius when an emotional bond was discovered between the Coca-Cola brand and its customers.

 3.9. Late 1990s-early 2000s: Becoming a Total Beverage Company

At the end of the 1990s, the transition from a sparkling soda business to a “complete beverage company” was on the cards, with many early product releases quickly capturing the  consumer demand for non-carbonated drinks. Nowadays, Coca-Cola Company sells standard and low-kilojoule soft drinks as well as juice, sports drinks, energy drinks, teas and flavored milk.

 3.10.  Now and in to the Future: Keeping Up with Consumer Trends

While customers continue to demand fresh and exciting beverage options around the world, the organization is seeking new ways to tap into rising trends by taking control of fast-growing beverage brands.

Although the company continues to expand sparkling beverage choices, including the continued development of its initial and most popular brand, Coca-Cola.

 4. The marketing move of the century by Coca-Cola

 In 2009, the “Open Happiness” campaign was unveiled globally. The central message of “Open Happiness” is an invitation to billions around the world to pause, refresh with a Coca‑Cola, and continue to enjoy one of life’s simple pleasures. The “Open Happiness” message was seen in stores, on billboards, in TV spots and printed advertising along with digital and music components — including a single featuring Janelle Monae covering the 1980 song, “Are You Getting Enough Happiness?” The happiness theme continued with “Open the Games. Open Happiness” featured during the 2010 Winter Olympic Games in Vancouver, followed by a 2010 social media extension, “Expedition 206” — an initiative whereby three happiness ambassadors travel to 206 countries in 365 days with one mission: determining what makes people happy. The inspirational year-long journey is being recorded and communicated via blog posts, tweets, videos and pictures.

 5. The workforce behind this miracle!

 The Coca-Cola Company operates in the non-alcoholic beverage market and is well-known for its billion-dollar soft drink, Coca-Cola. As of December 31, 2018, the company, which was founded in 1892, employed about 62,600 associates worldwide. The global operating firm consists of an Atlanta-based corporate division, and about 300 bottling partners worldwide.

 

6. Simplest measure of Coca-Cola’s worth?

At the end, a company is worth just as much as investors are willing to pay for it. Coca-Cola currently has around 4.32 billion shares outstanding. At a share price of approximately $43.50 per share, this places Coca-Cola’s market capitalization at about $188 billion. Moreover, market capitalization takes into account the relative quantities of cash and debt a company has. Many people tend to look at the value of the company, which removes the financial structure selected by the company and instead focuses on the value of the business that the company produces. If you balance cash and debt, Coca-Cola has an annual value of almost $213 billion.  

 

 

 

 

 

 


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