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Case Study
Case Study
Case Study
1: Strategic Management
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The Carbonated Soft Drinks Industry in Pakistan in the
Context of Coca Cola
1. A Brief History
Coca-Cola Enterprises was established in 1986 as a young company by the
standards of the Coca-Cola system. Yet each of its franchises has a strong heritage in the
traditions of Coca-Cola that is the foundation for this Company. The Coca-Cola Company
traces its beginning to 1886, when an Atlanta pharmacist, Dr. John Pemberton, began to
produce Coca-Cola syrup for sale. However the bottling business began in 1899when two
Chattanooga businessmen, Benjamin F. Thomas and Joseph B. Whitehead, secured the
exclusive rights to bottle and sell Coca-Cola for most of the United States from The
Coca-Cola Company. The Coca-Cola bottling system continued to operate as
independent, local businesses until the early 1980s when bottling franchises began to
consolidate. In 1986, The Coca-Cola Company merged some of its company-owned
operations with two large ownership groups that were for sale, the John T. Lupton
franchises and BCI Holding Corporations bottling holdings, to form Coca-Cola
Enterprises Inc. The Company offered its stock to the public on November 21, 1986, at
adjusted prices of $5.50 ashore. On an annual basis, total unit case sales were 880,000
in1986.In December 1991; a merger between Coca-Cola Enterprises and the Johnston
Coca-Cola Bottling Group, Inc.(Johnston) created a larger, stronger Company, again
helping accelerate bottler consolidation. As part of the merger, the senior management
team of Johnston assumed responsibility for managing the Company, and began a
dramatic, successful restructuring in 1992.Unit case sales had climbed to 1.4 billion, and
total revenues were $5 billion at the year-end. Presently The-Coca-Cola Company is the
largest soft drink company in the world. Every year 800,000,000 servings of just "Coke"
are sold in the U.S alone
2. CCBPL
The Coca-Cola Company began operating in Pakistan in 1953. Coke, Fanta and
Sprite were the brands with which Coca-Cola started operating in Pakistan. The CocaCola System in Pakistan operates through eight bottlers, four of which are majorityowned by Coca-Cola Beverages Pakistan Limited (CCBPL). The CCBPL plants are in
Karachi, Hyderabad, Sialkot, Gujranwala, Faisalabad, Rahim Yar Khan, Multan and
Lahore. The remaining two plants, independently owned, are in Rawalpindi and
Peshawar. The Coca-Cola System in Pakistan serves 70,000 customers/retail outlets. The
Coca-Cola System in Pakistan employs 1,800 people working for the company. During
the last two years, The Coca-Cola Company in Pakistan has invested over $130 million
(U.S) and Coke has successfully provided 51 years of service to its customers in Pakistan.
Coca Cola
Sprite
Fanta
Sprite 3G
Coke diet
Sprite Zero
6. Today
Today, CCBPL is operated directly under the supervision of Coca Cola. It has 10
Plants all around in Pakistan:
Karachi.
Lahore
Gujranwala
Rawalpindi
Peshawar
Hyderabad
Faisalabad
Sialkot
Rahimyar khan
Multan
Sahiwal
7. Market Share
According to a Wall Street Journal report, Pepsi though still the market leader,
has lost significant market share to Coca Cola because of the latters sponsorship of Coke
Studio. As of July 2010, Coke claimed 35% of all cola sales in Pakistan while Pepsis
market share was 65%, down from a dominant 80% in the 1990s that it mainly gained by
sponsoring cricket. However, PepsiCo still remains Pakistans No. 1 Soft Drinks
company.
8. Further Investment
The Coca-Cola Company plans to invest $379 million on manufacturing facilities
across Pakistan over the next three years, according to a report released in June 2013.
9. Social Responsibility
9.1 Environment Conservation: Coca-Cola Pakistan, in collaboration with WWFPakistan, organized a clean-up drive to clean the most visited tourist site of Pakistan,
Lake Saif-ul-Mulook. The clean-up drive is part of Coca-Cola and WWFs ongoing
project titled Environment Conservation Project.
9.2 Lighting a Million Lives: Coca-Cola Pakistan, in collaboration with Buksh
Foundation, has electrified 10 off-grid villages in the Sahiwal District of Punjab via the
solar energy project, Lighting a Million Lives.
9.3 EMPOWER: EMPOWER is an innovative program launched by Coca-Cola Pakistan
to provide extra-curricular learning to university-going youth of the country, through
inspirational talks delivered by experts from various fields.
10. Problems
10.1 Distribution
Coca Cola Company is facing a problem in distribution, as distributors are
expecting more from Coca Cola to encourage retailers to provide space to their products,
in the form of providing refrigerators. Its competitor, Pepsi Cola, is far more effective in
providing such facilities to distributors, which gives it a vital competitive edge. Pepsi
Cola also provides better incentives like upfront discounts to its distributors, wholesalers,
and retailers.
10.2 Promotion
Coca Cola seems to rely only on a one-dimensional promotion strategy, which is
music in the form of Coke Studio. On the other hand, Pepsi has chosen a far more
appealing platform, which is Cricket.