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In: Economics

CASE #1: COCA COLA The Coca-Cola company started 110 years ago as a small, insignificant one...

CASE #1: COCA COLA

The Coca-Cola company started 110 years ago as a small, insignificant one man business. Since then, it has grown into one of the largest companies in the world. The first chairman of the company was Dr. John Pemberton and the current chairman is Muhtar Kent. The demand for this product has made this company into a 50 billion dollar business.

Coca-Cola was invented by Dr. John Pemberton, an Atlanta pharmacist. He concocted the formula in a three legged brass kettle in his backyard on May 8, 1886 by mixing lime, cinnamon, coca leaves, and the seeds of a Brazilian shrub. (Things Go Better With Coke 14). Coca-Cola, as he called the beverage, made its debut in Atlanta's largest pharmacy, Jacob's Pharmacy, as a five cent non- carbonated drink. Later on, the carbonated water was added to the syrup to make the beverage that we know today.

Coca-Cola was named by Frank Robinson, one of Pemberton's close friends. Pemberton, in a state of poor health and in debt, was forced to sell a portion of the company to Asa Candler. In time, Candler acquired the whole company for $2,300.

Candler achieved a lot during his time as owner of the company. On January 31,

1893, the famous Coca-Cola formula was patented. He aggressively advertised Coca-Cola in newspapers and on billboards. In the newspapers, he would give away coupons for a free Coke at any fountain. Coca-Cola was sold to Ernest Woodruff in 1919 for 25 million dollars. He gave control of Coca-Cola to his son, Robert Woodruff, who would be president for six decades.

Woodruff introduced the six bottle carton in 1923. He also made Coca-Cola available through vending machines in 1929. That same year, the iconic Coca- Cola bell glass was made available. He started advertising on the radio in the 1930s and on television in 1950.

Currently Coca-Cola is advertised on over five hundred TV channels around the world. Often considered the best known trademark in the world, Coca-Cola is sold in about one hundred and forty countries to 5.8 billion people in eighty different languages. This is why Coca-Cola is the largest soft drink company in the world. Coca-Cola is worth more than 58 billion dollars on the stock market (Coca-Cola, The Coca-Cola Company 232).

For more than 65 years, Coca-Cola has been a sponsor of the Olympics. One way to see all of the achievements of the Coca- Cola company is to visit the World of Coke in Atlanta. It houses a collection of memorabilia, samples of the products, exhibits, and many other interesting items.

Cost of production of coke is very low because it is nothing but water mixed with some sweetener and color. Demand for coke is growing. Rich and poor, young and old, everyone likes Coca Cola.  

The Question:

Can the labor force of your chosen company be trained further to increase productivity and lower cost of production?

As a business is your chosen company profitable? Will it be able sustain profitability?

How can it make its profit grow?

Solutions

Expert Solution

As we know that technology keeps on improving and there are constant innovations in any field. So, even if a company boast that the labor force of the company is having all the training available for the job, still that will not remain true after some time because labor force now would be needing further training for the new advancements. Therefore, though marginal utility of the additional training would keep on decreasing but still advance training leads to further increase in productivity and decrease in cost.

Coca-cola is one of the most successful and profitable company. Now it has been seen that this company has been there for more than a century and sustained its profitability by having continuous innovation, aggressive promotion, proper marketing, appropriate pricing, global strategy, etc. It can make its profit grow by eliminating its competition and increasing the market share in the market.  


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