Coke's Relationship with Bottlers: To "Revive and Sustain"
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Code : COM0030
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Region : US
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Introduction:Often considered as "the liquid substitute for liberty", and a symbol of all American notions like "free-enterprise and runaway success", Coca-Cola is the most valuable brand in the world. The Coca-Cola Company (Coke), with its
118-year history, is the11th most admired company globally, operating in over 200 countries, with nearly 400 brands,
serving the world 1.2 billion servings of soft drinks each day. Coke's wide range of beverages include non-alcoholic
carbonated drinks, diet and light soft drinks, waters, juices and juice drinks, teas, coffees, and sports drinks. The two
things that have made Coke great, according to a former executive of the company, are "the brand Coca-Cola and the
bottler system". |
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Too much of control wielded by the company over its bottlers strained its relations with the bottling partners. This, along with the downturns in the economies of several developing countries in the world, affected the performance and earnings of the Coca-Cola system and brought a loss of $1.2 billion from the bottling system in 1999, compared to a gain of $373 million in 1997. The company is trying all methods – restructuring and reorganizing itself, changing leadership, changing policies and strategies, rebuilding its relations with its partners, and refurbishing its tarnished image, in order to perk up and get its sheen back. It can be observed that the company's efforts are not fruitless, as it posted net income of $1.1 billion on $5.1 billion in revenue in the first quarter of 2004, compared with net income of $835 million on $2.9 billion in revenue for the same period in 2003. At the end of the year 2003, Coke's net operating revenues totaled $21,044 million, while the revenues from the company-owned bottling operations alone amounted to $2,80816.
