Case study

HI5016 FINAL ASSESSMENT T1 2023 CASE STUDY The Birth of a Refreshing Idea: Coca-Cola History https://www.coca-colacompany.com/company/history/the-birth-of-a-refreshing-idea The product that has given the world its best-known taste was born in Atlanta, Georgia, on May 8, 1886. Dr. John Stith Pemberton, a local pharmacist, produced the syrup for Coca-Cola, and carried a jug of the new product down the street to Jacobs' Pharmacy, where it was sampled, pronounced "excellent" and placed on sale for five cents a glass as a soda fountain drink. Carbonated water was teamed with the new syrup to produce a drink that was at once "Delicious and Refreshing," a theme that continues to echo today wherever Coca-Cola is enjoyed through the Coca-Cola trademark. Thinking that "the two Cs would look well in advertising," Dr. Pemberton's partner and bookkeeper, Frank M. Robinson, suggested the name and penned the now famous trademark "Coca-Cola" in his unique script. The first newspaper ad for Coca-Cola soon appeared in The Atlanta Journal, inviting thirsty citizens to try "the new and popular soda fountain drink." Hand-painted oilcloth signs reading "Coca-Cola" appeared on store awnings, with the suggestion "Drink" added to inform passers-by that the new beverage was for soda fountain refreshment. During the first year, sales averaged a modest nine drinks per day. Dr. Pemberton never realized the potential of the beverage he created. He gradually sold portions of his business to various partners and, just prior to his death in 1888, sold his remaining interest in CocaCola to Asa G. Candler. An Atlantan with great business acumen, Mr. Candler proceeded to buy additional rights and acquire complete control. The History of the Coca-Cola Contour Bottle The Creation of a Cultural Icon A Refreshing Legacy One of the most famous shapes in the world is the iconic contour fluted lines of the Coca-Cola bottle. Renowned as a design classic and described by noted industrial designer, Raymond Loewy as the "perfect liquid wrapper," the bottle has been celebrated in art, music and advertising. When Andy Warhol wanted a shape to represent mass culture, he drew the bottle and when Volkswagen wanted to celebrate the shape of the Beatle, they compared the car to the bottle. How did the bottle become so iconic? It began with the desire to protect brand Coca-Cola and was a cooperative project between The Coca-Cola Company and its bottlers. An Iconic Beginning In 1899, two Chattanooga lawyers, Joseph Whitehead and Benjamin Thomas, travelled to Atlanta to negotiate the rights to bottle Coca-Cola. The product had been an increasingly popular soda fountain drink established a mere 13 years previously. In fountain form, Coca-Cola grew from an average of nine drinks per day sold in 1886 to being sold in every state of the US by 1900. Thomas and Whitehead wanted to capitalise on the popularity of the drink by bottling it to be consumed outside the four walls of a soda fountain. The contract the two signed was a geographic one and The Coca-Cola Bottling Company began franchising the rights to bottle Coca-Cola in cities across the U.S. By 1920, over 1,200 Coca-Cola bottling operations were established. Sales in both fountain and bottle form continued to increase and that popularity led to dozens of competitors trying to imitate the famous trademark of Coca-Cola to deceive the public into buying their drinks. The bottles used in those days were simple straight-sided bottles that were typically brown or clear. The Coca-Cola Company required that the bottlers emboss the famous Coca-Cola logo onto every bottle. However, competitor brands like Koka-Nola, Ma Coca-Co, Toka-Cola and even Koke copied or only slightly modified the Spencerian script logo. These competitor bottles created confusion among consumers. While the Coca-Cola Company began litigation against these infringements, the cases often took years and the bottlers were constantly asking for more protection. As a first step to help the bottlers, in 1906, The Coca-Cola Company introduced a diamond shaped label with a colourful trademark to stand out from the infringers. Unfortunately, Coca-Cola was often sold out of barrels of ice-cold water that would cause the labels to peel off. Some competitors like Koca-Nola even imitated the label as well! Innovative Solutions By 1912, The Coca-Cola Bottling Company sent a note all of its members noting that while The CocaCola Company had a distinctive logo, they did not have any way to protect their business. They proposed the members all join together and develop a "distinctive package" for their product. They worked with Harold Hirsch, the lead attorney for The Coca-Cola Company to best determine how to get a special bottle. In 1914, Hirsch made an impassioned plea for the bottling community to unite behind a distinctive package. "We are not building Coca-Cola alone for today. We are building CocaCola forever, and it is our hope that Coca-Cola will remain the National drink to the end of time. The heads of your companies are doing everything in their power at considerable expense to bring about a bottle that we can adopt and call our own child, and when that bottle is adopted I ask each and every member of this convention to not consider the immediate expense that would be involved with changing your bottle, but to remember this, that in bringing about that bottle, the parent companies are bringing about an establishment of your own rights. You are coming into your own and it is a question of cooperation". On April 26, 1915, the Trustees of the Coca-Cola Bottling Association voted to expend up to $500 to develop a distinctive bottle for Coca-Cola. So, eight to 10 glass companies across the U.S. subsequently received a challenge to develop a "bottle so distinct that you would recognize if by feel in the dark or lying broken on the ground." With that simple creative brief, the competition was on. Roots in the Root Glass Company In Terre Haute, Indiana, the Root Glass Company received the brief and had a meeting to begin to work on their design. The Root team was composed of C.J and William Root, Alexander Samuelson, Earl Dean and Clyde Edwards. Samuelsson, a Swedish immigrant who was the shop foreman, sent Dean and Edwards to the local library to research design possibilities. When the team came across an illustration of cocoa bean that had an elongated shape and distinct ribs, they had their shape. The team developed the bottle idea and Dean carefully sketched the now recognizable shape on heavy linen paper and under Samuelsson's direction, a few sample bottles were struck. The Root Glass Company put forth a patent registration under Samuelsson's name which was granted on November 16th, 1915. That date was later incorporated into the lettering on the final design of the bottle. It is interesting to note that the patent submission was made without the signature embossed Coca-Cola script lettering. This was done to protect the secrecy of the design and the ultimate client. In early 1916, a committee composed of bottlers and Company officials met to choose the bottle design. The Root version was the clear winner and The Coca-Cola Company and the Root Glass Company entered an agreement to have six glass companies across the U.S. use the bottle shape. The contract called for the bottles to be coloured with "German Green" which was later called "Georgia Green" in homage to the home state of The Coca-Cola Company. It also called for the name of the city which was placing the glass order to be embossed on the bottom of the bottle. These city names entertained consumers for decades and led to kids to compare whose bottle was from further away for generations. The weight of glass was to be no less than 14.5 ounces, which when filled with the 6.5 ounces of Coca-Cola meant each bottle weighed more than a pound! Bringing Everyone on Board Even though the bottle had gone into production in early 1916, not all bottlers immediately jumped to change out their glass stock. For many bottlers, the glass bottles were the most expensive portion of their business and they needed to be convinced to make the change. The company began to do that with national advertising featuring the exclusive bottle. The first national calendar featuring the bottle appeared in 1918 and by 1920, most of the bottlers were using the distinctive bottle. In 1923, the patent for the bottle was renewed. It was the custom of the patent office to issues the patent on the Tuesday of each week. For the 1923 patent, that Tuesday just happened to fall on December 25! As the new patent was issued, the date on the side of the bottle was changed to December 25th, 1923 and the bottle was quickly nicknamed the "Christmas Bottle." Patents expire after 14 years (the bottle patent was renewed again in 1937,) by 1951, all patents on the shape had expired. The company approached the Patent Office that the bottles shape, "distinctively shaped contour," was so well known that it should be granted Trademark status. While it was highly unusual for a commercial package to be granted that status, on April 12th, 1961, the Coca-Cola bottle was recognized as a trademark, in part bolstered by the fact that a 1949 study showed that less than 1% of Americans could not identify the bottle of Coke by shape alone. Now you know why the bottle happened, so how has it permeated culture over the years? A Cultural Impact The Coke bottle has been called many things over the years. One of the more interesting of the nicknames is the "hobbleskirt" bottle. The hobbleskirt was a fashion trend during the 1910s where the skirt had a very tapered look and was so narrow below the knees that it "hobbled" the wearer. The bottle was also called the "Mae West" bottle after the actress's famous curvaceous figure. The first reference to the bottle as a "contour" occurred in a 1925 French Magazine, La Monde, which described the Coca-Cola bottle with a distinctive contour shape. To the general public, the shape is just "the Coke bottle." One of the interesting notes about the shape is that while it is almost universally recognized, the form has evolved over the years. Just as the original patent from 1915 was a slightly fatter shape than the bottle that went into production, today's aluminium bottle is a 22nd century update of the classic design. When King and Family sized packaging were introduced in 1955, Raymond Loewy was part of the team that worked to recast the bottle but still keep the proper proportions. The Company took advantage of this classic shape on the cover of the 1996 Annual Report when we placed a silhouette of the bottle with the caption, "Quick, Name a Soft Drink." While Andy Warhol is the artist most known for using the Coke bottle in art, the first popular artist to incorporate the bottle in a painting was Salvadore Dali, who included a bottle in his 1943 work, Poetry in America. Later artist like Sir Eduardo Paolozzi also used the form in the late 1940s. Robert Rauchenberg included Coca-Cola Bottles in his 1957 sculpture, A Coca-Cola Plan. However, Warhol's use of the bottle in his 1962 show, The Grocery Store, cemented the "pop art" movement and enshrined the bottle as a favorite or succeeding generations of artist. Warhol's quote from his 1975 book, The Philosophy of Andy Warhol, sums up the artist's choice of the bottle to represent mass culture. "What's great about this country is that America started the tradition where the richest consumers buy essentially the same things as the poorest. You can be watching TV and see Coca-Cola, and you know that the president drinks Coke, Liz Taylor drinks Coke, and just think, you can drink Coke, too. A Coke is a Coke and no amount of money can get you a better Coke than the one the bum on the corner is drinking. All the Cokes are the same and all the Cokes are good. Liz Taylor knows it, the president knows it, the bum knows it, and you know it." Coca-Cola Collaborates with Tech Partners to Create Bottle Prototype Made from 100% Plant-Based Sources https://www.coca-colacompany.comews/100-percent-plant-based-plastic-bottle The Coca-Cola Company's sustainable packaging journey crosses a major milestone this week with the unveiling of its first-ever beverage bottle made from 100% plant-based plastic, excluding the cap and label, that has been made using technologies that are ready for commercial scale. The prototype bottle comes more than a decade after the company's PlantBottle debuted as the world's first recyclable PET plastic bottle made with up to 30% plant-based material. A limited run of approximately 900 of the prototype bottles have been produced. "We have been working with technology partners for many years to develop the right technologies to make abottle with 100% plant-based content aiming for the lowest possible carbon footprintand it's exciting that we have reached a point where these technologies exist and can be scaled by participants in the value chain," said Nancy Quan, Chief Technical and Innovation Officer, The Coca-Cola Company. PET, the world's most recycled plastic, comprises two molecules: approximately 30% monoethylene glycol (MEG) and 70% terephthalic acid (PTA). The original PlantBottle, introduced in 2009, includes MEG from sugarcane, but the PTA has been from oil-based sources until now. PlantBottle packaging looks, functions and recycles like traditional PET but has a lighter footprint on the planet and its resources. Coca-Cola's new prototype plant-based bottle is made from plant-based paraxylene (bPX) - using a new process by Virent - which has been converted to plant-based terephthalic acid (bPTA). As the first beverage packaging material resulting from bPX produced at demonstration scale, this new technology signals a step-change in the commercial viability of the biomaterial. The bPX for this bottle was produced using sugar from corn, though the process lends itself to flexibility in feedstock. The second breakthrough technology, which The Coca-Cola Company co-owns with Changchun Meihe Science & Technology, streamlines the bMEG production process and also allows for flexibility in feedstock, meaning more types of renewable materials can be used. Typically, bMEG is produced by converting sugarcane or corn into bioethanol as an intermediate, which is subsequently converted to bioethylene glycol. Now, sugar sources can directly produce MEG, resulting in a simpler process. UPM, the technology's first licensee, is currently building a full-scale commercial facility in Germany to convert certified, sustainably sourced hardwood feedstock taken from sawmill and other wood industry side-streams to bMEG. This marks a significant milestone toward the commercialization of the technology. "The inherent challenge with going through bioethanol is that you are competing with fuel," said Dana Breed, Global R&D Director, Packaging and Sustainability, The Coca-Cola Company. "We needed a next-generation MEG solution that addressed this challenge, but also one that could use second generation feedstock like forestry waste or agricultural byproducts. Our goal for plant-based PET is to use surplus agricultural products to minimize carbon footprint, so the combination of technologies brought by the partners for commercialization is an ideal fit with this strategy." In 2015, Coca-Cola unveiled its first prototype for a 100% bio-based PlantBottle at the Milan Expo using lab-scale production methods to produce bPX. This next-generation 100% plant-based bottle, however, has been made using new technologies to produce both biochemicals that make the bottle and are ready for commercial scaling. "Our goal is to develop sustainable solutions for the entire industry," Breed said. "We want other companies to join us and move forward, collectively. We don't see renewable or recycled content as areas where we want competitive advantage." Since introducing PlantBottle, Coca-Cola has allowed non-competitive companies to use the technology and brand in their productsfrom Heinz Ketchup to the fabric interior in Ford Fusion hybrid cars. In 2018, the company opened up the PlantBottle IP more broadly to competitors in the beverage industry to scale up demand and drive down pricing. As part of its World Without Waste vision, Coca-Cola is working to make all its packaging more sustainable, including maximising use of recycled and renewable content while minimizing use of virgin, fossil material. The company has pledged to collect back the equivalent of every bottle it sells by 2030, so none of its packaging ends up as waste and old bottles are recycled into new ones; to make 100% of its packaging recyclable; and to ensure 50% of its packaging comes from recycled material. This innovation supports the World Without Waste vision, specifically the recently announced target to use 3 million tons less of virgin plastic from oil-based sources by 2025. The Coca-Cola Company will pursue this 20% reduction by investing in new recycling technologies like enhanced recycling, packaging improvements such as light-weighting, alternative business models such as refillable, dispensed and fountain systems, as well as the development of new renewable materials. In Europe and Japan, Coca-Cola, with its bottling partners, aims to eliminate the use of oil-based virgin PET from plastic bottles altogether by 2030, using only recycled or renewable materials. While the majority of plastic packaging material will come from mechanically recycled content, some "virgin" material will still be needed to maintain quality standards. That's why Coca-Cola is investing in and driving innovation to boost the supply of feedstock from renewable technologies as well as from enhanced recycling technologies. Enhanced recycling "upcycles" previously used PET plastics of any quality to high quality, food grade PET. "We are taking significant steps to reduce use of 'virgin', oil-based plastic, as we work toward a circular economy and in support of a shared ambition of net-zero carbon emissions by 2050," Quan said. "We see plant-based plastics as playing a critical role in our overall PET mix in the future, supporting our objectives to reduce our carbon footprint, reduce our reliance on 'virgin' fossil fuels and boost collection of PET in support of a circular economy." Sustainability is not something new at The Coca-Cola Company. The Company's sustainability efforts cover a wide range of topics including the following: water, women, community well-being, sustainable packaging, climate protection, human and workplace rights, and sustainable agriculture. https://www.coca-colacompany.comews/coca-colas-sustainability-history Such efforts began over 100 years ago and have since become an integral part of the Company. While there are countless sustainability projects and initiatives started by the Company, there are some monumental moments that have helped shape the company's efforts. These efforts are highlighted in this timeline of events. 1917 The Coca-Cola Company began its partnership with The Red Cross. During World War I, the Coca-Cola system ran annual Red Cross drive campaigns which continued for over a decade. This partnership remains strong today and has been essential to the company's involvement in disaster relief throughout the years. 1935 Lettie Pate Evans joined the Board of Directors as the first woman to serve on the board of a major company. 1963 The Coca-Cola Company produced its first diet drink, Tab. Tab was introduced before the early growth of the low-calorie soft drink segment, and the beverage was developed for consumers who wished "to keep tab on their calories." Several women chemists played a critical role in the development of Tab. 1966 The Coca-Cola Company launched "The Nutrition Project", assigning an international team of scientists and food technologists the task of finding a solution to the "protein gap" facing the impoverished nations of the world and provide more light, protein-rich beverages to consumers. This project led to the introduction of the brands Saci, Sanson and Ta, three protein-rich energy beverages developed in Latin America, utilizing the local ingredients such as soybeans and whey as protein source ingredients for the beverages. 1984 The Coca-Cola Foundation was founded. The Coca-Cola Company is committed to giving back 1 percent of its prior year's operating income annually through the foundation. The foundation serves three priority areas: women, water and well-being. 2001 The Coca-Cola Company established the Coca-Cola Africa Foundation, which has worked to prevent and treat HIV/AIDS in Africa. Since it was established, the Coca-Cola Africa Foundation has launched numerous projects and initiatives throughout Africa. 2007 DASANI and Sprite Boost Sustainability Packaging Credentials in North America The Coca-Cola Company announced a transformational partnership with the World Wide Fund for Nature (WWF) to address challenges related to freshwater conservation. This partnership focused on five core areas including the following: conserve seven of the world's most important freshwater basins, improve water efficiency within the company's operations, reduce the company's carbon emissions, promote sustainable agriculture and inspire a global movement to conserve water. 2009 The Coca-Cola Company introduces PlantBottle Packaging - the first ever recyclable PET plastic beverage bottle made 30 percent from plants. The Coca-Cola Company has continued to develop sustainable packaging, including the creation of the world's first prototype PET bottle made entirely from plant materials in 2015. 2010 The Coca-Cola Company launched the 5by20 Initiative. The goal of this initiative is to enable the economic empowerment of 5 million women entrepreneurs across the globe by 2020. Through the initiative, women are offered access to business skills training courses, financial services and connections with peers or mentors. 2013 The first EKOCENTER is established. EKOCENTER is a modular community market that is run by local woman entrepreneurs and provides safe drinking water, wireless communication, electricity and other functionality to jump-start entrepreneurship opportunities and community development. The 100th EKOCENTER was opened in 2016 and the project continues to grow around the globe. This project also complements the 5by20 initiative that was launched in 2010. The Coca-Cola Company's sustainability efforts and goals continue to develop as the years go on and their impact can be found across the globe. Within the last 5 years, the Coca-Cola Company has launched new initiatives and achieved many goals, such as accomplishing its 100 percent water replenishment goal five years ahead of schedule. The company will not stop once it has accomplished a goal; it creates new initiatives and works to make abigger impact. The history of sustainability in the Coca-Cola Company is an indication of how far the Company has come and how much farther it can go in the future. https://en.wikipedia.org/wiki/Coca-Cola Franchised production model The actual production and distribution of Coca-Cola follows a franchising model. The Coca-Cola Company only produces a syrup concentrate, which it sells to bottlers throughout the world, who hold Coca-Cola franchises for one or more geographical areas. The bottlers produce the final drink by mixing the syrup with filtered water and sweeteners, putting the mixture into cans and bottles, and carbonating it, which the bottlers then sell and distribute to retail stores, vending machines, restaurants, and foodservice distributors. Geographic spread Since it announced its intention to begin distribution in Myanmar in June 2012, Coca-Cola has been officially available in every country in the world except Cuba and North Korea. However, it is reported to be available in both countries as a grey import. Coca-Cola has been a point of legal discussion in the Middle East. In the early 20th century, a fatwa was created in Egypt to discuss the question of "whether Muslims were permitted to drink Coca-Cola and Pepsi cola." The fatwa states: "According to the Muslim Hanefite, Shafi'ite, etc., the rule in Islamic law of forbidding or allowing foods and beverages is based on the presumption that such things are permitted unless it can be shown that they are forbidden on the basis of the Qur'an." The Muslim jurists stated that, unless the Qur'an specifically prohibits the consumption of a particular product, it is permissible to consume. Another clause was discussed, whereby the same rules apply if a person is unaware of the condition or ingredients of the item in question. Coca-Cola first entered the Chinese market in the 1920s and opted for a localised name Ke-Ke Ken-La, but the name sounded like chewing wax blocks, resulting in poor product sales. In the 1930s, the new localised name Ke-kou ke-le, which means "Tasty and Fun", was replaced, taking into account the effects of syllable translation and meaning translation, so that the sales of the product increased and became a good translation case. The story introduction from Coca-Cola mentions that Chiang Yee provided the new localised name, but there are also sources that the localised name appeared before 1935, or that it was given by someone named Jerome T. Lieu who studied at Columbia University in New York. Competitors Pepsi, the flagship product of PepsiCo, the Coca-Cola Company's main rival in the soft drink industry, is usually second to Coke in sales, and outsells Coca-Cola in some markets. RC Cola, now owned by the Dr Pepper Snapple Group, the third-largest soft drink manufacturer, is also widely available. Around the world, many local brands compete with Coke. In South and Central America Kola Real, also known as Big Cola, is a growing competitor to Coca-Cola.[119] On the French island of Corsica, Corsica Cola, made by brewers of the local Pietra beer, is a growing competitor to Coca-Cola. In the French region of Brittany, Breizh Cola is available. In Peru, Inca Kola outsells Coca-Cola, which led the CocaCola Company to purchase the brand in 1999. In Sweden, Julmust outsells Coca-Cola during the Christmas season.[120] In Scotland, the locally produced Irn-Bru was more popular than Coca-Cola until 2005, when Coca-Cola and Diet Coke began to outpace its sales. In the former East Germany, Vita Cola, invented during communist rule, is gaining popularity. In India, Coca-Cola ranked third behind the leader, Pepsi, and local drink Thums Up. The Coca-Cola Company purchased Thums Up in 1993. As of 2004, Coca-Cola held a 60.9% market-share in India.[123] Tropicola, a domestic drink, is served in Cuba instead of Coca-Cola, due to a United States embargo. French brand Mecca-Cola and British brand Qibla Cola are competitors to Coca-Cola in the Middle East. In Turkey, Cola Turka, in Iran and the Middle East, Zamzam and Parsi Cola, in some parts of China, Future Cola, in the Czech Republic and Slovakia, Kofola, in Slovenia, Cockta, and the inexpensive Mercator Cola, sold only in the country's biggest supermarket chain, Mercator, are some of the brand's competitors. Classiko Cola, made by Tiko Group, the largest manufacturing company in Madagascar, is a competitor to Coca-Cola in many regions. In 2021, Coca-Cola petitioned to cancel registrations for the marks Thums Up and Limca issued to Meenaxi Enterprise, Inc. based on misrepresentation of source. The Trademark Trial and Appeal Board concluded that "Meenaxi engaged in blatant misuse in a manner calculated to trade on the goodwill and reputation of Coca-Cola in an attempt to confuse consumers in the United States that its Thums Up and Limca marks were licensed or produced by the source of the same types of cola and lemon-lime soda sold under these marks for decades in India."

Question 6 (7 Marks)

1. In order to promote freer trade, World Trade Orgainisation member countries have intensified negotiations as a means of promoting enterprises to trade internationally.

Examine the benefits of trade negotiation to a firm such as Coca Cola. 3 marks

ANSWER i:

1. The rise of Japan provides the best experience to explain the economic growth of countries through infant protection. In order to follow the Japanese experience, many developing countries have adopted import tariffs as a tool for protectionism. Use the figure below to examine the effects of protectionism on non-alcoholic bevarages for a nation such as Mexico. 4 marks