Coca-Cola is the number one captivator of peoples throats. The company, in the last one hundred years, has managed to transform peoples thirsts in to a need for Coca-Cola. The story of the Coca-Cola Company has humble beginnings. In 1885, John Pemberton, and Atlanta pharmacist, registered a trademark for French wine cola-ideal nerve and tonic stimulant, a brew he had developed in a three-legged pot he apparently stirred with an oar. His desire to create such a product was based upon a stomach injury and subsequent morphine addiction he acquired during the American Civil War. (Frederick p. )
His research led him to the Peruvian cola leaf whose healing effects included aiding digestion, aphrodisiacal powers, and life extending elements. He did not realize at the time that he invented the beverage that the cola leaf was as dangerous as morphine. (Frederick p. 32) Nevertheless, the product was made available to the public, advertised as a means of alleviating both stomach and head aches. Pemberton did not have a very keen business sense, and so he hired Frank Robinson as the head marketer and manager of Coca-Cola. Robinson became the first in a long line of Coca-Cola men with a genius about the management of the product.
By 1870, under the ownership of Asa Candler, the drink was the reason why people went to the soda fountain. (Frederick p. 37) However, it was clear that the drink was still only appreciated within the southern United States. Coca-Colas problem with expansion at this time centered on two specific problems. Firstly, thousands of imitators made it impossible to distinguish the difference between the impostors and the Real Thing. However, after an extensive court battle the Company won all rights to its trademark, thus eliminating all would-be impostors from the competition.
The second problem that faced the company involved the ingredients of the beverage in question. (Frederick p. 45) Cocaine, a by-product of the coca leaf, was still suspected to be present in Coca-Cola. The bad effects of this narcotic were only just being discovered at the end of the nineteenth century. With such suspicions over the safety of the beverage, Coca-Cola was forced to refine its ingredients until there was absolutely no cocaine present within the beverage before trade conditions were lifted on the product.
By the time Coca-Cola had managed to alleviate these situations, other companies had begun their expansion into foreign markets in search of new consumers in order to help maximize their profits. In an attempt to gain their lost ground, Coca-Cola revolutionized the soft drink industry. Due to the nature of the product itself, the Coca-Cola company did not know how to get the syrup to various points abroad; further, soda fountains didnt exist in Europe at the time.
The idea of bottling Coca-Cola revolutionized the soft drink industry and enabled further expansion in American markets and also allowed the company to begin looking overseas for profits. They believed that bottling would allow consumers to buy mass amounts for their home and would also make expansion into foreign markets easier because they could ship the ingredients for the product all over the world to bottling plants. In 1894 the idea of bottling Coca-Cola was agreed to by the entire company. (Frederick p. 68) The business was now in the appropriate form to take on the world.
In 1923, Robert Woodruff took hold of the presidency of Coca-Cola, and led the company into a new era: one that saw expansion of their production into foreign markets as their main goal. (Candler p. 173) In 1926, spurred by a curiosity about Cokes potential to please the foreign palate, Robert Woodruff outlined a plan to test the drink in Europe. (Candler p. 14) Once it was clear that the drink would be sold overseas, there were those who recommended modifying its flavor to suit the taste buds of each nationality. Yet, Woodruff stuck to his belief in the universal appeal of Cokes single secret, formula.
Unfortunately, the bottling practices in Europe were not as sanitary as those employed in America. Consequently, those who drank the Coca-Cola in Europe, in 1922, was met with disaster. (Pendergrast p. 170) Unfortunately, the bottling practices in Europe were not as sanitary as those employed in America. Consequently, those who drank the Coca-Cola in Europe ended up getting quite ill. Back in the United States, having been cleared from any suspicion of utilizing cocaine in its formulation, Coke reestablished its relationship with the arm forces.
This proved to be a key component in Coca-Colas success overseas. By the early twentieth century, Coca-Cola was visible through out all areas of American Life. It was during World War II that Coke deluged the globe. It also marked a significant period of history for the beverages foreign interests. Woodruff thought that even if the company lost money, Coke should be made available to the armed forces. After the attack on Pearl Harbor, Woodruff declared Coca-Colas wartime policy: we will see that everyman in uniform gets a bottle of Coke for five cents, wherever he is and whatever it costs.
The war department agreed that such a move would provide a boost of morale for its troops. Thus, wherever the American GIs went, so went Coca-Cola. It was considered a morale booster and an emblem of home for the homesick soldiers. In the course of the war they managed to drink five billion bottles of Coke. (Pendergrast p. 206) In 1943, General Dwight D Eisenhower requested that the War Department establish 10 bottling plants. (Pendergrast p. 206) By the end of the war they had the government fund the installation of sixty-four bottling plants behind allied lines.
As soon as the battlefront moved, so would the bottling company. During Cokes involvement in the Second World War, the company was dominated by the Nazis as well. However, the Nazi appreciation for the beverage ended when it was discovered that Coca-Cola provided kosher beverages for American Jewish communities. Consequently, German sales plummeted and it seemed as though the product was on the brink of extinction. As a solution to the problem, Coca-Cola developed a new drink called Fanta and introduced it to the Nazi regime where it was met with great success.
Thus, even in wartime the companys loyalty was to the movement of the product and not political concerns. It is important to recognize that much of the American soldiers thirst for Coca-Cola was also based upon a craving for anything American. This was the moment when the company fully comprehended the extent of their significance as an American symbol. Their beverage actually helped to maintain the morale of American troops. Coca-Cola managed to gain access into every area of the world that had been used as a battlefield.
Thus, they found themselves in a good position for expansion in the post World War II era. By 1950, the global expansion of Coca-Cola was evident. The company had successfully moved into a number of markets in Africa, Asia and the Middle East. (Kahn p. 18) By 1990, 50% of the companys business occurred outside the United States, demonstrating the strength of the product in foreign markets. (Elliot p. 156) However, with such success, some critics believed that people were drinking Coke for its trademark, and not for its taste.
Not only had the company conquered taste buds worldwide, they also succeeded in creating the most successful advertising and marketing strategies to reach a global audience. Since Coca-Colas inception its focus has been on creating a worldwide market for Coke. Todays marketing strategies for Coca-Cola are driven by the ideas of quality and availability. That is, to ensure that a Coke can be purchased more readily than any other product in the world. . Coca-Cola has succeeded in becoming a dominant global force present in many marketplaces. Coca-Cola is sold in 195 countries around the world and requested in more than 80 languages today.
Regardless of how the markets are classified, or the various strategies implemented for introducing Coca-Cola to new areas, the notion is the same; that is, that different countries can have the same needs and the same demands for the same products. (Moran p. 23) It is this exact sentiment that many people criticize when speaking of globalization and its impact on developing markets. This supposed convergence in global demand has not developed out of sheer desire for products like Coca-Cola in foreign and developing countries.
Instead, items like Coca-Cola are made readily available by multi-national companies and thus said to be desired everywhere. Theoretically, the consumer does not choose to spend his money on Coca-Cola, rather, he is forced to. Its in his face. Many people feel that globalization has been driven by the commercial interests of large American based transnational corporations, often acting in collaboration with western political and military interests, and that this process has resulted in a new form of dependency in which cultures are destroyed through the intrusion of Western values.
Coke does not adapt to local cultures as much as it forces Western Ideologies upon specific foreign cultures. Its presence does not adapt to local environments as much as it alters them. For Coca-Cola there are no barriers of custom, race or creeds to prevent Coke from achieving its mission; to become the universal drink. There are quite a few people who have vehemently objected to Coca-Colas presence in their countries. Some of the most vibrant and articulate resistance to Coca-Colas globalization’s mal-effects can be found in India.
In 1977, George Fernandes, an Indian Industry Minister realized that coke was more readily available to the people of India than clean drinking water. (www. corpwatch. org p. 1) He found this appalling and took action to exile the company from India. He presented coke with an ultimatum; to either fold up and go or to have an Indian partner and tell him what their technology was. Coke would not share the great secret of their technology, their only option left was to get out and that is exactly what they did, but not with out a fight. They tried their best to influence the government at various levels.
Cabinet ministers were approached as were the media. Finally, nothing worked and the order asking them to get out of the country was signed. (www. corpwatch. org p. 4) Another reasons for the social tensions between Coca-Cola and India was the amount of capital being taken out of the country. The foreign Exchange Regulations Act at the time of Coca-Colas exile from India, stipulated that any foreign enterprise operating in India in non-priority sectors should not have more than 40% equity. (www. corpwatch. org p. 3) Coke did not comply with this act and had 100% equity in India.
The company had invested less than twenty thousand dollars in the country and had taken about 8 million dollars out of the country as profits in the twenty years they had been in the country. (www. corpwatch. org p. 3) India was left with less capital to invest in their local economy and contribute to technological growth efforts such as research and development (which the country was already lacking funds for). When Multinational corporations, like Coca-Cola, enter into foreign countries they drive out small-scale local industries out of business and generate unemployment as a result.
Indian companies in industry and the service sector are getting killed, says George Fernandes. Small-scale beverage producers are forced to close down shop as a result of Cokes presence. There is no hope for even large-size or medium-size Indian companies who are confronted by Multinationals. (www. corpwatch. org p. 5) Presumably, competition would not allow this to happen, but the battle between local producers and multinationals is equivalent to a wrestling match between a midget and a Japanese Sumo wrestler.
You can say that both of them have a level playing field, but the midget is not built like the Sumo wrestler, he is fighting a losing battle. Increasingly, multinational corporations like Coca-Cola are trying ruling the world. Many governments are, in effect, relinquishing control over their countries’ economic and social agendas to globalization and the corporate agenda, as can be seen by Coca-Colas reentry into the Indian market in 1988. (www. corpwatch. org p. 4) Coca-Cola has moved deliberately to overcome barriers to its expansion.
As for its overall global success, Coca-Cola is known to have one of the worlds most sophisticated marketing strategies. Around the globe, throughout diverse and often bewildering emerging market economies, Coca-Cola has rapidly achieved market leadership. There is no question that Coca-Cola has succeeded in its goal to become a dominant global force, but at whos expense? The company invades local cultures and takes advantage of the vulnerability of developing nations, allowing them to push their product upon the people of these countries.
At the same time, they are moving to circumvent national governments to provide for favorable production and retail circumstances. The regulatory agencies of most of these governments are caving in to the New World Order of globalization, allowing corporations like Coca-Cola to assume an ever more stateless quality, leaving them less accountable to any government anywhere and more able to conduct business any way they feel necessary to succeed.