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Coca Cola's Vertical Integration
Transcript of Coca Cola's Vertical Integration
Creating global reach with local focus thanks to the Coca-Cola system, which bonds the company with more than 275 bottling partners worldwide.
The Company does not own or control all of its bottling partners.
"Vertical Integration is where the supply chain of a company is owned by that company. It also described, management styles that bring large portions of the supply chain not only under a common ownership, but also into one corporation".
(Ford Rauge, 1920)
Coca Cola's Vertical Integration
Coca-Cola manufactures and sells concentrates, beverage bases and syrups to bottling operations, owns the brands and is responsible for consumer brand marketing initiatives.
Our bottling partners manufacture, package, merchandise and distribute the final branded beverages to our customers and vending partners, who then sell our products to consumers.
Coca-Cola Refreshments (CCR)
All bottling partners work closely with customers -- grocery stores, restaurants, street vendors, convenience stores, movie theaters and amusement parks, among many others -- to execute localized strategies developed in partnership with our Company.
Customers then sell our products to consumers at a rate of more than 1.8 billion servings a day.
In January 2006, Company-owned bottling operations were brought together to form the Bottling Investments operating group, now the second-largest bottling partner.
In April 2007, partners met to discuss the development of a core set of performance indicators for the Coca-Cola system.
Bottling partners produce their own corporate responsibility reports which can be viewed in the Sustainability Reports section.
The Coca-Cola Company and the largest bottler, Coca-Cola Enterprises, took actions in 2010 and 2011 to strategically advance our partnership.
The Coca-Cola Company has acquired CCE's entire North American business, renaming the sales and operational elements of Coca-Cola Enterprises North American businesses to Coca-Cola Refreshments (CCR). Additionally, most of its U.S. and Canada businesses where integrated into CCR.
This vertical integration increases operating effectiveness and efficiency by combining the current manufacturing and distribution capabilities into one unified organization.
These changes strengthen Coke's commitment to work toward sustainability and provide an opportunity for further momentum in North America.
Benefits of V.I. for Coke
Benefits of V.I. for Stake Holder
Rise in Stock Value
Control of Supply Chain
Control Over Distribution
Control of Enviormental Awarness.
These last three reduces the gap between company and consumer.
Benefits of V.I. for Customers
Integration to the Coca-Cola System.
Better Value for Money
Product reach increased.
Vertical Integration is a Check Mate move for a mature company as Coca-Cola that can affort it, and increase its reach for consumers.
Sounds like a Monopoly move.