Knowt
TNC case study: Coca Cola
Spatial Organisation
Raw materials from China, Canada, US, c.Africa. Manufactured in SE Asia + central America. HQ in Atlanta, R+D centres in Atlanta, Mexico City, India. Sold in 200+ countries.
Franchise
Coca-Cola is a franchise that grants permission to individual licensing then to carry out commercial activity under their brand e.g. recipe tweaked for a country where there is sugar tax- Coca-Cola System. Focuses on the importance of integration of markets and innovation of technology e.g. changed marketing in 2000 due to backlash on health and effects of chemicals in Coca Cola. Began to promote as a lifestyle brand via coke-zero and diet coke. Owns other brands e.g. Fanta, Sprite, Minute Maid.
Influence of Coca-Cola
Belief Coca-Cola established the red/white colour scheme of Santa- reflects of how much , influence TNCs have. 94% of world’s population recognise the Coca-Cola logo.
In 2011, Mexico consumed 172l/capita of Coca-Cola (over 100l increase since 1991, before formation of NAFTA), more than any other country. Directly coincides to the fact 9mn people in Mexico suffer from diabetes. NAFTA has helped Coca-Cola establish in Mexico via free trade.
Impacts of Coca-Cola on host countries
Positives
Social: Training and education programmes e.g. surpassed global commitment to enable empowerment of 5mn female entrepreneurs by 2020. Coca-Cola foundation awards grants to companies globally. Massive employment opportunities directly and indirectly.
Economic: Franchise operations therefore local bottlers profit from sale. Investment in new plants→ expanding markets e.g. $90mn R+D centres in Shanghai (multiplier effect). Studies show that for every job in Coca-Cola in a local area, 10 extra jobs are created in the area.
Environmental: Initiates sustainable agriculture schemes (e.g. rainwater harvesting system for tea supplies in China). Uses marketing networks to raise awareness of recycling and distribution network for disaster relief.
Negatives
Social: Harsh working conditions, worker encouraged to abandon unions in LICs. Millions spent on countering links to obesity e.g. £5mn in European Hydration Institute.
Economic: Long hours and little pay, majority of profits returned to US shareholders, vulnerability to effects of top-down decision making in Atlanta.
Environmental: exhaustion of local water supplies (used more water than 1/4 of world’s population in 2012), water pollution in Coca-Cola products. → Water scarcity in areas of Chiapas, Mexico e.g. Many residents drink Coca-Cola instead as easier to find and just as cheap→ increase by 30% in mortality rates from diabetes between 2013 and 2016→ conflict between TNC and locals and wildcat strikes.
TNC case study: Coca Cola
Spatial Organisation
Raw materials from China, Canada, US, c.Africa. Manufactured in SE Asia + central America. HQ in Atlanta, R+D centres in Atlanta, Mexico City, India. Sold in 200+ countries.
Franchise
Coca-Cola is a franchise that grants permission to individual licensing then to carry out commercial activity under their brand e.g. recipe tweaked for a country where there is sugar tax- Coca-Cola System. Focuses on the importance of integration of markets and innovation of technology e.g. changed marketing in 2000 due to backlash on health and effects of chemicals in Coca Cola. Began to promote as a lifestyle brand via coke-zero and diet coke. Owns other brands e.g. Fanta, Sprite, Minute Maid.
Influence of Coca-Cola
Belief Coca-Cola established the red/white colour scheme of Santa- reflects of how much , influence TNCs have. 94% of world’s population recognise the Coca-Cola logo.
In 2011, Mexico consumed 172l/capita of Coca-Cola (over 100l increase since 1991, before formation of NAFTA), more than any other country. Directly coincides to the fact 9mn people in Mexico suffer from diabetes. NAFTA has helped Coca-Cola establish in Mexico via free trade.
Impacts of Coca-Cola on host countries
Positives
Social: Training and education programmes e.g. surpassed global commitment to enable empowerment of 5mn female entrepreneurs by 2020. Coca-Cola foundation awards grants to companies globally. Massive employment opportunities directly and indirectly.
Economic: Franchise operations therefore local bottlers profit from sale. Investment in new plants→ expanding markets e.g. $90mn R+D centres in Shanghai (multiplier effect). Studies show that for every job in Coca-Cola in a local area, 10 extra jobs are created in the area.
Environmental: Initiates sustainable agriculture schemes (e.g. rainwater harvesting system for tea supplies in China). Uses marketing networks to raise awareness of recycling and distribution network for disaster relief.
Negatives
Social: Harsh working conditions, worker encouraged to abandon unions in LICs. Millions spent on countering links to obesity e.g. £5mn in European Hydration Institute.
Economic: Long hours and little pay, majority of profits returned to US shareholders, vulnerability to effects of top-down decision making in Atlanta.
Environmental: exhaustion of local water supplies (used more water than 1/4 of world’s population in 2012), water pollution in Coca-Cola products. → Water scarcity in areas of Chiapas, Mexico e.g. Many residents drink Coca-Cola instead as easier to find and just as cheap→ increase by 30% in mortality rates from diabetes between 2013 and 2016→ conflict between TNC and locals and wildcat strikes.