Coca-Cola Develops the African Market

The Coca-Cola Company is the number-one seller of soft drinks in the world. Every day an average of more than 1.6 billion servings of Coca-Cola, Diet Coke, Sprite, Fanta, and other products of Coca-Cola are enjoyed around the world. The company has the world’s largest production and distribution system for soft drinks and sells more than twice as many soft drinks as its nearest competitor. Coca-Cola products are sold in more than 200 countries around the globe.
For a variety of reasons in developing countries, sales have been flat or growing slowly. For example, in 1989, North Americans bought $2.6 billion worth of Coke, but in 2009, the figure had only grown to $2.9 billion. Looking for attractive, newer, growing markets, Coca-Cola has turned its attention to Africa. The potential is great there, with 59 million African households earning enough in the year 2000 to be able to spend half their income on nonfood items. This figure is expected to increase to 106 million by the year 2014. Africa has very little debt and a positive trade balance, which can add to its attraction as a place to invest. While Coke has been in Africa since 1929, more recently it has made substantial efforts to significantly increase sales there, building on its current presence. At present, Coke is Africa’s largest employer, with 65,000 employees and 160 plants. Its market share in Africa and the Middle East is 29%, and 9.1 billion liters of beverage are sold by Coca-Cola there annually. Building on techniques learned in Latin America, Coke is trying to earn new customers in Africa by winning over small stores. Moving throughout villages and towns, Coca-Cola is distributing Coke signage and drink coolers to shop after shop. In an effort to distribute their products in areas with poor roads and to reach remote areas, Coca-Cola is establishing Manual Distribution Centers like they used in Vietnam and Thailand. Such centers currently employ more than 12,000 Africans and generate $500 million in annual revenue.
Discussion
1.      In several countries of Africa, a common size for a Coke can is 340 milliliters (mL). Because of the variability of bottling machinery, it is likely that every 340-mL bottle of Coca-Cola does not contain exactly 340 milliliters of fluid. Some bottles may contain more fluid and others less. Because of this variation, a production engineer wants to test some of the bottles from a production run to determine how close they are to the 340-mL specification. Suppose the following data are the fill measurements from a random sample of 50 cans. Use the techniques presented in this chapter to describe the sample. Consider measures of central tendency, variability, and skewness. Based on this analysis, how is the bottling process working on this production run?

Sources:Duane D. Stanford, “Coke’s Last Round,” Bloomberg Businessweek, November 1–7, 2010, pp. 54–61; “Dimensions of a Standard Coke Can,” Dimensionsguide, http://www.dimensionsguide.com/dimensions-of-a-standard-coke-can. View Coca-Cola Company’s 2009 annual report at http://www.thecoca-colacompany.com/investors/pdfs/10-K_2009/03_Coca-Cola_Item1.pdf.340.1    339.9    340.2    340.2    340.0
340.1    340.9    340.1    340.3    340.5
339.7    340.4    340.3    339.8    339.3
340.1    339.4    339.6    339.2    340.2
340.4    339.8    339.9    340.2    339.6
339.6    340.4    340.4    340.6    340.6
340.1    340.8    339.9    340.0    339.9
340.3    340.5    339.9    341.1    339.7
340.2    340.5    340.2    339.7    340.9
340.2    339.5    340.6    340.3    339.8

2.      Suppose that at another plant Coca-Cola is filling bottles with 20 ounces of fluid. A lab randomly samples 150 bottles and tests the bottles for fill volume. The descriptive statistics are given in both Minitab and Excel computer output. Write a brief report to supervisors summarizing what this output is saying about the process.

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