CSR Co Ca Cola Company Analysis PDF

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Course Code: BUSM4692 Course Name:

MANAGING INTERNAIONAL BUSINESS RESPONSIBILITY

Location where you study: RMIT Vietnam – Saigon South Campus Title of Assignment: A2 Company Analysis File(s) submitted: Student Name: Pham Ngoc Minh – s3533364 Learning Facilitator in charge: Assignment due date: 19 April 2019 Date of submission: 19 April 2019 Word Count:

Contents A.

Company Profile............................................................................................................................2

B.

Coco-Cola Corporate Social Responsibility..................................................................................2

C.

Evaluation An Discussion..............................................................................................................5

D.

1.

Carroll's Pyramid......................................................................................................................5

2.

Literature Review......................................................................................................................7

3.

The Coca-Cola’s initiatives........................................................................................................8

4.

Critiques from various stakeholders.........................................................................................9 Recommendation.........................................................................................................................10

Conclusion...........................................................................................................................................10 References...........................................................................................................................................11

A. COMPANY PROFILE The Coca-Cola Company was established in 1892. The firm is considered as the largest company to manufacture and distribute beverages in soft drink industry. The company has a strong financial statement and distribution channels to distribute its products around the world. Moreover, the company reinforces its marketing activities to account for the largest market share compared to the major competitor: Pepsi. The firm has also established several programs to reduce negative impact to society and produces valuable opportunities for people to reach

educational programs. Protecting water resource is the first priority of the firm in terms of CSR because water is the main ingredient in producing soft drinks. B. COCO-COLA CORPORATE SOCIAL RESPONSIBILITY The Coca-Cola Company is the world's biggest beverage company, offering more than 500 brands spread out in more than 200 nations. Corporate Social Responsibility (CSR) is at the key mission and core value when doing business. Coca Cola discharges Sustainability Report that involves the subtleties of CSR projects and activities launched by the company. Coca Cola plans to give back at least 1% of its annual revenue for charitable causes every year (Dudovskiy, 2015). The figure outlines the example of appropriation of this fund as below:

Coca Cola have been using 19 out of 21 billion-dollar revenue for lower- or no-sugar beverages to encourage people buying more of diet drink instead of added sugar drink. In addition to the namesake Coca-Cola drinks, there are some of well – known beverage brand names around the world including AdeS soy-based beverages, Ayataka green tea, Dasani waters, Del Valle juices and nectars, Fanta, Georgia coffee, Gold Peak teas and coffees, Honest Tea, Minute Maid juices, Powerade sports drinks, Simply juices, smart water, Sprite, vitamin water, and Zico coconut

water. Coca-Cola is taking it seriously about making positive contributions to the world consumption which begins with reducing sugar in daily drinks and continuing to update new products with more valuable attributes. It also means that Coca Cola is continuously contributing to minimize the environmental impact, creating rewarding careers for associates and bringing economic opportunities. To be more specific, Coca-Cola manages to minimize its carbon issue in beverage by promoting campaigns such as the "Plants make us happy". As can be seen in many other campaigns, main goal of Coca-Cola is to bring a sense of happiness in the daily life. A more environment – friendly way of providing the best goods and services is provided by the campaign "Plants make us happy" in which cans, plastic bottles and glass bottles are recycled in order to build sustainable. Besides, the goal is to provide the same amount of goods and guarantee the quality but using as little packages as possible. "In 2013 Coca-Cola developed the lightest and most environmentally friendly can in the world". Another brand of Coca-Cola called 'Coca-Cola Life' is the most environmental – friendly disposed plastic container which is made with 30% plants and are recyclable consequently diminishing the carbon impression of Coca-Cola altogether. Stevia, a characteristic plant based sugar is utilized to make this beverage a significantly more beneficial refreshment with just 108 calories and substantially less sugar. In the Middle East, Coca Cola has propelled various campaigns as a component of the corporate citizenship program. These range from supporting college understudies who are planning to progress towards stepping in business field through the program called 'Ripples of Happiness', to furnishing displaced people in the area with clean drinking water, through the Arwa 'Price of Water' campaign that Coca Cola propelled in 2014 (Coca-Cola Arabia, 2019). Coca-Cola is a standout amongst the best-known global brands in Vietnam. Coca-Cola Vietnam's production lines in Ho Chi Minh, Da Nang and Hanoi select around 2,500 workers, over 99% of whom are Vietnamese. The Company's portfolio in Vietnam incorporates Coca-Cola, Coca-Cola Light, Coke Zero, Sprite, Fanta, Minute Maid Nutriboost, Minute Maid Teppy, Schweppes, Dasani and Aquarius. Since 2017, to meet the quick changing in tastes and requests of customers, Coca-Cola Vietnam has proactively expanded its top notch portfolio with the advancement of bundled juice and tea items. Coca-Cola Vietnam has considered economic improvement as the center of its business exercises which incorporate sorting out protected and solid workplace,

setting need to preparing representatives (Coca Cola Vietnam, 2019). A few supportable advancement ventures were likewise communicated by point by point objectives of vitality sparing, compelling water use and water balance. Coca-Cola keeps building economical networks in areas where the organization works. For sustainable goal, Coca-Cola focuses to limit environmental impacts over the entire value chain and build up a keen production line using sustainable power source, sun based vitality and advanced waste treatment framework. Sustainable development additionally originates from the exposal with the vision with be an absolute beverage firm in which they give an assortment of qualified quality items with decreased sugar level and innovative recipe, offering vital supplements and highlights that best meet customers' various needs. Beside creation speculation, Coca-Cola additionally offers need to sustaining Vietnamese skillful group through improving local workforces' capacity and growing an authority group with high aptitude of worldwide standards. Up to this point, the firm enrolls around 2,500 representatives, more than 99% of whom are Vietnamese, and keeps on reserving US$1.4 million consistently for ability enlistment and advancement. Specially only 2017 alone, Coca-Cola has put around US$1.5 million in corporate social responsibility (CSR) campaigns. Various productive network programs have been presented, including the supply of spotless, safe drinking water to local citizens through EKOCENTER idea. Besides, giving clean water and necessities, EKOCENTERs additionally composed a progression of business start-up instructional classes for local women and built up the model of social businesses (tapchimoitruong, 2019). Furthermore, Coca-Cola puts incredible accentuation on supporting environmental change control and agricultural advancement in Mekong Delta areas, especially in piloted regions of Dong Thap, An Giang and Long An. Another thing is that they help upgrade the execution of small- and medium-sized enterprises (SMEs), Coca-Cola has constantly given mentorship, consultancy and backing up for SMEs to support their preparation, making them very much well - prepared for joining the worldwide supplying network. Corporate Social Responsibility urges organizations to end up faithful, mobile - friendly, client cordial, business - friendly and more. Coca-Cola has made such practices so as to make their organization a standout amongst the most famous and successful around the world. For instance, maintaining sustainable is essential to the firm. They have numerous designs for the future to

satisfy the guarantee of a completely sustainable firm. Coca-Cola thinks about the earth and what impression they left behind, this is only one of the methods in which the organization remains faithful to our reality. Innovation has brought worldwide connectedness, relatedness and family relationship to our reality. Coca-Cola has utilized innovation to rouse us, yet to interface us as a network. The Olympic Games is only one case of how they have added to worldwide network and inspiration. To sum up, Coca-Cola's corporate social responsibility activities have brought any kind of effect in our reality and will keep on uniting us to 'share a coke'. C. EVALUATION AND DISCUSSION 1. Carroll's Pyramid There are 4 parts of Carroll Model which includes Economic Responsibility, Legal Responsibility, Ethical Responsibility and Philanthropic Responsibility (Carroll, 1991). Now we will apply the Carroll’s pyramid model for the case of Coca-Cola in relation with CSR 1.1 Economic Responsibility Asyraf (2008) stated that the economic responsibility is considered as one of the most important parts of business organization before they conduct social activities such as charity and sponsorships. The business firm delivers goods and services to consumers at fair prices and earns reasonable profits to develop it business in sustainable ways. In the case of Coca-Cola, the net operating revenue in 2017 was reported at $35,410 million and net income was $1,248 million (Financial Report, 2017). The business of the world’s largest beverage company is expanding to some regions around the world such as: Europe, Middle East and Africa, Latin America, North America and Asia Pacific. The products of the company are currently in more than 200 countries. The firm has a strong bottling and distribution system assist its growth in terms of manufacturing, delivering, trading products to customers around the world. The strong financial position can support the Coca-Cola to grow in the social programs. 1.2 Legal Responsibility The second important in Carroll’s pyramid is legal responsibility which is the tool to protect the relationship between companies and society. In the case of Coca-Cola, the company completes almost law regulations at every place where it is operating and distributing products. However, the company was banned from production activities from Kerala, India because the multinational

company has been depleting water resources of the state (The Economic Times, 2019). Some Kerala traders have a commitment not to sell products of Coca-Cola. The firm witnessed the difficult things because it did not comply under the laws. The water issues in India showed clear evidence that Coca-Cola does not adhere to the laws and regulations responsibility. 1.3 Ethical Responsibility This one combined the legal responsibility and economic responsibility. There are many programs as well as strategies which the firm applies to reduce negative impacts on the environment and make the world better. The company has a smaller issue related to water resources in India. However, this issue was solved and the company complied the regulations from India government. There are some commitments of the company such as purchasing 100% renewable energy electricity by 2020, and supporting education in Nigeria. Coca-Cola makes a donation of $1.7 billion to invest in the agro ecosystem in India which provides benefits to 200,000 farmers. The Coca-Cola foundation sends a support to global water leadership program, community recycling and women’s economic empowerment (Coca-Cola, 2019). 1.4 Philanthropic Responsibility The business organization should donate its financial and human resources to society which is considered as a part of philanthropic responsibility. The firms send to community such donations, sponsor social programs; other social activities to support them overcome the hard situations. For the case of Coca-Cola, the company contributes 1% of annual operating revenue of the prior year. The commitments are done through the Coca-Cola foundation and company donations. For the year of 2017, the company and the Coca-Cola foundation donated $138 million to benefit 300 organizations in direct ways towards to all 70 countries and territories. Several priority areas that Coca-Cola focuses on are empowering women, protecting the environment and enhancing communities (Coca-Cola, 2019). The firm also makes some efforts to support local community to deal with HIV prevention in Africa. The programs also solve critical community challenges and opportunities for the firm. Moreover, there are some activities of the Coca-Cola which meet the philanthropic responsibility requirement such as drip irrigation projects and independent retailer training programs (Tsukamoto and Wagner, 2013). 2. Literature Review

All business sectors in the economy bear the impacts of the rising demand to respect corporate social responsibility. All large firms in soft drink sectors have many programs to undertake corporate social responsibility. There are two key areas such as philanthropy and causemarketing campaign for companies in beverage industry to make efforts in the areas of CSR. First, soft drink industry philanthropy makes a contribution to enhance community through donations of large company involved CSR activities. Coca-Cola and Pepsi are the two largest firms in beverage industry which have corporation foundations to establish grants to non-profit organization and institutions. For Coca-Cola, the company uses 1% of total operating revenue to donate in grants to organizations around the world. Meanwhile, Pepsi have $27.9 million for domestic grants in 2009 (phaionline, 2019). The soft drinks sectors have a trouble with environmental impacts such as carbon dioxide emission, water pollution, wastes and destroying ecosystem. Key points for business organizations are to improve their use of recourses such as decreasing energy consumption, increasing productivity, investing in research and development and using alternative resources like renewable energy and water efficiently. Manufacturers have to consider a main task to recycle materials form packaging and others. Moreover, consumer and public health currently are increasing their health consciousness and worry about the consequences of health issues. Soft drinks sectors have a limitation on sugar inside beverage bottles because sugar may cause of obesity and diabetes. Firms in beverage industry provide jobs and products safety to their staffs and consumers to protect their health as the top corporate social responsibility (Boumediene and El Houda, 2018). With these issues investigated, soft drink firms are easy to undertake CSR practices to deal with these social issues such as climate change, water resources and sanitation and other. 3. The Coca-Cola’s initiatives Coca-Cola has taken part in various initiatives to improve health and public well-being as well as environment. One of the most priorities of initiatives of the firm is about clean water resources. The firm has investment in both social and economic on water resources because this input material is a main ingredient of Coca-Cola’s beverages. However, water resources also play important roles in ecosystems and needs to be protected. The second crucial program of the firm

is to against to climate change and preservation of the nature because the company’s products are reliable on raw materials from agricultural sectors (Coca-Cola, 2019). 

Water quality and availability

The firm invests in water quality and availability because of its importance to the firm business. The foundation of Coca-Cola’s water stewardship has many strategies to replenish 100% of water used in the finished beverages back into the environment. The community water projects coordinate with many critical partners such as: World Wildlife Fund, USAID, The Nature Conservancy, and Water for People, WSUP, Global Water Challenge and UNDP. With replenish projects, Coca-Cola give a support to access the safe water for human consumption and sanitation services. Other programs are to improve water in agriculture as well as use water efficiently (Coca-Cola, 2019). 

Energy efficiency and climate protection

The company commits to reduce carbon dioxide in its production and supply chain by using renewable energy. Coca-Cola also shows a vision of the world without waste because packaging is very important in food and beverage industry. The firm invests in packaging innovation and makes a commitment of using 100% recyclable for packaging by 2025. The company has investment in recycling around the world such as South Africa, Kenya and Mexico to become a market leader in terms of increasing recycle content and renewable materials (Coca-Cola, 2019). 

Women’s empowerment

The slogan of the company is that when more women work, economies grow. 5by20™ encourages more than 660,000 women entrepreneurs in 2017. The program is expanding over 11 new countries such as: Belgium, Bolivia, Czech Republic and other. The program connects to women through online and offline channel. The company provides learning materials and opportunities for women to increase their skills to contribute to domestic production and employment. The program also has a partnership with the UK Department for International Development to launch new program to provide educational chances for women who aged between 16 and 19 in Nigeria (Coca-Cola, 2019). 4. Critiques from various stakeholders

Some people have arguments that the business organization had better to focus on making profits and operating business in smooth ways and let the government and non-profit organization faces with environmental issues. Other justification is that the business corporations are meant to product products and services rather than handling social problems. They do not have interests in these fields because of lack of knowledge and facilities. Last but not least, cleaning the environment, investment on research and development and other activities related to social issues increase the cost for companies. The cost would be passed on the price of products which consumers consume. While consumers are likely to purchase products from companies involved CSR activities, the others might not be. This can push the companies in the economic disadvantages. D. RECOMMENDATION The company should respect to society and environment by increasing many programs and solution to reduce impacts of its business operation to society. Applying renewable resource to all Coca-Cola supply chain and operation is necessary because it bring to benefits for the firm to less dependable on fossil fuel and energy reductions. Specially, focusing on recycle material in packaging and bottling products is important. This activity helps the firm to use material in efficient ways. More importantly, Coca-Cola has spent its funds on research and development to generate innovative solutions for issues on sugar in products as well as upgrading production systems. For c...