Management Fundamentals 5th Edition by Robert Lussier

Exercise 1

Coca-Cola was created by Dr. John Stith Pemberton, a pharmacist in Atlanta, Georgia. It went on sale in a drug store for five cents a glass as a soda fountain drink on May 8, 1886. Today, The Coca-Cola Company is the largest beverage company in the world. It has grown to become the world's most recognized brand, with nearly 500 brands and more than 1.6 billion servings sold each day to consumers in more than 200 countries. Along with Coca-Cola, the company offers a wide range of other nonalcoholic beverages, including diet and light soft drinks, waters, juices and juice drinks, teas, coffees, and energy and sports drinks. To continue sustainable growth, The Coca-Cola Company was one of the first U.S. companies to go international. The company began building its global network in the 1920s. One of the first countries the company expanded to was China, opening its first bottling plants in Tianjin and Shanghai in 1927. By 1948, Shanghai was the first market outside of the United States to post annual sales of more than 1 million cases of Coca-Cola. When The Coca-Cola Company reentered China in 1979, it was the first international consumer company to grasp the opportunities offered by the open-door policy. Since that time, Coca-Cola has invested more than $2 billion in the local market in China and established a total of 38 bottling plants that employ more than 30,000 people, most of which are local hires.
In the late 2000s, The Coca-Cola Company was looking for new ways to expand in China. In September 2008, Coca-Cola announced a bid for Huiyuan, one of China's top local brands and the country's largest maker of 100 percent fruit juice. The deal would have been the largest for The Coca-Cola Company in Asia and the second-largest acquisition overall for the company in their history. However, in March 2009, the Chinese government found Coca-Cola's bid to be in violation of the country's new anti-monopoly law and blocked the company's acquisition bid. With acquisitions apparently offthe table, Coca-Cola had to figure out how to continue growing in China. The company decided to solve its problem by focusing on existing brands and building the company's production, sales, distribution, and marketing operations.
In March 2009, The Coca-Cola Company opened a new $90 million research and development center in Shanghai. In June of that same year, the company and its bottling partner, COFCO Coca-Cola Beverages Ltd., continued its expansion by opening two new bottling facilities-one in Xinjiang and the other in Nanchang.
The new bottling facility in Xinjiang, located along the historic Silk Road, will provide a strategically important platform for continuous growth of Coca-Cola in northwestern China, where Xinjiang, with over 20 million consumers, is the largest province. The Nanchang bottling plant will provide refreshing Coca-Cola products for 44 million consumers in this central province of China.
The new facilities are testimonies to Coca-Cola's long-term commitment to China as part of a recently announced $2 billion, three-year investment plan aimed at bolstering further growth in one of the world's largest and fastest growing beverage markets. This new investment has directly created 796 new jobs at the new bottling plants, and is more broadly expected to create an additional 8,000 jobs with upstream suppliers and a wide variety of service providers. In addition, Coca- Cola has two new bottling plants scheduled to open in Inner Mongolia and in the Guangdong province in late 2010. Although it doesn't have Huiyuan, Coca-Cola is still growing in China.
Setting specific objectives and criteria are important in a decision to open new facilities.
A) true
B) false