Case Study of a TNC:
Coca-Cola is a carbonated soft drink sold in thestores, restaurants, and vending machines of morethan 200 countries.
It is the number one manufacturer of soft drinks inthe world.
Their headquarters is situated in Atlanta Georgia,USA. It is probably the best known brand symbol inthe world.
They sell nearly 400 different products.
70% of its sales are generated outside of North America.
Until 1905, the soft drink, marketed as a tonic, contained extracts of cocaine as well asthe caffeine-rich kola nut.
The Coca-Cola recipe was formulated at the Eagle Drug and Chemical Company, adrugstore in Columbus, Georgia by John Pemberton, originally as a coca wine calledPemberton's French Wine Coca.
In 1886, when the county passed legislation which prohibited the alcoholic version,Pemberton responded by developing Coca-Cola, a non-alcoholic version.
The soft drink was first sold to the public in Jacob's Pharmacy in Atlanta on May 8, 1886.
It proved popular in the United States at the time due to the belief that carbonatedwater was good for the health. Pemberton claimed Coca-Cola cured many diseases,including morphine addiction, dyspepsia, neurasthenia, headache, and impotence.
After disputes over ownership, with many people creating the recipe, Asa GriggsCandler The Coca-Cola Company in 1892.
Coca-Cola was sold inbottlesfor the first time on March 12, 1894.
Cans of Coke first appeared in 1955
The first bottling of Coca-Cola occurred inVicksburg,Mississippi, in 1891
By 1895, Candler had built syrup plants in Chicago, Dallas and Los Angeles.
Advertising focused on the authenticity of Coca-Cola, urging consumers to "Demand thegenuine" and "Accept no substitute." As copycats sprang up.
As the country roared into the new century, The Coca-Cola Company grew rapidly,moving into Canada, Panama, Cuba, Puerto Rico, France, and other countries and U.S.territories. In 1900, there were two bottlers of Coca-Cola; by 1920, there would beabout 1,000.
The expansion of Coca-Cola overseas took place in 1923 and in 1928 Coca-Cola wasintroduction to the Olympic Games for the first time when Coca-Cola traveled with theU.S. team to the 1928 Amsterdam Olympics
To support troops in the Second World War (but also to keep their business steady as faras business is concerned) they offered coca cola to any troops for 5 cents.
During the war, many people enjoyed their first taste of the beverage, and when peacefinally came, the foundations were laid for Coca-Cola to do business overseas. From themid-1940s until 1960, the number of countries with bottling operations nearly doubled.
After 70 years of success with one brand, Coca-Cola, the Company decided to expandwith new flavors: Fanta was originally developed in the 1940s and introduced in the
Case study 14 - Nokia & Coke
What do you need to know?
What are the local, national and regional impacts of these decisions?
Map showing the location of Nokia's operations
Reasons for the location of its operations
MNCs such as Nokia have branches in many countries because they want to reduce costs. With lower costs, their profits are higher. MNCs such as Nokia keep costs low by opening factories and offices in regions of the world that have:
Low labour costs
Cheap land or building costs
Low business rates(the tax paid by a company)
Locating business to be close to the customer:
Another reasons why Nokia is constantly expanding its range of factories and offices is to be close to its customers, who are spread right across the globe. Nokia's products have massive appeal. Nokia estimated that the mobile phone market had around 2.2 billion people in 2005 and this was expected to rise 4 billion in 2009. Growth in mobile phone ownership and subscription has been particularly strong in Newly Industrialising Countries (NICs). As consumers in LEDCs have become wealthier, Nokia has expanded its business into Asia, Africa and South America. It has, therefore, opened new sales offices in many NICs, located closer to these new customers.
Different jobs in different locations:
Nokia employ a wide range of staff. Some are highly qualified or skilled, such as business managers or R&D staff. Other staff, such as some assembly workers or sales stuff, do not require high-level qualifications or as much training. So, like many other MNCs, Nokia has chosen to locate the assembly of basic products in their range in NICs where wages are lower.
However, the more highly trained R&D staff tend to work in Europe. Here, Nokia develops new products, such as hand-held devices capable of filming video, playing games and surfing the web. These devices use the latest technology and therefore need more highly trained staff to develop and produce them. These high-tech products are also aimed at wealthier consumers, so it makes sense to make them in Europe.
Coca-Cola - not just bad for your teeth?
Pollution caused by the factories - lower standard of regulation
Jobs for local people
Local people can learn new skills
Development of local infrastructure
Development of mineral wealth
New energy projects such as dams built
Large-scale pollution in lakes and rivers
By manufacturing in Europe Nokia can avoid having to pay tariffs in the EU
Improve the quality of life of people living in the region