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University of Missouri- Kansas City

Research Project- Coca-Cola İçecek- Turkey

Zach Boyd, Brian Burasco, Spencer Chaney and Yazan Darhali

Management 370

Dr. Jae Jung

7 May 2015

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Index

Cover Page………………………………………………………………………………………………………… 1

Current Company and History…………………………………………………………………………. 3-7

Human Resource Management…………………………………………………………………………… 7

Figure 1…………………………………………………………………………………………………………….. 4

Figure 2…………………………………………………………………………………………………………….. 9

Figure 3-6 …………………………………………………………………………………………………………10

Figure 7 ………………………………………………………………………………………………………….. 11

Market Analysis-Soda……………………………………………………………………………………….12

Bottled Water………………………………………………………………………………………… 13

RTD Tea ………………………………………………………………………………………………... 13

Environmental Impact ……………………………………………………………………………………… 14

Figure 8-9………………………………………………………………………………………………………… 14

Resources……………………………………………………………………………………………………….... 15

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Turkey is at the northeast end of the Mediterranean Sea in southeast Europe

and southwest Asia. To the north is the Black Sea and to the west is the Aegean Sea.

Its neighbors are Greece and Bulgaria to the west, Russia, Ukraine, and Romania to

the north and northwest (through the Black Sea), Georgia, Armenia, Azerbaijan, and

Iran to the east, and Syria and Iraq to the south. The Dardanelles, the Sea of

Marmara, and the Bosporus divide the country. Turkey in Europe comprises an area

about equal to the state of Massachusetts. Turkey in Asia is about the size of Texas.

Its center is a treeless plateau rimmed by mountains. Fate has put Turkey at the

junction of two continents. As a land bridge, a meeting point and a battleground, it

has seen people moving in both directions between Europe and Asia throughout

recorded history. That human traffic has left monuments and debris, dynasties and

lasting cultural legacies, all of which have contributed to the character of modern

Turkey (lonelyplanet). Turkish history is such a hugely rich patchwork of

overlapping eras and empires that it boasts figures, events and phenomena familiar

even to the layperson. The current Turkish government is a Republican

parliamentary democracy (infoplease).

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Turkey’s population is about 81 million, with four million in Ankara, the

capital of Turkey. However, Istanbul is Turkey’s most famous and highest populated

city with over 11 million people living there. Turkey is the 2nd largest European

country after Russia, with a total area of 301,382 square miles. The current

president of Turkey is Recep Tayyip Erdogan, who to the Turks, is considered one of

their greatest leaders throughout their history. Under Erdogan’s rule, Turkey’s GDP

ranking made a marvelous breakthrough from the 111th to the 16th highest GDP

worldwide, an average of ten ranks per year. Erdogan was able to restore Turkey to

the right path on all aspects, whether it was economically or socially. In ten years,

Erdogan was able to build 125 new universities, 189 school, and 510 hospital. When

the U.S. and European economies took a hit in 2007, schools in the U.S. and Europe

raised their tuition rates, while Erdogan made an announcement that education will

be totally free for school and college students in Turkey! Erdogan was also able to

pay all of Turkey’s debts, and greatly increase the country’s exports. All of those

factors made Turkey’s economy be at an all-time high, and a great opportunity for

businessmen to invest their money in.

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Throughout the history of Turkey, the nation has seen perish and thriving in

recent years. The history of the Turks covers a time frame of more than 4000 years.

Turks first lived in Central Asia around 2000 BC. Later, some of them left Central

Asia and spread around, establishing many states and empires independent from

each other within a vast area of Asia and Europe. These empires included The Great

Hun Empire (established during the 3rd Century B.C.), the Göktürk Empire (552-

740), the Uygur Empire (741- 840), the Avar Empire (6-9 Century A.D.), the Hazar

Empire (5-10 Century A.D), the Great Seljuk Empire (1040- 1157), and many others.

Turks in Anatolia: The Turks started to settle in Anatolia in the early 11th century

during a great migration. The Malazgirt victory in 1071 against the Byzantines

literally opened up the gates of Anatolia to the Turks. It is following this date that

the Turks fully conquered the whole of Anatolia and established the Anatolian Seljuk

State there (1080-1308). This was the first Turkish State in Anatolia and was

sometimes called, after its capital city of many years, the Konya Sultanate. The state

of Anatolia lasted through midway of the Seljuk state until the Mongol invasion in

the year 1243. This began the rise of the Ottoman Empire, which eventually ruled

over 3 continents and lasted 623 years until the end of World War I

(turkishculture). The weakening of the Empire continued until World War I. The

Ottoman Empire entered the First World War in 1914 on the side of the allied

powers and emerged defeated from the war in 1918, compelled to sign the Mondros

Armistice on October 30, 1918. Under the terms of this Armistice; Britain, France,

Russia, and Greece occupied the territories of the Ottoman Empire. This was the

actual end of the Ottoman Empire. Years later there was an uprising of the local

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government by a small group of liberators that eventually took over the government

and thus the Republic of Turkey was born.

The United States and Turkey have an interesting background together. “The

U.S.-Turkish friendship dates to 1831, when the United States established

diplomatic relations with the Ottoman Empire. After World War I and the founding

of the Turkish Republic, the United States established diplomatic relations with

Turkey in 1927. U.S.-Turkey relations advanced further with the Economic and

Technical Cooperation agreement signed July 12, 1947” (state.gov). Not only was

Turkey an ally in the World Wars, they have also been a member of NATO since

1952. In recent news the state government website stated, “U.S.-Turkey economic

relations are guided by the Framework for Strategic Economic and Commercial

Cooperation (FSECC), established in 2010 by Presidents Obama and Gul. Following

the announcement of free trade negotiations between the United States and the EU,

in May 2013 President Obama and Prime Minister Erdogan established a parallel

dialogue, the High Level Committee (HLC), as a forum for deepening U.S.-Turkey

trade relations”. Overall, the United States and Turkish relations can only improve

from here. In the future they could be a very important ally and trading partner to

our great nation.

Coca Cola is a worldwide icon that can be perceived simply by the shape of

their bottle or their logo. Originally founded in Atlanta, Georgia in 1886, Coca Cola

has been an icon and located in Istanbul since 1964. A bit of information taken from

the CCI website stated, “Coca-Cola İçecek (CCI) is the 6th largest bottler in the Coca-

Cola System in terms of sales volume. CCI produces, distributes and sells sparkling

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and still beverages of The Coca-Cola Company (TCCC) across Turkey, Pakistan,

Kazakhstan, Azerbaijan, Kyrgyzstan, Turkmenistan, Jordan, Iraq, Syria and

Tajikistan. CCI employs 11,000 people and has a total of 23 plants, offering a wide

range of beverages to a consumer base of close to 370 million people. In addition to

sparkling beverages, the product portfolio includes juice, water, sports and energy

drinks, tea and iced teas (cci.com/tr/en).  They are an active participant in the

community, and a huge seller in the nation, making them a dominant presence in

Europe and worldwide.

The Coca-Cola mission statement is simple and effective, it states their goal is

to “To refresh the world... To inspire moments of optimism and happiness...To

create value and make a difference”. Their vision statement asks their employees

to:

Be a great place to work where people are inspired to be the best they can be.

Bring to the world a portfolio of quality beverage brands that anticipate and satisfy people's desires and needs.

Nurture a winning network of customers and suppliers, together we create mutual, enduring value.

Be a responsible citizen that makes a difference by helping build and support sustainable communities.

Maximize long-term return to shareowners while being mindful of our overall responsibilities.

Be a highly effective, lean and fast-moving organization.

Coca-Cola İçecek provides 24 billion servings annually to 370 million people.

With this being said, they bring in 2.7 billion in annual revenue. Their shareholdings

consist of 25.9% public holdings, an individual professional basketball team in

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Turkey called Anadolu Efes holds 50.3%, 3.7% belongs to an independent business

man Özgörkey, and the remaining 20.1% belongs to employees in the Coca-Cola

company.. “CCI’s shares are traded on Borsa Istanbul (BIST) under “CCOLA.IS”,

American depositary receipts (ADR) are traded over the counter in the United States

under “COLAY”, Eurobond is traded on Irish Stock Exchange under “CCOLAT”

tickers” (cci.com/tr/en).  Therefore, Coca-Cola is a huge benefactor to the nation of

Turkey and its surrounding neighbors. The following table below shows other

important information about the company and their annual outlooks and recent

milestones.

Human Resource Management:

Coca-Cola İçecek is known for their human resource management nationally

and internationally. Coca-Cola focuses on the acquisition and retention of highly

skilled and intelligent employees that allow Coke to maintain its high position

within the market. Coke takes care of its employees and treats them as an asset and

a true benefit, instead of just a worker. CCI is also renowned for their planning and

forecasting abilities. This is the process of what positions the company has to fill,

and how they are going to fill them. The CCI HR department involves company

strategic planning for hiring new employees in the future. They forecast for the

unexpected and what the employees will need. They do their best to make it clear

that the employees are the most important assets to the company, so their

satisfaction is a top priority for them.

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fig.2

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Investor Relations Graphics:

fig. 3 fig. 4

fig. 5

(The figure below shows the region Coca-Cola İçecek covers)

fig. 6

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fig.7

(This figure shows the beverage consumption vs. the nations stated GDP)

Coca-Cola İçecek is operating in one of the worlds most dynamic and exciting

markets. Many people consider it as “A gateway to Turkey, Pakistan, Central Asia,

and The Middle East. As stated before, they serve nearly 370 million people

annually; 60% of that population is under the age of 30. Therefore meaning that this

company is still on the mend. The following figure goes to show that Coca-Cola

products consumption is a very large part of Turkeys overall society.

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Market Analysis:

The Turkish soft drink market is currently experiencing strong value growth.

Not only was this previous year positive, it was actually the best year in review thus

far. The market is shifting from the core (standard) drinks, to a very diverse group

of products, as it is across the world. “In Turkey, more people than ever are living in

urban areas. Rapid urbanization has led to major shifts in consumption trends,

which have significantly benefited soft drinks. In addition, rising urbanization can

also be linked to the increasing number of professional people in the cities. This is

being reflected not only in improved incomes but also valued leisure time. Due to

the busier lifestyles in urban areas, there has been a dramatic rise in takeaway and

fast food consumption, which has also contributed to the sales of soft drinks”

(euromonitor.com). Not only is urbanization a crucial part to the market, as is the

recent health and wellness trend. This need for a healthy lifestyle has lead to the

sales of carbonates and powder based concentrates. With the high demand for

healthy products now, Turkish sales have flourished in items such as juices, teas,

and flavored bottle water. There is also a new market for add ons to water such as

Dasani Drops, Minute Drops, and PowerAde Powder which are the products that

Coca-Cola offers to the market. Coca-Cola continues to rank first in 2014 due to its

high sale items in carbonates and juice and newly introduces, high targeting in tea,

sports and energy drinks. Overall, the soft drinks market is expected to continually

grow from where it is now. The constant introduction to new products will allow

this company and branding to flourish in the Turkish markets for years to come.

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“In 2014, bottled water recorded off-trade volume growth of 2%, this being

weaker than the 4% CAGR of the review period. Category growth started to slow in

2012 following the Turkish government’s announcement that some companies did

not meet required health and hygiene standards with their 19-litre demijohns

(called “damacana”) of still bottled water. As still bottled water is the dominant

format within bottled water, accounting for 93% of total volume sales in 2014,

overall category growth is significantly affected by the performance of still bottled

water” (Euromonitor.com). Many of the citizens of Turkey use the local tap water

for daily items like cooking or brushing their teeth, but bottled water for everything

else like coffee and ice due to the high mineral content of their local waters. Some

research stated that a vast majority of the restaurants in Turkey serve bottled water

instead of ice water like what we are used to here in the United States.

“RTD tea was one of the most dynamic categories within soft drinks over the

review period, recording an off-trade current value CAGR of 54%. The main driver

of growth was the changing consumption habits of younger consumers. Turkey has

a very young population, which is increasingly opting for RTD tea over carbonates,

and juice concentrates. As a result, the household penetration of RTD tea is

increasing rapidly” (Euromonitor.com). The current brand leader in Turkey is Pepsi

Cola, as their Ready To Drink Teas came far before Coca-Cola introduced their teas.

Within the next year, economists are expecting Ready To Drink Teas to break record

sales and move up an additional 12% from where they are now.

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Environmental Impact:

The Coca-Cola İçecek website has a lot of information about how in recent

years they are doing their best to turn the company as “green” as possible. Their

main tagline reads, “Energy management and climate protection are the priorities of

CCI’s sustainability strategy. We continue working towards increasing energy

efficiency and reducing emission rates in order to minimize our environmental

impact. With the awareness of our responsibility to reduce CO2 emissions generated

as a result of the consumption of non-renewable energy sources, we do not consider

energy efficiency and climate protection performances as separate concepts and we

aim for continuous improvement in this field.  CCI’s energy management policy is

based on 2 basic principles: Reduce & Recycle.” The following figures show recent

emission ratings and overall energy consumption

fig. 8-9

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References

A Brief Outline of Turkish History. (n.d.). Retrieved April 23, 2015, from

http://www.turkishculture.org/general-1067.htm

Coca Cola İçecek. (n.d.). Retrieved April 23, 2015, from http://www.cci.com.tr/en

Geography. (n.d.). Retrieved April 23, 2015, from

http://www.infoplease.com/country/turkey.html

Soft Drinks in Turkey. (2015, February 1). Retrieved April 23, 2015, from

http://www.euromonitor.com/soft-drinks-in-turkey/report

Turkey. (n.d.). Retrieved April 23, 2015, from

http://www.lonelyplanet.com/turkey/history

U.S. Relations With Turkey. (2015, February 24). Retrieved April 23, 2015, from

http://www.state.gov/r/pa/ei/bgn/3432.htm

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