University of Economics Ho Chi Minh City

School of International Business

TOPIC:

Multinational
Corporation - The
Coca Cola
Company

Lecturer: PhD
Phan Thu Hien

Members:

Lam The Anh

Tran Dieu Hoa

Phan Minh Hoang

Nguyen Xuan Binh

MỤC LỤC

I. Introduction of topic 3
1. The reason for choosing this topic: 3
2. History 3
II. Coca-Cola's penetration into the Vietnamese market 4

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 1. Western penetrade market by importing in Vietnam of Coca-cola 4
2. Coca-cola's measures to penetrate the Vietnamese market 6
2.1. Pioneering and creating advertising campaigns associated with
the cultural identity of Vietnam 7
2.2. Maintain effective distribution channels 7
2.3. Carry out extensive funding programs 8
III. How Coca Cola 's strategies have positive influences on VietNam 10
IV. How Coca Cola 's strategies have negative influences on VietNam 11
1.Causes a series of health problems 11
2.The disappearance of local beverage brands 11
3.Accused of tax evasion in Vietnam 12
V. Source for the topic 12

I. Introduction of topic

1. The reason for choosing this topic:

Coca Cola is a multinational company with a long history of development and strong
development. Especially in the Vietnamese market, Coca Cola is one of the leading beverage
distributors in terms of sales and market share. Therefore, it can be said that Coca Cola has
become a habit of Vietnamese today.

One more reason for our group to choose this topic is because the company's tax evasion is
always a hot topic in the business world.

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2. History
Origin born
Coca-Cola was invented by pharmacist John Stith Pemberton, owner of a private
laboratory and pharmacy. Initially, Pemberton appointed a popular drug to help
fight headaches and fatigue. He experimented and experimented, successfully
mixing a black syrup like coffee. This type of syrup mixed with cold water can be a
water-reducing headache and increase refreshing.
Pemberton retains this formula only knowing that the most important ingredient in
this drink contains a certain percentage of essential oils extracted from the fruit and
leaves of the plant. This is the only plant in the South American rainforest, which
contains significant amounts of cocaine and caffeine. So the drug works to
refreshing, anti headache, fatigue. The name Coca-Cola also derived from that.
Pemberton replaced the "K" with the more familiar "C".
After invented the Coca-Cola, Pemberton was very happy and went around
offering this drink, especially at the "Soda-Bar" pubs in Atlanta. However,
Pemberton was disappointed that no one was drinking Coca-Cola. It is dark brown
and is considered by everyone to be a drug, not a mere beverage. The Coca-Cola
formula only became a beverage thanks to a staff member in the bar "Jacobs
Phamarcy" who mistakenly blended Coca-Cola with sodas instead of regular
Pemberton's
Coca-Cola is more likely to be brewed than it used to be, making it unusually
refreshing, and at the time Coca-Cola could serve the masses of consumers. From
then on, the bar brews and sells 9 to 15 cups of Coca-Cola every day. However, for
the first year Pemberton only sold 95 liters of Coca-Cola.

XX century
Coca-Cola's first outdoor advertising painting was painted in 1894 in Cartersville,
Georgia. Cola Cola is sold as a functional food for the treatment of pain. After
about 50 years of Coca-Cola, the drink became a national symbol of the United
States. In 1935, Coca-Cola was certified kosher (ie a food that complied with the
dietary requirements of the Jewish Act) by Atlanta Rabbi Tobias Geffen, after the
company had a minor change. About the origin of some ingredients in the
beverage.

New Coke
On April 23, 1985, Coca-Cola publicly changed its drink recipe with a new product
called "New Coke." Surveys show that most consumers love New Coke's taste
more than Coke and Pepsi, [1] but Coca-Cola's management does not anticipate the

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public's nostalgia for the item. Old drinking, resulting in people protesting very
much. On July 10, 1985, Coca-Cola Company again changed its traditional
formula with Coca-Cola Classic, using HFCS instead of sugar as the main
sweetener.
II. Coca-Cola's penetration into the Vietnamese market
1. Western penetrade market by importing in Vietnam of Coca-cola

Brand of Coca-cola is one brand of the best of America. Famous for the symbol of
trustly, unique and the sampire, but when on the field in Vietnam, Coca cola still
satisfied the user by respecting to the cultural features value of the user of Vietnam.
Coca-Cola's penetration into the Vietnamese market through stages
Standard Penetration methods Capital contribution
ratio
Year
1994 Export

August 1995 Joint venture between 70% - 30%

Coca-cola Indochina and
Vinafimex

September 1995 Joint venture between 60% - 40%

Indochina Coca-Cola and
Chuong Duong Beverages
Company
January 1998 Joint venture between 70% - 30%
Coca-cola Indochina and
Da Nang Beverages
Company
Since October 1998 Companies with 100%
foreign capital

Source: http://www.coca-cola.com.vn/operations.asp

In the Vietnamese market, Coca-Cola has been in the South since the 1960s and its
products are imported. In 1975, after the Vietnam War, the company shut down
temporarily. When the US government lifted the embargo on Vietnam, with

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Vietnam's open policy and market analysis of the company, Coca-Cola decided to
re-enter Vietnam. With a large population, of which 65% is under the age of 30,
Vietnam is an attractive market for the Coca-Cola Company.
Coca-Cola was back in February 1994. At this time, Vietnam did not allow the
establishment of a wholly foreign-owned enterprise, so the only way to operate in
the Vietnamese market was to joint with a certain company. Moreover, after a long
time coming back to Vietnam market, in order to avoid risks and take advantage of
domestic partner's strengths, Coca-Cola's joint venture is fully reasonable.

For the Vietnamese market, although investing in joint ventures, with the proverb
of not wanting to share power in management as well as decision-making power in
implementing the strategy, so from the beginning, Coca Cola has the intention of
establishing a 100% foreign owned enterprise. In the early days, although the
business was not profitable, Coca-Cola Vietnam still actively supported the sport
activities of Vietnam billion, despite strong opposition from the Vietnamese
partners. In addition, Coca-Cola lowered the price of products by more than 20%, a
can of Coca-Cola in the US about 10,500, while in Vietnam only about 5,000 -
6,000. Therefore, Vietnamese partners can not cover the losses and have to sell the
entire Coca-Cola stake. As a result, Coca-Cola has completed the transformation
into a 100% foreign owned company.

When Coca-Cola came to Vietnam, Coca-Cola's rival Pepsi was present in Vietnam
a few years ago and has built up a solid position. So, just in the Vietnam market,
Coca-Cola has launched a series of discount promotions, free trial ... This strategy
has two effects: first, to resonate the company, mark the presence of the company
on the market, attracting the attention of consumers. Second, to eliminate the weak
competitors, to make it easier to dominate the market. Domestic, small-scale,
small-scale beverage companies are unlikely to compete with the world's most
powerful corporations, with huge financial power like Coca- cola. After that, some
competitors in the Vietnamese market had to close down, some of them turned
their business away from direct confrontation (like Tribeco moved to produce
beverage from fruit). Therefore, in Vietnam there are only Coca-Cola and Pepsi in
the carbonated beverage market.

For more than 20 years in the Vietnamese market, Coca-Cola has made a great
contribution to community development and is a leading beverage company in
Vietnam. The presence of the company is increasingly confirmed through
advertising and communication activities and the development of community
relations through sponsorship of educational programs, improving people's lives

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like disaster relief, employment support for women ...

2. Coca-cola's measures to penetrate the Vietnamese market

One characteristic of Coca-Cola is that no matter where it is produced, any country

has a taste and quality that is unchanged. With the persistence and preservation of
such products, it is clear that the success of Coca-Cola worldwide in general and in
Vietnam in particular, is not just due to the quality or taste of the beverage. The
answer lies in the marketing and distribution network of the company across the
country. The image of Coca-Cola has become a part of the cultural life of the
Vietnamese people and is a message conveying good traditional values. The value
of Coca-Cola's success lies in its insights and incarnation in indigenous culture,
empowering global brands in any country.

2.1. Pioneering and creating advertising campaigns associated with the cultural
identity of Vietnam

With the view "marketing is more important than product itself", Coca-Cola is
generous with its extensive advertising and marketing campaign in Vietnam based
on market research and as well as understanding consumer culture here. However,
with this market, advertising aggressively alone is not enough to succeed if not
care about customs and habits of Vietnamese consumers.

Advertising campaigns and image building are closely linked to the traditions and
customs of Vietnam that make Coca-Cola a no-brainer for pure pleasure and a
messenger of literary values of the Vietnamese. It is not coincidental that the Coca-
Cola brand wants to be recalled by Vietnamese consumers every time they mention
the traditional New Year. Campaign "Én về - Xuân sang – Niềm vui đến" is one of
the typical examples.

As a close friend of every family meal, Coca-Cola Vietnam launched “Coca-cola

cùng mẹ chăm sóc bữa cơm gia đình” program in September 2007 to promote the

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preservation of Traditional values of Vietnamese families. Coca-cola media
campaigns have called on modern families to pay more attention to the care of
family meals and to promote the role of mothers in engaging family members with
a family meal. The distinctive and fresh color of Coca-Cola makes the Tet holiday
brighter and the tray is full. Coca-Cola wants to contribute to the well-being of
modern families, preserving traditional values inherent in the nation.

Delivering the culture through advertising, media campaigns, Coca-Cola wants to

make a deep impression on the minds of every Vietnamese consumer. The
company invests heavily in marketing programs to strengthen its reputation from
this perspective. Marketing became a powerful weapon for Coca-Cola as it
penetrated the market and affirmed its position there, always a leading brand in
beverage.

2.2. Maintain effective distribution channels

Proud to be the best product in the world, Coca-Cola does not segment the market,
not focus on any object. This comes from the desire everyone knows, can buy and
can use Coca-Cola beverage as a necessity of life. From rural to urban, from the
South to the North, from the upper classes to the poorer people are familiar with
Coca-Cola's unmistakable products.

What factors cause the company to have such a nationwide coverage? That is the
distribution channel. Coca-Cola's hands bring this water to every region, every
street, every village and every household.
These are the distribution channels installed professional customer management
system in each region, each region and each channel; dynamic sales team trained in
professional sales process; The successful image promotion program is aimed at
attracting consumers to ensure that Coca-Cola products are everywhere and ready
to serve customers.

Coca-Cola has used unique tactics to gain market share in three-wheeled vehicles
that have been marketed to the streets and to the corners of Vietnam. The bikes
become a close and familiar symbol of life in Vietnam. Coca-Cola took advantage
of this feature to turn into a distribution advantage that no competitor would copy.

In this way, all the people are good at finding Coca-Cola products, even far away
supermarkets. Distribution system has satisfied Coca-Cola consumers in any area.
Beverages are essential on every grocery stores.

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As we can see, Coca-Cola has chosen a unique but effective way to bring products
to consumers. Clearly, Coca-Cola is close and associated with everyday life in
Vietnam as a family-friendly companion.

2.3. Carry out extensive funding programs

a. Coca-cola Learning Center

Coca-Cola and the Coca-Cola Company play a leading role in community

education programs with a variety of activities that contribute to improving and
improving the lives of people in rural areas and urban throughout the country. The
goal of the Coca-Cola Learning Center program is to provide learning facilities for
students. So far the company has invested $ 375,000 to set up and run the program.
At present, there are 40 learning centers in 33 provinces across the country.

b. Educational program on environment

Coca-Cola sponsors the "Green Planet" contest to raise awareness of

environmental protection for students in elementary and secondary schools across
the country.

c. Disaster relief

The Coca-Cola Company was one of the first foreign companies to help flood
victims in 1999 as the biggest hurricane of the century devastated the Central. All
Coca-Cola employees have donated money, relief supplies totaling VND350
million. Coca-Cola Company donated 1.2 billion VND to help flood victims in
2000; In 2001, 90 million VND was devastated for the victims of the typhoon Ling
Ling; In 2002, the province suffered a prolonged drought, the company brought
food and Joy drinking water for a total of 150 million dong.

d. Employment support for women

This is a program of great social significance that Coca-Cola committed to
implement in Vietnam in response to the movement of poverty reduction. 2,000
women receive wheelchairs as a means of trading Coca-Cola products in Vietnam.
Followed by a joint program between the Coca-Cola Company and the Women's
Union, the "love house" was built to help children in difficult circumstances to
have a place to live, learn and give scholarships to their children.

e. Guilin Banh Chung Guinness record

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The Coca-Cola Company sponsored the Ước Lễ Traditional Cake Market in Thanh
Oai District, Ha Tay Province - Hanoi to make a giant cake to celebrate the
traditional New Year in 2002 and help Vietnam achieve the first Guinness World
Record. Banh chung weighs 1.4 tons 330 kg is made from glutinous rice, 100 kg of
green beans, 100 kg of pork, 10 kg of spices by 50 people made and 2,25m height.
After displaying for 3 days of Tet, the cake was divided into 20,000 gifts for
charity organizations and Guinness certificate was transferred to the Ministry of
Culture and Information of Vietnam.
It can be seen that with the Vietnamese market, in addition to supplying products,
Coca-Cola also focuses on other issues such as education and training activities,
social activities ... Through sponsorship activities, the company will be deep in the
minds of consumers and become more familiar with everyone.

In conclusion, Coca-Cola uses a variety of measures to stay in the Vietnamese

market and be accepted by Vietnamese consumers. That success is due to the
marketing strategy combined with the choice of penetration and ownership of the
company.

III. How Coca Cola 's strategies have positive influences on VietNam
Coca-Cola Vietnam is committed to supporting Vietnamese enterprises in
sustainable development
- During the APEC Senior Officials' Meeting 2017 held in Danang from November
6 to 11, Vietnam hosted the Vietnam Business Summit and here Sanket Ray,
General Director of the Company Limited Coca-Cola Vietnam (Coca-Cola Vietnam)
has made a long-term commitment to sustainable development in Vietnam. Since
its entry into the Vietnamese market, Coca-Cola has made a number of positive
contributions to help Vietnamese businesses develop sustainably.

- In the year 2017, Coca-Cola Vietnam launches the project "Supporting small
and medium enterprises in Vietnam in sustainable development". Accordingly,
the project focuses on the training program of capacity building, in-depth
consultancy with 3 main contents: Innovation; Supply Chain Management and
Corporate Social Responsibility.

- Besides, Coca-Cola Vietnam also actively contributes to the empowerment of

women. Specifically, in September last in Hue, Coca-Cola Vietnam participated
in sharing information about the program "5by20".

- In Vietnam, Coca-Cola develops the 5by20 initiative through e-learning

courses organized by the Vietnam Women's Union and the Vietnam Women
Entrepreneurs Council. These on-line courses provide entrepreneurial skills
and complete financial planning to support women who are confident and willing
to undertake business activities to improve their home economics. , develop
local economy, create jobs and contribute to sustainable social development.

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- Coca-Cola has invested more than $ 7 million in a range of community
projects in Vietnam in clean water, community capacity, and relief efforts
natural disasters since 2010 ... or as E-learning start-up training courses
are organized at ECOCENTER community support centers to support business
skills and improve income for women in many localities nationwide.

- In summary, with the high quality products confirmed by the world as Coca-
Cola, penetration in Vietnam is not too difficult. Moreover, the prominent
advantage of Vietnam is that it is a populous country with a high proportion
of young people, who are the best customers, most suitable for traditional
Coca-Cola products. . Unlike Japanese consumers, Vietnamese often have the
habit of buying beverages at markets, stores, small stalls near their homes or
on the street, so Coca-Cola has built a broad distribution network. to bring
the product to the consumer. Coca-cola accounts for more than 50% of the
beverage market in Vietnam [24], with three large bottling plants in Hanoi, Ho
Chi Minh City and Da Nang. The company directly employs 1,378 people and
produces about 16,000 jobs in related industries.
IV. How Coca Cola 's strategies have negative influences on VietNam
1.Causes a series of health problems
Lead in the drinking water industry. However, Coca Cola 's drinks has many times left the
scandal for this famous brand. It is worth mentioning that these issues are often related to user
health, natural environment...
Coca Cola, Known as a popular drink in the world and a key product of the company. But many
researchs show that, if used regularly, users can be affected by health and increased risk of
dangerous diseases such as obesity, kidney stones, diabetes and cancer.

2.The disappearance of local beverage brands

Only after a few dozen years of investment in Vietnam, two foreign-invested enterprises namely
Coca Cola and Pepsi are absolutely occupying market share of carbonated soft drinks.
For many years, the beverage market in VN has been driven by the two strong brands Coca-Cola
and Pepsi. Some strong local business of VN such as Tribeco or Chuong Duong are still in the
bottom.

Examble: In 1998, before the "risk named Tribeco", Coca Cola has reduced the price by 30%, the
price of product is 800 dong / bottle.
Immediately, to deal with this , Tribeco to lower the product price from 950 to 660 VND / bottle .
However, business with little money will never win the one with lot of money. Tribeco's output
dropped sharply, from 30 million liters (1998) to 4 million liters (in 2000), profit from 6.8 billion
was only 0.2 billion. Tribeco has run out of carbonated drinks and jumps into new fields of soya
milk with bottle, canned and fresh juices.

3.Accused of tax evasion in Vietnam

Coca-Cola has been investing in Vietnam since the early 1990s. Nearly 20 years of doing
business in Vietnam, Coca-Cola has repeatedly reported losses. This has helped the company
avoid paying taxes to the state. Despite repeated losses, Coca-Cola plans to invest $ 300 million

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in its next three-year plan to expand its business. in Viet Nam. This has made Coca Cola
inevitably questioned the transfer pricing.

Examble: Profit margins in Vietnam are higher than in the US, businesses will report losses in
Vietnam and they don't have to pay business taxes in Vietnam, then they transfer all the profits to
the US and they just have to pay taxes at a lower rate than Vietnam for the US government

V. Source for the topic

https://baomoi.com/8-tac-hai-khung-khiep-cua-viec-uong-coca-thuong-
xuyen/c/23882709.epi
http://english.vietnamnet.vn/fms/business/54313/coca-cola-suspected-major-tax-
avoidance-scam.html
https://kinhdoanh.vnexpress.net/tin-tuc/doanh-nghiep/nguyen-nhan-khien-tribeco-
giai-the-mat-thuong-hieu-2732980.html
http://enternews.vn/thi-truong-nuoc-giai-khat-co-gas-dn-noi-du-suc-thay-doi-cuc-
dien-5522.html
http://enternews.vn/doanh-nghiep-nuoc-giai-khat-noi-bo-quen-loi-the-vuon-nha-
99187.html
http://www.coca-cola.com.vn/operations.asp
https://vi.wikipedia.org/wiki/Coca-Cola
http://www.brandsvietnam.com/7064-7-chien-luoc-giup-CocaCola-thanh-thuong-
hieu-so-1-toan-cau
https://www.cocacolavietnam.com/cau-chuyen-ve-coca-cola/con-duong-phia-
truoc-cua-coca-cola

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