On Jan. 29 1892, The Coca-Cola Company was incorporated in Atlanta Georgia.
If you bought a share of Coca-Cola in 1904 for $40 it would be worth nearly 9.8 million today. This is in no small part due to globalization and international trade. When Coca-Cola started out in Atlanta the size of the market available was too small for the company to have its current revenue and number of employees. Today, only 43% of Coca-Cola sales occur in the United States and you can buy a Coca-Cola in every country in the world except North Korea. Having a large global reach and employing so many people in Atlanta gave the company a lot of power.
When Martin Luther King Jr. won the Nobel Peace Prize in 1964, Atlanta was still a segregated city, but the Mayor, Ivan Allen, planned a celebratory dinner. When no community leaders bought tickets, Allen appealed to former CEO of Coke, Robert Woodruff, to intervene. He convinced Coca-Cola CEO J. Paul Austin to summon Atlanta’s important business leaders. He savagely told them “It is embarrassing for Coca-Cola to be located in a city that refuses to honor its Nobel Prize winner. We are an international business. The Coca-Cola Company does not need Atlanta. You all need to decide whether Atlanta needs the Coca-Cola Company.” The dinner was sold out within two hours.
- What are some moral arguments for the position Coca-Cola took? What about business arguments? Do you think internationalization of Coke’s market played a role?
- How do you explain the fact that no community leaders signed up originally, and then there was a rush to do so? What, apart from fear of Coca-Cola’s threat to relocate, might have played a role in the quick turnaround?
- Who gained from the international success of Coca-Cola? Why aren’t there more successful foreign soda companies?