Sample Essay

The net profit/ sales for Coca Cola Company was at 18.7% in 1996, 21.9% in 1997, 18.8% in 1998, 12.3 % in 1999 and 10.6% in 2000, as opposed to the profit/ sales for Coca Cola Enterprises which was 1.4% in 1996, 1.5% in 1997, 1.1% in 1998, 0.4 % in 1999 and 1.6% in 2000. Similarly the net profit/ sales for PepsiCo Inc was at 4.6% in 1996, 7.1% in 1997, 8.9% in 1998, 10.1% in 1999 and 10.7% in 2000, as compared to the net profit/ sales for Pepsi Bottling Group which was 0.9% in 1996 and 1997, -2.1% in 1998, 1.6 % in 1999 and 2.9% in 2000.

        As depicted above historically the concentrate producer of Coca Cola and Pepsi made more money and revenue as compared to the bottlers who had to work on very slim margins. Yet still the concentrate producers are interested in integrating bottlers operations under them to make way for a comprehensive work flow and process model. The main reasons as to why the concentrate manufacturers are keen to integrate into the bottlers territory is because of the complete control it provides them over the manufacture and the packaging of the carbonated soft drunks. By working on the concentrate as well as under taking bottling operations the concentrate manufactures are able to uphold the quality of the product from start to end while significantly reduce the cost of relation building with bottlers which is one of their main costs. Moreover the companies can also market and launch advertising campaigns at their own end without consulting or waiting for input form the bottlers.

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