Question

Read the case “Appendix_Week_2T_Case_1C_Coca-Cola_Dives_into_Africa”, and answer question 2.2. Question 2.2. What are the challenges that Coca-Cola is likely to face to grow its business in Africa?

Answer 1

Coca cola is one of the prominent player in the selling the beverages. It owes a significant growth rate if serving the customers from 1886 and it still has a high market share in its segment giving a tough competition to its competitors. The company is expanding its business into Africa. A company cannot operate in any other country without calculating the profitability and the returns they get from it. Expanding business is some other countries require a lot of investment too. A business can only sustain if local people are included in the business model. Coca cola works on franchisee model it does not provide any kind of ownership. Africa is a country which is not very developed and the economy is also poor. So, searching for an enterprise who can take franchisee in and of the African state is also a very difficult task. The roads and the infrastructure is also very poor. The coca cola company faced lots of problem for moving the heavy trucks in the urban areas as there was very little space and the space was also very less. When the urban area in Africa has this type of problem then the villages would not have even any roads. These were few challenges which coca cola was facing in expanding its business in Africa.