Coca-Cola – A Global Product
- Coca-Cola is an American TNC that manufactures, markets and sells soft drinks
- It was established in 1886 in Atlanta where its HQ remains, and now operates in over 200 countries
- Two-thirds of Coca-Cola’s revenue comes from overseas and it owns other brands like Fanta and Sprite
- Coca-Cola has promoted itself through global advertising campaigns and by sponsoring major sporting events
- It is one of the most recognisable global brands and it has many positive and negative impacts on people and environments all over the world
Positive and Negative Impacts of Coca Cola
Positive impacts | Negative impacts |
Coca-Cola and its 225 independent bottling plants employ over 700,000 people around the world | It has been accused of exploiting workers by paying low wages and allowing poor working conditions |
It also creates lots of jobs indirectly through its supply chain, creating a multiplier effect | It contributes to health problems like obesity and diabetes by promoting the consumption of sugary drinks |
It is working to reduce its negative environmental impact by investing in more sustainable packaging and encouraging recycling | It manufactures billions of single-use plastic bottles which contribute to the global plastic waste crisis |
It supports community development e.g. their 5by20 initiative aimed to empower 5 million female entrepreneurs between 2010 and 2020 by providing them with training and resources to start and grow their own businesses | They use an estimated 300 billion litres of water per year which can contribute to water scarcity e.g. there was community backlash and protests against Coca-Cola in India due to groundwater depletion and contamination of local water sources |
Worked example
Explain how one transnational corporation (TNC) has contributed to the globalisation of the world's economy
[4 marks]
- Remember, this answer is a point marked with 1 mark for each valid point made with extra marks for developed points (d)
- The command word is ‘explain’
- The focus of the question is ‘TNC’
- You will gain marks for explaining how the chosen TNC has contributed to increased flows of goods, capital, labour and/or technology and ideas
- For full marks, you must make sure that you link to globalisation of the world economy
Answer:
- Nike has become one of the world's largest suppliers of sports equipment (1), employing over 44 000 workers in over 50 countries (1d).
- Manufacturing helps the social and economic development of these countries through the transfer of skills, technology and the rise in wages (1).
- The company’s headquarters and much research take place in Oregon in the USA (1) but its products are manufactured in poorer countries like Indonesia and Vietnam, where labour costs are cheaper (1d).
- Components for sports goods are sourced from various different countries around the world (1), including rubber for its trainers from Malaysia and Indonesia and cotton from Turkey and India (1d).
- From its global operations, Nike’s annual turnover continues to rise, with profits reaching $14 billion in 2015 (1).
- The company has increased its global market and reputation by sponsoring and promoting international sports events and sports stars (1).