By: Mutaz Al Maani Dung Nguyen Carlos Palacios Brian Piech Andrei-Cosmin Rotaru Eduardo Siqueria C OCA C OLA E NTERPRISES B EST IN F RANCE C ASE S TUDY D ECEMBER 18 th, 2003

E XECUTIVE O VERVIEW Non-alcoholic refreshment business; 90% of product is produced in France with French ingredients; There is a unique, long, evolving history of Coca- Cola in France; For international growth, HRM – specifically, individual people – is the most important element; Excellent synthesis of Coca- Cola’s vision & French culture and values Advice: no matter how large a multinational corporation grows, it has to “stay local”

F ROM A S MALL F RENCH C OMPANY TO A L ARGE S UBSIDIARY OF AN A MERICAN M ULTINATIONAL  In the beginning, the U.S. Coca-Cola company monitored quality standards and handled publicity and marketing efforts;  After gradual steps, in 1996 the French company became a subsidiary to CCE in the U.S.; the French operations still retain local flavor;

C OCA C OLA E NTERPRISES F RANCE  70 year history in France;  Humble origins: first bottle of Coke sold in a small café by Saint Lazare station in Paris;  Non-alcoholic refreshments;  Averaging 8 to 9% growth per year;  Recently entering bottled water market.

K EY F IGURES IN F RANCE  Net sales: €1.3 billion  Market Share, non-alcholic drinks: 9.1%  Market Share, soft drinks: 57%  Employees: 2,500

C OCA C OLA F RANCE  Clients include small local restaurants, cafes, small distributors, and direct to consumer  90% of the product is made in France with French companies providing ingredients and support services

W HY IT C AME TO F RANCE  At first, international growth wasn’t planned  Coke was licensed out to local partners  International expansion happened simultaneously around the world  Until the 1990’s, Coca-Cola France was locally run, with only marketing being handled by the headquarters in the U.S.  Coca-Cola Enterprises France is now a direct subsidiary of Coca-Cola Enterprises in the U.S.

C OCA C OLA V ALUES Due to the length of time Coca Cola was run in France as a separate organization, by the time the US regained a controlling interest there was already a healthy synthesis of U.S. and French culture. French Values French Values Coke’s Values

C OCA C OLA VALUES Some key Coca-Cola values are:  Passion for your work  Humility  Professionalism  Ethics  Team work

C ONSTRAINTS IN F RANCE Coca-Cola has a long and unique history in France. Its presence has evolved over time, with a widening and growing distribution network and growing client and customer base As Coca-Cola Enterprises France is, in essence, a French company with little interference from the U.S. headquarters, there is minimal effect of constraints

A DAPTATION TO F RANCE P ART I – T HE D ISNEYLAND P ARIS S YNDROME  Key date for adaptation comes in 1996, when the French company came under direct control of Coca-Cola in the U.S.  At first, it was the “Disneyland Paris effect” – American managers were brought in who did not know the local business climate, culture, or history  Coke tried to make the French company a carbon copy of the American one

 A vital element to succeed in France is to take the time to learn the language, to understand cultural means of communication;  It is critical to choose job assignments overseas with care and insight;  The second batch of American managers were eager to live in France, had taken the time to learn French, and were open to learning how things were done in the past. A DAPTATION TO F RANCE P ART II – T HE K EY IS H UMAN R ESOURCE M ANAGEMENT

E SSENTIAL A DVICE  Local people need to be involved and part of the decision making process  Knowledge of language and culture is not a luxury – it is a necessity  There needs to be a synthesis of local values and global vision

Similarity to Starbucks’ Philosophy Starbucks CEO Orin Smith’s 5 Lessons on Expanding Overseas Don’t assume the market is like America, no matter how similar the culture; Set up partnerships abroad to grow faster; Never become better at opening stores than operating them; Hire locally for both managers and rank-and-file employees; Adapt to local culture and tastes. Does Coca-cola France adhere to these philosophies?... …YES!

Sources  Christian Polge, Directeur General,  Marie Garnier, Assistant to the Directeur General,  “A Lesson in Real Coffee Culture,” Shirley Leung, Wall Street Journal Europe, December 15,  Class discussions, slides, and handouts.

O UR T EAM  Mutaz Al Maani Résidence Expansiel,  Dung Nguyen Résidence Expansiel,  Carlos Palacios Résidence Expansiel,  Brian Piech Résidence Expansiel,  Cosmin Andrei Rotaru Résidence Expansiel,  Eduardo Siqueria Résidence Expansiel,