Partnerships have been an important part of Coca-Cola (NYSE:KO)’s business strategy. The company utilizes business partnerships in a variety of different ways to help grow its earnings and improve its corporate brand.
Coca-Cola’s bottling operations is one area of its business that benefits from strategic partnerships. The company’s 21st Century Beverage Partnership Model is currently working in the U.S. to provide more efficient productivity through five bottling partners. Some of the benefits of this partnership include improved technological capabilities and increased access to bottling territories.
In February Coca-Cola announced a continuation of this partnership which will include territory granted to bottling partners in Chicago and Central Florida.
Also in February 2014 Coca-Cola announced a new global partnership with Green Mountain Coffee Roasters that will allow Coca-Cola to provide innovative single-serve cold beverage products for Green Mountain Coffee Roasters’ new Keurig Cold. The Keurig Cold will be introduced in 2015 and provides innovative new technology for the single-serve cold beverage market.
- Warning! GuruFocus has detected 4 Warning Signs with KO. Click here to check it out.
- KO 15-Year Financial Data
- The intrinsic value of KO
- Peter Lynch Chart of KO
Upon regulatory approval, the partnership will begin in March 2014. While the 21st Century Beverage Partnership agreement is focused primarily on territory rights, Coca-Cola’s strategic partnership with Green Mountain Coffee Roasters will be centered around a $1.25 billion investment by Coca-Cola that will give it a 10% minority ownership stake in the company.
These are two current examples of Coca-Cola’s utilization of strategic partnerships to help it grow earnings over the long term. The company is also involved in many other partnerships that help it to improve its brand and promote global responsibility.
In its 2012/2013 Global Reporting Initiative it included detail on its partnerships citing over 250 global bottling partners and partnerships with over 23 million customer retailors. Additionally, Coca-Cola also has many partnerships that focus on sustainability and environmental responsibility. Some of these partnerships include the Center for Packaging Innovation and Sustainability, Conservation International and the United Nations Development Programme.
These examples further illustrate the importance of Coca-Cola’s strategic partnerships. The use of strategic partnerships has been a valuable tool for Coca-Cola and will continue to be central to its business model in the future.