1. GLOBALISATION REASONS FOR EXPANSION

2. Reasons for Global expansion Increasing sales and new markets Increasing sales and new markets Acquisition of resources and technology Acquisition of resources and technology Diversification Diversification Minimisation of Competitive Risk Minimisation of Competitive Risk Exploiting Economies of Scale Exploiting Economies of Scale Responding to regulatory differences Responding to regulatory differences Tax Minimisation Tax Minimisation Cushioning economic cycle Cushioning economic cycle

3. CCA-Sales and new market Australia is high income with small population Australia is high income with small population Australians consume large quantities of NAB but the rate of growth of consumption is slow Australians consume large quantities of NAB but the rate of growth of consumption is slow Australia’s Asian markets are developing hence offering greater opportunities for growth than the existing Australian market which CCA already dominates Australia’s Asian markets are developing hence offering greater opportunities for growth than the existing Australian market which CCA already dominates The emphasis is on future growth sales The emphasis is on future growth sales

4. CCA- acquisition of resources CCA has acquired plants and operations in many countries thereby enabling it to adopt new technologies CCA has acquired plants and operations in many countries thereby enabling it to adopt new technologies The move into Asia has enabled it to take advantage of cheap labour costs The move into Asia has enabled it to take advantage of cheap labour costs

5. CCA -Diversification CCA through global expansion has the opportunity to diversify it’s product range. CCA through global expansion has the opportunity to diversify it’s product range. In australia carbonated beverages are popular while in S.E. asia consumers prefer iced tea and fruit juices. In australia carbonated beverages are popular while in S.E. asia consumers prefer iced tea and fruit juices. These differentating consumer preferences has encouraged CCA to launch new products These differentating consumer preferences has encouraged CCA to launch new products Additionally it has allowed it to rejuvenate its product life cycle for some of its established drinks such as Coca- Cola Additionally it has allowed it to rejuvenate its product life cycle for some of its established drinks such as Coca- Cola

6. CCA- minimising competitive risk Operating in more than one market means that it faces less competition from the potential entry of new products or competitiors into its Home market e.g. ‘RED BULL’ or ‘V’ Operating in more than one market means that it faces less competition from the potential entry of new products or competitiors into its Home market e.g. ‘RED BULL’ or ‘V’

7. CCA – Economies of scale By increasing its operating size CCA can acquire syrup at less cost By increasing its operating size CCA can acquire syrup at less cost Cor-procure adopted to buy aluminium through ‘100 club’ brings down the input costs for aluminium Cor-procure adopted to buy aluminium through ‘100 club’ brings down the input costs for aluminium

8. CCA – Economic Cycle International expansion has also made CCA less vulnerable to fluctuations in the economic cycle. E.g. if sales fall in Australia this can be offset by increasing sales in foreign markets International expansion has also made CCA less vulnerable to fluctuations in the economic cycle. E.g. if sales fall in Australia this can be offset by increasing sales in foreign markets Also seasonal variations – operating in Northern and Southern Hemisphere will ensure a consistent demand for their products Also seasonal variations – operating in Northern and Southern Hemisphere will ensure a consistent demand for their products

9. CCA- Regulatory Differences Abides by local laws as much as possible- wages etc. Abides by local laws as much as possible- wages etc. Rejection by ACCC to buy Schweppes but in NZ they had no problems as licensing laws are different Rejection by ACCC to buy Schweppes but in NZ they had no problems as licensing laws are different

10. CCA – Tax Minimistaion 10% GST to all goods sold in Australia 10% GST to all goods sold in Australia The Coke syrup is done through CCA’s subsidiary in Singapore in order to minimise tax on the product The Coke syrup is done through CCA’s subsidiary in Singapore in order to minimise tax on the product Tax in Fiji and Indonesia is less tha tax in Australia, NZ and South Korea Tax in Fiji and Indonesia is less tha tax in Australia, NZ and South Korea