Dr Pemberton started out with some simple, key ingredients – curiosity, focus, energy, passion, innovation and determination. It was these ingredients that created our winning formula, and they are still key to the success of The Coca-Cola Company today.
Welcome! This learning map will help you appreciate how your actions contribute to the Company’s growth so that both you and Coca-Cola succeed.
Getting Started
Part of our ongoing success is the delivery of our 2020 Vision, which demands a renewed focus on creating sustainable value across our system. Your knowledge of our business performance metrics and their relevance in your day-to-day actions plays a vital part in achieving this, which is why we encourage everyone to ‘Act Like An Owner’.
Remember, when the right business outcomes are achieved, Coca-Cola succeeds, and so do you, through your Annual and Long-Term Incentives.
The ‘Act Like An Owner’ Learning Map will help you to understand:
- Our key metrics and the drivers of business performance, providing real-life examples along the way to help you put things into context.
- How your actions influence our success, and what you might do differently in the future. You may see suggestions of things you are already doing in your day-to-day work, which is great – you’re already Acting Like An Owner!
We all need to Think and Act like an Owner of The Coca‑Cola Company, understand our business strategy, and the key metrics and drivers of performance.
Getting to know you
To get started, we need to know just a little about you. We'll ask you four quick questions. We’ll use your answers to build a customized experience that’s just for you!
* If you fall into more than one of these categories, you can come back and make another selection later.
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Unit Case Volume Growth
"Unit Case Volume" means the number of unit cases of beverages sold by the Company and its bottling partners to customers and consumers.
+Unit Case Volume Growth is a key indicator of the overall health of our business, as it reflects how much finished beverage product is being consumed.
Click here to view
a real life story of
Unit Case Volume Growth
We can all:
- Keep an eye on social media channels to stay up to date with public opinion on our products and competitors.
- Keep an eye on social media channels to stay up to date with public opinion on our products and competitors.
- Keep an eye on social media channels to stay up to date with public opinion on our products and competitors.
Net Revenue Growth
Net Revenue Growth measures top-line growth of the proceeds Coca-Cola receives from the sale of its products after discounts.
+Net Revenue Growth measures the proceeds we receive from the sale of our beverage products, which contributes to our top line growth.
Click here to view
a real life story of
Net Revenue Growth
Profit Before Tax Growth
Profit Before Tax Growth measures the growth of earnings before income tax.
+This all adds up to create bottom-line growth. PBT represents the growth of our earnings after we deduct the cost of goods sold and our operating expenses from our revenue.
Click here to view
a real life story of
Profit Before Tax Growth
Economic Profit Growth
Economic Profit is net operating profit after tax less the cost of capital used in the business.
+Capital Efficiency is all about making smart decisions around managing our assets and investments.
Click here to view
a real life story of
Economic Profit Growth
What can I do?
Here’s a reminder of all the actions you can do to contribute to the key business metrics.
Here’s a reminder of all the actions you’ve seen that influence Unit Case Volume Growth.
Click on the different tabs to see a reminder of the actions you can take to contribute to performance against the other key metrics.
Unit Case Volume Growth
Net Revenue Growth
Profit Before Tax Growth
Economic Profit Growth
You may be doing these things already, which is great – if so, you’re Acting Like An Owner!
Learn more
Congratulations! You’ve completed the Act Like an Owner Learning Map. Learn more using the links below, or start again to continue exploring.
Visit Harvard ManageMentor where you'll find these modules to strengthen your ability to Act Like an Owner (click here if you are a CCR associate)
- Budgeting
- Business Plan Development
- Decision Making
- Feedback Essentials
- Finance Essentials
- Goal Setting
- Strategic Thinking
- Strategy Execution
- Meeting Management
- Performance Measurement
- Project Management
Keep Developing!
For additional personal development opportunities, visit the Company's online learning management system (click here if you are a CCR associate).
We hope you have learned a lot about how your daily actions influence our success, and gained some ideas about what you might do differently in the future to support the Company’s continued growth. Why not take the opportunity to learn more?
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Unit Case Volume Growth
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What is Unit Case Volume Growth?
A "Unit Case" is equal to 24 eight-ounce servings of finished beverage.
"Unit Case Volume" means the number of unit cases of beverages sold by the Company and its bottling partners to customers.
"Growth" in Unit Case Volume is the incremental number of Unit Cases sold from year to year. Growth in Unit Case Volume shows our ability to sell more of our products to customers.
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Why is it important?
Unit Case Volume Growth is a fundamental indicator of our ability to successfully sell our products to consumers and generate Net Revenue Growth, a key part of our 2020 Vision.
It is one of the measures of the underlying strength of the Coca-Cola system because it measures trends at the consumer level. Unit Case Volume Growth is critical to our goal of remaining the #1 Sparkling and Still Beverage Company in the World.
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How does Unit Case Volume Growth influence my Annual Incentive (AI) and Long-Term Incentive (LTI)?
Unit Case Volume Growth is a key performance metric in the AI in our international Groups and Business Units, in BIG, and for our Corporate associates, and it carries a 25% weight.
It also influences other AI measures such as Net Revenue Growth and Profit Before Tax Growth.
Unit Case Volume Growth also drives our ability to generate Economic Profit Growth which carries a 70% weight in Long Term Incentives.
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Net Revenue Growth
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What is Net Revenue Growth?
Net Revenue Growth measures top-line growth of the proceeds Coca-Cola receives from the sale of its beverage products after discounts (such as sales incentives).
Net Revenue Growth does not account for Cost of Goods Sold or Operating Expense.
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Why is it important?
Net Revenue Growth is central to our 2020 vision and goals of remaining the #1 Sparkling and Still Beverage Company in the World and doubling our system revenue.
Net Revenue Growth is an indicator of the quality of our earnings.
Continuous growth allows us to continue to invest in our People, Portfolio, Planet and Partners over the long-term.
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How does Net Revenue Growth influence my Annual Incentive (AI) and Long-Term Incentive (LTI)?
Net Revenue Growth is a key performance metric in the AI carrying a weight of 25% for those in our international Groups and Business Units, in BIG, and for our Corporate associates, while for those in CCNA and CCR it carries a 35% weight.
Net Revenue Growth is also a key performance metric in the LTI program with a 30% weighting for all participants.
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Price
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What is Price?
Price refers to the amount we charge our consumers to purchase our products. Pricing decisions are determined based on a number of factors, such as competitive market conditions.
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Why is it important?
Price can have a significant impact on the Unit Case Volume Growth and as a result is a key driver of Net Revenue Growth and Profit before Tax Growth.
The lower the price, the more we need to sell to reach the same level of return. Having the right product at the right price for each consumer segment is critical.
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How does Price influence my Annual Incentive (AI) and Long-Term Incentive (LTI)?
Like Mix, Price is a primary driver of Net Revenue and Profit Before Tax (PBT) Growth which are both key measures in the AI.
- PBT Growth carries a weight of 50% for those in our international Groups and Business Units, in BIG, and for our Corporate associates, while for those in CCNA and CCR it carries a 35% weight.
- Net Revenue Growth carries a weight of 25% for those in our international Groups and Business Units, in BIG, and for our Corporate associates, while for those in CCNA and CCR it carries a 35% weight.
Net Revenue Growth is also a key performance metric in the LTI program, with 30% weighting for all participants.
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Mix
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What is Mix?
Mix can refer to the combination or “mix” of our product types or package sizes sold. For example, product mix can refer to the amount of sparkling versus still beverages sold in a specific geography and package mix can refer to the mix of immediate consumption versus future consumption package sizes.
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Why is it important?
Some of our products are more profitable than others - therefore mix can have a significant impact on our ability to meet our Net Revenue Growth and PBT Growth projections. For example, sparkling beverage products sold in immediate consumption packages in small format / convenience stores generally yield a higher gross profit margin compared to sparkling beverages sold in larger packages in large format stores.
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How does Mix influence my Annual Incentive (AI) and Long-Term Incentive (LTI)?
Mix is a driver of Net Revenue and Profit Before Tax (PBT) Growth which are both key measures in the Annual Incentive.
- PBT Growth carries a weight of 50% for those in our international Groups and Business Units, in BIG, and for our Corporate associates, while for those in CCNA and CCR it carries a 35% weight.
- Net Revenue Growth carries a weight of 25% for those in our international Groups and Business Units, in BIG, and for our Corporate associates, while for those in CCNA and CCR it carries a 35% weight.
Net Revenue Growth is also a key performance metric in the LTI program, with 30% weighting for all participants.
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Share
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What is Share?
Share measures the Company’s portion of the non-alcoholic beverage market, often referred to as the Non-Alcoholic Ready to Drink (NARTD) market segment.
NARTD includes both the Sparkling and Still beverage markets.
In general, we measure our share of the market segment in two ways:
- Volume Share – the Company’s portion of the total Unit Case Volume in a certain beverage market segment.
- Value Share – the Company’s portion of the total Retail Value (what the consumer pays at the point of sale) in a certain beverage market segment.
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Why is it important?
Share is a fundamental indicator of our ability to successfully sell our products to consumers and generate Net Revenue Growth, a key part of our 2020 Vision.
It measures the overall strength of the Coca-Cola system and supply chain including bottler partnerships, marketing, manufacturing, sales and distribution.
Share is critical to our goal of being #1 in NARTD business in every market and every category that is of value to us.
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How does Share influence my Annual Incentive (AI) and Long-Term Incentive (LTI)?
Share is a key metric in the Annual Incentive for associates in CCNA and CCR, and it carries a 30% weight. It also influences other AI measures such as Net Revenue Growth and Profit Before Tax Growth. Share also drives our ability to generate Economic Profit Growth, which carries a 70% weight in the Long Term Incentive for all particpants.
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Profit Before Tax Growth
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What is Profit Before Tax Growth?
Profit Before Tax Growth measures the growth of earnings before income tax. Profit Before Tax deducts Cost of Goods Sold and Operating Expense from Net Revenue. It also considers equity investee income, interest income/expense and other charges or gains.
It is often referred to as ‘bottom-line growth’ or profitability.
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Why is it important?
Profit Before Tax Growth measures the success of executing on our 5 strategic priorities.
As Profit Before Tax considers Net Revenue and our total cost of doing business, it is a fundamental indicator of productivity and operating efficiency across our entire system.
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How does Profit Before Tax Growth influence my Annual Incentive (AI) and Long-Term Incentive (LTI)?
Profit Before Tax Growth is a key performance metric in the AI, carrying a weight of 35% in CCNA and CCR, and 50% elsewhere.
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Cost of Goods Sold
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What is Cost of Goods Sold?
Cost of Goods Sold (COGS) is the cost of the raw materials and direct labor to manufacture concentrates, syrups and finished beverage products.
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Why is it important?
COGS is one of our largest cost items and therefore has significant impact on our ability to generate Profit Before Tax and Economic Profit.
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How does Cost of Goods Sold influence my Annual Incentive (AI) and Long-Term Incentive (LTI)?
Effective management of COGS is a primary driver of Profit Before Tax (PBT) Growth.
PBT Growth is a key performance metric in our AI with a weighting of 50% for those in our international Groups and Business Units, in BIG, and for our Corporate associates, while for those in CCNA and CCR it carries a 35% weight.
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Operating Expense
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What is Operating Expense?
Operating Expense includes the marketing, sales and administrative costs that enable us to market, sell and deliver our products.
Examples include marketing research, advertising, salaries, travel, entertainment, etc.
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Why is it important?
Operating expense is one of our largest cost items and therefore has significant impact on our ability to generate Profit Before Tax Growth and Economic Profit Growth. We all have direct control on many operating expenses and can each have a significant impact on our ability to improve overall cost management.
Smart investments in operating expenses such as marketing research, advertising, travel, etc. also have a direct impact on our ability to increase Share, and to generate Unit Case Volume Growth and Net Revenue Growth.
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How does Operating Expense influence my Annual Incentive (AI) and Long-Term Incentive (LTI)?
Effective management of operating expense is a primary driver of Net Revenue and Profit Before Tax (PBT) Growth.
Both measures have significant weighting in our Annual Incentive:
- PBT Growth (35% in CCNA and CCR, and 50% everywhere else),
- Net Revenue Growth (35% in CCNA and CCR, and 25% everywhere else)
Net Revenue Growth is also a key performance metric in the LTI program with 30% weighting for all participants.
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Cost Management
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What is Cost Management?
Cost Management refers to the effective control of both Cost of Goods Sold (COGS) and Operating Expense.
COGS is the cost of the raw materials and direct labor to manufacture concentrates, syrups and finished beverage products.
Operating Expense includes the marketing, sales and administrative expenses that enable us to market, sell and deliver our products. Examples include marketing research advertising, salaries, travel, entertainment, etc.
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Why is it important?
COGS and Operating Expense are our largest costs and therefore have significant impact on our ability to generate Profit Before Tax and Economic Profit.
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How does Cost Management influence my Annual Incentive (AI) and Long-Term Incentive (LTI)?
Effective management of overall cost is a primary driver of Net Revenue and Profit Before Tax Growth (PBT) Growth.
Both measures have significant weighting in our AI:
- PBT Growth (35% in CCNA and CCR, and 50% everywhere else), Net Revenue Growth (35% in CCNA and CCR, and 25% everywhere else)
Net Revenue Growth is also a key performance metric in the LTI program with 30% weighting for all participants.
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Economic Profit Growth
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What is Economic Profit Growth?
Economic Profit is net operating profit after tax less the cost of capital used in the business. Economic Profit evaluates whether the Company is generating earnings in excess of its cost of capital.
Put simply, Economic Profit is a way of thinking about value. It measures the true economic value created by a business by calculating how much profit a company generates after it subtracts the cost of capital (e.g. bottling lines, inventory, trademarks) it uses to generate those profits.
You can learn lots more on the Economic Profit microsite here.
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Why is it important?
Economic Profit Growth is an important indicator of long-term financial strength and has historically correlated with the stock price. It indicates our ability to sustain long-term growth and maximize shareowner value over time.
It’s a comprehensive measure that not only considers profit, but also Capital Efficiency, which helps to make smart decisions around managing our investments.
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How does Profit Before Tax Growth influence my Annual Incentive (AI) and Long-Term Incentive (LTI)?
Economic Profit Growth is a key metric used to calculate LTI awards, but is not used to calculate AI awards.
Economic Profit Growth accounts for 70% of the LTI business performance measurement for all participants. The remaining 30% is accounted for by Net Revenue Growth, which measures top-line growth.
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Capital Efficiency
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What is Capital Efficiency?
Capital Efficiency is a measure of how effectively we are generating volume, revenue and profit from the assets we invest in the business.
Capital includes:
- Tangible Fixed Assets, such as manufacturing plants, bottling and production equipment, technology, machinery, land and office facilities.
- Working Capital, such as inventory, receivables, and payables.
- Intangible Assets, such as trademarks and franchise rights on our concentrates and finished sparkling and still beverages.
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Why is it important?
The assets we invest in the business allow us to manufacture, market and sell more than 500 beverage brands.
Managing these assets efficiently will allow us to maximize the return in the form of volume, revenue and ultimately economic profit.
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How does Capital Efficiency influence my Annual Incentive (AI) and Long-Term Incentive (LTI)?
Capital efficiency is a primary driver of Economic Profit Growth.
Economic Profit Growth is a key metric used to calculate LTI awards, accounting for 70% of the LTI business performance measurement for all participants.
This means that any payout from your Performance Cash and Performance Shares over the three-year performance period is largely calculated based on Economic Profit Growth. Capital Efficiency also has an impact on our ability to generate Unit Case Volume and Net Revenue growth.
Unit Case Volume Growth is a key performance metric in the AI (25% weight in Corporate, BIG and our international Groups and BUs) while Net Revenue growth is a performance metric used in both the AI (35% in CCNA and CCR, and 25% everywhere else) and LTI (30% weight for all participants).
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Fixed Asset Utilization
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What is Fixed Asset Utilization?
Fixed assets are the tangible assets (property, equipment) and the investments we make in these assets over the longer term.
Fixed assets includes:
- Manufacturing plants
- Bottling and production equipment
- Technology
- Machinery
- Land/sites
- Buildings, office facilities etc.
We use these Fixed Assets to manufacture, market and sell our products.
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Why is it important?
Fixed assets are one of our largest asset investments. Disciplined investments in these assets allow us to manufacture our concentrates, syrups and finished beverages so we can meet the demands and standards of our partners and consumers.
Targeted investments in the right locations, facilities and technology enable us to sustain our world-class marketing and selling processes and approaches.
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How does Fixed Asset Utilization influence my Annual Incentive (AI) and Long-Term Incentive (LTI)?
Effective management of fixed assets is a primary driver of Economic Profit Growth.
Economic Profit Growth is a key metric used to calculate LTI awards, accounting for 70% of the LTI business performance measurement for all participants. This means that any payout from your Performance Cash and Performance Shares over the three-year performance period is largely calculated based on Economic Profit Growth.
Fixed asset decisions also have an impact on our ability to generate Unit Case Volume Growth, increase Share and drive Net Revenue Growth. Unit Case Volume Growth is a key performance metric in the AI (25% weight in Corporate, BIG and our international Groups and BUs) while Net Revenue Growth is a performance metric used in both the AI (35% in CCNA and CCR, and 25% everywhere else) and LTI (30% weight for all participants).
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Working Capital Management
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What is Working Capital Management?
Working Capital Management is a measure of how effectively we are managing key current assets and liabilities such as inventory, receivables and payables:
- "Inventories" includes: raw materials, ingredients, packaging, and supplies in addition to concentrates, syrups and finished beverages.
- "Receivables" refers to money owed to us from our bottling partners, resellers and other customers.
- "Payables" refers to the money we owe to our suppliers, vendors and other business partners.
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Why is it important?
The ability to manage inventory, receivables and payables has a positive impact on Capital Efficiency and ultimately Economic Profit Growth.
For example, ensuring we don’t have too much or too little inventory on hand ensures that we are able to meet the demands of our bottlers, partners and end customers but also helps prevents us from making costly investments in the production of unused finished products.
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How does Working Capital Management influence my Annual Incentive (AI) and Long-Term Incentive (LTI)?
The effective management of working capital is a primary driver of Economic Profit Growth. Economic Profit Growth is a key metric used to calculate LTI awards, accounting for 70% of the LTI business performance measurement for all participants.
This means that any payout from your Performance Cash and Performance Shares over the three-year performance period is largely calculated based on Economic Profit Growth.
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Real life story of Unit Case Volume Growth
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In India, we applied a new type of market segmentation to make our products more accessible to lower income consumers. The ‘Splashbar’ fountain provides a portion of a Coca-Cola beverage product dispensed from a 2-litre bottle into a plastic cup for just 5 rupees, which is a key price point for our lower income consumers in the Indian market. This drives incidence and increases our unit case volume while also allowing new consumers to access our products, so that as incomes grow and the middle class expands, we will continue to see increases in consumption and therefore drive future growth in unit case volume.
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Real life story of Net Revenue Growth
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Karen went to dinner at a local restaurant with friends. She realized they were serving a competitor’s beverage products, so she started a conversation with the restaurant manager about converting to Coca-Cola. This conversation turned into a successful lead, which later culminated in that restaurant becoming a new Coke customer. By doing this, Karen contributed to growing the Company’s share of her local market!
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Francisco learnt about the ‘OBPPC’ concept in a recent Town Hall meeting. At home, he spoke to his son Julián about the upcoming party that he and his schoolmates were planning to raise funds for charity. Francisco suggested to Julián that instead of the 2-litre bottles of Coca-Cola beverages they had planned to use, they switch to smaller bottles or mini cans. That way, they could speed up servings to party guests and also achieve a better price per serving for their fundraising activity. With his recommendation, Francisco not only increased Julián’s collection for charity, but also improved the Company’s net revenue by influencing the consumption of products with higher profit margins.
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Real life story of Profit Before Tax Growth
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In 2015, Coca-Cola unveiled the world’s first PET plastic bottle made entirely from plant materials. PlantBottle packaging uses patented technology that converts natural sugars found in plants into the ingredients for making fully recyclable PET plastic bottles. The packaging looks, functions and recycles like traditional PET but has a lighter footprint on the planet and its resources and – importantly – uses less material overall thus reducing costs and helping to grow PBT. By 2020 our goal is to use plant based packaging for all of our PET plastic bottles.
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Mark called the team to a brainstorming session to discuss ways to reduce his business area’s spending so that the team could contribute to productivity targets, which support PBT growth. There was a lot of energy in the discussion and the team ended up with a list of very simple things to do that anyone in the Company can implement. These included turning off the lights when leaving the office; combining trips to reduce travel costs; making a direct call to a colleague instead of using conference call facilities; turning off computers instead of leaving them in sleep mode at the end of the day. Mark documented the ideas in a one-page desktop guide that the team began using for themselves, and also shared with colleagues in other teams.
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Real life story of Economic Profit Growth
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When Pablo joined Coca-Cola, he was surprised to observe that there were parts of his office environment that has not been updated for quite some time. In his next one-to-one with his manager, Ridhima, he asked her why the Company wasn’t diverting more money to upgrading the office space. Ridhima explained that investment in new office buildings and the speed of renovating existing buildings is reliant on the Company’s profitability – the capital involved in upgrading our real estate can only be released when our profitability allows. Pablo now understood that renovation of his office will likely come over time, but that not all locations can be updated at the same time as our economic profit performance must continue to grow to allow it to happen.
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Mariam knew there was a problem when she realized there was only one month left to the end of the summer holidays, and half of the warehouse was still full of unsold products. She quickly called together a task force to brainstorm ideas of how to reduce the stock and boost sales. She also got together with Production Planning to adjust plans, better to fit the local demand. By streamlining the inventory in this way, Mariam improved a key element of capital management, which in turn supports stronger EP growth.