Coca-Cola's response to the threats and opportunities it faces has been largely defensive. The company has introduced new products largely in response to categories that have been created by other companies -- moving into coffee drinks in response to Pepsi's deal with Starbucks and introducing Fruitopia and Nordic Mist (Foust, 2006). These moves are reactionary and despite the company working hard at new innovation, it tends to lag other firms in the creation of innovative products. In addition, the company finds itself on the defensive with respect to taxation and other government relations issues. Moreover, Coca-Cola still finds itself subject to prices of raw ingredients, where it could otherwise have implemented backwards integration, long-term hedging or other strategies to mitigate the potential consequences of commodity price fluctuations.
The result is that Coke has been largely unsuccessful. On the Investor Relations section of its website, Coke puts forth some minor initiatives in which it has had some success, but the company remains a follower when it comes to introducing quality new products. In addition, the company remains under pressure for increased taxation and it remains in a situation where its market share is declining in its core products. The company saw revenues decline last year, although profits increased. Profits had declined in 2008 despite a revenue increase (MSN Moneycentral, 2010). Financial improvements at Coke, then, have been incremental. The company remains in search of transformational change.
The company needs to dig deeper to address the threats that it faces. Innovation stems from culture change, and in this area Coca-Cola...
The total asset turnover ratio on the other hand indicates that just as is the case with the fixed asset turnover ratio, the Coca-Cola Company has been less effective in the utilization of all its assets in sales generation. The inventory turnover ratio is essentially a measure of the number of times the inventory of a business entity is replaced or sold within a given period of time. In the
Coca-Cola Company ("Coca-Cola," "Coke") is a U.S.-based manufacturer and distributor of non-alcoholic beverage. The company recorded revenue of $46.5 billion in FY2011, and earned $8.5 billion in net income. According to the company's website, it sells products in over 200 countries, given the company near-global scope. This also ensures that Coca-Cola has substantial exposure to foreign currencies. This report will discuss a number of international financial aspects to Coca-Cola's business,
With a small number of companies competing for a market that in many cases (North America, for example) is subject to slow growth, the competition can be characterized as intense. Thus, Coca-Cola's marketing message must also take into account the moves that its competitors are making. Coca-Cola not only must respond to shifts in the competitive environment but as industry leader must protect its position by making proactive moves
61, as opposed to only 28.90, the industry average (Reuters, 2009); this means that the company uses much more debt than equity to finance its operations and that debt reimbursement might constitute for priority in profit distribution All the above indicate that the largest beverage maker in the world is not as successful as initially believed. Yet, an estimation of the equity futures cannot occur without a look at the company's
Typically, buyers have the ability to switch their tastes from one soft drink brand to the other. Barrier to Entry: It is very difficult to enter the industry due to several factors: First, a new firm will need to implement economic of scale to enjoy cost reduction and compete favourably within the industry. To establish economic of scale, a new firm will require huge capital investment ranging from several millions of
Coca-Cola Macro-Economic Analysis Coca-Cola is an extremely effective organization. Nevertheless it has a number of difficulties surfacing at this time. The Coca-Cola Company offers around four hundred various consumer drinks and merchandise. The majority are not known as well as seldom observed with regards to accessible purchase. Furthermore, an additional problem the organization ought to deal with may be the health problems associated with soft drinks since it really is recognized that
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