* It is the world’s leading brand of soft drinks
It has a very well known brand across the world. The business is valued at around $67,000 million which ranks far ahead than its competitor Pepsi which is valued at $12,690 million. Coca Cola also own a wide range of different brands such as, Oasis and Relentless. They also started to introduce extensions on their original products e.g. Vanilla Coke, Cherry Coke and Coke with Lemon.
* It has a large scale of operations
Coca-Cola has revenues over and above $24 billion. They are the biggest producer, distributor and marketer of non-alcoholic drink concentrates and syrups in the world. They have been making and selling their drinks since 1886 in the US. Currently they sell their products in 200 different countries across the world. There is approximately 52 billion servings of all kinds of beverages worldwide, everyday. And out of those 52 billion Coca-Cola accounts for more than 1.4 billion. All over the world Coca-Cola owns 32 beverage concentrate or syrup manufacturing plants. Also they own or have interest on 37 operations with 95 drink bottling and canning plants located outside the US. Because of Coca-Colas large scale it lets it feed the market with no difficulty and enhances its revenue.
* Strong growth in three segments
The three segments that have grown in revenue the most are Latin America, East, South Asia, and Pacific Rim and Bottling investments. In Latin America it grew by 20.4%, in East, South Asia and Pacific Rim it grew by 10.6% while also bottling investments revenue increased by 19.9%.
* Negative Publicity
In India Coca Cola received bad publicity because they were accused, by the Center for Science and Environment (CSE), of having pesticide residue in their products. This was in fact true, they contained dangerous pesticide residue in their products around in and around the Indian national capital region. The chemicals that were found in the pesticide could cause serious health problems, such as:
* Cause Cancers
* Damage the nervous and reproductive systems
* Reduce bone mineral density
This made Coca-Cola’s brand image badly damaged and would make people not want to buy their products. This could also have had an unfavourable impact on their growth on their products in international countries.
* Slow performance in North America
The performance in North America was not strong at all. This part of America counts for 30% of total revenue for Coca-Cola so there needs to be a better performance in North America for the company to improve. The sale of cases went down by 1% because of weak sparking drink trends and also the decline in the warehouse-delivered water and juice companies.
* Decline in cash from operating activities
The cash flows from operating activities decrease by 7%. Net cash provided by operating activities was at $5,957 million which was a drop from the year before which was at $6,423 million.
* Growing bottled water market
Because of the worlds growing concerns over health bottled water sales are growing. In the US bottled water revenues were estimated to be around $15.6 billion. The market consumption amounts were of about 30 billion litres. The market is expected to rise to 38.6 billion by 2010. Coca-Cola could then influence it strong place in the bottled water section and take advantage of the massively growing demand for flavoured water all over the world.
* The growing Spanish population in the US
As a result of the Hispanics growing number and economic power, they have become of more importance to marketers. Coca-Cola can benefit from this massively because as the population grows the more that Coca-Cola will be consumed.
* Intense competition
Coca-Cola is at intense competition in the non-alcoholic beverages section of the drinks industry. They also are at threat from types of drinks such as juices and nectars and fruit drinks. A few of the companies that are threats to Coca-Cola are:
* Cadbury Schweppes
* Kraft Foods
Factors that can affect the company’s business can be. Advertising, pricing, sales promotion programs, product innovation, and brand and trademark development and protection. The competition could also affect Coca-Cola’s market share and revue growth rates.
* Dependence on bottling partners
Most of Coca-Colas business comes from them selling concentrates and syrups to other companies to makes the drinks. They depend on partners to bottle their drink. 83% of its worldwide unit case volumes were produced and distributed by bottling partners which the company did not have any controlling interests.
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Overall I found out that coca cola is a good business even in the recession. I found out that the business is valued at $67,000 million which is quite a lot ahead of their competitors Pepsi. They managed to change their weaknesses into strengths and their threats into opportunities. I think that Coca-Cola will always do really well as a company even in bad financial climates.