Analysis of the coca-cola company - 2475 Words

Analysis of the coca-cola company (Essay Sample) Content: Assignment Title: The Coca- Cola Company Studentà ¢Ã¢â€š ¬Ã¢â€ž ¢s Name Course Title Instructorà ¢Ã¢â€š ¬Ã¢â€ž ¢s Name Date Company Description The Coca-Cola remains one of the most renowned brands worldwide. The company locates its headquarters in Atlanta Georgia. It is an American Multinational that has shaken the world with its competitive beverage products. It also retails syrup but only handles nonalcoholic products. The firmà ¢Ã¢â€š ¬Ã¢â€ž ¢s founding father was Asa Griggs Candler. He was an American famous business person and at one time worked as the mayor of Atlanta, Georgia. He formed the company in 1892. The most remarkable product for this endeavor is Coca-Cola drink. The approach, methodology, and formula for creating this product are as a result of innovative work of John Stith Pemberton. John Stith Pemberton, who was a pharmacist at the time of its formation. He was determined to change the face of beverage market by producing a formula previously not existing. After 1889, the company has been continuously opening numerous distribution system to sell its products. The firm has clients worldwide, and this move has compelled it to open supply points in more than 200 nations. Muhtar Kent is the current CEO and chairperson as per 2015. The company noted emerging competitors at an early age and always makes acquisitions improve its image while reducing competition worldwide (Arnold, 2015). The firm has performed numerous acquisitions including Fuze beverage in 2007, 1993 acquisition of Thums Up, and the 1960 purchase of Minute Maid. If we work as per the 2010 figures, the company will approximate that 1.6 billion drinks get served each day, most remarkably the famous Coca-Cola type which accounts for 78 percent of the total sales of this firm. A Recent ranking by Forbes approximates that the company currently is worth $56.1 billion net worth. The success of this business has been a combination of innovative ideas and sound management (Arnold, 2015). It also offers numerous products such as Dasani, Fanta, Sprite, and Coca-Cola Zero among other products. Analysis of the Company Strengths The company has numerous advantages which keep it at the top of the beverage retail and marketing industry among its rivals such as Pepsi. Ample distribution network- The Company knows that its products are under demands. For this reason, they have established numerous distribution networks worldwide. The well-established system serves as a strength in a numerous way. First, it allows the company to supply its products to customers with minimum cost and without delay. It also makes its products remain accessible to most people, a move that enables the company to get new clients. The vast network also helps the company to sell products that they obtain from acquisitions such as Minute Maid (Arnold, 2015). Customer Loyalty -the Companyà ¢Ã¢â€š ¬Ã¢â€ž ¢s products such as Sprite, Fanta, and Coca-Cola enjoys enormous customer loyalty. Most of these products got established long ago, and customers already got used to taking these products. Coca-Cola drink, in particular, has a huge number of fans. This move makes consumers prefer these drinks to others that rival firms may try to introduce. The huge number of fans acts as the source of revenue allowing the company to concentrate on launching other products rather than marketing the already existing products. Sound Marketing strategies. The firm employs marketing strategies that are superior to those of its rivals. The company does not market specific segment of the population; rather it targets the whole community. Targeting entire population implies that the corporation aims to benefit from all ages and genders. As opposed to Pepsi which alters its target population with time, Coca-Cola has maintained the approach of targeting the whole community, hence generating more revenues from all the populations. Marketing for this company also involves well-known celebrities such as Aamir Khan, a move that makes the customers get to like the products of this company. Business valuation- The Company remains one of the most valuable firms in the world. Currently, the company valuation is at 79.2 billion dollars. The company enjoys the valuation due to its assets worldwide and its brand-name among other valuations (Hansen, 2016). The brand name, in particular, creates more market for the company as many customers want to get aligned with the products of this firm due to its popularity. The company also enjoys Huge Market share. The two rivals in the industry are Coca-Cola and Pepsi. Of this two giants, Coca-Cola has a high market share worldwide. The company offers numerous products including Sprite and Fanta. The huge market share guarantees the company ample returns, a move that helps the company finance its operations. Weakness The fundamental weakness of this firm is that it lack diversification of products it offers. The company specializes on retail of soft drink, a move that limits its revenue. Lack of diversification also restricts the growth of the company as the beverages it offers prone to variations due to economic problems and consumer perception of the product. Another fundamental weakness of this firm is high debt levels. The company has enormous debts acquired from a large number of acquisitions it has made over time. Most of the acquisitions aimed to suppress competition rather than create value for this firm. The high debts lower the productivity of the enterprise as it spends the huge amount of money servicing the debts. Another weakness is the health issues associated with consuming the products of this company. Worldwide, the cases of obesity are on the rise, and health experts have associated the products of Coca-Cola with carbonates that result in these health issues. The firm will require more efforts to dissociate its products with health concerns or create healthy beverages. Lastly, another weakness present in this company is the word of mouth. Currently, most of the exclusive tastes depicted in advertisements differ from the real taste of the product. Despite the fact that the company has never come under lawsuit due to unethical marketing, such marketing brings a bad perception of the company from its customers and may risk losing them in the long run. The company also has a weakness in water management. This issue is a critical problem that is bringing negative public image for the company and costing it an enormous amount of money. Addressing water management issue will be a vital requirement for Coca-Coca Company. Opportunities The company has numerous opportunities. One key opportunity is to venture more into the developing nations. Currently the companyà ¢Ã¢â€š ¬Ã¢â€ž ¢s operations in impoverished and war-torn countries in minimal. While this approach may avoid a risky venture, venturing into this countries will create a huge market for this company. Despite the fact that most people in this countries are experiencing the consumption of carbonated drinks for the first time, being a pioneer in this nations will give Coca-Cola an upper hand compared to its rivals. Another opportunity is diversification. Currently, the companies have specialized in syrups and beverages. This approach has limited the firmà ¢Ã¢â€š ¬Ã¢â€ž ¢s profits. Diversifying and offering medical syrups, and organic beverages among others will open new sources of revenue for this company. The company can also introduce Coca-Cola snacks and bottled water which will use the same supply facilities already existing. This move will cost the company little amount of money while giving ample returns for the enterprise. This approach will increase the profitability of the business due to more sales. Another opportunity for Coca- Cola Company is to market less selling products. Most of the products it acquired from acquisitions such as Minute Maid are less selling compared to Pepsi and Coca-Cola. In marketing these products, the enterprise will make sure that it gain more revenues from their sales and create a new market for them. This opportunity will provide the firm with a chance to grow. Lastly, the company has an opportunity to improve in its supply chain. The company spends vast sums of money managing its supply chain process. Changes in prices of oil make these costs keep on rising. The company also pays massive amounts of money monitoring its products and the distribution process. Improving supply chain through use of technology to minimize costs can help the company direct such funds to other places where they can get utilized in an efficient manner. The company also has a chance to boost its growth through acquisitions. The Market in China remains one critical area that this firm should try to venture. Despite earlier acquisition in China which failed, the company has a chance to fully enter this market through other means and obtain more revenue from this country. Threats Numerous factors threaten the performance of Coca-Cola. First, the firm is in constant competition with both direct and indirect rivals. Direct competitors include Pepsi Co. This company has gradually reduced the profitability of Coca-Cola in two ways. First, it has offered an alternative to the customers, some of whom have switched from using Coca-Cola products and preferred Pepsi Co, hence lowering revenue (Ladda, 2012). The competition has made Coca-Cola to spend more money on advertisements, hence reducing the profitability. Indirect competition arises from Starbucks and McDonalds who offers coffee products which are drinks that many people like. The company has come under threat of sourcing for raw materials. This firm uses water as the primary raw material. In the recent days, water contamination with lead, mercury and other impurities such as pesticides threatens the safety of water and hence the company. With climatic change and dese...