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Economic Analysis Of Business Operation Of Cola

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Question:

Discuss about the Economic Analysis of Business Operation of Cola.

 

Answer:

There surely are a number of beverage conglomerates in the world, however coca cola is undoubtedly the most renowned and arguably the world’s largest beverage company. They have an assortment of more than 500 sparkling and still brand with a astonishing product variety of more than 3800 beverages. Along the years they have expanded remarkably to establish a 20 billion dollar brand, including reduced, low calorie and no calorie options for diet conscious generation of today (Schwartz 2017). Studies suggest that they produce more than 1.9 billion different products bearing the name of the brand that are enjoyed in more than 200 countries every single day. Some examples of their best sellers include Coca-Cola, Sprite, Fanta, Diet Coke,Coca-Cola zero, Coca-Cola Life, DASANI, Minute Maid, Ciel, POWERADE™, Simply Orange, Fresca, glacéau Vitaminwater, Del Valle, glacéau smart water, Mello Yello, FUZE®, FUZE Lemon Iced Tea, Honest Tea®, Odwalla, and POWERADE ZERO™ (Coca-Cola Product Descriptions 2017).

The journey of this world renowned brand began back in 1886, in the hands of a n Atlanta pharmacist, Dr. John S. Pemberton, who created the world’s first soft drink with a distinctive taste just out of blatant curiosity (Ladas et al. 2013). The flavoured syrup that he created was mixed with carbonated water and was deemed excellent by the ones who tried it the first time in his neighbourhood pharmacy. The interesting drink was named Coca-Cola by Frank M. Robinson, who also designed the trademark and script for Dr. Pemberton, which is still used in the promotion and campaigning of the brand (Chalikias and Skordoulis 2016).

The headquarters of this company is located in Georgia, Atlanta, having a 29 story and 403 feet or 122.8 m high rise in the name of coca cola plaza. This building, a popular landmark in Georgia was established in 1979, along the corner of North Avenue and Luckie Street (Keller, Parameswaran and Jacob 2011). The architecture of the particular building is breathtaking in its beauty carved by the architect Bob Foker, FABRAP (Coca-Cola Product Descriptions 2017). Both the building and the complex have been located near Georgia Institute of Technology in uptown Atlanta. The month of May in 2011, witnessed this beverage market giant celebrating its 125th anniversary when a projection screen was set up in the building that will cast various different coke advertisements made through the years. the building was also transformed into a giant cup of ice that was later filled with coke to celebrate their monopolizing success in the beverage industry (Keller, Parameswaran and Jacob 2011).

It has to be understood that coca cola has had the market in the palm of their hands for a considerable amount of time; however, there are a number of competitors in the market now. It can be stated from the market research that PepsiCo and Dr Pepper are the most viable competitors of the company (Powell and Gard 2015). Moreover, it should not escape notice that PepsiCo has captured the attention of the market with three best seller products, Pepsi, Mountain Drew and Diet Pepsi. These alternatives have a craze in the young generation that rivals that of the brands belonging to Coca Cola. The core competencies of the company focuses on three major sectors, tangible, intangible and human. Thos categorization of the core competences will aid in evaluating and analysing the corporate resources and strategies of the company for the sake of this assignment (Ladas et al. 2013).

In simplified terms, tangible resources can be defined as the summation of the financial and physical resources that the company has got. The net worth of coca cola in the market at the moment is 158.8 billion dollars, and the company earned a profit of 8.6 billion dollars in the year of 2012 (Powell and Gard 2015). Hence it is very clear that their financial foundation in the market is strong and sustainable. This strong footing in this dynamic market is attained by their sound invested strategy of more than billions of dollars in growing diverse markets like that of India, China, Russia, and Vietnam. The investment worth is then utilized to improve the brand recognition and infrastructure for the sake of different expansions (Pendergrast 2013).

 

The technological resources that coca cola has invested along the resources are diverse, aong with the reputation they have generated in the market is appreciable. Intangible resources are nothing but the amalgamation of the technological resources and the market reputation accumulated by a business enterprise. Coca cola is considered to have a spectacular machinery and infrastructure, with a significant investment in modernization of the machinery and infrastructure (Forceville 2014). Their production methodologies are considered to almost fully automated and completely hygienic. They have accelerated their production process to heighten their product quality and meet the market demands. Studies suggest that more the company invests in delivery and distribution as equally, they have a huge network of hybrid engine delivery trucks which helps the company save on the fuel costs but also contributions to the environment by ensuring minimum harmful emissions (Schneider 2016).

Another important sector for any business enterprise to have a smooth growth curve is the employee engagement; the motivation and the engagement of the employees have a huge influence on the operational success of the company. Coca cola is known for their interactive employee management employee motivation strategies (Coca-Cola Products 2017).  They often conduct interactive and fun tests to gauge the level of organizational engagement in the employees their job satisfaction. They also have a number of activities integrated to make it the enterprise a more of an ideal workplace such as gym access, supplemental fruits and coke and flexible shift timings. Employee training and developmental procedures are also at the frontier of their operational focus and lastly the salary scale that they offer is also attractive and they also entertain an exciting employee appraisal program to keep the employees satisfied and motivated to achieve more than they can achieve (Keller, Parameswaran and Jacob 2011).

Coca cola being internationally operating beverage market giant, there are sig ificant threats associated to their operations as well. The political issues include the was fare aftermath that the company is facing between USA and Iraq, the company is known as an American brand and the sales have taken a significant blow due to the political enmity of USA with the middle Eastern countries. The changing economy is another threat to the company. The consumer behaviour continues to change and the cost cuttings are affecting their sales and their quality in order to retain the customer base (Forceville 2014).

A corporate organization has to face societal threats as well, with the society inclining towards healthier lifestyles; the demand of soda is decreasing. The people nowadays are more drawn towards a glass of plain mineral water than a can of coke. The company has also been sued for racial discrimination in the year of 1999 (Schwartz 2017). The company had to pay a pretty penny for having discriminating and unequal pay scale for the employees offering a much lesser pay scale for black employees. This scandal significantly affected the media presence of the company and the majority of the target market was lost (Schwartz 2017).

On a concluding note it can be said that coca cola is the largest fizzy beverage company selling their products all over the globe. However the market situation has changed subsequently, Pepsi has emerged to be the biggest substitute to a can of coke. They have similar taste, similar pricing and similar brand promotion. Hence time has come for the company to start focusing on improving their pricing, quality and brand recognition in order to regain the market monopoly that they used to have. 

 

References:

Chalikias, M. and Skordoulis, M., 2016. Implementation of FW Lanchester’s combat model in a supply chain in duopoly: the case of Coca-Cola and Pepsi in Greece. Operational Research, pp.1-9.

Coca-Cola Product Descriptions: The Coca-Cola Company. [online] The Coca-Cola Company. Available at: https://www.coca-colacompany.com/brands/product-description [Accessed 5 May 2017].

Forceville, C., 2014. The strategic use of the visual mode in advertising metaphors. Critical multimodal studies of popular discourse, pp.55-70.

Keller, K.L., Parameswaran, M.G. and Jacob, I., 2011. Strategic brand management: Building, measuring, and managing brand equity. Pearson Education India.

Ladas, S.D., Kamberoglou, D., Karamanolis, G., Vlachogiannakos, J. and Zouboulis?Vafiadis, I., 2013. Systematic review: Coca?Cola can effectively dissolve gastric phytobezoars as a first?line treatment. Alimentary pharmacology & therapeutics, 37(2), pp.169-173.

Pendergrast, M., 2013. For god, country, and coca-cola. Basic Books.

Powell, D. and Gard, M., 2015. The governmentality of childhood obesity: Coca-Cola, public health and primary schools. Discourse: Studies in the Cultural Politics of Education, 36(6), pp.854-867.

Schneider, S., 2016. How to design a measurable shared value strategy: the case of Coca-Cola Brazil (Doctoral dissertation).

Shemwell, D., 2016. False Advertising and Labeling Suits Two Years After the Landmark Supreme Court Decision in Pom Wonderful Versus Coca Cola: Implications for the Marketing Professoriate.

Schwartz, T., 2017. The Responsive Chord: How media manipulate you: what you buy... who you vote for... and how you think. Mango Media Inc..

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