Financial Analysis of Coca-Cola Company

Financial Analysis of Coca-Cola Company

Introduction

Coca-Cola Company is the largest beverage manufacturer company in the world. The company has more than 500 still and sparkling brands that are refreshing consumers. The company has most valuable brands of the world that are accumulated into 16 billion US Dollar brands. Among the most famous brands; Coca-Cola, Diet Coke, Coca-Cola Zero, Sprite, Fanta, Minute Maid, Simply Orange, are highlighted brands. The company is the No.1 provider of beverages including sparkling beverages, juices, ready-to-drink coffees and juice drinks, globally. The company is operating in 200 countries worldwide and has the best and largest distribution network of beverages in the world and on average serves more than 1.8 billion servings per day. The Coca-Cola Company focuses on strategies to support healthy and active living, inclusive and safe work environment, reduce environmental footprints, with a long-term commitment to enhance economic development and building sustainable communities. The company has more than 700,000 employees including bottling partners and among top 10 employers in the private sector. The company does not operate in two countries officially that are Cuba and North Korea.

Discussion

Affects of Recession

The coca cola company has shown great performance even in recession and tough time. In 2010 when the recession was at its peak, the company did record breaking sales in European countries. The brand image of coca cola is happiness and optimism that help the company in the tough climate of the economy. The company's “open happiness” campaign Support Company's heritage and its image of optimism and enjoyment. Company's innovative marketing and continued investment in promotional and advertisement activities helped the company to do well in the recessionary period. Most of the businesses rollback their businesses in different countries during the recessionary period but the Coca-Cola Company by doing innovative marketing and selling techniques emerges as a profit generating companies in the period.

Affects of High Interest Rate

Whenever the interest rate in economy tends to rise the businesses start cutoff spending. Interest rate influences bond and stock interest rates, business and consumer spending, recession and inflation. When the interest rate tends to raise, the disposable income of consumer declines. It also affects sales of businesses (Simon et.al, 1993). The sales of coca cola in different countries are also declining when the respective economies show higher interest rate. Due to availability of substitute in the market sales get affected. But the company's marketing strategy and innovative sales techniques enable the company to increase the sales even when interest rates are high.

Affects of Global Competition

Global competition is rising nowadays due to the liberalization and barriers reduction to trade and economies, globally. The coca cola company has Pepsi co. as its global competitor in beverages industry. The global competition enables the Coca-Cola Company to move towards product orientation, understanding customer psychology and customer satisfaction through innovative marketing and sales techniques. The Coca-Cola Company is doing really good despite heavy competition from Pepsi, and increasing its brand equity and loyalty by increasing sales year by year (Atanasov ...