Coca-Cola Accounting Analysis
The Coca-Cola Company is the leading global brand in the non-alcoholic beverages market. Despite its position in the market, the company has experienced negative revenue growth over the last three years. This is because there are new market risks that are affecting the performance of the soft drink industry. The drop in revenue is attributed to the decline in the demand for carbonated beverages due the rising health concerns. Coca-Cola needs to come with new strategies to ensure it remains relevant in the market. The company should invest in new commodities such as dairy products which are free from health concerns.
Reasons for Choosing Coca-Cola
Coca-Cola is used in this analysis because it is a global company and markets or licenses a large number of refreshment brands. The presence in many countries creates challenges that affect the strategic positioning of the company. The company I faced with the choice of whether to standardize their product offerings globally or adapt their products to a particular market. There is also another option of adopting an integrated approach of utilizing both strategies simultaneously. It will be important to learn how the company is able to monitor the wide number of subsidiaries and still maintain the lead in market share and revenue earned. Therefore, analyzing the company will give a comprehensive knowledge on strategies employed to manage the diverse brands in diverse markets.
Overview of the Company
The Coca-Cola Company was founded in 1886 and is currently the leading manufacturer, marketer and distributor of non-alcoholic beverage concentrates and syrups. The company operates in over 200 countries with more than 500 different brands (The Coca-Cola Company, 2016). The company’s subsidiaries employ about 30,000 people around the world. The market in which Coca-Cola operates is also dominated by PepsiCo and Dr Pepper Snapple Group. Coca-Cola claims 47% of the global market followed by 21% for PepsiCo.
Though the company is strong in the soft drink, there are risks that are likely to affect its operations.Obesity ConcernsObesity concerns are likely to reduce the demand for carbonated drinks. In the recent years, there has been a growing concern among consumers and health professionals about the health risks associated with taking soft drinks (The Coca-Cola Company, 2016). Health professionals suggest that consumption of sugar-sweetened beverages is the primary cause of the recent hike in obesity rates. Increasing public concerns or increased taxes on these beverages are likely to affect their market demand.Water IssuesWater is the main ingredient in the manufacture of carbonated beverages and other drinks manufactured by Coca-Cola. However, water is a scarce resource in many parts of the world. There has been a growing concern over the water used by the company, especially in the developing world. As the demand of water increases, the cost of accessing is likely to rise and this will affect the operation of the company (The Coca-Cola Company, 2016).
Evolving Consumer Preferences
Consumer preferences are changing due to nutrition considerations, obesity concerns, changing …