Current global markets
The Coca Cola company license or owns and markets more than 500 non-alcoholic beverage brands, mainly sparkling beverages in addition to still beverages such as juices, waters, sports and energy drinks, ready-to-drink coffee, and enhanced waters. The company serves the global market, which include Europe, Africa and Eurasia, North America, Latin America, Pacific, Corporate and Bottling investment (Coca Cola, 2014). Coca Cola sells more than 230 brands in more than 200 countries (Coca Cola, 2014). While the company currently operates internationally, it has always emphasized local operations, with independent business people with their localities own and bottling and distribution operations. Coca Cola is currently the market leader with a market share of 29.9 percent followed closely by PepsiCo Inc., which has a market share of 11.5 percent and Nestle with a market share of 3 percent (Cavale, 2014). Other smaller companies in the industry accounts for the remaining 59.6 percent of the global market share (Cavale, 2014).
The global volumes of Coca Col only grew by 2 percent in 2003. However, the beverages industry has experienced dwindling global growths. Dr Pepper Snapple Group and PepsiCo are also facing a similar situation. While PepsiCo realized global growth of 1 percent, the sales volume of Dr Pepper Snapple Group dropped by 2 percent in 2013 (Cavale, 2014). Despite dwindling growth, emerging markets, such as Brazil, India, and China present the industry with growth opportunities. The 2012 report indicates that the per capita consumption of Coca Cola in China and India alone represented more than 50 percent of the worldwide average per capita consumption (Cavale, 2014). For example, in the Indian market, Coca Cola has a market share of 56 percent while Pepsi has 34 percent (Cavale, 2014).Despite recording dwindling sales volumes in North America, the company expects a positive result in 2014.Recommendations
Emerging markets such as India, China, Africa, and Africa presents huge opportunities for growth in the beverage industry. Consequently, focusing on these markets is the key to addressing the issue of slowing of revenues and profits of Coca Cola. Coca Cola depends too much on sale of beverages, as about 75 percent of its sales volume comes from sales of beverages (Coca Cola, 2014). This figure is significantly high when compared to its competitors. For instance, Pepsi is the largest owner of snacks business and depends equally on both its businesses for profit and revenue (Coca Cola, 2014). In addition to soft drinks, Coca Cola can start focusing on bottled water, snacks business, juice and tea drinks to offset the decline in the sales of soft drinks. In 2013, Coca Cola realized a growth of 5 percent for its bottled water business, which represent more than double growth for soft drinks sales (Coca Cola, 2014).
With increased focus on the emerging markets, Coca Cola can realize an increase in per-capita consumption. In addition, with increased focus on non-soft drinks business segment and the interest of shareholders, the firm can offset the recent decline in performance. Coca Cola can use its dividend stock to its benefit. While they do not present the excitement of high-potential stocks, they prove more endowing and stable (Abrahamian, 2013). In the long term, the compounding impact of the quarterly payouts produces more results than anticipated. The company should also consider increasing its advertisement budget to enable it reach the emerging markets. Increasing advertisement budget in the United States more than Pepsi can help the firm ensure increased growth.
References:
Abrahamian, A. A. (2013). Coca-Cola reports higher profit, sticks by long-term goal. Reuters. Retrieved from http://www.reuters.com/article/2013/10/15/us-cocacola-results-idUSBRE99E0BY20131015
Cavale, S. (2014). Coke revenue misses estimates as soda sales slow. Reuters. Retrieved from http://www.reuters.com/article/2014/02/18/us-cocacola-results-idUSBREA1H0WH20140218
Coca Cola. (2014). Coca Cola. http://us.coca-cola.com/home/
