Introduction
The Coca Cola Company is a multinational corporation and manufacturer of beverages, with its headquarters in the United States of America. The company engages itself in retailing and marketing beverages that are non-alcoholic. Its flagship product, Coca Cola, to which it is best known of, was invented in the year 1886 by John Stith Pemberton, who was a pharmacist by then residing in Columbus, Georgia. In 1889, Asa Griggs Candler bought the Coca Cola brand and formula. After buying the company, he successfully incorporated it in 1892. In essence, the Coca Cola Company is responsible for producing concentrate syrup, which they sell to bottlers around the world. The bottlers hold exclusive territory. The company has its anchor bottler, Coca Cola Refreshments, which is based in North America. In the present moment, Muhtar Kent serves as the chairman of the company. The stock of the company is listed on the New York Stock Exchange and has done exceptionally well.
Financial Condition
Coca Cola Company enjoys a very strong financial position, which has seen it ranked among the world’s top companies as far as trade volume is concerned (Hays, 2004). The market of the beverage is wide and covers most parts of the world, supplying its products to more than two hundred countries in the world. According to the company’s 2010 annual report, more than 1.6 billion drinks of the company are consumed in a single day. This makes it the highest beverage selling company in the world. In essence, seventy-eight percent of the beverages that are consumed in a single day contain a coca cola trademark. The Company successfully became the first brand in the world in the UK grocery sales to top one billion pounds. This makes it to be classified among the best performing companies in the world because of the high supplies it makes. The stability in the company will no doubt make it have a bright future to dominate the industry as it has done before. By the year 2010, the total assets of the company were valued at $1.38 billion. This was boosted by the increase to the accounts receivable, playing a crucial role to offset the decrease in property. The management of the company has done a great job in ensuring that the company still competes at the highest level despite the competition that it faces from the new entrants in the market.
The company’s income statement since 2009 until 2013 was as follows:
As shown by the table above, the company is in a very strong financial condition, since its foreseeable future is in better hands.
Industry and Competition
Already termed as the giant entity in the beverage industry, the Coca Cola Company faces minimum competition in the soft drink section. Analytically, the threat of new entrants into the industry is low since there are no signs that companies could be created to rival coca cola, which has already established itself as a favorite to many people. Many reasons favor the fact that there are no signs of new entrants. Strictly speaking, in order for a company to be of a status that can provide severe competition to coca cola, then it must have high fixed costs for the production process. Coca Cola seems to have taken most of the few bottlers that are available, meaning that the new entrants have to begin by building their bottling plants. This is a tough exercise because of the high costs that will be incurred to cater for this. Coupling this with the high costs that are incurred for advertisements, coca cola stands in a better chance to avoid much competition from the potential entrants into the industry.
One company that has succeeded to rival coca cola is the Pepsi Company. Despite his fact, coca cola has managed to overcome the production of Pepsi and producing quality products. To curb this competition, the two companies have some basic agreements that guide them in the pursuance to be the market leaders (Pendergrast, 1993). Such is the reason that the two companies agreed with the existing bottlers to avoid taking new brands that dealt with products that are similar to Pepsi and coca cola. Important to note is the fact that although many companies have given up producing similar products to coca cola in order to provide stern competition, the major competition to the company comes from sports drinks, bottled water, tea and coffee. One factor that plays against coca cola is the concern that most consumers have to their health. Research has constantly revealed that coca cola products have some gases and preservatives that have negative impacts to the lives of the consumers. This has played a part in making the products of coca cola unpopular, as people opt for the healthier soft drinks. This has been a major concern for the coca cola company in its bid to maintain its status as the major shareholder in the industry.
Organizational Situation
Coca Cola’s organizational situation has seen the company adapt and find the relevant market for its products. This has played a key role to the ability of the company to successfully operate for more than 125 years and remain a major force in the industry. To achieve this milestone, several stakeholders play a crucial part in the day-to-day running of the company’s products. The stakeholders may include the employees, shareholders, Local communities, governmental agencies, suppliers and consumers. Because of the division of roles within the industry, conflicts are bound to arise. Whenever such is the case, the company has in place relevant mechanisms to solve the problems, further boosting the effectiveness of the company. The divisional managers of the company are responsible in running the operations of the company all over the globe. This has in effect ensured the company remains a powerhouse in the beverage industry, overcoming the competition that it faces from other companies such as Pepsi.
Suggested Strategies
In order for the company to remain a strong player in the industry for the near future, then it has to embrace a number of strategies for its organizational development. In essence, the conflicts that arise are in most cases as a result of the overlapping roles that are assigned to the shareholders. Conflicts play a major role in promoting the decline of the company. In order to solve this, the company ought to define each shareholder’s roles in order to avoid creating conflicts. The development of and advancement of technology has also seen the competitors improving their advertisement mechanisms, becoming a threat to the company’s financial position. The management ought to embrace modern technology in order to effectively compete and remain the major shareholder in the industry. A number of health issues have been raised regarding the coca cola products. Due to the fear for their health, most people have opted for substitutes such as sports drinks and bottled water. This has significantly lowered coca cola’s sales. In order to have the impact that the company has had over the past years, the management has to swiftly move and address these issues.
References
Coca Cola Company,& Quality Information Publishers (2007). Historic vending machine films. Asheville, N.C.: Quality Information Publishers.
Hays, C. L. (2004).The real thing: Truth and power at the Coca-Cola Company. New York: Random House.
Pendergrast, M. (1993). For God, country, and Coca-Cola: The unauthorized history of the great American soft drink and the company that makes it. New York: Scribner's.
