Will Breon
Regent University
2022-3-22
ECON230
Milestone 1: Coca Cola
Company Overview:
The Coca-Cola Company is a multinational beverage corporation that operates in both production and distribution of their product. Coca Cola has been around for over one hundred years and has bloomed into the largest international beverage corporation in the world.
Coca Cola operates under stock ticker: KO, and main investors include: The Vanguard Group Blackrock, and Warren Buffet’s Berkshire Hathaway. Coke supplies to over 200 various countries worldwide, supplying over 500 different products, manufactured by over 80,300 Coca-Cola employees worldwide.
Comparative Advantage Over Rivals
Coca-Cola does have a clear comparative advantage over its competition as Coca Cola has the highest selling beverage brand in the world (The Coca Cola Company, 2020). There are a multitude of areas to explain the growth and popularity of the Coca-Cola brand, but one that should not be overlooked is the phenomenal advertising, which has “been among the most prolific in marketing history, with a notable and major impact on popular culture and society as a whole” (Stringer, 2015).
Coca-Cola also has a multitude of different drinks and flavors to choose from, keeping them on the forefront of competition in many beverage sectors. The most challenging competitor is PepsiCo with Schweppes likely being a more distant third.
Explaining Supply and Demand
Coca-Cola is a well liked product, as well as many of the other products they make, so the demand should naturally increase with consumer income increases, which should generally happen over time. Coca-Cola also is at huge benefit due to brand loyalty, as many people including family members of mine swear that Coca-Cola is leaps and bounds better than Pepsi, so will never go for a competitor. Additionally health conscious or health restricted consumers have more healthy options such as Coke Zero and Diet Coke—although we know they are hardly healthy.
GDP
Coca-Cola’s largest worldwide market share is found in the United States, with annual revenues of 11.5 billion (MarketUS, 202. The GDP of the United States is $20.9 trillion. Additionally, the countries that make up Europe are a key market for Coca Cola with 2.45 billion in annual revenue, with the GDP of Europe being $15.2 trillion.
How does fluctuations in GDP, economic growth, investments, and patents affect the company’s profitability?
Fluctuations within the economy absolutely has an impact on Coca-Cola, as “The Coca-Cola Company got slammed by the pandemic [covid-19] for its most recent fiscal quarter, with revenue down 28% from last year and earnings down 32%.” (Demetrakakes, 2020).
Fluctuations in the nation’s GDP also affect companies as a healthy economy breeds a more spend-happy consumer. There is no real patent issue in regard to Coca-Cola, as the company guards the recipe as a trade secret and very few people know what ingredients make up the formula.
References:
Europe, Middle East & Africa. The Coca-Cola Company. (2020). https://investors.coca-colacompany.com/about/segments/europe-middle-east-africa.
Demetrakakes, P. (2020, July 22). Pandemic Hits Coca-Cola Hard. Foodprocessing.com. https://www.foodprocessing.com/industrynews/2020/pandemic-hits-coca-cola-hard/.
Market Us. (2021, October 6). Coca-Cola Company statistics and Facts. Market.us. from https://market.us/statistics/food-and-beverage- companies/coca-cola-company/.
Hello Will, I love how you mentioned "Additionally health conscious or health restricted consumers have more healthy options such as Coke Zero and Diet Coke.." I believe it is very important for companies such as Coca Cola to consider the needs of their consumers. With a more 'heath-conscious' society that we are living in today, most people want to have their cake and eat it to without too much deprivation, starvation, or neglecting of the things we love most (to eat). So to cater to such diverse audiences who LOVE a Coke but won't want to pack on the pounds- having Coke Zero's and Diet Cokes are great alternatives to try to go with ebbs and flows of the times. Thanks for posting!