Blog 1: Milestone 1
Billie Shattuck
Regent University
ECON 230 (02): Macroeconomics
Dr. Jeff Bahah
March 25, 2022
Blog 1: Milestone 1
Company Overview
The Coca-Cola Company, NYSE: KO (2022), is a total beverage company with products sold in more than 200 countries and territories with brands consisting of Coca-Cola, Sprite, Fanta, and other sparkling soft drinks, hydration, sports, coffee, and tea brands include Dasani, SmartWater, Vitaminwater, Topo Chico, Powerade, Costa, Georgia, Gold Peak, Honest, Ayataka, and BodyArmor. (Coca-Cola, 2022, About the Coca-Cola Company, para. 1)
The Comparative Advantage Over its Rivals
As a total beverage company, Coca-Cola is “present in almost every beverage category having approximately 200 master brands, over 700,000 people in their system help deliver those brands to customers every day” (Coca-Cola, 2022, Strategy/Overview/ Purpose, para. 2). As Proverbs 16:26 states, “a worker’s appetite works for him, for his hunger urges him on” (New American Standard Bible, 1995).
Additionally, “Digital is beginning to play an integral role in their RGM strategy, providing competitive advantages” (Coca-Cola, 2022, Growth Strategy/Revenue Growth Management, para. 3). The rivals include “PepsiCo, Quaker Oats, Gatorade, Aquafina, and Frito Lay, with Frito Lay commanding 60% of the US snack food markets with its broad range of chips, and acquisition of food companies in Europe and China” (The Great PepsiCo Fightback: Why Fizz No Longer Matters, 2007, p. 17).
The Supply and Demand For Coca-Cola’s Key Product or Service
According to Coca-Cola (2022), “for both the quarter and the year, growth in developing and emerging markets was led by China, India, and Russia, while growth in developed markets led by the United States, Mexico, and the United Kingdom” (Earnings Release, p. 4). From Coca-Cola’s Income Statement provided, Net Operating Revenues from December 31, 2020, were $33,014 (USD in millions) and $38,655 (USD in millions) on December 31, 2021, an increase of $5641 million in revenue. (Coca-Cola, 2022, Earnings Release, p. 14).
GDP of Coco-Cola’s Home Country and A Key Market (Country)
The revenue segment from North America in 2020 was $11,477 (USD in millions) and $13,190 in 2021. Europe, the Middle East & Africa’s segment brought revenues of $6057 (USD in millions) in 2020 and $7193 (USD in millions) in 2021. (Coca-Cola, 2022, Earnings Release, p. 14). The GDP for the United States is 14.93%, and the GDP for Europe, the Middle East & Africa is 18.76%.
The Fluctuations in GDP, Economic Growth, Investments, and Patents Affect the Company’s Profitability
According to the Coca-Cola Company’s earnings release (2022), “the volume performance was driven by investments in the marketplace and ongoing recovery in markets where coronavirus-related uncertainty was abating” (p. 4). “Considered one of the leading global brands among the most admired corporations, Coca-Cola claims it supports the fight against obesity, sponsoring campaigns, research, and initiatives to promote physical activities” (Gertner & Rifkin, 2018, p. 161).
References
Coca-Cola (2022). The Coca-Cola Company. All Rights Reserved. Retrieved March 23, 2022
from https://www.coca-colacompany.com/home
New American Standard Bible (1995). Retrieved March 25, 2022, from
https://www.biblegateway.com/passage/?search=romans+8%3A28&version=NASB1995
Gertner, D. & Rifkin, L. (2018). Coca‐Cola and the Fight Against the Global Obesity
Epidemic. Thunderbird International Business Review, 60(2), 161-173. https://doi.org/10.1002/tie.21888
The Great PepsiCo Fightback: Why Fizz No Longer Matters (2007). Strategic Direction
(Bradford, England), 23(7), 17-20. https://doi.org/10.1108/02580540710753418
Very well thought out. I believe that Coca-Cola has a comparative advantage over their competitors due to the age of the company, being the oldest soft drink company, as well as the company partnering with bottling companies to bottle the product (accessed 2022). This gives Coca-Cola the opportunity to focus on the perfection of the product itself instead (accessed 2022). Coca-Cola also produces many different types and flavors of beverages as apposed to only one kind of beverage.
Comparative analysis of Coca-Cola Company and PepsiCo. (2019, Aug 19). Mary Essays. https://maryelizabethbodycare.com/comparative-analysis-of-coca-cola-company-and-pepsico/
Thank you for your contributions to this blog. I also did my work and research on Coca-Cola and discovered Coca-Cola is a dominant market player because it has several distinct advantages over its rivals. Product quality, marketing, research, and innovation are only a few reasons for the company's success. In the soda market, it faces only Pepsi as serious competition. Every major corporation's greatest asset is the reputation of its brands (Tabarrok, & Cowen, n.d.) Coca-Cola has built up a lot of value in its name over the years. The firm has amassed a massive consumer base over the years. Coca-Cola is a household name in many countries.
Coca-Cola's ingredients include sugar cane, fruit, and water, all of which are sourced from farmers and processors at the beginning of the supply chain. The most crucial materials, including water and sugar, are purchased regionally, with partners having some say over the sugar variety. Beverages in Coca-Cola have high demand hence channeled from the manufacturers to consumers (Tabarrok, & Cowen, n.d.) Coca-Cola's beverages are cheap, meaning that the demand for its products is high compared to its rivals. Coca-Cola has different branches across the globe, which aids in making sure that products are distributed evenly across all its consumers.
Coca-target Cola's demographic consists of people aged 10 to 25, with an additional target demographic between the ages of 25 and 40. Consumers who want a more robust taste profile will find a ready audience in the company's traditional cola products. The home country for Coca-Cola Company is America with a GDP of $25.347 trillion with a population of 332,725, 203.
The positive economic growth and high GDP experienced in America create a favorable environment for businesses such as Coca-Cola. With a larger economic base, it means that Coca-Cola company can easily expand its market due to the willingness of investors to invest. More investors are attracted to the company as its home country GDP is high meaning that it is stable financially hence high-profit margins.
Reference
Tabarrok, A. & Cowen, T. ( n.d ) Modern Principles of Economics – Chapters 1-3, 26, 28