The identified multinational company for the milestone project is Coca-Cola Company. Coca-Cola is an American beverage company headquartered in Atlanta, Georgia, United States (The Coca-Cola Company). The Coca-Cola Company has a comparative advantage over other competitors in the beverage industry. Coca-Cola Company employs a competitive positioning strategy by offering an extensive product line (Guo & Wen, 2021). The company's comprehensive product line produces different brands of beverages, including carbonated and non-carbonated drinks, energy drinks, and bottled water. The diversification of other brands of beverages gives consumers the option to choose, creating a comparative advantage for the company.
Additionally, Coca-Cola conducts comprehensive and extensive advertising, which creates a competitive advantage for the company contributing to a significant market share for the firm (Guo & Wen, 2021). The beverage company spends significant revenue on advertising through mainstream and social media advertising creating public awareness for the company products and increasing the firm's high market share. Lastly, Coca-Cola provides superior customer service, attracting and retaining clients through developing customer loyalty (Guo & Wen, 2021). Therefore, Coca-Cola's extensive product line, extensive advertising campaigns, and superior customer service creates a comparative advantage for the beverage company over its rivals.
Coca-Cola Company produces various beverage drinks, including carbonated, non-carbonated, bottled water, and energy drinks. The company quickly supplies its beverage products to clients globally in their local markets. The ease and fast supply of Coca-Cola beverage products to clients are facilitated through local sourcing, which means the company directly manufactures products in the country the products are sold (Shrum, 2018). The company has numerous bottling and manufacturing facilities worldwide with diversified production lines to quickly supply consumer products. Additionally, Coca-Cola embraces innovation in its supply chain, creating a long-term relationship with suppliers and distributors and strict quality assurance in its supply chain regarding health, safety, environment, and certification (Shrum, 2018). Further, the demand for Coca-Cola products is inverse to their price. An increase in prices in Coca-Cola products reduces the demand for the products, while a decrease in prices increases the demand for Coca-Cola beverage products.
The Gross Domestic Product (GDP) of the United States was $ 22.997 trillion in 2021 (O'Neill, Statista. 2022). Further, Coca-cola is a multinational company serving the market globally, for instance, in Canada. The GDP of Canada was $1.99 trillion in 2021(O'Neill, Statista. 2022). Economic factors affect Coca-Cola's profitability. Mainly, fluctuations in GDP, economic growth, investments, and patent directly affects Coca Cola profitability. Gross Domestic Product (GDP) is the value of all finished goods and services produced within a country in a given year (Cowen & Tabarrok, 2021). Fluctuations in GDP affect Coca Cola profitability since, for example, if the GDP of the USA, Coca-Cola's home country, increases, it means production within the borders of America has increased.
The production entails all industry sectors, including the beverage sector. Hence an increase in GDP increases Coca Cola profitability to increased production, which leads to high sales and revenues. Additionally, economic growth fluctuations impact the company's profitability. Economic growth is the increase in the production of goods due to innovation, capital accumulation in a country, and improvement in living standards (Cowen & Tabarrok, 2021). Economic growth increases Coca-Cola Company since production in all industry sectors, including Coca-Cola Beverage Company, will increase, leading to high sales, revenues, and profitability. In addition, the improved living standards of living due to income growth will result in high demand for Coca-Cola products due to increased consumers' purchasing power leading to high profitability for the company.
Further, investments have a positive relationship with profitability. An increase in the level of investment in an economy increases Coca-Cola Company's profitability since increased investments lead to economic growth and avails more capital for productivity. Lastly, patent fluctuations affect the company's profitability. Well-established and observed patent rights result in high profitability since patent rights limit the ability of rivals to use particular technologies of production and also provide the company with monopolistic powers, making it easier to profit from the market.
References
Cowen, T., & Tabarrok, A. (2021). Modern principles of economics. 5th Edition Macmillan.
Guo, X., & Wen, M. (2021). Research on Competitive Strategy of Coca-Cola Company. In 2021 3rd International Conference on Economic Management and Cultural Industry (ICEMCI 2021) (pp. 2879-2885). Atlantis Press.
O'Neill, A. (2022). Gross domestic product (GDP) ranking by country 2017 | Statista. Retrieved from https://www.statista.com/statistics/268173/countries-with-the-largest-gross-domestic-product-gdp/
Shrum, A. (2018). The Coca-Cola Supply Chain & Manufacturing Process Explained | Dynamic Inventory. Retrieved from https://www.dynamicinventory.net/coca-cola-supply-chain/
The Coca-Cola Company: Refresh the World. Make a Difference. Retrieved from https://www.coca-colacompany.com/
Coca-Cola is a renowned brand globally. They have been able to remain as a market leader for many years and withstanding the competition from other companies not only in the United States but also around the globe. Their commitment to change and evolve as market trends change is impressive. “The Coca-Cola Company owns or licenses and markets non-alcoholic beverages brands, primarily sparkling beverages and a range of still beverages, such as waters, flavoured waters and enhanced waters, juices and juice drinks, ready-to drink teas and coffees, sports drinks, dairy and energy drinks.” (Brondoni, 2019, pp.20). The ability to expand their products to cater to the different trends is one of the main reasons the company continues to be a market leader and name in the beverage industry.
Reference:
Brondoni, S. M. (2019). Shareowners, stakeholders & the global oversize economy. the
coca-cola company case. Symphonya, (1), 16-27.
doi:http://dx.doi.org/10.4468/2019.1.02brondoni