Milestone 1: Coco-Cola

Milestone 1: Coca Cola

Several competitors in the U.S. soft drink industry are vying for market dominance. With nearly 45% of the market, Coca-Cola leads the pack (RttNews.com, 2021). PepsiCo and Dr. Pepper are also closely following (Ridder, 2022). Several factors have led to the Company's leading position in the market, including focusing on product excellence, marketing, exploration and innovation, and many others. At first glance, Pepsi and Coca-Cola appear to be very similar companies, but they have several significant differences. Pepsi attributes 25% of its revenue from carbonated drinks to its carbonated drinks, while Coca-Cola retains 75%. Food distribution is Pepsi's largest revenue source; its brands include Frito-Lay, Tostitos, and Quaker. An exceptional distribution network, technological innovation, and sustained competitive advantage characterize Coca-Cola. This template is formatted according to APA Style guidelines, with one inch top, bottom, left, and right margins; Times New Roman font in 12 point; double-spaced; aligned flush left; and paragraphs indented 5-7 spaces. The page number appears one inch from the right edge on the first line of each page, excluding the Figures page.

Coca-Cola has had some of the most creative advertising campaigns in its marketing history. Through the various advertising campaigns the Company has run throughout its 129-year history, the brand has often had a significant influence on culture and society, including a hit song played on popular radio stations in 1971. Due to its aggressive advertising campaigns, Coca-Cola consistently ranks as the world's number one soft drink. In its most recent financial year, the Coca-Cola Company reported an increase of almost 40 billion U.S. dollars in revenue worldwide, making sense since its income fluctuates over time. North America generated nearly a third of Coca-Cola Company's total revenue that year, making it their most profitable region (Market.US, 2022). The Company's second-largest revenue source is from bottling investments. There are many innovative and memorable advertising campaigns that Coca-Cola runs in its advertising campaigns. One of how the Company has been able to maintain high revenues is by increasing investment in advertising. Over the past few years, the Company has spent more than four billion dollars on advertising.

Supply and Demand

Coca-Cola sells approximately 1.7 billion servings of sodas in a single day. Small shops are selling ice-cold Coke in the middle of nowhere across the Middle East and secluded African villages and towns. As a result of Coca-Cola's manufacturing techniques and efficiencies, its production costs are a fraction of the selling price of the product, allowing it to make a high-profit margin on the sale of the product.

Today, Coca-Cola as a company, has a production and distribution network around the world. They sell over 1.9 billion products every day around the world (RttNews.com, 2021). More than 200 countries worldwide sell the Company's 500 beverage products (The Coca-Cola Company, 2022). Coca-Cola distributes its products through a network of bottling, distribution, and retail operations owned or operated by the Company. To meet customers' desires, needs, and lifestyles, Coca-Cola offers customers a variety of choices. Coca-Cola always has an inherent need to link demand and supply. The Coca-Cola Enterprises supply chain is seamlessly integrated with modern technologies. For instance, 3D printing is used to manufacture its drinks' bottles and cans.

Coca-Cola has the advantage of controlling most of its manufacturing facilities, which means it does not rely on costly contractual agreements with suppliers. The Coca-Cola Company also has access to its high-quality syrup, a scarce resource that allows them to produce its famous drink at a low cost and with little chance of contamination. Coca-Cola's comparative advantage has enabled them to dominate the market; they account for around 60% of all soft drink sales in the United States alone and approximately 80% worldwide (RttNews.com, 2021). With a 42.8% market share, Coca-Cola dominates the U.S. carbonated beverage market. The percentage of beverages consumed every day by Coca-Cola products is 3.1%. One of the largest companies in the U.S, over 300,000 tons of aluminum sheets are used annually by Coca-Cola in the U.S., making it the largest user of cans in the country (Market.US, 2022).

Gross Domestic Product in the U.S.

North America is the flagship market of Coca-Cola, reaching approximately 320 million consumers and holding a retail industry value of roughly $228 billion (RttNews.com, 2021). Diet Coke and Coke contribute most of Coca-Cola's revenue directly from soft drink sales. Coca-Cola is uniquely positioned to be affected by the drop in consumers' purchase of carbonated drinks. The Coca-Cola Company has thus established 18 clinical trials that will test the health benefits of new ingredients that they hope to use in future beverages to compensate for the lack of brand extension into healthier drinks (Cravens, 2009, pp. 584-585).

Fluctuations

Increased costs have the potential to boost Coca-Cola's profitability. Inflation is another issue that has an impact on Coca-Cola's profitability. The effects of inflation on a company's profitability can be attributed to the volume of sales, the effects of inflation on costs, and the changes in the relationship between prices and fees (Cowen & Tabarrok, 2021, p.482). As the supply of money in the market increases, inflation is brought on by this increase in supply.

Profit

Despite revenue growth of 5 percent and improved margins, Coca-Cola Co. (K.O.) reported a 19 percent decline in profit for its second quarter from last year. The quarterly earnings per share and revenue were higher than those expected by analysts. Moreover, the Company reiterated its outlook for the entire year of 2021 regarding adjusted earnings and organic revenue growth (RttNews.com, 2021). As a result of the lowered performance, Coca-Cola's net income attributable to its shareholders decreased 19 percent during the second quarter to $2.25 billion, or $0.52 per share, compared to $2.78 billion, or $0.64 per share, in the prior quarter. In terms of comparable earnings per share, the Company generated $0.55, up from $0.51 last year before items were excluded (Market.US, 2022).

Economics

During the pandemic, Coca-Cola took steps toward transforming into a digitalized enterprise. They also accelerated its e-commerce priorities, which include the MyCoke B2B ordering platform, partnerships with food aggregators to boost visibility and availability of beverages, and the Wabi ecosystem of digital apps. Coca-Cola CEO James Quincey expects to see sporadic shortages on grocery shelves through 2022. Supply chain problems and higher commodity costs have resulted in some shortages in 2022 for Coke, like other food and beverage companies. Issues such as the labor shortage, rising gas costs in Europe, and the explosion of a plant in Brazil caused plastic to catch fire. Its profits and revenue surpassed Wall Street's expectations and raised its fiscal 2021 forecast, sending shares up 2% in afternoon trading. (Maishera, 2021).

Investments

In recent years, Coke has invested heavily in R&D in developing vending machines that follow customer gestures or even communicate with customers hundreds of miles away. Coca-Cola has identified critical technologies for acquisition through its External Technology Assessment and Acquisition (ETA) program, such as Lumense's nano-sensing technology, which allows the Company to detect contamination in its carbonated beverages through CO2 gas (Brachmann, 2015). The Company is also looking forward to investing in its consumer-centric Beverages for Life strategy for the future. It can deliver long-term, sustainable growth through its investment in this strategy. "The objectives and priorities we set for ourselves during the peak of the crisis have galvanized our company and are driving our ability to continue to execute through volatile, near-term dynamics" (Quincey said The Coca-Cola Company, 2022).

Patents

It is no secret that Coca-Cola placed a great deal of emphasis on beverage dispensers. Beverage Dispensers, Artificial Sweeteners & Beverage Packaging are some of the most cited technologies in the Coca-Cola patent portfolio (Brachmann, Steve 2015). Assignees with the most forward citations include Pepsico, Purecircle, and Sweet Green Fields. There have been 1009 patent applications filed by Coca-Cola (excluding its subsidiaries) at the USPTO as of this writing. Sixty-five of these patents have been granted, resulting in a grant rate of 71.1%. Coca-Cola has never applied for a patent on its recipe (Brachmann, Steve (2015).

Gross Domestic Product (GPD)

Coca-Cola is an organization that is experiencing satisfactory growth in general, as illustrated by its stock performance, its current and future sales revenues, its current and future profits, and the fact that the trend of successful growth is likely to be sustained in the future. Over 900 Coca-Cola facilities are located around the world. Thousands of communities and a wide variety of cultures are represented by over 100,000 employees at the Company (The Coca-Cola Company, 2022). Moreover, hundreds of thousands of people are employed by bottling partners worldwide due to the partnership. Employment, taxation, payment of suppliers, and investing in communities contribute to each community's economic success. It is estimated that Coca-Cola has around 20 million customers worldwide. A retailer, convenience store, theater, kiosk, or vendor may sell its drinks to consumers through one of the following channels. Cola's brand is built on the strength of its small, independent retailers. The system provides small retailers and vendors with the tools to build their businesses and become business partners with Coca-Cola.

In conclusion, Cola brand is an American multinational company that produces beverages under Coca-Cola. As well as manufacturing, retailing, and marketing Coca-Cola and other products, this Company also has other products. To ensure Coca-Cola's presence around the globe, the Company distributes its products through a comprehensive network of bottlers in every corner of the globe. It is the most widespread, largest, and most sophisticated water bottling network in the world, with a production and distribution network that spans the globe. Consequently, Coca-Cola has taken full advantage of this opportunity, establishing a solid foothold in markets that are developing and emerging rapidly.

References

Brachmann, Steve (2015). Coca-Cola's Patents: From Juice Dispensers to Artificially Sweetened

Cereals.

https://www.ipwatchdog.com/2015/03/25/coca-cola-patents-juice-dispensers-artificially-sweetened-cereals/id=55730/#

Cowen, T., Tabarrock, A. (2021). Modern Principles of Economics, 5th Edition, New York: Worth Publishers.

Maishera, Hassan, (2021). Coca-Cola's Shares Rally After the Company's Earnings Top Estimates, Yahoo Finance.

https://finance.yahoo.com/news/coca-cola-shares-rally-company-151057923.html

Market.US, (2022). Coca-Cola Statistics and Facts.

https://market.us/statistics/food-and-beverage-companies/coca-cola-company/

Ridder, R. (2022) Leading soft drink brands ranked by grocery sales value in the United

Kingdom (U.K.) in 2018,

https://www.statista.com/statistics/296662/soft-drink-brand-ranking-in-the-united-kingdom-uk-by-grocery-market-value/

RttNews.com, (2021). Coca-Cola Q1 Profit Declines 19%, But Results Top Estimates, Nasdaq:

Market.

https://www.nasdaq.com/articles/coca-cola-q1-profit-declines-19-but-results-top-estimates-2021-04-19

The Coca-Cola Company (2022). Segments: North America

https://investors.coca-colacompany.com/about/segment