Will Breon Econ230 Week 6, Post 2 Analyizng Impacts of recent economic activity on Coca-Cola-Company The Impacts of inflation, Unemployment, and Supply Shortages Inflation can be generally defined as “an increase in the general or average level of prices” (Cowen & Tabarrok, 2021). With increasing inflation rates that just broke a 30 year high in regard to inflation percentage growth year over year, the prices of many goods are increasingly expensive. In response to these occurrences, the Coca-Cola Company announced in late 2021 that they would increase prices to offset rising expenses. CEO James Quincey said "there’s pressure built up for '22 that will necessitate some price increases. We intend to manage those intelligently, thinking through the way we use package sizes and really optimize the price points for consumers" (Doering, 2021). Coca-Cola’s saw revenue decrease around 4 billion, from $2019 to 2020 (Coca-Cola Company, 2021). The impacts of unemployment have also been felt throughout the country in many ways, as “unemployment rates have soared from under 4% in 2019 to over 14% in 2020–largely in part to shutdowns from COVID-19” (Cox, 2021). Since then, unemployment rates have relatively steadily declined, with the current unemployment rate sitting around 4.6% according to the Bureau of Labor Statistics (Cox, 2021). With supply chain issues and global threats still in play, there is still risk for a resurgence in unemployment rates, but the general belief is that the highest unemployment rates are behind us for the immediate future. Coca-Cola has experienced issues from these supply chain shortages first hand, with large shortages in aluminum cans—“it had been experiencing a number of logistics challenges” (Partridge, 2021). Intertemporal Substitution and Labor Adjustment Costs: To help combat these economic factors, Coca-Cola offers multiple developmental programs to help motivate employees and maximize both productivity and fulfillment in employees that are top performers within the company. The Coca-Cola company also offers a program called Red Tag, through which employees can earn merchandise and opportunities to travel, again based on performance. “Twenty-six global associates were selected and the winners blogged about their experiences on our internal website” (Coca-Cola Company, 2021). Labor Adjustment Costs can be understood as the costs of workers transitioning from declining sectors of the economy to growing sectors, as well as costs of hiring and firing workers. The Coca-Cola Company was affected by these changes in the economic environment as their New York City delivery partner was “struggling to recruit enough truck drivers in the city, which one supermarket chain owner said was leading to product shortages in his stores” (Dean, 2021). In response to this, Coca-Cola cut dozens of brands, a move laying off over 2,200 workers, with the goal of “invest in growing brands like Minute Maid and Simply Juices and fund the launch of new products like Topo Chico Hard Seltzer, Coca-Cola Energy, and Aha sparkling water” (Durbin, 2020). The projected costs of the severance packages for employees as a result of this decision were around $350 million to $550 million, which is no minor commitment for Coca-Cola, highlighting their confidence in the direction of these newer products (Doering, 2020). We see the many impacts that recent events, including COVID-19 and global invasions have had on economic forces such as inflation, unemployment, the supply chain, and impacts that companies like Coca-Cola have to constantly adapt to and manage. Coca-Cola is a true blue chip company and I believe that they have seen rougher days and will continue to expand and grow in both the immediate and long term future. References Coca-Cola Co. (2021, October 6). Coca-Cola Company statistics and Facts. Market.us. from https://market.us/statistics/food-and-beverage- companies/coca-cola-company/ Coca-Cola Co. (2021). Why work at The Coca-Cola Company - Careers. The Coca-Cola Company: Refresh the World. Make a Difference. from https://www.coca-colacompany.com/careers/why-work-at-the-coca-cola-company Cowen, T., & Tabarrok, A. (2021). Modern principles of economics (4th ed.). Cox, J. (2021, November 05). Job creation roars back in October as payrolls rise by 531,000. from https://www.cnbc.com/amp/2021/11/05/jobs-report- november-2021.html Dean, G. (2021, September 16). Coca-Cola Delivery Driver Shortage in NYC, store runs low of Stock. Business Insider. from https://www.businessinsider.com/coca-cola-trucker-labor-shortage-new-york-city-supply- chain-2021-9?amp Doering, C. (2021, May 04). As inflation rates, food and beverage manufacturers pass higher costs on to consumers. https://www.fooddive.com/news/as-inflation-rages-food-and-beverage-manufacturers- pass-higher-costs-on-to/599148/ Doering, C. (2020, August 28). Coca-Cola to offer buyouts to 4,000 employees, with layoffs to follow. Food Dive. from https://www.fooddive.com/news/coca-cola-to-offer-buyouts-to-4000-employees-with- layoffs-to-follow/584333/ Durbin, D.-ann. (2020, December 17). Coca-Cola laying off 2,200 workers as it pares brands. AP NEWS. from https://apnews.com/article/layoffs- james-quincey-coronavirus-pandemic-e3364940775d662b92f78fb97c8af5da Partridge, J. (2021, September 02). Coca-Cola's supply chain under pressure due to shortage of cans. from https://www.theguardian.com/business/2021/sep/02/coca-colas-supply-chain-under- pressure-due-to-shortage-of-cans

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/.