Tag: Coca Cola

Coca Cola Internet Marketing Campaign Analysis Paper

As the world’s leader in carbonated soft drinks, Coca Cola runs a market in more than one hundred and fifty countries around the global. According to Bhasin (2016), Coca cola produces eighty and sixty percent of its operating profit and revenue respectively outside the borders of the United states. He further stresses that both Coca cola’s logos of the white and red are known to more than ninety percent of the world’s population. This illustrates how effective Coca Cola‘s marketing campaign across the globe is. Curd (2015) states that “the international presence of Coca-Cola is phenomenal and its logo, advertising and colours are among the most recognized in the world” (p.2).Therefore in this essay an analysis of Coca Cola’s marketing campaign-that has made it one of the most successful cooperation in the world-will be made.

The first step of formulating a successful marketing campaign begins with a set of precise objectives that paint a clear picture of what the company’s aims are. In this step, specific goals that may help to propel the campaign are made. It is also of paramount importance that during formulation of objectives that real statistics be incorporated as this will play a greater role in determining the overall budget of the marketing campaign and confining this budget with in margins that are lower than the expected revenue (Bhasin, 2016). It is also important that the objectives of the campaign are within a defined timescale so that the marketing campaign gets the time it duly deserves. In regards to Coca Cola, their objectives are to: increase their sales, communicate to their target audience about their products and elevating/ strengthening the coca cola brand. This step is followed by defining the target audience that is performed in order to comprehend who the clienteles are and reasons behind their continuous royalty to the product. This helps to tailor the message of the campaign to attract new customers basing on their needs or re-assuring the old clientele about the product. In internet marketing, internet based questionnaires is one of the effective ways of gathering information about customers’ royalty towards a business or a particular product that is being marketed (Bhasin, 2016). Another way of collecting this information is having customers to render their opinions whenever they step into to store to buy the product. This knowledge helps to determine who the targets of the marketing campaign are. Coca cola’s marketing campaign generally targets people from all spheres; young, old and sports audiences. Therefore coca cola’s marketing campaigns usually target all sorts of these audiences.

Evaluating the competition has always been at the core of the marketing campaign. This involves knowing who the competition are and knowing what they offer as compared to the product that marketing campaign is aiming to get on to the shelves. This evaluation involves visiting websites of competing companies to gather information about them or running by them a series of inquiries and assessing their response to these inquiries (Bhasin, 2016). As result the marketing team may pick a few pieces of advices that may further perfect the campaign. The end result of this evaluation step is the definition of the company’s unique selling points (USP).The definition of these unique selling points helps marketing campaign to craft precise massages that will be used during the campaign. In addition, also required during this evaluation step of marketing is the Strengths, Weaknesses, Opportunities and Threats (SWOT) analysis. SWOT analysis is essentially jotting: a list of what the companies does better than its competitors-Strengths; areas in which it needs to improve in order to catch up to its competition-weaknesses; areas that may out of the company’s control but may be promising to offer the company new prospects-Opportunities and areas that the company may not have control over but a likely to cause damaging impact on to the company-Threats.

According to Bhasin (2016), Coca Cola’s strengths include: its huge market share, its presence in almost all parts world, its carefully crafted appeal to customers and its recurrent advertising among others. Bhasin (2016), contributes some of Coca Cola’s weaknesses to its competition with other tough brands in the same market like PepsiCo; low response to diversification into other sectorsas compared to PepsiCo, its ineffectiveness in putting more healthy products on to the shelves and its poor management of water resources especially in regions that are suffering from water scarcity water (Curd, 2015). Among some of Coca Cola’s Opportunities include: more engagement in developing countries’ markets, improving is logistics sector that is a core part of its supply chain and advertising more of its products that sale less than the ones that sell more.Coca Cola’s threats include competition from other unintended competitors that are offering healthy substitutes to coca cola’s products and problems with water sourcing especially in regions where water is uncommon.

In conclusion, basing on the strengths, weaknesses, opportunities and threats analysis of Coca Cola, the company should adopt a marketing strategy that emboldens Coca Cola’s global outreach since brand awareness is one of the company‘s strengths. Water is a major raw material for Coca Cola thus the company should pursue a marketing strategy that targets countries with abundant water and re-evaluate its businesses in countries with limited water supply. Coca Cola may improve its transport and distribution sector so that it can transport its products from countries with water and deliver them to countries with limited water supply rather than manufacturing them in these countries. Lastly, Coca Cola should embark on an intensive advertising campaign for its less known products whilst relating them to its well renowned brands.

Coca Cola Company


Coca Cola Company is an American multinational corporation dealing in beverages by manufacturing, retailing and marketing non-alcoholic beverage concentrates as well as syrups. Primarily, the company is famous for its flagship product Coca Cola that was invented by pharmacist John Stith Pemberton in the year 1886 in Atlanta, Georgia (Giebehaus, 2008). This is the time when the Company was founded. Coca-Cola company serves a worldwide market with its branches on every continent. The company’s total assets or net worth are estimated at $87.896 billion. the company is organized into divisions that are headed by presidents (Giebehaus, 2008). The company is also managed by a board of directors with Muhtar Kent as the chairman of the board.

Coca-Cola Mission Statement

Today, no beverage brand reaches most of the man-kind than Coca-Cola. Its mission statement is quite straightforward and is based on three main pillars. The company believes it can make the world a better place and to make everyone enjoy the happiness that comes with it. All the company’s aims, objectives, vision, values and mission statements are based on that belief. This mission statement forms the foundation of the enterprise. According to the Coca-Cola Company on Mission, Vision, and Values “Our Roadmap starts with our mission,” this is enduring. It declares our purpose as a company and serves as the standard against which we weigh our actions and decisions.” (The Coca-Cola Company). This roadmap is a long-term plan around which the company’s operations revolve around. Simply put, the three core aims and objectives that form the mission statement are to refresh the world, to inspire moments of optimism and happiness and finally to create value and to make a difference.

But how does the company ensure the mission statement is accomplished? What does it mean to refresh the world according to Coca-Cola? Well, this is not only attributed to stimulating the consumers with the very best of soft drinks brands but also to care for the environment as it is a major source of its ingredients. Highlighted by the recent “Share a Coke” campaign, Coca-Cola has gone a mile ahead to inspire moments of optimism and happiness to all its customers. The commercials and ads have been designed to bring a smile on the audiences’ faces, leave alone the satisfaction that comes from enjoying the various products this company offers. Regarding the last stated mission, the company tries to create value and make a difference by encouraging recycling of their containers as well as partnering with reputable charitable organizations. Among the most known charitable organizations that the company has partnered with include the World Wildlife Fund and the International Foundation of the Red Cross and Red Crescent Societies. With the best market strategies today, as well as a good leadership structure in place, Coca-Cola continues to take its place in the Global market today, albeit stiff competition from other world-leading beverage companies, on the top of the list been Pepsi (Coca-Cola Company, 1990).

Coca Cola’s mission statement can be summarized in three broad statements. It works to ensure it offers the best quality service to its customers. Being in service since the late 19th century once can comfortably conclude that the company has already appealed to customers in ways that other soft drink production companies have not. Coca cola is almost a worldwide monopoly (Lopez, 2013). The mission statement is characterized by the following:

  • To refresh the world in mind body and spirit: In short, Coca-cola here states its intent of maintaining its status of being the major soft-drink distribution company (Liebowitz, 2011). They want to appeal to the world more than they have already. This is a mission statement one of the reasons why Coca-Cola remains the top beverage distributor in the world. They intend to reach the world in ways that work toward leaving a permanent mark. Using their team of well-trained staff puts a lot of hard work and commitment, they have a potential of achieving the above-stated mission statement (Isdell & Baeley, 2012). Goals such as this one which is human oriented mostly end up succeeding.
  • To create value and make a difference: This statement aims to highlight its intent of achieving uniqueness. They thrive to add value to the products in which they produce to make them more appealing to the human consumers (Elmore, 2015). The distinguishing factor in Coca-Cola is that no one can replicate the secret formula that is used to manufacture the drinks. Insight shows that the only two individuals who are well acquainted with the secret formula are not allowed to travel in the same plane least it clashes. By doing so, the company makes a difference by producing what cannot be replicated by other competitors (Butler & Tischler, 2015). This also helps to add value to the drink since it cannot be obtained anywhere else. One can comfortably argue that Coca-cola has made a stepping stone in maintain the value and making a difference (Elmore, 2015). It is one of the reasons as to why it maintains being a globally recognized branch. Missions oriented toward human living are always bound to succeed.
  • To inspire moments of happiness: Someone, who is well acquainted with the Coca-Cola Company cannot fail to note that it has been behind various campaigns which govern happiness and togetherness. For example, the Share a Coke campaign. This was a brief period in which Coca-cola introduced the notion of writing people’s name on bottles of the drink. The names used were mainly common names (Butler & Tischler, 2015). One would fail to resist buying a drink that had their friend, family member, loved one or even a colleague at work. These were the basis of moments of happiness inspired by the drink. Other similar campaigns have also been enacted which aim to instill happiness to the individuals purchasing the drink (Coca-Cola Company, 1993).

Company missions and vision statement are more likely to be achieved if they are oriented toward satisfying human wants. A characteristic of a good product is its ability to meet all pillars of human wants that are supposed to be in the overall product. Adding on top of that is the marketing strategy. If one learns to correlate a product with happiness, there is a high chance that consumers will be purchasing that particular product a great deal (Butler & Tischler, 2015). Coca Cola has learned to make consumers associate the drink with family, friends and overall bonding. This may be seen in a lot of their commercials.


The Coca-Cola Company, as already explained, is a soft drink/beverage distribution company (Butler & Tischler, 2015). This means that a significant portion of its products is soft drinks. The secret ingredient to the Coca-cola drink widely remains unknown. Only two people are aware of it (Butler & Tischler, 2015). This might be the secret behind the success of the company since their products cannot be replicated. Each drink/ beverage offered by the company is its unique brand (Butler & Tischler, 2015).

Similarly, the company also distributes bottled water branded Dasani. This is not found in all countries, however (Butler & Tischler, 2015). Similar to the bottled water, the company also has a range of processed fruit juice referred to as the minute maid brand (Butler & Tischler, 2015). It exists in various flavors, but it is limited to a few countries. The other range of soft drinks includes Fanta and Sprite. Coca-Cola exists in different sub reads and types. For example, there is the Coca-Cola Zero which is low in sugar, and the Coca-Cola light which is low in gas. Distinct sub-variants that exist include the diet coke (Elmore, 2015).

Different flavored variants of the Coke exist, for example, in the Asian region; there is a vanilla flavored variant of the Coca-cola (Elmore, 2015). The company distributes according to the taste preference and culture of the affected region. The packaging is also different in each and every region as a representative of the culture of the regions involved. The standard Coca-cola drink is available in some parts of the world while the other variants are only limited to specific areas alone (Elmore, 2015).

The company is hence well suited to answer the needs of its consumers. The major problem facing the company is the different countries where consumption of Coca-Cola or other soft drinks is completely inhibited. This impedes expansion into these regions (Elmore, 2015). The company has an elaborate plan to work over this. The only real threat to Coca-Cola is rival soft drink manufacturers like Pepsi and alcohol distribution chains. They do not present as much threat however because Coca-cola is a drink that virtually anyone can take while alcohol is restricted to a particular age bracket alone. This flexibility is one of the many reasons as to why the company is continuing with its rising streak. All products manufactured by Coca-cola serve to match the preference of different cultures (Elmore, 2015).

Executive leadership at Coca-Cola

The organizational structure at Coca-Cola is one of its kinds and is one of the key factors that have led to the overall success of the company. This international company organizes itself in a manner that places it comfortably on the world market, while at the same time looking at the particular needs of its regional markets sensitively to address any emerging issues. The company has a separate International Division Structure whose staffs work in isolation from the head office though. There are five continental divisions, each with a president as the head. Some further vice-presidents control the sub-divisions, which can go to as low as individual countries. The operations at the domestic level are very much similar to those at the international level making control quite easy (Brunner, 2010).

At the head office, we have Muhtar Kent, who is the Chairman of the Board of Directors and the Chief Executive Officer (CEO). At the senior leadership, there is James Quincey who is the overall President and Chief Operating Officer of all the international divisions. At the North America Division, there is J. Alexander Douglas who is the executive president as well as vice president of this region. Following closely is Ceree Eberly who is the Senior Vice President and Chief People Officer. Other in senior leadership includes Chief Technical Officer, Chief Strategy, and Planning, Chief Information Officer, Chief Financial Officer, Chief Legal Counsel as well as Chief Customer and Commercial Leadership Officer among others. The Board of Directors among other duties elects those to hold the offices according to their capabilities. The company continues to enjoy good leadership with one of the best organizational structure which coupled with a corporate sergeant Head Office responsible for giving the company overall direction makes it a leader in the world market for soft drinks. Today, the company has over 700000 system employees and ranks among top ten private employers, thanks to its real leadership.

Goals/ Vision

The company has a set of unique goals and visions in which it strives to achieve (Lopez, 2013). They provide the framework and guidance which it needs to progress forward. As stated previously, the company’s goals and visions act as guidelines to show which way overall, the company is progressing (Butler & Tischler, 2015). For example, if a company was progressing forward, it will be characterized by an achievement of more goals and missions and vice versa. Coca cola’s goals include

  • Fostering unity: One of Coca Cola company mission is to foster unity by providing a healthy working environment where people can work alongside each other with peace and harmony (Butler & Tischler, 2015). This in turn leads to inspiration of each other and hence raises working efficiencies in the long run (Butler & Tischler, 2015),
  • Build Image and Variety: Coca Cola Company wants to supply drinks of different varieties to all parts of the globe when demand is needed (Butler & Tischler, 2015). Considering the fact that there are different cultures all around the world with different tastes and preferences, Coca Cola can appeal to all of them by providing drinks which match their cultural preferences. By appealing to all audiences, the company builds its image and continues to be the preferred choice for a wide variety of audiences (Butler & Tischler, 2015).
  • Establishing Partnerships: The Company also aims to establish a wide network of partnerships with well-established companies. The partnerships will allow the company to thrive in an all rounded situation. Partnering with some of the most common distributors such as Walmart is also advantageous to both of the company’s (Elmore, 2015). Partnerships may also be established with local schools and universities, i.e. sponsoring football and basketball teams
  • Profit: Another one of the company’s goals is to ensure their respective shareholders and stakeholders are assured of long term profits. This is while being mindful of other responsibilities in which the company has to undertake. These incentives ensure maximum stakeholder support and coordination when partaking a major project which is in need of some financial input from them.
  • Productivity: The Company’s final goal is to be productive (Elmore, 2015). This is through employing a highly productive team which is fast moving and quick to make decisions. This puts the company under a strategic advantage over other competitors (Elmore, 2015). Achieving this goal is the stepping stone for the company. This is due to the fact that most companies strive to be productive in nature. This ensures much profit realized and hence the company prospers.

Goals as explained above are the pillars which define the direction where the company is trailing. Goals create a major media for comparison between two different entities (Kepos & Cengage Learning (Firm), 2007). The one with the most elaborate and well-defined goals characterized by the achievement of a great deal of them is likely to be more successful than the other one. Effective goal creation and achievement is the best way to ensure that the company is moving forward or that it is moving backward (Elmore, 2015). Companies should, therefore, sport an elaborate goal setting technique if it wants to thrive in many different places (Elmore, 2015).


Business Level and Corporate Level Strategies – Coca Cola Company


This paper discusses Coca-Cola Company, a beverage industry leader, and it will focus on analyzing its business-level and corporate-level strategies. It will also discuss the company’s significant competitor; PepsiCo, Inc. and provide a comparison of strategies at both levels.  Having started operating its business in 1886, Coca-Cola Company remains the largest nonalcoholic beverage manufacturer, distributor as well as marketer (Coca-Cola, 2013). Indeed Coca-Cola is the leading maker of soft drinks operating in over 200 nations and owns more than 400 nonalcoholic beverage brands. Apparently, the most valuable beverage brand in the world is Coca-Cola thereby promoting the operations of the company on a global scale. Having started its operations more than a hundred years ago, the company has gone through different challenging times of economic prosperity and depression, and war and peace. For a long time especially in the 1990s, the Coca-Cola was one of the world’s most reputable companies. The company specializes in making and selling carbonated soft as well as many other non-carbonated drinks. With its mission statement “to refresh the world, to inspire moments of optimism, and to create value and make a difference everywhere we engage”, Coca-Cola has a set of ideals to which it adheres to both at the business and corporate level (Coca-Cola, 2013).

Business Level Strategies

Differentiation Strategy

The company embraces differentiation strategy in order to remain unique in the market and separated from its competitors. Through differentiation strategy, the company makes unique and valued products for its customers. The company has unique capacities to customize its products in order to ensure that they meet the wants and needs of its target markets. For instance the company satisfies the needs of old health conscious consumers by providing Diet Coke, Odwalla products and Vitamin water. On the other hand, it meets the needs and expectations of young consumers by providing vanilla coke and cherry coke, which are flavored and PowerAde products of Coke (Saul, 2010). It is also worth noting that the management at Coca-Cola Company continues investing a lot of time and money into research in order to acquire a clear comprehension of the various segments in the market in respect to age, income and lifestyle in order to achieve accurate development and marketing for its products.

In terms of packaging, differentiation strategy has and continues playing a significant role by helping Coca-Cola products continue remaining adaptable to different market segments (Saul, 2010). In this regard, functional packaging has been essential for making products appear in different forms and sizes. This includes product appearance fountain drink dispensers, aluminum cans, and plastic and glass bottles. Besides, the company also uses different sizes and shapes of the cans and bottles in order to ease operations in vending machines. The company also makes sure that it uses recyclable packaging materials in order to promote its commitment to the sustainability of the environment. Packaging materials are well labeled to make consumer identification easier. Apart from product differentiation, the company also embraces image differentiation whereby it emphasizes its logo to achieve this. The logo is essential for establishing the name of the brand in the minds of consumers.

Cost Leadership Strategies

There are various methods that a company can embrace in order to attain the status of low cost producer. These methods can either be implemented separately or in combination. One of the ways is by a firm considering a product design that does not attract extra costs especially where alternative materials can be used (Magretta, 2009). The firm can also employ production as well as operational processes that do not demand high costs. The positioning of Coca-Cola regarding cost leadership strategy is as a result of learning, knowledge as well as experience in matters of production as well operational processes. The strategy is also achieved through economies of scale especially in research, promotion and development. The company also achieves cost leadership strategy through embracing efficient/effective manufacturing systems and distribution networks.

Marketing Strategies

Marketing segmentation

Coca-Cola makes strong choices regarding the kinds of markets it requires targeting in order to promote its sales. A market segment refers to a group of product or service consumers possessing unique characteristics in a collective manner. For instance, the company satisfies the needs of old health conscious consumers by providing Diet Coke, Odwalla products and Vitamin water. On the other hand, it meets the needs and expectations of young consumers by providing vanilla coke and cherry coke, which are flavored and PowerAde products of Coke (Coca-Cola, 2013).


Promotion Strategy

The company considers certain levels of emphasis regarding public relation, advertising, technological changes, sales promotion, personal selling etc. During advertisement; for instance, Coca-Cola employs a number of phrases such as “enjoy”, “drink Coca-Cola”, “always Coca-Cola”, “Life tastes good” and many more. These advertising strategies have played an essential role in ensuring that the brand successfully reaches global markets (Campbell & Goold, 2014). Besides, these advertisement techniques enable consumers to remain informed of the significance of Coca-Cola products.

Price Strategy Trade Promotion

Coca-Cola Company does offer incentives to retailers and middlemen mostly in form of free empty bottles and free samples. This encourages such retailers and middlemen to keep pushing the product further into the market (Campbell & Goold, 2014). This is one of the reasons why Coca-Cola is more common in the market than other brands. In other words, it is a “Seen and Sold” scenario. The company is also involved in sponsoring various sporting events and in so doing; it grows its market share.

Considering these business-level strategies, differentiation strategy is the most significant strategy that can drive the company into long-term success.  Through differentiation strategy, the company can make unique and valued products for its customers. The company has unique capacities to customize its products in order to ensure that they meets the wants and needs of its target markets. Besides, through differentiation strategy, the company can capitalize on the weaknesses of its competitors in order to gain a competitive advantage.

Corporate level strategy

A corporate strategy is essential for guiding a company’s performance in its overall business activities as well as resource allocation in order to achieve the established goals of the business. The company has been keen on developing new products every time it enters a new market. At one point Coca-Cola was known to be a company operating in a market dominated by carbonated soft drinks. However, over time, the company began producing new products such as Sprite, Fanta and Diet Coke, which are non-carbonated, and that have eventually become the key products of the company. Besides, in order to further penetrate the market, the company has widened its business definition into what is called ‘ready packaged liquid refreshments’ (Campbell & Goold, 2014). Through embracing this consideration, the company has grown beyond the usual carbonated soft drink (CSD) market and joined markets such as fruits juices, ready to drink tea and bottled water.

Globalization strategy

This is another significant corporate business-level strategy. Technological advancements have been significant for contributing to Coca-Cola’s business growth through globalization especially during the 20th century (Campbell & Goold, 2014). For instance, transportation of products became easier and cost effective especially following the development of faster and bigger semi-trucks, trains, jet aircrafts and cargo ships. This enabled and continues enabling Coca-Cola manufacture and avail its products in furthest markets. Due to technological development, the company has taken advantage of the situation and now has its presence in more than 200 countries in the world.

In regards to these corporate strategies, production of new products for new markets is the most significant business level strategy that can drive the business into long-term success. Through embracing this consideration, the company has grown beyond the usual carbonated soft drink (CSD) market and joined markets such as fruits juices, ready to drink tea and bottled water. This has been significant for enabling the company to penetrate new markets.

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Investment Analysis: Pepsi Vs Coca Cola

The Coca Cola Company

Company History

The inception of Coca Cola Company is dated back to 1896, from the curiosity of an Atlanta pharmacist, (‘Coca‐Cola Co ‘, 2008). Dr. John S Pemberton together with Frank M. Robinson formed the company and together they drafted a transcript trademark for the company that is still used to date. The Company is now world’s leading producer of beverages with branches virtually in every country in the world. Since its foundation in 1896, the company has been a market leader in beverage manufacture and the company manufactures over 500 brands of products that are positioned geographically to meet customer demands, (Coca Cola, 2014). The company is under stewardship of Muhtar Kent, chairperson of the board and the company chief executive officer.

Company Products, Major Suppliers and its Clients

Coca Cola Company produces a number of products under its brand name and these products vary from region to region. The company has a number of portfolio products that it produces and these include mineral water, sport drinks, energy drinks and carbonated beverages among other products, (Hillman, 2009). The company products cover over 580 million across 28 countries in the world, making it the single largest manufacturer of alcohol-free beverages.

The major consumers of the Coca Cola products include sportspeople, children, and older people of all ages. In fact, the company products cover all market segments. However, majority of the company sales come from the beverages where it accounts for over 63% (2013 statistics). The company major suppliers includes suppliers of raw materials that include fruit juice, suppliers of machines, bottles as we as its bottling partners. The company products include Dasani, coke, Fanta, sprite, Krest, and coke zero among other beverages.

Pepsi Inc.

Company History

Pepsi Inc. is a food, snack and beverage company whose invention dates back to 1893 due to work of Caleb Davis Bradham. Caleb Davis Bradham worked as a part-time pharmacist in a nearby store in North Carolina. He would soon open his own drug store where he invented what came to be Pepsi Company, (Pepsico.com, 2014). The company celebrated its 100th anniversary in 1998. The company introduced a new and revolutionary campaign dubbed GeneratioNex in 1997 that sought to challenge new norms and way of doing things.

The company leadership boasts of talented and strong individuals. The company leadership consists of president, vice-presidents and CEO’s of various regions in the world. The company president is Zein Abdalla with various CEO’S that include Albert P Carey, CEO Americas beverages among others. The company leadership is guided by company mission which is “performance with purpose”, (Gottlieb, 2010).

Company Products, Clients and Major Suppliers

            According to statistical analysis of 2013, the major contributors of the revenue of Pepsi cola originated from foods (63%) and beverages (37%), (PepsiCo, 2014). The foods produced by the company include gamesa, sabritas, chips and cheese flavored snacks among other foods. The company also produces beverages that include Mountain Dew, Pepsi, 7 Up, Gatorade, SoBe Lifewater, Tricana juice and Aquafina among other many beverages. The company suppliers include the suppliers of its raw materials that are mainly from agricultural produce and the suppliers of machinery.

In addition to the concentrates that the company uses, it also purchases syrup containers, boxes for packaging its cans, bottles, sweeteners and glass. Finally, the company purchases its potatoes, milk, apples and oats from various farms in the world. The company has a special team in Europe that is responsible for monitoring and managing the company’s agricultural business, (Elmore, 2013).

Financial Analysis of the two Companies

Profitability Ratios

Investors look at how the company is efficient in converting its operations into profits, a fact that is only possible through analysis of company operations using its profitability ratios. Profits constitute the most followed metrics in business, investment and finance, (Ramsden, 1998). Profits are one of the key drivers of stock in the business world. There are many profitability ratios that investors can look into in order to determine on whether to invest in a company. Some of the common profitability ratios are current ratio, quick ratio, return on equity, and profit margin and debt-to-equity ratio among other types of ratios, (Magoon, 2008). This report shall look at profitability analysis of Coca Cola and Pepsi based on current ratio, debts to assets and debt to equity ratios.


The current ratios from the two companies shows a steady growth from 2011 – 2013, however, in 2011 Pepsi had more liabilities compared to Coca Cola in the same year. In addition, Coca Cola Company has more assets than Pepsi since it has higher current ratios compared to those by Pepsi in same years, except in 2013 where Coca Cola had 1.13 and Pepsi had 1.24. For an investor wishing to invest in the two companies, Coca Cola would be more profitable since it had shown steady growth and most of the company investments are held in assets.


Debts to Assets Ratios for the two Companies

Debt to asset ratio for any company is a ratio used to evaluate the assets funded by the creditors and it is a useful tool in determining the shorter solvency of a company, (Bull, 2008). This is calculated by dividing total liabilities by total assets, Debts to Assets =Liabilities/ Assets, (Bull, 2008).

From the calculations in the table 2 above, the two companies show a difference in the debt rations. Coca Cola is healthier since less of the company assets are financed by the creditors to the company; this is shown from the fact that the ratios are smaller compared to Pepsi whose assets receive most of its finances from the company creditors than in Coca Cola Company.

In Coca-Cola Company for instance, in 2013, the creditors funded 63% and shareholders funded 37%, for Pepsi in the same year, creditors funded 68% and shareholders funded 32%.  Given that, Assets = Liabilities + Shareholders Equity, For Coca Cola, $1.00 = $0.63 + $0.37, this means in the year 2013, for every dollar of the asset, the shareholders had 37cents, while in Pepsi, for every asset of the company the shareholders had 32 cents. This means that the two companies are highly leveraged although it is profitable to invest in Coca Cola than Pepsi.

Debt to Equity Ratios

Debt to equity ratio is a profitability ratio that shows the variation of debts to assets. The debt to equity ratio is in fact a tool used to assess the balance between the liabilities and the equity of the shareholders that is employed to fund assets, (Ramsden, 1998). It is obtained by dividing total liabilities by total shareholder’s equity. In the calculations in the table 3 above, Pepsi had $2.52 in liabilities for each dollar in the shareholders equity, which is higher than that of Coca Cola that had $1.52 in liabilities for each dollar in the shareholder’s equity.

Although the debt to equity for Pepsi shows a decrease from 2011 t0 2013, its figure remains high than that of Coca Cola which kept rising in the same period. However, the values remain higher than the industry average of 0.94 to 1 in the same period.

News Events of the Two Companies from 2012 to Present

The major news and events in the two companies centers mainly on acquisition of more market share and generation of more sales by the end of 2014. The two companies introduced two new brands of beverages. Pepsi introduced Pepsi Next while Coca Cola introduced its own called coke zero, (Ajc.com, 2014).

However, the two companies intend to market its new brands in the market through different sponsorship deals in the market. The path that Pepsi has taken is to invest even more in the super bowl, which targets over 180million Americans viewers. In doing so, the company hopes to sale even more bottles of Pepsi Next. In contrast, Coca Cola introduced its Coke Zero, a new sugar free brand that it intends to create more market awareness to its consumers. Unlike Pepsi, Coca Cola invested both in the Winter Olympics as well as Super bowl. In addition, Coca Cola has acquired stakes in Monster Beverage Company, buying over 16% of the stakes in the company for over $2.15 billion, (Topics.nytimes.com, 2014).

Analysis of the Income Statements of the two Companies

The income statement is a representation of the financial operations of a firm over a given period, detailing the revenues generated in that period. In addition, income statement gives the costs that were incurred in generating the revenues, (Peterson Drake & Fabozzi, 2006).

The net revenues for Coca Cola increased steadily from 2011 to 2012, decreasing slightly in 2011. In 2011, the net operating revenues were $46,542,000,000 in 2012 was $48,017,000,000 decreasing to $46, 854,000,000 in 2013, (Stock Analysis on Net, 2014). However, the net revenue for Pepsi decreased from 2011 to 2012 and increased in 2013. The revenues for the years 2011 – 2013 are $66,504,000,000, $65,492,000,000 and $66,415,000,000.

It is clear from the analysis above that Pepsi has a higher net income than Coca Cola although Coca Cola seems in good financial shape than Pepsi. Therefore, in order to boost its revenue base, the company should increase its product base through acquisitions and development of other product lines.

Analysis of the Balance Sheets of the Two Companies

Vertical Analysis

            In vertical analysis, the consolidated balance sheet of the two companies shall be used to analyze the growth of the two companies. In this study, the percentage of the total assets for the two companies shall be used as base amounts. The current assets of Pepsi in 2013 equal $22,203,000,000 and this equals 28.7% of the total assets. In the year 2012, the current assets equal $18,720,000,000, in 2011, the value is $17,441,000,000, and this translates to 25.0% and 23.9% of the total assets respectively, (Coca-Cola, 2014). This shows that the company witnessed steady growth in its assets value from 2011 to 2013.

Similarly, the current assets of Coca Cola in 2011 were $25,497,000,000, which equals to 31.9% of the total assets in the same year. In the year 2012, the company current assets equal $30,328,000,000, which equal to 35.2% of the total assets in the same year. Finally, in 2013, Coca Cola had current assets of $31,304,000,000 and this accounted for 34.8% of the company total assets for 2013. This shows that Coca Cola had a steady growth in its current assets from 2011- 2012, however, the growth in the assets dropped in 2013. The company assets grew from 31.9% in 2011 to 35.2% in 2012, however, the figure dropped to 34.8% in 2013. The drop in the growth of the current assets could not have been felt had the total liabilities dropped in the same period.

In 2011, the current liabilities for Pepsi were $18,154,000,000, 34.8% of total liabilities. In 2012 and 2013, the values were $17,089,000,000 and $17,839,000,000 respectively. This translated to 32.7% and 33.6% of the total liabilities respectively for the respective years. The total liabilities of Pepsi dropped in 2012 by 2.1%, however, the company liabilities rose in 2013 by 0.9%. The increase in the company liabilities can be attributed to the reduced growth of assets for the company in the same year.

For the same period, the current liabilities for Coca Cola were $24,283,000,000 in 2011, $27,821,000,000 in 2012 and $27,811,000,000 in 2013, (Coca-Cola, 2014). These translate to 50.2%, 52.1% and 48.95% of the total liabilities respectively. These show that the current liabilities of Coca Cola dropped steadily from 2011 to 2013. In the same period, the assets of Coca Cola dropped by 1.6%, the company liabilities dropped 3.15%. This data analysis shows that Coke’s shares of equity are worth than those of Pepsi due to their profitability. In to make its balance sheet attractive to investors, Pepsi should reduce the amount of liabilities and increase stockholder’s equity.

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Employee Development Appropriateness Evaluation – Coca Cola

Coca cola is a beverage company dealing in manufacturing, retailing, distribution and marketing of non alcoholic beverages. It was initiated in 1886 and it has remained in the market up to this date. It has risen to be the best in the beverage industry facing competition from PepsiCo, Inc. In order for it to stay competitive, there is need to evaluate the appropriateness of  its employee development policies and practices in terms of their strategic goals, objectives and the current environment of constant change, which this paper tries to explain.

Employee development policies and strategies.

The Coca-Cola Company has devised many ways of developing their employees and retaining them. First, they make it their main concern to treat the entire employees well by creating an environment where they can develop their skills, do extremely well in their performance and move towards the betterment of their careers. Secondly, their training and development programs are meant to attract and retain the best talents in the world (Sheridan, 2012). They place more emphasis on employee development plans and management of internal talent. This help the employees discover their talents and know how they can use them in their roles in the company. They also ensure that managers take part in leadership development programs and employee performance management.

Through the use of employee engagement, the company is able to make its employees feel that they are a part of the company’s success and have a better understanding of their contributions towards the achievement of the companies’ goals. It uses diverse ways of gauging each employee’s level of commitment to the company and their working lives (Sheridan, 2012). For example, the managerial team can have dialogues with employee representatives to get their opinions about the growth of the company, or surveys from the employees.

The company strives to make their employees enjoy their working life by providing a good working environment and incentives like giving employees discounted gym memberships and on –site exercise classes, free Coca-Cola drinks and fruit. They also provide a staff restaurant which offers healthy food options for all the employees, flexible working hours, learning allowances and a Cycle to Work scheme (Noe, 2013). All these are geared towards motivating the employees. The companies’ employee development is open and all-encompassing, one in which everyone is treated fairly. They believe that having employees from diverse backgrounds, with different life experiences and talents is an added advantage to the company’s growth and development. Therefore respecting and valuing diversity is central to its vision and values. They have employment policies and practices that protect its employees against any kind of discriminations and ensure equal opportunity for all people, regardless of race, age, sex or ethnic background.

Coca Cola Company has a good communication systems that enables all its employees participate in it. Every year, a global Employee Insight Survey is distributed, seeking employees’ ideas on how the company is running and what is needed for improvements (Noe, 2013). It then tracks the responses from the surveys and the resulting improvement from year to year.

They have a mentoring program that allows employees to develop their skills. The availability of Coca-Cola University provides an online teaching environment for its employees. This is where they are given short term assignments that give them chances to work in different departments, within the same state or different country (Lam, 2012). Employees are encouraged to pursue higher education programs with reimbursements available for undergraduate and graduate studies at accredited colleges. They are also encouraged to make use of e-learning programs beyond Coca-Cola University, external conferences and training opportunities to improve their knowledge and skills.

The company’s performance and practices.

The company conducts performance appraisals to each employee in order to evaluate the quality of their performances. This is a process within the broader performance management system that connects organizational objectives, daily performances, professional objectives and rewards and incentives (Tarique, 2014). When the company began diversifying, its main focus was on fairness and inclusion. And to ensure this rule was adhered to, it implemented a wide range of monitoring and reporting tools.

It instituted an annual Pay Equity Study to ensure fair compensation practices among its employees. Assessments on distribution of merit awards, stock options and annual incentives were also performed, this was done after various decisions have been made and before payment of incentives to employees (Broadhurst, 2012). This would help in finding errors or problems and being solved before informing the employees.

The company’s diversity office reviews the selection, hiring and promotion data on quarterly basis and takes a weekly view of all continuing staffing activities to ensure fair selection, sourcing and recruitment of its employees (Broadhurst, 2012). In areas of performance management, the triage method is used to monitor who is receiving better or less scores on their annual assessments and the required actions taken to solve the issues causing the fewer score.

How the company should handle functional areas of human resources.

The challenges related to changing nature of work and work place environment occur in every organization. These changes require skilled, motivated and knowledgeable workforce with employees who are ready to adapt to the new changes and remain focused on the future of the company, and for this to happen all the departments in the company should work towards a common goal (Azulay, 2012). The organization should emphasize its role in ensuring that policies and programs ease the continual development of its staff.

The managers should work with non management staff to evaluate and provide feedback on their skills and interests and select training and development activities that match their career development objectives and requirements. Managers should always be informed of current policies and practices that support employee development due to changing nature of work and the working environments as well (Kaye & Giulioni,2012). After a learning activity, they have to make a follow up program to ensure that what was learned is incorporated into new skills and acquire knowledge.

The employee on the other hand should take initiative to assess the skills and interests and seek development activities that match their needs. According to Azulay (2012), employees with upgraded skills work to their full potential since they are prepared to deal with the changing demands of the workplace. They also have better career satisfaction which increases their morale to work and productivity.

The human resource department is mostly about employing, retention or dismissal of its employees. Its major functional areas include employee training and development, perfoming appraisals, career planning, health and safety, job classifications, working conditions and unions (Noe, 2012). It should put more emphasis on employee training and development since it adds up to all the other functions. Most employee development and training programmers fall under specific categories like management development, Career development, basic skills, professional skills, Technical training and supervisory skills. Career development has more benefits to both the company and individual employee since it is the continuous attainment or refinement of skills and knowledge coupled with career planning activities. Job mastery skills are those that are necessary to successfully perform one’s job. Professional development skills are the skills and knowledge that are beyond the capacity of the employee’s job description, although they may indirectly improve job performance.

The Philosophy of Human Resource managements authorize career development and growth of employees in every organization. By providing the employees with the current information and the future trends about the company, it will help them make realistic career development goals (Kichharr & Guttmann, 2011). This sense of responsibility for managing one’s career contributes to development of self-confidence which improves the employees self esteem and finally leading to better productivity. This explains how career development increases employee motivation and productivity.

Skill development is mainly attained when one is working in a given environment and contributes to learning opportunities leading to employee’s career satisfaction. This will trigger the need for one to search for more knowledge and experiences about that specific career, and that is what is needed most in a company, employees who are yearning to further their studies to improve their skills (Azulay, 2012).

The function of career planning and development clarifies the match between the organizational and individual goals. It helps the human resource department to attract top staff and retain valued employees (Azulay, 2012). This is because the company commits itself to offer career development activities to its employees with attractive remuneration packages. It will also reduce costs when the organization uses its own staff talent to provide career developments opportunities within the company.

The company should ensure that they have a couch to help employees identify their strengths and weaknesses, interests and values by maintaining an open, effective communication and continuous encouragement (Kirchharr & Guttmann, 2011). It should have an advisor who will provide organizational information, resources and the facts about the company to the employees by helping them develop reasonable career goals based on their departments’ needs and individual development plans and understand the current opportunities and limitations in the company.

It should have an appraiser who will evaluate each employee’s performance in a transparent and fair manner and relate this to their potential opportunities. This can be done by providing feedback in a way that fosters development, conduction performance appraisals that define their strengths, weaknesses and career development needs. Also by relating their current performance to their future potentials in a realistic manner, and using individual development plan as a tool for continual feedback and development. The company should also have referral agents who will help employees meet their goals through contacts with people and resources by helping them formulate development plans and consulting on strategies and providing opportunities for exposure, visibility and experience such as task forces (Kirchharr & Guttmann, 2011).

Ways to improve employee engagement.

Employee development can be improved in many ways depending on the nature of the business and the demand of the products or services. One way is providing mentoring or coaching programmers in the company. The companies must ignite the managers’ passion to couch and mentor their employees (Azulay, 2012). It would be cheaper to use its own staff rather than employing a coach from a different organization. This provides demonstrated benefits around the quality of work, problem solving and communication skills.

The other way is by practicing job rotations within the organization. This provides an opportunity for employees to move to different positions and learn new skills and information about the organization. Job promotions can also motivate employees to work harder in developing their own needs and the companies’ demands at large, and with these they may also develop new skills. By stretching assignments and projects to employees will  also play a role in developing them since they working ahead of the demands of the company, this is done by identifying that special assignment that might exist in the company in the coming months and identifying a team that work as a cross-functional team in dealing with the issue or need. Another way for employees to learn critical elements about a company is by introducing job shadowing programs (Kaye & Giuliuni, 2012). The employee will be able to learn new skills while outside their areas of specialization. By providing employees with opportunities to take part in volunteering programmes, having presentations in team meetings or joining diversity committees, this provide job enrichment as well as learning new skills .

The companies should deal with the short- projection of learning and development needs. In the past, what one learned in school was valuable for years, but currently, knowledge and skills can become obsolete within months, which necessitate the need to learn rapidly and regularly. Organizations are therefore required to make learning and development a continuous process (Noe, 2012).It is the responsibility of the company to teach their employees to own their career development by helping them identify their areas of interests since the growth and development of one’s talent is vital to ones success, ability to be innovative and the overall productivity.

By providing flexible learning options to its employees, a company should emphasize the importance and the need of engaging in more learning and development activities. A company should also build trust in its organizational leadership. The managers should lead by example by being honest, open and transparent about their personal contributions to learning and development (Azulay, 2012). This will encourage the rest of the employees to follow the initiative as well. All the above mentioned are currently in use at the Coca-Cola company only that they have to well implemented into their programs to maximize the opportunities to improve their productivity.

Finally the company should be able to match different learning options and styles to suit different employees. The workforce at moment has five generations and the company must restructure how employees learn and the tools and activities they use to match their preferences and expectations (Noe, 2012). For example millennial group may need the use of computers and video games or retreats as their learning activities. This should be modified in the Coca-Cola Company for it meet its performance objectives.

Change management.

Change management is an attentive planning and sensitive implementation of new ideas in consultation with, and involvement of the people affected by the changes. When making changes in an organization, use of psychological contract is of good use. This refers to the relationship between an employer and its employee concerning mutual expectations of company’s inputs and outcomes (Hiatt & Creasey, 2012). It’s a balance between how the employee is treated by the employer and what the employee puts into the job. This can applied beyond the employment situation to human relations and the wider society. Qualities like respect, compassion, trust, empathy, fairness and objectivity characterize the psychological contract.

Nudge theory is another method used to initiate changes in an organization. It is a concept that helps in understanding how people think, make decisions and behave. It helps people improve their thinking and decisions, manage change, identify and modify existing and helpful influences on people (Hiatt & Creasey, 2012). The manager has a responsibility to facilitate and enable change; it must therefore involve the people.

In connection to that, Coca-Cola training and development programs are focused in reducing the gap between the organizational needs and consumer needs. They encourage their employees to further their studies either through the Coca-Cola University or other learning institutions with reimbursement of their tuition fees. They use social learning theory in their training and development programs. It provides their employees with the opportunity to develop knowledge and skills that lead to more effective job performances. The development process is a joint responsibility between managers and employees (Azulay, 2012). The process includes determining the employee development needs, agreeing on the development methods and couching.

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Change Pattern in Market Model: A Contextual Analysis of Coca Cola Company


A business market is made up of all the organizations that buy goods and services for the purposes of use in production of other products and services that are rented, supplied or sold to others. It is crucial to note that the core of any business is what it sells. A business will invariably sell legal rights either in terms of ownership of asset or the sale of the right to use an asset. Defining a business model acts as an exceptional predictor of financial performance which is fundamentally in terms of profit and market value. Companies in market model strive to be competitive in selling their goods and services in the marketplace. Competitiveness thus forms a significant aspect in the determination of whether a firm will prosper, fail or barely get by. It is through a composite of marketing and operational functions that business organizations compete. A basic input in an organization’s decision making process is identification of consumer wants and needs which is a considerable underpinning to competitiveness. In addition, price control as well as advertising and promotion forms the prime factors in influencing the consumers buying decisions. This paper seeks to evaluate the market industry in which Coca Cola operates and highlights the key factors that affects the market model and the company’s competitive advantage.

Coca Cola and Soft Drink Industry

Acknowledging that an assortment of impressive industrial advances has increasingly made global business easier and effective, together with the fact that efficient airline transportation have served to make the business world become gradually smaller, it is pertinent to note that such market forces have indeed had an influence on the way Coca Cola operates its business in the soft drink industry. Assessing the apparent competitive forces can aid a Coca Cola as a company in venturing out a position in its respective industry that is less susceptible to attack.  This is helpful in determining how structurally attractive an industry is and seeks to illuminate on Coca Cola’s relative position within the industry in question. It is vital to note that the ultimate profit potential of an industry is subject to the collective strength of the industry forces (Puravankara, 2007).  . Every industry has structural underpinnings in terms of a set of fundamental economic and technical characteristics that result in the competitive forces.

The soft drink industry is essentially made up of two primary manufacturing systems which distinctly are; the flavoring syrup and concentrate manufacturing and the soft drink manufacturing. The supply chain of this market model depends significantly on the syrup producer. The soft drinks business involves a life cycle that moves from syrup producers, to bottling, distribution, to merchants through to final consumers (Deichert et al., 2006). Generally, the industry in its entirety is confronted with challenges resulting from slumping economy as well as variations in consumer’s consumption patterns which lately are subject to an enhanced health consciousness among the public.

The US Flavoring and concentrate manufacturing sub-industry of the soft drink market is dominated by two major players who represent a 73% of the total US market. These players are Coca Cola Company, taking up 40%, and PepsiCo. represents a 33% of the market share. The remaining 27% of the soft drink industry is taken up by the smaller companies. The other sub-industry which is the Soft drink manufacturing is dominated by Coca Cola (28.6%), PepsiCo, Inc (26.8%) and Dr Pepper Snapple Group (806%). Other small companies represent the remaining 36% of the market share.

The flavoring Syrup and concentrate manufacturing industry generated a revenue of 1.4 billion dollars by 2010 and it is expected that the industry grows at a rate of 1.4% yearly, however, the industry is projected to increase with a 0.8 % by the year 2015. On the other hand, the Soft Drink Manufacturing Industry is valued at 47.2 billion US dollars in the United States in terms of revenue.  The annual growth of the industry was placed at 1.8 % between 2005 and 2010 while it is projected that the industry will maintain this growth rate in the period between 2010 and 2015. The products of the industry are generally referred to as soft drinks. However, the products can further be subdivided into six main product segments. These segments are; Carbonated Soft Drinks, Fruit beverages, bottled water, functional beverages, Sports drinks and others (Puravankara, 2007).  .

Coca Cola Company is a leading manufacturer, marketer and distributer of soft drinks concentrates and syrups. The company owns over 500 brands spread across all categories the soft drinks. With its headquarters in Atlanta, Georgia, the company sells its syrup and concentrates to a number of contracted independent bottlers which in turn produce, bottle and distribute the soft drinks final products. The North American business segment consists of the company’s operations in the United States, Canada, Puerto Rico, the Virgin Islands, and the Cayman islands. The segment operates three business units: sparkling beverages, still beverages, and emerging brands (Deichert et al., 2006). The North American business segment owns and operates nine still beverage production facilities, 10 principal beverage concentrate and syrup manufacturing plants, and four bottled water facilities; leases one bottled water facility; and owns a facility that manufactures juice concentrates.


General Pattern of Change of Soft Drink Market Model

The market model in the soft drink industry has undergone a number of significant changes over the past half decade. A major significant encounter in the industry has been the building pressure from government regulation as regards advertising directed towards children of 12 year of age and below. Although some companies still direct a portion of advertising to children, these companies have agreed to promote more healthful messages in their advertising. Regulation involves the imposing of certain requirements by the government on private firms and individuals in a bid to achieve set government’s purposes in the market (Deichert et al., 2006) .  Regulation seeks to allow the provision of cheaper goods and services, protection of existing companies and firms from unfair competition, provision of safer products and workplaces among others. Regulation falls into two broad categories namely; economic and social regulation. Social regulation involves the government’s lookout on the safety and quality of goods and products. In addition, social control deals with superintending the conditions under which the goods and services are manufactured.

The other noteworthy challenge fronting the soft drink industry is finding out a better way to address the public’s concerns over diet as well as the overall health and wellness. With a growing majority of the public concerned with these issues, there is a rising demand for products that address these needs and for marketing messages that convey the benefits of these products to consumers. All segments of the soft drink industry have been working to develop products to meet these needs and differentiate their brands from the competition.

Subsequently, the industry has been adopting new forms of media marketing and promotion employing the internet and social media platforms to reach out to consumers. Coca Cola has a dedicated website that has been designed with the target consumer audience in mind. The Coca Cola website provides to the consumers, additional information, promotions, and interactive opportunities (Puravankara, 2007).

Competitive Forces of Coca Cola Company

The soft drink industry has remained very competitive for all the companies involved. The greatest notable competition has been from rivalry exhibited by major sellers in the industry (Lima, 2006).  All these soft drink companies have to appreciate the effects of pressure from rival players, substitute products, new entrants to the market, buyers and suppliers. Coca Cola, Pepsi, and Cadbury Scheppes are the main competitors in the industry. All these major competitors are well established globally which translates into a great competition. Coca-Cola owns four of the top five soft drink brands (Coca-Cola, Diet Coke, Fanta, and Sprite). However, it had lower sales in 2005 than PepsiCo (Murray, 2006). Nonetheless, Coca-Cola has higher sales in the global market than its biggest competitor PepsiCo.

It should be noted that the brand name loyalty has proven to be another major competitive pressure. This has compelled the rival companies to create new varieties of soft drinks in a bid to improve sales while ensuring they capture the attention of new consumers. In the soft drink industry, new entrants are not a major competitive pressure. With the view that Coca Cola and Pepsi dominates the market both companies having strong brand names and exceptional distribution channels makes the threat of new entrants minimal. Additionally, the industry can be take to be saturated which means that market growth is small. Consequently, it has become challenging for new entrants to penetrate the market and leaves the competition between the two major players.

Oligopoly in the Soft Drink Industry

The Soft Drink industry is characterized with market oligopoly. Oligopoly is a market structure that is characterized by competition among small number of large firms having huge market power. In the soft drinks industry market structure Company’s derive their market powers from barriers to entry thus only a small number of firms compete with each other. The market has few interdependent firms that change their prices subject to changes by their competitors (Waddams, 2011). In addition, the market structure in oligopoly is characterized by similar products but differentiated by competing firms and imperfect knowledge on best price and availability. Firms resolve to use product differentiation in a bid to enhance their capacity to set prices (Corchon and Marcos, 2010), which leads to products of a firm becoming more inelastic.

Coca Cola Company has maintained the reputation being of one of competitive international soft drink company having expanded its market penetration to all the main geographical locations around the globe. This has earned the company a broad base portfolio and in turn ventured in offering a wide spectrum of soft drink beverages. With the current strong soft drink market in Asia, Coca Cola is aware that the region will in the near future account for more than a quarter of the worldwide soft drink consumption.


Trends from macro-environment are the major key factors in the market model changes in the soft drink industry. For a company to be successful, it has to be cognizant of consumer needs and wants while ensuring they maintain the ability to adopt following changes in the market model. The size of the company is also a key aspect when it comes to determining market share in the soft drink industry. Coca Cola, as a large distributor, has the ability to negotiate with school systems, universities and stadiums giving them the benefit of being exclusive suppliers for specified events and period of time. The established brand loyalty is a chief aspect in the soft drink market. Statistics have indicated that most consumers of carbonated soft beverages are extremely dedicated to Coca Cola brands without the opting to purchasing other varieties.

Differentiating Between Market Structures – Coca Cola

The soft drink industry has diverse players, including coca cola. Coca Cola is one of the leading soft drink producers globally. Over the years, Coca Cola has registered continued growth. Presently, it produces over 500 different products, which are distributed globally. It principal business rival is Pepsi (Besanko, Braeutigam & Gibbs, 2011). The industry has very few players dominating it. Most of the players trade in products that are rather homogeneous. In the market, Coca Cola seeks to grow into the leading branded beverages’ provider globally. The market is considerable oligopolistic in structure. Between themselves, Pepsi and Coca Cola control over nine tenths of the market. The other large player, especially in the US, is Cadbury-Schwepps (Doole & Lowe, 2008; Jennings, Sliger & Murphy, 2001).

Market Structure

Coca Cola operates in a market with an oligopolistic structure. The market is deemed oligopolistic since it comprises of a few companies competing against each other in an environment that is markedly competitive. The companies have marked influence over each other’s product pricing regimes (Doole & Lowe, 2008; Jennings, Sliger & Murphy, 2001). The market is defined by high entry barriers, or impediments. As well, it is defined by demand curves that are rather kinked as well as the proliferation of cartels. Characteristically, capital-intense firms are predisposed towards competing in oligopolistic markets (Layton, Robinson & Tucker, 2011).

Given that the market comprises of multiple players, product differentiation remains quite challenging. Coca Cola operates in a market that, unlike the markets with perfect competition structures, has its dynamics specially those relating to pricing, determined or shaped by only a few businesses (Besanko, Braeutigam & Gibbs, 2011). Oligopolistic types of markets exist for real unlike those with perfect competition structures. The latter largely exist in theory.

The resolution that the market within which Coca Cola operates has an oligopolistic structure is based on several factors. First, there are few companies competing in the market. The companies include Cadbury-Schwepps, Pepsi, and Coca Cola. The few companies in the market provide most of its required supplies (Layton, Robinson & Tucker, 2011). The decisions made by each of the companies markedly affect the decisions of its rivals. The productivity of each of the companies markedly affects the productivity of its rivals. As is typical of oligopolistic markets, the few largest companies in the soft drink industry dominate the soft drink market and industry in general according to Morschett, Schramm-Klein and Zentes (2010).

Second, as is typical of oligopolistic markets, Pepsi and Coca Cola, which dominate the market, are highly interdependent in some aspects according to Morschett, Schramm-Klein and Zentes (2010).  Particularly, the behaviors expressed by Pepsi are impacted upon by what its management perceive to be the actions and thinking of Coca Cola’s management. On the other hand, the behaviors expressed by Coca Cola are impacted upon by what its management perceive to be the actions and thinking of Pepsi’s management (Doole & Lowe, 2008; Jennings, Sliger & Murphy, 2001).

Third, as is typical of oligopolistic markets, Pepsi and Coca Cola compete in a market that is defined by considerable price stability and highly standardized goods (Trigg, Himmelweit & Simonetti, 2002). Fourth, the resolution that the market within which Coca Cola operates has an oligopolistic structure is based on the actuality that the market is characterized by non-pricing competitive approaches. As well, the market is characterized by limited sharing of information by the competing businesses (Layton, Robinson & Tucker, 2011).

Apart from the characteristic features of markets with oligopolistic structures explained above as regards the market in which Pepsi and Coca Cola operate, there are other typical attributes of such markets. Each of the dominant firms in oligopolistic markets has considerable market shares. Accordingly, the pricing regimes adopted by each of them have considerable effects on its rivals’ pricing regimes, hence profitability. Pepsi, like Coca Cola, has a considerable market share. Accordingly, Pepsi’s pricing regimes have considerable effects on Coca Cola’s pricing regimes, hence profitability (Besanko, Braeutigam & Gibbs, 2011).

On the other hand, Coca Cola’s Pepsi’s pricing regimes have considerable effects on Pepsi’s pricing regimes, hence profitability. When either Pepsi or Coca Cola is formulating an output or price-related decision, it reflects on the likely response of the other (Layton, Robinson & Tucker, 2011). That means that the two, like all firms operating in oligopolistic markets, are highly interdependent as regards such decisions. Owing to such interdependence, Coca Cola engages in market behaviors that are deemed strategic. A firm is said to express strategic conduct, or behavior, if its favorable outcomes are determined by its competitors’ actions (Doole & Lowe, 2008; Jennings, Sliger & Murphy, 2001).

The firms with operations in markets that are deemed as having oligopolistic structures engage in group behaviors that are strategic. The group behaviors are persuaded by the firms’ interdependence of price, as well as output, decisions. As noted earlier, any of the firm’s price, as well as output, decisions directly impact on the competition. Rather than developing independent strategies regarding pricing, as well as output, the firms commonly opt for consensuses among themselves, to ensure that the interests of them are appropriately safeguarded (Besanko, Braeutigam & Gibbs, 2011). In most markets with oligopolistic structures, rival businesses tend to conduct themselves as if they are just one business even as they remain keen on retaining their operational autonomy according to Morschett, Schramm-Klein and Zentes (2010).

Competitive Strategies

            As indicated earlier, Coca Cola operates in a market that is characterized by non-pricing competitive approaches (Layton, Robinson & Tucker, 2011). In such a market, the decisions made by one dominant business impact on its rivals significantly. As noted earlier, when either Pepsi or Coca Cola is formulating an output or price-related decision, it reflects on the likely response of the other. That means that the two, like all firms operating in oligopolistic markets, are highly interdependent as regards such decisions (Doole & Lowe, 2008; Jennings, Sliger & Murphy, 2001). That means that the two, like all other firms in markets defined by oligopolistic structures, are not favorably served by price-based competitive strategies. Coca Cola is best served by the adoption of competitive strategies that are not based on pricing.

Particularly, Coca Cola would be highly competitive and maximize its profitability by offering its clients ample credit facilities as its competitive approach. The facilities will help its clients purchase Coca Cola products and pay for them after making the attendant sales. The other strategy that can serve Coca Cola rather well is extending the opening hours of the warehouses holding its products. That will enable its clients replenish their Coca Cola stocks anytime of the day (Besanko, Braeutigam & Gibbs, 2011). Effectively, the extended opening hours will see the company make more sales than it is doing presently. The other strategy that can serve Coca Cola rather well is expanding its products’ branding scheme to increase their differentiation in the light of its rivals’ products.

These three competitive strategies will be effective in growing Coca Cola’s profitability. There are likely to be effective since they hold the potential for maximizing client response and enhancing market performance (Doole & Lowe, 2008; Jennings, Sliger & Murphy, 2001). As well, there is a marked likelihood that the three competitive strategies will be effective since Coca Cola is already highly competitive in the soft drink industry according to Morschett, Schramm-Klein and Zentes (2010).  In addition, there is a marked likelihood that the three competitive strategies will be effective since the pricing differences between the products manufactured by here is a marked likelihood that the three competitive strategies will be effective since Coca Cola and those of its rivals are insignificant (Besanko, Braeutigam & Gibbs, 2011). Coca Cola can only distinguish itself with respect to aspects like customer satisfaction, delivery time, and quality.


  1. Coca Cola should offer its clients, especially the wholesalers of its products, ample credit facilities to help them purchase its products and pay for them after making the attendant sales (Besanko, Braeutigam & Gibbs, 2011).
  2.  Coca Cola should extend the opening hours of the warehouses holding its products to make more sales than it is doing presently.
  3. Coca Cola should expand its product branding scheme to increase its products’ differentiation in the light of its rivals’ products.


Current Day Employee Relations Analysis, Discussion And Trends – Coca Cola And Pepsi

Employee Relations Analysis

Coca-Cola acknowledges the fact that each employees a unique talent to the company. As such, the company strives to ensure that it caters for the welfare of its employees. Employees of the company as brand ambassadors of the Coca-Cola. Therefore, Coca-Cola ensures that it employees are happy by treating them fairly. This is one of the major factors that resulted in the success of the company over the last decades. Coca-Cola encourages open communication with its employees. This is critical to the success of the company since it operates in a diverse market. The company strives to ensure that it inspires its employees to enable them have superior results. Encouraging open communication enables Coca-Cola to solicit and leverage innovative ideas from its employees. Employees played a critical role in the development of Coca-Cola’s mission, values, and objectives. Coca-Cola also has one of the best compensation packages available in the market currently.

The company offers its employees various developmental opportunities. These include the Coca-Cola university, which is a learning program to the high performing employees of the company. The company has a Peak Performance System that enables it to determine its high performing employees. This enables it to create an effective movement and succession plan in various parts of the globe. Pepsi also ensures that it treats its employees fairly. The company has various initiatives that help in improving the welfare of its employees. The company provides its employees with learning and developmental opportunities. This improves the employee motivation, which is critical in improving their productivity. This is one of the major factors that have helped in improving the competitiveness of the company over the last few decades (Shimp & Andrews, 2013).


Current Day Legislation Analysis, Discussion And Trends – Coca Cola And Pepsi

Legislation Analysis

Both Coca-Cola and Pepsi Cola operate in different markets. As such, they must adhere to the legislation of the different jurisdictions. Increase in the minimum wage may have a significant impact on the operations of the companies. Coca-Cola has faced various legal issues in the past. In the 1970s, Coca-Cola refused to provide Indian regulators with its formula. This forced the company to stop selling its product in India for 16 years. Various EU member countries also banned the selling of Coca-Cola due to the poisoning of more than 90 children in Belgium. The children were poisoned due to the use of wrong carbon dioxide in Coca-Cola. The carbon dioxide contained toxins such as lindane and malathion, which led to breakdown of the immune system of the children. Poisoning due to intake of Coca-Cola in India also led to the ban of Coca-Cola and other soft drinks.

The U.S. has also banned the selling of Coca-Cola in schools due to health concerns. In fact, increasing health awareness has led to a reduction in the sale of Coca-Cola and Pepsi Cola. It has led to the increase in the sale of conventional soft drinks such as tea. Pepsi Cola also operates in a highly structured legal environment. This necessitates the company to ensure that its operations do not violate the laws of the markets it operates in. The company has previously been banned in various regions due to violation of environmental laws of the country. Both Coca-Cola and Pepsi Cola must ensure that they fulfill various legal requirements prior to setting up their operations in various parts of the globe. Fulfilling the legal requirements is usually a lengthy process, which may take weeks in some countries (Smith, 2010).

Current Day Compensation Analysis, Discussion And Trends – Coca Cola And Pepsi

Compensation Analysis

Human resource is one of the most vital capitals of any company. As such, companies strive to ensure that they offer their employees favorable compensation packages. Coca-Cola offers its CEO and Chairman of the Board, Muhtar Kent, one of the highest compensations packages in the U.S. The company offers Kent more than $18 million in salary, bonuses, and stock options. Other senior executives of the company receive a much less salary. Coca-Cola’s high compensation of its senior executives has made the company be criticized by various parties. This is due to the fact that the high compensation is detrimental to the wishes of shareholders. The high compensation has resulted in a transfer of wealth from shareholders to the executives of the company. In 2014, Coca-Cola planned to reward its directors billions of dollars worth of stock.

Despite the fact that Pepsi Cola is a much smaller company than Coca-Cola, it has twice as many employees as Coca-Cola. The company offers its CEO and chairman of the board of directors, Indra K. Nooyi, more than $19 million in salary, bonuses, and stock options. Other senior executives of the company receive less than half the compensation package of the CEO. One of the major weaknesses of Pepsi Cola is failure to focus on the value of its employees. The company says very little about how it treats its employees. It also offers little information on the expectations and responsibilities it has towards the employees. Despite the fact that the company has programs that ensure that its employees take part in various school programs and scholarships, it directs very little effort towards them. Pepsi leaves its employees out of its grand scheme of things. It considers them as a means towards an end. Limited focus on employees may be detrimental to long run competitiveness of the company (Shimp & Andrews, 2013).