Wait a second!
More handpicked essays just for you.
More handpicked essays just for you.
Coca cola business activities
Coca-cola executive summary and introduction
Research objectives about coca cola
Don’t take our word for it - see why 10 million students trust us with their essay needs.
Recommended: Coca cola business activities
Coca Cola uses currency derivatives to conduct their business internationally. According to excerpts taken from the company’s KO “The purpose of our foreign currency hedging activities is to reduce the risk that our eventual U.S. dollar net cash inflows resulting from sales outside the United States will be adversely affected by changes in foreign currency exchange rates”. The currency derivative that is used by Coca Cola is forward exchange contracts. Coca Cola purchases currency options collars to hedge certain portions of forecasted cash flows denominated in foreign currencies as well as to offset the earnings impact relating to exchange rate fluctuations on certain monetary assets and liabilities. The company uses forward exchange contracts to hedge its net investment position in certain major currencies and international operations. The major operating currencies include the Brazilian real, Mexican peso, Australian dollar, South African rand, British pound, Euro and Japanese Yen.
The international operations of Coca Cola are subject to certain opportunities and risks, including currency fluctuations and governmental actions. As a result the company closely monitors their operations in each country and seeks to adopt appropriate strategies that are responsive to changing economic and political environments, as well as fluctuations in foreign currencies. The Company estimates the fair value of its foreign currency derivatives based on quoted market prices or pricing models using current market rates. A portion of the changes in fair value for these contracts have been designated as cash flow hedges. The company manages most of their foreign currency exposures on a consolidated basis, which allows them to net certain ex...
... middle of paper ...
...s to contribute vastly by not only operating their business in the country but they also take on tasks and sponsorships such as the Russian Winter Olympics, contributing to the countries health in terms of positioning their products and altering their product to suit the needs and health of the consumers by producing beverages with less caffeine, healthy teas made from fruits from the country among other things that can be seen in their investment into the China emerging market. Though Russia’s economic level depends less on Coca Cola there are other countries that benefit greatly through Coca Cola’s investments. The beverage industry is a major driver of economic growth in India. The company has provided employment for thousands of people in each of the countries especially in India and this contributes to the economy of the by lowering the rate of unemployment.
Saputo has production plants in Canada, America, Argentina and Australia, and many of their products are sold on the international market. Due to the fact that products are sold internationally, exchange rates affect the end price of products in different countries. For example, many of the raw materials used in the Argentine plants, such as milk, is imported from Canada. Therefore, the exchange rate between Canada and Argentina affects the cost of raw materials for the Argentina plant. If the Canadian dollar appreciates against the Argentine peso, the cost of raw materials will increase for the production plant, and vice versa.
Coca Cola is more interested in penetrating all markets and is willing to invest heavily in areas that will support distribution to emerging markets like South Africa. Coca Cola does this by establishing bottling plants as close to their consumers as possible. This puts the production and distribution (and jobs) directly in the hands of the local territories; this allows communities to be invested in the success and distribution of Coca Cola. As an example; in South Africa they have the first all-Black managed bottling plant which has won Coca Cola a tremendous amount of respect and continues to perpetuate brand loyalty in that region. This Model has allowed Coca Cola to expand to 56 countries with 160 plants alone on the African
The pharmaceutical industry is relatively immune from the effects of economic cycles. Demand for the industry's product remains constant in up and down economic cycles as market demand is a function of the overall health of the population. However the globalization of the pharmaceutical industry increases the risk associated with foreign investments and exchange rates. The firms in this industry seek to minimize risks by using hedging practices such as foreign currency forward-exchange contracts, borrowing in foreign markets, and using currency swaps.
One of the Coca-Cola Company’s strongest strengths lies in its ability to conduct business on a global scale while maintaining a local approach, one of the most intelligent strategies thought up by the human resource department of Coca-Cola.
Directly, the organization has just achieved six billion shoppers in almost two hundred nations. Coca-Cola Organization has been exceptionally fruitful in global advertising exertion. Forceful promoting, marketing and market division has had an important influence in the achievement. It has depicted itself as fun, liveliness, opportunity, way of life and the worldwide interest of Coca-Cola was symbolized by a 1971 business, where a gathering of youngsters from everywhere throughout the world to a ridge in Italy to sing Sick jump at the chance to purchase the world a Coke. The organization has been supporting huge occasions, similar to the Olympics, Ocean Recreations, FIFA Container, Worldwide Film Celebrations everywhere throughout the world to make mindfulness, validity and to marks itself as world-class organization (Coca-Cola 1).
Coca cola has always dominated the markets outside United States unlike Pepsi’s internationalization strategy that took too long. Therefore, the long-term brand of Coca cola and better pricing strategies would help in competing with Pepsi. Unlike, Pepsi, Coca cola had targeted entering into partnership and alliances with local distributors and firms. This helps to develop strong relationship within the domestic firms to reduce the domestic barriers and thus, enhance the company’s competitiveness (Thabet, 2015). Lastly, the Asian markets consist of related and supporting industries to the soft drink industry that helps the companies in gaining a strong competitive position in the markets. Based on the competitive advantage of nation’s model, Coca cola has more home based advantages to develop a competitive advantage in relation to other countries on a global
When considering the currency exposure that would need to be managed by Roraima, three aspects must be considered. Transaction exposure, translation exposure and economic exposure. Transaction exposure would be when dealings would be “affected by fluctuations in foreign exchange rate values” (306). Translation exposure would occur when these exchange rate differences show up differently on the financial statements. And lastly, the economic exposure refers to a situation in which the projected “earning power is affected by changes in exchange rates” (307). Economic exposure is the concept that best reflects the overall process of managing foreign exchange risk because it deals with the long-term effects of a global strategy and earning power. The firm would have to be alert to changes in exchange rates enabling them to project their costs and
This includes according to Coca Cola’s annual report, PET resin, preforms and bottles, glass and aluminum bottles, aluminum and steel cans, plastic closures, aseptic fiber packaging, labels, cartons; cases, post-mix packaging, and carbon dioxide. (Kent & Waller, 2016). Fixed cost are costs that remain constant regardless of production output. Some examples of fixed cost that Coca Cola incur includes rent expenses for their bottling plants, salary for thousands of employees, the cost to upkeep their plants and equipment, insurance, and advertising expenses. Advertising is a big production cost for Coca Cola that does not change when output changes this is because companies will continue advertising their products whether output is low or high. The cost of advertising includes magazines ads, billboard signs, celebrity endorsements, and
Coca Colas astute marketing strategies has played a huge role in its global expansion. By using popular slogans paired with catchy jingles. Coca-Cola has ingrained into individuals hearts becoming a household name globally. Coca Cola has successfully expanded to over 50 countries. Becoming a master in cultural adaptability customizing packaging and advertising to each individual market. Creating a connection between the consumer and their products. Coca Cola doesn’t sell a beverage, they sell an experience, a memory to each consumer around the world. Coca Cola takes advantage of social trends and media, expanding their consumer reach faster than ever. Through that same social media, Coca Cola has created its own social culture type trends, that allows people in different parts of the world to come together allowing them to feel a part of unique exclusive group open to all worldwide. This increasing the company’s popularity. Along wiith its massive success, Coca Cola maintains a high standard for their products with quality
Other types of exchange rate risks are translation risk and so-called hidden risk. The translation risk relates to cases where large multinational companies have subsidiaries in other countries. On the financial statement of the whole group, the company may have to translate the assets and liabilities from foreign accounts into the group statement. The translation will involve foreign exchange exposure. The term hidden risk evolves around the fact that all companies are subject to exchange rate risks, even if they don’t do business with companies using other currencies. A company that is buying supplies from a local manufacturer might be affected of fluctuating foreign exchange rates if the local manufacturer is doing business with overseas companies. If a manufacturer goes out of business, or experience heavy losses, it will affect all the companies it does business with. The co...
As the world 's largest manufacturer and distributor of non-alcoholic beverages, Coca-Cola is certainly no stranger to global marketing. Established in the US, Coca-Cola initiated its global expansion in 1919 and now markets to more than 200 countries worldwide. It is one of the most recognizable brands on the planet and also owns a large portfolio of other soft drink brands including Schweppes, Oasis, 5 alive, Kea Oar, Fanta, Lilt, Dr Pepper, Sprite and PowerAde. Despite this, Coca-Cola often struggles to maintain its market share over its main rival PepsiCo in some overseas markets, particularly Asian countries.
Coke Facts The Coca Cola Company Coca Cola India: Key Facts - Coca Cola Business, website: http://www.cokefacts.com/facts/facts_in_keyfacts.shtml
This proven track record for the company can be attributed to a number of factors, the first which is relatively crucial is the company's secret formula for Coca-Cola, which comparably tastes better than what competition has to offer in the market. The company's ability to come up with new products while at the same time reinventing the old products has offered them a competitive edge over their peers. The company boasts of having the world's most diverse and comprehensive distribution networks, this offers them accessibility to billions of people in areas that would prove rather difficult for their peers to distribute their products. The African continent has been cited as an excellent example, it is more often than not to see a distribution outlet for coke on a remote location on the continent
The foreign exchange market is one of important mechanism in the international business because foreign exchange is an intermediary for all nations in term of the growth of the economy. There are many functions of foreign exchange market in the global economy. In the international business, it uses the foreign exchange markets in four ways. First, the pay...
Development in the political arena would have been handled well if Coke would have evaded having to sell 49% of its equity by approving to start new bottling plants. The timing of entry into the Indian markets brought In terms of promotional activities, the advertising and giving away of free offers and vacations by Coca cola and Basmati rice by Pepsi, the coca cola’s goal in connecting the youth to the market, the different promotional TV campaigns in India using of celebrities, and the Pepsi sponsorship of cricket and soccer sports. In terms of pricing policies, Pepsi got a quicker market share by their belligerent pricing policies and coca cola’s 15-25% price cut down in the market. In terms of distribution arrangement, the bottling and packaging of products for better distribution around Also, to save and recycle the usage of water.