My professor just graded the attached document, but this is what he said is missing. Would you please help me with it?
Make sure the company's name is noted down consistently throughout the text.
. Make sure all tables and graphs are sandwiched between texts.
. Show revenue shares of CC and its competitors on a pie chart, and comment on the market type based on that information.
Running head: COCA COLA 1 Coca Cola
Institutional Affiliation COCA COLA
Coca cola has been on the drive to increase its revenues through strategic pricing and putting
more money in the advertising department and promotions. Pepsi is one of the greatest
competitor for coca cola. The types of costs associated with the production of coca cola are; Fixed costs; these do not vary with the type and amount of service that has been provided
in the short run. Variable costs; these type of costs change with the amount of service that is provided Average cost; this is the cost that is incurred in a single platform per hour. Marginal cost; this is the change in the total cost for each unit of output that is produced
(Cadle et al., 2014). Coca cola company experiences mixed costs that are attributed to marketing expenditure. These
costs contain both the variable and fixed portions. Changes that occur in the production process
or during the sale process affect the mixed cost but not at a proportionate rate. In addition to the
marketing expenditure, telephone and electricity bills (Cadle et al., 2014). These mixed costs
account for represent the minimum and or the basic cost of having the service for use by the
company. According to Coca cola, the fixed costs arises from the monthly expenses and the costs
incurred. The estimations of the fixed costs incurred by company amounted to $15 million. The
cost of goods sold by Coca cola amounts to an estimate of $2 billion where the total allocable
cost being 10% of the good that are accounted for in the cost of sales. The relevant activities in
the company such as the current cost of workers, salaries and wages that are within the bottling
department have an estimated annual cost of $130 million. In addition to the relevant costs, the COCA COLA
cost of direct materials in making the bottles such as the glasses, the chemicals used and the
water was estimated to be $63 million. The remaining irrelevant costs such as lighting and minor
utilities were $120,000 (Young, 2015). The relevant costs are main basis of decision making in
the company. These are the main determining factor of whether some operations of the company
will be carried on. Although irrelevant costs may be committed to the business, they may not be
reflected or allocated in some departments. From the above table, the results are the income statement of Coca Cola Company. The SG&A of
Coca Cola is the same as the cost of sales due to the amount of money that has been invested on
advertising. In assessing the profitability ratios of the company, the profit margin of the company
shows how much money the company generates in profit for every dollar in its revenue. This
shows how the revenues can be evenly distributed over the expenses that have been incurred in
the fiscal year of the company. The profit margin for Coca- cola is reasonable since it ranges
from 15-18%, this amount gives them enough money for re-investment and distribution to the
required shareholders. The profit margin of the company has been reducing over the years COCA COLA
between 2012- 2013 (Young, 2015). This has been explained by factors such as the various
amount of business that coca cola has in countries abroad. The reduced profit margin have
resulted in major write down and loses that are associated with foreign exchange. SECTION V
The return on assets for the company has been unstable over the years. The assets that have been
made by coca cola entail the cash and marketable securities and long term tangible assets.
Although the return on assets has been declining over the past years, coke has shown a good
return on the assets that?s showing a good profitability for the company.
Coca cola is among the world?s largest preferred brand with a variety of soft drinks. It mainly
focuses on targeting the value based advertising which allows for price discounts and its
allowances to its distributors and retailers. It adopts both the push and pull strategy in its
marketing analysis. Its main strategy focuses on listening to the voices that around and that are
asking for beverage. It is also aimed at contributing in the communication around the globe COCA COLA
through creating a sense of wellness and an educative platform. Its major segmentation are the
demographic segmentation which accounts for the greatest percentage of the company?s
product, behavioral segmentation and health wise segmentation are included in the market
In addition to market segmentation, Coca cola adopts both mass marketing and targeted
marketing. Every customer is taken as a target customer by the company. This takes into
consideration the age of individuals and the health status of individuals. The health status has
triggered the production of diet coke which ensures that it meets the need of individual with
diabetes. In addition the PEST analysis is considered in the marketing strategies of the company
(Young, 2015). This analyses focus on the political, economic, social and technological factors
that influence the strategy adopted by the company in the environment that it operates in. when it
comes to the analyses of the political factors, the non-alcoholic beverages are controlled by a
certain body. Thus the different government systems that enforce and enact the law affect the
production of components by the company. Economic factors take into consideration the interest
rates, inflation rates and the exchange rates. Exchange rates are attractive to companies for
instance coca cola, this encourages them to borrow more money for investment.
Coca cola exists in a perfectly competitive market, this affects the demand of the products. For
this reason, the increase or decrease in the price of the Coca cola products affects the demand of
the product by the consumers. There exists barriers and limitations for such a type of market
structure. Many companies that are in the soft drink business invest more in their advertising.
Thus there exist a threat by new entrants in the market, due to the customer loyalty created by the
competing brand which is Pepsi, it makes it hard for the coca cola company to keep up, thus COCA COLA
there must exist product differentiation so as to ensure that it maintains and attract more
customers in the market.
The threat of substitutes is another barrier in the market structure that Coca cola operates in.
Pepsi provides almost the same product as Coca cola does. These two companies act as rivalries
and each company is on a mission to increase both the revenues and the profitability. Apart from
the rivalry firm, there exists substitutes such as smoothies, milkshakes, water and coffee.
Switching costs by coca cola may make it difficult for them to increase their profitability through
alterations of the prices.
The global beverage industry is highly regulated and entails various instabilities. This is due to
the changes and the existing uncertainties in both the political and economic environment. The
PEST pose a very great threat in the beverage industries. There is stiff competition in the
beverage industry, companies that have not embraced diversity remain vulnerable to barriers
such as rivalry, the suppliers and buyers power. Despite coca cola being a diversified company,
product substitution and the new entrants pose a great threat to the company.
Coca Cola being one of the largest global company with a great market share, has a market
capitalization of about $120 billion which is beyond the average beverage industry of $75
billion. In addition, the market capitalization is above Pepsi which is $98 billion. The better
competitive edge is attributed to the strong global presence that it possess, strong capital and
asset base, wide and distribution channels that are reliable and the global brand recognition over
its competitors. COCA COLA
The leadership and management structure of coca cola have been initiated by the internal
changes that have occurred in the company. The company needs to continue promoting its
historical trend that has been created over the years through motivation, innovation and training
and development in the company. Further, introduction, revision and the implementation of
effective marketing strategies, faster decision making techniques and effective asset utilization
should be highly considered and evaluated so as to ensure the company continues being the
number one brand in the beverage industry. If not so, coca cola may page way and leave the
battle to its competitors. References
Cadle, J., Eva, M., Hindle, K., Paul, D., Rollason, C., & Turner, P. et al. (2014). Business
Analysis (1st ed.). Swindon: BCS Learning & Development Limited.
Team, T. (2015). Forbes Welcome. Forbes.com. Retrieved 27 November 2016, from
Young, S. (2015). Financial Analysis of the Coca Cola company. UKEssays. Retrieved 27
November 2016, from https://www.ukessays.com/essays/business/financial-analysis-of-the-cocacola-company-business-essay.php
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