October 9th, 2012
Coca-Cola has been a firm that has catered toward the needs of its consumers. It has been around since 1886 and has adapted to the changing market since then. Coca-Cola has noticed the change in business due to the expanding global market. They have encountered the change in consumer preferences, the recent economic recession, and the emerging markets being a prime contributor to future growth. They have adapted to these changes through investments, the hiring and selection of certain employees, and strategic tactics which promote economic profits for the firm. The firm also understands the environmental impact that their product may have and have taken steps to alleviate the problems that may arise. Coca-Cola has a business plan for the next years eight years until 2020 promoting strong efforts in the emerging and developing countries where a giant population is located. Economic Trends
It is common knowledge that a majority of the future market untapped by businesses is the emerging markets in Asia. Morningstar's analyst Ken Perkins notes that there will be a large growth in the beverage industry located primarily in Asia. (Borzykowski,2012,p.37) This is a major reason why Coca-Cola has begun to develop and promote their products in global market, due to the fast number of untapped customers in these areas. In 2011 Coca-Cola released a statement indicating their corporate goals over the next ten years. Muhtar Kent, Coca-Cola's CEO, released a statement in 2011 stating that Coca-Cola believes there new business plan will deliver between 800 million and a billion new customers by 2020, with 60% of that new wealth coming from emerging markets. (Choueke, 2011)
Since the economics of the world have become global Coca-Cola has begun making advances inside these emerging markets. In the past few years Coca-Cola has begun investing large sums of cash into these markets in terms of advertising and property and equipment. In 2011 the firm announced that it will invest over $62 million dollars into Kenya, including investment in refurbishing equipment along with advertising expenses and reinforcing the juice market. (Kamau, 2011) The company is not just catered towards the market in Africa but have also invested large amounts of cash into China and India, where one-third of the world's population is located which represents a giant market share. In 2012, Coca-Cola announced that it will be investing $5 billion into India, along with investing $3 billion into China over the next eight years. Coca-Cola had originally stated that it would be investing only $2 billion into India but changed its mind due to lowering of its GDP. (Borzykowski, 2012, p.38) The change in investment shows that Coca-Cola understands the importance of this market as other rival competitors have also invested large sums into the market such as Pepsi investing 2$ billion into it. (Pepsi SWOT Analysis, 2012, p.6) These countries are beginning to develop and in order to help these countries develop Coca-Cola has also invested into the local communities of these countries. Strategies
Recently in Africa, Coca-Cola has begun to help the African's eastern providence by contributing cash to their juice manufacturing sector located inside the country. Coca-Cola notices the philanthropist activates of Bill and Melinda Gates inside the country and created an $11 million partnership with the philanthropists.(Kamau,2011) This allows the country to gain access into Coca-Cola's supply chain by granting more than 35,000 mangos and fruit farmers the opportunity to grow and increase yield on their farms. This partnership with the local's of Kenya also help's to show that Coca-Cola takes a proactive interest in their stakeholders and also the environmental impact their product has on its stakeholders.
As the world becomes more reliable on fresh water and renewable resources, Coca-Cola...
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