2 - Wealth creation by Coca-Cola—a strategic perspective

Abstract

Coca-Cola Company is the world’s largest beverage company. Coca-Cola is one of the most valuable and recognizable brands in the world. The company’s portfolio features 20 billion dollar brands. Coca-Cola has the largest beverage distribution system in the world serving consumers in more than 200 countries. Coca-Cola offers beverages at a rate of 1.9 billon servings a day. The Company envisages its 2020 Vision document as a roadmap for doubling revenues in the decade with the focus on key areas of profit, people, portfolio, and partners. Coca had focused on its marketing efforts as a part of advertising strategies. The Bottling Investments Group (BIG) is the central part of the Coca-Cola System. Coca-Cola company business strategy focuses on building its existing brands and broadening of is family of brands, products and services. The core capabilities of Coca-Cola are consumer marketing, commercial leadership, franchise leadership, bottling, and distribution operations. In 2012, Coca-Cola introduced four-year productivity and reinvestment program to strengthen the brands and reinvest the resources to drive long-term profitable growth. Based on responsible marketing policy, Coca-Cola do not buy advertising placements that target children defined as audiences with 35% or more of viewers under the age of 12. In terms of charitable contributions, 28% of funds were allotted to Water Stewardship, 26% to health initiatives and 23% to education in year 2014. The Coca-Cola Company uses Golden Triangle partnership for stakeholder engagement with focus on public, private, and civil sectors. Sixty-two percent of the net operating revenues in 2014 were attributed to finished product operations and 38% were attributed to concentrate product operations. By 2015, Coca-Cola had its 53rd consecutive annual increase in dividends. During the period 1984–2014, Coca-Cola had purchased 3.2 billion shares of the company at an average price per share of $14.66. Coca-Cola enters into foreign exchange contracts to hedge net investments in international operations. The average growth rate of revenues was approximately 9% during the period 2005–2010.