*The Coca Cola system is one of the most diverse organisations on earth employing many people from all over the world. Our policy is to foster an inclusive environment that encourages employees to work to their full potential.
*Our workplace must be a place where everyones ideas and values are gathered. Our employees deserve equal treatment in health and safety, conpensation and other aspects of the working place.
*We seek to strengthen communities through our education sceme. Education because of its power to expand opportunities for individuals and to increase understanding between cultures.
Coca Cola is obviously driven by it's shareholders to make big profits and alot of there beliefs in some way or another eventually come back as profit. For instance caring for the environment will increase its public image so more people may buy Cola if they value the environment. In contrast an organisation who doesn't care for the environment may get bad publicity and some people may refuse to buy that product or service.
In the early 20th century alot of companies, infact most if not all would of created a system to reach maximium production and not have spared a thought to the employees, community or environment. There is far greater emphasise on developing people and skills and other sentimental values such as the environment and equality.
Quality is another point which so much focus is on these days, quality means what we can expect. If peoples expectation out weigh the product they have been given they may well never buy that product again. In contract if the product out weighs there expectation you can expect people to return again and again.
MAKING A PROFIT
The main objective of a business is usually to make a profit. This is because without a profit the business is resistricted to what It can/wants or in the worse cases die because of heavy debts which cannot be paid off. Without high profits a large business with shareholders will not be happy and confidence will be lowered, it cannot improve its technology to improve quality or quicker and more efficient production ect.
Of course if a company makes a loss in the short term it can get a loan but this can be very risky, if not done properly it may find itself in even greater debt also banks look at your profit potential carefully before giving it out.
Here are Coca Colas profits and gains in 2002.All profits are in Millions $.
Year ended December 31. 2001 2002 % change
Net operating revenues: $ 19,564 $ 17,545 12
Operating income $ 5,458 $ 5,352 2
Net income $ 3,050 $ 3,969 23
Net income per share $ 1.23 1 $ 1.60 2 23
Dividends paid $ $1,987 $1,791 11
Unit case Sales (in Billions $)
International operations $13.1 $12.5 5
North America operations $5.6 $5.3 6
Worldwide $18.7 $17.8 5
As we can see there profits are exremely healthy and in most areas we have a % increase in profits, this is a sign of a successful business.
The Coca-Cola Company in 2002 achieved worldwide unit case volume growth of 5 percent, nearly 950 million incremental unit cases. Excluding volume associated with the brands acquired during 2002, their growth rate was 4.5 percent. Cash from operations was a record $4.7 billion, a 15 percent increase over 2001. After investing activities, they generated $3.6 billion of cash flow in 2002, a 22 percent increase. Reported earnings per share were $1.23 after a reduction of $0.54 resulting from accounting changes and several other items, including $0.11 per share impact from stock option expense. Throughout the year, they outpaced the rest of the industry in each of the major beverage categories in nearly every key global market. There results this past year were very encouraging, and were achieved in spite of a challenging global economic and political environment. However, one of the hallmarks of The Coca-Cola Company throughout its 117-year history is the belief that they can never be satisfied with there performance, and that they must always aspire to what we have yet to achieve.
In North America there focus was on innovation in 2002 produced the strongest unit case volume growth in more than three years: an increase of 6 percent versus 2 percent in 2001. The significant improvement in performance was led by excellent growth in brand Coca-Cola products and driven by a series of major product initiatives, including the highly successful launch of Vanilla Coke and diet Vanilla Coke in the same year, and the relaunch of Cherry Coke and diet Cherry Coke. Strong growth from Fanta also contributed to the solid performance. While Dasani continued its impressive performance as the fastest-growing packaged water in the industry ever, they also expanded their water offerings with strategic transactions involving Groupe Danone’s water brands, including Evian. By executing there strategy of innovation through multiple distribution channels, they were able to achieved record volume and share of sales results for Minute Maid brands in North America. Growth in chilled juices was led by the expansion of Simply Orange not-from-concentrate orange juice, while the bottler-produced Minute Maid Refreshments line solidified its leadership in the rapidly growing and profitable juice-drink category. They built upon our leadership within the food service and hospitality segment by providing innovative products and service solutions that address specific customer needs. The result was a pace of fountain volume growth in excess of industry traffic. Through events and promotions ranging from the Olympic Games to American Idol to Harry Potter they managed to strengthened connections between brands and the consumers. And, in the Coca-Cola tradition of supporting the communities they continued to emphasis on positive youth development with continued support of the Coca-Cola Scholars Foundation, Camp Coca-Cola, Reading Is Fundamental and a new physical activity program for youth, called “Step With It!”
In South America a strong platform for future competitiveness is taking shape throughout that area. In shrinking markets where there were significant declines in volume, such as Argentina, they increased the share of the nonalcoholic ready-to-drink beverages category by being sensitive and responsive to reduced consumer buying power. In the North Andean region (Peru, Bolivia and Ecuador), they ended 2002 significantly stronger, with volume growth up 7 percent. In spite of economic volatility in Brazil, the volume increased 3 percent in 2002.
To realise opportunities for growth in 2001, the company focused on (aims and objectives from last year)
1) profitable diversification and expansion of there range products while advancing there core brands (success)
2) improving working relationships with their bottling partners around the world (success)
3) building an integrated team operating with heightened focus on corporate governance and financial transparency. (success)
I can therefore report and suggest good progress in all three areas.
MARKET SHARE / SALES
Businesses with a large share of the market (most sales) are best positioned to benefit from the cost savings that follow from producing on a larger scale. An example is someone whos baking 100 cakes using an equal amount of gas/elecricity as when you can produce 50. A large company can mass produce items or a product for 24 hours, the larger company will be best placed to buy products at a discounted price and so be able to spend more on advertising and so on.
All big companies will fight for a % in market share and it's a dream to be the market leaders. Market share is vital for profit and they will fight it all out for supremacy. And if/when they succeed they will tell the entire world to gain even more. Market leaders are quite easy to spot, once they have a big slice of the market they will pump money into advertising and investment and other improvements. And obvious market leader is Mac Donalds.Another example of a market leader is Coca Cola who I have chosen to study. Coca Cola are said to hold 43.2% (net income $ 3,969,000,000 ) of the "non alcoholic" beverages market (2002) and have ruled it with an iron fist. This is a massive increase from 29.3% recorded in 1995.
Coca Cola is so dominant that 94% of the world's population and is the most widely recognized word after "OK".
It is common sense to suggest that market share is closely linked with profit, larger profit shares means more income. This theory is also called PIMS (Profit impact of marketing strategies) which was thought of by an American businessman in 1961.
The Boston Consulancy group have provided a graph to show how the 'experience curve' works, the leading market shares will get lower costs because they will be supplied in a larger bulk saving more and more. The cost of producing each unit will fall as the total output increases. This will also gain efficency as you gain more experience and can spot faults easier. Coca Cola are no stranger to experience, nearly 10,450 soft drinks from The Coca-Cola Company consumed every second of every day. If all the Coca-Cola ever produced were in regular sized bottles, there would be over 4 trillion bottles, this shows the monumental size of the company and it's massive share in the market today.
Greater experience is a blessing which stems from a few factors:
* Doing things on a larger scale rather than small.
*Getting rid of less efficient methods of production
Relative market share of a company = market share of company
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Nearest competitors market share
OFFERING CHARITABLE OR NON PROFIT SERVICE
There are many organisations in this company who fall into this catagory. They are generally called Not For Profit companies. There objectives and aims differ significantly to For Profit companies. These companies may measure their success in providing aid and assistance in war torn countries, accomadation might be measured by shelters. Of course these companies would need to operate like any other business.
Although Coca Cola are not a Charity they do provide assistance and donations.
In June 2001 they announced a 3 year contract with UNAIDS to prevent and fight HIV/AIDs all over the African continent. Since then a range of Coca Cola resources have been sent to ultilise in the fight against AIDs.
PRODUCING HIGH QUALITY PRODUCTS
High quality means producing a good or service to a customer requirments. It does not neccessarily mean "most expensive".