coca cola case study analysis

Coca-cola target audience , geographical segmentation , coca-cola marketing channels, coca-cola marketing strategy , coca-cola marketing strategy 2024: a case study.

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Coca-cola has colossal brand recognition as it targets every customer in the market. Its perfect marketing segmentation is a major reason behind its success.

Firstly, the company targets young people between 10 and 35. They use celebrities in their advertisements to attract them and arrange campaigns in universities, schools, and colleges.
They also target middle-aged and older adults who are diet conscious or diabetic by offering diet coke.

Income and Family Size

It introduces packaging and sizes priced at various levels to increase affordability and target students, middle class, and low-income families and individuals.

Coca-Cola sells its products globally and targets different cultures, customs, and climates. For instance, in America, it is liked by older people too. So, the company targets different segments. It also varies the change accordingly, like the Asian version is sweeter than other countries.

Coca-Cola targets individuals as per their gender. For example, Coca-Cola light is preferred by females, while coke zero and thumbs up are men's favorite due to their strong taste.

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Coca-Cola initially employed an undifferentiated targeting strategy. In recent times, it has started localizing its products for better acceptability. It incorporates two basic marketing channels : Personal and Non-personal.

Personal channels include direct communication with the audience. Non-personal marketing channels include both online and offline media, such as

Promotion Campaigns
PR activities

Social Media

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A uniquely formulated Coca Cola marketing strategy is behind the company's international reach and widespread popularity. The strategy can be broken down into the following:

Product strategy

Coca-cola has approximately 500 products. Its soft drinks are offered globally, and its product strategy includes a marketing mix. Its beverages like Coca-Cola, Minute Maid, Diet Coke, Light, Coca-Cola Life, Coca-Cola Zero, Sprite Fanta, and more are sold in various sizes and packaging. They contribute a significant share and generate enormous profits.

Coca-Cola Products

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Pricing Strategy

Coca-Cola's price remained fixed for approximately 73 years at five cents. The company had to make its pricing strategy flexible with the increased competition with competitors like Pepsi. It doesn't drop its price significantly, nor does it increase the price unreasonably, as this would lead to consumers doubting the product quality and switching to the alternative.

Place Strategy

Coca-cola has a vast distribution network. It has six operating regions: North America, Latin America, Africa, Europe, the Pacific, and Eurasia. The company's bottling partners manufacture, package, and ship to the agents. The agents then transport the products by road to the stockist, then to distributors, to retailers, and finally to the customer. Coca-Cola also has an extensive reverse supply chain network to collect leftover glass bottles for reuse. Thus, saving costs and resources.

Coca-Cola’s Global Marketing

Promotion Strategy

Coca-Cola employs different promotional and marketing strategies to survive the intense competition in the market. It spends up to $4 million annually to promote its brand , utilizing both traditional and international mediums for advertisements.

Classic Bottle, Font, and Logo

Coca-Cola organized a global contest to design the bottle. The contest winner used the cocoa pod's design, and the company used the same for promoting its shape and logo. Its logo, written in Spencerian script, differentiates it from its competitors. The way Coca-cola uses its logo in its marketing strategy ensures its imprint on consumers' minds.

Coca-Cola’s Gripping Advertisements

Localized Positioning

The recent 'Share a coke' campaign, launched in 2018 in almost fifty countries, has been quite a success. The images of celebrities of that region and messages according to the local language and culture of the area target the local market.

Coca-Cola Advertisement Featuring Celebrities

Sponsorships

The company is a well-recognized brand for its sponsorships, including American Idol, the NASCAR, Olympic Games, and many more. Since the 1928 Olympic Games, Coca-Cola has partnered on each event, helping athletes, officials and fans worldwide.

Coca-Cola as Official Olympics Partner

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With technological advancement, social media and online communication channels have become the most significant part of the Coca-Cola marketing strategy. It actively uses online digital marketing platforms like Facebook , Twitter, Instagram, YouTube, and Snapchat to post images, videos, and more. The Coca Cola marketing strategy primarily includes SEO , email marketing , content marketing , and video marketing .

Coca-Cola’s Instagram Posts

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Coca-Cola Marketing Case Study

From the star ‘Coca-Cola’ drink to Inca Kola in North and South America, Vita in Africa, and Thumbs up in India, The Coca-Cola Company owns a product portfolio of more than 3500 products . With the presence in more than 200 countries and the daily average servings to 1.9 billion people, Coca-Cola Company has been listed as the world’s most valuable brand with 94% of the world’s population recognizing the red and white Coca-Cola brand Logo . Moreover, 3.1% of all beverages consumed around the world are Coca-Cola products. All this because of its great marketing strategy which we’ll discuss in this article on Coca-Cola Marketing Strategy .

Coca-Cola –

has a Market capitalization of $192.8 Billion (as of May 2016).
had 53 years of consecutive annual dividend increases.
with the revenue of over $44.29 billion, is not just a company but an ECONOMY.

The world knows and has tasted the coca cola products. In fact, out of the 55 billion servings of all kinds of beverages drunk each day (other than water), 1.7 billion are Coca-Cola trademarked/licensed drinks.

Marketing history

Market research in the beginning.

It all started 130 years ago, in 1886, when a Confederate colonel in the Civil War, John Pemberton, wanted to create his own version of coca wine (cola with alcohol and cocaine) and sent his nephew Lewis Newman to conduct a market research with the samples to a local pharmacy (Jacobs pharmacy). This wasn’t a new idea back then. The original idea of Coca wines was discovered by a Parisian chemist named Angelo Mariani.

Pemberton’s sample was sold for 5 cents a glass and the feedback of the customers was relayed to him by his nephew. Hence, by the end of the year, Pemberton was ready with a unique recipe that was tailored to the customers taste.

Marketing Strategy In The Beginning

Pemberton soon had to make it non-alcoholic because of the laws prevailing in Atlanta. Once the product was launched, it was marketed by Pemberton as a “Brain Tonic” and “temperance drink” (anti-alcohol), claiming that it cured headaches, anxiety, depression, indigestion, and addiction. Cocaine was removed from Coke in 1903.

The name and the original (current) Trademark logo was the idea of Pemberton’s accountant Frank Robinson, who designed the logo in his own writing. Not changing the logo till date is the best strategy adopted by Coca-cola.

Soon after the formula was sold to Asa G Candler (in 1889), who converted it into a soda drink, the real marketing began.

Candler was a marketer. He distributed thousands of complimentary coca-cola glass coupons, along with souvenir calendars, clocks, etc. all depicting the trademark and made sure that the coca cola trademark was visible everywhere .

He also painted the syrup barrels red to differentiate Coca-Cola from others.

Various syrup manufacturing plants outside Atlanta were opened and in 1895, Candler announced about Coca-Cola being drunk in every state & territory in the US.

The Idea Of The Bottle

During Candler’s era, Coca-Cola was sold only through soda fountains. But two innovative minds, Benjamin F. Thomas and Joseph B. Whitehead, secured from Candler exclusive rights (at just $1) for bottled coca cola sales.

But Coca-Cola was so famous in the US that it was subjected to imitations. Early advertising campaigns like “Demand the genuine” and “Accept no substitutes” helped the brand somewhat but there was a dire need to differentiate. Hence, in 1916, the unique bottle of Coca-Cola was designed by the Root Glass Company of Terre Haute, Indiana. The trademark bottle design hasn’t been changed until now.

Coca-Cola Worldwide

In 1919, Candler sold the company to Robert Woodruff whose aim was to make Coca-Cola available to anyone, anytime and anyplace. Bottling plants were set up all over the world & coca cola became first truly global brand.

Robert Woodruff had some other strategies too. He was focused on maintaining a standard of excellence as the company scaled. He wanted to position Coca-Cola as a premium product that was worthy of more attention than any of its competitors. And he succeeded in it. Coca-Cola grew rapidly throughout the world.

Coca-Cola Marketing Strategies

The worldwide popularity of Coca-Cola was a result of simple yet groundbreaking marketing strategies like –

Consistency

Consistency can be seen from the logo to the bottle design & the price of the drink (the price was 5 cents from 1886 to 1959). Coca-Cola has kept it simple with every slogan revolving around the two terms ‘Enjoy’ and ‘happiness’.

From the star bottle to the calendars, watches and other unrelated products, Candler started the trend to make Coca-Cola visible everywhere. The company has followed the same branding strategy till now. Coca-Cola is everywhere and hence has the world’s most renowned logo.

Positioning

Coca-Cola didn’t position itself as a product. It was and it is an ‘Experience’ of happiness and joy.

Franchise model

The bottling rights were sold to different local entrepreneurs , which is continued till now. Hence, Coca-cola isn’t one giant company, it’s a system of many small companies reporting to one giant company.

Personalization & Socialization

Unlike other big companies, Coca-Cola has maintained its positioning as a social brand. It talks to the users. Coca-Cola isn’t a company anymore. It’s a part of us now. With its iconic advertising ideas which include “I’d Like to Buy the World a Coke” & “Share a Coke”, it has maintained a special spot in the heart of its users.

Diversification

Coca-Cola, after marking its presence all over the world, took its first step towards diversifying its portfolio in 1960 by buying Minute Maid. It now operates in all but 2 countries worldwide with a portfolio of more than 3500 brands.

Coca-Cola Marketing Facts

Logo & bottle design hasn’t changed since the start.
During its first year, Coca-Cola sold an average of 9 drinks a day.
Norman Rockwell created art for Coke ads.
Coke has had a huge role in shaping our image of Santa Clause.
In the 1980s, the company attempted a “Coke in the Morning” campaign to try to win over coffee drinkers.
In 1923, the company began selling bottles in packages of six, which became common practice in the beverage industry.
Recently, it was in the news that Verizon acquired Yahoo for around $5 billion which is more or less the same amount the Coca-Cola Company spends on its advertisements.
The number of employees working with the Coca-Cola Company (123,200 to be exact) is more than the population of many countries.

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A startup consultant, digital marketer, traveller, and philomath. Aashish has worked with over 20 startups and successfully helped them ideate, raise money, and succeed. When not working, he can be found hiking, camping, and stargazing.

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January 2002 (Revised January 2004)
HBS Case Collection

Cola Wars Continue: Coke and Pepsi in the Twenty-First Century

Format: Print
| Language: English
| Pages: 24

About The Author

David B. Yoffie

Related work.

May 2006 (Revised April 2009)
Faculty Research

Cola Wars Continue: Coke and Pepsi in 2006

Cola Wars Continue: Coke and Pepsi in 2006 By: David B. Yoffie and Michael Slind

Case Study Analysis of Coca-Cola – Segmentation, Targeting, Customer Analysis Summary

Coca-Cola VALS
Coca-Cola Customer Analysis
Coca-Cola Product Market
Segmentation & Targeting Analysis

Introduction

Coca-Cola Company is one of the most global successful multinational corporations headquartered in Atlanta, USA. The corporation has branches in more than 200 countries, which are doing well both in sales and management.

This case study focuses on the research about Coca-Cola Company and analyzes its VALS information, Customer Analysis, Product Market, Segmentation and Targeting, Competition, and Competitive Market Analysis.

Coca-Cola Values and Lifestyle Survey Information (VALS)

Regarding VALS information, the corporation recently used psychographic procedures in dividing its market. Based on the available information, the buyers are classified into various categories using psychological traits, depending on the person’s lifestyle (SRI-BI 1).

Here, the person’s lifestyle determines his/her purchasing behavior and helps in determining the consumers’ attitude, aspirations, opinions, hopes, desires, beliefs, fears, prejudice, needs, fears, and desires (SRI-BI 1). Therefore, the company uses the information received using VALS to develop brand personalities and images. As a result, the corporation increases the preference for its product and boosts the overall sales.

Coca-Cola Case Study: Customer Analysis

Since the company provides a range of energy and soft drinks, its customers are drawn from all categories of people regardless of age, race, sex, culture, and other social attributes (Perreault 24). The company has numerous brands specifically to satisfy the needs and tastes of its worldwide consumers (Lagos, Schirf and Smith 2). Indeed, the global success of the company products results from the rise in consumer preferences.

Notably, people from all social classes identify with the range of coca-cola soft drinks available in the market. Those from high, medium and low-class purchase coca-cola products because the drinks are of different prices to cater for the financial position of the customers (Lagos, Schirf and Smith 2). As a result of innovation, the company has been able to meet the consumer needs and aspirations

Coca-Cola Product Market Analysis

The company has a range of products, which guarantee the consumers’ health needs. The products are of great taste and low fats. Furthermore, it has fruit juices for adults and children to supplement fruits, which people need for health and refreshment. Other products include energy drinks, mineral water, sport drinks, soft drinks, tea and coffee drinks.

Considering the company products, energy drinks include play and rehab among others. Juices include fuze, acueducto, andina fresh and others. Mineral water includes vio, acquamist and others. Soft drinks include Coca cola, Fanta, and Sprite among others. Tea and Coffee include deeppresso and other products.

Coca-Cola Segmentation and Targeting Analysis

Coca-cola segmentation analysis summary.

The criteria that the company uses to classify its customers are measurable, responsive to marketing mix and reasonable (Perreault 42). Therefore, the segmentation criteria that the company applies include economic, geographic, demographic, behavioral and psychographic.

Under economic segmentation, the market is divided based of the level of income (Perreault 55). Therefore, this classification has people contain people from high-income, medium-income and low-income categories.

Geographic segmentation acknowledges variables climate, population growth, region, and population density (Perreault 56). The company invests more on regions with high population growth and density.

Demographic segmentation relies on human variables including age, ethnicity, gender, occupation, education, family status and others (Perreault 57). These variables are different aspects and the company applies then only on areas deemed essential, in the sense that those factors do not affect the consumer choices and preference.

Behavioral segmentation enables the company to use variables such as price sensitivity rate of usage; benefit sought, and brand loyalty (Perreault 58). In this area, the company uses such attributes to improve on the quality of its products.

Psychographic segmentation helps the company determine the consumers’ lifestyle, attitude toward the product and value he/she attaches to it (Perreault 59). Through this segmentation, the company is able to understand the customers’ preference and desires thus make informed choices during distribution.

Coca-Cola Targeting Analysis Summary

Through enhancing promotion and advertising, the company targets high and middle class people because this category consists of people with enough money to purchase such luxury products (Shimp 37). In addition, the company has innovated economy packs, costing less so that the consumers from low class do not miss these luxurious products.

Such innovation has made the products and the company popular among the public. For instance, coca-cola soft drink is one of the most popular brands that the company has. Furthermore, its cost is reasonable and pocket friendly for all the consumers drawn from all classes because the product is packed in relatively small quantities.

Coca-Cola Competition Analysis Summary

Since there are other companies manufacturing soft drinks and the non-alcoholic ones, the Coca-Cola Company operates in a very competitive business environment.

Some of the innovative approaches to encounter competition include product’s diversification, price reduction, carrying out targeted advertising and promotions (Lagos, Schirf and Smith 2). Competition is very healthy since it increases innovation while improving the quality of the products (Blythe 78).

Coca-Cola Company competes in a number of industries including soft drink, beverage, juice, non-alcoholic beverage, health & nutrition, energy, sports, coffee & tea manufacturing.

Owing to the steady increase in demand for the above soft drink, the company faces stiff competition from the other business players in the industry. Perhaps, the high demand for the luxury drinks led to emergence of other industries in this field to bridge the gap (Blythe 102).

Coca-Cola Competitive Market Analysis

As a business entity, coca-cola company faces a stiff competition from other players in the soft drink industry. Notably, competition is imminent and the company is doing enough to minimize its impacts on the consumers through advertising and promotion (Shimp 44).

The major competitors threatening the operations of coca-cola company include American Beverage Corporation located at Verona, Aquaterra Corporation located at Mississauga, Pepsi, National Beverage Company, and Cott Corporation among others.

American Beverage Corporation manufactures and distributes its soft drink and non-carbonated products to different countries around the globe (Blythe 105). Majorly, the company dominates the sales of its products in the US, Canada, United Kingdom, but also in other parts of the world. Moreover, the company products target users from different groups including age, religion, gender, cultural background and social class.

Aquaterra Corporation is another key competitor to Coca-Cola Company. It manufactures various soft drink flavors, which are sold in many countries around the world (Blythe 106). Many of their customers prefer the products due to the company’s health considerations.

Coca-cola also faces competition from Pepsi Company that is known for its famous soft drinks, including Mountain View and Pepsi among other products. Pepsi Company market and distribute a number of products worldwide, with its niche market in the US (Lagos, Schirf and Smith 2). In addition, the company is also increasing its non-carbonated beverage production, due to the rising consumer preferences for the drinks.

National Beverage Co. is another stiff competitor to the company. It manufactures, markets, develops, and distributes various beverage products in the US and other parts of the world (Lagos, Schirf and Smith 2). The company and others take advantage of the growing world population that needs the soft drinks. Specifically, the company manufactures distinct brands with a variety of flavor according to the customer demands.

Some of their brands, which have attracted a number of consumers, include Faygo and Shasta (Lagos, Schirf and Smith 2). It also has cola drinks, VooDoo Rain for the young consumers, St. Nick’s Holiday and Ohana fruit-flavored drinks (Lagos, Schirf and Smith 2).

Since the customers are increasingly becoming health conscious, the company exploit this by producing premium beverages to achieve this, and maintain its customers.

Cott Corporation is another competitor producing high quality premium drinks such as juices, high energy and organic beverages among others. The company sells its products in the US, Canada, United Kingdom, and other parts of the world (Lagos, Schirf and Smith 2). In addition, the company products target consumers from different categories including age, religion, gender, cultural background and social class.

In general, Coca-Cola Company remains the dominant business entity that provides refreshing soft drinks. Though it has a lot of competitors in the field of soft drinks, fruit-flavored drinks and other non-carbonated drinks, it uses innovative techniques such as economy packs, intensified marketing and informed marketing segmentation to remain competitive.

Since the products are luxury drinks, their users are drawn majorly from the high and middle classes. This means, competition is very high and the best company can only survive in this market through innovation and diversification, being affordable and manufacturing products, which guarantees the consumer of healthy life. Indeed, Coca-Cola Company has succeeded in its diversification strategies and in the quality of is products.

Blythe, Jim. Essentials of Marketing Communications , (3rd Ed.). New York: FT/Prentice Hall, 2006. Print.

Lagos, Theresa. Schirf, Lisa and Smith, Vicente 2001, Analysis of the Coca-Cola Company . PDF file. Web.

Perreault, William. Basic Marketing: A Marketing Strategy Planning Approach , (17th Ed.). New York, NY: McGraw-Hill Publishers, 2009. Print.

Shimp, Terence. Advertising, Promotion, and Other Aspects of Integrated Marketing Communications. (7th Ed.). Mason, Ohio: Thomson South-Western, 2007. Print.

SRI-BI, 2006, The VALS Segments . PDF file. Web.

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IvyPanda. (2023, February 18). Case Study Analysis of Coca-Cola – Segmentation, Targeting, Customer Analysis Summary. https://ivypanda.com/essays/coca-cola-company-5/

"Case Study Analysis of Coca-Cola – Segmentation, Targeting, Customer Analysis Summary." IvyPanda , 18 Feb. 2023, ivypanda.com/essays/coca-cola-company-5/.

IvyPanda . (2023) 'Case Study Analysis of Coca-Cola – Segmentation, Targeting, Customer Analysis Summary'. 18 February.

IvyPanda . 2023. "Case Study Analysis of Coca-Cola – Segmentation, Targeting, Customer Analysis Summary." February 18, 2023. https://ivypanda.com/essays/coca-cola-company-5/.

1. IvyPanda . "Case Study Analysis of Coca-Cola – Segmentation, Targeting, Customer Analysis Summary." February 18, 2023. https://ivypanda.com/essays/coca-cola-company-5/.

Bibliography

IvyPanda . "Case Study Analysis of Coca-Cola – Segmentation, Targeting, Customer Analysis Summary." February 18, 2023. https://ivypanda.com/essays/coca-cola-company-5/.

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Coca-Cola Branding Strategy and Marketing Case Study

Analysis and examples of coca-cola’s identity, positioning, key messages, tone of voice, brand archetypes, customer benefits, competitors, and marketing content..

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Brand Overview

Food & Beverage
Non-Alcoholic

Business Type

Physical Products

https://coca-cola.com

Target Customer

Soft Drink (Soda) Consumers

Primary Need ( Job To Be Done )

Have a classic cola soft drink that delivers a flavor I’ve enjoyed my entire life

Brand Visual Identity & Content

Primary brand colors, brand typefaces, hero content.

Hero Content Type

Content features people, brand messaging, key messages, benefit or feature focus, tone of voice, brand archetypes.

( Learn More About Brand Archetypes )

Everyperson

Brand Positioning ( Elements of Value )

( Learn More About The Elements of Value )

Aspirational

Affiliation & Belonging

Sensory Appeal

Brand Benefits

Enjoy a soft drink that provides a predictable, classic flavor

Connect with a drink that I know will be the same no matter where I am

Feel a sense of nostalgia for a drink that you’ve enjoyed with friends and family your whole life

Competition

Key competitors.

Pepsi, Dr. Pepper , 7-Up, Mountain Dew, Sprite, Fanta, Schweppes, La Croix, Bubly

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16 Coca-Cola: ‘Taste the Controversy’: A Case Study on Marketing Challenges

Published: June 2022
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The not so lucky situations and criticism of the Coca-Cola brand come from its first-ever product. As the history from many sources says, Dr John Smith-Pemberton, Coca-Cola creator, fought in the Civil War, and had some injuries. He made a special formula in order to help him deal with the constant pain in his body: the Pemberton’s French Wine Coca which also had a great taste at the time, had alcohol in it. It quickly became very popular until a vote by the state legislature Atlanta and Fulton County in favour of the national temperance movement. The national temperance movement prohibited the use of alcohol and heavily criticized medicinal wine such as French Wine Coca. Pemberton was forced to drop the wine ingredient in his French Wine Coca. After some further experimenting, he decided on the use of sugar syrup as a substitution for the wine and that is when Coca-Cola was born. He invented many drugs, but none of them ever made any money. So, after a move to Atlanta, Pemberton decided to try his hand in the beverage market. In his time, the soda fountain was rising in popularity as a social gathering spot. Temperance was keeping patrons out of bars, so making a soda-fountain drink just made sense. And this was when Coca-Cola was born.

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Digital Innovation and Transformation

Mba student perspectives.

Assignments
Assignment: Competing with Data and…

COCA COLA LEVERAGES DATA ANALYTICS TO DRIVE INNOVATION

Given the size of its operations, Coca Cola generates a substantial amount of data across its value chain – including sourcing, production, distribution, sales and customer feedback. Over the years, the company has embraced Big Data to drive its business strategic decisions.

Coca Cola is the world’s largest beverage company, with over 500 soft drink brands sold in more than 200 countries. Every day, the world drinks more than 1.9 billion servings of their beverages including Coke, Diet Coke, Fanta, Sprite, Dasani, Powerade, Schweppes, Minute Maid and more. [i]

According to a Forbes article, Coca Cola was one of the first globally recognized brands, outside of the tech sector, to embrace Big Data. In 2012, its chief big data officer, Esat Sezer, said “Social media, mobile applications, cloud computing and e-commerce are combining to give companies like Coca-Cola an unprecedented toolset to change the way they approach IT. Behind all this, big data gives you the intelligence to cap it all off.”

More recently, Greg Chambers, global director of digital innovation, has said “AI is the foundation for everything we do. We create intelligent experiences. AI is the kernel that powers that experience.” [ii] It is quite clear that data analytics and AI have been woven into the fabric of Coca Cola.

In a world that is increasingly dynamic, with changing customer behavior, Coca Cola is betting on Big Data to remain relevant.

Pathways to a Just Digital Future

How Coca-Cola uses Big Data

Coca Cola has been investing extensively in research and development, especially in artificial intelligence, to better leverage the mountain of data it collects from customers all around the world. This effort has helped the firm better understand consumer trends in terms of flavors, and customer’s preference for healthier options in certain regions.

In addition, given Coca Cola presence in 200 plus countries with varying customer trends and the rise of innovative brand, it has become increasingly important for the beverage company to understand and track the evolving taste of its customers and introduce a social consciousness to its product offerings.

Product development using data analytics and innovative channels

Image result for coca cola freestyle jack in the box

In 2008, Coca Cola unveiled a new fountain drink machine, which allowed customers to prepare drinks, mixing a variety of flavors, from their smart phone. With smart phones, people can order exact percentages of different mixtures and flavor additions and save them for next time. Based on monitoring data collected from this self-service soft drinks’ fountains, Coca Cola launched Cherry Spirite as a new flavor.

Given the prevalence of smart phones and how it has been woven into the fabric of our daily lives, Coca Cola sort to leverage this platform to connect and engage with customers in a deeper way.

These freestyle fountain machines, which generated invaluable insights into customer preference, led to launch new brands and flavors. “We discovered that there were a lot of people that really preferred Cherry Sprite. This channel has become a powerful outlet for the introduction of new brands or flavors.” Thomas Stubbs, VP/Engineering and Innovation at Coca Cola. [iii]

Coca Cola also uses data to inform how its sources for raw materials. For example, the company accesses data about weather, crop yields, pricing, and taste, combined with satellite imagery, to inform when and how they source oranges for juices. [iv] This data informs an algorithm that matches products to local customer tastes and ingredient availability. [v]

Social data mining

Image result for coca cola social media channel

Coca Cola has over 100 million followers on Facebook and 35 million on Twitter. Their vast reach has expanded even further thanks to AI, as they’re able to analyze the web for mentions of their brand across the Internet.

In 2015, for example, they were able to determine that Coca Cola products were mentioned online once every two seconds. Having access to this information helps them understand who their customers are, where they live, and what prompts them to discuss the brand. They could also use AI image technology to identify when photos of their products were uploaded to social media, and then serve people ads based on the images they uploaded. According to company representatives, such targeted ads are four times more likely to be clicked on than other methods of targeted advertising. These techniques might lead to original advertising created by AI technologies, such as “automated narratives” according to a Coca Cola marketing executive. [vi]

Coca Cola is increasingly betting on data analytics and AI to drive its strategic business decisions. From its innovative free style fountain machine to find new ways to engage with customers in a meaningful way, Coca Cola appears to be well-equipped to remain relevant in the future.

[i] https://www.forbes.com/sites/bernardmarr/2017/09/18/the-amazing-ways-coca-cola-uses-artificial-intelligence-ai-and-big-data-to-drive-success/#57347fe578d2

[ii] https://www.forbes.com/sites/bernardmarr/2017/09/18/the-amazing-ways-coca-cola-uses-artificial-intelligence-ai-and-big-data-to-drive-success/#57347fe578d2

[iii] https://www.warc.com/newsandopinion/news/coke_taps_insight_from_freestyle_machines/40312

[iv] https://www.forbes.com/sites/bernardmarr/2017/09/18/the-amazing-ways-coca-cola-uses-artificial-intelligence-ai-and-big-data-to-drive-success/#57347fe578d2

[v] https://www.forbes.com/sites/bernardmarr/2017/09/18/the-amazing-ways-coca-cola-uses-artificial-intelligence-ai-and-big-data-to-drive-success/#57347fe578d2

[vi] https://www.forbes.com/sites/bernardmarr/2017/09/18/the-amazing-ways-coca-cola-uses-artificial-intelligence-ai-and-big-data-to-drive-success/#57347fe578d2

Student comments on COCA COLA LEVERAGES DATA ANALYTICS TO DRIVE INNOVATION

Great sharing. Interesting to know that Coco cola is using AI in customer analysis and detecting cola photoes. I am wondering for a CPG company with cost constrain, how much would Coco cola willing to spend in Tech(AI) investment?

Organisational Behaviour: A case study of Coca-Cola Company

Abstract: The paper contains a detail analysis of organizational behavior discussing issues facing cutting age organizations on leadership behavior, organizational effectiveness, organizational structures and human resource management. The paper further analyzed the structure and culture of Coca-Cola Company with emphasis on issues relating to ricks and uncertainties in the company’s decision making. Recommendations are laid based on the study to address the company’s issues and align decision-making with the company’s structure

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Coca-Cola Case Analysis

Summary of the case.

Coca-cola is the largest beverage company in the world and employs about 71,000 people in over 200 countries. It has a range of products which includes: diet coke, coca cola, sprite and fanta. There is concern from coke that the move towards healthy eating and drinking will affect her sales in her traditional sugar and sugar based drinks negatively (Badal, n.d, p.1). Coca-Cola was founded in 1886 and its headquarters are based in Atlanta Georgia.

In the year 2006 Coca-Cola reported $2.4 billion revenues which was 4.2 percent increase from 2005. Coca-Cola reported it’s earning as estimates in the third quarter of 2007, the price increase was attributed to the rise in price of aluminum and the cut in cost of sweetener in North America. In the third quarter coke reported a net income of $268 millions compared as to $2132 millions the previous year. The net operating income went up to $5.41billion.There was decline in the cases shipped by 2.5 percent as compared to the proceeding year, while there was six percent rise in cost and four percent rise in price per case (Badal, n.d, p.2).

Would you recommend Coca Cola to enter the snack business from which PepsiCo derives so much revenue?

I would recommend Coca Cola to venture in snack business first the Coca-cola products and snacks are complimentary goods. This shows that a consumer is likely to use both products at the same time. This shows that this will boost the Coca-Cola sales directly, and also the demand for both products is tied together, an indication that the snacks will have ready market as it will capture the already existing consumers of the coco-cola beverages (Coke facts, 2000, p, 6). The Coca Cola Company will also be able to take advantage of its existing distribution channels and facilities. This will reduce the operating cost of the snack business and also enhance quick market penetration. This means the logistics of venturing in snacks business will be simple. Due to the increased competition in the beverage industry Coca-Cola can supplement the possible decline in sales. This will ensure continued profitability and the future of the company will be secure. This will also provide a good competitive edge to Coca-Cola against its competitors, (Ezine articles, 2009, p, 5,). The coca-cola company will be able to increase sales and this will boost the long term profitability of the company. This will also enable full utilization of her human resources.

The snacks business will also enable the company to compete well with PepsiCo which is their main competitor in a level playing ground. This is because the PepsiCo is getting most of their profits from their snacks business. This shows they will have countered the strength of its competitors hence improving their market position as the market leaders.

What are some of the potential challenges and how can the negative impact be minimized?

The Coca Cola Company will have divided attention such that it may lose touch with its core business. The company will have to divert some of its financial and human resources into the snack business. This may end up compromising some of its competencies in beverage production (Ezine articles, 2009, p, 5). The Coca Cola Company may face the challenge of competing with already established snacks producing companies. This is because some of these companies have well established products which command a big market share.

The first problem of divided attention can be minimized by the company forming a department that is autonomous which will deal with the snacks business. Both range products will utilize the same distribution channels in order to cut on cost. The company should try to market its snack products by relating the products with its already existing brands. This will enable the consumers to identify with the new products. The company should use the already set logistic network (in the company it serves) to distribute and market the snacks products. This will enable the company to coordinate the snacks business cheaply. The company should gather adequate information that will convince the shareholders to invest their money in the snacks business

Reference List

Alen, Badal. (n.d.). Coca -Cola Company- 2007 case , The union institute.

Coke facts, (2000). The truth about Coca-Cola company around the globe , Web.

Ezine articles, (2009). Building a Brand Growth Strategy, Web.

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Six Sigma process leads us to one conclusion that“Customer is the King”. Customers are the most important aspect of your business. Without the customer, you wouldn’t have a business. Companies have to understand that customers can make or ruin them completely.

One of the large companies like Coca – Cola tried to rule the market according to their wish, which lead to mammoth loss for the company.

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The Coca-Cola Company ( TCCC) is a leading manufacturer, retailer, and marketer of beverages, which sells beverage products in more than 200 countries. It is an American multinational beverage corporation headquartered in Atlanta, Georgia.

The Coca-Cola Company is into the manufacturing, retailing and marketing of nonalcoholic beverages. The company produces Coca-Cola, invented in 1886 by pharmacist John Stith Pemberton. In 1889 the formula and brand were sold for $2,300 to Asa Griggs Candler, incorporated The Coca-Cola Company in Atlanta in 1892.

Coca-Cola is the most popular soft drink in the world. It’s sold almost everywhere, and its brand name is known in most languages.

The Coca-Cola Company manufactures and sells not only Coca-Cola itself, but also offers a wide range of other beverages, like Fanta, Sprite, water, juices, and energy drinks. The brand owes its success primarily to the product itself and then to its iconic marketing campaigns that position Coke as a drink with a fun and active lifestyle – “Open Happiness”

It was April 23, 1985 when the Coca-Cola Company changed their Coke recipe. A national poll conducted showed that only about 13% of beverage’s fans liked the new Coke. The company observed a steep downfall; their customers weren’t upset, they were transparently angry.

The customers of Coca-Cola took it upon themselves to initiate the launch of a campaign to bring back the original Coca-Cola back. These passionate customers did everything, from setting up hotlines to signing petitions, and were outspoken in their quest to get the original Coke back.

In this duration, the Coca-Cola Company took a major hit. They spent $4 million in development, and then after deciding to pull it back from the market, they had over $30 million worth of unwanted new Coke concentrate. This was the worst mistake that the Coca-Cola Company had ever made, and it is still referred to as the worst gaffe a company has ever made.

Let’s first understand the Supply chain of TCCC: How it Works

In a nutshell, Coca-Cola beverages go through the following destinations in their journey:

Manufacturer
Distributor

The classic workflow within Coca-Cola supply chain:

The Company has its headquarters in Atlanta. The manufacturing of the concentrated syrup is done here and then sold it to Coca-Cola Enterprises (CCE) or another bottling partner, which is responsible for selling the product in North America and Canada.
The bottling partner sends it to a manufacturing facility, which mixes the syrup with other ingredients, such as filtered water and sweeteners. After that, the bottler packages the final product and distributes it to retail partners (stores, restaurants, vending machines, etc.)
The Coca-Cola Export Corporation (TCCEC) partners with local bottlers across the world and distributes the drink to the corresponding local markets.

Other things that contribute to Coca-Cola’s supply chain:

Coca-Cola Enterprises flawlessly integrates modern technologies into its supply chain. For instance, it uses 3D printing to manufacture bottles and cans for its drinks.

2. People

Logistics team consists of more than 100 people to ensure the safe journey of each bottle from factory to fridge.

3. Long-term relationships with retail partners

Over the past few decades, Coca-Cola has proven to be one of the most valuable and reliable suppliers for its retail partners. For instance, the company has been growing together with McDonald’s since 1955.

4. Strict quality control

The company has strict quality requirements for its manufacturing practices. For instance, Coca-Cola HBC, a bottling franchise partner of Coca-Cola Enterprises, requires quality, environment, and health safety certifications from its suppliers.

5. Global Supply Chain Council

The Coca-Cola Company is a beverage giant which has established the Global Supply Chain Council, which consists of subcommittees that focus on adhering to its established supply chain strategy. The Council has its own centralized portal where the employees and supply chain participants share their experiences and best practices.

6. Close collaboration with bottlers

The Coca-Cola Company provides a standard set of guidelines for all of its bottling partners and suppliers. As a result, most of the strategic decisions are centralized. The headquarters controls most of the bottling partner’s operations.

Coca-Cola Logistics

Logistics is an integral part of any supply chain, and Coca-Cola’s logistics expertise undeniably contributes to its supply chain success. Here are some of the logistics-related best practices executed by Coca-Cola:

Manufacturing products on a more frequent basis
Connecting with core team weekly worldwide
Shifting the production plants closer to customers
Introducing daily interaction among the main sites
Introducing seamless processes that are shared between all supply chain participants.

Implementation of Six- Sigma process by The Coca-Cola Company

The Definition of the problem was based on Customer’s complaints. The complaint was mostly about the delay in responding to their questions instead of using various lines of customer care. Others had complaints about the lack of consistency of answers given to various customers related to questions like effects of this drink on toddlers. After so much Research, Customer Care department has authorized use of DMAIC project plan to get rid of delay in answering to customer’s query.

The Measure phase analyzed the reason for the delay in responses. Various hotline numbers were inspected along with the various Customer care departments. Machines and other technical issues were examined thoroughly to check whether they played any sort of role for the delay in responses or not. List of Common questions were also shared among the entire customer care department so as to make sure regarding the consistency of answers given to the customers.

The Analyzing Phase , data was presented more in the mathematical form. Uses of graphs, charts were recommended for easy interpretation. This was done to examine why some hotline numbers performed better than others. It also examined why there was delay in responses from customer care department to the customers.

The Improvement Phase was the phase where focus was on the how to solve the identified problems. Employees whose call numbers had better performance were requested to guide other employees so that all the employees are in the same level. Employees were also briefed on how to group questions to be able to give consistent answers to the customers.

The Coca-Cola Company required issuing some Goodwill message to the customers to clarify the matters which customers asked frequently. This will help the customer care call center to get rid of some of the questions which caused delays. Only the uncommon queries were attended by customer care department and therefore the loading on system reduced, which further resulted in better performance of customer care department.

The Control Phase was to ensure that the new standards were followed and maintained. Customer care department was required to submit the weekly reports to Coca-Cola Management to show the progress.

DMAIC project plan has worked in many companies and also worked for Coca-Cola Company.

Now, let us understand what is “SIX-Sigma ”?

Six Sigma is a methodology which provides tools and techniques to define and evaluate each step of a process. It provides methods to improve efficiencies in a business structure improve the quality of the process and increase the bottom-line profit.

Six Sigma is ranked among the important approaches for making business processes more effective and efficient. In addition to establishing a culture dedicated to continuous process improvement, Six Sigma offers tools and eliminates defects and helps to identify the root causes of errors, allowing organizations to create better products and services for consumers.

Six Sigma is : A Business Strategy: Using Six Sigma approaches, a business can make strategies along with plan of action and drive revenue to new heights, cost reduction and process improvements can also be done in all parts of the organization.

A Vision: Six Sigma approaches are helpful for the Senior Management to create a vision which provide defect free, positive environment to the organization.

A Benchmark: Six Sigma approaches help in improving process metrics. Once the improved process metrics achieve stability; we can use Six Sigma methodology again to improve the newly stabilized process metrics.

A Goal: By using Six Sigma approaches, companies can keep a rigid goal for themselves and work towards achieving them throughout the year. If any company uses proper approaches of six sigma then it often leads these organizations to achieve these goals.

A Statistical Measure : Six Sigma is a data driven approach. Statistical Analysis is used to identify root-causes of the problem. Additionally, Six Sigma approach is highly used to calculate the process performance using its own unit known as Sigma unit.

A Robust Methodology : Six Sigma is the only approach available in the market today which is a documented methodology for problem solving. If used in the right manner, Six Sigma improvements are bullet-proof and they give high yielding returns.

While most people associate Six Sigma with manufacturing, but the methodology is applicable to every type of process in any industry. An organization uses Six Sigma approach to set up a management system that systematically identifies errors and provides methods for eliminating them.

Watch this video for a complete understanding of Six Sigma.

The Importance of People in Six Sigma

A key component of successful Six Sigma implementation is buy-in and support from executives. This methodology does not work well when the entire organization has not engaged in.

Further, another vital aspect is the training of personnel at all levels of the organization. White Belts and Yellow Belts typically receive an introduction to process improvement theories and Six Sigma Terminologies.

Green Belts typically work for Black Belts on projects, helping with data collection and analysis. Black Belts lead projects while Master Black Belts look for ways to apply Six Sigma across an organization.

People develop expertise in Six Sigma by earning belts at each level of accomplishment. These include Yellow belts, Green Belts, White Belts, Black Belts and Master Black Belts.

The martial arts belt structure is used to recognize proficiency in training and application in Six Sigma, using the following colors:

White Belt – Overview DMAIC, Define Phase
Yellow Belt – White Belt + process mapping, data collection and charting, assisting with a project
Six Sigma Green Belt Certification – Yellow Belt + Project leader, core Six Sigma tools, change management, hypothesis tests and more
Six Sigma Black Belt Certification – Green Belt + advanced statistical analysis and experiments, change management,
Six Sigma Master Black Belt Certification – Black Belt + Design for Six Sigma, more advanced statistical analysis, unique tools for specific industries and processes, working with leadership, implementing successful improvement programs

Formal certification is recognized at the Green Belt, Black Belt and Master Black Belt level based on one or more of the following criteria:

Completion of training covering the body of knowledge
Years of work experience with the body of knowledge
Passing an exam covering the body of knowledge
Completion of one or more Six Sigma projects

Process of Six Sigma

There are two major approaches used within Six Sigma:

DMADV : The DMADV method is typically used to create new processes and new products or services. The letters stand for:

Define the project goals

Measure critical components of the process and the product capabilities

Analyze the data and develop various designs for the process, eventually picking the best one

Design and test details of the process

Verify the design by running simulations and a pilot program, and then handing over the process to the client

DMAIC : The DMAIC process is used primarily for improving existing business processes. The letters stand for:

The DMAIC project methodology has five phases:

Define the system, the voice of the customer and their requirements, and the project goals, specifically.
Measure key aspects of the current process and collect relevant data; calculate the ‘as-is’ Process Capability.
Analyze the data to investigate and verify cause-and-effect relationships. It also attempts to ensure that all factors are considered.
Improve or optimize the current process based upon data analysis using techniques such as design of mistake proofing, and standard work to create a new, future state process.
Control the future state process to ensure that any deviations from the target are corrected before they result in defects. A control check is created to monitor the progress of the process.

The DMAIC framework, Six Sigma can utilize several quality management tools:

Seven Basic Quality Tools (Quality core tools):

1. Cause and Effect Diagram:

Also, known as Fishbone diagram. The diagram has its shape similar to a fish skeleton. Hence, named as Fishbone diagram. This tool is used to explore causes to a single effect (or event) through brainstorming. These causes are put under different common categories known as 5 M or 6 M. Where, 6 M expands as – Man, Material, Method, Machine, Measurement & Mother Nature.

2. Flow Chart: It suggests the process flow in a diagrammatic way. It outlines a pictorial representation of processes or process steps to understand their flow upstream or downstream.

3. Pareto Chart:

Also, known as 80:20 principle. The Principle states, 80% of the outcome is a result of 20% causes. It’s a kind of bar chart showing the frequencies of different causes or factors in descending order. The main purpose of this chart is to highlight the most significant factors among a number of factors.

4. Histogram:

It’s a bar chart to study the frequency distribution of data set. It’s used to understand nature of data.

5. Check sheet:

It is used for data collection. A frequency of factorized data is collected in check sheet.

6. Control Chart:

These charts are used to check, whether process data remains under control for the shorter time span. They involve process control limits and sometimes customer specification limits as operational ranges or bands. The aim of these charts is to ensure process data doesn’t go beyond control limits. However, some exception rules are also there to ascertain the condition of a process going out of control, while well within control limits.

Six Sigma strategies seek to improve the quality of the output of a process by identifying and removing the causes of defects and minimizing impact variability in manufacturing

Each Six Sigma project carried out within an organization follows a defined sequence of steps and has specific value targets, for example: reduce process cycle time, reduce pollution, reduce costs, increase customer satisfaction, and increase profits.

The application of Six Sigma has the ability to reduce the variation of the characteristics of the product or service from the target by using either continuous improvement or a design/redesign approach.

Interesting Facts

It wasn’t that the Coca-Cola Company didn’t do their research; in fact over 53% loved the new Coke over the original. In the blind taste test, the subjects were just asked which one they liked best. So they didn’t have a choice. If they had been told that in choosing the new Coke the original would be moved out from the market, then the result of research would have been something else.

According to the grapevine, customers make their purchasing decisions on habit, longing, and loyalty.

This decision could have destroyed a great company. Luckily they listened to their customers and went back to the original Coca-Cola, and today with Six Sigma methodologies implemented, they are $182.9 billion strong!

Does Coke’s Supply Chain Management Inspire You?

Coca-Cola’s manufacturing and supply chain management have inspired many other companies to learn from their gaffe which resulted in steep lose for the company.

But businesses today had scale growth at a much rapid rate than you could back in the early 1990s because of the new software and automation techniques.

If you too are motivated to learn the Six-Sigma Process, what are six-sigma approaches, what is Six Sigma DMAIC etc. then there is certification courses which is available online and offline. You can pursue the Six- sigma course and earn belts as you accomplish each phase.

Frequently asked Questions and Answers

Q. What is Sig Sigma?

A. Six Sigma is a measurement-based strategy for process improvement. It’s a methodology, which aims at improving process and increasing customer satisfaction (Both internal & external). The concept behind this approach is to reduce the variation in processes. This reduction leads to consistent and desired outcomes from processes. Hence, Continuous process improvement with low defects is the goal of this method.

Q. How Coca-Cola Company used Six-Sigma process?

A. The Company used the most Common and applicable to almost all the companies Six-Sigma approach to bounce back in market in no time. Refer BSI Case Study Coca-Cola Enterprises Ltd , for more clarity.

Q. What is Six-Sigma DMAIC?

It is an integral part of Lean Six Sigma process, but can be implemented as a standalone quality improvement process. Indeed, it is the most preferred tool that can help improving the efficiency and the effectiveness of any organization six- Sigma Approach DMAIC

Q. Which is the best online platform for Six Sigma Course?

A . Sig Sigma Course from Henry Harvin Education is ranked as top online platform to pursue Six-sigma Course.

Q. Career benefits after Six-Sigma course?

A. After completing the six sigma course certification you become eligible for jobs demanding analytical background, you Open doors to Job Opportunities Abroad demanding specialization. Or you can also Support a Startup with improved Process and Performance that leads to high-quality products and services.

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Home » Management Case Studies » Case Study: Analysis of the Ethical Behavior of Coca Cola

Case Study: Analysis of the Ethical Behavior of Coca Cola

Coca-Cola is the world’s largest beverage company that operates the largest distribution system in the world. This allows Coca-Cola companies to serve more than 1 billion of its products to customers each day. The marketing strategy for Coca-Cola promotes products from four out of the five top selling soft drinks to earn sales such as Coke, Diet Coke, Fanta and Sprite. This process builds strong customer relationships , which gives the opportunity for these businesses to be identified and satisfied. With that being said, customers will be more willing to help Coca-Cola produce and grow.

Pepsi and Coca-Cola, between them, hold the dominant share of the world market. Even though Coca-Cola produces and sells big across the United States, in order for the company to expand and grow, they had to build their global soft drink market by selling to customers internationally. For example, both companies continued to target international markets focusing on traditional soft drinks, new-age drinks and expanding into the snack-food businesses. With these new changes, Pepsi has 60% of the U.S. Snack-food market while Coca-Cola contributes 85% of its sales outside of the United States.

Increasing market share is one of the most vital goals for a business such as Coca-Cola and Pepsi. Competitions between other soft drink companies, false market share reports and other business conducts can cause certain obstacles if the top selling companies allow them too. However, Coca Cola’s strategy, from the early and late 1800s, of achieving goals such as the international mergers , big market shares, snack food production and overall performance allowed them to strive then and continue to succeed today. Today, most of coke sales are spread throughout the world in the 2004 Annual Report, “Coca Cola had gallon sales distributed as follows: 28% in the United States, 26% in Mexico, Brazil, Japan and China and 46% in spread throughout the world”. This means that Coca Cola makes 70% of its profits from other countries. Coca-Cola must remain vigilant to keep their brand untarnished and their ethical issues to a minimum; their brand is their main key to success.

Coca Cola’s Reputation

Coca-Cola is admired and known for its strength of brand. It is the most well recognized logo and brand across the world. Coca-Colas strong emphasis on reputation they have created loyalty, trust among their customers, and the strongest brand recognition of all time. Coca-Cola retains a commitment and plan to attract, satisfy, and keep customers for the long run. The company has a reputation of having the most loyal customers of the industry. It is this reason that has made Coca-Cola the market leader in the beverage industry year after year. Coca-Cola continues to earn numerous awards including Responsible CEO of the year (2010), most socially responsible company (2008), Worlds most accountable companies (2007), and top 50 most admired companies (2010). Coca-Cola has sought not only to be the world’s largest beverage company but also to improve the quality of life of the communities they serve.

Coca-Cola is extremely active in all aspects of society and environmental issues. Coca-Cola has made numerous steps to prevent harm to the environment in its production of products. Some of these steps include eco friendly facilities and equipment. Coke has been a leader when it comes to environmental issues throughout the years with a major goal of being water neutral, which means every drop of water used by the company will be replenished by 2020. Coca Cola also has a commitment to helping the local aspect by collaborating with different groups and organizations to help with many local and health issues. An example of this would be Coca Cola’s collaborating with UNAIDS to help with the HIV/Aids epidemic throughout the world. Coca Cola has also had a vast impact on improving education. They have had many programs over the years, which include a scholarship program that has given out over 22 million dollars in grants.

Social Responsibility Focus

Many companies do not realize the importance of having a connection with the community and to be seen in their eyes as a very strong ethical company. Coca-Cola has taken up a few different social projects that have given them a good amount of support from the public. For example, they have done a philanthropy known as “Education On Wheels,” in which children are placed into a classroom that history is brought to life, giving them a very rich learning environment. They do different activities that really get the children thinking and force them to develop critical thinking methods. This is a huge thing for Coca-Cola and in our opinion for companies as a whole. The first thing that you must engage in a customer is their emotions , the strongest buying point that people act on. If people start recognizing that a company is doing community based activities for children, they are going to be very prone and likely to want to support and buy the products from the company.

The second thing that Coca-Cola has done is setup multiple scholarship funds available for high-school seniors as they make their way into college and the real world. Coca-Cola was very smart when they went about setting up these different funds for students. There is a huge market with kids graduating high school and those who are currently in college, appealing to these kids will grow a strong interest in their company and will build up their brand image more than ever. It states in the book that it is beneficial to the shareholders by doing this. This is so true with every company because shareholders and people who are invested in the company want to make sure that they are involved in a company that is making ethical decisions and who are giving back to the community in some way, shape or form.

As long as Coca-Cola keeps being persistent with how they give back into the community and monitor what they are doing on an ethical standpoint, they will keep their customers and stakeholders happy.

Crisis Situations

Coca-Cola has not always been a squeaky-clean company that never had problems. The stock price of the company is the same price as it was 10 years ago, and this is due to the ethical and legal issues that were associated with the company. A small problem occurred in Belgium in 1999 when a few children fell ill after drinking a product with the Coca-Cola brand on it. They had a recall on the product there in Belgium, but soon after, every item Coca-Cola made was pulled off the shelves in every store. This caused a loss of reputation, which, in turn, made people lose respect for the company and investors started selling their stocks in Coca-Cola. Neighboring countries, such as Luxembourg and the Netherlands, soon followed suit and recalled all products throughout both countries.

After Coca-Cola found the root of the problem, that being a bad batch of carbon dioxide, they made an announcement regarding the situation. Being a few days after all this happened was a little too slow for the media, and they ate up the story making Coca-Cola look worse than what was said about them. However, this was not the only occurrence. France supposedly had about one hundred people become sick due to mold in the products they consumed. Every single product was banned throughout France until the problem was resolved, but Coca-Cola had yet another slow response to the problem and their reputation was further diminished.

During this crisis, Coca-Cola started to run into different problems with their marketing in European countries with anti-trust laws. They wanted to create a merger with themselves and Orangina, a French company, but their overaggressive style turned off the other companies in the deal, which became a problem. Their strong-arm tactics proved to be too much for the foreign countries, and creating a competitive advantage seemed to cross the line of the anti-trust laws in which they were sued for the by the country of Italy. Italy won the court-case, which caused investigations of the company’s competitive practices, which is never a good thing for business.

Racial Discrimination Allegations

Coca-Cola faced a lawsuit in the spring of 1999. Fifteen hundred African American employees sued Coca-Cola for racial discrimination . Later, the number grew to 2,000 current and former employees. The company was being charged because they put African Americans at the bottom of the pay scale. An African American could have the same job as a Caucasian, but the African American would make $26,000 less each year. This is a huge difference in pay especially if it is only based on the color of a person’s skin. In the lawsuit, it states that the top management of Coca-Cola knew about the discrimination for four years and did nothing to stop it. The company denied the accusations, but the public had strong reactions to the case. To rebuild their image, Coca-Cola created a diversity council and paid $193 million to settle the racial discrimination lawsuit.

Problems with the Burger King Market Test

Just three years after the racial discrimination lawsuit, Coca-Cola found themselves in another allegation. Matthew Whitley, a mid-level Coca-Cola executive filed a whistle-blowing suit. Whitley revealed fraud in a market study that Coca-Cola did on behalf of Burger King. In 2002, Coca-Cola wanted to increase sales so they paired up with Burger King to launch a frozen Coke as a child’s snack. Before launching nationally, Burger King wanted to test the product out in the market. Burger King launched a three-week trial run in Richmond, Virginia to see if it was worth the investment. Customers received a coupon for a free frozen Coke when they purchased a Value Meal. When the test first started, sales of the frozen Coke were not looking good. Therefore, Coca-Cola decided to pay at least one individual $10,000 to take hundreds of children to Burger King to purchase Value Meals including the frozen Coke. U.S. attorney general for the North District of Georgia discovered and investigated the fraud. Coca-Cola had to pay Burger King $21 million, the whistle-blower $540,000, and a $9 million pretax write off had to be taken. Coca-Cola disputed the claim; however, it was extremely costly for the company. Not only did they lose millions of dollars, but also the case attracted a lot of negative publicity. In addition, it ruined any relationship that they had with Burger King.

Inflated Earnings Related to Channel Stuffing

Along with the other ethical dilemmas Coca-Cola was faced with, the company was accused of practicing channel stuffing. Channel stuffing is the practice of shipping extra inventory to wholesalers and retailers at an excessive rate, typically before the end of a quarter. The use of channel stuffing is deceptive and a company utilizes it to inflate their sales and earnings figures. When a company ships out their product to a distributor, it is counted as a sale. However, when a company participates in channel stuffing, they count the sale and usually the product is returned or it remains in a warehouse. The company sends their retailers more than they can sell, falsely demonstrating that there is a high demand for the product. It can also be used to hide when the demand of a product declines.

The benefit the company would receive from channel stuffing is more earnings on their financial statements and misinforming their investors. In Coca Cola’s situation, they were accused of sending extra concentrate to Japanese bottlers from 1997 to 1999 to dishonestly inflate their profits. Even though Coca-Cola settled the accusation, the Securities and Exchange Commission concluded that channel stuffing did occur. The company then pressured bottlers into purchasing extra concentrate in return for extended credit.

Coca-Cola promised the SEC to avoid engaging in channel stuffing in the future. At this time, the company created an ethics and compliance office, who verifies each financial quarter that they have not altered the terms of payment or extended special credit. Coca-Cola agreed to try to reduce the amount of concentrate held by the international bottlers. Even though they settled the predicament with the SEC, Coca-Cola still faces a lawsuit with shareholders for channel stuffing in Japan, North America, Europe, and South Africa.

Trouble with Distributors

Coca-Cola also faced serious issues with their distributors beginning in 2006. The company had deliveries of Powerade sent to Wal-Mart in a small Texas test area. When they tried to expand the delivery of Powerade directly to Wal-Mart warehouses all over the US, fifty-four of their bottlers filed lawsuits. Coca-Cola had an agreement regarding Powerade bottlers and that it was a breach of the agreement to provide warehouse delivery to Wal-Mart, even with the use of a subsidiary agent for warehouse delivery. The subsidiary agent, CCE, and Coca-Cola claim that they were trying to meet a request from Wal-Mart for warehouse delivery, just how PepsiCo distributes Gatorade. CCE proposed making payments to some other bottlers in return for taking over the distribution of Powerade. The bottlers were concerned that the proposed arrangement would violate antitrust laws. In addition, they believed that moving forward with their warehouse delivery would deteriorate the value of the bottlers’ businesses.

This dilemma had a serious impact on the reputation of the company. When one firm in a channel structure suffers, all the firms in the supply chain suffer in some way as well. Coca-Cola adopted a new enterprise resource system that made their classified information available to a group of partners. Since there is a lack of integrity between Coca-Cola and their partners, the partners assume a greater risk when forming a partnership with the company. These problems with their distributors took a toll on their partner companies, their stakeholders, and finally, their bottom lines.

Problems with Unions and Coke Trade Secrets

Amongst other international problems faced by Coca-Cola, they ran into trouble related to labor unions as well. The major cause of these problems occurred in Columbia where there were unfortunate deaths of Coca-Cola workers as well as forty-eight who went into hiding and another sixty-five who received death threats. The labor unions claimed that Coca-Cola chose to be involved with illegal dealings surrounding these deaths, death threats and disappearances. Coca-Cola denied any of the allegations and claimed that only one of the deaths was on the premises of the bottling plant that Coke worked with while the other ones were located off the premises where Coke had no involvement. Rather than take swift action Coca-Cola made itself look bad by not offering to help to any of the workers or their families. The further denial along with not providing any aid or action caused animosity with labor unions regarding the case and put another black mark on Coca-Cola’s currently sliding ethical reputation. Sure there may have been other circumstances behind the problems in Columbia but Coca-Cola did nothing to help anyone else or themselves in the situation.

Another problem Coca-Cola faced came a little closer to home. Coca-Cola had three employees get arrested in 2006 for fraudulently and unlawfully stealing and selling trade secrets from Coca-Cola. One of the people accused in the case contacted Pepsi and told them he was a high level employee with Coca-Cola. He then offered them very confidential and detailed information regarding the Coca-Cola Company. Coca-Cola then received a letter from Pepsi about the offer and contacted the FBI. The FBI found out the informant’s name was Ibrahim Dimson from Bronx, NY. He provided the FBI with fourteen pages worth of confidential information marked classified as well as top secret products from the Coca-Cola company. Ibrahim got his information from Joya Williams who was an executive administrative assistant for Coca-Cola’s global brand in Atlanta . She had access to all of the information given to the FBI by Dimson who is known in the case as “Dirk”. This is a big problem for Coca-Cola because not only are the actions of employees a direct responsibility of the company but it also makes the company look bad if there is internal problems. Any company that has people who are willing to give trade secrets to the direct competition need to evaluate the people who are in charge and make a change if the employees feel that disloyal towards a company that is very well known and successful globally. The company should have a system in place to protect it’s secrets because otherwise any person on the street can go take the syrup formula from Coke and give it to its competitors. This is another ethical situation where the right leadership and system in place could have resolved the issue before it started. Because of poor leadership now Coca-Cola’s reputation is once again tarnished ethically and 3 company employees are being charged with serious crimes.

Ethical Recovery?

Even after all of these problems presents, the customers in Europe said that they still feel like coke would behave correctly during these times of crises. Even after all of this they are still ranked third in a PricewaterhouseCoopers survey of the most respected companies in the world. Coke then donated $50 million to a foundation to support programs in minority programs, and hired an ombudsman who reports directly to the CEO in order to settle the racial discrimination lawsuit shown above. Coke is taking the initiative to fix their problems and the international community is seeing that. It seems that since they are taking these precautions to prevent further problems in the future, the European nations, in addition to the United States will be more trusting of Coke in their decisions in the future.

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Coca Cola Analysis (Accounting)

The Coca Cola Company is the world’s leading owner and marketer of nonalcoholic beverage brands. In order to achieve long-term sustainable growth they look at their brands, financial strength, unrivaled distribution system, global reach, and a strong commitment by management and associates worldwide. The company focuses on inspiring their employees, satisfying customer desires, nurturing partners, making a global difference, maximizing returns to shareowners, and managing for overall effectiveness.

The financial statement that the Coca Cola Company provides shows their strong leadership by the data they present. By discussions held in class it allows us to analyze the following detail: stockholders’ equity, dilutive securities and earnings per share, investments, revenue recognition, income taxes, pensions and postretirement benefits, leases, changes and error analysis, and cash flows. All numbers presented throughout this discussion are in millions.

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With respect to the Coca Cola statement, we have determined that through the owner’s equity the corporation had three categories: capital stock, additional paid in capital, and reinvested earnings. As we discussed in chapter 15, common stock can be issued par value, no-par, lump-sum sales, and noncash transactions. We have determined that the Coca Cola Company did not issue preferred stock. If Coca Cola were to issue preferred stock it would give features to the holders that differs from those who were issued common stock.

Some things that are associated with preferred stockholders would be preference to dividends, assets if company is liquidating, convert their shares into common stock, have the callable option, and nonvoting. The Coca Cola Company had 3,250 shares of common stock issued at $.

25 par value to employees related to stock compensation plans. Since stock was issued above par it has an increase to addition paid in capital, making up the difference in par.

The capital surplus (additional paid-in capital) was due to increase in stock issued related to compensation, decrease to tax benefit from employees’ stock option, and increase stock-based compensation resulting in an amount of $8,537. The retained earnings stated had a beginning balance of $38,513 from 2008, with the addition of income made in 2009 at $6,824. During the year they declared $. 41 dividends to the shareholders each quarter giving $3800 declared dividends at year-end.

As discussed in class there are reasons why companies would not pay dividends equal to their legally available retained earnings.

Some of the reasons we stated were maintaining agreements with creditors, to meet state corporation requirements, to retain assets that would be paid out as dividends to finance growth, to smooth out dividend payments from year to year, or to build a cushion against possible losses. With Coca Cola having a loss in 2008 due to carrying value it would be important for them to follow the reason to have a cushion incase another loss needs to be recorded in future periods. In chapter 16 in regards to 15, we have determined that the basic net income per share was $2. 95 and diluted net income per share was $2. 93 in 2009.

We can see that this was calculated through the given consolidated net income and net income attributable to shareowners. As discussed in class the basic net income is calculated by net income per share divided by weighted shares outstanding. Shares outstanding were 2,324, 2,315, 2,312, and 2,303 for quarters one, two, three, and four providing us with the average weighted shares outstanding of 2,314 for 2009 (shown in the full consolidated statement of income). After finding the average number of shares outstanding we can compute the basic earnings per share by dividing $6,824 net income by 2,314 weighted shares outstanding giving us $2. 5.

A complex capital structure exists when a corporation has convertible securities, options, warrants, or other rights that upon conversion or exercise could dilute earnings per share. The Coca Cola had exercised 15 shares in 2009 so as discussed in class when calculating their diluted earnings per share they add treasury stock exercised.

The calculation for dilutive earnings per share adds in the 15 exercised shares giving us an average shares outstanding of 2,329. In all, the dilutive earnings per share is calculated by the $6,824 net income divided by the 2,314 average shares outstanding plus 15 dilutive securities giving us $2. 3 per share.

The Coca Cola statement had not shown any conversions in preferred stock since it was not recognized and no convertible bonds were recognized so no conversions were accounted for. In regards to chapter 16, if the company decided to issue securities they could obtain warrants making the security more attractive. One of the securities that did make the company more attractive would be the marketable securities of $62. The reason that Coca Cola would decide to obtain marketable securities would be for the following reasons: igher rate of return, convert into cash because of investment liquidity, or easy decision making for buying or selling. The Coca Cola shows that the marketable security as a short-term investment making the company more attractive for 2009. We have determined that a warrant in stock compensation plans were given in this current period.

Some reasons that compensation programs are effective which were discussed through class were to create company performance, motive employees to high levels, help retain executives, maximize the employee’s after tax benefit, and minimize the employer’s after tax.

The determination of compensation expense due to stock options plans were accounted for under the fair value method. As discussed in class, a company recognizes the value of the options as an expense in the periods in which the employee performs services; $241 was expensed in 2009. With respect to the Coca Cola Statements we have determined that the company incurs equity method investments under trading securities and and available-for-sale. As discussed in class, the equity method means that the investor has significant influence over the investment and holds 20-50% of ownership.

Coca Cola has the following equity method investments: FEMSA, Enterprise Inc.

, Amatil Limited, Hellenic Bottling Company, Icecek, Continental, Embonor, Bottling Co. , and Polar. As stated in chapter 17, the company originally records the investment at the cost of the shares acquired but subsequently adjusts the amount each period for changes in the investee’s net assets. Coca Cola clarifies this in their equity investing notes by stating that they evaluate their fair value to their cost basis in investment every reporting period.

The Coca Cola chooses to recognize unrealized gains or losses when accounting using the fair value option. As discussed in class, trading securities will recognize unrealized gains and losses in net income and interest when earned.

The securities for available-for-sale will recognize unrealized gain and losses under comprehensive income under stockholders’ equity. The Coca Cola Company has recognized $52 in 2009 for their available-for-sale securities under other comprehensive income. In 2009, we can see that Coca Cola showed a carrying value of $4,114 and fair value of $13,215.

As discussed in class this means that the company does not need to be assessed for impairment. The reason was based off of management’s decision to realize the loss on impairment for approximately $81 during the fourth quarter in 2008.

This impairment also affected the equity loss of $875 that was presented in 2008 that led an increase of $1655 in 2009 showing $781 equity income in 2009. Coca-Cola does not typically raise capital through the issuance of stock. Instead, they use debt financing to lower their overall cost of capital and increase their return on shareholders’ equity.

Revenue Recognition was the main focal point in chapter 18. Revenue transactions for Coca-Cola are initiated and completed at the same time.

That is, Coca-Cola meets the conditions for recognizing revenue (being realized or realizable and earned) by the time it delivers its products. For this reason, Coca-Cola uses the revenue recognition at point of sale method. When looking to the company’s annual report, Coca-Cola explicitly states that it recognizes revenue when title to its products has been transferred to its bottling partners, resellers, or other customers.

Coca-Cola clarifies that title usually transfers upon shipment to or receipt at its customers’ locations, which are determined by specific sales terms of each transaction. As noted in chapter 18 of our textbook, when it comes to using the point of sale method, some implementation problems can occur. These problems include sales with discounts, sales with right of return, sales with buybacks, bill and hold sales, etc.

We can see some of these implementation problems taking place when looking to Coca-Cola’s revenue recognition.

Coca-Cola customers are able to earn certain incentives including cash discounts, funds for promotional and marketing activities, volume-based incentive programs and support for infrastructure programs. To avoid overstating its revenue, it is vital that Coca-Cola make estimates to account for such customer incentives. To reach these estimates, which will be deducted from revenue, Coca-Cola’s management looks to contractual terms, customer performance and sales volume, and considers past results.

Coca-Cola includes these incentives’ estimates in deductions from revenue, a component of net operating revenues in its consolidated statements of income. The aggregate amount of deductions from revenue recorded by Coca-Cola for these programs in 2009, 2008, and 2007 were approximately $4.

5 billion, $4. 4 billion, and 4. 1 billion, respectively. These figures include the amortization expense on infrastructure programs. Other types of revenue recognition that we discussed in class were percentage of completion, completed contract and installment sales.

The first two types, percentage of completion and completed contract, are mainly used in construction business and therefore would rarely if ever be seen in the financial statements of Coca-Cola.

The installment sales method recognizes income in the periods of collection rather than in the period of sale. As we have stated, Coca-Cola records its sales at point of sale so again we would not expect to see any installment sales on any of their records. Another topic which we touched on in class in regards to the wholesale distributor and manufacturing industries was trade loading and channel stuffing.

In short they described the manufactures over selling and possibly at a deep discount to the customers in order to show higher sales and profits than they actually have. These practices misrepresent operating results and “window dress” financial statements. We are not implying that Coca-Cola does such practices but it should be known that these methods have been and will likely continue within the business world.

As we have learned through our discussion of chapter 19, income tax expense is comprised of both a current tax component and a deferred tax component.

With deferred tax liabilities, the income tax expense will be comprised of a current tax expense and a deferred tax expense. For example, for 2009 Coca-Cola reported an income tax expense of $2,040 (in millions) on its income statement. When looking to Coca-Cola’s notes on income taxes, we can see that for that same year the company reported a current tax expense of $1,687 and a deferred tax expense of $353 ($1,687 current tax expense + $353 deferred tax expense = $2,040 total income tax expense).

A deferred tax liability can also be seen in Coca-Cola’s numbers for 2007 ($1,783 current tax expense + $109 deferred tax expense = $1,892 total income tax expense).

With a deferred tax asset, the total income tax expense consists of a current tax expense and a deferred tax benefit. For example, in 2008 Coca-Cola reported an income tax expense of $1,632 on its income statement. In Coca-Cola’s notes on income taxes, the company reported a current tax expense of $1,992 and a deferred tax benefit of $360 ($1,992 current tax expense – $360 deferred tax benefit = $1,632 total income tax expense).

To reach the consolidated net income seen on its income statement, Coca-Cola simply reduces its income before income taxes by the above specified income tax expense amounts for each year. Chapter 20 of our text dealt with pensions and post retirement benefits. In class we discussed two types of pension plans, defined contribution plan and defined benefit plan.

With a defined contribution plan, the employer agrees to contribute to a pension trust a certain sum each period with no guarantee the benefits will be there when the employee retires. In this situation, the employee bears the risk.

With a defined benefit plan, a certain amount of benefits is put away for an employee, and a certain amount must be there for the employee to collect upon retirement. These benefits are usually determined by factors such as employee’s years of service and compensation level in the years right before retirement. With a defined benefit plan, the employer bears the risk.

As we can see in Note 10 of Coca-Cola’s Notes to Consolidated Financial Statements, the company sponsors qualified defined contribution plans, which substantially cover all U. S. employees.

In addition, the company also sponsors nonqualified, unfunded defined benefit plans for certain associates. When accounting for pensions, the five components of pension expense, as listed in chapter 20, are service cost, interest on the liability, actual return on plan assets, amortization of prior service cost and gain or loss.

The components of Coca-Cola’s net periodic benefit cost for its pension and other postretirement plans for 2007, 2008 and 2009 year ends consist of service cost, interest cost, expected return on plan assets, amortization of prior service cost and amortization of actuarial loss.

The service cost for the company’s pension benefits were $113, $114, and $123 (in millions) for 2009, 2008, and 2007, respectively. Interest costs saw an increase over these three years, going from $191 in 2007, to $205 in 2008, to $213 in 2009. While chapter 20 initially emphasizes actual return on plan assets as a component of pension expense, here we can see Coca-Cola instead reports their expected returns on plan assets. This approach is used by actuaries, and was adopted by FASB to reduce wide swings that could potentially occur in the actual return.

To reach the expected return of plan assets amount, a company multiples the expected rate of return by the market-related value of the plan assets. Coca Cola’s figures for this component were reported in the negatives all three years. Additionally, the amortization of prior service cost for the Coca-Cola’s pension benefits went up from 2007 to 2008, from $7 million to $10 million, and then went back down in 2009 to $5 million. In chapter 21, we discussed accounting for leases. A lease is a contractual agreement between a lessor (the owner of the property) and a lessee (the one getting the rights to use the property).

There are a few advantages to leasing instead of purchasing. These advantages are: 100% financing at fixed rates, protection against obsolescence, flexibility in lease agreements, less costly financing, tax advantages, and possible off-balance-sheet financing. Each of these advantages are reasons for the growth of leasing amongst entities. The two types of leases are capital and operating. There is a specific criterion to distinguish between the two.

In order to record a lease as a capital lease it must be noncancelable. Additionally, it must meet one or more of the following requirements. 1)The lease transfers ownership of the property to the lessee. (2) The lease contains a bargain-purchase option which allows the lessee to purchase the leased property for a price that is significantly lower than the property’s expected fair value at the date the option becomes exercisable. (3) The lease term is equal to 75 percent or more of the estimated economic life of the leased property. (4) The present value of the minimum lease payments (excluding executory costs) equals or exceeds 90 percent of the fair value of the lease property.

If none of these four requirements are met than the lease is recorded as an operating lease. Also, if the lease is cancelable than it is to be recorded as an operating lease. Capital leases transfer substantially all the benefits and risks to the lessee where as operating does not. The two types of leases also differ in their recordings. Capital leases are recorded as liabilities for the lessee and receivables for the lessor where as accounting for operating leases records expenses for the lessee and revenues for the lessor.

Under the capital lease method a financing transaction is taking place and an obligation is created hence the nature of the liability. It is recorded at the lower of (1) the present value of the minimum lease payments or (2) the fair value of the leased asset at the inception of the lease. Companies are not to record a leased asset for more than its fair value. With an operating lease there is no asset and related liability on the balance sheet, there is only an expense on the income statement. In regards to depreciation, it is recorded only under a capital ease because there is no asset on the balance sheet under an operating lease.

The depreciation is recorded at the economic life of the asset if the lease agreement transfers ownership or contains a bargain-purchase option. If the lease agreement has neither of those two criteria than the asset is depreciated over the term of the lease. In regards to Coca-Cola they lease land, office and warehouse space, computer hardware, machinery and equipment, and vehicles under noncancelable operating lease agreements expiring at various dates through future years.

Some leases contain guaranteed residual value which is the amount Coca-Cola will pay the lessor at the end of the lease to purchase the property or the amount Coca-Cola guarantees the lessor to realize after the property is returned. Also found in their financial statements are capital leases.

Companies can have both leases and both can help the financials of a business; it is merely just the preference of how to record the asset being acquired, as long as the follow the guidelines of classifying the lease.

With all this being said about capital and operating leases, the following differences occur if using a capital lease instead of an operating lease: (1) an increase in the amount of reported debt, both short and long term (2) an increase in the amount of total assets and (3) a lower income early in the life of the lease and, therefore, lower retained earnings. With this in mind one cannot simply compare companies earnings per share and say one is better than the other. Many factors contribute to such calculations.

Imagine that Coca-Cola renewed its leases and altered the agreements to change their lease from an operating to a capital lease. Such a change would directly effect the income statement because less expenses would be recoded and subsequently the balance sheet would gather more assets and liabilities again effecting the numbers.

It is very important to look into the business holding and dealings of a company before making decisions about the prosperity of a business. Chapter 22 discusses accounting changes and error analysis. The FASB has established a reporting framework, which involves three typesof accounting changes.

The three types are: (1) change in accounting principle, (2) change in accounting estimate, and (3) change in reporting entity. A fourth category, errors in financial statements, necessitates change but it is not classified as an accounting change. A change in accounting principle involves a change from one generally accepted accounting principle to another such as LIFO to FIFO.

Adaption of a new principle in recognition of events that have occurred for the first time such as adopting an inventory method for a newly acquired item is not a change in accounting principle. Reporting changes can be cumulative, retrospective, or prospective.

The FASB requires that companies use the retrospective approach unless a company cannot reasonably determine the amounts in which they need to restate in prior periods. As discussed in class, upon a change in principle, a note should be reported in the notes of the financial statements as to why and the effects of the change on net income and therefore retained earnings. In regards to a change in accounting estimate, companies are to report prospectively.

They are not to adjust previously reported results but instead account for the effects of all changes in the current and future periods.

Possible changes in estimate effect: uncollectible accounts, inventory obsolescence, useful lives and salvages values of assets, and periods benefited by deferred costs to say the least. Again a note is to be reported in the financial statements for a change in estimate. In regards to this chapter and as stated by Coca-Cola is their financial statements, “There have been no changes in the Company’s internal control over financial reporting during the quarter ended December 31, 2009 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting. In chapter 23 we discussed the statement of cash flow which helps provide information to help investors, creditors and others asses the following: (1) the entity’s ability to generate future cash flows (2) the entity’s ability to pay dividends and meet obligations (3) the reasons for the difference between net income and net cash flow from operations and (4) the cash and noncash investing and financing transactions during the entity’s accounting period. The statement of cash flows is separated into three parts: operating activities, investing activities, and financing activities.

The operating activities involves income statement items such as cash receipts from sales of goods and services, and cash payments to suppliers and employees for acquisitions of inventory and expenses. The investing activities generally involve long-term assets and include making and collecting loans, acquiring and disposing of investments, and productive long-lived assets. The financing activities involve long-term liability and stockholders’ equity items.

This includes obtaining cash from creditors and repayments of loans, and obtaining capital from owners and providing them with a return on and a return of the investment. In regards to Coca-Cola’s statement of cash flows, a steady rise in operating activities is shown from 2007 to 2009 with numbers being 7,150, 7,571, and 8,186 in 2009 respectively. By looking at the investing activities we see that half of Coca-Cola’s net cash used is in relation to purchasing of investments of 2,152, which could lead to significant rates of return in the next coming years.

Upon review of the financing activities we see that Coca-Cola has paid off 12,362 of its debt in 2009, which is a third more than the past two years combined, which in the eyes of a possible lender such as a bank is a very good sign. This shows that they are able to pay off their debts and not let them sit on the financial statements. Also Coca-Cola paid 3,800 in dividends this current year which is more than it has paid in the previous two years.

This is a positive sign for possible speculators looking to buy stock in the company and also for current stock holders. Another positive is the net increase in cash from 2008 from 4,701 to 7,021. With the rise in cash and cash equivalents it shows that Coca-Cola is doing well and could have the ability to reinvest in other forms of securities.

We can check to see that the correct balance was reached in the statement of cash flows by verifying it with the cash balance on the balance sheet. Upon review they both has the correct balance of 7,021.

In respect to this analysis as a whole, we, the accountants of tomorrow, have learned a great deal in being able to combine the readings of these chapters, the homework, and our discussions in class to better understand Coca-Cola’s financial statements, and financial statements as a whole. With so much going into the process and reporting of such statements it can be easy to get lost and misinterpret the true numbers behind a company. By analyzing Coca-Cola in regards to the chapters we have covered when can better grasp the practice of accounting and the methods of reporting used.

Coca Cola Harvard Case Study
Coca Cola Analysis
The Coca-Cola Company: Analysis
Swot Analysis of Coca Cola
Market Analysis Coca-Cola
Coca-Cola Swot Analysis
SWOT Analysis for Coca Cola

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Case Study: Coca-Cola Company Overview The Coca-Cola Company, established in 1892, is a global beverage giant known for its iconic brand and extensive product portfolio. With operations in over 200 countries, Coca-Cola has a diversified product range that includes carbonated beverages, juices, sports drinks, and teas.
Ibotta Stock: New IPO With Strong Growth (NYSE:IBTA)
In Ibotta's case, the company is profitable, but the valuation is still far from low. Based on a share count of 30 million (according to YCharts), Ibotta is currently valued at just above $3 billion.