Coca Cola Corporate Social Relationship

CORPORATE SOCIAL RELATIONSHIP

Corporate Social Relationship

Primary Products and Services

From the onset, it would be prudent to note that the Coca-Cola Company happens to be one of the best known enterprises in the world. The company also has a rather rich history – having been established 136 years ago and later on growing to become the iconic brand that it is today. At present, the company has its headquarters in Atlanta, Georgia. In essence, being primarily a beverage corporation, the company makes and offers for sale a wide range of beverages and drinks to customers. As the company observes, it has a total of 4 beverage categories, i.e. coffee and tea; juices, dairy and plant-based; sparkling soft drinks; and waters and hydration (Coca-Cola Company, 2022). Some of the best-known brands that the company has in its portfolio at the moment are inclusive of, but they are not limited to; Coca-Cola soft drink, Costa Coffee, Dasani water, Schweppes, Sprite, Fanta, etc. Being a multinational, the company has operations and supplies its products in multiple places or locations across the world.

Primary Stakeholders and their Influence on Coca-Cola’s Financial Performance

There are a number of primary stakeholders that could have a huge impact on the company’s financial performance. The stakeholders that will be taken into consideration in this context are: customers, management, and shareholders.

a) Customers

When it comes to customers, it is important to note that this particular stakeholder group largely comprises of those who purchase the various brands that the Coca-Cola Company has on offer, i.e. as has been highlighted above. With this in mind, they happen to have a huge impact on the profitability of a company. This is more so the case given that they have the choice of either purchasing the various products offered for sale by the Coca-Cola Company, or settling for products offered by the competition. If customers are loyal, then this would have a positive impact on the company’s bottom line.

b) Management

The management also happens to be a crucial stakeholder on this front owing to the roles it plays on the planning, leading and controlling fronts. Managers develop and implement strategies with an intention of further enhancing the success of the company in an otherwise competitive business environment. It therefore follows that if the management of the company is effective in the formulation of effective strategies, then the company can have a lasting competitive advantage and outperform its competitors. At present, the company’s chief executive officer happens to be James Quincey. He also doubles up as Chairman of the board. Other key officers of the firm are inclusive of, but they are not limited to; John Murphy (executive VP and CFO), Brian Smith (president and COO), Michael Arroyo (global chief marketing officer), Stacy Apter (VP and corporate treasurer), etc.

c) Shareholders

Shareholders could also be considered a crucial stakeholder group that has an influence in the financial performance of the Coca-Cola Company. The said group comprises of all those who could be considered the owners of the company by virtue of holding its stock. Some of the major shareholders of this particular company at present are; BlackRock, Berkshire Hathaway, and the Vanguard Group (The Coca-Cola Company, 2022). It is important to note that these shareholders could have a major influence on major decisions made at Coca-Cola. This is especially the case given their voting rights. In exercise of their voting power, shareholders could either approve or shoot down major proposals by management. This has the capability to influence the strategic direction of the enterprise – and, thus, its financial performance.

Coca-Cola Company’s External Environment: Assessment of Crucial Factors

There are a wide range of factors in the company’s external environment that could have an impact on the said company’s success. The factors that will be taken into consideration in this particular context are; competitors and downturn in economic activity/recession.

a) Downturn in Economic Activity

When it comes to downturn in economic activity, it should be noted that at present, most countries are reeling from the adverse effects of the global COVID-19 pandemic. This is more so the case given that the measures taken to limit the spread of the disease significantly depressed economic activity. More specifically, as Pak, Adegeboye, Adekunle, Rahman, McBryde and Eisen (2020) indicate, “significant reductions in income, a rise in unemployment, and disruptions in the transportation, service, and manufacturing industries are among the consequences of the disease mitigation measures that have been implemented in many countries” (175).

It therefore follows that amongst other things, the disposable incomes of people have significantly fallen. This in turn affects purchasing power. There is also the likelihood that the worst is yet to be experienced. Indeed, according to a recent report released by the World Bank most countries are likely to experience a recession in the not so distant future (Bove, 2022). Being a multinational, the Coca-Cola Company is likely to experience reduced profitability as customers purchase less products due to their reduced disposable income.

b) Competition

Yet another critical factor in the Coca-Cola Company’s external environment is increased competition. Some of the company’s top competitors are inclusive of, but they are not limited to; Keurig Dr Pepper, PepsiCo, and Red Bull. These companies have the ability to eat into the Coca-Cola Company’s market share through release of new products, product innovation, engagement in price wars, etc. At present, Coca-Cola Company still maintains the lead as the market leader in as far as carbonated soft drinks are concerned. However, as Crowford, Brennan, and Khamis (2020) point out, the emergence of companies focusing on refreshment drinks deemed to have higher nutritional value could have the effect of reducing the operating margin of the Coca-Cola Company in the long-term.