Assessment of the Coca Cola Company
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Assessment of the Coca Cola Company
The assessment of the financial performance of Coca Cola based on the Credit Suisse HOLT Lens as a potential investor
The company reported 1Q outcomes per the expectations. There was a 3% increase in organic sales. This is in line with the full year 3% organic increase target of the management (Businesswire.com, 2015). The management maintained its fundamental guidance for the year. Besides, the company’s refranchising was on track to be completed. The management approximated an extra $800M productivity savings across a wide array of cost buckets.
The assessment of the financial performance of the company based on the Valens Research charts and tear sheets as a potential investor
The company was a victim of its significant performance. Using the Valens Research, the stock price of the company reflected levels of cash flow return that would never witness a decline. It also ingrained crucial organic development of increased GDP levels of the U.S for decades.
The assessment of the strategic risks of the Coca Cola Company based on the Credit Suisse HOLT Lensas a potential investor
Cost synergies earning visibility, guides to 315-340m euros of the net cost synergies from the incorporation that offers better earnings growth visibility earnings (Credit Suisse, 2016). Nonetheless, contrary to some perceptions of some investors, there is a minimal upside risk to the cost synergies since the targets are consistent with the historical transactions of the company’s bottling and prospective further requirements of investment in case the weak conditions of the market persist.
The assessment of the strategic risks of the company based on the Valens Research charts and tear sheets a potential investor
Coca Cola faces challenges in the current marketplace due to the changes that are driven by the market, socio-economic changes and regulatory changes. Therefore, the corporation needs to mitigate its dependence on the carbonated beverage. Besides, it should enhance the diversification of the product portfolio into the noncarbonated sector to ensure it maintains its competitiveness. Coca Cola should address the fundamental issues and subsequently shift towards a learning corporation.
The strategy of the Company
The Tenets of Return Driven Strategy where the company executed well in the last few years
A significant part of the success of the company was its emphasis on the brand over the product. The company does not simply sell a drink in a bottle but conveys happiness in the bottle. The objective of the company is to sell to its consumers the lifestyle and experiences that are linked to the brand. The company ensured that it created its visual advertisements by mainly focusing on its target consumers. There is no age restriction for its beverage. Besides, the company has been creating advertisements that would cater to the larger population segment while making sure that it produces justice to them, one consumer, at a time.
The Tenets of Return Driven Strategy where the company has not executed well in the last few years
The Coca Cola Company has developed by listening to its consumers. It also maximizes the technology to get rapid responses to form the consumer. The corporation is more incorporated internationally and deals with its consumers and clients regularly. This change in the culture of the company to become increasingly agile implied that the company needed to become transparent regarding the behaviours that are behind growth and learning. The company lost a lot of time in an effort of replicating the success of coke in everything that the firm did. It took a long time for new products to be launched.
The recent events that have created barriers for the company in executing its strategy
Various factors have created obstacles for the company in its strategy execution. First, individuals are becoming more health-conscious hence shifting towards organic drinks. There is also the effect of indirect competitors such as Starbucks Coffee, which contributes to the stiff competition that the company faces. Besides, the production of carbonated beverage needs a significant amount of water, land and other natural resources. Consequently, this raises serious issues of the environment. The corporation also needs to adjust its policies according to the political change of the company. The corporation needs to take care of the legislative reforms of the government and implement strategies that align with the government’s directives. Change in politics also impacts the tax, expansion and other policies in a nation.
The Brand of the company
The company sells and distributes Coca Cola, the most recognized drink brand globally. It also sells and distributes, leading non-alcoholic ready to drink beverage in regards to the volume of sales (Pratap, 2017). The other brands that are licensed to the corporation comprise of Sprite and Fanta. Coca Cola also owns its brands. They include Avra, Amita, Fruice and Deep River Rock.
The Genuine Assets of this company
The total assets of the company for the 2020 quarter were $94,689 million. The average total assets of the company were -2.30 in the past 12 months. The corporation has equity positions in operations of canning and distribution, which is responsible for the production of approximately 58% of the volume. It also has positions in unconsolidated bottling.
Strategic risks of the company
Key take-ways or “lessons learned” and conclusions or opinions from your research about the company and why I would invest in this company today as a potential investor
The company is focusing on extending its portfolio of beverage through innovations in packaging and taste. Coca Cola is envisioning prospects of growth in its beverages as well as categories of beverages such as ready-to-drink coffee and teas and juices (The Coca Cola Company, 2020). As an investor, I would invest in the company since its expansive portfolio permits the business of the company to thrive as the preference of the consumer shifts over time. Therefore, the company should continue to yield huge amounts of profits and revenue. This will satisfy the investors that are in search of investment consistency and safety.
References
Businesswire.com. (2015). The Coca-Cola Company Reports Third Quarter 2015 Results. Retrieved from: https://www.businesswire.com/news/home/20151021005697/en/Coca-Cola-Company-Reports-Quarter-2015-Results. Accessed 8 August 2020.
Credit Suisse. (2017). Coca Cola European Partners. Retrieved from: https://research-doc.credit-suisse.com/docView?sourceid=em&document_id=x724914&serialid=73k2VqV0R4q42rMKp32snvz9NXYMm5LdZsZ4i9ZFT%2fw%3d&serialid=jOk0PSLIx2F4eY8LeWSz7A%3d%3d. Accessed 8 August 2020.
Pratap, A. (2017). Coca Cola Marketing Mix. Retrieved from: https://notesmatic.com/2017/03/coca-cola-marketing-mix/. 8 August 2020.
The Coca Cola Company. (2020). Report: U.S Sales of Non-Alcoholic Beverages Grow More than $5 Billion in 2019. Retrieved from: https://www.coca-colacompany.com/news/report-us-sales-of-non-alcoholic-beverages-grow-more-than-5-billion-in-2019