An Organisation Study

On

“THE COCA-COLA COMPANY”

Submitted to

Visvesvaraya Technological University (VTU), Belgaum, Karnataka.

`
In partial fulfilment for the award of the degree of

MASTER OF BUSINESS ADMINISTRATION (MBA)

Submitted By

VANITA PANIGRAHI

(USN-1CR19MBA60)

Under the guidance of

Internal Guide
Prof. NAMITHA P KONNUR
Assistant professor
Department of Management Studies
CMR Institute of Technology
Bangalore-560037

Department of Management Studies,

CMR Institute of Technology,
AECS Layout, IT Park Road,
Bangalore-560037. (2019-21Batch)
 DECLARATION

I, Vanita Panigrahi hereby declare that the Internship report on “The Coca-Cola Company” is prepared
by me under the guidance of Prof. NAMITHA P KONNUR, faculty of Department of Management
Studies, CMR Institute of Technology.

I also declare that this Internship work is towards the partial fulfillment of the university regulations
for the award of degree of Master of Business Administration by Visvesvaraya Technological
University, Belgaum.

I have undergone an internship of organization study for a period of Four weeks. I further declare that
this report is based on the original study undertaken by me and has not been submitted for the award
of any degree/diploma from any other University /Institution.

Place: Bangalore Signature of the student

 ACKNOWLEDGEMENT

I wish to pledge and reward my deep sense of gratitude for all those who have made this Internship
Report come alive.

I would like to express my heart-felt gratitude to thank Mr. Sanjay Jain, principal, CMR Institute of
Technology, for his valuable suggestions and moral support throughout the course of my project.

I would like to express my heart-felt gratitude to Mr. Sandeep Kumar N - HOD,

Department of Management Studies CMR Institute of Technology for his valuable suggestions and
moral support throughout the course of my project.

I am gratefully indebted to my internal faculty guide Prof. NAMITA P KONNUR, CMR Institute of
Technology, for encouraging me and for her constant support throughout the course of the project and
helping me complete it successfully.

Finally, I express my sincere thanks to my Parents, friends and all the staff of MBA department of
CMRIT for their valuable suggestions in completing this Internship Report.

VANITA PANIGRAHI
(1CR19MBA60)
 TABLE OF CONTENTS

Chapter Particular Page No.

No.

01 INTRODUCTION TO COCA-COLA

02 INDUSTRY PROFILE

03 ORGANIZATION PROFILE

04 BACKGROUND

05 NATURE OF BUSINESS

06 VISION MISSION

07 QUALITY POLICY

08 WORKFLOW MODEL

09 PRODUCT PROFILE

10 OWNERSHIP PATTERN

11 ACHIEVEMENTS

12 FUTURE GROWTH AND PROSPECT

13 THE McKENSY’S 7S FRAMEWORK

PORTER’S FIVE FORCES OF COCA-COLA

14

15 SWOT ANALYSIS

16 COCA-COLA FINANCIAL ANALYSIS

17 BIBLIOGRAPHY
 EXECUTIVE SUMMARY

This report has been prepared with a specific purpose in mind. It outlines the history and current
scenario of the Coca-Cola Company globally and locally. The first part of the study takes us through
the present state of affairs of the beverage industry and Coca-Cola Company globally.

The report contains a brief introduction of Coca Cola Company and Coca-Cola India and a detailed
view of the tasks, which have been undertaken to analyze the market of Coca-Cola i.e. we have
performed Competitive, PESTLE and SWOT analysis of Coca-Cola Company and PESTLE and
SWOT analysis of Coca-Cola India in order to identify areas of potential growth for Coca-Cola. We
have also given a brief description of Trends and Forces that are affecting Coca-Cola Company
globally.

The main objective of this project report is to analyze and study in efficient way the current position
of Coca- Cola Company. The study also aims to perform Market Analysis of Coca-Cola Company &
find out different factors effecting the growth of Coca-Cola. Another objective of the study was to
perform Competitive analysis between Coca-Cola and its competitors. Apart from these objectives this
study is also conducted to understand the Customer preferences towards various Coca-Cola products.
INTRODUCTION TO COCA-COLA
INTRODUCTION TO COCA-COLA

Coca-Cola, the product that has given the world its best-known taste was born in Atlanta Georgia, on
May 8. 1886. Coca-Cola Company is the world's leading manufacturer marketer and distributor of
non-alcoholic beverage concentrates and syrups, used to produce nearly 400 beverage brands. It sells
beverage concentrates and syrups to bottling and canning operators, distributors, fountain retailers and
fountain wholesalers. The Company's beverage products comprise of bottled and canned soft drinks
as well as concentrates, syrups and not-ready-to-drink powder products. In addition to this, it also
produces and markets sports drinks, tea and coffee.

The Coca-Cola Company began building its global network in the 1920s. Now operating in more than
200 countries and producing nearly 400 brands the Coca-Cola system has successfully applied a simple
formula on a global scale: "Provide a moment of refreshment for a small amount of money- a billion
times a day."

The Coca-Cola Company and its network of bottlers comprise the most sophisticated and pervasive
production and distribution system in the world. More than anything, that system is dedicated to people
working long and hard to sell the products manufactured by the Company. This unique worldwide
system has made The Coca-Cola Company the world’s premier soft-drink enterprise. From Boston to
Beijing, from Montreal to Moscow, Coca-Cola more than any other consumer product, has brought
pleasure to thirsty consumers around the globe. For more than 115 years, Coca-Cola has created a
special moment of pleasure for hundreds of millions of people every day.
The Company aims at increasing shareowner value over time. It accomplishes this by working with its
business partners to deliver satisfaction and value to consumers through a worldwide system of
superior brands and services, thus increasing brand equity on a global basis. They aim at managing
their business well with people who are strongly committed to the Company values and culture and
providing an appropriately controlled environment, to meet business goals and objectives. The
associates of this Company jointly take responsibility to ensure compliance with the framework of
policies and protect the Company's assets and resources whilst limiting business risks.
INDUSTRY PROFILE
INDUSTRY PROFILE

A BRIEF INSIGHT OF THE FMCG INDUSTRY IN INDIA

Fast Moving Consumer Goods (FMCG) also known as Consumer-Packaged Goods (CPG), are
products that have a quick turnover and relatively low cost. Consumers generally put less thought into
the purchase of FMCG than they do for other products.

The Indian FMCG industry witnessed significant changes through the 1990s. Many players had been
facing severe problems on account of increased competition from small and regional players and from
slow growth across its various product categories. As a result, most of the companies were forced to
revamp their product, marketing, distribution and customer service strategies to strengthen their
position in the market.

By the turn of the 20th century, the face of the Indian FMCG industry had changed significantly. With
the liberalization and growth of the Indian economy, the Indian customer witnessed an increasing
exposure to new domestic and foreign products through different media, such as television and the
Internet.

Apart from this, social changes such as increase in the number of nuclear families and the growing
number of working couples resulting in increased spending power also contributed to the increase in
the Indian consumers’ personal consumption. The realization of the customer's growing awareness and
the need to meet changing requirements and preferences on account of changing lifestyles required the
FMCG producing companies to formulate customer-centric strategies. These changes had a positive
impact, leading to the rapid growth in the FMCG industry. Increased availability of retail space, rapid
urbanization, and qualified manpower also boosted the growth of the organized retailing sector.

HLL led the way in revolutionizing the product market, distribution and service formats of the FMCG
industry by focusing on rural markets, direct distribution, creating new product, distribution and
service formats. The FMCG sector also received a boost by government led initiatives in the 2003
budget such as the setting up of excise free zones in various parts of the country that witnessed firms
moving away from outsourcing to manufacturing by investing in the zones.
Though the absolute profit made on FMCG products is relatively small, they generally sell in large
numbers and so the cumulative profit on such products can be large. Unlike some industries, such as
automobiles, computers, and airlines, FMCG does not suffer from mass layoffs every time the
economy starts to dip. A person may put off buying a car, but he will not put off having his dinner.

Unlike the other economic sectors, FMCG share float in a steady manner irrespective of global market
dip, because they generally satisfy rather fundamentals as opposed to luxurious needs. The FMCG
sector which is growing at the rate of 9% is the fourth largest sector in the Indian Economy and is
worth Rs 93000 cr. The main contributor making up 32% of the sector is the South Indian region. It is
predicted that in the year 2021, the FMCG sector will be worth Rs.243000 cr. The sector being one of
the biggest sectors of the Indian Economy provides up to 4 million jobs. (Source: HCCBPL, Monthly
Circular)
ORGANIZATION PROFILE
ORGANIZATION PROFILE

The Coca-Cola Company is the #1 nonalcoholic beverage companies in the world, as well as one of
the world's most recognizable brands. It is home to more than 500 beverage brands, some 20 of those
billion-dollar-brands, including four of the top five soft drinks: Coca-Cola, Diet Coke, Fanta, and
Sprite. In addition to soft drinks, it markets waters, juice drinks, energy and sports drinks, dairy and
plant-based beverages, and ready-to-drink teas and coffees. Other top brands include Minute Maid,
Powerade, Dasani, Honest Tea, and vitamin water. With the world's largest beverage distribution
system, Coca-Cola reaches thirsty consumers in more than 200 countries. Nearly 65% of its sales come
from outside the US.
BACKGROUND
Background

The prototype Coca-Cola recipe was formulated at the Eagle Drug and Chemical Company, a Drug
store in Columbus, Georgia by John Pemberton, originally as a coca wine called Pemberton's French
Wine Coca. He may have been inspired by the formidable success of Vin Mariani, a European coca
wine.

In 1886, when Atlanta and Fulton County passed prohibition legislation, Pemberton responded by
developing Coca-Cola essentially a non-alcoholic version of French Wine Coca. The first sales were
at Jacob's Pharmacy in Atlanta Georgia, on May 8, 1886. It was initially sold as a patent medicine for
five cents a glass at soda fountains which were popular in the United States at the time due to the belief
that carbonated water was good for the health. (9| Pemberton claimed Coca-Cola cured many diseases,
including morphine addiction, dyspepsia, neurasthenia, headache. and impotence Pemberton ran the
first advertisement for the beverage on May 29 of the same year in the Atlanta Journal.

By 1888 three versions of Coca-Cola - sold by three separate businesses - were on the market. Asa
Griggs Candler acquired a stake in Pemberton's company in 1887 and incorporated it as the Coca Cola
Company in 1888. The same year, while suffering from an ongoing addiction to morphine, Pemberton
sold the rights a second time to four more businessmen J.C. Mayfield, A.O. Murphey, C.O. Mullahy
and E.H. Bloodworth. Meanwhile, Pemberton's alcoholic son Charley Pemberton began selling his
own version of the product.

John Pemberton declared that the name "Coca-Cola" belonged to Charley, but the other two
manufacturers could continue to use the formula. So, in the summer of 1888, Candler sold his beverage
under the names Yum Yum and Koke. After both failed to catch on. Candler set out to establish a legal
claim to Coca-Cola in late 1888. in order to force his two competitors out of the business. Candler
purchased exclusive rights to the formula from John Pemberton.

Margaret Dozier and Woolfolk Walker however in 1914, Dozier came forward to claim her signature
on the bill of sale had been forged and subsequent analysis have indicated John Pemberton's signature
was most likely a forgery as well.

In 1892 Candler incorporated a second company, The Coca-Cola Company (the current corporation),
and in 1910 Candler had the earliest records of the company burned, further obscuring its legal origins.
By the time of its 50th anniversary, the drink had reached the status of a national icon in the USA. In
1935, it was certified kosher by Rabbi Tobias Geffen, after the company made minor changes in the
sourcing of some ingredients.

Coca-Cola was sold in bottles for the first time on March 12, 1894. The first outdoor wall the
advertisement was painted in the same year as well in Cartersville, Georgia. Cans of Coke first
appeared in the year 1955. The first bottling of Coca-Cola occurred in Vicksburg, Mississippi, at the
Biedenharn Candy Company in 1891. Its proprietor was Joseph A. Biedenharn. The original bottles
were Biedenham bottles very different from the much later hobble-skirt design that is now so familiar.
Asa Candler was tentative about bottling the drink, but two entrepreneurs from Chattanooga,
Tennessee Benjamin F, Thomas and Joseph B. Whitehead proposed the idea and were so persuasive
that Candler signed a contract giving them control of the procedure for only one dollar. Candler never
collected his dollar, but in 1899 Chattanooga became the site of the first Coca-Cola bottling company.

The loosely termed the contract proved to be problematic for the company for decades to come. Legal
matters were not helped by the decision of the bottlers to subcontract to other companies, effectively
becoming parent bottlers Coke concentrate or Coke syrup, was and is sold separately at pharmacies in
small quantities, as an over-the-counter remedy for nausea and mildly upset stomach.

On April 23 1985, Coca-Cola, amid much publicity, attempted to change the formula of the drink with
"New Coke" Follow-up taste tests revealed that most consumers preferred the taste of New Coke to
both Coke and Pepsi, but Coca-Cola management was unprepared for the public's nostalgia for the old
drink, leading to a backlash. The company gave in to protests and returned to a variation of the old
formula, under the name Coca-Cola Classic on July 10. 1985.

On February 7 2005, the Coca-Cola Company announced that in the second quarter of 2005 they
planned to launch a Diet Coke product sweetened with the artificial sweetener sucralose, the same
sweetener currently used in Pepsi One. On March 21, 2005, it announced another diet product Coca-
Cola Zero, sweetened partly with a blend of aspartame and acesulfame potassium. In 2007, Coca-Cola
began to sell a new "healthy soda": Diet Coke with vitamins B6, B12, magnesium, niacin, and zinc,
marketed as "Diet Coke Plus". On July 5 2005, it was revealed that Coca-Cola would resume
operations in Iraq for the first time since the Arab League boycotted the company in 1968.
In April 2007 in Canada the name "Coca-Cola Classic" was changed back to "Coca-Cola." The word
"Classic" was truncated because "New Coke" was no longer in production, eliminating the need to
differentiate between the two. The formula remained unchanged.
In January 2009 Coca-Cola stopped printing the word "Classic" on the labels of 16-ounce bottles sold
in parts of the southeastern United States. The change is part of a larger strategy to rejuvenate the
product's image. In November 2009 due to a dispute over wholesale prices of Coca-Cola products,
Costco stopped restocking its shelves with Coke and Diet Coke.

(Timeline view of Coca-Cola bottling 1899-1957)

NATURE OF BUSINESS
Nature of business

Coca-Cola manages six operating segments (most of them geographically based), including Europe,
the Middle East, and Africa (EMEA); Latin America; North America; Asia Pacific; Bottling
Investments; and Corporate.

Its geographic operating segments primarily manufacture and sell beverage concentrates and syrups.
North America is the largest geographic segment, accounting for about 35% of revenue; the EMEA
and Asia-Pacific regions generate nearly 25% and about 15%, respectively, followed by Latin
America, which brings in just more than 10% of total revenue.

The shrinking Bottling Investments segment generates about 10% of revenue and includes company-
owned and consolidated bottling operations, which sell soft drinks and other nonalcoholic beverages
to retailers, distributors, wholesalers, and bottling partners who distribute them to retailers. Coca-Cola
owns stakes in major bottlers such as Mexico's Coca-Cola FEMSA (28%), European bottler Coca-
Cola HBC (23%), AC Bebidas (20%), Coca-Cola European Partners (19%), Monster Beverage (19%),
and Coca-Cola Bottlers Japan (18%).

In early 2019 the company launched another segment, Global Ventures, which will include the results
from recently acquired Costa Limited, owner of thousands of coffee shops operating outside North
America.

Soft drinks account for about 70% of Coca-Cola's worldwide unit case volume.
VISION MISSION
Vision mission

Coca-Cola’s Purpose is to “refresh the world, make a difference.” Its vision and mission are to “craft
the brands and choice of drinks that people love, to refresh them in body & spirit and done in ways
that create a more sustainable business and better-shared future that makes a difference in people’s
lives, communities, and our planet.”

● People: Be a great place to work where people are inspired to be the best they can be.
● Portfolio: Bring to the world a portfolio of quality beverage brands that anticipate and satisfy
people's desires and needs.
● Partners: Nurture a winning network of customers and suppliers, together we create mutual,
enduring value.
● Planet: Be a responsible citizen that makes a difference by helping build and support
sustainable communities.
● Profit: Maximize long-term return to shareowners while being mindful of our overall
responsibilities.
● Productivity: Be a highly effective, lean and fast-moving organization.
QUALITY POLICY
Quality Policy

At Coca-Cola HBC, we believe that success depends on the supply of high-quality products, packages
and services that meet and exceed customer and consumer expectations of our brand products.
Fundamental to this is the responsibility to ensure the quality and food safety of all the products we
manufacture and distribute across our markets.

We are committed to continually enhancing the reputation of the brands we produce and distribute,
maintaining consumer confidence in our portfolio through the development and implementation of
quality and food safety systems, standards and practices.

All Coca-Cola HBC operations are committed to continuous improvement, which is measured,
evaluated and validated for effectiveness through internal and external audits.

We believe that the responsibility for achieving quality and food safety commitments lies with every
single Coca-Cola HBC employee, in how they do their job and in their relationship with stakeholders.
Quality and food safety are the responsibility of every employee that has a direct influence on
ingredients, packaging, manufacturing, storage and the transport of products.

The following quality and food safety principles are the foundation of Coca-Cola HBC’s commitment
to quality and food safety:

● Manufacture and deliver products that meet the highest quality and food safety standards.
● Meet all statutory and regulatory requirements for quality and food safety, including mutually
agreed customer requirements related to quality and food safety.
● Ensure a sustainable quality and food safety culture through the implementation, certification
and continuous improvement of effective quality and food safety management systems
compliant with ISO 9001, FSSC 22000, together with Coca-Cola system requirements and
standards (KORE) in all operations and where applicable.
● Validate the effectiveness of the quality and food safety management systems through internal
and external audit processes recognized by the International Standards Organization (ISO) and
The Coca-Cola Company.
● Apply a risk assessment methodology, aligned with the context in which we operate, to
facilitate our ability to achieve quality and food safety management system objectives and
continually improve.
● Build a quality and food safety capability, mindset and culture through structured programs
that develop employees’ competencies and technical skills, increase awareness, manage risk
and drive increasing levels of excellence across the organization.
● Continually review quality and food safety policies, standards and procedures to effectively
manage food safety risks associated with changes in products, processes and technologies.
● Include quality and food safety strategies in the annual business planning process to ensure that
food safety and quality remains an integral part of operations.
● Set annual measurable quality and food safety objectives for all operations, and at group level,
to ensure continuous improvement and compliance with all standards.
● Ensure that suppliers and contractors embrace the same quality and food safety commitments
and monitor the materials and services they supply through audits and incoming goods
inspections.
● Communicate quality and food safety requirements to suppliers, contractors, customers and
consumers and other relevant interested parties by establishing specifications for ingredients
and packaging materials, product storage and distribution and consumer guidelines.
● Communicate quality and food safety aspects, strategies and performance to employee’s
associates, consumers, customers and principal stakeholders that have an impact on or are
affected by Coca-Cola HBC’s food safety and quality management systems.
WORKFLOW MODEL
Workflow Model

In our concentrate operations, we typically generate net operating revenues by selling concentrates and
syrups to authorized bottling operations (to which we usually refer to as our “bottlers” or our “bottling
partners”). Our bottling partners either combine the concentrates with sweeteners (depending on the
product), still water and sparkling water, or combine the syrups with sparkling water to produce
finished beverages. The finished beverages are packaged in authorized containers — such as cans and
refillable and non-refillable glass and plastic bottles — bearing our trademarks or trademarks licensed
to us and are then sold to retailers directly or, in some cases, through wholesalers or other bottlers.
Outside the United States, we also sell concentrates for fountain beverages to our bottling partners who
are typically authorized to manufacture fountain syrups, which they sell to fountain retailers such as
restaurants and convenience stores which use the fountain syrups to produce beverages for immediate
consumption, or to authorized fountain wholesalers who in turn sell and distribute the fountain syrups
to fountain retailers.

In our finished product operations, we typically generate net operating revenues by selling sparkling
soft drinks and a variety of other nonalcoholic beverages, including water, enhanced water, and sports
drinks; juice, dairy and plant-based beverages; tea and coffee; and energy drinks, to retailers or to
distributors, wholesalers and bottling partners who distribute them to retailers. These finished product
operations consist primarily of our Company-owned or -controlled bottling, sales and distribution
operations which are included in our Bottling Investments operating segment. Also, in the United
States, we manufacture fountain syrups and sell them to fountain retailers, such as restaurants and
convenience stores who use the fountain syrups to produce beverages for immediate consumption, or
to authorized fountain wholesalers or bottling partners who resell the fountain syrups to fountain
retailers. We authorize these wholesalers to resell our fountain syrups through nonexclusive
appointments that neither restrict us in setting the prices at which we sell fountain syrups to the
wholesalers nor restrict the territories in which the wholesalers may resell in the United States. Our
finished product business also includes juice and other still beverage production operations in North
America. Our fountain syrup sales in the United States and the juice and other still beverage production
operations in North America are included in our North America operating segment.
(Workflow for Coca-Cola)
PRODUCT PROFILE
Product Profile

The Coca-Cola Company (NYSE: KO) is the world’s largest beverage company, refreshing consumers
with more than 500 sparkling and still brands and nearly 3,900 beverage choices. Led by Coca-Cola,
one of the world’s most valuable and recognizable brands, our company’s portfolio features 21 billion-
dollar brands, 19 of which are available in reduced-, low- or no-calorie options. These brands include
Diet Coke, Coca-Cola Zero, Fanta, Sprite, Dasani, vitamin water, Powerade, Minute Maid, Simply,
Del Valle, Georgia and Gold Peak. Through the world’s largest beverage distribution system, we are
the No. 1 provider of both sparkling and still beverages. More than 1.9 billion servings of our beverages
are enjoyed by consumers in more than 200 countries each day.

Did you know? Coca-Cola sells soup in a can! Bistrone is a nourishing meal on the go, available in
two flavors in Japan.

Visitors to World of Coca-Cola in Atlanta have the opportunity to sample over 100 Coca-Cola
beverages from around the world in the ever-popular Taste It! beverage lounge. Guests can also try
their hand at “inventing” new beverages by mixing flavor combinations using the Coca-Cola
Freestyle® fountain dispenser. The touch-screen machine has the capacity to dispense over 100 regular
and low-calorie beverage brands in multiple taste combinations. Take a virtual tour of Taste it now!

More and more people are choosing low-calorie foods and beverages as a way to balance caloric intake
with physical activity. The Coca-Cola Company has a successful track-record of product innovation
in the low-calorie beverage category, with the introduction of Tab® in 1963 and Diet Coke® in 1982.
By 1986, Diet Coke became the world’s top-selling diet cola and continues to uphold that title today.
Diet Coke’s success led to the introduction of many flavor extensions, such as Diet Coke with Lemon,
Diet Vanilla Coke, Diet Cherry Coke, Diet Coke with Lime and most recently, Diet Coke with Splenda.
Recognizing that some consumers want a no-calorie beverage with the distinctive taste of the original
Coca-Cola brand, Coca-Cola Zero was introduced in 2005. Created to appeal to young adults, the
launch of Coca-Cola Zero was one of the most successful launches in The Coca-Cola Company’s
history. The beverage is now available in more than 140 countries.

Of course, it all started with the original Coca-Cola brand beverage in 1886. Since that time, there has
been much speculation and rumor about what exactly is contained in the Secret Formula of the world’s
best-known beverage. At World of Coca-Cola, you can feel closer than ever before to Coca-Cola’s
most closely guarded trade secret and learn about the intrigue behind the secret formula in our new
Vault of the Secret Formula experience at World of Coca-Cola.

Coca-Cola remains committed to paying attention to consumers’ changing needs as well as cultural
diversity in what people like to drink and how they drink it. That commitment is evident in initiatives
from a group dedicated to identifying emerging brands to innovation in packaging and recycling
programs.

Did you know? Before it goes to market, each Coca-Cola product undergoes nearly 450 different tests
to ensure that ingredient and packaging quality meets Company standards.

Among the newest choices for consumers is the mini can. At 7.5 ounces and only 90 calories, it is a
refreshing alternative for consumers who are conscious of portion and calorie control. Another new
choice is Sprite® Green, the first naturally sweetened, reduced calorie sparkling beverage in the U.S.
made with TRUVIA® natural sweetener. Each 8.5-ounce serving has 50 calories and 5% lemon juice.
Lastly, in order to help consumers, make more informed decisions about their beverage selections, The
Coca-Cola Company has added calorie information to the front of product packaging.

The Coca-Cola Company cares about the health of consumers as well as the health of the planet. As
part of a quest to make every plastic bottle 100% renewable and recyclable, the Plant Bottle was
introduced in 2009. Plant Bottle packaging is a redesigned PET plastic bottle made from up to 30%
renewable plant-based material that is fully recyclable in most communities. This is the only plastic
bottle in the marketplace made from plant-based material which helps reduce dependence on non-
renewable sources. In the United States, Plant Bottle packaging is being used for all Dasani® package
sizes. The innovative bottle was recently honored with a Greener Package Award. The second-annual
Greener Package Awards recognizes innovations that significantly reduce packaging’s environmental
footprint. Plant Bottle also won the DuPont Award for Packaging Innovation and the Design for
Recycling Award from the Institute of Scrap Recycling Industries.
OWNERSHIP PATTERN
Ownership Pattern

Coca-Cola institutional investors with more than 5% of its stock include Berkshire Hathaway (an
investment company owned by Warren Buffet) with 9.38% of shares, The Vanguard Group, holding
6.67% of shares and BlackRock owning over 5.67% of shares of the company. Other individual
investors like Herbert A. Allen, director of The Coca-Cola Company since 1982, Barry Diller,
Chairman of the Coca-Cola board since 2002 and former CEO James Quincey.

Who is Herbert A. Allen?

Director of the Coca-Cola Company since 1982, Mr. Allen is President, Chief Executive Officer and
a Director of Allen & Company Incorporated, a privately held investment firm.

Who is Barry Diller?

Director of The Coca-Cola Company since 2002, he is also Chairman of the Board and Senior
Executive of Expedia Group, Inc. Barry Diller has also served as Special Advisor to TripAdvisor, Inc.

Who is James Quincey?

James Quincey is Chairman of the Board of Directors of The Coca-Cola Company. From December
2016 he has been serving as CEO of the company. He joined Coca-Cola back in 1996 holding several
marketing and operations leadership positions over the course of his career.
ACHIEVEMENTS
Achievements

Interbrand’s Global Brand Scorecard for 2003 ranked Coca-Cola the #1 Brand in the World and
estimated its brand value at $70.45 billion Coca- Cola currently offers nearly 400 brands in over 200
countries or territories and serves 1.5 billion servings each day.

The Coca-Cola Company won 2 awards in 2018 and 3 awards in 2017. In 2018, The Coca-Cola
Company won for Best Company for Diversity 2018 and Best Company Compensation. In 2017, The
Coca-Cola Company won for Top Rated Company for Women, Top Rated Company for Diversity and
Top-Rated Product Teams. Based on 6,418 ratings and 376 participants, employees at The Coca-Cola
Company are satisfied with their work experience. The overall culture score, 68/100 or B-, incorporates
employee ratings based on their feedback on the Perks and Benefits, Manager, Meetings and more.
FUTURE GROWTH AND PROSPECT
Future Growth and Prospect

The world’s largest beverages company took 21 years to sell one billion cases—or containers—
containing its sugary sodas and drinks in India. It now intends to sell another billion in five years.

That comes also as Coca-Cola Co. aims to make India its third-largest market by volumes, from fifth
largest at present. However, James Quincey, the company’s chairman and global chief executive
officer, didn’t specify a timeline for the same.

Coca-Cola, Quincey said, won’t be making further investments in India till 2022. “What we’re focused
on is getting our investment plan that was running through 2022, completed preferably on or ahead of
schedule that will support the growth that’s coming for the marketplace (India),” he told Bloomberg
Quint today. The company, he said, would launch products at lower price points within its existing.

The company had announced in 2013 that it would invest $5 billion in India and followed that up with
another $1.7 billion four years later for the fruit circular economy, an initiative to source native produce
to be infused in its beverages. Coke’s diversification beyond sugary drinks is part of its efforts to fend
off competition from arch-rival Pepsi, among other competitors, and reach out.

Sugar Content

Coca-Cola is working on reducing the sugar content in its beverages in three to four years and has
already reduced it in Thumbs Up and Maaza to below six grams, T Krishna Kumar, president-India
and Southwest Asia of Coca-Cola, said. All new launches by the company won’t have more than six
grams of sugar in the next three and a half to four years, he said. “Most of our new products which
were expanded come with sugar levels, which are much below what has been prescribed by the WHO.”

Corona virus

Impact Quincey told Bloomberg Quint that the impact of the novel corona virus outbreak in China
would “be temporary”.

The company is insulated from any short-term impact since it has buffers and contingency for its
ingredients, he said, adding that if the virus spreads at an exponential rate globally, it would be a big
issue.
THE McKINSEY’S 7S FRAMEWORK
The McKinsey 7S framework

The McKinsey 7S framework is a valuable tool used by organizations to ensure their company is
operating optimally under a variety of circumstances. Developed by the McKinsey consulting
company in the 1980s, the tool sought to promote an alignment of seven key parameters as a means
for maximizing the likelihood of company success. These parameters, dubbed the “7 S’s”, are all
interconnected within the framework, with each “S” being as important as the next. This
interconnectedness also outlines a key component of the framework – a change in one parameter
necessitates a change in all of the others in order to maintain alignment and ensure company success.
The model is particularly useful when re-evaluating a company’s organizational structure and strategy
after a large change (ex: a merger, change in management, rapid expansion etc.). Such changes will
likely cause a large shift in at least one of the 7 “S” components. It is therefore useful to use the
McKinsey 7S model to re-evaluate whether all 7 S components remain aligned and make the necessary
changes to maintain this synergy if misalignment has occurred.

The 7 S elements are outlined in the matrix below:

These elements can be further subdivided into the “Hard S’s” and “Soft S’s”.

Hard S’s

Strategy

A company’s “strategy” is the plan it has developed in order to achieve a sustained competitive
advantage within their market space. This strategy should be specific and well-articulated. When
building a company strategy, it is important to consider the following questions:
• What are the company objectives?
• How will the objectives be achieved?
• What makes us competitive?
• How will the company mitigate risks and potentially damaging external factors?

Structure

The structure of a company is its organizational layout. This includes the way different business sub-
divisions and units are organized, as well as the hierarchy of who is accountable to whom and for what.
This is an important factor in determining the decision-making process and lines of communication
within a company.

Systems

Systems are procedures and processes that “run” an organization. These are the areas of the company
that determine how business is done. Examples of systems include:
• Financial Systems
• HR Systems
• Document & Information Storage
• Communication Systems

Systems also include the controls and feedback mechanisms used by an organization to ensure they
are “on the right track”.
Soft S’s

Style

Style is a representation of the management of a company and how they expect their employees to
represent themselves. These mannerisms reflect how the company wants to be portrayed to the public
and is generally a direct reflection of the character of the company’s leaders. Some examples include:
• How people within the company interact with one another and their customers
• Any symbolic value attached to actions and decisions
• How leaders and managers approach decision making (i.e. democratically)

Staff

Staff is everything to do with company personnel, from the top to the bottom of an organization. One
major theme when considering the staff of a company is the motivation, and generally companies tend
to build their staff based on how people get motivated. Some examples of staffing to consider are:
• What type of employees the company has/wants?
• How many employees are needed for the organization to succeed?
• How the employees are trained?
• How will the company reward or incentivize employees?

Skills

Skills are the abilities in which the employees perform the best, and the overall repertoire of talent that
the company has. These skills can include:
• Hard skills (i.e. software developers, skilled laborers, etc.)
• Communication within the company and to their customers
• Wealth of knowledge (i.e. PhDs, experienced workers, etc.)

Major changes within the organization often leads to a reassessment of what skills are present and
what skills are needed moving forward. Skill development is often equally as important as hiring
people who are extremely skilled.
Shared Values

Shared values are at the core of the McKinsey 7s Model, with each of the other six S’s having a direct
connection with it. Shared values are the overall standards to which management and employees hold
themselves to, and these must be clear and evident to the entire organization. Quite often an
organization will use a mission statement to try to reflect these values to the public. Essentially these
are the ‘guiding principles’ of a company and relate to everything that happens anywhere within the
organization.

Applying Mckinsey 7s to Coca-Cola

In order to visualize how the Mckinsey 7s model would work on a real company, we have chosen to
apply the principles to the beverage company Coca Cola.

Strategy

The strategy at Coca Cola can be broken down into many different sub-categories. The corporate
strategy, business strategy, and operational strategy can all be considered key moving pieces in the
success of Coca Cola’s business model. The corporate strategy looks at continuing to build Coke’s
extensive beverage portfolio, asset expansion into Asia, and developing new products that align with
the current demand for more natural and healthy alternative beverages.

Structure

The corporate structure of Coca Cola is heavily segmented to account for the many different divisions
and regions this multi-billion-dollar company operates in. Head office provides the main direction for
the company, with key strategic decisions being made by the team of 12 ExCo’s with one head ExCo
committee serving as the CEO. The ExCo’s either represent one of the regional branches of Coca Cola
or serve a more specialized niche in the company (e.g. CFO). Latin America, Pacific, Eurasia & Africa,
Russia, and North America represent the five key regions that Coca Cola has designated specialized
business.
Systems

There are several main systems that are part of Coca-Cola business strategy. They have directional
systems that flow from ExCo’s down to entry level employees where upper management ensures the
shared values are adhered to when making any strategic decisions. Process systems are in place to
divide up large tasks into bite sized chunks and to provide management with the necessary tools to
adhere to the shared values. Additionally, there are day to day management systems in place to receive
employee feedback and provide incentives and awards for adherence to the shared values.

Style

The corporate culture of Coca Cola emphasizes a style that focuses on teamwork and togetherness.
They continually look to implement the idea of One team, one company, One passion. Coca Cola
strives to promote sustainability and community development, as well as being environmentally
friendly.

Staff

Due to Coca-Cola’s tremendous standing in the soft drink industry, they draw in some of the most
talented people in the industry. Coca-Cola also provides career development opportunities, stock
options, and performance rewards resulting in a high retention rate and low employee turnover.

Skills

As previously mentioned, Coca-Cola has some of the most talented employees in the soft drink
industry, thus the skills their workers possess are second to none. Coca-Cola is always coming up with
innovative ways to improve their products and this reflects the great management, research and
development, and systems skills that are prevalent throughout the company. They also always look to
allocate whatever technological and staffing resources are required to make their innovative ideas a
reality.
Shared Values

As previously mentioned, the shared values are at the core of McKinsey 7s Model. Coca-Cola has
clearly recognized this and looks to implement their own shared values in their systems, structure,
strategy and style as a world leader in the soft drink industry. Before making any key business and
management decision, Coca-Cola will ensure the decision at hand meets their 6p’s:

• People: Be a great place to work where people are inspired to be the best they can be.
• Portfolio: Bring to the world a portfolio of quality beverage brands that anticipate and satisfy
people's desires and needs.
• Partners: Nurture a winning network of customers and suppliers, together we create mutual,
enduring value.
• Planet: Be a responsible citizen that makes a difference by helping build and support
sustainable communities.
• Profit: Maximize long-term return to shareowners while being mindful of our overall
responsibilities.
• Productivity: Be a highly effective, lean and fast-moving organization.

Evidently, Coca-Cola employs a business model that has considered the many key factors presented
in the Mckinsey 7s model. The alignment of Coca-Cola to these principals has likely driven the success
of this company making them the world leader in the soft-drink industry they are today.
PORTER’S FIVE FORCES OF COCA-COLA
Porter's Five Forces of Coca-Cola

Since its introduction in 1979, Michael Porter’s Five Forces has become the de facto framework for
industry analysis. The five forces measure the competitiveness of the market deriving its attractiveness.
The analyst uses conclusions derived from the analysis to determine the company’s risk from in its
industry (current or potential).
The five forces are:

1. Threat of New Entrants

2. Threat of Substitute Products or Services
3. Bargaining Power of Buyers
4. Bargaining Power of Suppliers
5. Competitive Rivalry Among Existing Firms

1. Threat of New Entrants

The potential of an industry determines the new businesses entering the market. Apart from the growth
prospects, the barriers to entry and exit are key factors that affect the market entry decisions of firms.
In case of the beverage industry, the barriers to entry are low owing to the low cost of setting up a
production unit and marketing expenses to make the product available to the target market. There are
small scale companies entering in the beverage industry which suggests the ease of market entry for
new firms (Wahlen, Baginski and Bradshaw, 2014) Since Coca-Cola is a globally recognized brand
that is consumed in more than 200 countries, the presence of small scale players and new entrants has
no significant impact on the operations of Coca-Cola. Companies such as Coca-Cola can benefit from
the market dynamics by using its strong market presence to expand its portfolio and further penetrate
into new markets.

2. Threat of Substitute

Consumers can select a beverage from the wide range of options available in the market. There are
different companies supplying soft drinks, juices and bottled water which increase the threat of
substitute products. However, consumers that prefer the taste of soft drinks produced by Coca-Cola
are not likely to switch to other beverages. Nevertheless, the availability of other brands besides Coca-
Cola affects the industry dynamics as the consumers have the option to select other beverages (Wahlen
et al., 2014). It can be concluded that the threat of substitute products in the beverage industry is
moderate, thus the switching decisions of the consumers have the potential to have some effect on the
financial performance of Coca-Cola.
3. Bargaining Power of Buyer

Individual consumers are the ultimate buyers of soft drinks. However, Coke and Pepsi's real 'buyers’
have been local bottlers who are franchised -or are owned, especially in the case of Coke- to bottle the
companies’ products and to whom each company sells its patented syrups or concentrates. While Coke
and Pepsi issue their franchise, these bottlers are in effect the’ conduit' through which these
international cola brands get to local consumers Through the early1980's, Coke's domestic bottlers
were typically independent family businesses deriving from franchises issued early in the century.
Pepsi had a collection of similar franchises, plus a few large franchisees that owned many locations.
Until 1980, Coke and Pepsi were somewhat restricted in owning bottling facilities, which was viewed
as a restraint of free trade. Jimmy Carter, a Coke fan, changed that by signing legislation to allow soft-
drink companies to own bottling companies or territories, plus upholding the territorial integrity of
soft-drink franchises, shortly before he left office. Also, the three most important channels for soft
drinks are supermarkets, fountain sales, and vending. In 1987, supermarkets accounted for about 40%
of total U.S. soft drink industry sales, fountain sales represented about 25%, and vending accounted
for approximately 13%. Other retailers represent the remaining percentage. While both Coca-Cola and
Pepsi distribute their bottled soft drinks through a network of bottling companies, Coca-Cola uses its
own network of wholesalers for their fountain syrup distribution, and Pepsi distributes its fountain
syrup through its bottlers.

4. Bargaining Power of Suppliers

The suppliers of the beverage industry include firms that supply basic commodity items such as sugar,
caffeine, flavors and other ingredients required to manufacture beverages. The suppliers providing
these items have limited control over the price shift and can't exert a significant influence on the price
structure. Since suppliers view their contract with large scale beverage companies such as Coca-Cola
as an important part of their distribution network, they are not likely to exert much influence or use
bargaining power in setting up price of the ingredients. In addition, the suppliers have to abide by the
guiding principles such as Agriculture Guiding Principles (journey Staff, 2017), suggesting that they
have low bargaining power and the company has greater influence on supplier contracts and pricing.
5. Competitive Rivalry among Existing Firms

The intensity of competitive rivalry in the beverage industry is moderate. The main competitor of
Coca-Cola is Pepsi while the other producers of soft drinks, bottled water and juices have a
comparatively lower market share (Lamb, Hair and McDaniel, 2011).

Moreover, the small-scale companies do not have the potential to affect the market share of Coca-Cola
to a significant degree, thus indicating that the main competition is among Pepsi and Coca-Cola, which
has led to the term Cola Wars to define the rivalry between the two firms. Since Coca-Cola has a well-
established brand identity and a loyal set of consumers, it is not likely to be affected by competitors.
This competitive landscape suggests that there is a moderate threat of competitive rivalry with the
main competition originating from PepsiCo.
SWOT ANALYSIS OF COCA-COLA
SWOT Analysis of Coca-Cola

SWOT stands for Strengths, Weaknesses, Opportunities, and Threats, and so a SWOT Analysis is a
technique for assessing these four aspects of your business.

You can use SWOT Analysis to make the most of what you've got, to your organization's best
advantage. And you can reduce the chances of failure, by understanding what you're lacking, and
eliminating hazards that would otherwise catch you unawares.

Better still, you can start to craft a strategy that distinguishes you from your competitors, and so
compete successfully in your market.
The following is the SWOT analysis for The Coca-Cola company:

Coca-Cola Strengths – Internal Strategic Factors

1. Strong brand identity – Coca-Cola is a highly popular brand with a unique brand identity. Its
soft drinks are the most-selling drinks in history.
2. Highest brand equity – Coca-Cola is undoubtedly one of the most renowned brands with the
highest brand equity. It was also awarded ‘highest brand equity award’ in 2011 by Interbrand.
3. Extended global reach – It is sold in more than 200 countries with 9 billion servings per day of
Company products. It has introduced more than 500 new products globally. Some of these are
variations of Coca-Cola beverages, like Coca-Cola Vanilla and Cherry Coca-Cola. Its brands
are known to touch every lifestyle and demography.
4. Greatest brand association and customer loyalty – Coca-Cola is considered one of the US's
most emotionally-connected brands. This valuable brand is associated with ‘happiness’ and has
strong customer loyalty. Customers can quickly identify their particular taste. Finding its
substitutes is difficult for them. Moreover, Coca-Cola and Fanta have a larger fan following
than other beverage names in the industry.
5. Largest Brand Valuation – Coca-Cola is listed as the 3rd Best Global Brand on InterHbrand’s
annual ranking. Having an estimated brand value of $79.96 billion, it has retained the top
position for many years.
6. Dominant Market Share – Out of Coca-Cola and Pepsi, the only two largest manufacturers of
soft drinks in the beverage segment, Coca-Cola has the largest market share. Coke, Sprite, Diet
Coke, Fanta, Limca, and Maaza are the highest growth drivers for Coca-Cola.
7. Unparalleled distribution system – Coca-Cola has the most efficient and most extensive
distribution network in the world. The company has nearly 250 bottling partners globally.
8. Acquisitions – Coca-Cola acquired AdeS in 2016. AdeS is the largest soy-based beverage
brand in Latin America. Through this acquisition, Coca-Cola expanded its ready-to-drink
beverage portfolio.
Coca-Cola Weaknesses – Internal Strategic Factors

1. Aggressive competition with Pepsi – Pepsi is the biggest rival of Coca-Cola. Had it not been
Pepsi, Coca-Cola would have been the clear market leader in the beverage.
2. Product diversification – Coca-Cola has low product diversification. Where Pepsi has launched
many snacks items like Lays and Kurkure, Coca-Cola is lagging in this segment. It gives Pepsi
leverage over Coca-Cola.
3. Health concerns –Carbonated drinks are one of the major sources of sugar intake. It results in
two grave health issues – obesity and diabetes. Coca-Cola is the biggest manufacturer of
carbonated beverages. Many health experts have prohibited the use of these soft drinks. It is a
controversial issue for the company. However, Coca-Cola hasn’t devised any health alternative
or solution for this problem yet.

Coca-Cola Opportunities – External Strategic Factors

1. Introduce new products and diversify its segments – Coca-Cola has the opportunity to introduce
new offerings in health and food segments just like Pepsi. It can contribute to their revenue,
and they can branch out from carbonated drinks.
2. Increase presence in developing nations – Many regions with hot climate has the highest
consumption for cold drinks. Thus, increasing presence in such locations can be excellent –
Middle Eastern and African countries are a good example.
3. Bring an advanced supply chain system – Coca Cola’s business is entirely dependent upon
logistics and supply chain. Transportation costs and fuel prices are always on the rise. Thus,
coming up with some advanced and improved systems for distribution can be an opportunity.
4. Packaged drinking water – Coca-Cola owns several packaged drinking water brands like
Kinley. There is a great potential for expansion in this segment for Coca-Cola. There is an
opportunity to expand and bring more healthy drinks in the market to avoid people’s criticism.
Coca-Cola Threats – External Strategic Factors

1. Water usage controversy – Coca-Cola has faced many criticisms over its water management
issue. Many social and environmental groups have claimed that the company has a vast
consumption of water in water-scarce regions. Besides, people have alleged that Coca-Cola is
polluting water and mixing pesticides in water to clear contaminants.
2. Packaging controversy – Greenpeace censured Coca-Cola in its published report in 2017 for
its use of single-use plastic bottles. It has also been criticized over its recycling and renewable
sources.
3. Direct and indirect competition – Although direct competition from Pepsi is clear in the market,
however, there are many other companies which are indirectly competing with Coca-Cola.
Starbucks, Costa Coffee, Tropicana, Lipton juices, and Nescafe, are the indirect competitors of
Coca-Cola which can threaten its market position.
COCA-COLA FINANCIAL ANALYSIS
Coca-Cola Financial Analysis

Coca Cola Company operates around the world in North America, Africa, Asia and the Middle East
and more than 200 countries. Coca Cola is the biggest beverage company as it holds over 500 sparkling
and still brands, and it also owns the largest market share and has market capitalization is 102 billion
in US dollars and the industry average is 75 billion in US dollars. (Coca-Cola Company, 2020).

The fundamental element for a successful business is having effective decision-making process based
on an effective planning and financial management (Al Muhairi & Al Muhairi, 2019). Financial ratio
analysis became extremely dependable by business owner and investors when taking decision or
investing. Financial ratios help to comprehend financial statements in order to take appropriate action
to improve it, moreover it also helps investors to compare between companies financial performance
before investing. (Chnar,2018).

According to Chnar (2018) financial statement demonstrates the financial position for a business
during a specific time, it also assists in predicting the future performance. The creditors are interested
in knowing the business future ability in covering debt, while investors care about the profitably and
the managers care about the efficiency.

Liquidity in finance refers to how quickly and easily assets can be converted to cash to cover the
business short- or long-term debt. There are several liquidity ratios used in financial analysis such as
Current Ratio, Quick Ratio and Cash Ratio.

Current ratio is used to measure the business capability to pay it short term debt or the one due within
a year. Current ratio focuses in showing that the company is able to pay off its current liabilities by
turning assets to cash. Furthermore, having a current ratio of 1 means the business is a good one and
it can cover the liabilities due and overcome any argent situations. Moreover, quick ratio also known
as acid test is similar to the current ratio except quick ratio focuses more on turning the current assets
into cash like inventory. The majority of businesses have a quick ratio below 1 as they don’t have to
settle their liabilities quickly, do this ratio is more beneficial to companies who pays within weeks. in
addition, cash ratio concentrates on paying the debt using the cash and marketable securities as they
are the most liquid asset. For cash ratio is better for companies to have it below 1 as it is better to invest
the money rather than having It lay around (Jacobs, 2015).
On another hand, Activity Ratios also known as operation ratio measures the speed which several
accounts are converted into sales or cash. Most companies depend mostly on accounts inventory
turnover, receivable turnover, and total asset turnover to measure it. Inventory turnover revels the
actual time used to produce, keep and sell inventories. Companies have various inventory turnover as
their need to store product produce is different, for example fresh food company where products are
consumed faster will have less inventory turnover than electrical company. Moreover, account
receivable turnover is a number that show how many times the business collects account receivable
from its customers in a year. Account receivable turnover is important as it shows the period needed
for the company to collect which effects the cash flow. furthermore, total asset turnover measures the
capability of the firm to generate sales from assets, and the higher the turnover the better as it shows
the business can produce sales (Sakevych, 2019).
Debt ratio indicates how stable is the company financially as it shows the amount of assets that were
financed by debt, thus having a lower debt ratio is better for the business as it will have lower risk.
Another ratio is Time Interest Earned Ratio which is used to know if the business is able to pay its
interest. Creditors and debtors use it to define the business debt capacity and to identify if the company
is facing financial trouble. (Wilkinson, 2013)
Profitability ratios are the sheds the light on the ability generate profit. Return on Total Assets, Return
on Equity and Profit Margin are examples of profitability ratios used. Return on total asset ratio also
known as return on investment ratio determine the overall effectiveness to generate profits using the
available assets. Investors are interested in this ratio as it’s a tool that asset them on knowing how
much of their contribution is generating profit for the business. In addition, return on equity helps
future investors to see how their money will be uses in the business to generate profit. Lastly Profit
Margin ratio shows how much profit is generated from each dollar in sales. Having a high profit margin
gives a competitive advantage because the business will be able to make less revenue and still pay off
the expenses (Jacobs, 2015).

Data and Methodology

The study is based on data collected from Yahoo Finance for Coca Cola Company. The financial data
collected was from the Income Statement and Balance Sheet for the years 2016, 2017, 2018 and 2019
in order to conduct a financial analysis using the liquidity, activity, debt and profitability ratios.
 Table 1: Financial Data of Coca Cola Company
Item/Year 2019 2018 2017 2016
Current Assets 20,411,000 30,634,000 36,545,000 34,010,000

Current 26,973,000 29,223,000 27,194,000 26,532,000

Liabilities
Inventories 3,379,000 2,766,000 2,655,000 2,675,000

Cash 11,175,000 15,964,000 20,675,000 22,201,000

Receivables 3,971,000 3,396,000 3,667,000 3,856,000

Total Assets 86,381,000 83,216,000 87,896,000 87,270,000

Total Liabilities 65,283,000 64,158,000 68,919,000 64,050,000

Total Equity 18,981,000 16,981,000 17,072,000 23,062,000

Sales 37,266,000 31,856,000 35,410,000 41,863,000

Cost of Goods 14,619,000 11,770,000 13,256,000 16,465,000

Sold
EBIT 10,533,000 9,781,000 9,427,000 8,626,000

Interest 946,000 919,000 841,000 733,000

Net Income 8,920,000 6,434,000 1,248,000 6,527,000

All numbers in thousands, Source: Yahoo Finance

Results and Discussion

Table 2: Liquidity Ratios of Coca Cola Company

Ratio/Year 2019 2018 2017 2016
Current Ratio 0.76 1.05 1.34 1.28
Quick Ratio 0.63 0.95 1.25 1.18
Cash Ratio 0.41 0.55 0.76 0.84

Figure 1: Current Ratio of Coca Cola company

 Current Ratio
1.60

1.40
1.34
1.28
1.20

1.00 1.05

0.80
0.76
0.60

0.40

0.20

0.00
2019 2018 2017 2016

Current ratio shows the business ability to cover the short term debt .As it shows in the graph, Coca
Cola company recorded a current ratio of 1.28 in 2016 and having a current ratio above 1 is good for
the company which it means Coca Cola is able to cover the short term debt. In 2017 the current ratio
increased to 1.34 which is good but kept on drooping for the following two years to 1.05 and 0.76 due
to decrease in current assets. This clearly shows that the company is facing liquidity issues.

Figure 2: Quick Ratio of Coca Cola Company

Quick Ratio
1.40

1.20 1.25
1.18

1.00
0.95
0.80

0.60 0.63

0.40

0.20

0.00
2019 2018 2017 2016

Quick ratio focuses on using the current assets to cover the debt. Similarly, to the current ratio, the
quick ratio increased from 1.18 to 1.25 from 2016 to 2017. And then declined to 0.95 in 2018 and 0.63
in 2019 due to decrease in current assets
 Figure 3: Cash Ratio of Coca Cola Company

Cash Ratio
0.90
0.84
0.80
0.76
0.70
0.60
0.55
0.50
0.40 0.41

0.30
0.20
0.10
0.00
2019 2018 2017 2016

Cash ratio means using the most liquid assets to pay current liabilities. the graph reveals that Coca
Cola cash ratio kept on deteriorating for last 4 years from 0.84 to 0.41. Just as the previous two liquidity
ratios the cash ratio is also dropping.

Overall, Coca cola liquidity has been worsening over the past 3 years as all the used liquidity ratio
showed it. This can raise a red flag that Coca Cola is not managing their working capital effectively.

Table 3: Activity Ratios of Coca Cola Company

Ratio/Year 2019 2018 2017 2016
Inventory Turnover 4.33 4.26 4.99 6.16
Receivable Turnover 9.38 9.38 9.66 10.86
Total Asset Turnover 0.43 0.38 0.40 0.48

Figure 4: Inventory Turnover of Coca Cola Company

 Inventory Turnover
7

6 6.16

5 4.99
4.33 4.26
4

0
2019 2018 2017 2016

Coca Cola inventory turnover in 2016 was 6.16 times then it continued to decrease for the following
years to become 4.99 in 2017 and 4.26 in 2018. There was slight increase to 4.33 times in 2019. The
decrease in inventory turnover ratio indicates that Coca Cola products where sold slower than it used
to. The shelf life of Coca Cola products is long as the product take years to expire, however, coca cola
faced trouble selling their product faster in the last 3 years compared to the previous years, but it is
still a good ratio.
Figure 5: Receivables Turnover of Coca Cola Company

Receivable Turnover
11.00
10.86

10.50

10.00

9.66
9.50
9.38 9.38

9.00

8.50
2019 2018 2017 2016

Receivable turnover is the period needed to collect receivables from customers. Coca Cola
receivable turnover was 10.86 in 2016 and 9.38 in 2019, the ratio decreased slightly. A good receivable
turn ratio is 10 and we can say Coca Cola is performing good which shows a good cash management.
Although Coca Cola does most of the its business worldwide, they are maintaining a good ratio.
 Figure 6: Total Assets Turnover of Coca Cola Company

Total Asset Turnover

0.60

0.50
0.48
0.43
0.40 0.40
0.38

0.30

0.20

0.10

0.00
2019 2018 2017 2016

This graph shows the total asset turnover ratio which measures the capability of the firm to generate
sales from assets. Coca Cola had a ratio of 0.48 in 2016 which then decreased the following year to
0.40 then again to 0.38 in 2018 and this states that the efficiency of Coca-Cola in using its assets to
generate sales has worsened. The decrease can also be linked back to the decrease in inventory
turnover. However, there were a slight increase in the ratio in 2019 to 0.43.

Activity ratio showed that Coca Cola’s ability to sell their product decrease the past three years and
their best inventory turnover was in 2016 was 6.16 times. Moreover, the company also experience a
slight decrease in the efficiency in collecting the receivables, however their utilization of assets to
generate revenue increased the past couple of years.

Table 4: Debt Ratios of Coca Cola Company

Ratio/Year 2019 2018 2017 2016
Debt Ratio 76% 77% 78% 73%
Times Interest Earned
11.13 10.64 11.21 11.77
Ratio

Figure 7: Debt Ratio of Coca Cola Company

 Debt Ratio
0.79
0.78
0.78
0.77 0.77

0.76
0.76
0.75
0.74
0.73
0.73
0.72
0.71
0.70
2019 2018 2017 2016

Debt ratio shows the amount of assets that were financed by debt. The graph points out the Coca Cola
Debt ratio increased by 5% from 73% in 2016 to 78% in 2017 due to increase in total liabilities and
then decreased to 77% in 2018 and 76% in 2019. The drop in the ratio from 2017 to 2019 shows that
Coca Cola dependence on debt decreased but still high.

Figure 8: Times Interest Earned Ratio of Coca Cola Company

Times Interest Earned Ratio

12.00
11.80 11.77
11.60
11.40
11.20 11.21
11.13
11.00
10.80
10.60 10.64

10.40
10.20
10.00
2019 2018 2017 2016

Times interest earned ratio indicates the ability of a business to cover the interest payments using
EBIT. Coca Cola experienced a decline in times interest earned ratio from 11.7 in 2016 to 10.64 in
2018 which means they faced difficulties in covering interest due to decrease in sales, but in 2019 they
were more comfortable as the ratio increased to 11.43.
The debt ratio analysis of Coca Cola does not look good as the company relay on debt heavily to
finance debt they have shown a progress in reducing it Moreover, Coca cola faced issues with the
Time interest earned ratio from 2016 to 2018 but it started to improve in 2019.

Table 5: Profitability Ratios of Coca Cola Company

Ratio/Year 2019 2018 2017 2016
Return on Equity 47% 38% 7% 28%
Return on Assets 10% 8% 1% 7%
Profit Margin 24% 20% 4% 16%

Figure 9: Return on Equity of Coca Cola Company

Return on Equity
0.50
0.47
0.45
0.40
0.38
0.35
0.30
0.28
0.25
0.20
0.15
0.10
0.07
0.05
0.00
2019 2018 2017 2016

Return on equity measures how much profit were made using the investors contributions. Coca cola
return on equity decreased massively in 2017 to 7% when it was 28% in 2016 due to decline in net
income. Moreover, as the net income increased the next two years the return on equity ratio also
increased to 38% in 2018 and 47% in 2019. The higher the return on equity the better as it measures
the efficiency of the company and it also attracts investors to the business (Al Muhairi and Nobanee,
2019).

Figure 10: Return on Total Assets of Coca Cola Company

 Return on Assets
0.12

0.10 0.10

0.08 0.08 0.07

0.06

0.04

0.02
0.01
0.00
2019 2018 2017 2016

Return on assets is a used to know how much profit a company generate using it assets (profit per
dollar). The return in asset ratio declined from 7% in 2016 to 1% in 2017 and it also links back to
decrease in net income. However, the ratio boosted in 2018 to 8% and in 2019 to 10% due to increase
in net income.
Figure 11: Profit Margin of Coca Cola Company

Profit Margin
0.30

0.25
0.24

0.20 0.20

0.15 0.16

0.10

0.05
0.04
0.00
2019 2018 2017 2016

The graph shows that Coca Cola had a profit margin of 16% in 2016 and 4% in 2017. According to
Ramakrishnan (2017) the decrease was because of demand fall for carbonated beverages in North
America and also in the same year carbonated drinks were labeled as unhealthy by the ministry of
health. However, the profit margin increased dramatically after that to reach 20% in 2018 and 24% in
2019.
LEARNING EXPERIENCE
LEARNING EXPERIENCE

It's been privileged to undertake an organization study at “the largest and most profitable company”.
It was a wonderful experience and indeed a great learning working in such a company which offers
high quality products.

The organization study about “The Coca-Cola Company” has given me the opportunity to gain
valuable industry related experience that would allow me to expand my career options. The skills and
knowledge I gained was quite vast.

Apart from learning as how the organization functions, its structure, departments, policies and
processes the study has opened the doors to explore the various dimension of the organization.

The guidance, support, feedback, useful suggestions and advanced insights about my subject which
was provided by my project guide helped me to successfully complete this Organizational Study.

It has given wide way of studying about FMCG. The organizational study definitely broadened and
provided a lot of insight about the organization. I really had a wonderful experience with The Coca-
Cola Company.
BIBILOGRAPHY
Bibliography

1. https://www.coca-colacompany.com/
2. https://www.coca-colaindia.com/
3. https://www.coca-cola.com/
4. https://en.wikipedia.org/wiki/The_Coca-Cola_Company