Coca-Cola Corporation

Coca-Cola Corporation

   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 comprises 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.

I have decided to choose Coca-Cola, because it has strong brand recognition across the globe. The company has a leading brand value and a strong brand portfolio. Business-Week and Inter-brand, a branding consultancy, recognize. Coca-Cola as one of the leading brands in their top 100 global brands ranking in 2006.The Business Week-Inter-brand valued Coca-Cola at $67,000 million in 2006. Coca-Cola ranks well ahead of its close competitor Pepsi which has a ranking of 22 having a brand value of $12,690 million Furthermore; Coca-Cola owns a large portfolio of product brands. The company owns four of the top five soft drink brands in the world: Coca-Cola, Diet Coke, Sprite and Fanta.

Strong brands allow the company to introduce brand extensions such as Vanilla Coke, Cherry
Coke and Coke with Lemon. Over the years, the company has made large investments in brand promotions. Consequently, Coca-cola is one of the best recognized global brands. The company’s strong brand value facilitates customer recall and allows Coca-Cola to penetrate new markets and consolidate existing ones.

2. Calculation

1st Project. The Coca-Cola Zero Production

   Coca-Cola Corporation want to invest on the project named Coca-Cola Zero. Coke Zero strategically important project for Corporation, as well as branding depends on what kind of values it brings, so we should accept it regardless will it bring us profit or not. The peculiarity of this drink is that it contains the least amount of sugar. In fact, the research now seems to indicate that taking in excessive sugar is more liable to make you fat than consuming fat is. And of course, the massive rise in recent decades of diabetes, heart problems and cancer of the digestive tract have been linked to the huge increase in sugar consumption in the rich world over recent decades. What gives hope to people with diabetes, once again drink this drink.The construction of this project will be begin immediately, and becoming operational at the beginning of the first year. All amounts of money will be shown in tenge.

   The Coca-Cola has decided to invest 9.000.000.000.000 tenge for the next year new project evaluation. Company is preparing 5 projects, listed below:

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   The company wants to calculate profit that reaches the fifth project in the draft. In this case, Coca-Cola company will face initial investments, if it will choose Project E.

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   Each year Coca-Cola will produce 190.000.000-206.000.000 boxes of Coke Zero. Box price will be starts from 33,360KZT in the first year. Price will change during the project’s economic life. At the last year the price will be grew at 39,600 KZT.

Coca-Cola can plan their yearly budgets and goals by calculating these fixed costs in advance, because it’s a cost that does not change with an increase or decrease in the amount of goods or services produced or sold. Fixed costs are expenses that have to be paid by a company, independent of any business activity.

Fixed cost includes monthly payment as salaries, insurance, rent and interest. The variable costs change with the output of the organization. The annual budget planning for variable costs can be critical to the success of the organization by planning as close to the variable cost as possible. Variable cost of the project include all expenses that related with production, in our case variable cost includes food, utility payments and raw materials.  As Coke Zero generally have high fixed costs and lower variable costs they need to plan accordingly to ensure they hit the break-even point. When there is an increase in the production volume of the company, it will have a higher marginal profit.

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