Custom essays on Market Behavior

For my analysis I had chosen the stock of Coca-Cola Co. In this work we stated three economic terms and explained, how they apply to the company we had chosen. The terms were: resources, marginality and production. The main natural resource, which company uses in its production is water. Concerning the term “marginality” we tried to analyze economic strategies, which company uses to boost its margin. In section concerning production the main products of Coca-Cola Co were named. Next we picked one “Big Economic Idea”, which was Idea 5 from the slides and characterized its use in the operating of the Coca-Cola Co.
Keywords: resources, marginality, production.

Considering the given story, I have a sum of 1000$ and I am investing it in Coca-Cola Co (TCCC) stock. Taking into account the price of one share of the stock of this company, which is 52.82$ (Retrieved July 14, 2010), we can calculate an exact number of shares I can buy.
X =
As can be clearly seen from the formula, my stock would equal 18 shares, roughly. The 1-year return on my shares is 7.90%. Taking into consideration the quantity of my shares and the sum invested, we can define the profits.
1) Money invested: 18 52.82 950.76$
2) Rate of margins: 950.76 7.90% 75.11$
Thus, in 1 year we may earn margin of 75.11$ on the 950.76$ investments in TCCC shares.
As to economic terms, the first is resources. The main natural resource for TCCC production is water. Because of the general scarcity of fresh water and its sources in the present-day technological society, the problem of replacement of water used in beverage production is very burning and urgent.
Understanding it, the chairmen of TCCC in 2007 had announced a multi-year partnership with World Wildlife Fund (WWF) in order to conserve and protect freshwater resources. The announcement was made at the annual meeting of WWF in Beijing, China, where TCCC has launched a 20$ million contract with WWF. The company is focusing actions on three core areas: 1) reduce the amount of water used in beverage production; 2) recycling water used in beverage process; 3) replenish water in nature.
The second is marginality. Although 2008-2009 was a period of global economic recession, TCCC earned 7,085,000,000$ in 2009 (which is a significant rise from year 2008 6,268,850,000$ profits). The company is positioning itself well on the market, both organically and through acquisition, such as that of a Chinese juice maker Huiyuan for $2.4 billion. However the company was unsuccessful with its purchase of Huiyuan as it broke anti-trust laws in China (TCCC, 03/09/2008). On March 5, 2010, Coke’s Chief Executive Officer said that emerging markets are bouncing back quicker than more developed markets (Kamcity, 05/03/2010).
The third is production. What does TCCC produce? As it was noted before, TCCC produces soft drinks. It manufactures a variety of more than 450 beverages all over the world. The key products of TCCC are: Coca-Cola, Diet Coke, Fanta, Sprite, Dasani water, Nestea and Barq’s Root Beer. How did TCCC grow from a small Pemberton Medicine Company to a world-wide leader of soft drinks beverage? TCCC used numerous technologies to achieve its rise to the top of soft drinks beverage industry. Through technology, the company perfected Coca-Cola and spread it all over the world.
From the “Big Economic Ideas” I had chosen the Idea 5: For the economy as a whole, expenditure equals income equals the value of production. From the viewpoint of macroeconomics, firms and households represent economic actors that interact on the market. Their interaction is guided by the low of demand and supply, whereas the role of the buyer and the seller changes, depending on the nature of interaction between them. The aim of the firm is to equal its expenditures to its income, and, whenever possible, get profit (Body, Merton, 2000).
As the popularity of carbonated soft drinks is falling, especially in the USA (since the loss in profits in the 3rd quarter of 2008), TCCC concentrates on production of non-carbonated drinks, such as Dansai water, Vitamin water and Powerade. Moreover, the CEOs of TCCC turn their attention to new foreign markets, especially that of India and China. They base their strategy on reasoning, that profits, which they will acquire selling carbonated beverages on this markets, could cover their decrease in margins in the USA (Marketwatch, 17/07/2008). To my mind, to increase profits, TCCC should concentrate on its main products and team up with new business partner, as it did with Powerade in year 2003.
In this paper we discussed TCCC, the problem of fresh water scarcity as the main natural resource for beverage production, the problems of production and margin gain, concerning specific character of TCCC’s products. Further we examined the company’s economic strategics, the revenue and the factors which influence its forming. We must admit that with its strong marketing strategy, solid stock prices and large working capital, TCCC is a good choice to invest money in.

References
Body, Z., Merton, R. (2000). Finance. New Jersey: Prentice Hall.
TCCC Press Center News Release. (2008, September 3). The Coca-Cola Company Offers To Buy Huiyuan Juice Group.