Custom essays on Coca-Cola Company

Deep understanding of supply and demand concepts as well as analysis of factors influencing supply and demand is important for any company. Stock prices and financial position of the company is significantly influenced by changes in such factors. Naturally, for companies operating internationally the set of these factors is more varied, and the analysis has to be done using various points of view. The aim of this essay is to consider factors influencing the demand and supply for Coca Cola Co. products, and analyze the company’s stock dynamics during last three months.
1. Description of company and products
The Coca Cola Company was established in 1891; it distributes a number of soft drink brands such as Coca Cola, Diet Coke, Fanta, Sprite lines of drinks etc. The company uses a complex franchise distribution system (Hoover & Eloranta & Huttunen, 2001): it sells concentrated beverages to bottlers operating worldwide, and these are the bottlers who produce, package and sell ready beverages to local retailers. Generally, Coca Cola Co. operates in more than 200 countries and presents more than 400 brands in these countries (Hoover & Eloranta & Huttunen, 2001). Though the company does not perform bottling operations, it owns a significant percent of its bottlers’ shares.
The main strength of Coca Cola Co. is its complex and at the same time highly efficient marketing system, well-known branding and highly developed marketing policy. The main competitor of Coca Cola Co. is Pepsi, which also offers strong beverage brands worldwide.
2. Factors affecting demand
There are numerous factors affecting demand for Coca Cola beverages. First of all, the demand changes seasonally, and increases during summer months. Taking into account the unusual heat that was noticed in many parts of the globe, it is possible to suggest that this summer the demand for Coca Cola production will increase significantly, and decline in autumn.
The tendency to buy healthier drinks that is spreading worldwide also affects the demand for Coca Cola carbonated soft drinks, which account about 80% of total Coca Cola sales (Grant, 2005). Moreover, economical recession results in decreased consumer spending and it is also the factor that negatively affects sales of Coca Cola products. Finally, the company loses a certain amount of profit due to currency fluctuations due to the fact that its main revenues are coming from international sales.
3. Factors affecting supply
The supply of Coca Cola beverages strongly depends on the prices and availability of raw materials used for productions of the drinks, namely: supply of sweeteners such as corn syrup, supply of aluminium used for producing beverage cans and prices for plastic used for production of bottles (Madura, 2006). For example, there is a tendency for aluminium to become cheaper after seasonal increase, and thus, the supply of Coca Cola products might increase if prices remain the same. Meanwhile, the global production of aluminium is falling (Grant, 2005), and if there is shortage of aluminium, the supply of the company’s products will decrease (or shift more closely to plastic bottles).
There is one more group of factors influencing supply of Coca Cola products in different regions – local laws and regulations. Due to these factors, sales and import of Coca Cola in some regions have declined. Nevertheless, the company showed a 5% increase in growth in the second quarter of 2010 year compared to previous year (Coca-Cola Company, 2010).
4. Analysis of stock prices
The stock of Coca Cola today is worth $55.39, according to (Coca-Cola Company, 2010). Using “historical prices” instrument, it is possible to find out that three months ago the price of the same stock was $51.03. The general dynamics of stock prices during these three months shows almost steady growth. Taking into account that the considered period is from 25 May to 25 August, i.e. covering the whole summer, it is possible to suggest that the main reason for increase of stock prices is seasonal increase of demand for beverages, and as a result, growth of the company’s revenues and financial stability.
The analysis of factors affecting demand and supply for Coca Cola Co. beverages shows that demand is mainly affected by seasonal changes, dynamics of consumer tastes as well as tendency for healthy lifestyle and economical factors such as currency fluctuations and recession. The supply is influenced by prices and availability of raw materials and by changing laws and regulations concerning import of Coca Cola drinks. Analysis of stock prices has shown stable increase of stock price since May 25, which is most likely due to seasonal increase of demand for beverages.

References
Grant, Robert M. (2005). Contemporary strategy analysis. Wiley-Blackwell.
Hoover, William E. & Eloranta, Eero & Huttunen, Kati. (2001). Managing the demand-supply chain: value innovations for customer satisfaction. John Wiley and Sons.
Madura, Jeff. (2006). Introduction to business. Cengage Learning.
Coca-Cola Company. (2010). Available from