Coca Cola Ethical Issues Essay

1. Consider Coca-Cola’s advertising throughout its history. Identify as many commonalities as possible for its various ads and campaigns. (For a list of Coca-Cola slogans over the years, check out http://en.wikipedia.org/wiki/Coca-Colaslogans.)

Exchange rate gains or losses are brought to account in determining the net profit or loss in the period in which they arise, as are exchange gains or losses relating to cross currency swap transactions on monetary items. Exchange differences relating to hedges of specific transactions in respect of the cost of inventories or other assets, to the extent that they occur before the date of receipt, are deferred and included in the measurement of the transaction. Exchange differences relating to other hedge transactions are brought to account in determining the net profit or loss in the period in which they arise. Foreign controlled entities are considered self-sustaining. Assets and liabilities are translated by applying the rate ruling at balance date and revenue and expense items are translated at the average rate calculated for the period. Exchange rate differences are taken to the foreign currency translation reserve.

When determining which company has the most to offer it is necessary to look at each set of numbers from several different views. For instance this paper will cover vertical and horizontal analysis, profitability, solvency, and liquidity ratios. I will be explaining how each set of results play into the decision making of which company would be best to invest in, by comparing both companies numbers in able to collect the necessary data to make a calculated decision.

An official financial analysis for a specific company needs two years of financial data from the company and from a competitor in the same industry. This financial analysis is between PepsiCo, Inc. and Coca-Cola. Pepsi and Coca-Cola dominate the beverage market worldwide. In addition to sodas, they also distribute a variety of water and energy drinks. Based on the analysis, the investor will be able to make a better investment choice.

The rivalry between coke and Pepsi is legendary and not just only product development and occasionally get personal collusions which sometimes resonate their marketing and promotional activates.

Pepsi is a world famous carbonated soft drink made by American company PepsiCo. Its distinctive blue packaging makes a huge contrast with its long-time rival’s signature red packing, Coca-Cola. First introduced as 'Brad's Drink' in North Carolina, USA at 1893 before renaming to Pepsi at 1898, Pepsi has always trying to be the dominant brand in soft-drink market while completing with Coca-Cola, known as the Cola War, where the two brands used a series of television advertisements and marketing campaigns trying to get more influence in the soft-drink market among the consumers. Pepsi launched its new commercial advertisement ‘Live For Now Moments Anthem’ in April 2017, as a part of its previously launched Pepsi's first global campaign ‘Live For Now’ in April 2012. The protest-themed advertisement, however, not only was nowhere near Pepsi’s original expectation, but it causes a huge ethical issue, backlash and controversy that made Pepsi took down the advertisement and issue an apology in less than a few days.

Coca-Cola was invented by John Pemberton the Coca-Cola Company began in 1886. With more than 1.9 billion consumers a day, in more than 200 countries, Coca-Cola is dedicated to being the world’s largest beverage company by maintaining and gaining customers. Customer preference is a core value to coke. Coke has dedicated itself to meet the thirst needs of every customer. They engage with their customers at home, restaurants, sporting events. Almost everywhere customers go, they can find a coke product. They build their top line growth and capital efficiency through investment in FIFA World Cup, “Open Happiness” global campaign, and have many worldwide partners, increasing their business nearly 5% every year by creating a diverse customer base.

One of the world's most well-known brands is that of Coca Cola. It is one of America's most popular brand exports, and has seen major international success by opening up bottling and distribution plants abroad in several countries. One of these previously successful bottling plants was located in Colombia, yet events shocked both the nation and the world that would eventually tie Coca Cola into a major human rights violations scandal.

Coca Cola is a beverage company, a major consumer of water resources, it uses 2.43 liters of water to produce just 1 liter of beverage which makes it prone to criticism and consumer boycotts so to protects its brand image and defend its vision statement, which said be a responsible citizen, and run its business smoothly it decided to start water program to maintain its operations in Vietnam and build a CSR reputation.

Coca Cola’s first main weakness is that it is highly susceptible to any kind of negative publicity. Every kind of negative publicity can hurt the brand badly. Some years ago after traces of pesticides were found in the products of Coca Cola, it had hurt the brand really hard. Sales had dipped in various corners of the world apart from the criticism that flowed. Any such thing can hurt the popularity and sales of coca cola. However, Coca cola can overcome this weakness by being more transparent regarding the ingredients it uses in the production of its brands.

In 1999 few children fell sick in Belgium after consuming a Coca-cola brand. This resulted

“Coca-Cola brands are available to consumers throughout the world. Today they account for 1.7 billion servings of all beverages consumed worldwide daily. Coca-Cola has the edge in the market and because they are first to capitalize on new consumer trends. They continue to focus on continuous operating improvements, and they are ever changing to meet market demands. Pepsi Co satisfies the needs of its customers with the wide variety of products offered. They also have the different type of beverage or snack and its brands can substitute for each other. Coco-Cola and Pepsi Co is known as the top 100 most valuable brands in the world.

“A Coke is a Coke, and no amount of money can get you a better Coke than the one the bum on the corner is drinking. All the Cokes are the same, and all the Cokes are good. Liz Taylor knows it, the President knows it, the bum knows it, and you know it."(Andy Warhol, 1975) Regardless of its corporate reputation, the organizational performance and its social responsibility of Coca-Cola makes it loved around the world. Ever since its creation in 1886 Coca-Cola has been a household brand known globally for generations of families. I have to mention, of all the cases researched this is my least favorite not only because of my childhood love for the product because the ethical issues in one way or another always manage to resolve themselves not before further tainting the reputation Coke worked so hard to obtain. Most times, whether an organization is innocent of an unethical act, it becomes secondary to the suspicion of the original act. Almost as if the court of public opinion has the power to ruin the reputation of an organization based on an unfounded accusation. In spite of my loyalty after having ready the case, I do believe Coca-Cola to be flawed. The contamination scare in Belgium is a great example of a public relations nightmare. The slightest hint of impurity should have pushed Coca Cola into crisis management mode but they were slow to react, citing it a minor issue (Ferrell, Fraedrich, & Ferrell, (2011). It was not until local officials

Also, Coca-Cola has very strong rivalries. The main one is of course PepsiCo, which is very famous all over the world and has a great variety of products. Thus, Coca-cola can’t afford its image to be damaged because if that happens PepsiCo will become the leader of the industry very fast. Right now Coca-Cola needs a new Strategic Communication Plan to try to overcome the issues.

By doing some research about the company, I found many articles where Coca-Cola is involved in different scandals like; environmental issues, animal testing, business practices, health isssues, employee issues, lawsuits, etc. Such a big accusations have strong facts who supported what it is being told, which make it very difficult to not believe in those rumors. I cannot say that I believe in all rumors, but I do believe there is some kind of true inside the rumors. It is very sad to think how companies can get to the point of acting illegally and unethically to obtain market power like Coca-Cola has been doing in the past