Financial Factors Affecting The Coca-Cola Company

Decent Essays
Conglomerate Coca-Cola is a company that prides itself on being the world’s largest beverage company, and one who embodies the cross borders concept of international business by being recognised by no less than 94% of the world’s population is an undoubted success story. However, the company is not immune to the various political, economic, social and technological factors (PEST) that can affect their international operations and, in turn, the future development of the firm.
Subject 1 - Economic Factors:
Arguably, financial issues are the most important external factor affecting the global multi-national enterprise, as Coca-Cola acquires a notable percentage of net operating revenue from international product sales. For example, ‘In 2016, operations
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The Cola-Cola Company are subject to numerous duties and taxes urged by governmental officials, for example, the sugar tax which is due to take effect in April 2018 (HM Revenue & Customs, 2016). It is the company’s belief that 'as... governments in the United States and throughout the world experience significant budget deficits, some lawmakers have singled out beverages... and have imposed or increased...sales or similar taxes on beverages, particularly sugar-sweetened beverages' (The Coca-Cola Company, 2017). Following the introduction or increases of new indirect taxes could mean that the costs of products would increase making beverages less affordable to consumers and therefore, negatively impacting revenues as basic economic theory predicts that higher prices will generally lead to less demand. Nevertheless, unless products face a drastic price shift, customers can be hesitant to alter their consumption habits. Economic evidence from the shows that the demand for non-alcoholic beverages is inelastic. Therefore, if prices were to rise by 1% then this would lead to a mere, less than !% drop in…show more content…
After 18 months of planning, Coke partnered with Amazon in summer 2016 to make their brands available on the e-commerce platform. Today, Coca-Cola allows you to shop for beverages at your own leisure, available on your laptop, mobile and tablet devices at four different Amazon services. “Nowadays, people don’t want things tomorrow, they want them today, and thanks to these quick, efficient services, we can meet that need.”- Jon Davitt, Amazon Strategic Sales Manager. Coca-Cola depends on the success of innovation activities such as this, if not this may hinder future growth objectives, which, as a result, could have an opposing impact on their annual financial
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