North American Market For The Coca Cola Company

Published Date: 02 Nov 2017

The fact is that the North American market’s volume grew 1% in the quarter of 2013, cycling prior year growth of 2%. As a result, we can see that the company’s revenue performance demonstrates the fact that currency neutral net revenue for the quarter decreased 1%, showing favorable price/mix of 2% offset by overall volume downfall of 2%. It is actually hurt by the two fewer selling days in the most-recent quarter and the disadvantageous structural changes (1%).

Due to the fact that the company constantly creates the strong brand values, streamline customer service and extend system possibilities, North America could gain value share and volume in still beverage, as well as nonalcoholic and ready-to-drink beverages. However, it is possible to trace that "sparkling beverage volume declined 1 percent in the quarter with solid sparkling beverage price/mix growth of 3 percent" ("The Coca-Cola Co.," 2013, para. 7). In turn, still beverage volume is up to 6% in the quarter, while the company’s portfolio of juice drink brands increased in volume of 3%.

Thus, it is possible to conclude that the company surely increased its volume and sales in particular with regard to the North American market’s volume, still beverage volume, as well as the company’s portfolio of juice drink brands. However, it can also be noted that there are some declines for this period, including the company’s currency neutral net revenues and sparkling beverage volume.

Focusing our specific attention on this particular question, firstly it is possible to say that the Coca-Cola Company, in spite of all the obstacles that stand in its way, always represents a qualitative and quantitative growth within all of its 5 operating groups with the volume gain and cost of operating profit shares in various categories, including the non-alcoholic, sparkling and still beverage ones.

The Coca-Cola Company’s volume grew 3% for the first quarter "with growth across diverse markets, including Thailand (+38%), India (+30%), Russia (+15%), China (+6%), Germany (+4%), Japan (+2%) and Brazil (+2%)" (The Coca-Cola Company, 2013, Performance Highlights section, para. 3). In addition to the above-stated information, it is possible to add that Fanta volumes are up by 6% and Sprite volumes climbed by 5% for the quarter. As a result, these data clearly demonstrates a balanced growth portfolio in the category of sparkling beverages.

Now let us pay attention to the long-term drivers of profitability: 1) the money-saving ideas in order to raise the trading earnings and volumes in the future drivers of the company, which can include as follows: the tea & coffee, drinking water operations, and more; 2) it is critical to determine and implement the future growth opportunities in order to drive and optimize the company’s future growth; 3) the company should invest in Eastern Europe and Asia since it is an important valuation driver over the medium term, which aims to "look forward to indicate whether a company can maintain and improve its growth and ROIC over the next one to five years" (Koller, Goedhart, & Wessels, 2010, p. 433); 3) it is essential to utilize a "total system" strategy, as well as to create market share without aggressive cost-cutting strategies; and 4) the intensive leadership of Coca-Cola’s senior management creates a deep impact.

Hence, it is possible to conclude that utilizing the appropriate strategies will help to sustainably drive the company’s long-term growth.

The earnings per share results will be discussed for the first quarter of 2013. To start with, the earnings per share are considered to be a financial ratio equal to the ratio of net profits of the company available for distribution to the annual average number of ordinary shares. Earnings per share are one of the key indicators used to compare investment attractiveness and efficiency of companies operating in the stock market.

This year, the Coca-Cola Company reported the earnings per share results, which were $0.39, down 13%. As Chief Financial Officer Gary Fayard states "our comparable earnings per share were $0.46, up 5% versus the prior year quarter despite currency headwinds of approximately 4%" (Kacur, 2013, para. 12).

Hence, it should be noted that all the per share information clearly demonstrates a direct impact of the increase in the maximum number of shares of stock (authorized shares) and the stock divide, which is aimed at increasing the number of shares within a particular company. However, the stock divide will not have a negative impact on the net share repurchases throughout the whole year.

Talking about the long-term growth targets, it is possible to mention about some of them: 1) First quarter net revenues declined 1%. However, "excluding the impact of currency and structural changes, net revenues grew 2% despite two fewer selling days in the quarter" (The Coca-Cola Company, 2013, para. 4); 2) the acquisition of Coca-Cola Enterprises Inc.’s assets and liabilities; 3) the company’s worldwide growth concerning its share portfolios.

The today’s results showed that the company’s effective strategies, brand marketing and leadership efforts are properly interconnected with each other and thus allow the company to persistently be victorious at the point of sale.

In fact, the emerging markets are used to describe the stock markets of the companies with emerging economies. There is no doubt that the emerging markets offer a great scope for the use of various investment strategies and profit in both the short and long terms. As a result, the emerging markets for the Coca-Cola Company are quite effective and beneficial in increasing its market share. Virtually, the emerging markets stimulated the growth of the Coca-Cola Company’s international business for which the volumes grew 5% year on year.

The only fact is that the Coca-Cola Company declared that its international business has a strong benefit from the first quarter earnings thanks to 4% total volume growth. In addition, using its valuable flagship brand Coca-Cola sold 3% more in comparison with the same period of time last year. Thus, we can see that the company’s top-line has significantly grown in the emerging economies.

Furthermore, it is possible to add that the effective strategy in emerging markets applied by the Coca-Cola Company is to invest in the infrastructure projects, which stimulate volumes with the help of increased access to the potential consumers. All in all, the company firmly consolidates that the innovative and advanced initiatives, which are actually essential to both stakeholders and customers, will surely have a positive impact on the business, as well as the earnings per share.