Coca-Cola Company and its Sales Growth

Summary of the Article

This article is about the Coca Cola Company and its confidence on the growth of its sales. The company manufactures beverages and the chief executive of the company said that he was confident about the success of the Coca Cola brand despite certain uncertainties that existed in the international market. He also said that the company would be able to gain market share even after the decreasing trend of overall sales that has been noticed. Although instability existed in the market but Coca Cola is the best consumer business and could enhance its sales if it takes corrective actions.

Coke reported earnings of $1.89m, or 81 cents per diluted share in the third quarter, as revenues rose by 9 per cent to $8.4bn. (Birchall, 2008).

Coke remove the non-recurring items due to which its earnings per share increased by 17 percent and the overall sales volume increased by 5 per cent, including a 7 per cent increase in international volumes.

All this happened due to the competition that existed in the market and the primary competitor of the Coca Cola Company is PepsiCo.

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This was the reason why the company had to face a reduction in sales. Growth is one of the major challenges being faced by Coke, especially due to the markets that were emerging in North America after which the company did report growth.

However, the reason for the decrease in the sales was the reduction in demand of the beverages in the restaurants as well as the convenience stores. The company earns 30 percent of the total revenue mainly from the sales made in North America.

The sales of Coke reduced in North America by 2 percent but this was better than the overall decline in the soft drinks category that was reported to be 3 percent. Moreover, it also succeeded in beating the some of the sales of its competitor, PepsiCo and this was mainly because of the good performance of the new Coke Zero drink.

However, this fact was clear that both the beverage companies were facing some challenges out of which the recruitment factor was the most important. This recruitment referred to the young consumers who had moved to other drinks.

Analysis

The article highlights the existence of competition between the Coca Cola Company and PepsiCo due to which there has been a reduction in the sales of the company. Therefore, despite the fact that Coca Cola is a well known brand and is recognized internationally, however it must pull up its socks and concentrate more on research and development in order to crater the needs of the consumers.

Furthermore, to extend its market share growth is essential and the company must work out on the business strategies that would give way to growth and create a higher demand of Coke. As a trend of reduction in demand of the beverages being manufactured by the Coca Cola Company has been noticed, the company must do extensive research and development in order to find out where there has been a problem that has caused the demand for their beverages to decrease. Once, research is conducted, the company must adopt a marketing plan and so extensive marketing by launching a campaign that would give way to the demand of the beverages and thus increases sales of the company.

Due to the existence of PepsiCo as a competitor, Coke has to fulfill all the requirements of the customers so that it can beat the sales of PepsiCo and create a demand for their own drinks. This must create variations in their drinks, introduce more flavors according to the tastes of the consumers and market their drink in order to bring back its previous customers and also to attract prospective customers. (David, 2008).

References

Birchall,J. (2008). Coke chief is confident on sales growth. Financial Times. 18th Edn. Asia        Editions. London (UK). p. 18. Oct 20, 2008. Retrieved from: http://proquest.umi.com/pqdweb?did=1575876881&sid=2&Fmt=3&clientId=29440&RQT=309&VName=PQD

David,F. (2008). Strategic Management: Concepts & Cases. 12th Edn. Prentice-Hall, Hardcover.