Coca-Cola: Multinational Enterprise (MNE)


The Coca-Cola Company is an American global beverage business with headquarters in Georgia. It is the producer, dealer, and seller of nonalcoholic drink concentrates, as well as syrups. It is popularly known for Coca-Cola, its leading product developed by John Pemberton in 1886. In 1889, Asa Candler purchased the Coca-Cola formula including its trademark and incorporated the organization in 1892 (Hays, 2004). Since 1889, the corporation has been operating a licensed distribution system where it manufactures the syrup concentrate and sells to different bottlers holding private regions across the world. Coca-Cola Refreshments is the corporation’s anchor bottler based in North America. 

The company has many brands such as Coca-Cola, Fanta, and Minute Maid. With clients in over 200 nations, it licenses and advertises over 500 beverage varieties like sparkling, energy, sports, and juice drinks including waters. In 2006, the organization introduced Enviga, a type of green tea beverage and the product was to be tried in two selected coffee retail models. In the previous decade, Coca-Cola Company’s soft beverages have declined, particularly in advanced markets due to threats on sales from negative marketing concerning health risks like obesity (Coca Cola Company, 2012). Therefore, the Corporation has addressed this problem by developing other components of their noncarbonated product selection like fruit juices and tea drinks. Moreover, the company partly intends to modify the customary way of conducting business and compensating for declining transactions due to fluctuating tastes. Therefore, it focuses on vending most of its minor bottling processes and concentrate on advanced margin operations such as vending distillates, as well as syrups to distributors.

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Coke manages seven major operating geographical components such as Europe, North America, and Bottling Investments. The operating division within North America makes most of its income by selling complete drinks while divisions in other geographic areas conduct business by manufacturing and selling drink distillates, as well as syrups. Moreover, 63% of the company’s transactions came from complete product sales in 2015, and the rest from distillate operations. In 2015, the organization’s made virtually 55% of its deals outside America in some 200 nations globally across Africa, North America, and Eurasia among other places (Ma’arif, 2008). Significant global markets are Europe, Asia, and Latin America because they made over 30% of the aggregate 2015 income. With regard to strategy, the company progresses with searching for considerably undeveloped markets characterized with a developing middle class, as well as money to purchase soft beverages and juices. Consequently, it declared to heavily invest in Africa until 2020.

Considering the company’s functioning activities, it’s exposed to a considerable level of foreign money risk. Its foreign cash exposure emerges from negative modifications within exchange charges among the US dollar, the euro including exchanges in its non-euro nations. Business exposures arise primarily from raw supplies bought in monies like the euro that may cause costly transactions within the country’s operating currency. The company is exposed to foreign currency changes because it uses 64 operating exchanges such as the Japanese yen, British pound, Mexican peso, and Brazilian real. In every country, it closely monitors its operations and seeks to implement proper strategies which are receptive to instabilities in foreign money exchange charges (McIntyre, 2013).

On a collective basis, Coca-Cola Company manages the majority of its foreign exchange exposures allowing it to net particular exposures and maximize on any ordinary counterbalances. For example, in 2004, about 78% of the functional income was made outside America, implying that over time, flaws in a certain currency are usually balanced by other currencies’ strengths. The corporation further uses derived financial devices to decrease its net exposure to exchange instabilities.

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  1. Coca Cola Company. (2012). 2011 Year in Review.
  2. Hays, C. L. (2004). The real thing: truth and power at the Coca-Cola Company. New York, NY: Random House.
  3. Ma’arif, N.N. (2008). Power of Marketing. Jakarta: Penerbit Salemba
  4. McIntyre, P. (2013). Coke’s local advertising campaign a worldwide success
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