Coca Cola hopes not to go flat
It can be a hard life at the top and this is something that Coca Cola is probably feeling at the moment. Much in the same way that a football team who is used to success suddenly feels tired and jaded after losing a game or two (hello Davie Moyes), when you are at the top of your industry and your profits and revenues start to decline, you get a bit worried.
Coca Cola’s figures are impressive, but when you’re at the top of the game the competition is with yourself. With Coca Cola announcing that the global profits for year on year fell by 4%, to a mere $1.2bn, and that net revenue for the three months leading to the end of December 2013 also fell by 4%, you can see why there has been panic and consternation at Coca Cola HQ. A 2% drop in revenue for 2013 and a 5% fall in operating income make grim reading for the shareholders and people at the top of the company. Again, a bit of perspective should come with the fact that the operating income level for 2013 came in at over $10bn but in business, trends can often be more important than the figures.
Big changes are needed to keep Coca Cola at the top
Clearly Coca Cola needs to make some changes and the firm has announced their strategy. They are going to squeeze their supply chains even further, reinvent that money into more marketing and all will be well with the world. The Coca Cola plan is to increase their marketing expenditure, which is great news for anyone lucky enough to be on the Coke bandwagon.
These changes will see the people responsible for the production of Coca Cola being forced to work under tighter constraints with more pressure, however, as long as the marketing executives get to throw a lot of cash at the problem, things will be just fine.
Here are some things that Coca Cola might think about doing to improve their product, but very probably won’t:
• Reduce the amount of sugar in each can or bottle
• Give better pay and workers’ rights to the masses employed by the company around the world
Coca Cola is always going to be a product that sells well, that is the way it is because tt is a product that is so ingrained on the minds of consumers. The world is changing though. Many people are looking into the background of firms and Coca Cola, like many others, are being out under scrutiny for working practices around the world. Many people are looking at what goes into drinks and the sugars and other products involved with Coca Cola are turning some people away in an increasingly competitive market.
The tactics employed by Coca Cola will bring about some success, of that there is no doubt, but the company needs to be wary of reaching out to an audience that is no longer interested in hearing what the firm has to say. Throwing more money at a problem is not always the best solution.