Business Assessment Coca-Cola

Question: Comparative Analysis of the companys competitive position in its various markets. 3) What considerations should your company look at when trying to create Social Impact? Answer: Introduction In the year 1886, in downtown Atlanta, Georgia, Coca-Cola was first created by John S. Pemberton and was served at Jacobs pharmacy. The name Coca-Cola was given by the company accountant Frank Robinson who thought the presence of the tow Cs would look good in advertising. When the company was first founded, the average drinks served per day was nine adding up to total sales of fifty dollars that year. Today, the company has grown to serving anywhere near 1.8 billion drinks per day. The Coca-Cola Company, now headquartered in Atlanta is an American multinational company which is the number one maker of soft drinks in the world with around 3500+ products, 128 years of history and billions of drinks being served every day. In the year 1919, the company was bought by Ernest Woodruff and a group of investors for twenty five million dollars and the vision of Coca-cola as an international commodity were initiated by Mr. Woodruff which is being followed till date by the company and its vario us subsidiaries (coca-colacompany.com, 2015). The company comprises of around four hundred different brands and includes some of the famous brand names under which their offerings are distributed including Coca-Cola, Sprite, Fanta, Diet Coke, Coca-Cola Zero, Aquarius, Minute Maid, Dasani, and Bacardi and so on (coca-colacompany.com, 2015). The primary offerings of the company are in the form of still and sparkling beverages. The former includes non-alcoholic beverages that are non-carbonated including drinking water, enhanced waters, energy drinks, juices, teas, coffees and sports drinks. The latter comprises non-alcoholic carbonated beverages. The companys products are designed to appeal to a variety of consumer bases with Coca-cola Zero being sweetened with a blend of low calorie sweeteners and Diet coke with aspartame, a thoroughly tested and safety approved sweetener to decrease the calorie content of the beverage making them a useful tool for weight management. In addition, the company offers innovative marketing campaigns and advertising projects and its association with celebrations and happiness sub-consciously seem to affect peoples choices making it a success over its rivals. The main aim of this essay is to research and analyze the business prospects and competitive position of The Coca-cola Company based on a comparative analysis with its main rival Pepsi Co using the competitive advantage theory and its social impact in terms of corporate social responsibility and sustainability initiatives. The Coca-Cola Company has been chosen for this study mainly because of its global presence and popularity with the masses. According to a former chairman of the company, the company derived its main strength from being global (Vrontis and Sharp, 2003). Even though it was based in America, most of the company profit came from elsewhere in the world. The multinational company is one of the pioneers when it comes to soda drinks and carbonated drinks served and consumed around the world by people of all age groups. The company has the highest market share in the industry and serves as one of the most favorite brands due to the innovation they bring into every product a nd hence, it would be interesting to study how the company evolved over a period of time, their strategic positioning, sustainability and their plans for the future considering the highly competitive industry situation. Comparative Analysis Coca-Cola and Pepsi are the most popular and most successful products in the entire history of soft drinks business. The companys have a huge market share and are worth billions. PepsiCo was bought out of bankruptcy at just twelve thousand dollars earlier in its lifecycle and now it has emerged as the only sustained rival of The Coca-Cola Company (Tedlow, 2002). Michael Porters five forces is one of the de facto framework used for industry analysis. The Coca-Cola Companys competitive position in the industry compared to its rival Pepsi can be determined based on one such analysis of the five forces which include: Competitive rivalry, threat of new entrants, threat of substitutes, bargaining power of suppliers and bargaining power of buyers. Competitive Advantage Theory - Porters Five Forces Competitive Rivalry The soft drink industry is almost completely monopolized by PepsiCo and The Coca-Cola Company which these two companies holding up to seventy percent of the entire market share. Since the year 2004 until the present date, Coca-Cola has held the highest with 40 - 50%, PepsiCo around 25% and Dr. Pepper holding the third place followed by others (Statista, 2015) though these companies have continually failed to reach the success that Coca-Cola and Pepsi has witnessed. While the taste distinction between the two drinks is very subtle and is not easily recognized when consumed unlabeled, the coca-cola has always dominated the industry. The initial success of Pepsi over Coke was in the form of their pricing strategy. In the 1930s when Coca-Cola had entirely monopolized the soft drinks market in the U.S, Pepsi, a company that had just erupted from its bankruptcy, formulated an entry strategy based on price. It was then that the popular Cola war began. While Coca-Cola was aimed at mass market, the depression during the period gave way to the emergency of Pepsi which was similar in taste but was offered at dramatically lower prices. This in combination with the companys solid distribution chain led to the success of Pepsi. But after World War II this had to end and Pepsi had no choice but to increase prices. The company that had solely depended on the price umbrella till then had to change strategy. Product and market differentiation took over the key place since then. After Donald Kendall took over, Pepsis prospects began to change drastically and it became the brand that was near equal to Coca-Cola and the change that coke was slow to recognize as it viewed its product as beyond competition (Tedlow, 2002). The two main companies then began to advertise mainly on their product differentiation, advertising strategies rather than pricing. Coca-Colas worldwide advertising budget per year is almost near a quarter of a million dollars while PepsiCo comes somewhere near. The advertising of Coca-Cola depends heavily on the themes of celebrations, happiness and togetherness and has been recognized globally while Pepsis advertising has been limited comparatively and depends on celebrity endorsements, hit music and appealing to the younger generation. In fact, PepsiCo has also been claimed to be the first ever company to use a celebrity endorsement for their product when they used Barney Oldfield, an auto racing pioneer for advertising their drink. Jennifer Lopez, Britney Spears and David Beckham are some of the popular stars that have endorsed Pepsi (Bush, Martin and Bush, 2004). But PepsiCo has one advantage over the Coca-Cola Company in terms of product diversification. While Coca-Cola heavily relies on its soft drinks and offers most of its products in the category, PepsiCo has a diverse range of products including healthy food. For example, PepsiCo acquired Quaker Oats to enter the healthy food sector in 2005 and Gatorade to increase its energy drink market (Andersson, Arvidsson and Lindstrom, 2006). Consequently, in the year 2006, the sales revenue of Coca-cola fell slightly behind PepsiCo for the same reason and by the end of the year 2010, the gross profit of PepsiCo was higher than Coke. Also, the research and development investment of PepsiCo is larger. Given these circumstances, the competition from PepsiCo will always be a major threat to Coca-Cola. Threat of New entrants Threat of New entrants in this industry is very low, the main reason being the presence of strongly established brand names of Coca-Cola and Pepsi. Entry requires high capital costs for production facilities, warehouses, transport and labor. The building of a new efficient plant cost around seventy five million dollars back in the 90s. The strong marketing and advertising of the duopolies of Coke and Pepsi has resulted in higher brand loyalty and equity with a strong consumer base in the over 200 countries they have presence. Also, as discussed earlier, billions of dollars worth of money goes into the advertising of products of these companies every year which is quite a sum for a new entrant to match with and increase visibility of their products. For a newcomer to counterpart this level of presence is almost unfeasible. Also, any new comer would definitely face the toughest level of competition from the established two companies in terms of innovative product lines and price wars m aking survival difficult for the new companies. In addition, Coca-Cola and Pepsi have their own bottlers in designated geographic areas that are committed to the companies and the company arrangements are such that these bottlers do not take up new entrants. Alternatively, the new brands can build their own bottling plants which also require a considerable amount of capital investment and lowers the feasibility. Also, both the companies follow backward integration process which makes it very difficult for new market entrants to find bottlers for their products. PepsiCo and Coca-Cola offer their retailers a margin of 20-30% for the shelf-space offered which is a high margin which the new entrants would find difficult to compete with. Moreover, it would also be difficult to convince retailers to substitute coke of Pepsi with their products considering the strong customer base and brand loyalty. Its virtually impossible for a new product to match a scale of popularity as that of Pepsi and Coke. Threat of Substitutes Threat of substitute products is very high in this industry with a range of products starting with water, tea, coffee, to fresh juices being presented to consumers by different companies (Marc, 2014). Also, Coke and Pepsi are increasingly adjudged junk food and are marked as being very high in calorie content. With increase in health awareness among buyers, energy drinks, sports drinks and bottled waters are a threat to the carbonated drinks. To overcome this problem the companies came up with the diet versions of the drink. They also have entered the market for afore mentioned products. The suppliers of substitutes again are put in a situation where they have to compete with these giants for industry presence. Also, given the size of the organization and the large and established distribution channels, it enables the companies to get in contracts with Universities, Stadiums and organizers wherein they become the key supplier and only supplier for a particular length of time. Also, the products and their perceived value are very low in this industry. All the products and substitutes are priced at almost similar prices and the advertising and marketing activities for the products make the difference. Hence the switching costs are very low and consumer shifting towards substitute products is very high. In a blind test conducted for a study, participants could not even tell the difference between Pepsi and Coke (Deichert et al, 2006). Bargaining Power of Suppliers The bargaining power of suppliers in this industry is very low. The ingredients that go into the making of soft drinks are very simple which include water, colorants, flavors, caffeine, sugar and sweeteners. The bottles are supplied by separate bottlers. 36% of the largest coke bottler company, the Coco-coal enterprises is also owned by The Coca-Cola Company itself. With that percentage of ownership, the supplier bargaining power cannot be very large. These materials are easily available and at very low cost and with the presence numerous suppliers, the bargaining power of suppliers of these commodities in the industry relatively weak (Jannoun, 2011). Also, the basic merchandise due to its low cost makes the switching cost low too giving manufacturers the option to easily switch suppliers as per the convenience. Coca-Cola and Pepsi is possibly the largest customer these suppliers could ever possess. Bargaining power of buyers The bargaining power of buyers in any industry is always high. Since soft drink industry is also consumer based which have commodities directed at the buyers, the profitability of the business naturally depends upon the buyer. In todays market consumer preferences are more deviated towards differentiated products. Soft drinks have been around in the world since the eighteenth century and to keep them going innovation plays a key role. New formulations, bottle designs, packaging and appearance with new colors, flavor of formula are designed to make complete brand awareness in consumers minds as a means of providing competitive advantage. The different ways in which the commodities are made available for consumers include convenience stores, soda fountain, vending machines, restaurants, canteens and other categories in different quantity packaging where the sales depends on the buying power of the consumers to pay the said price. Large retailers like Wal-Mart, Costco and others may have increased bargaining power because of the large quantities in which the purchase is made but it is also zeroed by the brand loyalty of the end consumers. But due to the bulk quantity of products, these retailers can buy products at a lower price than most. But restaurants do not have that liberty as the quantities ordered by them arent as much. But with increasing consumer demand this scenario may witness a change in the future. Social Impact of Coca-Cola Coca-Cola builds and nurtures strong brands and identifies the importance of doing the right thing by the society through their sustainability programs. Their measures are intended at reducing the impact the company has on the environment and health and well-being of consumers. The main areas of concentration include conservation of water (water efficiency and quality), water being the primary raw material that goes in to the making of the products, energy efficiency and preservation of soil pollution. They follow the corporate social responsibility law to secure our future. But there have many issues relating to excessive water usage, effects on peoples health (the main problem being obesity) and several human rights violation issues that have been reported constantly on the company. Coca-Cola Corporate Social Responsibility The company has a clearly defined plan for sustainability with priorities on delivering for today without affecting the future and to lead the industry. According to the company, the CSR responsibilities are at the core of whatever they do and they believe in bringing about a change climatic change and eco-friendly packaging and use of recycled products. Energy and climate change The gas emissions from manmade activities pose serious threats to the longevity of the planet and coca-cola strives to build a business that has low carbon emissions. The company has made commitment to reduce the carbon footprint of its beverage by one third in the year 2020 compared to the level in 2007. Average reduction of carbon footprint is aimed to be achieved through every stage of the production process. Beginning with purchase of sustainable ingredients to the packing to the bottling to transportation to disposal a comprehensive approach to reducing environmental impact every step of the way has been proposed (Cokecce.com, 2015). Reducing emissions from manufacturing is the first step. This is proposed to be achieved by focusing primarily on energy efficiency in their manufacturing plants by closely monitoring and efficiently managing the energy consumed. Continual investment in innovation, RD and state of the art production lines, piloting of energy management standard 50001 in few facilities, and aim at sourcing their energy from renewable sources as much as possible. Reducing emission from trucks used for transporting and cold drink equipments is the next step. Production and distribution of products locally to reduce transportation costs and emissions is being followed in addition to efficient maintenance of the vending machines and coolers. Backhauling with suppliers and customers is another initiative aimed at reducing emissions (cokecce.com, 2015). Sustainable Packaging and Recycling In safeguarding the contents of a product and for safe damage-free transportation, packaging of a material plays a key role. But materials used for packaging could be high in carbon footprint and often non-biodegradable items end up polluting the land. The company CSR values are committed towards ensuring the use of sustainable packaging and easy recycling in order to achieve a point where there are no wastes in their operation. Right from design, material used, weight, recovery, disposal and recycling the prime objective is to reduce carbon footprint and optimize usage. According to the company, 99.5% of their produced waste is recycled. In an aim to achieve circular economy, the recycling of materials is given priority (cokecce.com, 2015). Thirty two percent of items used for packaging comes from recycled sources according to the company at present (cokecce.com). Use of virgin PET in packaging materials is being reduced and replaced by use of renewable material such as PlantBottle which is a plastic material comprising twenty five percent recycled PET and 22.5% plant material. In two of the largest markets for the company in France and Great Britain, the company has spent millions to set up pipelines for recycling PET. Also, through various non-government organizations and several awareness campaigns, the company is hoping to push more and more of their consumers towards recycling. For instance, the recycle for our future campaign encourages at-home recycling by studying the recycling habits of consumers and launching an online recycling program. Another aim is to have zero percent landfill and to achieve this; the company is constantly investing in recovery infrastructure. The company data prove that 99.5% of waste was recycled in the year 2013 and zero landfill rates was achieved at fourteen of the company plants. Constant redesigning of packaging to decrease the weight and yet not compromise on the quality is done through a process called lightweighting. Through this process, a 3g reduction in weight was achieved for their 500 ml PET packaging in the year 2013 compared to the previous year and their lightest aluminum can weighs just 10g. Conserving Water Water is essential for everyday functioning of human body and one of the most precious resources of the world. In production of Coca-cola beverages, it also serves as the primary ingredient and is central to all the raw material used by the company in one form or the other. Raising concerns regarding climatic changes leading to low rainfall, the depleting ground water resources and ensuing water scarcity is a major concern for the environment and consequently the company too (Biswas and Bozer, 2015). Through their water stewardship policy, the company aims to set standards to ensure water efficiency by utilizing only that much required for manufacturing and as little as possible for every liter of beverage that is produced (cokecce.com, 2015). The water conservation policy is based on four primary principles that include: conservation of water resources for operations and society, ensuring absolute water efficiency but reducing the water usage quantity, water recycling, treatment and in order to support aquatic life it is returned to the environment and water resource replenishing in low water quality areas before use in the making of beverages. Areas of water stress are identified using mapping and the watersheds in those areas are replenished. From the use of three liters to make a liter of beverage, by 2013 the company had reduced the usage to 1.35 liters per liter of beverage produced. The company aims to reduce the amount even further by the year 2020 (cokecce.com, 2015). Promoting Healthy Living Obesity is a growing epidemic in the world and a constant challenge to health. In order to prevent the disorder and to lead a life of health and happiness, the least that is required of people is to live an active life. The company indulges in a range of activities and campaign to promote healthy living including sports activities providing the opportunity for the community to involve themselves in physical activities more often. Through continued association with various organizations, both national and local, the company runs physical activity programs for people to participate in. the brand name and their influence is utilized by the company in their advertising campaigns where they promote physical activity. For instance, the most recent campaign of the company was the Happiness is movement campaign associated with the 2014 FIFA world cup. Others include the Sweden swimming federation, Norway city ride, and the street games of Great Britain and so on (Cokecce.com, 2015). The Spec ial Olympics National Summer Games that was held in Great Britain in the year 2013 was proudly supported by the company. Also, according to the company the artificial sweeteners employed in the making of low calorie versions of the beverage including diet coke and coca-cola life are harmless and are clinically tested to be safe. In addition, high fructose corn syrup used in the sparkling beverages or any food tem isnt responsible for weight increase in consumers. The ingredients used are approved by the FDA (Food and Drug Administration) as safe to be used in the preparation of beverages. Therefore, in an aim to promote healthy living the company has its core the three principles: Think, Drink and Move (coca-colacompany.com, 2015). Workers and Workplace In their belief, it is the employees that make or break a company. Employees hold the primary key to the companys success and sustainability. The company hopes to recruit the best talent from each community and gift them with a rewarding career while promoting independent thinking and provide them with a safe and healthy workplace to keep them winning. Their workplace diversity program has its main focus on fostering a culture that is diverse and inclusive, ensuring class of the art safety standards in their operations and ensuring worker safety in the plants, and to develop a program wherein the employees are encouraged to lead an active and healthy living (Cokecce.com, 2015). The Health risk assessment program of the company analyses the current health state of the employees and provides them with access to fitness programs and centers across the geographical area of the positioning. Seventy six percentages of the companys employees are part of an individual development plan for th emselves. The global corporate challenge that the company initiated encouraged people to pursue activities like walking, cycling and swimming. Thousands of people participated in the initiative and walked at an average of 13000 steps per day per person which is a good physical activity. The company is aimed at protecting human rights and values the rights of the workers immensely. Ten components of the human rights policy include valuing diversity, stakeholder and community engagement, ensuring human rights, freedom of association, workplace security, child labor laws, forced labor laws, work hours and normal wage and benefits, proper guidance and protection for reporting of employees and ensuring safe and healthy workplace. It is the responsibility of every employee in maintaining the harmony of the workplace and ensuring it is free from discrimination or harassment of any kind. In addition to all these, the company has a sustainability program that is not isolated just for preserving water. It is the food water energy nexus that is the concern of the future of the planet. The three are interrelated and interdependent; the prospect that must not be ignored if a complete sustainability has to be achieved (Koch, 2015). The company aims to not restrict their water stewardship program to the four walls of their organization but increasingly delve into agricultural activities and other activities and create awareness about use of water efficiently (coca-colacompany.com, 2015). Their program is intended at extending to water sources available domestically and making water, sanitation and hygiene a universal availability. The sustainable development goals of the company are to be agreed upon in the month of September later this year increasingly concentrating on the food-water-energy nexus. Devastating Impact on Water Resources The most recognizable brand while claiming to adhere to strict ethical standards and social responsibility has been in the news constantly for drinking the world dry. The coca-cola company, in its quest for water resources required for its plants has been reported to dehydrate the society by drying up farmers wells and thus impacting the local agricultural activities. The company has been accused of maintaining its clean sheet only through the multi-million dollar advertising capacity and strong brand image while seriously violating workers rights in countries such as Colombia, Russia, Guatemala and Russia. According to the company sources itself, they admit that without water it was impossible to run their business and that the entire company depended upon uninterrupted access to tons and tons of water. One liter of coca-cola requires the availability of three liters of water and the operations of the company has been accused of exacerbating water shortages in areas that are already suffering from decreasing rainfall and subsequent water shortages. In addition, the water extracted by the company is drawn towards the surface through various strata of rocks and during the course are contaminated heavily with foreign particles which according to analyses is very harmful to human beings. This makes the water unfit for production which is ignored by coke. Apart from production uses, the industry also requires huge quantities of water for cleaning and other purposes. This is particularly true in case of the Indian subcontinent where the company is vastly opposed by different community campai gns around various states. For instance, in the year 1999, the company set up a plant operation in Kaladera village in Rajasthan which is well known as the desert state of India. According to the villagers and farmers, this activity exacerbated an already precarious water situation. The entire area depended upon the scarce groundwater supply and setting up of the plant caused a severe decline in water level as the following years saw a ten meter decline in water level which was drastic. The accusations were met by the company by pointing out the various rain water harvest facilities established by them but again there were problems concerning the maintenance. In an another infamous case, the companys renewal of license was declined and protested by the village council of Plachimada in the southern state of Kerala, India in the year 2004 citing overuse and contamination of water resources in the area. Elsewhere, in El Salvador the exploiting of groundwater resources by the company has been an ongoing activity f or around twenty five years. Land and Soil Contamination Again, this problem has been most prominent in India where the communities living in and around the company plants and bottling enterprises experience devastating water shortages and environmental impact. The sludge-like waste by-product produced by the company were found to contain toxic levels of dangerous chemicals including lead and cadmium and this waste was provided by the company as fertilizer to the farmers. While coca-cola maintains that the product is harmless, farmers have been increasingly protesting against those waste being dumped in their agricultural fields. Contamination of the Product itself Accusations on Coca-Cola containing dangerous levels of pesticides have been around forever. In 2003, the CSE (Center for Science and Environment) tested the beverages produced by the company and found them to contain pesticide concentration thirty times larger than the allowed concentration by European Standards (Killercoke.org, 2013). In Indian agriculture, DDT, a pesticide is banned was also found in the drink. Accusations on pollution, water depletion, soil contamination and a subsequent result in decrease in fertility of their agricultural lands was made my Indian Ministers and farmers and Coca-Cola was even banned from cafeterias for a while. In addition, the purified tap water drink Dasani, during its launch, was found to contain bromates which are cancer causing agents and immediate recall ensued. Workers Right Violations Anti-union activities of Coca-cola were also increasingly documented. In an infamous case in Colombia, trade union leaders were reportedly tortured and murdered by paramilitaries who had links with the government. SINALTRAINAL, a main trade union of the company filed a complaint in USA in the year 2001 against the company and the bottling agency. The unions maintained that in addition to the murders in Colombia, many others were into hiding and have received death threats. Also, in Turkey, the company was sued on behalf of several truck drivers, trade unionists and their families for alleged workers rights violation. While Coca-cola maintains that the workers protests were illegal. The company has also been accused of dismissing workers who participated in strikes. In Guatemala there has been an ongoing struggle by workers against the company. Impact on Health As health concerns of people spur, the consumption of coke has decreased according to the company authorities. According to Wal-Mart, one of the largest retailers of the commodity the movement of coke has decreased than what it was a decade ago. With the all other healthy choices available drinking coke has decreased giving way to lots of water, juices and energy drinks. While the exact reasons for the epidemic of obesity in the U.S hasnt been known yet, people constantly associate it with soda and beverages like coke. Weight loss stories of people who quit drinking coke have inspired many. This reality was ignored by coke for a long while but they have to accept it now. Cultural shifts of a community dont happen all of a sudden. Coca-Cola took the symptoms lightly and now has witnessed a diet change that doesnt include guzzling of coke like water. The New England Journal of Medicine first reported a possible case of spermicidal effects of coke in the year 1985 which was proved two years later by researchers in China but did not have any effect. In 2010, according to a Danish study it was reported that a thirty percent decrease in sperm count could be noticed in men who drank more than thirty two ounces of coke daily. This was also reported as result of healthy food intake by cola drinkers while non coke drinkers ate more nutritious fruits and vegetables. Sixty four milligrams of caffeine is present in a twelve ounce bottle of coke. While caffeine is an ingredient people rely on to keep them active, the prolonged intake of caffeine can be harmful to health as it boosts heart rate and constricts blood flow in arteries and veins. The sugar intake done by consuming coke also has harmful effects on the body. The high sugar and calorie content are said to be responsible for obesity problems and diabetes. The artificial sweetener aspartame that is used in diet coke to reduce sugar intake have been proven to have neurological side effects. The phosphoric acid concentration in the beverages have been said to cause osteoporosis by destroying the bones and teeth. Coke products are also known to contain cancer causing agents. Currently, there are also law suits against the company for marketing their vitamin water as healthy while it was anything but. For reasons unknown, diet coke has also been associated with risk of stroke. Conclusion and Recommendation In conclusion, it is clear that the profitability and effectiveness of the company is well supported by the strong brand image, competitive position and market share. The companys strategy and tactics complement each other help the company stay ahead of competition with its prime rival PepsiCo. A comparative study based on the Porters five forces model reveals that the companys position is secured for the near future with absolutely no threat of new entrants or bargaining power of suppliers and buyers. The only concern of the company is the competition from PepsiCo which is a serious threat that the company needs to constantly look forward to. It has been going on for a century and is more likely to keep going and this requires coca-cola to be constantly ahead of its game. It was noted that the product diversification of PepsiCo is better than that of Coca-Cola which has its business solely concentrated on the beverages sector. Coca-cola needs to think more about diversifying too and project a unique brand image in all aspects of the business. In studying the social impact of the company, the company has a very clearly defined sustainability policy in place and has been thriving constantly to reduce their impact on environment, energy and climate and use of water resources. But at the same time, the company has also been in the central point of several controversies and accusations relating to using up of water resources, concentration of toxic chemicals and carcinogens in their product, contaminating the land and soil and for constantly violating workers rights. The company needs to be more vocal about its sustainability plans and demonstrate them to the authorities concerned. Another serious concern is the increasing health interest among people who think soda to be harmful to their health and are switching to healthier options like green tea, fresh fruit juices and drinking lots of water. The declining sales in the soft drinks sector is one key challenge the company needs to attend to. The U.S market, which is one of the primary markets of Coca-cola, the sales has been decreasing constantly over the years. People are on the look-out for healthier options that is low in calorie and also promote their health. In order to overcome this issue, the company needs to concentrate more on the healthy substitute options which are in vogue today more than the carbonated drinks which are viewed by majority as life threatening. The company can hence concentrate more on health and wellness. References Albanese, F. (2001). Merchandising and Licensing to Improve Brand Equity. The Coca-Cola Case. Emerging Issues in Management, (1). Andersson, E., Arvidsson, E. and Lindstrom, C. (2006). Coca-Cola or Pepsi; that is the Question - A study about different factors affecting consumer preferences. School of Management and Economics. 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