Globalization conditions that affect finance include things like wages, working conditions, purchasing power of consumers and the presence of substitutes. These factors vary from one country to another and influence significantly the financial standing of any global company. In this case, the Coca Cola Company is a renowned global company that produces and sells soft drinks to a wide range of consumers. There are myriad global conditions that impact its finance such as changing of customer’s attitudes and values, fluctuations in the economy, and demographic patterns.
This paper provides a SWOT analysis of the external factors that impact finance of the Coca Cola Company.
The first strength is that Coca Cola Company advertisements utilize famous people such as musicians and movie stars to feature in its advertisements. The movie stars and musicians influence many people to consume the company’s products, which increases the finance of the company. The consumers’ acceptance of Coca Cola as the “real cola” also influences the company’s finance. This is because other companies have tried coming up with the same brand, but the customers did not perceive them the way they fancy products from Coca Cola. Thirdly, other global companies such as McDonalds, which have a contract with the Coca Cola Company, have an influence on their finance as they help in the marketing of Coca Cola products. The lower and middle class acceptance of the price of products from the Coca Cola also has an impact on their finance.
Health organizations act as the main weakness to the company’s finance as they advance that the frequent consumption of products from the company has the capability of causing obesity. This is a weakness because many parents, in return, advice their children who are the main target of the company to avoid frequent consumption of the company’s products, and this affects negatively the company’s finance. Another weakness is that only teenagers subscribe to the company’s products. If the company’s products were popular among the elderly population, this would have a positive impact on Coca Cola finance.
The consumer’s need for healthy drinks offers Coca Cola Company a chance to venture into the product. Since there is a raising concern regarding the type of foods and drinks people eat, this should motivate the company to start producing healthy drinks and foods to increase their financial position. The presence of different cultures around the world should also influence the company to come up with drinks that appeal to these different cultures.
Three main threats include health concerns, presence of substitutes, and the purchasing power of consumers. Firstly, there are continued campaigns held by health organizations around the world for people to embrace healthy living. Thus, this is a threat to Coca Cola’s products because most of its products are not healthy drinks. Secondly, the consumers’ purchasing power is a threat to the company because of the economic trends. The presence of unpredicted economical downturns affects the consumers’ purchasing power significantly and, in turn, the Coca Cola Company financial standing. Lastly, presence of substitutes forms a threat to the Coca Cola Company. According to research, substitutes such as tea, coffee, hot chocolate, juice, and milk make consumers not to be accustomed to soft drinks.
In conclusion, the Coca Cola Company has a rich history since its formation, and it is ranked among the top global companies. The company’s SWOT analysis indicates that the consumer’s identification with its products contributes to its financial success. People’s consciousness about healthy living acts as a threat to the company because many of its products will lack market. Thus, the company should consider venturing into the production of healthy drinks and foods.