Arnold Case Study 2 (12 - 14) - Short-Term Objectives One...

  • Liberty University
  • BUSI 690
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  • magpie2015
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Short-Term Objectives One short-term objective with the company infrastructure should be to improve their relationships with the bottling companies that distribute beverages in the U.S. and abroad. Making investments in the contract packaging industry can be beneficial to Coca- Cola in analyzing their returns because many of the facilities in this industry have slow, but predictable growth in cash flow, modest capital investment requirements, and relatively low levels of R&D spending ( Alderson, 2012). Liquidating their investments in bottling companies that favor their product will allow Coca-Cola to complete its liquidation in a lesser amount of time than their competitors. It would also allow them to sell their investments to a strategic investor and use their proceeds of sale to repay any outstanding debt and give the remainder back to their main investors and stakeholders. Another short-term objective of the company should be to utilize the current pop culture trends and new social media that has arose in the market in the last several years. Popular social media sites such as Instagram and Twitter allows the user to interact with a large selection of the consumer, thus, increasing interaction and communication between the public and the product. Recommended Strategy & Long-Term Objectives The recommended strategy for Coca-Cola's new business model consists of product expansion into the non-carbonated beverage industry. If the company invested into producing energy drinks, flavored water and numerous other non carbonated drinks they would see an increase in sales revenue due to the large volume of consumer demand associated with these types of products. The energy drinks industry comprises beverages such as energy drinks; energy shots and energy drink mixes. In 2011, dollar sales of
energy drink beverages and shots in the United States amounted to about 8.1 billion US dollars. According to research company Mintel, it is estimated that category sales will increase to 13.5 billion US dollars by 2015 (Chon, 2012). With Coca-Cola's financial success and control in the carbonated beverage industry, branching their products out into similar markets can only benefit their brand and image to the consumer. Growth is another positive advantage to this strategy, as Coca-Cola will be gaining a competitive advantage against similar products and brands. In common business law, a company that is capable of differentiating their product from other businesses in the same industry to large extent will be able to reap vast amount of profits (Chon, 2012). Companies that can effectively differentiate their product to meet all areas of consumer demand can assume to be the organization with the upper hand in business.

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