Coca-Cola Company (KO) Is a Essay

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Coca-Cola's response to the threats and opportunities it faces has been largely defensive. The company has introduced new products largely in response to categories that have been created by other companies -- moving into coffee drinks in response to Pepsi's deal with Starbucks and introducing Fruitopia and Nordic Mist (Foust, 2006). These moves are reactionary and despite the company working hard at new innovation, it tends to lag other firms in the creation of innovative products. In addition, the company finds itself on the defensive with respect to taxation and other government relations issues. Moreover, Coca-Cola still finds itself subject to prices of raw ingredients, where it could otherwise have implemented backwards integration, long-term hedging or other strategies to mitigate the potential consequences of commodity price fluctuations.

The result is that Coke has been largely unsuccessful. On the Investor Relations section of its website, Coke puts forth some minor initiatives in which it has had some success, but the company remains a follower when it comes to introducing quality new products. In addition, the company remains under pressure for increased taxation and it remains in a situation where its market share is declining in its core products.

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The company saw revenues decline last year, although profits increased. Profits had declined in 2008 despite a revenue increase (MSN Moneycentral, 2010). Financial improvements at Coke, then, have been incremental. The company remains in search of transformational change.

The company needs to dig deeper to address the threats that it faces. Innovation stems from culture change, and in this area Coca-Cola has moved slowly. Mary Minnick left Coke for political reasons in 2007, highlighting perhaps the reasons why the company has continued to lag in innovation -- the mindset simply does not exist. The company's current innovation pipeline is still attributed to Minnick, which calls into question if it can continue to foster innovation going forward (Rayasam, 2007). The evidence is that it cannot and it is still addressing its threats in a reactionary way, and this is resulted in the same flat performance that the company has endured for many years.

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