The Coca Cola Company (Coursework Sample)
Location selection of cocacola companysource..
The Coca Cola Company
Overview of the Coca Cola Company
It is the world’s leading producer, and vendor of non-alcoholic drink syrups and concentrates. Since its inauguration in 1886, Coca Cola has been capable to manage and maintain the quality of its brand to motivate and create moments of joy and happiness among people. With a mission to refresh the world with various refreshing commodities, the Coca Cola Company is home to over five hundred beverage brands, including the most famous soft drinks Fanta, Diet Coke, Sprite, and Coca-Cola. With its headquarter based in Atlanta, Georgia, the company can serve over two hundred nations and territories with its unique products. The managing team of the Coca Cola Company is considering expanding the business to more regions in the world, more so in Germany or France. However, there are several considerations to make before deciding the actual location to establish its new branch. These factors include:
1. Currency Risk and Exchange Rates- deciding on facility location depends on the rate of domestic and foreign currency. In a territory where the exchange rate is favorable, the firm can generate more profits than in an environment with unfavorable rates of exchange. However, exchange in rates of currency has a disadvantage as they may rise and fall at any given time depending on the value of money, making them unpredictable.
2. Labor Productivity, attitudes, and costs is another major factor to consider when expanding a business. Labor productivity informs one about the number of units produced daily versus the cost of wages (Rothaermel, 2016). Moreover, a company can assess people’s attitudes towards work, turnover rate, availability, and quality of workforce and motivation of workers towards a particular project (Alcácer et al., 2016). The disadvantage of labor productivity is the average number of units per day.
3. Political risks, attitudes, government rules, culture, and values- Government and politics are among the major influences on a business’s success or failure due to the trouble of matching particular values, rules, and cultures of one nation to another. On the other hand, political influence matters in that one will need to evaluate the attitude of the government towards investment, consistency of policies, and the record of stability of a government at any given time (Rothaermel, 2016). An advantage of this factor is that nations or territories with almost similar rules, culture, and values reinforced with a good history of political stability can lead to the global success of a business. The disadvantage, however, is that diverse cultures with instability shall make a company struggle to meet its goals.
4. Costs- there are two categories of expenses, which include tangible and intangible costs. Tangle costs refer to those that are identifiable and measurable. They include taxes, raw materials, utilities, labor, and transport costs, among others. Intangible costs such as infrastructure, education, etc. are that influence the presence of a particular industry. An advantage of this consideration is that both categories are efficient, thus making a firm more lucrative. The disadvantage is that identifying and measuring intangible costs can be hectic.
5. Location of customers/ markets- it is more effective and cost-effective when a business is close to its clients, making it comprehend about the market quickly. Moreover, the firm will need to survey the size of the potential market for its services and products, as well as population trends, nature, and change in demand (Rothaermel, 2016). One benefit of this factor is that identifying and understanding customers can help improve products according to their preferences. However, the drawback to this advantage is the inconsistency of customers can disorient operations of the business hence unable to meet customers’ needs.
6. Availability of supplies and proximity to suppliers- In areas where raw
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