Coca Cola mission, Vision and their cost Revenue and profit functions

4. Coca Cola
 Coca-Cola is a carbonated soft drink sold in stores, restaurants,
and vending machines throughout the world.
 It is produced by The Coca-Cola Company of Atlanta,
Georgia, and is often referred to simply as Coke (a registered
trademark of The Coca-Cola Company in the United States
since March 27, 1944).
 Originally intended as a patent medicine when it was invented
in the late 19th century by John Pemberton, Coca-Cola was
bought out by businessman As a Griggs Candler, whose
marketing tactics led Coke to its dominance of the world soft-
drink market throughout the 20th century.

5.  The company produces concentrate, which is then sold to
licensed Coca-Cola bottlers throughout the world.
 The bottlers, who hold territorially exclusive contracts with the
company, produce finished product in cans and bottles from
the concentrate in combination with filtered water and
sweeteners.
 The bottlers then sell, distribute and merchandise Coca-Cola to
retail stores and vending machines.
 The Coca-Cola Company also sells concentrate for soda
fountains to major restaurants and food service distributors.

6. Mission:
 To refresh the world…
 To inspire moments of optimism and
happiness…
 To create value and make a difference.

7. Vision:
• People:
Be a great place to work where people are inspired to be the best
they can be.
Portfolio:
Bring to the world a portfolio of quality beverage brands that
anticipate and satisfy people’s desires and needs.
Planet:
Be a responsible citizen that makes a difference by helping build and
support sustainable communities.
Profit:
Maximize long-term return to shareowers while being mindful of
our overall resposnsibilities.
Productivity:
Be a highly effective, lean and fast-moving organization.

8. Cost, Revenue, and Profit Functions
 Cost :
 A cost function specifies the cost C as a function of the number of
items x. Thus, C(x) is the cost of x items. A cost function of the form
C(x) = mx + b is called a linear cost function.
 The quantity mx is called the variable cost and the intercept b is
called the fixed cost. The slope m, the marginal cost, measures the
incremental cost per item.

9. Revenue
 The revenue resulting from one or more business transactions is the total
payment received, sometimes called the gross proceeds.
 If R(x) is the revenue from selling x items at a price of m each, then R is
the linear function
 R(x) = mx and the selling price m can also be called the Marginal
revenue.

10. Profit
 The profit, on the other hand, is the net proceeds, or what remains of the
revenue when costs are subtracted. If the profit depends linearly on the
number of items, the slope m is called the marginal profit. Profit, revenue,
and cost are related by the following formula:
 Profit = Revenue − Cost
 P = R – C
 To break-even means to make neither a profit nor a loss. Thus, break-even
occurs when
P = 0,
Or
• R = C Break-even
 The break-even point is the number of items x at which break-even occurs.

11. Some local competitors:
 Main competitor:
 Pepsi
 Other competitor:
 Gourmet

12. Product
 Coca cola has the big chain of product line.
 Over 3500 products.
 250ml bottle
 Cost per unit = 425

13. Date Quantity Cost Revenue Fixed
cost
Variable
cost
1 April 0 21250 0 21250 _
2 100 42500 45000 21250 21250
3 150 63750 67500 21250 42500
4 200 85000 90000 21250 63750
5 250 106250 112500 21250 85000
6 300 127500 135000 21250 106250
8 350 148750 157500 21250 127500
9 400 170000 180000 21250 148750
10 450 191250 202500 21250 170000
11 500 212500 225000 21250 191250
13 550 233750 247500 21250 212500
14 600 255000 270000 21250 233750
16 650 276250 292500 21250 255000
17 700 297500 315000 21250 276250

14. Date Quantity Cost Revenue Fixed
cost
Variable
cost
18 750 318750 337500 21250 297500
19 800 340000 360000 21250 318750
20 850 361250 382500 21250 340000
21 900 382500 405000 21250 361250
22 950 403750 427500 21250 382500
23 1000 425000 450000 21250 403750
24 1050 446250 472500 21250 425000
25 1100 467500 495000 21250 446250
26 1150 488750 517500 21250 467500
27 1200 510000 540000 21250 488750
29 1250 531250 562500 21250 510000

15. Coca cola Distributer:
 Price per unit: 425
 Cost of 100 units: 42500
 Fixed cost: 21250
 Variable cost per unit: 212.5
 Selling price per unit: 450

16. Cost function:
 C – 42500 = 212.5 (x – 100)
 C = 212.5x – 21250 + 42500
 C (x) = 212.5x + 21250
Marginal cost:
Marginal cost= slope =
63750 – 42500
150 - 100
MC: 21250/ 50 = 425

17. Revenue function:
 R (x) = 450x
Marginal Revenue
Marginal revenue = slope =
• Marginal revenue = 67500 – 45000
150 - 100
= PRs.450

18. Break-even point:
 Break-even is a point where there is no profit and no loss.
R(x) = C(x)
• 450x = 212.5x + 21250
• 450x – 212.5x = 21250
• 237.5x = 21250
• X = 21250/ 237.5
• X = 89.47368421
Prove that:
• 22500 (89.47368421) = 212.5 (89.47368421) + 21250
• 40263.15 = 19013.15789 + 21250
• 40263.15 = 40263.15

19. Profit function
• P(x) = R (X) – C (X)
• = 450x – (212.5x + 21250)
• = 237.5x – 21250

20. 40000 Break-even
30000
20000
10000
0 20 40 60 80 100
R(X)
C(X)
(40263.15, 89.50)
x