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Coca-Cola: Redefining Its Purpose Case - 1
Deals With Declining Earnings Rate of World Leading soft drink company Coca-Cola. We are analyzing this case year 2004
Facts Of The Case <ul><li>Coca-Cola reduced its key earnings objectives </li></ul><ul><li>Coca-cola achieved annual growth...
ISSUES <ul><li>The first problem is the low growth in the market. </li></ul><ul><li>The second problem is the way that Coc...
Questions
What is your view of the earnings growth objectives of Coca-Cola?
Do you think that Coca-Cola’s strategy with bottling companies is proper?
What do you suggest Coca-Cola’s earnings objective should be and why?
Thank You!
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Coca-Cola: Redefining Its Purpose

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Coca-Cola: Redefining Its Purpose

  1. 1. Coca-Cola: Redefining Its Purpose Case - 1
  2. 2. Deals With Declining Earnings Rate of World Leading soft drink company Coca-Cola. We are analyzing this case year 2004
  3. 3. Facts Of The Case <ul><li>Coca-Cola reduced its key earnings objectives </li></ul><ul><li>Coca-cola achieved annual growth in its earnings for shareholders of 15-20% in the year 1991 to 1997. </li></ul><ul><li>Then followed 3 years of sharply declining earnings. </li></ul><ul><li>In 2001, the company’s Chief Executive set a more realistic objective of 11-12% operating income growth. </li></ul><ul><li>This target was reduced to 10% & then to a further 6-8% by the new Chief Executive. </li></ul><ul><li>North America is Coca-Cola’s leading market. </li></ul><ul><li>Drinks Market that were growing faster include bottled water , fruit juices & Sport drinks. </li></ul><ul><li>Coca-cola is under-represented in some soft drink market sectors. </li></ul><ul><li>Coca-cola does not have a good record on new product introductions. </li></ul><ul><li>Coca-cola bought the Schweppes Mixer Drink Brand from Cadbury Schweppes (UK) in 1999. </li></ul><ul><li>Coca-cola brought back Neville Isdel as its CEO in 2004. </li></ul>
  4. 4. ISSUES <ul><li>The first problem is the low growth in the market. </li></ul><ul><li>The second problem is the way that Coca-Cola earns its profits. </li></ul><ul><li>The third reason for doubt about the earning growth objective relates to the successful introduction of new products </li></ul><ul><li>The fourth problem is the reluctance of the company to make acquisitions that might enhance earnings growth. </li></ul>There are 4 issues in this case
  5. 5. Questions
  6. 6. What is your view of the earnings growth objectives of Coca-Cola?
  7. 7. Do you think that Coca-Cola’s strategy with bottling companies is proper?
  8. 8. What do you suggest Coca-Cola’s earnings objective should be and why?
  9. 9. Thank You!

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