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Managerial economics and strategic analysis - Essay Example

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Coca Cola Company was started in 1886 and is currently the world’s biggest manufacturer, marketer and distributor of their product consisting of a non alcoholic beverage syrup and concentrate (Hays, 2004). The Company is currently in operation in over 200 countries worldwide…
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Managerial economics and strategic analysis
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Download file to see previous pages Hays (2004) estimates that about 70 % of the sales volume for the Company comes from outside the United States and about 80% of the profits comes from non American countries. Coca cola Company is therefore one of the Companies with most presence in the world, which is attributed to the fact that the soft drink; Coca Cola is widely available globally and has become the world’s favorite soft drink (Hays, 2004).
According to Dess (2012), the successful implementation of a Company’s strategy requires effective strategic control. Control is in the form of behavior and how information is used. In order to cater for the interests of the two key players in a Company, that is the shareholders and the managers, a Company must ensure that these interests are aligned (Dess, 2012). This can be achieved through establishing corporate governance.
Globally, the soft drink market is dominated by three Companies; the Coca Cola, Cadbury’s Schweppes and Pepsi Cola Companies. Coca Cola laid claim to about 47% of the global market with Pepsi Cola following at 21 % and Schweppes at 8%.
In aligning the interests of the Company shareholders and managers, Coca Cola separated the Company separated it’s ownership from its control. This was made possible through the employment of managers to run the Company on behalf of the owners. The company employs the use of incentives intended for its managers to facilitate the achievement of the Company’s goals.
The control of governance mechanisms has been successfully achieved through the use of external auditors who check the Company books regularly to ensure that the financial information disclosed by the Managers is accurate and in doing so; protect the owners from financial risks (Dess, 2012). The Company is also subject to external regulatory bodies that check for the quality of their product and control the standards of these products. These bodies ensure that the consumer gets a product that fits their needs ...Download file to see next pagesRead More
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