Coca Cola and Identification of Key Problems

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Coca Cola and identification of some of its key problems
As it could be seen from the news article from the last year, in spite of the growing sales
of Coca Cola in terms of double digit growth in the June quarter, there have been emergence of
multiple issues such as the high rate of taxation on the sugary aerated drinks, which has been
caused due to the increase in prices of sugar based items used as ingredients in the product.
Previously, the taxation rate was just around 25 to 26 percent, which soon reached a new level of
more than 40 percent, because of which, the price of sugar increased exponentially and resulted
in increased cost of the aerated beverage items produced by Coca Cola in Seychelles too (Noe et
al. 2017). It has put a huge pressure on the profit margin because of the high level of dependence
on the ingredients used along with the commodities, and as such, considered as a major issue
faced by Coca Cola at present.
Due to this, the company has been constantly facing pressure within the beverage
industry and the volume of the company has reduced to a large extent as well, which affected the
firm performance and also reduced the revenue generation capability and growth in volume too.
Within the Indian emerging market, the introduction of GST further resulted in margin pressure
with the emergence of inflation and thereby affected the ability of Coca Cola to set the right
prices for the products and arouse interest among the customers all over (Maan 2014). Not only
does the rate of taxation and surged prices of aerated drinks and sugary components are the main
cause of these key problems experienced by Coca Cola.
The other key problems have arisen with these beverage items falling under criticism
from many of the clients as well as the health care companies. All these carbonated soft drinks
contain high amounts of sugar and caffeine, which could be the cause of health issues such as

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obesity, diabetes, etc. Due to this,. Many of the health care agencies as well as the customers
started criticizing the product and the brand, which also lead to decline in sales and revenue
generation for the last few years (Coca-colaafrica.com 2019).
All these issues and challenges have made Coca Cola learn various lessons, which can be
used as various scopes and opportunities to remain competitive within the marketplace as well as
generate higher revenue in business (Cheng et al. 2014). To keep up with the taxation related
aspects, the company need to make the supplier network strengthened and also focus on keeping
the sugar and other ingredients on stock so that with the rising prices, the company does not face
any major issues thereafter.
Coca Cola must also follow the key trends, i.e., the health consciousness and rising
concerns about health among the clients as well as focus on global expansion to ensure
improvement of market share and at the same time, enhance the profit level to be achieved by
Coca Cola. It is recommended for Coca Cola to invest more on the marketing activities for
increasing awareness among people and at the same time, represent the health benefits with the
introduction of new healthy beverage items that can add health value to the drinks and improve
the health of clients who consume it (Taylor 2014). The company could also shift from aerated
beverage to milk based drinks that are healthy. The Vitingo and Aquarius Glococharge launch
could be successful as the products are priced reasonably, thereby to aim the rural market
segments more prominently. The company also must be committed to the use of recycled content
for ensuring that plastics do not get dispersed here and there and cause pollution. Though
commitments are made by the company, still not much favorable results could be seen from the
past few years. Coca Cola has been found to be lobbying against the best possible solutions,
which could have resulted in reliable and consistent high recycling rates (Coca-colaafrica.com