Essay on Benefits Of Coca Cola Company

1102 Words Nov 11th, 2016 5 Pages
The Coca-Cola Company aims at freeing up its capital for investment in more profitable operations after selling some of its properties to various partnering bottlers (Foster, 2014). Such a step would also reduce the company’s costs because it would be outsourcing to bottling companies which could be more efficient than Coca-Cola. Additionally, selling the assets to such bottling companies would enable them to develop less expensively than through the construction of new plants (Elmore,
2015). In fact, selling part of the Coca-Cola’s assets to the partner companies will lead to the reduction of their costs. At the same time, they would still maintain their production and distribution standards as well as mitigate the operational and reputational risk since they would be dealing with known entities (Elmore, 2015). By selling part of its production facilities, the company expects to generate higher returns on the invested capital since it has reduced its capital base and has additional cash for reinvestment. Coca-Cola Company also recorded a better-than-expected profit in the second quarter of 2016 due to its lower commodity costs and aggressive cost-cutting (Sidorick, 2016). The company 's revenue fell by eight percent but surpassed the average estimate by the analysts due to the boosts by the hikes in price and its bet in the smaller bottle and can sizes (Albaum, G., &Tse, D. K., 20016). According to Banks (2016), Coca-Cola Company targets three billion dollars by 2019…

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