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Challenges of globalization for Coca-Cola

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I need help answering these questions using the Coca-Cola company as the firm.

Identify which economic concepts, such as comparative advantage, apply to your firm.

Explain how these economic concepts can be used to address the firm's problems and opportunities?

Identify which economic and political policies affect your firm and explain how they impact business decisions.

How does your firm use technology to strategic advantage?

Discuss the impact of globalization on the firm's cost structure, markets, currency risk, and overall strategy. Be sure to provide a definition of globalization in your answer.

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Solution Summary

The difficulties and opportunities presented to Coca-Cola by the global economy are discussed, along with various policies affecting Coca-Cola and how globalization impacts the company. The answer is about 827 words with 2 references.

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Some terms that we can apply to the market for Coke are substitute good, competition, and economy of scale. There are of course many others that you could discuss.

Competition occurs when a sufficient number of buyers and sellers exist such that no single market participant has enough influence to determine the going price of the good or service. Competition is fierce for market share in the soft drink industry. Overall, the financial statements of the three top competitors in the soft drink industry show that the industry is highly competitive and has little growth. Net profit margins increased for all three corporations, however only at a small rate. The soft-drinks industry is fully saturated with competitors. Also, the industry is no longer expanding, and market share is actually decreasing as more consumers are looking to healthier options, such as water and sports drinks. In economic terms, these are substitute goods. When one kind of good (or service) can be consumed or used in place of one another in at least some of their possible uses, it is a substitute good.

Because of the large investment required to construct a bottling plant, economy of scale will apply to this market. It would not make sense to build a plant to sell just a little product. It is only when demand for your product is very large that the cost is ...

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