Coca-Cola roll rahvusvahelises majanduspoliitikas (0)

Tallinn University
School of Governance, Law and Society
Coca - Cola Company’s role in IPE
Final paper
Tallinn 2018
Brief overview
The Coca-Cola Company is an American corporation founded in 1892 and today engaged primarily in the manufacture and sale of syrup and concentrate for Coca-Cola, a sweetened carbonated beverage that is a cultural institution in the United States and a global symbol of American tastes, headquartered in Atlanta, Georgia (Encyclopædia Britannica ).
Coca-Cola is the world’s largest beverage company, refreshing consumers with more than 500 sparkling and still brands and nearly 3,900 beverage choices. Led by Coca-Cola, one of the world’s most valuable and recognizable brands, their company’s portfolio features 21 billion -dollar brands, 19 of which are available in reduced-, low- or no-calorie options. These brands include Diet Coke, Coca-Cola Zero, Fanta , Sprite, Dasani, vitaminwater, Powerade, Minute Maid, Simply, Del Valle , Georgia and Gold Peak. Through the world’s largest beverage distribution system, they are the No. 1 provider of both sparkling and still beverages. More than 1.9 billion servings of their beverages are enjoyed by consumers in more than 200 countries each day (World of Coca-Cola). As the numbers are so immense and hard to imagine, it is appropriate to mention the reach of Coca-Cola Company. It manages six operating segments in Europe , Middle East , Africa , Latin America, North America and Asia . These segments primarily manufacture and sell beverage concentrates and syrups. The biggest segment is North America, accounting for nearly 30% of revenue (World of Coca-Cola).
Role in IPE
Coca-Cola’s role in international political economy is undoubtedly very great. There are not too many beverage companies that can compete with Coca-Cola and therefore it has the ruling position on international level of beverage companies. Coca-Cola company has a great power to change many factors that are important in the beverage industry. This means that in today’s globalized world Coca-Cola has a lot of trailblazing work done and to do. For example the introduction of the new renewable and recyclable plastic bottle in 2009 which made many similar companies to follow the lead because the health of the planet is important to many people and therefore big companies have to be more planet friendly because otherwise many people would not buy their products and buy something more economically friendly, in this case Coca-Cola. That shows how one company can be a gamechanger to other companies and talks loudly about the influence of Coca-Cola Company.
Previously mentioned example was just one specific example how much power can one company have. On the wider scale Coca-Cola Company creates many jobs and gives income to people in every region of the world and that in general boosts the economy of the world. Last year 61 thousand people (a huge downgrade from 2012 when 150 thousand people worked for the company) worked for Coca-Cola Company and created a revenue of 35 billion U.S dollars worldwide when the Estonian state budget for 2018 is only 10,58 billion euros (Statista).
Other than generating jobs and money Coca-Cola Company has a huge role in politics as well because they have a lot of money and with lot of money comes a lot of power to do and change things. For example they try to promote economic growth and decent work for everybody including women , men, young people and persons with disabilities and equal pay for equal work value . They are committed to enable the economic empowerment of 5 million women across its global value chain by 2020 (Business for 2030). This is a very problematic topic in general politics section and it is important that companies like Coca-Cola get involved because they have a huge reach to places all over the world and politics should be more about involving different actors than making unanimous decisions that are not good for the people.
Taking all the previously said in the consideration it is obvious that Coca-Cola Company has a huge role in international political economy all over the world. The company has done a lot of great things for IPE and continues to contribute to the international political economy to make a world better and cleaner place to live and also give everybody an equal chance on life and career . It is rather weird to think that companies like Coca-Cola and etc. have so much influence on the whole political economy but that comes to show us how literally every company which is known for good things and not so good things, can influence the whole political economy process .
Appyling a theory – liberalism
As mentioned before Coca-Cola Company is a multinational corporation and that means it occupies a prominent and often controversial role in the global economy. Multinational corporations operate simultaneously in national political systems and global markets , they have been the subject of considerable controversy among governments and among observers of the IPE. Some consider multinational corporations to be productive instruments of a liberal economic order : Multinational corporations ship capital to where it is scarce, transfer technology and management expertise from one country to another , and promote the efficient allocation of resources in the global economy. Other consider multinational corporations to be instruments of capitalist domination: Multinational corporations control critical sectors of their hosts’ economies , make decisions about the use of resources with little regard for host -country needs , and weaken labor and environmental standards (Oatley, T. 2012 p. 158).
I chose the liberalism theory for the analysis because Coca-Cola Company tries to fit under this theory from their point of view and it would be interesting to compare how it fits and what is the reality of the company.
Liberalism is the enlightenment of man and the belief in progress and the advancement of an ideal world where all nations work together to achieve the betterment of humankind. Liberalism is the driving force behind economic integration and the globalization movement. Liberalist thinkers believe that trade and economics is the path to a more prosperous, healthy, safer, happier and freer world and view economic integration as the path to true global peace under a singular economic and cultural world order (The Political Philosopher).
The underlying framework for liberalism theory is a democratic political structure. Democratic principles such as human rights, rule of law and property rights are seen as the base for the promotion of free trade and capital markets. The liberal theory seeks the spread of democratic and economic principles to produce the outcome of globalization, economic integration and interdependence (The Political Philosopher).
From this point of view Coca-Cola Company fits quite well under the liberalist theory. They follow the idea that all the nations and economies should work together for the better future, create jobs and give the opportunity to work for people all over the world. The company is also in favor of democracy and all people should be able to create their own ideal into reality. They also fight for human rights and try to accomplish the prosperity in the world. From the free trade point of view they also support that because it gives them a better conditions to move and sell their products all over the world.
Although Coca-Cola says all that on their page I am a little skeptical about their point of view. There are a lot of scandals around Coca-Cola Company, for example the Kerala scandal in India where they drained many of the farmers water sources and therefore they lost their ability to use water for their personal use and for their crop. Another problem was their marketing scheme where they paid Warner Brothers 150$ million to promote their unhealthy products among young children with the Harry Potter movie.
There are many more scandals related to Coca-Cola company and that comes to show us how they manipulate their consumers with their positive point of view to the world and to it’s wonderful prosperity. Reality is that they fall more under the World Systems theory and Marxism but they try to show the world how great of a business they are and how much they care about people and the planet when it is not always true.
Future projections
Coca-Cola is a very successful company to this day. They operate on a very strong business model what is recession resistant with distinct competitive advantages and a wide economic moat. That being said, there are some that believe that Coca-Cola’s best days are behind it. Soda sales have dropped for 11 straight years ( Sure Dividend). That could be because people prefer healthier options or sodas have lost their popularity compared to older times where soda drinks were part of every meal eaten. Although the sales are dropping it should not be too worrying for the company because their reputation and place in the market are established firmly.
The company’s future growth will largely be driven by three factors. The factors are:

Organic Growth, driven by expansion of the beverage market and Coca-Cola’s stills portfolio – Coca-Cola company is mostly based on soda drinks what aren ’t the most popular option for people nowadays so it is important that they make some kind of a switch towards more organic drinks otherwise they lose a lot of money if they are so focused on one side of the beverage market.

Business Restructuring (Coca-Cola is divesting of its bottling operations) – it is crucial for Coca Cola to restructure their business because it is said that Coca-Cola is ran by very outdated business model that is not capable in today’s changing world.

Penetration in International Markets – since all the big corporations are expanding to places that have never been considered as profitable areas it is important that Coca-Cola does that too because there are still lot of areas with huge expanding potential like Africa.
After all these are just predictions that might be overturned in the next decade but that is how the things are looking for Coca-Cola right now and only time will tell if it is true and Coca-Cola will be extinct in the future as some of the critcs say. I think it is rather far-fetched because Coca-Cola has established their position on the market so firmly that it is not possible to drop them so easily but only time will tell.
References
1. Britannica, T. E. (2018, September 24). The Coca-Cola Company. Retrieved from https://www.britannica.com/topic/The-Coca-Cola-Company#ref875240 (24.10.2018)
2. Coca-Cola Beverages & Products. World of Coca-Cola. (n.d.). Retrieved from https://www.worldofcoca-cola.com/about-us/coca-cola-beverages-products/ (24.10.2018)
3. Coca-Cola’s Growth Potential & Market Share. Sure Dividend. Retrieved from https://www.suredividend.com/coca-colas-growth-potential/ (24.10.2018)
4. How Realism , Liberalism, and Marxism Relate to the International Political Economy. The Political Philosopher. Retrieved from https://thepoliticalp.com/2014/01/14/how-realism-liberalism-and-marxism-relate-to-the-international-political-economy/ (25.10.2018)
5. Number of employees worldwide. (n.d.). Statista- Retrieved from https://www.statista.com/statistics/254562/coca-colas-number-of-employees-worldwide/ (24.10.2018)
6. Oatley, T. H. (2012). International political economy. New York : Routledge.
7. The Coca-Cola Company. (n.d.). Retrieved from http://www.businessfor2030.org/the-coca-cola-company/ (24.10.2018)