Coca Cola's Strong Global Presence Gives It A Definite Edge

| About: The Coca-Cola (KO)

Coca Cola (NYSE:KO) has emerged as a strong player amid the widespread economic downturn that has disrupted the international market. While the market has taken an inevitable slant toward consumer goods, demand has been faltering and Coca Cola, alongside its competitors, has had to engage in aggressive marketing in order to survive.

All the same, I am confident that Coca Cola's strong international presence is fueling its business during the ongoing economic slowdown. In fact, I believe that its unquestionable dominance in key global markets will be instrumental in maintaining a profitable bottom line and meeting stakeholders' expectations.

Of China and India

Much has been said about these two potent markets. China and India's economies have grown substantially over the past decade, presenting countless opportunities. Being the canny player that it is, Coca Cola has already commenced exploiting these opportunities.. In fact, the big beverage maker is already a market leader in the competitive Chinese market.

Focusing on China, I believe that Coca Cola will displace local competitors and gain more market share in future years. After all, it already has a convincing track record. The beverage giant has posted protracted double digit growth in the Asian country for nine out of the last ten years. Last year volume growth came in at 13 percent; underscoring the withheld potential in the Chinese market.

To add substance to the whole Chinese angle, Coca Cola has focused on a lucrative segment in the market - college age consumers. College age consumers have a definite disposition toward consumer goods and as such spend much of their income on beverages and food..

I am also confident regarding Coca-Cola's presence in the Indian market, for the following reason:

Coca Cola has stronger financial muscle compared to local competitors in the market. This means that it can advertise and market more intensively. Similarly, it has the ability to expand more swiftly and organically. Looking at the 12 percent volume growth in 2011, it is clearly evident that there is room for improvement.

Restructuring highlights importance of international market

If you are a keen news follower, you certainly know by now that Coca Cola is engaging in major restructuring.

The beverage heavyweight is headhunting for qualified candidates who can provide insight into its new international operating structure. This new structure emphasizes Coca Cola's determination to streamline its global operations and yield better results. In an unprecedented overhaul, the beverage maker will cut its six geographically organized operating units to two manageable units.

I believe that this highlights the importance that Coca Cola attaches to the international market. Profits gleaned from international operations show promise and I am confident that this new global operating structure will enhance efficiency and perhaps lead to greater profits.

I am also confident that the new global structure will be instrumental in reversing fortunes in the troubled European market. This new structure will enable Coca Cola to arrive at effective strategies in a more timely fashion. As such, it will be able to increase Europe's per capita consumption which is currently half that of the American market.

Similarly, the new global structure will allow Coca Cola to counter Pepsi's (NYSE:PEP) aggressive marketing in the European market. Pepsi has engaged in heavier marketing this financial year and intends to capitalize on Coca Cola's weaker presence in the European market.

Another advantage traceable to the new global operating structure is that profound emphasis will be placed on the local American market. This will be instrumental in battling Dr Pepper's (NYSE:DPS) growing popularity. Dr Pepper's lack of exposure to the unstable European market has allowed the company to double its efforts in the American market. Similarly, its wide array of products has allowed it to zero in on indecisive American consumers.

Dr Pepper is also attractive to investors because of its yield. It currently delivers a yield of 3.09 percent, as compared to Coca Cola's lesser 2.58 percent. Similarly, there has been a lot of insider trading, signaling the strong confidence in its stock.

All the same, Coca Cola is better positioned because of its size and yet again, strong presence in the international market. I do believe that Coca Cola is a good choice for a canny investor looking to make big returns in the long haul. Interestingly, Warren Buffet also seems to have the same idea after he failed to reduce his stake at Coca Cola despite doing the same in other blue chips. Buffet's Berkshire Hathaway has a substantial long term position in Coca Cola, highlighting foreseeable prospects.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.