Brand Coca-Cola
Valuation of Brand “Coca-Cola”
Project Report, Valuations and Real Options
Contents
Executive Summary 4
COCA-COLA Company 5
Coca-Cola Brand 7
Relevance of the Study 7
Why Coca-cola 8
Objective of the Study 9
Literature Review 9
Data Source 10
Valuation Methodologies 10
Income based valuation methods (Dividend Discount Approach) 11
Valuation Description 12
Method 1: 3 stage Dividend Discount Model approach 12
Method 2: Relative Valuation Approach 14
Method 3: Cost Based Approach 14
Conclusion & Uniqueness about this study 16
End Notes 18
Executive Summary
The global beverage industry consists of the total revenues generated through the sale of soft drinks, beers, ciders, flavored alcoholic beverages (FABS), spirits and wines. For the purpose of this report we are concentrating only on the soft drinks sectors as that is where coca cola deals in. The global beverages industry had total revenues of $1749.4 billion in 2010, representing a CAGR of 1.9% for 5 year period of 2006-2010. The industry forecast is that the industry will decelerate and will have an anticipated CAGR of 1.8% for five year period of 2010-2015.
A report by Rabobank, global financial services says that industry consolidation will take place in 2012-2013 and will be driven by the five mega trends such as volatility, emerging market demand, bifurcation of value, convergence of distribution and sustainable sourcing.
Soft drinks have been a custom of passage among the youth of modern generations which sets up this category for future generations. With margins getting slim, it is important that brands continue to attract new customers and patronize them towards their brand. Consumer conversations are increasingly driving the perception of the brands which implies that the soft drinks and beverages brands will have to focus more on customer engagement and look for new entry points.
The soft drinks segment contributed revenue of $559.8 billion in 2010 having a share of
Project Report, Valuations and Real Options
Contents
Executive Summary 4
COCA-COLA Company 5
Coca-Cola Brand 7
Relevance of the Study 7
Why Coca-cola 8
Objective of the Study 9
Literature Review 9
Data Source 10
Valuation Methodologies 10
Income based valuation methods (Dividend Discount Approach) 11
Valuation Description 12
Method 1: 3 stage Dividend Discount Model approach 12
Method 2: Relative Valuation Approach 14
Method 3: Cost Based Approach 14
Conclusion & Uniqueness about this study 16
End Notes 18
Executive Summary
The global beverage industry consists of the total revenues generated through the sale of soft drinks, beers, ciders, flavored alcoholic beverages (FABS), spirits and wines. For the purpose of this report we are concentrating only on the soft drinks sectors as that is where coca cola deals in. The global beverages industry had total revenues of $1749.4 billion in 2010, representing a CAGR of 1.9% for 5 year period of 2006-2010. The industry forecast is that the industry will decelerate and will have an anticipated CAGR of 1.8% for five year period of 2010-2015.
A report by Rabobank, global financial services says that industry consolidation will take place in 2012-2013 and will be driven by the five mega trends such as volatility, emerging market demand, bifurcation of value, convergence of distribution and sustainable sourcing.
Soft drinks have been a custom of passage among the youth of modern generations which sets up this category for future generations. With margins getting slim, it is important that brands continue to attract new customers and patronize them towards their brand. Consumer conversations are increasingly driving the perception of the brands which implies that the soft drinks and beverages brands will have to focus more on customer engagement and look for new entry points.
The soft drinks segment contributed revenue of $559.8 billion in 2010 having a share of