I am trying to find Coca Cola's management of currency risks in china?

Question

Essentially there are four types of a MNC's exposure to currency risks which are transaction, translation, operating and Economic exposure. I am been searching all the major search engines and I have been unsuccessful. Please can some one find me some valuable information as it is needed for a major assignment. You don't necessarily need to find strategies for all four exposures, as even 1 or 2 will fine, but it would be good if it is detailed.

Answer 1

Business Risks


In addition to presenting a view of where the company is headed, management provides cautionary statements, discussing risks that might affect the company's future. If risks of the business are not fully discussed in a firm's annual report, these risks should be covered in the firm's 10-K and quarterly reports.



Companies can experience business problems and earnings set­backs that make goals more difficult to achieve. Coca-Cola derives 75 percent of its profits outside North America and about 60 percent of Gillette's earnings come from international markets. Operating in the emerging markets of Asia and Latin America carries economic and political risks. Foreign currency rate fluctuations are also a risk. Plum­meting currencies, such as seen with the Chinese yuan, Mexican peso, and Russian ruble, can contribute to lower earnings for multinational firms. Managers of Gillette and Coca-Cola use hedging techniques to reduce this risk, but may not always be successful. There is a risk that future demand for products might weaken, partially depending on whether advertising, marketing, and promotion are effective. In addi­tion, competitive products may cut into profits and costs of raw mate­rials needed for production of products may increase.



In Coca-Cola's 1994 annual report, former CEO Roberto Goizueta wrote: "We have little control over global economic trends, currency fluctuations and devaluations, natural disasters, political upheavals, social unrest, bad weather, or schizophrenic stock markets. We do, however, have complete control over our own behavior, an accounta­bility we relish. This can apply to corporate executives as well as investors. From 1998 to early 2000, his words rang true as the firm encountered slowing profits due to weak global markets, a strong dol­lar, and other problems. In 2000, Coca-Cola announced employee lay­offs and plans to restructure the company.

http://www2.coca-cola.com/investors/pdfs/10-K_2005/Coca-Cola_10-K_Item_07.pdf

Answer 2

Yeah, at home that's my drink, Zero. At the restaurants, because all they have is the Diet Coke, I drink the Real Thing(tm). Have to say, the original(tm) is more satisfying. But, then again, I was gaining too much of an inner tube with Real Coke(tm). It's my understanding that Lite will be phased out.