Coca-Cola shares have reach a 52-week low in the stock market. Coke has claimed, unseasonable cool and wet weather in northern Europe and volume pressure in North America has caused the stock to fall. Comparing summers between 2003 and 2004, in 2003 northern Europe had extreme high temperatures where as in 2004 was cooler and wetter than normal.

Weather can take an affect on a company but how much? Can weather be such a hindrance that it could destroy small or a large company or is weather a temporary excuse to explain why share prices are low? Coca-Cola is saying weather has kept their share prices declining instead of increasing.

In the short-run weather can have effect a companies shares. In the long-run can a company continue to blame the weather of its short fall? In my opinion weather can change a company for a short time but not in the long-run. The business needs to make the changes necessary to adapt for the change in weather.


Taber Wolrab said...

To an extent busnisses can be affected by the weather. I agree that any long-term problems should not be contributed to the weather. If the company views a problem in the short-run from the weather, it needs to fix the problem to where the weather isn't a factor in the long-run.

John West said...

Coke is simply upplaying the weather issue in an attempt to downplay its lagging sales. There really is no excuse that legitimizes the drop in sales that was experienced in Europe. Coke has been in business for a long time and I'm sure that this wasn't the first time that Europe suffered a cold spell. Perhaps Coke might look into developing a drink that would increase demand when other products are decreasing in demand. Maybe a hotter version of Coke.

Dr. Tufte said...

I don't know too much about this issue.

Weather seems implausible as an excuse for Coke, but information like this tends to have formal reports to Wall Street researchers as its source. So, perhaps there is something to this.

Keep in mind that Coke makes thousands of products besides colas.

I think the analysis is correct: if this is really a weather related problem, it will go away shortly.

Dr. Tufte said...

I just came across this. Apparently Coke was making Dasani (bottled water)in England by filtering river water. But, not well enough, and they had to withdraw it from the market.