Financial Analysis of the Coca Cola company

Financial Analysis of the Coca Cola company The Coca-Cola Company (founded in 1919 Georgia, USA) today is the largest global manufacturer, distributor and marketer of non-alcoholic beverage concentrates and syrups in the world. Its strategy is to become more competitive by using its vast assets-brands, financial strength, unrivalled distribution system and the strong commitment by management and employees worldwide. This report analyses Coca Colas financial performance during the period from 2005 to 2009 through the following steps: 1. Industry analysis 2. Firm Analysis 3. Financial Analysis in comparison with PepsiCo and the industry. 4. Evaluation and Conclusion The entire industry is under pressure because of currency fluctuations and high fuel prices. It cannot be concluded, however, that the beverage industry is being threatened more than other industries. The main threat is increasing consumer and regulatory awareness on health and nutrition considerations. There are 3 big players in the beverage industry. Buyers power and rivalry is quite significant throughout the industry. Coca Colas strengths are based on its global resources such as brand value, marketing innovation, strong capital base and distribution channels. Coca-Cola has achieved impressive profits records and ROCE exceeding by far the industry norms and PepsiCo. Although Coca Cola maintains low liquidity ratios, its ability to turnover the stock within a short period of 39 days and enjoy longer credit period with its suppliers, give sufficient comfort to meet its financial obligations. This implies that Coca-Cola has strong bargaining power. Historically, Coca-Colas dividend payouts have been over 50% of the net income of any given period. It is observed that Coca-Colas debt-financing strategy justifies the reasons for maintaining high debt-to-assets and debt-to equity ratios. Coca-Cola has the largest market share in the beverage industry and has a market capitalization of US$102bn which is far above an industry average of US$75bn. Coca Colas profits have steadily grown above industry norms and operational efficiency is quite impressive as indicated by revenue/employee which are twice as high as its main competitor and the industry. However, ROA declined year-by-year from 2005 thru 2009 couple with a decline in the share price. Nonetheless, the new leadership and management team has managed to improve the performance as evidenced by the excellent Q-3 2009 financial results and the resultant increase in EPS. Coca Cola has sound risk management policies that have enabled it to remain stable given the high foreign currency fluctuation, interest rate risks and political instability associated with the wide operation in over 200 countries. In particular, introduction, revision and implementation of effective marketing strategies, quick-decision-making, effective asset utilization, overall asset management policies and the dividend payout policies need immediate management attention, in view of the competitive nature of the beverage industry. Otherwise Coca-Cola may lose more grounds to its competitors. Table of Contents 1 Introduction.5 2 Macro Industry Analysis .6 3 Micro Industry Analysis ..7 4 Financial Analysis9 4.1 Profitability.9 4.2 Liquidity and Funds Management.10 4.3 Asset Management12 5 Evaluation.13 6 Conclusion14 7 References..15 8 Appendices 8.1 Appendix I Definitions of ratios used in the financial analysis.16 8.2 Appendix II Coca Colas Financial Ratios..20 8.3 Appendix III PepsiCo Financial Ratios22 8.4 Appendix VI Financial Statements 8.4.1 Coca Cola Financial Statements 8.4.2 PepsiCo Financial Statements 1 Introduction Coca-Cola (the beverage) was invented in May, 1886, in Atlanta, Georgia and the first drink was sold at a soda fountain in Jacobs Pharmacy in Atlanta by Willis Venable. The idea was if he could just get people to try Coca-Cola they Would buy it. History proved him right. In the beginning sales of Coca-Cola accumulated 50 US$ for the first year. Today the Coca-Cola Company is the largest manufacturer, distributor and marketer of non-alcoholic beverage concentrates and syrups in the world. The company provides a wide variety of non-alcoholic beverages, including carbonated soft drinks, juices and juice drinks, sports drinks, water products, teas, coffees and other beverages. Along with Coca Cola, this is recognized as the Worlds most valuable brand, the company markets four of the worlds top five Soft-drink brands, including Diet Coke, Fanta and Sprite. The companys main rival is the PepsiCo, although Coca Cola considers Tap water a long-term-indirect competitor. (Newstarget.com) Coca Colas global operating structure includes the following operating segments: North America, Africa, Asia, Europe Eurasia and Middle East, Latin America and Corporate. This report analyses Coca Colas financial performance. The structure of the report is as follows: à ´Ã¢â€š ¬Ã¢â‚¬Å¡Ã¢â‚¬ ° The first part of the report includes a Macro and Micro industry analysis in which the beverage industry is analyzed The second part is the Firm Analysis, which highlights Coca Colas Capabilities, Competences and Recourses The core of the report is the Financial Analysis, in which Coca Colas financial ratios are compared with its main competitor (PepsiCo) and with (the non-alcoholic beverage) industrys standards where possible Finally the report ends up with an evaluation and a conclusion 2 Macro Industry Analysis As a global company operating within the soft-drink industry, Coca Cola has to content with the traditional Macro Environmental factors. The applicable laws within the United States and in many countries around the world impose restrictions for Coca Cola and the beverage industry. New deposit laws in the United States and in Europe require beverage bottlers and distributors charge a refundable deposit on beverage containers. Implementing this system requires significant capital investment to develop the capability to handle and process empty beverage containers. (Reuters). Many continue to associate health risks with consuming carbonized drinks. A recent study in the United States links the consumption of soft drinks with Type 2 diabetes and weight gain. This idea is supported somewhat by the medical community with statements such as: Anyone who cares about his/her health or the health of their family would not consume these beverages. Although this study was localized within the United States, from a Political and Legal perspective it has potential global implications throughout the industry. Beverage industry is affected, by a number of Economical factors that range from the cost to manufacture and distribute products, to foreign currency exchange fluctuations, fuel prices and weather patterns. Coca Cola has a global manufacturing network and it is also affected by these and other economical factors. For example Nestles (50% owned by Coca-Cola) sales increased with 12.6% in 2005 but due to the impact of foreign exchange rate the sales decreased by 6.3%. (www.dailyreporter.com) Danones profits margins have also been significantly affected by the increase in oil costs and hence, decided to increase their prices by up-to 12%. However it cannot be concluded that the beverage industry is more vulnerable than other industries. The beverage industry also faces environmental challenges. In India, for instance, where there is a serious shortage of water supply, the industry giants were strongly criticized on their use of water that constitutes 90% of the raw materials. This could invite governments to introduce new legislations that may have global implications on the global industry. Additionally, the company experienced culturally imposed operating restrictions when marketing its product in some countries, due to risks related to the socio-cultural factors such as obesity, that have potential adverse effects on the beverage industry. (NewsTarget.com) 3 Micro Industry Analysis The non-alcoholic sector is dominated by three major players, which together control 90% of the global market. However, the rivalry is fierce among the competitors: Nestle, Cadbury Sweppes PLC, Groupe Danone and Kraft Foods, with PepsiCo being the number one Rival for Coke. Coca Cola focuses primarily on carbonated soft drinks and fruit juices, while all of it competitors supply the market with other food products in addition to soft drinks. Coca Cola is continuing its diversification efforts, however and now owns 50% of Nestle, which currently dominates bottled water sales in some regions. Nonetheless, as a result of its past focus of relying primarily on the soft drink market, Coca Cola more vulnerable to fluctuating market conditions than its competitors. The non-alcoholic beverages market remains somewhat vulnerable to the threat of substitutes. The market has become saturated with the introduction of an array of soft drinks, sports drinks and bottled waters. By its own admission , Coca Cola considers tap water one of the main Substitute Products, and possibly a long-term indirect threat. Although many consider the consumption of soft drinks such as Coke (and Pepsi) a social event, the need to quench thrust remains a primary factor. Coca cola views the ready availability of tap water as a long-term threat, especially considering the decreasing reputation of carbonized soft drinks. One of the most significant threats to the beverage industry and Coca Cola is that of buyers power. Consumers can change their decision to buy at once. In 1985 for example, Coca-Cola decided to change the taste of its Cola. The consumers stopped buying Coca Cola even though taste tests demonstrated an improvement. (Hoovers) Coca Cola has long enjoyed limited vulnerability to Suppliers Power. Coca Cola maintains a solid position. Several resources providing global access to the main ingredients, such as Sugar, Artificial Sweeteners and Fruit Juice. However, this can change somewhat because Coca Cola recently experienced some limitation with the availability of raw materials due to increased activity in India. (Reuters) The key to success for all beverage companies is differentiation. The right product along with an effective marketing and branding campaign could create a formula for success. However, when it comes to New Entrants, it is unlikely that new entrants are going to form any creditable threat. Competition from PepsiCo remains the main threat for Coca-Cola. 5 Financial Analysis The financial analysis is based on the consolidated audited accounts of Coca-Cola Company and Subsidiaries made-out by Ernst Young for the past 4 years from 2005 to 2009 and comparisons are made against one of its main rivals PepsiCo. The accounts have been prepared in accordance with USA generally accepted accounting principles and standards of Public Company Accounting Oversight Board. The audited accounts / reports bear an unqualified auditors opinion. 5.1 Profitability Coca- Cola has been able to maintain impressive gross profit margins (GPMs) during 2005 to 2009 ranged between 66% and 63% which is better than its main competitor PepsiCo, whose GPMs from2005 thru 2009 stood consistently at 54% and industry standard of 42.28% (http://yahoo.finance.com). NET REVENUE Apparently, the cost structure of Coca-Cola and its overall cost-position is relatively better than PepsiCo although PepsiCo was able to achieve higher revenues than Coca-Cola by up-to 33%. This is further evidenced by the cost-to revenue ratio which was in the range of 75% and 69% for Coca-Cola and 82% and 83% for PepsiCo. NET INCOME Further, better overall cost-position by over 50%, and prudent cost-control enabled Coca-Cola to comparatively achieve better net incomes than PepsiCo as indicated by Net-Profit-Margin (NPM). On an average basis (from 2005 thru 2009) Coca-Cocas NPM stands at 29.815% higher than PepsiCos 18.765% by 59%. 5.2 Liquidity and Funds Management While current ratios for both companies are maintained at a reasonable standard of above 1:1 and are constant over the four years, quick ratios are also maintained at almost 1:1 and hence found to be relatively reasonable in meeting the short-term financial obligations. The cash ratio stands at 0.62:1 (slightly higher than PepsiCos 0.51:1) in 2009 which has improved, compared to 0.44:1, 0.32:1 and 0.23:1 in 2008, 2007 and 2006 respectively, mainly due to the increase in cash and cash equivalents balances to US$6.71bn in 2009 from US$3.36bn in 2008, US$2.13bn in 2007 and US$1.88bn in 2006. Generally, Coca-Cola has been maintaining better cash ratios than PepsiCo. CASH GENERATED FROM OPERATING ACTIVITIES TO MATURING OBLIGATIONS Furthermore, although cash provided by operating activities have been steadily increasing at an overall growth rate of over 10%, Coca-Colas Cash-Generated-from-Operations-to-Maturing-Obligation (CGOMO) ratio declined to 0.59:1 in 2009 from 0.58 and 0.54 in 2008 and 2007 respectively due to the increase in current liabilities by over 39%. The key components to the overall increase in current liabilities are: à ¢Ã¢â€š ¬Ã‚ ¢ Increase of maturities of the long-term debt to US$1.5bn in 2009 from US$0.3bn, US$.18bn, US$0.1.6bn and US$1.4 in 2008, 2007, 2006 and 2005 respectively. à ¢Ã¢â€š ¬Ã‚ ¢ Increase of loans and notes payable to US$4.5bn in 2009 from US$2.6bn in 2008, US$2.5bn in 2007, US$3.7bn in 2006 and US$3.0 in 2005. Nonetheless, there shouldnt be major concerns as Coca-Colas ability to collect its debts within 35 39 days and pay its creditors in almost 200 days while turning over its stock in 63 days, giving sufficient comfort to meet its financial obligations. Coca Cola has strategized in 2005 that by 2009 it intends to generate cash from its operating activities to the extent of 39 billion us$ 5.3 Asset Management Comparatively, Coca-Colas average stock holding period of 64 days is higher than PepsiCos 40 days, as indicated (STR in 2009). The trend shows that both companies have been consistently maintaining their STRs at almost the same levels. The better PepsiCos ratio could be attributed to the diversified nature of its product lines to include foods as compared to Coca Cola which is purely in drinks. Therere negligible differences in the debt collection periods where the number of days range between 35 and 39 for both Coca-Cola and PepsiCo, which is considered reasonable in an industry which is highly competitive and where the norm is 60 days. This implies that both companies have the competitive edge that may enable them to avoid tiding-up the capital in the receivables and generate sufficient cash to meet their short term financial obligations. Credit payment period shows Coca-Cola enjoys a longer credit period of almost 200 days than PepsiCos 147 days. This implies that Coca-Cola has st ronger bargaining-power than PepsiCo, thus basically gives Coca-Cola a free interest loan. Notably, the fundamental difference in asset management policies between Coca-Cola and PepsiCo is Equity-method-investments by Coca-Cola which historically is among the key components of its asset-base. Coca Cola key Asset Components in 2009 6 Evaluation The global beverage industry is highly regulated and instabilities, changes and uncertainties in worlds political and economic environments pose risks and challenges to the beverage companies, especially those which operate in a global fashion. The sluggish global economy, budget deficits of major economic powers, steep rise in oil prices and sharp currency fluctuations are matters of concern in general that may potentially have adverse implications and put the profit margins under pressure for many companies. This is due to the increase in energy cost needed to run the plants and transport the products to the marketplace. Competition in the beverage industry is fierce; companies that are not widely diversified remain more vulnerable to threats such as, rivalry, buyers and suppliers powers. Product substitution and new entrants form a minor threat in the beverage industry. Coca-Cola, the largest global company with the largest market share in the beverage industry, has a market capitalization of US$102bn which is far above an industry average of US$75bn and slightly higher than PepsiCos US$98bn. Its global presence, wide and reliable distribution channels, strong capital and asset base and global brand recognition provide it with a competitive edge over its rivals and in achieving better economies of scale. However, ROA declined year-by-year from 2009 thru 2005 couple with a decline in the share price. Nonetheless, the new leadership and management team has managed to improve the performance as evidenced by the excellent Q-3 2009 financial results and the resultant increase in EPS. 7 Conclusion Coca Colas leadership and management structure and the overall organizational culture have recently been initiated by hiring the new CEO (E Neville), who now focuses on revamping the organizational structure and the strategies. His primary objectives are to promote Coca Colas historical strengths such as innovation, motivation, training and development, knowledge management and blow-up the bureaucracy that has long been existing in the company in order to achieve sustainable growth and competitiveness. Coca Cola has got sound risk management policies that have enabled it to remain stable given the high foreign currency fluctuation, interest rate risks and political instability in view of the wide operation in over 200 countries. In particular, introduction, revision and implementation of effective marketing strategies, quick-decision-making, effective asset utilization, overall asset management policies and the dividend payout policies need immediate management action in view of the competitive nature of the beverage industry, Otherwise Coca-Cola may lose more grounds to its competitors. The overall financial position of Coca Cola is fantastically sound. The notable decline in ROA is not a matter of great concern particularly when the companys leadership and management team has got a breath of fresh air whose effectiveness is evidenced following the announcement of impressive Q3 2005 financial performance. The new CEO (E Neville) may have set a new course for the worlds number 1 soft drink giant.

Globalization: the Americanization of the World?

Andrew J. Bacevich, American Empire: The Realities and Consequences of U. S. Diplomacy (Harvard University Press, 2002). Joseph E. Stiglitz, Making Globalization Work (Norton, 2007). James L. Watson, ed. , Golden Arches East: McDonald’s in East Asia (2nd edition, Stanford University Press, 2007). Robert McCrum, Globish: How the English Language Became the World’s Language (Norton, 2010). Fareed Zakaria, The Post-American World (Norton, 2009). Globalization is the integration of the world’s different regions into a global culture, economy, geo-political arena, and communication network. It is the process by which the lines of nation states are blurred, smoothed over by new international institutions. Globalization is the undeniable destination of human history and as such permeates nearly every facet of it. It is liquid in this sense, flowing and changing to fill in wherever it flows, but there can be no doubts of the tide of globalizations source: The United States of America. At first glance, the distinctions between Globalization and Americanization are almost imperceptible. â€Å"Big Mac, Coke, and Disney† (Watson, 5) are as recognizable to Chinese and Russians as they are to Americans. The World Bank and IMF’s policies are more or less set by Washington. The American military has the most powerful armies and fleets the world has ever seen, and has effectively dominated the world from World War I onwards. The United States population which is less than 5% of the world population produces about a quarter of global GDP. Such realities might lead one to the conclusion that Globalization and Americanization are synonymous, but is this actually the case? In the discussion of the books at hand, globalization as it pertains to Americanization is made evident. Andrew Bacevich contends that the United States is the primary agent of modern globalization. It has capitalized on the opportunities it has been presented with in order to create a system of global politics and economics that is of the most benefit to itself, all the while packaging it in altruistic rhetoric. Joseph Stiglitz contends that the United States has conducted globalization by dominating the institutions of world governance and finance. It has done so to the detriment of other nations and as such, the American means of globalization is not the best strategy if true globalization† is the desired end. James Watson holds that McDonald’s, once as iconic of America as the stars and stripes and one of the leading agents of globalization, has been assimilated into many local cultures. As such, it no longer represents the Americanized aspect of globalization, but is rather an international institution and an agent of globalization at large. Yet, some of the seemingly obvious aspects of American led globalization are not as American as they may seem today. Robert McCrum asserts that English being the world’s language arises not from American economic and foreign policies, but is rather a legacy of the British Empire. Furthermore, that America is not spreading its culture through English, it is only a tool to be used for communication. Finally, Fareed Zakaria demonstrates that we are departing from a unipolar world dominated by America. Although it will continue to play a leading role in the globalization of the world, â€Å"the rise of the rest† is diminishing its role and the United States is no longer solely holding the reins of globalization. Andrew Bacevich’s assertion is that the idea of the American empire differs only in form from traditional imperialism. Its function, enriching the mother country, is precisely the same but employs a variety of techniques to make this less evident. The United States embraces its role in history of exerting power only as a last resort. Only when circumstances totally necessitated it would America resort to using Theodore Roosevelt’s proverbial â€Å"big stick† (Bacevich 117). The Spanish American war began only when General Valeriano â€Å"Butcher† Weyler could be tolerated no more. World War I was entered only because of the unprovoked German aggression upon the Lusitania. Cold War military and political endeavors were nobly pursued to defend against Communist aggression. Yet Andrew Bacevich rejects this view. He argues that this â€Å"myth of the ‘reluctant superpower’—Americans asserting themselves only under duress and then always for the noblest purposes† (Bacevich 7-8) is exactly that, a myth. That Roosevelt’s reportedly soft speaking and big stick carrying America uses the† reluctant superpower† myth only in order to justify acts of self-interest. Perhaps the more fitting description of America by Theodore Roosevelt is his affirmation that â€Å"of course, our whole national history has been one of expansion† (Bacevich, 7). The United States has conscientiously exerted itself at every opportunity in order to expand its global economic and strategic interests. America’s superpower status and role as an agent of globalization is driven entirely by the machinery of self-interest. Bacevich writes that â€Å"ever increasing prosperity† (Bacevich, 85) is the primary national interest. Furthermore, as Bill Clinton stated â€Å"Growth at home depends upon growth abroad. † Of course, there is still the legitimate idealistic side of globalization as â€Å"the ultimate promise of peace, prosperity, and democracy† (Bacevich, 42), but America’s actual interest and role in globalization is to expand the American economy. In other words, America’s aims in globalization are to benefit the world yes, but â€Å"benefit the United States most of all† (Bacevich, 96). The American economic empire, brought about by the domestic desire for continued growth is the overarching American interest in the realm of globalization. The fact that â€Å"where interests were slight, the United States seldom bothered to make the effort to assert any substantial leverage† (Bacevich, 107) vividly illustrates this. Considering the insubstantial economic incentives of Africa, it â€Å"consistently ranks dead last in U. S. strategic priorities† (Bacevich, 107). Now, take into account the economic and political incentives of Europe’s markets and the Middle East’s oil reserves. Based on US military intervention, it is telling that â€Å"conditions that in the Balkans or the Persian Gulf the United States found intolerable were in Africa merely unfortunate† (Bacevich, 108). The United States found it necessary to militarily intervene in the former two interest-rife locations, and merely sent aid and rhetorical sympathies to the economically barren latter. The portrait of Americanization and Globalization that Andrew Bacevich paints acknowledges one of the primary facets upon which the two collide, the global economy and the United States role within it. To deny that America has been the driving force behind the creation and continuance of modern open market operations, and to deny that it has done so for the betterment of its own economic interests is to deny all but the rhetoric of American imperialism. The United States did not have, as the historian Ernest May naively stated, â€Å"greatness thrust upon it† (Bacevich, 7), but rather calculatedly and ingeniously shaped its responses to global politics and economics in order to integrate and derive the most benefit from the new globalized economy. Joseph Stiglitz, rather explicitly argues that â€Å"globalization should not mean the Americanization of either economic policy or culture, but it often does—and that has caused resentment† (Stiglitz, 9). He argues that â€Å"the worry about American unilateralism, about the world’s most powerful country imposing its will on others† (Stiglitz, 5) is fast becoming substantiated. Despite economic indicators such as GDP suggesting that poor countries seem to be improving, â€Å"globalization might be creating rich countries with poor people† (Stiglitz, 9). As Stiglitz argues, the United States’ goal of making Americanization a component of globalization is causing this. Particularly responsible has been the Washington Consensus, a set of development promoting policies created between the International Monetary Fund (IMF), the World Bank, and the U. S. Treasury. The former two of these are basically international lending bodies, delivering short and long term loans, respectively, to countries in need. The policies outlined are â€Å"downscaling of government, deregulation, and rapid liberalization and privatization† (Stiglitz, 17). Although these are the characteristics of western countries, western countries did not become this way through the â€Å"shock therapy† of instant implementation. Rather they came from a drawn out progression of events The implication is that the United States, in attempting to make its political and economic policies integral concepts of the grander one of globalization, is actually turning countries off to the Americanized aspect of globalization. Similarly, the manner in which the United States encourages international trade to be conducted is a hindrance to globalization at large within poor countries. Stiglitz writes that â€Å"countries often need time to develop in order to compete with foreign companies† (Stiglitz, 70). Yet, The United States and the international trade organizations which it dominates oppose tariffs for many industries on the grounds of it inhibiting trade and not allowing the all-wise power of the market to control the economy. However, â€Å"most successful countries did in fact develop behind protectionist barriers† and climbed the â€Å"ladder of development†. The anti-tariff policies that soundly developed countries advocate are viewed as trying to â€Å"kick the ladder away so others can’t follow† (Stiglitz, 71). The uncertain effectiveness of these western policies, policies necessary for developing countries to get assistance from the IMF and World Bank, which they almost undeniably need, calls into question the western policies which they don’t necessarily need, namely democracy. Stiglitz writes that â€Å"IMF conditionality undermines democracy† (Stiglitz, 56), that although â€Å"globalization has helped spread the idea of democracy, it has, paradoxically, been managed in a way that undermines democratic processes within countries† (Stiglitz, 12). America, in efforts to save countries from spending time on the economic policy learning curve, in reality ends up harming them. As such, the United States’ inadequacy for creating economic agendas for developing countries is a paradox of its own success. He posits that in order for the developing countries to benefit from globalization, the agenda of globalization needs to depart from the Americanized version, and instead â€Å"have the voices of developing nations (be) heard more clearly† (Stiglitz, 98). If the hardline factors of globalization—economics, geo-political military assertions, and international governance are the easiest to assess the American-ness of—the soft aspects: cultural and linguistic patterns, are the most difficult. James Watson contends that in some respect, global corporations gain their transnational appeal simply by being American; by being an image of modernity. However, he also holds that components of globalization that were once considered agents of Americanization are now accepted as local. Japanese McDonald’s have â€Å"clearly capitalized on the fact that it is associated with American culture† (Watson, 172). In China, McDonald’s promotes â€Å"the corporations image as an exemplar of modernity† (Watson, 42). McDonald’s in these countries represents what the West represents, or more accurately, what the locals believe the West to represent—â€Å"the promise of modernization† (Watson, 41). It has gone so far as to even change cultural eating habits. In these locations, McDonald’s sells more than hamburgers. It sells America as an ideology, a place of modernity, cleanliness, efficiency, and equality. As Watson would contend in China and Japan, McDonald’s represents the convergence of the idealistic facets of Americanization and globalization: the United States as a favorable model to be emulated. Yet in the case of McDonald’s in Hong Kong, it is not considered â€Å"an example of American-inspired transnational culture† or â€Å"perceived as an exotic or alien institution† (Watson, 107). Rather it is a fully assimilated part of Hong Kong’s modern culture. As Watson writes, â€Å"the transnational is the local. † The younger generation could not â€Å"imagine life without it† (Watson, 109). Thusly, at least in Hong Kong, the American aspect of McDonald’s globalization has faded with its assimilation into the national identity. Although American, it no longer Americanizes or suggests that the American odel is something good and unique that should be followed. McDonald’s in Korea however suggests a different view of Americanization. Some people hold that â€Å"eating McDonald’s hamburgers is tantamount to treason and loss of Korean identity† (Watson, 158) At least here, to some degree McDonald’s is view ed as an American crusader of â€Å"cultural imperialism—a new form of exploitation that results from the export of popular culture from the United States† (Watson, 5). McDonald’s represents a conquering American agent seeking to enthrall and draw in cultures to that of its global Americanized one. Another phenomenon of globalization, one might argue American-driven globalization, is English becoming the language of the world. Robert McCrum argues however that this is not a legacy of the American century, but rather a legacy of the British Empire. America has helped to propagate it but it in fact is originally an agent of British-ization. McCrum writes â€Å"The nineteenth (century) was, supremely, the century of British English – first the King’s and then the Queen’s – but it also witnessed the beginnings of the world’s English† (McCrum, 174). English spread to the earth not as a result of America’s dominance in the 20th century, but rather Britain’s far flung immigration in the 19th. McCrum contends that this is what made Jean-Paul Nerriere’s global English (Globish) so accessible to so many people across the world. It is removed from American influence in that it was not asserted upon the world by America. Rather because of Britain and certain historical tilts towards English speaking, it simply fell into place. In essence, McCrum asserts that British English lay the foundation for English to become, as John Adams wrote in 1780, â€Å"in the next and succeeding centuries†¦the language of the world† (McCrum, 105), and as such is not truly an assertion of American influence. However, McCrum’s points are debatable. As a proud Englishman, he seems ready to assert the obvious role of Britain in making it a global language, but is less generous when it comes to the American aspects. Furthermore, his denial of English as a cultural force is problematic. The global media is dominated by America. The largest media conglomerates in the world are American. Ten of the highest twelve paid musicians in the world are American. McCrum seems to ignore the fact that media is one of the largest aspects of globalization, and that American influences dominate it. These have been the themes of globalization. The convergence of Americanization and globalization has dually permeated military affairs, economics, culture, and language. On the global stage, the United States has been the dominant player for over a century. However, to what extent will this remain true in the 21st century? Fareed Zakaria contends that it will, but will require a reassessment of the global community. Zakaria puts forth that we are â€Å"now living through the third great power shift of the modern era† (Zakaria, 2), not â€Å"the decline of America but rather†¦the rise of everyone else† (Zakaria, 1). What this means for Globalization as it is linked to Americanization is that although the U. S. ’s role will still be there, it is diminishing. The historically United States dominated past has paved the way for this. Its active efforts in globalizing the worlds consequence is the â€Å"rise of the rest† (Zakaria, 2). As Zakaria writes â€Å"the United States succeeded in its great and historic mission—it globalized the world. But along the way†¦it forgot to globalize itself† (Zakaria, 48). The arising international order that Zakaria see’s is a term invented by Samuel Huntington â€Å"uni-multipolarity†, which can be described as â€Å"many powers and one super-power† (Zakaria, 43). In the new international order, the United States will merely be a leading actor on a stage of many. The other actors are comprised of new powerful economies—China, India, Brazil. The United States has been able to maintain its preeminence within globalization in the past but the changing realities of the global economic landscape will require according change from America. Zakaria lays out a series of principles that the United States should or must follow in order to maintain its position in the modern world as a chief agent of globalization. These principles recognize the changing landscape and suggest how America can perpetuate its interests, its goal of Americanization within globalization. Firstly, the United States must choose which policies it actively wants to pursue. The ambiguity of policy facing Iran and North Korea do not allow the United States to reach an attainable international goal. If the United States were to decide that they were simply proponents of â€Å"regime change or policy change (that is, denuclearization)† (Zakaria, 234) they could more efficiently define the changes they wish to see in the global community. Similarly, in order for the US to continue to blend Americanization with Globalization, they must set out broad rules and seek to cultivate its bilateral relationships with other nations. As Zakaria argues, if the U. S. has strong relationships with other strong nations, better than anyone has with another, â€Å"it gives the United States the greatest leverage†¦maximizing its ability to shape a peaceful and stable world† (Zakaria, 242). The United States must also be careful in how it shapes it’s responses to international conflict. â€Å"Legitimacy is power† (Zakaria, 247) and the nature of the United States’ current conflicts are â€Å"asymmetrical†, meaning they are not facing conventional military forces or typical state actors. As Zakaria writes â€Å"asymmetrical responses have become easier to execute and difficult to defeat† (Zakaria, 244). Therefore in order to remain legitimate, to have the power to â€Å"set the agenda, define a crisis, and mobilize support† (Zakaria, 247) for the United States’ interests in globalization, reactions need to be shaped to fit the conflicts at hand. Overall, Zakaria contends that if the United States is not willing to change its policies and approach towards globalization and the global community, it will no longer effectively be able to mesh Americanization with globalization. In the analysis of how linked globalization and Americanization are within the context of these books, a complex and comprehensive picture can be draw. The United States has been able to use globalization as a tool to create a global economic empire and cultural model. Through the capitalization of opportunities to expand its markets, packaged in its â€Å"reluctant superpower† myth, the United States has been able to assert itself internationally and accomplish its political and economic aims. However, the changing nature of the global landscape calls for a recalculation of how this strategy of self-interest can be perpetuated. Furthermore, the United States will have to make some concessions regarding its hegemony as other nations with large populations and strong economies grow in power and importance. Culturally, the United States benefited from the British Empire’s legacy of spreading English around the world. However, it has also been able to capitalize on this and further Americanize the world through the consequentially large English speaking media outlets. Multinational corporations such as McDonald’s still possess their American identity abroad, but this is beginning to change in respect to the world’s youth. It is now dually perceived as a symbol of modernity (which sometimes equates to Americanization) but also a component of local culture. Therefore, whether globalization is the Americanization of the world seems to be a yes. The debate whether it will, or should continue to be, is still ongoing, and remains to be seen, dependent on how America conducts itself in the post-American World.

My Last Duchess by Robert Browning Essay

In poem My Last Duchess, Robert Browning wants his readers to understand the conflict of art and morality. In the poem, the narrator talks about his dead wife, using eloquent words as though his word itself is a painting, but beneath his beautiful words, he tells a story of why and how he killed his wife, â€Å"I gave commands; Then all smiles stopped together† (Browning 2). He killed his wife because, she doesn’t appreciate him as much as he would like her to appreciate him, â€Å"as if she ranked/ My gift of a nine-hundred-years-old name/ With anybody’s gift† (Browning 2). The significance of Browning’s title to the theme of the poem is the engagement of art and morality of the poem and the actions of the narrator, he wants his readers to understand the beauty of the poem and question the actions of the narrator. Browning wants to know weather the readers will deem his poetry elegant despite of the fact that the narrator in the poem killed his wife. Works cited Browning, Robert. My Last Duchess and Other Poems. New York: Dover Publications, Inc. (1993).

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