Intellectual Capital

Intellectual Capital

What intellectual capital does Coca-Cola have as a part of their competitive advantage?

Intellectual capital is the difference between a firm's market value and book value. This is a measure of the value of Coca-Cola's intangible assets. Intellectual capital is broken down into human capital and social capital. Human capital is the "individual capabilities, knowledge, skills, and experience of the company's employees and managers". Human capital is key to a company like Coca-Cola because the knowledge of the Coke recipe and the personnel that have been operating this major corporation efficiently for years are invaluable. Muhtar Kent, Coca-Cola's Chief Executive Officer and Chairman of the Board, is very valuable to the company because he has been working his way up through the company since 1978. He has an extensive knowledge of operations leadership and marketing skills that have guided him to be the leader of number 59 on the 2012 Fortune 500 list. Social capital is "the network of relationships that individuals have throughout the organization". The long-term, polished relationships formed in the Coca-Cola administration has allowed the value of Coke's social capital to rise. The relationship Coca-Cola has with its suppliers, customers and partners is also very strong because Coke has been around since 1888. According to Interbrand, Coca-Cola is the most valuable brand name in the world valued at $77.8 billion dollars. The original Coke beverage is just sugar and water costing nickels. Once the brand name Coca-Cola is printed on the drink, it can be charged for dollars. The Coca-Cola Corporation also sells 3,500 other beverages worldwide.