Business Environment Of Coca Cola Company Business Essay

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This is an acdamic report which is focusing on the business Environmental changes of the international company of Coca Cola in the last five years. It discusses the strategic position of the company & its current status in the business in the emergent market. Coca Cola is the multinational company responsible for the manufacturing , selling & distributing of the wide range of the soft drinks across the globe. Their charter office is situated in the United Kingdom at Uxbridge, Middlesex in the England. The company is having a valuable brand with the extensive scope for the product development & the Market Development in an international market. The company is having its national as well as the international operations in the broad economic sector . The level of the turnover & profitability margins of the company are commensurate as per their expansion & development in the emergent market. The company is having objective of the extensive brand expansion & development maintained through the producing of the 260 million bottles in the different sizes

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every year [Jammi,2007] In the Great Britain they are having 4650 people with in the seven manufacturing sites across the country.[Hadle,2009] Coca – Cola Enterprises Inc. is an international organisation which is the parent company of Coca cola listed in the United States of America making marketing & product distribution in the North America & Western Europe.[Richard,2008] In the west London the company is having a marketing team of the people who are engaged in the marketing promotion & the distribution of the new products & brands which are existed in the world. [Uvert,2007] The regular activity of the corporate is to make, sell & distribute the soft drink items in all the parts of the world. In their product development in the Great Britain they have sparkling drinks like Classic Coca Cola, Diet Coke,Cock,Zero , Fanta & Sprite as well as Oasis still fruit drinks , Isotonic sports drink, Relentless energy drinks & vitamin water.[Jeorge,2010] Their strategic focus is to capture the international market through an effective market development & the consumer development. In an international market they are facing tuff market competition by Pepsi, Limca and Merinda who also are having a wide scope of the market dev elopment for their products in an international market.

Literature Review

The Coca cola company owns rights to the Schweppes in the name of Great Britain & the Coca Cola enterprise Manufacturers the Schweppes product range including the classic Schweppes, Lemonade, Schweppes, Bitter Lemon, Indian tonic water , a variety of juices with the Malvern English water, with the manufacturing of the products for the Coca Cola company, the company is also manufacturing & distributing soft drinks for the other brand owners, these include Capri sun, monster energy drinks with the Appletiser , Friuitiser, Pertiser range of the sparkling fruit juices [Potter,2008] Strategic policy management of the company is focusing towards the aim of the capturing of the national & international market for the sake of the development of the strength & quality improvement in the wide range of the market, Political environment of the company includes their commitment to an external stewardship extends throughout their system & incorporated in to their governance, management of the business operations, their audit committee has oversight of the environmental policies & performance with the overseeing of an environmental issues, the technical stewardship organisation has an operating responsibility for environmental matters including the water resources as well as the product quality scientific & the regulatory affairs & the business process excellence, they are also holding the responsibility for the setting of the environmental strategy based on their business operations, developing environmental standards & programmes with the managing of their performance level in an international market, Governmental experts panel , Nongovernmental organisations & academics are providing counsel to their management on the environmental issues with the views of the external stakeholders, with their environmental policies, programmes & performances [Denmark,2009] Economic Environment of the business is having the changes of the rapid structure of the business from the last five years in the year of 2005, they were doing high marketing strategy in the national market in the distribution of the products through the advertising campaign which has been got its success in the year of 2006 with the up gradation of the 35 % of the sales force, in the year of 2007 their sales strategy was included the techniques of the sales promotions in the international market which has given them an ideal opportunity of the increase in the position of the sales of the company by 39.5% comparing to the previous year results, their strategy of the marketing has enhanced in the last period of the year 2007, however, due to the serious credit crunch in the market growth of the sales is restricted & there is a large flaw in the performance level & the liquidity position of the company which has the outcome of the falling of the income level of the people , there was a serious issue of retrenchment of the people due to the non-availability of the jobs as the overstocking was happened with the decrease in the level of the performance & production of the company, Credit crunch has a very severe impact on the portfolio strategy of the product & it has disturbed the Pull & Push Strategy of the marketing environment of the company which resulted in to the 98.5% deterioration in the sales of the company in the comparison with the previous year, However, the environmental issue has begin to upgrade from the year of 2009 where by the recovery stage of the trade cycle of the business has begun which has given an opportunity to the company to increase their level of the performance in the emergent market resulted in to an appreciation of the 20% of sales in the year & is the period of the beginning of the rapid recovery stage in the business, which has continued in the present year of 2010 as well [Patson,2010] Level of the profitability of the company is commensurate towards the up gradation of the economic cycle, which has increase the productivity level , efficiency level in the business in the order to increase their target market & deserve the ample consumer satisfaction with the satisfying the needs & requisites of the consumer habits,likes,opinions,preferences, Legal issues in the terms of the import export regulations were favourable in this period of in the order to capture the potential market at the international level.[Robinson,2009]

Business Environment

The business environment of the company is distributed in the Micro & Macro Analysis Micro environment is the environment of the business in which factors are directly relating to the performance of the business & effect on the factors can change the strategic performance of an organisation whereas the Marco environment is the business environment in which factors are relating to the external environment of the businesses & the strategic impact of the environmental issues o the business policies can be ascertained in the terms of the political,economical,social,technological,environmenrtal & legal factors affecting to the level of the business environment.

Micro Environment

This is the term of the business environment in which all the internal factors which are having a direct & close impact on the performance level of the business are clubbed. They are as under –

Customers – They are the resources of the business operations in the lacking of the customers no business can be effectively run & operated in an international market. Every business is forming its strategy for the development of the customers in the emergent market. The idea of the Coca Cola company is of the same in the order to develop & expand their brand status in the Global market For doing the same activity they are applying all the marketing promotion & communication techniques in the business for constructing their growth strategy of the business In the last five years they have setted a large customer base in the local,regional,national & the international markets. They have deserved appreciation of the customer development continuously at the rapid rate of increase in the year 2005 by 32%,2006 49.3%,2007 52.4% in the first three years – in the year of 2008 there was a serious destruction of the business they have observed in their target market segmentation which has started improvements from the last year (King,2009)

Employee – The company has having a big number of employees in the business in the relation to the wide turnover of the business However, serious credit crunch in the market in the year of 2008 has serious affected the productivity level of the company due to the lowering of the capability level of the business which has resulted in the reduction of employees in due course of the retrenchment. The up gradation of the employee position has being started from the year of the year of 2009 as the recover stage has begun.

Media – This is the technique used in the business for the purpose of consumer development in the local,regional,national & international market of the business The company is using an imperative technique of the consumer development through consumer programmes , advertising & publicity, sales promotions, public relations, direct marketing.

Shareholders – These are the owners of the company who have the right of stake in the business, they are holding their powers of the control & management & decision- , making. They have right to attend annual general meetings of the company with the right to receive share in the profits of the company in the terms of the dividend. Warren Buffet is the owner of the company who has put the participative management style which suits for the strategic planning & decision-making in the business.

Suppliers – These are the persons who are supplying raw materials to the company for the purpose of the building & maintaining the strategy of the production of the company Suppliers are the effective sources of the production which are promoting the sales activity with the appreciating in the quality of the production of the company Supplier strategy control is the aim of every business activity, as they are regularly supplying an effective goods & services in the order to increase the turnover of the company They are supplying their goods & services on the basis of the credit periods issued to the company. Limit of the period of the credit is ascertained by the company based on the financial position & market performance. Suppliers are deciding the credit period in the terms of the days which are binding on the company & it is therefore an effective supplier control policy in the business is always playing a dynamic role in the strategic management of the company. Coca Cola company is having a good base of the suppliers which is providing the timely regular supply in the business in the order to execute the effective production strategy Their suppliers in Uk are scattered in the different areas like Bermingham,Bavon,Brighten, Manchester & other regional areas which are giving the continuous flow of the supply of the raw materials in the order to maintain the productivity control in the business One of the supplier namely Divine Grace has developed contract of the monthly supply of the 22 million ton of the Glass with the approval of the credit period of 15 days.[Rofer,2009]

Market Competitors – Market Rivalry is an effective source of the improvement of the performance of the company in which concentration is given on the business development in the order to increase the sales turnover, profitability level, service efficiency, market opportunities with the maintaining of the scope of the business. When 2 or more competitors in the same area of activity are trying to dominate the level of the efficiency & effectiveness of the each other that is known as the Market Competition. Every company has to develop imperative strategy of the market development & product development in the order to maintain the stability & status in the competitive environment of the business Market competition is helping to improve the level of activity & superiority in the business along with the measuring of the performance Coca Cola products are competing a tuff rivalry in the Market with Pepsi,Mirinda,Limca, 7 Up who are trying to dominate each others in an international business environment. At present Coca Cola is having 2nd rank of the performance of the cold drinks in an international market [Onart,2009]

Macro Environment

This is the term of the business environment in which focus is given on all of the external factors in the business environment & their strategic impact on the level of the performance of the business Following are the external environmental factors –

Political – These are the factors in an external environment of the business which can be impacted in the terms of the Government policy, Import Export Regulations , government intervention, taxation laws, human resource training & development in the business Political issues can be severely impacting the company organisation in the term of affecting on the policy regulations of the company & how the scope of the activity can be focused. For the Coca Cola the political environment of the corporate is remain continuously feasible import & export regulation in the UK,USA & Asian countries has supported the business for the promotion & development of the business in an international market. They are receiving the regular support from the Governmental & Non-governmental associations for the counselling of their management issues on the political background

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Economical – Economic issues are those which can be the interest rates, rate of inflation, economic development rate, foreign exchange rates which have the close impact on the business policy development They are proving an economic status of the company in the national as well as an international market. When the rates of the interest on the bank loans are lower giving opportunity of investment to the shareholders of the business in this period the rate of capitalisation increases. When the foreign exchange rates are higher given the exposure for exports which can be increases the national income of the country The Coca Cola has experienced a serious shock of the deterioration of the performance level in the year 2008 due to the serious credit crunch in the market they had loosed their potential liquidity status of the business in this period which they had ascertained during the rapid development of the business in the last 3 years with the effect from the year 2005 However, in the year 2009 they had experienced a recovery position in the business which had improved their status from the stage of the credit crunch, import export regulations & the rate of the economic development of the UK have a supportive focus to the expansion & development of the company in Europe.

Social – These are the factors which are relating to the changing demand & supply conditions of the business in due course of the alterations in habits,likes,preferences , opinions of the people which are impacting through the alterations of the manners,fashions,styles . The factors are having a direct impact on the scope of the business as the business growth is depended sensibly on these potential factors of the environment. It is the responsibility of the management of the business to always prefer an ideal policy of the business development at the stake of the social changes in the business environment. The changes in the habits of the people are always making changes in the sales turnover of the company, in the year of 2008 this impact was focused with the low level of income in the society.

Technological – Technological factors are having a very close impact on the development of the business When the technology of the business improves it is resulted in the increase in the level of the productivity of the business, effective marketing promotion techniques are appreciating the level of the sales performance of the company with the use of modern communication devices. Technological developments in the market are promoting the strategic development of the business with the effective use of machinery,equipments,channels of the production. Coca cola has experienced the potential growth of the business through the development of the new Franco technology of production in the Dec.2009 which has increased the production capacity in the quarter of the year by 30% comparing to the last quarter of the year.[Hasin,2010]

Environmental – These are the issues in an external environment of the business which can be occurred through the climatic conditions, temperature conditions , weather conditions in the external environment This has a very serious impact on the on the travel & insurance businesses. There are the natural calamities are affecting the performance level of the business such as earthqyuaakes,riots,floods which are destroying the life of the people & affects the performance level of the business Tsunami has a very sever impact on the business of the Coca Cola company.

Legal – These are the issues of the company affecting in the lawful applications. There are employment laws, consumer laws in UK which are playing importance for the corporate consumer laws are protecting consumers from the defalcations of the sellers. Employment laws are fixing the rules & regulations of the employment for the sake of the labour control in the business. Previously minimum wage per hour was £5.73 in Uk which has now increased to £5.80 per hour. Apart from that there are age discriminations laws,sex discriminations laws, disability discrimination laws which are having a close impact on the level of the performance of the business

Conclusion (Findings)

Coca Cola is one of the multinational company having its operations at the international level of the business The company is having a broad scope of the products development in the market They are already playing a commensurate role in the supply of the variety of the soft drinks which increases their supplier power in the business in the order to capture an emergent market. Buyer power in the economy is at the increasing level because of the recovery stage of the business which has reduced the problem of unemployment & poverty The company is facing a serious market competition with the new competitor products in an emergent market such as 7Up,Pepsi,Limca,Mirinda,Thumps up. With the rules & regulations of the international licensing there are so many restrictions on the new business in the same area of activity to take entry in the market, however, there are other drinks which are ideally domestic for the country are creating threat of the new entrants.


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