Business Environment Analysis of Coca Cola

The assignment analyzes the business environment of Coca Cola, a publically listed company with a specific structure and interdepartmental functions. It highlights the importance of middle-level management in coordinating functions to achieve long-run objectives. The research also explores various forms of business units and their planning operations, providing insights into how organizations can achieve their goals.

BUSINESS AND BUSINESS
ENVIRONMENT

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
P1 Purpose and legal structure of public, private and voluntary company............................1
M1 Structure, size, objectives of Coca Cola Company..........................................................2
P2 Size and scope of Micro SMEs, local companies, National companies, International
companies , Multinational companies and Global companies...............................................2
P2 Different functional units at Coca Cola.............................................................................3
M2 Analyse the link between inter-functional relationships & organization structure..........4
P4 Identification of the macro environmental factors impacting Coca Cola.........................5
M3 Application of PESTLE in Coca Cola.............................................................................6
P5 Appling SWOT to conduct internal and external analysis of Coca-Cola and Pepsi Co.. .6
M4 Use of SWOT analysis or decision making purpose in Coca-Cola.................................8
Conclusion.......................................................................................................................................9
References......................................................................................................................................10

INTRODUCTION
A business organisation empowers stewardship to its employees and supports its
participation. A business organisation consolidates sponsors for the youth. To meet the needs an
organisation plans strategies and makes programmes.
P1 Purpose and legal structure of public, private and voluntary company
An organisation can be defined as a group of persons who work together for a common
goal. The work is divided into many departments and they coordinates with each other.
Most common characteristic of an organisation is there are various part of a firm that
perform for a common goal. They all want to achieve common objectives. It is a machine of
management that divides work efficiently into members of an organisation. The aim of an
organisation is to create coordination between staff members.
There are mainly two type of organisation that are public sector and private sector
organisation.
Public sector provides various governmental services to the public. It includes the
services such as military policy, telecommunications, public education and infrastructure.
National health services is a public company which is situated in England. There are 1.6 million
people who are working in this company. The company operates service system independently.
Its work force are across the UK (Hin 2012).
Private sector refers to all for profit businesses which is own by common person not
operated by government. The main purpose of Coca Cola public listed company is to increase
the interest of the company. The company focuses on increasing financial interest.. The purpose
of the company is to fulfil needs of the children and families. To maximize return by increasing
productivity. The main objectives of Coca Cola Company are to expand its business globally
and accelerate growth. The mission of Coca Cola is to refresh the world for happiness moments
and to create value. The vision of Coca Cola Company is to make a great place for work for the
employees.
Public company- A public limited company refers to the limited liability company. The
shares are freely transferable in this type of company. For the formation of public company there
are minimum two directors are required that can be extend to twelve. When company registered,
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the member must agree to take shares. For public limited company there is a minimum share
capital before starting businesses (Kew and Stredwick, 2005). In the public company it has
seven number of shareholders and there is no limits. It is not affected by the death of
shareholders. It has separate legal entity. The main objective of this company is to fulfil the
needs of public. It is a company that do no offers its shares to the public.
Private company- private company is a non-governmental company whose objective is
profit maximization. In this company there are small number of shareholders, the ownership is
limited in this company (Beger, 2005). The main goal of these company is to provide new
sources of capital to the business, to increase opportunities and maintain investment
programmes. Another objective of this company is transparency in financial and annual report.
Voluntary company- It is a non-profit motive and self-governance company. It
membership is neither prescribed nor inherited. The main objective of this company is provide
services to the public (Fernando, 2011). This companies are formed for social welfare. First
motive of this company is to provide free services. These companies are not for profit oriented.
Well come trust is a voluntary company provides facilities for skill development
programmes. It analyses the needs of public and provides social services which is not for profit.
M1 Structure, size, objectives of Coca Cola Company
The headquarters of Coca Cola Company is in Atlanta. It involves manufacturing, selling
and marketing process. The company divides into two segments. Beverages and food services.
Beverages operates manufacturing and distribution of Coca Cola trade mark products in
Australia. The other food services distributes fruits, vegetable, jams and other item globally. The
company make sure that people pay attentions on its programmes and consolidated teams or
employees.
P2 Size and scope of Micro SMEs, local companies, National companies, International
companies , Multinational companies and Global companies.
Micro Small and medium enterprises- MSME are private organisation which is not
includes matrix. These are the small type businesses organisation whose number of employees
are limited. These type of companies are independently owned by public. Turnover of this
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businesses are limited there are many MSME that are statistical institutes, government promotion
agencies and private bake etc. in small enterprises there are 6 to 20 number of employees work in
the organisation. In the medium size enterprises there are 21 to 80 numbers of employees work
in the organisation.
Local companies- Local companies are those organisation whose number of employees
are more than small and medium enterprises. Its businesses are divided into local areas of states.
This are the large size of enterprises, in which there are more than 80 numbers of employees’
works together (Gatti, Gallegati and Kirman, 2000). Local companies operate within the states.
They can import and export their product or services but other activities are normally operated in
the state only.
National companies- National companies are the organisation whose scope are limited
to the whole nation. It sells our product to the whole country. It principally sells to the customers
independently or directly in the market.
International companies- The companies formed under the jurisdiction laws which have
limited activities. These companies deals with the international customers. The products and
services are offered in the international markets. In this companies they have no investment in
home country by outsiders (Kryzanowski, 2006). Intentional companies mainly export and
import their product to the other countries.
Multinational companies- Businesses of manufacturing and sales of product or services
more than one foreign countries, are known as Multinational Corporation. A company which
operates from home country with other subsidiaries countries (Stackelberg and et.al., 2010).
Multinational companies are different from international companies because in this companies
other foreign countries invests their capital in this.
Global companies- Global companies have direct investment of foreign countries which
is maintained by a strong headquarter in home country. In this companies economic of scale is
too large. It has much larger scope then others. The business in this companies are operated at
worldwide.
P3 Different functional units at Coca Cola
Organisation function- Organisation functions plays a vital role that help to perform
systematically in the businesses. It clarifies authority and helps to coordinate between staff
members. So that it is very important for the operations of the organisation.
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 Organisational functions are very important for the performance of an organisation. It
also defines job positions by effective administration.
 Functions of organisation are very important because from this managers can play our
role independently and there also a scope of new changes.
Organisational structures- It can be understand by the activities in which tasks are allocates
and supervisor directs towards the achievement of aim of firms. Organisation can make
structures according to its objectives. It depends on organisational operations and performance.
Functional structure- Coca cola is the world's largest beverage company. Coca Cola
Company is marketer of non-alcoholic beverage concentrates and syrups. Organisational
functions can be defined as a division of work into units that helps to accomplish different
activities. Top management team of the company consists several functional head such as CEO,
CFO and CIO.
 Marketing department: Most important team of coca cola organisation. Marketing team
is base of coca cola's organisation. Marketing team makes the client in all over the world.
Coca cola have global responsible marketing policy that covers it’s all beverages. Most
important and positive thing about its marketing team is that it do not market any product
directly to children under 12. Marketing team uses different techniques to sell the product
such as they use advertisement (Poak, 2013). Marketing team brings the order for the
coca cola company from their clients. The marketing team makes report of orders and
then they pass this report to the financial department.
 Finance department: finance involves management economic activity. In the finance
department the financial manager performs data analysis and advise the senior manager
on profit maximizing idea. Financial manager gets the order report from the manager of
marketing team (Palmer and Hartley, 2008). Financial department focus on the profits
and they make a plan how to complete the order with the maximum profit. Financial team
analysis the market trends to find the opportunities for expansion other company than
they make the report with the maximum profit.
 Manufacturing departement: Manufacturing team is establish for processing and
packaging of material for production. Manufacturing department of coca cola company
are combination of different department such as production department, quality check
department, sales and purchasing department. Production department is the largest
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department of company (Shedd and et.al., 2005). After the production department the
product is brought out in quality department for check the quality of product. In Coca
Cola Company there are high level technique machines are used to check the quality of
product.
Divisional structure- Divisional structure can be understand by designing of an organisation in
the manner that it is split up into semi units. It controls on day to day operations. Each division
can correspond to geographies or products of the organisation. Each divisional structure is very
important because it affords operational flexibility in the firm.
 Production department- It is mean by activities relating to products and services are under
the authority that is managed by one manages.
 Geographic department- it involves grouping activities that particularly deals with
different regions.
To be successful, coca cola Company’s operation are divided into various functions. These
functions are related to each other. Function of coca cola company's operations are as follows:
Matrix structure- It is also a structure of organisation that deals with individual operation are
grouped by the perspectives of its nature. It refers to including two functions of process that are
simultaneously. The advantage of this structure is it allows team members for sharing
informations and specialization that increases knowledge according to needs of projects.
M2 Analyse the link between inter-functional relationships & organization structure
Coca cola is a publically listed organization whose structure constitutes: board of directors,
top, middle & lower level management. Besides, this shareholders are real owners of this
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company, shareholder make a financial investment in organisation, and they do not have power
to directly involve in company management.
Board of directors: there are so many responsibilities which are followed by board of
directors. Board of director determine the organisation mission and purpose after that they select
the executive, manage the resources effectively and enhance the organisation's public image.
Board of director manage all the function of operation. They make different teams for different
department. They divide the management in different management team such as High level,
middle level and low level management. All the workers are come in low level management
categories (Porter, 2008). All leaders of different department comes in middle management
categorised. And seniors manager are comes in high level management categories. All leaders are
guide the employee to how to work effectively. If employee have any issue and problem with his
task and product than he will talk to his leader, leader will try to solve the problem at his level if
he is unable to solve the problem than he will go to Sr. manager and discuss the problem with
them, than they will solve out the problem. The employee cannot go directly to the high level of
manger he must discuss the problem with his supervisor firstly. This is work structure that is
followed by mentioned company.
P4 Identification of the macro environmental factors impacting Coca Cola
There are various macro factors that impacts Coca Cola and these are discussed with the
help of PESTLE analysis. It is further discussed as under:
Political
A major political factor that the company faced recently was the war which was against
Iraq by USA. Although Coca Cola is a very well-known company and has sales over various
areas over countries but their sale in Middle East and various Muslim countries have been
decreased to an extent (Vogel, 2008). Like in Iraq, people stopped buying its products just
because to represent their respect towards their culture and its citizens.
Economic
Economic reasons have also thrown a major impact on Coca Cola. During the time of
recessions, the attitudes and behaviours of the customers starts changing. AS Europe is having
recession, so there sales can go to a lower level.
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Social
The most important social factor affecting Coca Cola is that people are adopting healthy
lifestyles, so they are decreasing their interest as well in fast food and drinks including Coca
Cola as well. So, this can be the change affecting Coca Cola (Zhu and Kraemer, 2005).
Technological
Various technological features are being used for different advertising practices of Coca
Cola such as by means of television or internet (Salmons, 2012). Recent technologies also made
it possible to recycle the cans and bottles and it can have a positive impact on Coca Cola
industry.
Environmental
As there has been a growth in the company, the issues have been increasing as well.
According to a news portal, there has been found some sort of pesticides and DDT in Coca Cola
previously. But it can further cause cancer as well, so such factors have negatively affected the
company.
Legal
Coca Cola has already paid huge penalties for involving in cases like racial
discrimination (Trkman, 2010). Once in 1999, the company has made different salary sheets for
the people who are black and they were being given less than others, so they had paid huge
penalties for this allegation.
M3 Application of PESTLE in Coca Cola
Coca Cola focuses on every type of situation so that they can stay prepared how to deal
with the employees as well as customers. Like, if social factors are being considered, it has a
negative impact on Coca Cola as people are now adopting a healthy life style, so they can ignore
products of Coca Cola as well. After the company has paid penalties for racial discrimination,
the company has maintained its operations of motivating employees so that they can stay focused
as according to the Equality act 2010, it says there should be no sort of discrimination in the
workplace (Zsambok and Klein, 2014). So, now Coca Cola focuses on treating everyone equally
(Ling, 2017). Political factors have thrown some negative impact on the company, so it should
focus on some strategies that they can use for maximizing their sales. Technological factors have
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helped Coca Cola in increasing number of sales by the help of impressive advertisements and
maximized popularity.
P5 Appling SWOT to conduct internal and external analysis of Coca-Cola and Pepsi Co
Swot analysis of coca cola:
 Strength: coca cola is most famous brand which is present in households, hotels, office
etc. there are some factor which are described the strength in swot of coca cola.
 Brand Equity: coca cola has unique brand identity. Coca cola is known very well across
the whole world. They have a strong customer loyalty. The management of this company
is doing so well. They are focus on quality and taste of product with best price. Coca cola
has clients all over the world. Market reputation is also strength of this company. They
provide the best quality with good price and test. Some time they have had lose and profit
in business because of competitive companies but they are performing very well without
any big change in their organisation. Customer loyalty is most important strength of Coca
Cola Company. Many people are extremely loyal to this company.
 Vast global present: any country that people go, they will find the coca cola present in
that market. Coca cola is presented in 200 countries. All these factors contributed in the
strength of coca cola brand (Poak, 2013).
 Marketing strategies: coca cola have fantastic marketing strategies, they always focus
on advertisement and try to win their customer's heart. They have unique skill of
advertisement they always target people of all age.
 Distribution network: coca cola has a largest distribution network due to its demand and
its reputation in market.
Weakness:
 Water management: other companies and some people blamed coca cola for mixing
prestige in water to clear contaminate.
 competitive companies : Coco cola have many competitive companies that affect its
performances.
 absence in the health beverages: Coca cola affects the health of human being so that
health care organisations can not promote it.
Opportunities:
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 Diversification: The company provides a bid opportunity of enlarging its process and its
range of product.
 Developing nations: For this company employees and staff members can achieve their
goals and success.
 Supply chain improvement: It is a big opportunities for the retailers that it increases
supply chain.
Threats:
Raw material sourcing:
Indirect competitors: Some chains like costa coffee, straw bucks and cafe coffee day are on
rise, these chains offer a healthy competitive to coca cola drink.
SWOT analysis of Pepsico
Strength:
 PepsiCO is a leading and prominent FMCG brand in the food and beverage sector. Its
premium quality offerings have built a wonderful brand equity in the market. In 2017, in
Forbes, it is ranked at 29th position with a total brand value of $19.4 bn.
 Product portfolio: In the product portfolio, it has 5 highly popular products that
contributes highest to its revenue includes Tang, Real, Trpoicana, Slice and Roohafza
which has a strong market share.
 Loyal customer base: PepsiCo’s great taste of beverage makes their consumers extremely
loyal towards the brand. As a result, users do not prefer competitor’s products and prefer
only PepsiCo’s products.
 Strong distribution channel: PepsiCo is operating worldwide in more than 200 nations all
over the world with a worldwide spreaded network.
 Tie-ups: Company’s tie-ups with events, concerts and others always keep them in the
light of public and increase brand recall.
Weakness:
 Many soft-drinks create unhealthy impact over consumers and built negative image.
 Some of the products did not generate enough demand in the market such as Crystal
Pepsi.
Opportunity:
 It can expand into developing nations to capture a great market share where consumers
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are demanding health-conscious drinks and other products.
 Acquisition of other popular brands in the same sector can assist firm to boost
competitiveness and increase its product portfolio (Porter, 2008)
 Company needs to put more CSR efforts to generate brand popularity throughout the
world.
 It needs to spend more on research and development initiatives to focus on healthier
drinks.
Threats:
 Tough competition with Coca-Cola, Nestle, Kraft foods, Snapple Group, Modelez and
others
 Economic slowdown such as inflation adversely impacts business sales
 As a result of Brexit, it need to pay tariffs and import duties on its import from other EU
nations.
M4 Use of SWOT analysis or decision making purpose in Coca-Cola
Negative consumer views is the key weakness that Coca-Cola is currently facing which
built negative image among buyers. Therefore, managers need to make prudent decisions to
overcome the same, in this respect, firm need to receive regularly feedback from the consumers
and know their post purchase experiences. Consumer Relationship Management (CRM) is of
great significant for Coca Cola in knowing product users satisfaction level and their opinion. It
will help enterprise in making decisive actions to combat rising number of complaints due to
quality defects and others and boost their satisfaction level. It will facilitate Coca-Cola in
promoting positive word of mouth publicity and brand recognition (Zsambok and Klein, 2014).
Although, no-doubt, some of the product are extremely popular i.e. Coke, however, it has a
portfolio of more than 400 drinks and many are still not popular. Therefore, company needs to
put efforts on their marketing strategies and advertise such items for the consumer awareness.
Furthermore, in order to compete successfully with the competitors such as PepsiCo, it must
produce health conscious items to generate crowded customer base. Despite this, as a result of
Brexit (UK separation from EU), now Coca Cola need to pay import tariffs over their trading
functions with other European nations however, at the same time, own regulations of policies
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might benefited the company and offers opportunity in worldwide expansion. Coca-Cola has an
opportunity to acquire competitor and thereby avoid competition.
P6 Interrelationship between PESTLE and SWOT
According to business analysis SWOT and PASTEL both are interrelated approaches in
which Swot is a tool for an organisation and PESTLE stands for external factor. Swot analysis
focuses on internal factors whereas PESTLE analysis explores the legal and political factors. It
also helps to identify SWOT factors and both are two different perspectives. PESTLE assesses
market that deals with competitors and customers and SWOT assesses businesses and its position
in the market. internal factor affects the external factors for example weather of location might
affect the production coco cola company.
PESTLE becomes more relevant and useful for the business and SWOT analysis
provides benefits to the businesses by analysing its competitors. So that development of
technology can also affect traditional company. Therefore, the actions of competitors might
affect the performance of the company.
Conclusion
It is seen that various forms of a business units exist into an economy; however, the
organizations need to plan operations in a manner that its long-term goals are achieved. An
analysis for Coca cola is conducted throughout the research. It is seen that the Coca Cola is a
publically listed company & falls under private group of organizations. Further, the business unit
follows a specific structure & various interdepartmental functions are interlinked to achieve long
run objectives. It is the middle level management that coordinates functions among various
departments so as to achieve long run business objectives.
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