Coca-Cola's Business Environment Analysis

This assignment delves into the analysis of Coca-Cola's business environment. It utilizes both PESTLE and SWOT frameworks to examine the company's position within its industry. The PESTLE analysis considers political, economic, social, technological, legal, and environmental factors impacting Coca-Cola's operations. Simultaneously, the SWOT analysis evaluates the company's internal strengths and weaknesses against external opportunities and threats.

Business Environment
(Project 2)

INTRODUCTION
There are various number of factors which are being involved and
those factors can directly impact the present market place along with
organisational carrying out in better and effective way (Auzair, 2011). These
elements are inner and outer. Various factors like staff members,
management and culture can be stated as internal elements. While in
external factors there are like customers, suppliers and stakeholders and
many more. Besides this, there are certain things which are being described
as positive and negative impact on the macro environmental factors. SWOT
and PESTLE analysis can be conducted for examining the internal and
external factors for attaining aims and objectives of firm in an effective
manner.
TASK 1
1.1 Positive and negative impact of macro environment
In modern scenario, there are various kind of outer factors which directly affect the
market place of company in better way. This also can be stated as larger environmental elements
which can directly determine the growth and success in better manner. This in turn can be
determined through PESTLE reasoning which mainly involves investigation of political, social,
technological , economical, legal and environmental factors (PESTEL ANALYSIS, 2017). All
these factors have affirmative and negative affect on company structural area.
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Illustration 1: External Environmental factors
(Source: PESTLE ANALYSIS, 2017)
Affirmative and pessimistic affect of macro environment, is stated as under: -
Type Positive impact Negative impact
Political factors Political factors compiles mainly trade
policy, Govt. rules and many more.
Various kinds of benefits can be availed
by Coca Cola if the Govt. of respective
country minimise the tax rate on selling
of products. Globalisation is being
supported by the Govt. of UK and for
this they have to invest certain amount
within retail sector.
There are some situations when
the political factors are out of
control. In current, UK has been
facing this kind of issues of Govt.
instability which mainly exists
within the political environment
of UK. This can directly hamper
the growth and productivity of
the company (Stokes, Wilson and
Wilson, 2010). Besides this,
Brexit mainly affects the sales
revenue along with GDP rate of
the nation.
Economical Economical state of British Govt. is The pessimistic side of the
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factors increasing on regular basis which is the
main cause of MNC to open up quickly.
This can provide effective shape to the
income of people as they are
contributing within the economy. This
in turn will improve the GDP rate along
with per capita income of nation.
economic elements are that it
increase unemployment, poverty,
income level, interest rates, bank
rates and many more. Due to the
credit crises within UK,
purchasing power of the people
was influenced. Due to this, high
loss were incurred by the
organisations.
Social factors Coca Cola is a multinational
organisation in which number of
workers are working who have come
from different cultures. Everybody has
new ideas which in turn can help in
performing in other countries.
The negative side of this element
is social factors which are in turn
highly difficult for identifying
needs and wants of the
customers. High satisfaction level
is being needed to provide it to
the customers in order to
establish long term relations.
Technological
factors
Help is provided by the technological
advancement for enhancing up of
production capabilities of the company.
This in turn also improves the technical
skills (Kang, Lee and Kim, 2010).
It is very difficult for the
company to purchase heavy
machinery and due to this their
survival becomes very difficult
within the marketplace.
Legal factors If all the legal laws are being fulfilled by
the company, then the operations which
are being conducted can be much more
effective in nature.
Apart from this, certain strict
laws are being enforced by the
Govt. for import and export
within the other countries.
Environmental
factors
Satisfaction of all corporate social duties
helps a firm to drew in with clients for
long haul period.
Solid ecological acts and laws
can powers a company's
efficiency and benefit too.
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1.2 (M3)Describe PESTLE analysis for detailed analysis of macro environment
PESTLE model of TESCO: -
Political factors These type of factors can mainly influence the functions of Coca Cola
along with decision making process. There are some major political
factors like activities of trade union and lobbying initiatives of the home
market. For overcoming the financial instability over the world, support
is being by the Govt. for generating up the employment. This can
certainly increase the supply of luxury goods by modify the workplace.
Economical factors These elements can be stated as the major factor of interest as it pertain
profits, prices and leverage costs. Thus, it is highly important for the
Coca Cola to know about the changes (Kolk, 2016). Decline in
household along with disposable income, Coca Cola is now trending
towards the promotion of normal products instead of luxurious ones.
Social factors Now-er days buyers has moved towards the bulk shopping and Coca
Cola is mainly focusing up on producing up the non food items in order
to enhance up the sales. Besides this, products are being manufactured
which does not affect belief and values.
Technological factors Doors can be opened for the occurrence by technological advancement
within the selling sector. It mainly includes two factors: first one is
development online buying and second one can be checking out
accessibility of self services.
Legal factors There are several Govt. policies which have the potential to make a
impact on the productiveness and presentation level of business process.
For example: in 2004 FRC has modified cost of food point without any
notice.
Environmental
factors
There are various effective ways of production which can be adopted for
attaining environmental responsibilities which are in turn highly
beneficial for growth and development society.
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TASK 2
2.1 Conduct internal and external analysis
Administrators of Coca Cola are directed inward and outside investigation; which causes
them to investigate competency, aggressive legitimacy and cost position at commercial centre.
Alongside this, it likewise helps a firm in its basic leadership process towards expected period. It
should be possible through SWOT investigation which is urgent factor of business administration
(Jayawardhena, 2010). It involves all data that is connected with interior and outside components
of the organization. Under this, capability and failing are being taken as inner factors while
possibility and danger are handled as external factors. Below mentioned is the SWOT analysis of
Coca Cola:
STRENGTH
 The main capability of the company is
that they have won various kinds of
awards for the growth and development
in retail industry.
 Coca Cola is among the largest
company along with profitable
supermarket chain in terms of high
customer satisfaction level. Besides
this, enterprise has simulate its main
competitors in global environment.
 Effective and innovative techniques are
being utilised by the company for
carrying out its operations. This in turn
can create higher cost efficiencies and
maximise service experiences (George
and Bock, 2011).
 Coca Cola is an old company and that
is why it has long standing past history.
This in turn provides more credibility
WEAKNESSES
 Some of the subsidiaries are not
working in appropriate manner and due
to that they are getting more vulnerable
due to the certain external factors. For
example: due to economic recent crisis
in UK, Coca Cola profit has gone
down.
 The major competitor of the company
is Pepsi-Co which is the main and only
competitor of Coca Cola. Business
activities of the rivals can also affect
the sales revenue of Coca Cola.
 There is a rapid change within the
brand and the taste of customers,
company has been facing difficulties in
determining buyers in effective manner.
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and also assures operating functions of
the firm for a long period of time.
 Another significant quality of Coca
Cola is, it has advanced money holds
and a wide assortment of items and
administrations. This is the direct
reason as the firm has various clients at
worldwide level. It can support up
deals and additionally budgetary
position of the organization in a viable
way.
 Services are being provided by Coca
Cola all over the world which has
almost 7817 shops around the globe.
Hence company has own 54% of total
retail price. There is great option for the company
due to its large portfolio property,
financial abilities can be enhanced by
selling some phases of the property.
This would help in dealing with
emergencies.
OPPORTUNITIES
 There are many opportunities for Coca
Cola in private label market.
 Great opportunities are being provided
to the company by strategic alliances
and franchising, this in turn will help in
performing up of international market
and attracting large number of
customers.
THREATS
 Congruity in credit crunches and
monetary emergencies is a major
undermine which can lessens advertise
productivity and offer of the firm.
 Expanding the cost of raw materials,
which can influence Coca Cola
productivity by raising providers rates.
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 Joint venture is likewise great choice
for the organization; nearby elements
can help it through statistical surveying
and also insight with a specific end
goal to support up execution in the two
zones.
 Partners additionally powers
organization to satisfy social duties
towards condition, this can likewise put
an antagonistic effect on Coca Cola
cost (Herbst and Merz, 2011).
2.2 Interrelation of strength and weaknesses with external factors
There are some certain strength and weaknesses of each and every company in which
they can under take the working activities. It is highly essential for their growth and survival
within the target market. In addition, everything is well managed within the business
organisation and that is done by implementation of strategic approach. This will be accessible for
Coca Cola in order to gain competitive advantage from the global environment. Example can be
taken of political instability which improve they job opportunities due to Govt. pressure. This in
turn increases the level of income of people and thus will maximise the sales of food and non
food items (Tayur, Ganeshan and Magazine, 2012). Besides this, in year 2008 economical
instability was being reduced along with the income level of people. 2% was noticed in the
decline rate of unemployment within Coca Cola. In terms of social facilities, Coca Cola is
powerful in procedure of reaching consumers and fitting their demands in an better manner. The
mentioned company is not able to follow the legitimate laws properly which affect the on its
morality.
2.3 (M4) Impact of SWOT analysis on decision making process
After implementation of SWOT analysis, managers of Coca Cola can easily investigate
the inner elements which has potential to directly affect the market position along with profit
ratios as well. If there are more strengths then weaknesses then the aims and objectives of firm
can be easily attained in positive and effective manner. Effective utilisation of SWOT analysis
mainly provide assistance company to make the decision making process effective in nature.
Below mentioned SWOT analysis of Coca Cola:
Strength Accelerative market share
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Secure choice of goods and services
Coca Cola online
Large brand worth
UK activity leadership strengthened (Reinhardt and Stavins, 2010).
Weaknesses Debt reducing
Trust upon UK industry.
Signed points to sequent acquisition
Opportunities Non-food selling
Healthy and diet cokes
Further international growth
Threats Foreign returns could trip
Strong competitors, i.e. Pepsi-Co
2.4 (D3) Impact of macro and micro environmental factors
There are certain section like internal and external which can directly causing the
operations of company and its activities in strong manner. Thus, it is highly essential for the
managers to identify all of them in order to attain the goals and objectives of firm in short period
of time. For example: major weaknesses of Coca Cola is influential power of rivals. If the
competitor of business process have more varieties and quality goods then this directly hamper
the sales and profitability of Coca Cola in proper manner (Du, Bhattacharya and Sen, 2010). In
addition, this can directly affect the decision making process of the company that is appropriate
decision will not be taken by mangers and thus vision and mission in a proper way.
CONCLUSION
From the above study, it can be concluded that business situation is a collection of inner
and outer elements which can directly affect the decision making process. It affect political,
legal,environmental, technological, social and economical factors. Managers of Coca Cola
need to usage PESTLE analyse for monitoring all these elements. Beside this, SWOT analysis is
conducted for analysing internal aspects which can cause firm abilities in order to attain goals
and objectives.
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REFERENCES
Books and Journal
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control systems: a study of Malaysian hotels. International Journal of Business and
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Stokes, D., Wilson, N. and Wilson, N., 2010. Small business management and entrepreneurship.
Cengage Learning EMEA.
Kang, D., Lee, J. and Kim, K., 2010. Alignment of Business Enterprise Architectures using fact-
based ontologies. Expert Systems with Applications. 37(4). pp.3274-3283.
Kolk, A., 2016. The social responsibility of international business: From ethics and the
environment to CSR and sustainable development. Journal of World Business. 51(1).
pp.23-34.
Jayawardhena, C., 2010. The impact of service encounter quality in service evaluation: evidence
from a business-to-business context. Journal of Business & Industrial Marketing. 25(5).
pp.338-348.
George, G. and Bock, A. J., 2011. The business model in practice and its implications for
entrepreneurship research. Entrepreneurship theory and practice. 35(1). pp.83-111.
Herbst, U. and Merz, M. A., 2011. The industrial brand personality scale: Building strong
business-to-business brands. Industrial Marketing Management. 40(7). pp.1072-1081.
Tayur, S., Ganeshan, R. and Magazine, M. eds., 2012. Quantitative models for supply chain
management. (Vol. 17). Springer Science & Business Media.
Du, S., Bhattacharya, C. B. and Sen, S., 2010. Maximizing business returns to corporate social
responsibility (CSR): The role of CSR communication. International Journal of
Management Reviews. 12(1). pp.8-19.
Reinhardt, F. L. and Stavins, R. N., 2010. Corporate social responsibility, business strategy, and
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Online
PESTEL ANALYSIS, 2017. [Online]. Available through:
<https://www.kbmanage.com/concept/pestel-analysis>. [Accessed on 30th October
2017].
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