Strategic Operating Environment Analysis for Coca Cola

This report analyses the strategic operating environment of Coca Cola, including its internal and external environment, long-term international strategic objectives, and international operating strategies. The report discusses the concept of strategic management and its process, and how Coca Cola uses SWOT and PESTEL models to analyse its environment. The report also reviews Coca Cola's transnational, multi-domestic, and global strategies for international success.

Analyse the strategic
operating environment for
Coca Cola
Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY...................................................................................................................................1

Concept of Strategic management and its process............................................................1
Long-term international strategic objectives of Coca-Cola..............................................2
Analyse of internal and external operating environment.................................................3
Reviewing international operating strategies....................................................................5
CONCLUSION................................................................................................................................6
References:.......................................................................................................................................6

INTRODUCTION
The strategic management is the ongoing planning, monitoring and assessment of the
organisation activities which helps in meeting goals and objectives. The changes occurring in
business environment needs constant assess of the strategies for success. The strategic
management provides clear understanding of mission and vision that it wants to see in future and
values guiding actions. It is a branch of management which is concerned with the objectives,
formulation and implementation of strategies and corrective measures are introduce for
measures. The aim of strategic management is to gain competitive advantage by achieving
dominance in market (Brown, S and et.al., 2018). It also acts as guide for the organisation which
helps in surviving the changes in business environment. The report is based on case study of
Coca-Cola Limited. It is an multinational beverage corporation which is interested in
manufacturing, retailing and marketing of non-alcoholic beverages. This company was
introduced in 1886 by John Stith Pemberton. The report covers strategic management and its
process, and long term international strategic objectives. It also analyses internal and external
operating environment by using strategic management analysis and international operating
strategies are reviewed.
MAIN BODY
Concept of Strategic management and its process
The strategic management is all about of identifying and describing strategies that
managers formulate for achieving better performance and competitive advantage fir the
organisation. The manager of Coca-Cola company must have knowledge and analysis general
and competitive organisation environment for taking right decision for long term international
strategy. This provides company guidance to move in specific direction.
The process of strategy is been discussed-
 Setting goals- It is the first step in strategic management of Coca-Cola which sets short-
and long-term goals that it wants to achieve in future.
 Initial assessment- In this second stage the data and information are gathered that will
help in achieving organisation mission and vision of Coca-Cola. The understanding needs
of business in market is examined which may affect organisation goals (Heath, R.L.,
2018).
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 Situation analysis- It defines procedure of collecting, scrutinizing and information is
provided for the strategic purposes which helps in analysing internal and external
environment that influences an organisation in context to Coca-Cola.
 Strategy formulation- The best course of action is decided for achieving the objectives
and goals of organisation. The external resources are identified which an business needs
to accomplish for success.
 Strategy implementation- The formulated strategy is formulated I such way which helps
an organisation in gaining competitive advantage of company and putting the chosen plan
into action. The process must be understood by all in the organisation and should know
what duties and responsibilities they have in order to fit with goals of organisation (Koev,
S.R and et.al., 2020).
 Strategy monitoring- It involves key evaluation strategies and team performance is
measured. It involves team appraisal and review of both internal and external issues.
Long-term international strategic objectives of Coca-Cola
The long term strategics objectives are big pictures for the company which describe the
mission of an organisation. The strategic objectives are sort of performing goal which helps in
increasing profitability, growth in market share etc. The mission of Coca-Cola is to refresh the
world, to inspire moments of optimism and happiness and to create value and making difference.
The vision of Coca-Cola is to craft brands and choices of drinks that is loved by people, which
makes feel refresh to their body & spirit (Menon, A., 2018). It also wants to create more
sustainable business and better shared future. The company had long term growth opportunity
where in terms of market, commercial beverages represent approx. 70% of beverage
consumption in the developing world. The Coca-Cola has 20% share of cold, non-alcoholic
beverages with a very small position. The Coca-Cola has the long-term growth opportunity in the
diversified portfolio of beverages and brands which is an objective. The long-term goals are to be
worlds leading provider of branded beverage solutions by offering consistent and profitable
growth and having highest quality product and processes. It is having of increasing profit by
cutting down costs through productive and effective production facilities. It wants to focus on
environment friendly bottling production and enforces sustainability. It continually diversifies its
portfolio through innovations and partnerships keeping consumer in minds. The company is
developing a networked global organisation by combining power of scale with deep knowledge
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that is needed to win locally. The Coca-Cola will establish new operating units by focusing on
regional and local execution which will work closely with five marketing category leadership
teams in span of globe for rapid scale ideas (Rosenbaum-Elliott, R., 2021). This structure is
supported by company new created platform service organisation which offers global services
and enhance expertise crosswise to range of critical capabilities.
Analyse of internal and external operating environment
The business environment influences the business success in which it operates it defines to
set of conditions that is uncontrollable in nature and organisation functioning is affected.
Internal environment
It is a process where strategic strength and weakness within organisation is identified and
analysed to establish the degree of influence on key value chain management and competitive
advantage. The competencies allow in achieving superior efficiency, quality, innovation of
customers reflecting their possessions which is necessary to outperform it rivals. The Coca-Cola
uses SWOT model.
 Strength- The Coca-Cola has highest brand equity in its global presence with unique
identity. It is valuable company n world with 79.2 billion dollars which involves brand
value, factories and assets are spread across the world. It is presented in 200 countries
across the world which increased his brand name and having large market share. The
Coca-Cola follows effective marketing strategies by targeting people of all ages and done
through celebrities.
 Weakness- The Coca-Cola faces competition with Pepsi which is a weakness and smart
move is made by Pepsi by diversifying its products whereas Coca-Cola is having low
product diversification (Sax, J. and Andersen, T.J., 2019). The obesity is the major
problem that is affecting people and with the change in business environment people are
taking measures. The carbonated beverages are the prime reasons for fat intake where
Coca-Cola is larger manufacture of this beverages which is a weakness. In the past Coca-
Cola has faced lack of water management issues.
 Opportunities- The Coca-Cola has opportunity of diversification in heath and food
business which will improve its offering to customers. It also ensures to get better
revenue from present consumers by cross selling products. The developing nations also
have high presence which is moving towards healthy beverages. The hygiene is
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becoming major factor in consumption of water. The Coca-Cola has high presence in
packaged drinking water which may look on expansion an can be seen as opportunity.
 Threats- The Coca-Cola faced the threat of water its weakness was suspected using of
pesticides or vast consumption of water. The threat of water scarcity is on high and with
the change in climate several countries face water issues which a biggest threat for Coca-
Cola. The Coca-Cola face threat from indirect competitors such as coffee chains that is
offering healthy competition to Coca-Cola carbonated drinks (Shaulska, L and et.al.,
2021).
External environment
The company analysis external environment for identifying opportunities and threats by
formulating appropriate strategic planning as they have effect on organisation in different
aspects. It involves the macro-environment by using PESTEL model.
 Political- The government laws and regulation have direct impact on Coca-Cola food
products which may vary from country to country. The government has power of setting
penalties for the company if standard law requirement is not meet. The Coca-Cola
company may be affected with the change in laws and regulation such as accounting
standards, taxation etc. The prices of Coca-Cola were affected with the recent tiff
between US and China in trade war and facing cost pressure due to increase in tariffs on
steel & aluminium (Starr, E and et.al., 2018).
 Economic- The dominating market share of Coca-Cola is with 50% in carbonated
beverage market. With the increase in price due to tariffs it has 8% growth in net revenue.
It got support for frees and fair trade between nations through new trade agreement
between US, Mexico and Canada. The economic improvement in several international
market is been made for soft drinks which has a great role in success and stable growth
for non-acholic beverage industry.
 Social- The Coca-Cola wants to be connected with consumers by conducting social
campaigns. It launched the campaign #sharecoke. The people are encouraged to find
bottles with this name, shared on the social media platform by using hashtag. The online
Coca-Cola stores also helps customers to customize their names on bottles. The decreases
in demand declines revenue as the society looks for healthier range of beverages.
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 Technological- The Coca-Cola is experimenting in its product line which is coming with
first ready to drink frozen beverages in Japan. It has innovation driven culture which also
allows consumers for playing games online associated with products. For staying young,
fresh it makes use of social networking technologies and offers freestyle dispenser to
consumers for creating own beverages in several combinations through computer like
interface (Van Siclen, G.S., 2017). With the technology advancement it created
opportunities for developing new products by improving marketing and production.
 Environmental- The Coca-Cola faced lot of issue regrading water which took steps for
eliminating problem and reducing of carbon footprints to near Zero. It used smart farming
methods so that less water can be consumed. It is also turning solar energy to make
beverages in Fiji. According to the information of the Coca Cola Company, all of the
services are harshly watched conferring to the environmental laws obligatory by the
government.
 Legal- The Coca Cola Company accepts all the rights appropriate in the nature of their
corporate and every invention and product developments are always going into the
patented process. The company was accused for paying low wages and treated employees
inappropriately which attracted various protest of labour unions.
Reviewing international operating strategies
The international strategies provide efficiency to business across nations while remaining
responsive to variations in customer preferences and market conditions. The international
strategy helps in global expansion by investing more in target markets. The Coca-Cola has three
international strategies that is implemented for having international success in long run and
accomplishing objectives.
 Transnational strategy- This is operated with central or head office in one country that
coordinates local subsidiaries in international markets. This model is used by Coca-Cola
which means there is no predominant brand and centre of operations that will determine
overall decision making. The firm tries to balance the desire for lower cost and efficiency
so that local preferences can be adjusted within several countries (Vanieva, A.R., 2017).
 Multi- domestic strategy- This strategy is used when business is completely using
different sales, marketing and product strategies grounded on specific companies in
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which they are operating. The companies do not have focus on cost and efficiency but
concerting on responsiveness to local requirement with each of its markets.
 Global strategy- The business is defining one global brand which makes little to zero
changes for other markets. This is just opposite of multi-domestic strategy as there is
focus on lowering costs and better efficiency by sacrificing responsiveness to local
requirements within each of its markets.
CONCLUSION
The conclusion is being made that to have successful performing in highly competitive
industry the company is been able to utilize several strategies for aligning business objectives
and goals in long term international market. It is able to combine and employ resources in more
efficient manner. The Coca-Cola is affected with the internal and external environment. To gain
the success it formulated and implemented the strategies in the strategic management.
References:
Brown, S and et.al., 2018. Strategic operations management. Routledge.
Heath, R.L., 2018. Issues management. The International Encyclopedia of Strategic
Communication, pp.1-15.
Koev, S.R and et.al., 2020. Resource strategy for enterprise management as a tool to ensure its
competitiveness. Academy of Strategic Management Journal, 19(4), pp.1-8.
Menon, A., 2018. Bringing cognition into strategic interactions: S trategic mental models and
open questions. Strategic Management Journal, 39(1), pp.168-192.
Rosenbaum-Elliott, R., 2021. Strategic advertising management. Oxford University Press.
Sax, J. and Andersen, T.J., 2019. Making risk management strategic: Integrating enterprise risk
management with strategic planning. European Management Review, 16(3), pp.719-740.
Shaulska, L and et.al., 2021. Strategic enterprise competitiveness management under global
challenges. Academy of Strategic Management Journal, 20(4), pp.1-7.
Starr, E and et.al., 2018. Strategic human capital management in the context of cross‐industry
and within‐industry mobility frictions. Strategic Management Journal, 39(8), pp.2226-
2254.
Van Siclen, G.S., 2017. Strategic management in nonprofit organizations. Journal of Nonprofit
Education and Leadership, 7(1), pp.80-84.
Vanieva, A.R., 2017. Methodological principles of implementation of strategic management
agrarian enterprises development by financial economic restructuring. In World scientific
expanse (pp. 349-353).
Books and Journals
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