Global Business Environment of Coca-Cola | Report

Running head: GLOBAL BUSINESS ENVIRONEMNT: COCA COLA
Global Business Environment:
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Task 1 - Globalization
The following report deals with the analysis of a global business company, Coca
Cola that manufactured the packaging machinery products. This report makes an assessment of
the company’s business environment so that it can achieve the strategic goals of 2025 and
increase its market share in the existing market. In order to make an assessment, the political and
the economic system of the company, the culture and its factors which affect the operations have
been analyzed. Also how the free trade policies affect the operations of Coca Cola have been
discussed. In accordance to this, the impact of the government’s protectionist policies and the
ethical issues faced by the government is discussed. Finally the conclusion states the advices and
the recommendations that could be suggested to the Director of International Marketing.
The three factors that are responsible for the internationalization of the multinational
company of Coca-Cola are its sales promotion. The efficient techniques of the product packaging
and also its product innovation. The company had introduced different products to the existing
market which involved several innovative ideas (Brondoni 2014). The sales promotion of Coca-
Cola included the advertising strategies and campaigns. Creative advertisements have helped the
multinational company to attract huge number of customers worldwide. Moreover, the packaging
techniques involved innovative techniques so that the customers can easily avail them, and so
that they can be used by every person in a very easy manner. Moreover, product innovation has
been one of the strong factors for its globalization. The company has used mechanical innovation
and used advanced automated robotics which can improve the technique of bottling the cans.
Moreover, the packaging is done keeping in mind the ecological footprint which has also been an

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innovation (Barbulescu 2014). Thus these are the few factors that have helped the famous
beverage company reach its global customers.
Task 2 – Political and economic Systems
The economic factors which affect the international market of the multinational
company of Coca-Cola are the interest rates, the government policies regarding taxes and also
the economic growth of the nation. The inflation and the deflation rates of the nation affect the
market to a great extent. If the country is facing any kind of economic recession, and the same
time if the company decides to increase the price of the products, then there would be a severe
negative impact upon the production operation of the company. Moreover, also if the interest
rates of the nation are low, the company of Coca-Cola can apply for loans and from the bank, to
improve the operations (Corea 2016). The company then can invest in its technology from the
money loans. In such a case, if the new products of the company of Coca-Cola is less, then there
would be an increased sales of the same. The sales operation would be improved since there
would be greater sale of the products as the people would buy more of Coca-Cola products due
to its cheap price.
There are also political factors which affect the operations of the multinational company.
Since the products of the company fall under the category of Food and Drugs Administration, the
government ah the full authority to levy charges upon the company is the standards are not met
(Patsiaouras 2017). This can affect the operations of both the production and the sales of the
company. The company also needs to abide by the taxation charges and the laws and regulations
regarding the environmental needs. Moreover, the political environment of the international
market which includes constitutional charges of the government, the accounting charges and the

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environmental laws and regulations (Blecher et.al. 2017). The company also has the power and
the ability to enter into the emerging markets of the other nations such as Asia and the political
environment of these nations also affect the sales of Coca-Cola.
Task 3 – Culture
There are several cultural factors that affect the operations of the company of
Coca-Cola in the overseas market. Out of them the most common important are the age,
the customs and the religious beliefs. According to Cal and Adams (2014), being a
beverage and a non alcoholic drink company, the target customers of the company are the
young generation who belong to the age group of 15 to 40 years of age. The change in the
lifestyle of this age group affects the production and sales of the company to a great
extent. The changes in the social or the cultural trends in the different nations, bring a
positive or negative impact upon the marketing of the product in the overseas market,
based on the circumstance (Shaw 2016). The entire world, where the product is sold,
have citizens with different religious or cultural beliefs. Selling the products based on
their interest and their welfare affects the business to a great extent. For example, people
of today’s generation are more health conscious and they know the negative effects of
consumption of this soft drink. Thus the sales operation may get affected to some extent.
However according to Shaw (2016), the beverage company moves beyond just tasting the
drinks and works with the beliefs of the people. It supports the people for a noble cause
and encourages the right to education. Additionally, the company also provides grants to
the community and the people so that they can operate for a better future. Moreover, the
company is culturally more active and works for the local communities and their health

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needs. Thus being more sustainable in their business operations, they have made
themselves a company which in the global market not only performs business but also
looks into the needs of the community (Cola and Schweppes 2014).
Task 4 – Free Trade
The free trade policies of the nation, helps the multinational companies such as
the Coca Cola in performing international trade and expanding its market through the
overseas (Baker et.al. 2016). The products produced in United States could be exported to
other nations due to the foreign policies and more import of the products give the host
country a benefit of economy. There is currency conversion costs during the export and
the import services and this helps in the increase if the GDP of the nation. The North
American Free Trade Agreement is one such agreement that helps the multinational
companies such as the Coca-Cola to sell its products in the international market and
attract a greater number of the target audience (Oehri 2017). This trade agreement
successfully eliminated the trade restrictions of the nation and helped a lot of other
companies as well. Due to the Free Trade policies of North America, there had been a
great amount of positive effect on the expansion of the company of Coca Cola. The
company had a specific vision for the year of 2020, where there had been a strategy of the
company to increase its revenue. The foreign policies had helped the beverage company
to grow and gain an international appeal by moving beyond the borders. It had first
expanded into Canada moving outside the United States and then to Cuba and Panama
(Riley 2014). In the year of 2011, the company had grown universal as it had successfully
expanded its market to the United Arab Emirates and also in China. Moreover, the

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foreign policies, have helped in the growth of the company by giving employment to
huge number of the people in different other countries. As a result of the market
expansion, the host country received a great amount of economic benefit and revenue
growth (Baker et.al. 2016).
Task 5 – Protectionism
There had been policies of the U.K Government and they had been levied on the
companies of the nation in the history. Earlier there had been a free trade policy in the
United Kingdom. However, after 1920s, the policy needed to be abandoned because of
the great depression of the economy (Jones 2016). There had been no other option than
exclusion of the free trade policy from the government of the nation because it helped in
the economic degeneration. Thus to improve the economy, there had been a desperate
attempt to abandon the free trade agreements, but there had been a passage of the Import
Duties Act in the year 1932. This helped the nation to protect its trade as there had been
an imposition of 10 percent tariff on all imports. As per the discussions of Bourgeois
(2014) the companies earlier had been expanding their market overseas but after the
imposition of the import duties, there had been severe issues regarding the expansion of
the multinational companies such as the Coca- Cola in the overseas market. The changes
in the laws and regulations of the domestic government, the changes in the taxation
requirements and tax policies and also the foreign jurisdictions affected the entry of the
company in the foreign market. The Coca-Cola had to abide by the regulations laid by the
U.K government. According to Briggs et.al. (2017), on the other hand there also have
been the protectionist policies regarding the environment concerns which the company

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abides by. This has led the company to incorporate different innovations in their
productions and this has been accepted by the global armlet in a positive manner. There
have been less ecological footprint of the packaging of the products and this has allured
the foreign markets to a great extent (Jones 2016). Thus the production and the sales
operations of the companies have improved with the protectionist policies of the domestic
government.
Task 6 – Ethics
There have been several ethical issues that the company of Coca-Cola have had to
face. The company had to face an issue of racial discrimination as many of the African
American employees sued the company and accused it of an anomaly in payment of the
workers, based on their skin color in the year of 1999. According to Hammad (2014), the
company also had to face international problems such as the problems with the labor
unions. They had claimed of the illegal dealings that the company had and also the
company had several trade secrets which were unethical (Afeni 2017). The reputation of
the company was also at a stake because there had been an issue of allegation, that the
company produced products which made the children fall sick due to its consumption.
Anything apart from their own policies and promises is unethical and the consequences
have to be faced by the company as well as the customers and the stakeholders (Menaria
2015).
The main aspect of the Corporate social Responsibility, the company of Coca-
Cola aims to keep in mind the change of the trends of the customers and their target
audience. For this, they have ensured that the beverages contain reduced amount of

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calories, so that they can support Michelle Obama’s initiative campaign of “Clear on
Calories” (Burki 2016). In addition to this, the company has incorporated innovation in
their packaging techniques and invented a fully recyclable PET bottle, which is made of
plant and petroleum based materials. According to the discussions of Igwe, Icha-Ituma
and MAdichie (2018), also the company has kept in mind the development of their
employees, safeguarding their skills and talents with different programs as it is also a part
of their CSR program. They have also made sure that the company produces less
ecological footprint and has also signed the agreement on global climate change.
Task 7 – Recommendations and Conclusions
The Director of International Marketing should keep in mind the workplace
policies and also the legal rights of the labor so that the employees can work in a better
way, feeling safe and contented with their job. This can help the international market of
the company expand with a greater employee retention rate. He should also take care of
the target audience in the nations where he plans to expand his market. For example,
there has been a ban in the state of Kerela in India regarding the production of the soft
drinks. According to Igwe, Icha-Ituma and MAdichie (2018), this can affect the market of
the company and thus the expansion of the market should be done keeping in mind the
legal policies of the nations. Moreover, the productivity of the company of the
international markets if there is a stagnant market. The minimum wages of the employees
or the labor can be increased. This could affect the production of the company to a great
extent. Subsequently the export of the good and products will be increased along with the
sales (Markey, Lovegrove and Methven 2015).

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