Strategic Choice Analysis of Coca-Cola

The assignment analyzes the strategic choice of Coca-Cola using PESTLE (Political, Economic, Social, Technological, Environmental, and Legal) analysis to understand the macro-environmental issues affecting the company. It also applies Porter's 5 forces framework to assess the competitive industry dynamics and identify potential strengths and weaknesses. The document provides a comprehensive overview of the company's strategic position and its development process.

Organizational Strategic Choice-1
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Introduction
Strategic choice can be defined as the unique way by which a business distinguishes itself from
its competitor delivering values to its customer segments. Since the strategic position of an
organization is affected by the external environment, internal competencies and the expectation
and demand of the stakeholders, an understanding of the environment, the expectation, the
resolutions within the political and cultural framework set up a basis to understand the strategic
choice of an organization. We have taken COCA-COLA company, a successful soft-drinks
manufacturer, as an example to find out its development process of strategic choices.
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External environment Analysis: PESTLE
PESTLE analysis is a tool of analyzing and monitoring the macro-environmental issues having
an effect on the company’s performance. Pestle stands for Political, Economic, Social,
Technological, Environmental and Legal factors.
Figure 1: Pestle Analysis
Source: Own
Political factors include the degree to which government intervenes an industry and how much a
company is affected by government policy, tax structure, foreign trade, labor law, and
environmental law.
Economic factors include the exchange rate, growth of the economy, inflation and interest rate
and unemployment problems of a country.
Social factors incorporate general environment indexes like the demographic characteristic of a
country, customs, norms and possessed value of a client base of the organization.
Technological factors are comprised of the innovative technology that has the power to
influence the market positively and negatively and influence the decision of entering the market.
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PESTEL
Analysis
Political
Economic
Social
Technologi
cal
Environme
ntal
Legal

Environmental factors include various ecological and environmental aspects like climate,
weather, climate change that could greatly affect certain businesses, like agro-based industry,
tourism, and insurance.
Legal Factors include special laws such as copyright and patent laws, consumer protection laws,
Safety laws, and organization is bound to follow these laws.
Competitive industry analysis: Porter’s 5 forces
Porter’s 5 forces, a business analysis model, is created by Michael Porter to analyze a business’s
potentials and profitability. Porter's five undeniable forces used in measuring competition,
profitability, and attractiveness of an industry (Magretta, 2012). Porter’s 5 forces are as follows:
Figure: Porter’s 5 forces
(Source: own)
Competitive Rivalry
Competitive rivalry depends on the number of competitors in the market and their ability to
undercut a company. If competition rivalry is low, the company has more power to charge a high
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Competitive Rivalry
Supplier Power
Buyer Power
Threat of Substitution
Threat of New Entry

price, on the other hand, if competition rivalry is high with a larger number of companies with
more products and services, the power of the company lessens.
Supplier Power
How much suppliers can increase the price of a product and service depends on the uniqueness
of that product, number of suppliers and price offered by another supplier and if there is a fewer
supplier in an industry, the company has to depend on a single supplier that eventually leads to
more supplier power.
Buyer Power
The power of buyers is affected by certain forces like numbers of buyers, the significance of
buyers and the cost of finding new buyers or markets, and so if a company has a small and
impactful client base, more power is rest on the customer in negotiating for low prices and good
deals.
Threat of Substitution
Companies producing goods that have no close substitute can exercise a higher power at
increasing prices since close substitutes can make the customer go for those products and weaken
the company’s power.
Threat of New Entry
The force of new entrants can significantly affect the company’s position in the market and so
choosing an industry that has a tough barrier and obstacle to enter is more practical for a
company and also enables it to charge a higher price and better negotiation.
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