Strategic Management of Coca Cola: Internal and External Analysis

This report discusses the strategic management process of Coca Cola, its strategic objectives, and internal and external environment analysis. It includes SWOT analysis for internal environment analysis and PESTLE analysis for external environment analysis. The report also reviews the implementation and success of international operating strategies of Coca Cola.

Strategic Management

Table of Contents
INTRODUCTION...........................................................................................................................3
Main body........................................................................................................................................3
Strategic management process of coca cola...........................................................................3
Strategic objective of coca cola..............................................................................................5
External environment analysis of Coco-cola ........................................................................6
CONCLUSION................................................................................................................................8
REFERENCES................................................................................................................................9

INTRODUCTION
It is essential for every company to make strategies for their organisation to achieve their
organisational goal on time. These strategies are made after analysing internal and external
business environment. Effective management strategies will help companies to mitigate all risk
which they have at present and they can easily predict their future risk and make strategies to
mitigate in case they arrive in future (Archer-Brown and Kietzmann, 2018). Coca- cola is
multinational beverage company which is founded in the year 1892 by Asa Griggs Candler. It is
headquartered in Atlanta, Georgia, US. Their main product is their alcoholic as well as non-
alcoholic beverages. They are having different flavours of their drinks like Minute Maid have
lemonoide flavour, Fanta have orange flavour and many others. The following report mainly
focused on coca cola' s strategic management strategies to handle their business and gain
competitive advantage. It further include internal environment analysis, micro environment
analysis, macro environment analysis and SWOT analysis of Coca cola. Here few of the models
are used like McKinsey 7S model for internal environment analysis, Porter five forces for micro
environment analysis and PESTEL model to analyse the positive and negative impact of macro
environment.
Main body
Strategic management process of coca cola
Strategic management is the process where companies plan, implement and execute their
strategies with the main aim of gaining their organisational goal by having competitive
advantage in market. The main strategic management of coca cola is to provide long term
benefit to company by focusing on the factor that how they can target long term good revenue
earning ways. The process of strategic management which is followed by coca cola is given
below-
Stage one- Identification of goal
This is the stage where they identify their goal and objectives that what they actually
want to achieve in future and for how much period of time. Here, managers of coca cola makes
sure that the set targets and goals by senior authority will be clear to each and every employee

within the the organisation. Coca cola focuses on both short term goals as well as long term
goals. For example, coca cola identify their goal to achieve competitive advantage and earn long
term profit.
Stage two- Analysis
This is the stage where Coca cola collect data for their identified goal and objectives.
Here, they analyse the strategies of their competitors to identify whether their set targets will
help them to gain competitive advantage or not. This stage need high level of market research by
the company.
Stage three- Strategy Formulation
This is the third stage where where company formulate their strategies according to their
gathered information (Gasparian and et. al., 2018). In context of Coca cola, they identified their
competitors strategy in stage two and now they formulate those strategies which can help them to
attack their competitors and gain competitive advantage. Here, they use pricing strategies which
means they set lower prices as compared to their competitors.
Stage four- Strategy Implementation
This is the stage where companies implement the strategies within their organisation
which they have planed in earlier stage. Here, coca cola makes sure that their each employee
have clear direction for new strategies effectively. One of the main focused area of coca cola is
to provide benefits to provide appropriate information to their stakeholders and the primary
objective of this stage is to gain desired result effectively.
Stage five- Evaluation and Control
This is the last stage where company analyse whether their set goals and targets are
achieved properly of not. In context of Coca cola, their managers and supervisors analyse
whether their employees are working according to their new strategy or not (Voskresenskaya,
Shandova and Sofiienko, 2020). In case they found any obstacle in following their set strategy
then they try to mitigate it as soon as possible. This is the stage which defines that whether the
company need to work continue with their existing strategy or they need to modify it for further
benefits.
Strategic objective of coca cola
It is essential for every business to make good decisions for their organisational benefit
(Gupta, 2020). In context of coca cola, they make those organisational decisions which help

them to achieve their set goals and objectives effectively. The main objective of coca cola is to
identify the direction which can help them to achieve their organisational coal and to earn
competitive advantage. Another main objective of coca cola is to refreshing the world with their
high quality if beverages at affordable prices.
Analysis of internal environment of Coca Cola
The internal analysis of respective company has been performed with the help of SWOT as it
includes number of factors that can become strengths, weaknesses, opportunities and threats of
company. it includes effective analysis of internal factors and business environment that helps in
making company aware about significant threats and helps in overcoming from the weaknesses.
Strengths: This factor include the overall brand equity that depict the overall plus points of
company which are widely spread and also has global presence among the unique brand identity.
Brand has also been rewarded as the highest brand equity and its valuation is also the plus point.
Apart from this, the valuation of company is approximately 79.2 billion dollars that undertake
the brand value among its assets and other factories (Storey, Wright and Ulrich, 2019). Besides
from this, Coca cola has one of the large market share in which there are just two competitors
including Pepsi and coca cola. Further, respective company is the clear winner which is the
strength for the company.
Weaknesses: Its weaknesses include the existence within the market and other competitors. For
this, the major weakness includes the rivals that acts as thorn in flesh. For this, Pepsi had not
existed would have been the clear winner (Handika and Wibowo, 2018). Along with this, the
major weakness is that company has no contribution towards the health beverages. Furthermore,
the another weakness of coca cola that has been identified as the water management. The
organisation has been also sued under the several lawsuits because of its water management
issues.
Opportunities: There are several opportunities for the company that exist within the market. For
this, company can also thing over diversifying their roots in the several fields like food and
health businesses that helps in enhancing the overall offerings of company. It is also useful in
facilitating the better generation of opportunities for the company. Further, respective company
also tends to focus over the packages drinking water and also expanding over their packing for
drinking water segment by Kinley (Jiang and Li, 2019). Here, company has an opportunity while
enhancing the supply chain management that will help in improving the revenues of company.

Threats: Its threats include indirect completion that occur in front of them and raw materials as
well. The only raw material which is being used by respective company has been suspected for
using the other pesticides. For this, there is scarcity of water that can become threat for the
company. apart from this, company has also indirect competitors who leads to provide substitute
beverages for coca cola like costa coffee, Starbucks and many more. Furthermore, several
packaged health drinks are also threat for the respective company as they are likely to steal their
market share of coca cola that deals in carbonated drinks.
External environment analysis of Coco-cola
The external environment of the beverage industry is full of competition and contains
various factors that either directly or indirectly impact the environment. In order to analyse the
external environment precisely the Pestle analysis is effective tool as it helps in understanding
what factors are affecting the operations of the business. The Pestle analysis of the Coco- Cola is
discussed below:
Political factors: The government rules and regulations are always the factor that act as the
political barrier to the operations of the Coco- Cola as the obligations of the government on the
import and export of the products of the Coco- cola is the huge disturbance for the company's
operations. North Korea and Cuba are the two nations that has completely banned the incoming
of products of Coco- Cola in their nations and this is bad for the Coco- Cola productivity (Joslin,
2018). Also their many other countries that tend to have selling and purchasing of Coco- Cola as
illegal this reduces the immunity of the brand in many other countries. Also there is another
political factor which the liability towards the sugar taxes that are imposed by the food and drug
department of the US.
Economic factors: the economy always play a major role in influencing the business operations
of the company. There are many economic factors that drive or influence the changes in the
business operations of the Coco- Cola. The water is the major raw material of the Coco- Cola
and the high prices and taxes on the water due to scarcity of water has been impacting the
manufacturing cost of the company. The currency fluctuation is always the factor that influence
the operations of the organisation.
Social factors: the social changes brings the major impact on the business of the Coco- Cola. As
the company deals with the soft drinks and beverages that has huge sugar consumption and with
the changing customer preferences for the healthy lifestyle the sales of the company is badly

impacted. Therefore, in order to cope with the healthy customer demands the company came up
with new product development strategy and switched to develop zero sugar and diet sift drink.
This changed the business of the company as the perception of the people where changed with
new product.
Technological factors: the technology also influence the business of the Coco- Cola in certain
manner. In terms of marketing and advertising the technology has played a very useful a role for
the business of Coco- Cola. The company has utilized the platforms like social media and TV to
create the effective and creative social media content like videos and campaigns that has boosted
the sales of the company (M'zungu, Merrilees and Miller, 2019). The company also effectively
utilize new automation technology in manufacturing and packaging of its products as the
company has highly automated machineries to carry the products, raw materials from one place
to another in less time. The Coco- Cola has effectively leverages this external factor.
Environmental factors: the environmental concern and safety is likely to influence the business
of the Coco- cola. The company serve its products in plastic bottles and cans that are bad for the
environment as the plastic is bad for nature (Shimengah, 2018). Also the water level is also
depleting data by day which is problem for the company as they majorly operate on water as
their raw material. Therefore company is working on its sustainability strategy to reduce the
impact of its operation n the environment for the sustainable and Eco- friendly growth.
Legal factors: the legal laws are the part of the business and when the company operates in the
soft drinks and beverages the legal compliance with food and drug department is highly essential
in order to maintain the health safety of the consumers after the consumption of the product. Due
to the safety and health of the consumers the Coco- cola has faced legal obligations and
litigations many times. Due to which company has faced losses in the profitability.
Review of implementation and success of international operating strategies of Coca Cola
From the preceding discussion, it has been analysed that the internal and external analysis
can be reviewed for the leading organisation that supplies the non-alcoholic beverages in the
world. It has several strengths because of strengths and their brand image but also face several
challenges due to its vast reach (Neves and et. al., 2020). The most significant challenge which is
analysed for the company is its access to the raw material. For this, the high tariffs can become
the reason for increasing the cost of organisation. Also, the customer has also become health

conscious these days. Therefore, the company need to look over several healthy products in
terms of saving them from the loss of market share.
CONCLUSION
From the above discussion, it has been analysed that the strategic management plays an
important role for the effective operations of business organisation. The report also highlights the
several objectives and strategies in regard of primary organisations. It has been analysed that the
several internal and external factors have major impact over the business operations. In regard of
organising the internal analysis, SWOT has been used and for external PESTLE has been used.
Hence, reviewing the success of business has been made in regard of its strategies.

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