Report on Coca-Cola's Business Environment and Strategic Analysis

This report provides a detailed analysis of the business environment of Coca-Cola, a multinational corporation. It begins with an introduction to the business environment, emphasizing the impact of various internal and external factors. The report then examines the relationship between different business functions like HR, R&D, sales & marketing, and finance, linking them to the company's objectives and organizational structure. The organizational structure of Coca-Cola is explored, highlighting function-based, geographical-based, product-based, and customer-based approaches. Furthermore, the report utilizes PEST analysis to assess the positive and negative impacts of political, economic, social, and technological factors on Coca-Cola's operations. The analysis includes real-world examples and considerations for the company's strategies and future operations. This comprehensive overview provides a deep understanding of Coca-Cola's business environment and strategic considerations.

BUSINESS
ENVIORNMENT

INTRODUCTION
In today’s modern world, environment of business can be defined as combinations of
various factors which affect operations of a company either internally or externally. It includes
attributes like changing in technology; instability of government, taxation policies, business
ethics and more which impact on industrial functions in both positive and negative manner.
Therefore, it is necessary for management of an organisation to analyse concept of these factors
as well as identify demand and desire of customers. This would help them in creating
modifications in activities or add value in products as per requirements in order to gain
sustainability at marketplace for a longer period of time. In addition to this, serving high
qualitative products and services to people aid in achieving objectives and goals in a proper way.
In this assignment, an organisation of UK i.e. Coca Cola has been taken which operates its
business at multinational level. This organisation produces food and beverages like soft drinks in
various countries (Cascio, 2018). Present report discuss about various enterprises which are
classified on the basis of their sizes, scope and structures. Along with this, it also highlights the
positive and negative impact of macro and micro environment on business organisation.
TASK 1 (P1 & P2 covered in ppt.)
TASK 2
P3 Relationship between various functions of an enterprise and its link with objectives and
structure of firm
Every business organization operate their business activities at larger scale in which the
main aim of firm is to set better success at market place. Along with this, they also operate their
activities in order to establish their positive brand image by delivering quality services to its
customers. As Coca-Cola is one of the famous and popular brand which operate their entire
business activities at global level with the purpose of attaining higher success at market place.
Along with this, quality of services is also offered by the company to their customer’s as per
their needs and demand which may assist in achieving positive results from the services. It
directly contributes in establishing positive brand image (Cai and Yang, 2014). In addition of
this, it is also important for business organization to produce quality products and services as per
customers’ needs and wants which may help in attaining their business satisfaction level.
Business environment and its factors should be analysing by the manager of the company to
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reduce the negative impact on overall performance of the firm in appropriate manner.
Furthermore, macro environment considers various elements like political, legal, economic and
legal factors which may leads in attaining desirable goals and objectives of the company. All
these are largely affect the entire business activities which evaluate the actual performance of the
firm. In this manager play vital role in managing as well as considering all the factors at the time
of implementing the policies and strategies. This will aid in attaining positive results in order to
enhance the overall performance of the company and at the same time also capture larger market
share. In this, various department also play important role in operating all the operations which
may leads in attracting number of customers are as follows:
Human resource department: This department is one of the important in which manager
play vital role in hiring capable and skilled candidates who can handle all the business activities
in effective manner and also put their efforts for attaining better success (Botha, Kourie and
Snyman, 2014). By this manager allocate them work as per their capabilities so that they
effectively preform and attain better results. In addition of this, HR department also set their
process with the purpose of inviting skilled employees who having better knowledge towards the
company activities. This will help at the time of taking right decision at workplace. With the help
of this company established their positive image and capture larger market share form its rivals.
This department is interrelate with marketing division in which marketing manager is responsible
for inviting high skilled and capable workforce to accomplished set goals and objectives. With
the assistance of this all the workers are effectively perform their task and attain predetermined
objectives in allotted time frame.
Research and development: It is one of the important department in business
organization which may help in undertaking and effective research to determine the customers’
needs and wants towards the product’s. With the help of this company manufacture their services
accordingly in order to attain competitive advantages at market place. Along with this company
manager also prepare a questionnaire for collecting relevant information from the customers in
relation of company products. This will aid in attaining higher success at market place. In this
marketing and R&D department is interrelate with each other in which manager conduct research
for analysing as well as determining customers needs and wants. After that they provide all the
information to marketing manager to improve their customers base in appropriate manner and at
the same time also attain set goals and objectives.
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Sales and marketing: Number of methods used by the company to increase their overall
sales at market place. In context of Coca cola, they use current machineries at the time of
producing their goods and services which may leads in satisfying customers’ needs and wants in
most effective manner (Bah and Fang, 2015). Along with this company also use online process
to offer their services to their target customers.
Finance: For executing entire business activities, it is important for business organization
to keep enough amount of money so that they effective run their customers and use new and
innovative technologies. If company wants to buy quality raw material, then they require proper
funds which may leads in manufacturing quality services to its customers in order to maximize
their profitability level. Both marketing and finance department is relate with each other as
finance manager arrange adequate fund for marketing department so that they easily operate their
functions. This will directly contribute in accomplishing set goals and objectives in allotted time
frame.
Organizational structure:
 Function based: Under this, every business organization preform their business activities
for attaining set goals and objectives in appropriate time frame. Along with this, various
department also there in which company preform their task such as production, human
resource, marketing and many more. All these are also helps in attaining better success at
market place.
 Geographical based: Under this, Coca cola operate their business in business in various
regions in order to attain better success at market place. Along with this, firm also
perform their task as per specific need and wants to the region which may help them in
enhancing the profitability level of this company at market place.
 Product based: In this, company set their segment as per products quality and service
which offer to the customers in order to attain their better satisfaction level. For example,
company serve food and beverage to their customers as per their needs.
 Customer based: Under this, firm consider customer’s behaviours and manufacture their
products and services accordingly. With the help of this company enhance their overall
sales by providing better satisfaction to their customers.
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Organizational structure play vital role in implementing as well as executing business activities.
With the help of this company can easily enhance the chances of attaining success at market
place. In context of Coca-cola, they use Matrix organizational structure in which company all the
activities and relationship are established on the basis of grid and matrix as well. On the other
side, workers have dual reporting responsibility which with functional manager and product
manager as well. With the help of this company can easily maintain positive relation with all the
function that perform their activities for attaining success.
TASK 3
P4. Positive and negative impact of macro environment upon business organisation
Macro environment has created a huge impact on business of organisation like Coca Cola in
a huge manner (Baesens and et. al., 2014). This impact can be described using PEST Analysis
as:  Political Factors: It has been examined that there are ample number of elements under
this factor needs to be considered in an appropriate manner. Along with this, government
of United kingdom has made various rules and regulations that are related to both
employee legislations and some others. Away with this, it is must for Coca Cola to keep
on analysing of all the alterations that are being made by government. Employee relation
can be improvised of this company through examining all the modifications that are
being made by governmental agencies. For an example: if organizations do not keep in
mind of all the tax and other policies that needs to be properly taken care.
Positive Impact:If policies of government are in favour with Coca-Cola like trading policies,
taxations and more, then it will give opportunity to this firm in expanding its business
successfully.
Negative Impact: As Coca-Cola operates its business in many countries therefore, its business is
much affected by political factors. As every nation has own set policies and laws, thus, to obey
the same and run business accordingly, arise complexity for Coca-Cola. Economic Factors: Economic conditions of a country may aid organizations in bringing
changes in all the products and services. factor considerably put direct impact on
economical condition of an organisation. If an organisation requires tohave high
percentage of profitability and it is mandatory for them to fulfilling all requirement of
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consumers. This helps them in maintaining long term relationships with users. Away
from this, it also aid in giving hard competition to rivals at competitive world. Also, this
factor can be negative for Coca Cola at the time of increase in rate of taxes. It is one of
the important factor which largely affect the overall performance of the company because
economy of every nation play big role which define various elements such as tax rates,
inflation, income level of the people and many more (Armstrong and et. al., 2015). So
that its is important for manager of Coca cola to effective measure and implement within
their activities which may leads in attaining better success by establishing positive brand
image at market place. Effectively implementation of these elements help company to
achieve their set goals and objectives and at the same time also contribute in achieving
competitive advantage at market place.
Positive Impact: If economical condition and per capita income is good then it will aid Coca
Cola to generate high revenues and increase profitability of business.
Negative Impact: While in case of deflation period or when cash flow becomes low, then it will
adversely affect the business performance also. Social Factors: both customers and workers fo comes from outside world therefore it is
much needed for organisations to consider this element in an appropriate manner so that
issues can be resolved. there taste gets changes from time to time. Hence, it is mandatory
for Coca Cola to keep on analysing marketplace and find what exactly customers are
looking for. There are various elements under this factor are age, salary of an individual,
taste and etc. Continuous analysation of what exactly end users are looking for may put
positive impact in decision making. Away from this, Rapid changes that are coming may
cost much to Coca Cola may become a negative impact as it will put reduce profitable
percentage of company.
Positive Impact: High status, lifestyle and preference of people aid Coca Cola to give best
quality of products to them. Moreover, by giving contribution in CSR activities, this company
will get opportunity to enhance its brand image as well.
Negative Impact: Since products of Coca Cola consists high amount of carbonated water
therefore, people refused to intake such drinks which harm their health. Technology Factors: In today’s fast technological world, it has been found that
innovation and invention help organisations to make their products more creative. It
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assists companies to replace their existing systems with new technologies. Therefore, in
order to enhance profitability and produce better products, Coca Cola has adopted latest
technologies in system.
Positive Impact: Innovation and high technologies aid Coca Cola to marketing its products in
vast area of marketplace. Through high techniques, its managers can operate business more
easily.
Negative Impact: Due to frequent changes in technologies, profit ratio of Coca Cola can be
reduced.
TASK 4
P5 Studying on Internal and External Analysis
It has been identified that Coca-Cola has been a renowned name all around the globe.
Irrespective of this size it is essential for organisation to conduct SWOT analysis so that internal
and external business circumstances could be examined (Agarwal, Grassl and Pahl, 2012). This
analytical tool will make an organisation familiar with its strengths and weakness along with
identification of opportunities and threats for the business. The SWOT analysis of Coca Cola is
as follows:
Strength: These are referred to be the ideal performing domain of an organisation can be
referred to be cause of competitive position entertained by business. The primary strengths of
this organisation are its brand recognition and equity which makes it stand out from the
competition. This organisation sits among one of the most valuable company in the world and
recently valued at 79.2 billion. This organisation carries an extremely vast distribution network
as it rendering its products in the more than 200 countries worldwide. The marketing strategies
which is employed in the organisation are widely appreciated.
Weaknesses: Even though performing on such a major level, this organisation has been
exposed to various weaknesses which are to be countered. The primary weakness which emerges
as a threat is their competition with Pepsi. There is a intense competition amongst these
organisation and resulting in the Pepsi becoming market leader. There is an absence of the
variety in the product offering and mainly carries its operations in the soft drink domain
exclusively. There were allegation at this organisation relating to unjustified use of water in their
operations which is being criticised by the people.
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Opportunities: it has been mentioned that this organisation deals exclusively in soft drink
segment and carries an opportunity to expand their portfolio by offering diversified product.
Coca Cola can venture in snack and health drink segment which is being forecasted as profitable
for business. The existing supply chain of this organisation can be further utilised to offer distinct
offerings. This organisation can venture into market which are developing and can easily expand
their operations by offering existing products and services (Aterido, Hallward-Driemeier and
Pagés, 2011). This organisation can make further improvement in its supply chain so that rising
costs of transportation can be dealt with in an effective manner. The Coca Cola can further its
strengthen its sub brand Kinley as it well appreciated in the market.
Threats: The major threat to this business is growing concern of people towards their health.
The people in contemporary market are not very favourable towards consumption of soft drinks
which is to be though about (Apăvăloaie, 2014). The excessive consumption of water in their
operations emerges as a major threat as there is a rising in scarcity of water. The climate change
is affecting the supply of water which is impacting operations of this organisation. There is an
rise of organisation such as Tropicana, Gatorade and Real brand as they are catering their
services in health and energy drinks The rise in of health consciousness is helping these
organisation in stealing away market share of this organisation.
P6 Interrelation of Strength and weakness with external Macro factors
Like every other company, Coca-Cola is also having their own strengths and weaknesses.
The external factors that are present in the company are having both positive and negative
impacts upon the growth of the organisation. It is also known that they are earning most of their
revenue from their stores located in several stores located in all over word (Auzair, 2011).
Although they having their head office in Unites states but they are able to make their position
permanent in the market wherever they are being launched. This company is also considered to
have the biggest market share in the beverage industry as over (45% ) of shares are being owned
by them. But one of the negative factor associated with it is that they are not at all diversified
into different sectors and are only into beverage products only.
Another factor which is required to be considered is the religious belief of people. Since,
it is known that people of different countries are having different social norms so in whichever
country they go they have to serve their products as per their culture itself (SWOT of Coca Cola.
2018). It has also been suggested that Coca-Coca should meet all the norms given by the
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government so that all of their products can be sold at an effective manner. They are having a
strength that they are using a very good advertising strategy so as to promote their products and
services in the market but since their products and services are already famous so they don't need
to focus more on this sector rather they should invest this money to innovate new products.
Although they are very famous but the products and services which are produced by them
are not considered good for health. They are having so many bad chemicals which can adversely
impact the health of an individual (Avramenko, 2012). Coca-Cola is also working for creating
their brand awareness as through this they will be able to clear all the rumours that are being
spread about the company in the market. It has also been recommended to them that they should
keep bringing in new products so that no new competitors can enter into the markets and they
will be able to keep their control as well.
It has also been prescribed that Coca-Cola should capitalize on awareness, recognition
and loyalty of its customers so that they can get connected with the company for long term basis
and develop their relationship with them as well. If they will develop their public relations then
they will be able to focus on their growing market segments which will later on help them to deal
with their customers as well (Adeoye and Elegunde, 2012). Brand equity of Coca-Cola is very
strong. They are considered as one of the leading brand in beverage segment. Coca-Cola is
entering in emerging markets like India. This country has highest economic growth rate and
purchasing power of people in this nation is also increasing.
CONCLUSION
From the above mentioned report it can be concluded that business environment is set of
internal and external factors which directly affect the overall performance of the company in
positive and negative manner. For this, it is important for manager to effectively analyse as well
as assess all the factors in order to attain the positive results which directly contributes in
attaining better success at market place. With the help of this, company improve their overall
performance level and at the same also capture larger market share form its rivals. Along with
this, manager also take right decision by considering all the elements at the time of executing
business activities which may leads in attaining better success at market place. In addition of
this, different functions of business organization also help in accomplishing their goals and
objectives which is related with the each other. This will aid in capturing better attention towards
the company products and services in order to set their positive brand image at market place.
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REFERENCES
Books and Journals
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Armstrong, G. and et. al., 2015. Marketing: an introduction. Pearson Education.
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Bah, E. H. and Fang, L., 2015. Impact of the business environment on output and productivity in
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Botha, A., Kourie, D. and Snyman, R., 2014. Coping with continuous change in the business
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Online
SWOT of Coca Cola. 2018. [Online]. Available through: <https://www.marketing91.com/swot-
coca-cola/>.
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