Report on the Business Environment of Coca Cola in the UK: Analysis

This report provides a comprehensive analysis of Coca-Cola's business environment in the UK, examining various organizational types including public, private, and voluntary sectors, along with their legal structures. It delves into the impact of the macro environment on business operations, usin...Read More

BUSINESS
ENVIORNMENT

INTRODUCTION
Today in fast developing world, every organisation wants to expand its business in vast
area. For this purpose, managers of enterprises used to formulate unique and effective strategies
as well as policies through which they can complete the need of business environment. But for
this purpose, employers are needed to analyse all factors that may impact on operational
activities in both internal and external manner. It includes factors like economical changes,
fluctuations in legal terms and taxation policy, ethical demand, environmental law etc. All these
attributes are necessary to analyse, which aid organisations to run their business in a required
way. In addition to these, managers are also required to identify demand and needs of customers
as per area in which they live (Cai and Yang, 2014). This would aid in manufacturing products
or services as per their requirement. In order to measure impact of factors on business
environment, present assignment has been made on a UK based organisation named by Coca
Cola. It operates business at multinational level in various countries with offering a wide range
of products like soft drink, food and beverages etc. This report highlights various enterprises
classified on the basis of business sectors like public, private and voluntary along with legal
structure. In addition to this, impact of macro environment on business operations also discuss.
TASK 1
P1. Different types and purposes of organisations
In UK marketplace, there are several companies are running their business at small and
large scale organisation. These industries are working on different basis and opinions as per
business objectives, aims and goals. Therefore, they have possessed distinct legal structures also.
Generally, enterprises can be classified on profit and non-profit basis. As per present scenario,
Coca Cola Company has run its operational business in various countries for generating more
and more income. This firm is manufacturing business in confectionary products like soft drinks,
beverages and snacks. Along with this, in order to get attention of customers, marketing
department has made several campaigns like ‘Taste the Feeling’. Through this slogan, they
promote products in a large manner and convince people to avail. For generating high return on
investment, this enterprise used to create modifications in commodities on regular basis by
adding value in them. Therefore, Coca Cola has come under profit organisation.
The profit organisations are also called private companies in which regulatory bodies have
no control on business. These enterprises are work for earning more and more profit like Coca
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Cola, Starbucks, Cafe Coffee Day and more. While non-governmental companies are like charity
firms which generate money only to improve conditions of people by fulfilling their basic
necessities of life. It includes organisations like Oxfam, NGO and more. On the other hand,
NHS, Military, Law Firms and more include in Not-profit enterprises as well as are worked to
provide safety for citizens. Basic difference among companies of different sector can be
classified as:-
Basis of
Comparison
Non-government
organisation
Non-profit
organisation (Charity)
For profit organisation
Meaning Companies like NGO or
voluntary firms are non-
government organisations
who are independent
from national and
international government.
These are the non
commercial organisation
who are worked to
resolve issues of people.
Non-profit Firms are
charitable organisations
which are dedicated
efforts and business to
improve poor
conditions of people
living at a particular
place. Along with
support of government,
they provide funds to
small organisation who
want to launch business
for earning their
livelihood and complete
need of family and
society.
Private sector
organisations which are
operated businesses only
to fulfil demands and
needs of people at any cost
in order to earn more and
more income are come
under profit organisation.
These firms manufacture
or deliver services as per
need of people and
improve their standard of
life in a high manner. it
includes commercial
enterprises like retail
sectors, banks, restaurants,
insurance companies and
more.
Area of
Operations
These firms are operated
business on a large level.
Therefore, require lot of
funds which they gain
These corporations are
small in number.
In this, company can be
both small and large.
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from charitable trusts.
Objectives The main objective of
these companies is to
prevent society from
social causes, unusual
activities, harassment,
discrimination and more.
So that people can live a
terror free life.
Purpose of these
enterprises is to
maintain normal life of
people and complete
their basic necessities.
Earning more and more
profit as per demand of
customers in a short period
of interval is main goal of
commercial organisations.
Along with providing high
satisfaction to customers
and gain their retention is
another objective.
In addition to above, companies can be classified on the basis of size of organisation also as well
as area of operation. It can be described as below:-
Public Sector: Companies under this sector is governed by regulatory bodies. All
business operations are held under supervision of government. Generally, these enterprises are
worked on large scale for common purpose is to fulfil demands of people on affordable rates.
Since these industries are under governmental control, therefore, factors under business
environment impact in less as compared to private organisations. The main objective of public
sectors is to deliver services to people of domestic country on large level. These firms are earned
money also in the form of taxation and interest rates which they are applied on business of
private firms. The laws and legislations formulated by these firms are amended for all other
companies of a country. For example: Royal Bank of Scotland is an financial institution which
provide various services to people like saving their income, provide loans and funds on easy
rates etc.
Purpose of this sector: Public Organisations are mostly concern on providing goods and
services to people on easy rates as well as fulfil their basic necessities. These firms also
improvise condition of society by constructing infrastructures like building, roads, temples,
public parks and more. Creating healthy environment is main objective of these firms.
Private Sector: In this category, business organisation has operated either in the form of
sole traders, partnership or joint business. Government has no control on operational activities of
these enterprise but laws and regulations made by them are amended for private firms.
Companies under this sector are depended on regulatory bodies only for funds. Due to private
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ownership, factors present at micro and macro level affects business environment of such
companies in a large manner. For example: Coca Cola is a private and multinational company
which sells its commodities in various countries and hope to launch business in other locations
like remote areas also.
Purpose of this sector: Earning profitability and generating high revenue as well as
expand business area are the some of the main objectives of private enterprises. They
manufacture products as per demand and need of customers at national and international level.
Therefore, providing high satisfaction to them is also a major concern for these organisations.
Voluntary Sector: Companies in this sector are come under for non-governmental sector
whose main objective is to provide help to poor and needy people. It includes NGO type
enterprises with main motto is to improve living condition of society. For example: Oxfam, The
National Trust, Cancer Research UK and more are provided necessary help to citizens of UK.
Purpose of this sector: Providing healthy environment and disease free life is main
purpose of these organisations.
Legal Structure of the sectors:
Public Sector: Business of public sectors are fully governed by regulatory bodies.
Therefore, legal structures of these firms are divided on the basis of geographical locations i.e.
State, Central and Local. All have different type of roles and responsibilities. Central government
form laws and legislation while state government help in executing the same on companies and
citizens. Apart from this, local bodies are worked for improving life of people.
Private Sector: Business structure of private firms is divided on the basis of ownership like
sole proprietor, partnership and joint business. If business of company is operated by single
person than they are come under sole proprietors. While having two or more partners of business
are come under partnership type of enterprise. Both type of legal firms doesn’t require much
paper work as in partnership, business is divided among owners equally. Apart from this, joint
business partners have make a proper document in which business is distributed in terms of
capital investment made by owners.
P2. Size and Scope of various types of organisations
As in UK, organisations are divided on the basis of legal structure, ownership and
objectives. Therefore, they have different scope and size also. All these can be elaborated as:-
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Micro Scale: In context with size of firms, companies at micro level have generally 4 to
5 members in staff. It includes departmental stores, cafes, small restaurants, food stalls and more.
The main aim of these enterprises is to earn for livelihood and improve economical condition of
own family by completing basic necessities of life i.e. food, shelter and cloth.
Small scale: Enterprise at small scale has more than 50 members at workplace who
contribute their efforts in accomplishing short term demand of business. In UK marketplace,
there are 1000 of companies are running at small level, therefore, profitability of them affects
economy of country also. Therefore, regulatory bodies provide necessary funds to them so that
they can operate at large level. It includes retail industries, insurance firms, consultancies and
more.
Medium Scale: Under this sector, near about 150 employees are associated with business
of organisations. It includes technological firms, software companies and more. In addition to
this, these industries are worked with main purpose is to expand business at large level.
Large Scale: Organisation which are established at big level and have unlimited number
of employees is come under large scale enterprises. They consider more on gaining sustainability
at marketplace as well as competitive advantage.
Objectives differentiation and scope:
Micro Small Medium Large
In context with
objectives, companies
at micro level have
main scope is to earn
profit for own
consumption.
Necessity of needs of
family members is
concerning point of
view of these
companies rather than
demand of customers.
Small scale enterprises
are concerned more on
need and demand of
customers, therefore,
manufacture products
accordingly.
Generating high
revenues and more
profit is main
objective of these
companies.
Expansion of business
at large level and
selling commodities in
international market
are some major
objectives of medium
enterprises.
Gaining high attention
of customers, their
retention with products
or services, increase
profit share at
marketplace, enhance
competitive
advancement are some
major objectives and
goals of companies
operating at large
level.
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TASK 2
P3 Relationship between different organisational functions
An organisation can be divided on the basis of various functions performed by different
departments. All divisions have own role and responsibilities but worked with common purpose
i.e. to achieve objectives and goals of a company in a given period of interval. Therefore,
operational functions of all sections are interconnected with each other also. In addition this,
employers of firm distribute duties to all departments as per their functions (Botha, Kourie and
Snyman, 2014). In context with a private organisation of UK i.e. Coca Cola has various
divisions, all of which contribute efforts in enhancing profitability as well as productivity of
business in large manner and in short period of interval. Functions of all sections can be
explained as:-
Marketing department: This department carriers various activities like promotion and
advertisement. Managers formulate effective strategies and policies in order to marketing
products of Coca Cola in a vast manner. In addition to this, they also perform other activities also
like identifying demand and needs of people as well as purchasing power of them. Along with,
searching marketing area where they can deliver commodities in bulk and generate high
revenues from them. Marketing team also examine bargaining power of suppliers and buyers in
order to reduce expenditure of company and distribute products in large area simultaneously.
Apart from this, they also examine the need of changes in company’s operation and products to
avail competitive advancement (Cascio, 2018). This department helps sales division in allocating
areas where they can sell commodities in profitable manner.
Human Resource Management: This is the main department of an enterprise which
performs various functions like recruitment & selection, training & development, reward &
compensation, etc. Through these functions, HR managers used to provide necessary employees
in other divisions as per roles and responsibilities (Huang-Horowitz, 2015). Along with this, they
make workers capable to work according to needs of departments. For increasing their
efficiencies and motivational level, managers also provide them appraisals and rewards in order
to retain them with business for long period of time. In addition to this, HR managers are also
worked running business in legal manner.
Operations and production department: These divisions also perform major
responsibilities of business like they manufacture products or services as per requirement of
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customers. The main goal of Coca Cola is to generate higher profitability, therefore, these
department provide services in a profitable manner. In addition to this, managers of these
divisions perform severe type of duties viz. transforming raw materials into finished goods by
utilising resources in an economical way (Congleton, Hölzel and Lazar, 2015). Functions of
these departments are dependent on other divisions in gaining raw materials on low cost,
manufacturing them by contributing efforts of manpower, distributing the same in marketplace
and more.
Financial department: This department also holds its importance among others, it
performs major responsibilities as utilisation of money. This division provides finance to other
departments in providing necessary funds as per need of them in performing their functions. For
tjis assistance, they raise funds from various sources of marketplace and distribute them in other
divisions as per want. Along with this, finance managers make effective budget plans as
represent the same in front of investors, stakeholders and shareholders in an effective way
(Klapper, Love and Randall, 2015).
The main organisational structure of a company are described as below: Functional structure: This section is generally common for every type of organisation
whether dealing at large level or small. In this area, management of firm used to divide
roles and responsibilities to various departments as per objectives. Product Based: In this era, management of enterprises are used to manufacture products
and services as per demand of people in a particular area (Doh, McGuire and Ozaki,
2015). Through this function, an organisation can find systematic way for categorising
product line in an effective manner.
 Customer Based: Under this category, management of firm used to divide marketplace
into different segments as per need, demand and purchasing power (Menychtas and et.
al., 2014). Through these activities, a firm like Coca Cola can deliver its services as per
requirement of each section. This would help in completing requirement of customers as
per their want as well as in a short interval of time. These things aid organisations in
enhancing brand image as well.
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TASK 3
P4. Positive and negative impact of macro environment upon business organisation
In present technological world, there are various elements present at internal and external
environment of business organisation which affects operational activities in a large manner. Any
changes in such factors, demand enterprises to change strategies and policies in order to stay
competitive and run business in smooth manner. For examining negative and positive impact of
such factors, management of Coca Cola are required to make analyses by using PESTLE
technique. It can be elaborated as:- Political Factors: These elements are directly impact on trade of a company. Legislative
rules and regulations formed by regulatory bodies are used to keep an eye on activities
and business operations in order to eliminate corruptions. Along with this, political laws
are affected much on those companies which are operated business in various countries
as well. Therefore, business of Coca Cola is also affected by these laws. It demands this
firm to manufacture high quality of carbonated drink. Economic Factors: Economical condition of a country impacts on business of an
organisation in both positive and negative manner (Bah and Fang, 2015). For an instance,
in inflation period, purchasing power of people becomes high due to high level of
income, therefore, it helps enterprises in increasing their sales performance as well as
gain high return on investment. While in deflation period, all process goes in negative
way. In addition to this, fluctuations in interest rates and economical terminology,
demand enterprises to change strategies and policies accordingly. Social Factors: It includes perceptions and views of society and people living at there.
Due to modernisation, taste and preference of customers gets changes on regular interval
of time. This would effect on sales performance of as company as it demand to
manufacture innovative products or add value in existing commodities. Therefore, it is
essential for Coca Cola to keep modification in productions and deliver products of
unique taste in marketplace as per taste of people. Technology Factors: Today without technological advancement, any organisation cannot
achieve its success in a required manner (Moroni, Arruda and Araujo, 2015). Therefore,
in order to gain competitive advancement, it is necessary for all companies including
Coca Cola to adopt latest technology in business. This would help in manufacturing good
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quality of products as well. But, it requires heavy amount of funds which creates negative
impact on financial situations of organisations. Legal Factors: It is necessary for managers of Coca Cola to keep update its activities
with legal formalities. This will help in running business in a smooth manner. Legal
factors include employment legislations in order to prevent employees from unusual
activities and discriminations held at workplace (Apăvăloaie, 2014). Therefore,
Government of UK has established various laws like Anti-Discrimination Act, Health &
Safety Law, The National Minimum Wage Act and more. Therefore, Coca Cola had
compliance its organisation with all legislations and provide healthy environment to its
employees as well.
 Environmental Factors: This section demands a firm to reduce its wastages as well as
keep a safety measure to destroy the same in a proper manner. Since, beverages of Coca
Cola contain high amount of carbonate, therefore, this firm has faced several issues in
running business successful. This would effect its brand image as well as sales
performance in a negative way.
TASK 4
P5 Studying on Internal and External Analysis
In order to analyse internal and external factors of business activities, executive are
required to use effective method. This would help in gathering complete information of a
company like how it goes in marketplace as well as what are the opportunities present at
marketplace through they can enhance productivity. By conducting this, they can evaluate
number of competitors as well as barriers come in accomplishing objectives of business
successfully (SWOT of Coca Cola. 2018)
.
SWOT analysis of Coca Cola:
Strengths:
 At present scenario, brand image of Coca Cola is enhancing in a good manner through
which products of this firm are becoming more popular in all over world.
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 Unique way of marketing, effective use of tools and techniques help in attracting minds
of national and international customers in a large way. Along with this, its products give
a tough competition to beverages of competitors.
 The major advantage of this firm is its taste of drink and food products which aid in
retaining loyal customers for longer period of time.
Weakness:
 Presence of high carbonate in drinks effects health of people in a large manner. Due to
this, customers are now started move on other confectionary beverages like coffee and
healthy drinks. This factor has shown its major weakness.
 Less product differentiation as well as usage of old techniques affects brand image of this
company (Armstrong and et. al., 2015).
 Unhealthy food items also reveal its weakness.
Opportunities:
 Providing healthy drinks and organic fruit juices are some major segments through which
Coca Cola can gain attention of customers again.
 Usage of latest technique helps in providing more healthy and tasty products. Along with
keep them safe in a good manner (Pinto, 2015).
 Economical stability of UK Government provides an opportunity to raise funds on easy
interest.
Threats:
 Presence of competitors impact on sales performance of this company in a high manner.
 Increasing rate of suppliers who are provided raw materials impact on business of Coca
Cola.
 Awareness in people regarding their health has become a threat for confectionary
products of a company.
Thumsup, Pepsi, Costa Coffee, Cafe Coffee day and Star Bucks are various rival
enterprises that are affecting function of business in indirect manner.
P6 Ways in which Strengths and Weaknesses interrelate with macro factors
Through examining properly on factors of macro environment, managers of a firm can
measure impact of these easily on operational activities (Baesens and et. al., 2014). In addition to
this, by conducting proper analysis, they can strengthen the system more easily as well as reduce
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weaknesses also. Therefore, superiors of Coca Cola have used PEST analysis to evaluate the
weaknesses and strengths in a proper manner:
Political Factors: These factors normally impact in negative way of business operations
of a company, therefore, superiors are required to make modifications in policies and strategies
as per changes in political rules. It will prove beneficial in running business organisation in a
more affected way.
Economical Factors: This factor generally effects profitability and sales performance of
a company. It includes factors like exchange rate, deflation, inflation, taxation policy and more.
As per present situation, economical condition of UK is so good, this, sales performance of Coca
Cola is also enhanced in a large manner (Niemann-Struweg, 2014)..
Social Factors: Through manufacturing products in a high qualitative way by concerning
more on health factor of people help Coca Cola in providing high satisfaction to customers.
Along with utilisation of resources, also proves beneficial for production of this company.
Technological Factors: Coca Cola needs to make improvement in technologies, which
help in manufacturing good in a proper way.
CONCLUSION
From the given project report, it can be stated that for attain set business goals and
objective it is very essential for a business entity to first study the environment and examine the
various factors exist in that. One of the main benefit of this analysis is that it help business firm
in formulate an effective business strategy which provide competitive benefit to entity. Tool
called SWOT analysis can be use by entity to identify its m ain strengths and weakness. Further
there is a tool called PESTLE which can be use by firm to identify and examine the major factors
exist in business environment.
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