LSME 501 Strategic Management: Coca-Cola's Operating Environment

This essay provides a comprehensive analysis of Coca-Cola Ltd.'s strategic operating environment, focusing on long-term international strategic objectives and strategies. It employs SWOT and PESTEL analyses to evaluate internal and external factors, including political, economic, social, technological, environmental, and legal influences. Porter's Five Forces model is used to assess competitive intensity, the potential of new entrants, supplier power, customer power, and the threat of substitutes. The essay reviews the implementation and success of Coca-Cola's international operating strategies, highlighting its product diversification and aggressive marketing tactics. The conclusion emphasizes the importance of understanding the strategic operating environment for organizational success and profitability.

Strategic Operating
Environment

INTRODUCTION
Strategic Operating Environment refers to the environment in which the organization is
operating and thus its analysis is quite crucial for the managers so that they are able to take
important decisions (Chellappan, 2021). For this report, Coca Cola has been chosen. In this
report, a detailed and specific focus will be made on its Strategic Operating Environment.
MAIN BODY
Long-term international strategic objectives and strategies-
It is important for an organization to determine all them so that the right Action Plan can
be prepared accordingly (Luciano, Nahrgang and Shropshire, 2020). For an organization like The
Coca-Cola Ltd. It is also important for frame them. They are explained as follows-
 The company will look forward towards making the expansion so that it is able to attain
the goals and objectives.
 The company will also look forward towards ensuring that the use of Innovation can be
made so that the goals and objectives can be attained.
Analysis of internal and external operating environment-
It is necessary that this particular analysis can be carried out so that the decisions can be
taken accordingly (Malmelin and Virta, 2021). For an organization like Coca-Cola Limited it is
important and crucial that it is able to take the right decisions in a proper way. The company has
to make sure that it can make the use of the following models-
SWOT analysis-
SWOT analysis
Strengths Weaknesses
 The company offers a wide variety of
products and services to the customers
and therefore this is quite helpful in
ensuring that the satisfaction of the
customers can be ensured.
 The company makes sure that the
overall satisfaction level of the
customers can be enhanced so that the
 The company is weak in the application
of the marketing strategies and
therefore this is creating a high-level of
impact on it and therefore can affect it a
lot.
 Some of the products of the company
are not able to satisfy the customers and
therefore this is creating a particular
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management of the different types of
needs and requirements can be done
highly effectively and efficiently in a
proper and appropriate manner. In this
way, the organization will be able to
manage the work in a proper way.
level of impact on them.
Opportunities Threats
 The organization can make the use of
opportunity of making an expansion to
the different areas in the market so that
the management of the different types
of needs and requirements can be
carried out.
 In the organization, the opportunity of
making the use of Innovation should be
used so that the different types of new
products can be introduced and
therefore the enhancement in the
overall level of profitability can be
made highly effectively and efficiently.
 The organization is facing a threat due
to an increase in the overall level of
competition in the market due to which
its level of profits is getting impacted.
 The organization is also facing a threat
of increase in the overall level of tax
rates due to which there can be an
increase in the expenses and therefore
due to this reason the overall level of
profits can also be impacted as a result.
External Environment-
PESTEL analysis-
The use of PESTEL analysis is recommended to be made by the organizations because
through making its use they will be able to properly draw the conclusions and recommendations
and thus the actions can be taken accordingly (Nallareddy, Sethuraman and Venkatachalam,
2020). For an organization like Coca Cola Ltd. It is necessary that its application can be done
appropriately. The application of PESTEL analysis can be made as follows-
Political factors- These factors can create an impact on the organization because there
can be a change in the political situations which are prevailing in the country. For Coca Cola Ltd.
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It is necessary that a proper and detailed analysis of these particular factors can be done so that it
is able to attain the necessary goals and objectives. This is so because the important decisions
can be taken in this way.
Economic factors- These factors are also important because the economic conditions of
a country can change quickly. In the context of Coca Cola Ltd., it is necessary to consider their
impact.
Social factors- These are also important factors which are essential to be assessed
because the management of the social needs and requirements can be done through properly
understanding the influence which is created by these factors. It is necessary for an organization
like Coca Cola so that it can attain the goals and objectives.
Technological factors- These factors are also necessary to be assessed because the
technology keeps on changing quite frequently and therefore can impact the organizations. In the
context of Coca Cola Ltd., it is necessary to make sure that the identification of the change in
these factors can be done so that the decisions are taken accordingly.
Environmental factors- These are also important factors which are to be considered
because the customers nowadays are quite conscious about the environment. They desire that the
products which are being provided to them should be according to the environmental rules and
regulations which have been framed.
Legal factors- These are also quite important factors because the legal rules and
regulations are required to be given proper and appropriate consideration so that the decisions
can be taken accordingly. This is so because an organization like Coca Cola Ltd. is required to
make sure that it can comply with the legal rules and regulations of the country in which it is
present.
Porter's 5 forces-
It is an important model which is required to be used so that the situations which are
prevailing in the external environment can be assessed quite properly and appropriately
(Niemand and et.al., 2021). These forces are as follows-
 Competition in the Industry- It is an important force because it is important to assess
the overall level of competition which is present so that the right and appropriate
decisions can bet taken highly effectively and efficiently (Nwachukwu, Zufan and
Chladkova, 2020). The force carried a high power for Coca Cola Ltd. because in this
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industry there is a lot of competition which is present due to which the overall level of
profits is also affected.
 Potential of New Entrants- It is also a crucial force which is required to be given
appropriate consideration because there are a lot of new players which are waiting to
enter into the market and they can create an impact on the organization. The force
therefore carries a high power for Coca Cola Ltd. Because in this industry the new
players can easily enter into the market which therefore can affect it a lot.
 Power of Suppliers- It is also an important force which has to be considered because the
suppliers control the price which is fixed for each product. This force also carries a high
power for Coca Cola Ltd. Because in this industry the management of supplies is done in
a proper manner by the suppliers so that the decisions which are quite important and
crucial can be taken highly effectively and efficiently.
 Power of Customers- It is also an important factor which has to be given appropriate
consideration because the customers are the ones who drive the demand of the products
(Padash and Ghatari, 2020). This force has a high power for Coca Cola Ltd. because the
demand of the customers for the products can affect the prices and thus the overall level
of profitability of the products is also impacted as a result.
 Threat of Substitutes- This is also an important force which is required to be
considered. This force has a low power for Coca Cola Ltd. Because the company
provides quality products to its customers and they do not prefer to purchase substitute
products over its products.
Justification- 4 out of 5 forces have a high power and only 1 force has a low power. Thus, it can
be stated that Coca Cola Ltd. Is required to make sure that it can provide appropriate
consideration to the impact of these forces and is able to take the important and crucial decisions
which are highly necessary to be taken. This will therefore help a lot in ensuring that the
organization can manage its needs and requirements accordingly which will therefore help it a
lot.
Review of the implementation and success of the company's international operating
strategies-
Coca Cola Ltd. is a company which provides a wide range of products to the customers in the
market. The company has to make sure that it uses the international operating strategies so that it
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can manage its wide range of needs and requirements in a proper and appropriate way. The
implementation and success of the company's international operating strategies can be discussed
as follows-
 The company has introduced a wide range of products in the international market
according to the needs and requirements of the customers (Pal, 2020). Thus, it can be
stated that this particular strategy of the company has been successful because it has
managed to attract the attention of the customers effectively and efficiently.
 The company has made sure to make use of aggressive marketing strategies and tactics so
that it can manage to attract the attention of the customers in the market by attracting
them effectively and efficiently (Samimi and et.al., 2020). Therefore, it can be stated that
this particular strategy of the company has been successful because it has attracted the
attention of a lot of customers in the market.
Thus, it can be stated that Coca Cola Ltd. has been able to manage its wide range of needs and
requirements quite properly and appropriately which will therefore help it a lot to be able to
attain the goals and objectives which are necessary. The company should make sure that it can
identify the way in which its overall efficiency and effectiveness level can be enhanced. In this
way, the company can make sure that it is able to attain a strategic and competitive edge over the
competitors which are present in the market which will thus help it a lot (Yildiz and Aykanat,
2021).
CONCLUSION
From the above report, it can be concluded that Strategic Operating Environment refers to
the environment in which an organization is operating. Therefore, it can be stated that the
attainment of the goals and objectives can be done by the organizations so that they are able to
make sure that they can enhance their overall profitability level. This has to be done by ensuring
that the consideration of the factors affecting Strategic Operating Environment can be done
which will help the organizations a lot. The managers are required to make sure that they are able
to manage the different types of needs and requirements related with the organization by
determining the best approach to be taken in such an environment which will help them a lot.
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REFERENCES
Books and Journals:
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Malmelin, N. and Virta, S., 2021. Critical creativity: managing creativity as a strategic resource
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Nallareddy, S., Sethuraman, M. and Venkatachalam, M., 2020. Changes in accrual properties
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