Strategic Management: Coca-Cola Company's Operating Environment

This essay provides a comprehensive analysis of Coca-Cola's strategic operating environment, covering key concepts and perspectives of strategy and strategic management. It includes a detailed examination of both the macro and micro environments using models like SWOT and PESTEL analysis, along with Porter's Five Forces to assess industry competition. The report further explores the interrelation between strategic management and organizational culture, emphasizing the importance of strategic risk management and strategic leadership within Coca-Cola. The analysis concludes by highlighting the necessity of effective strategy development and management for achieving competitive advantage and sustainable growth in a dynamic market.

Strategic Management

Table of Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY...................................................................................................................................1
CONCLUSION................................................................................................................................6
REFERENCES................................................................................................................................7

INTRODUCTION
Strategic management can be define as a management of all important resources of
organisation in order to achieve its set goals and objectives (Ansoff and et.al., 2018). This is
majorly concerned with developing strategic vision, setting goals, formation as well as
implementation of strategies so that desired targets can be successfully achieved. Chosen
company for this report is Coca Cola. This is one of the leading American company which is
manufacturing beverages concentrates and soft drinks. Coco Cola company was introduced in
1892 and founder of this organisation was John Stith Perberton. This company is offering its
product and services to different part of the world and its headquarter is located in Atlanta,
Georgia, UK. In this report concepts and perspectives of strategy and strategic management is
mentioned. It consist of analysis of macro and micro environment as well as Porter's five force
model. Apart from this it includes strategic risk management as well as strategic leadership.
MAIN BODY
Strategy refers to actions take by company with the motive to achieving set goals. It
consist of plan that is developed to accomplish desired objectives in more effective and efficient
management. This is very helpful in correct use of different resources as well as redefine
direction towards common goals. Effective and efficiency strategies will maximize the chances
that respective organisation can attain goals and get competitive advantage over other rival
companies (Rothaermel, 2013). It is very important for Coco Cola company to correctly manage
its strategies in order to increase its productivity as well as profitability. Strategic management
can be describe as a ongoing planning, monitoring, analysing as well as assessment that is
necessary for attaining business targets. There are majorly three types of strategic perspectives
that is helpful in conducting business in effective and efficient way so that set goals could be
achieved. Perspectives to a successfully strategy includes people with front line the experience of
business, people with functional expertise and people with creative orientation.
There are various factors in environment that can affect business as well as its operations.
It is very essential to effective analyse and evaluate the micro and macro factor so that strategic
environment could be analysed properly. All of these factor play a crucial role in creating and
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developing effective strategies in order to accomplish business goals. There are different models
that could be used by Coca Cola company to evaluate micro and macro strategic environment. In
order to analyse internal environment of respective company SWOT analyse could be used. This
include strengths, weakness, opportunities and threat. Strengths of Coco Cola company includes
that it has very strong brand identity in market (David and David, 2013). It is one of the leading
company in Beverage sector and it is providing high quality products with the motive of
satisfying customer's need. It has developed strong relationship with customers and gain
customer loyalty. Coco Cola company has wide market area as well as distributing its products in
service in large market area. Weakness of this organisation includes it is developing product
which include major intake of sugar. This is considers as a drawback of this organisation as it in
related to health concern of customers. It is low product diversification of as compare to its rival
companies. There are various opportunities in market for Coco Cola company such as it can
introduce new product as well as diversify it into different segment. This company can introduce
new and healthy product with is able to satisfy need of customer that are more concerned with
their heath. It can use new and updated technology in its business process in order to enhance
productivity and profitability. Threats for this organisation includes high competitive market.
This company is dealing in market area with high and strong competition which can have
negative impact on its strategies and business. Pepsi is considered as its biggest threat and its
strategies will affect functioning of Coco cola company.
Macro strategic environment consist of various external factors that can have impact on
Coco business as well as its business operations. In order to analyse the external business
environment of respective company PESTEL analysis could be used. It consist of different
factors such as political, economical, social, technological, environmental as well as legal.
Political factor includes different rules and regulation that developed by UK government. It
consist of political stability, trade restriction, pricing regulation and so on. UK has stable
political and government party which could be consider as a positive factor (Hill, Jones and
Schilling, 2014). Economical factor consist of inflation rate, saving rate, foreign exchange rate,
interest rate, economic rate and many more. UK country GDP rates are slightly decreasing and
this can have negative impact on Coco Cola company. This changes in economical environment
factor can affect company's strategies as they have to develop more strong strategies.
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Social factor of macro environment includes all those factor that are related to social
behavioural of customer. It consist of demographic, population, culture, attitude, interest etc.
Coco Cola company is manufacturing product as per customers requirement in order to satisfy
their needs. Customers need and requirement is continuously changing and some consumers are
very heath conscious so this can have negative impact on respective company as well as
developing strategies (Hitt and Duane Ireland, 2017). Technology factor consist of new and
innovative technology or techniques that is used for conducting business activities. UK has one
of the most advance and updated technology which can have positive impact on its
manufacturing process as well as production. Respective company can use more modified
technology in order to ensure timely production as well as effective supply chain. Environmental
factor includes weather, climate, ecological system. It consist of different rules and regulation
that is developed for keeping environment save and green. Coco company is using more plastic
product in manufacturing its product which is affecting environment as well as ecological
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Illustration 1: Growth rate of UK
Source: UK Economic Outlook, 2019.

system. Business activities as well as product of Coco cola company is polluting environment so
they have to bear negative impact of this factor. Legal factor consist of various rules and
legislations such as discrimination law, anti trust law, copyrights, employment law, heath and
safety as well as data protection law. This company is manufacturing product with its unique
taste and it has copy right of its products. So this factor will be very helpful in keeping product
unique and protecting data of Coco Cola company.
There are various issues and problems that occur when company is conducting its
business activities in different market area (Meyer, Neck and Meeks, 2017). It is very important
to analyses and evaluate different issues of uncertainty so that company can develop effective
and efficient strategies. These uncertainty are majorly related to market area, natural disaster and
other factors. It is essential to timely manage all these issues in order to increase profitability and
productivity. There are different stages of product life cycle which will help in developing and
building high quality product. This life cycle define the complete product cycle from
introduction stage of decline. It consist of introduction, growth, maturity and decline stage. In
introduction stage company is introducing new product and when it is increasing sales as well as
known in market it is growth stages. Maturity stage is when product have potential number of
customer and last stage is decline stage. In last stage sales decrease as well as continue to drop.
Porter's five force model is a very helpful tool for developing effective and efficient
strategies that will help in gaining competitive edge over other rival company. This model helps
in evaluating and analysing different factors which is affecting business and competition in
particular industry. It include five forces which have impact on Coco Cola business such as
bargaining power of suppliers, bargaining power of buyers, threat of new entrant, threat of
substitutes and rivalry. Bargaining power of supplier is considered as weak in context of Coco
Cola company. This organisation have large number of supplier and it can easily change from
one supplier to other. Power of individual supplier is low and it will not have major impact on
respective company (Vogel and Güttel, 2013). This company is dealing in large market area as
well as providing its products or service to many customers. So bargaining power of individual
customer is low as individual customer will purchase small quantity of products. Coco Cola
company is a well established company from years and it has developed strong market image. So
this company has low threat from new entrant as new company will not be able to capture market
area developed by respective company. Threat of substitute refers to all those issues and which
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could be faced by company when customer prefer competitors products over Coco company.
There are many companies which are providing beverages such as soft drinks, juices and bottled
water so this includes the chance of substitution of product. Threat of substitution in context of
Coco Cola company is high and it will affect strategies of respective company. Rivalry among
existing competitors is very high as this company is dealing in highly competitive environment.
Major competitor of respective company is Pepsi and changes in strategies of Pepsi can have
negative impact on Coco cola business.
Strategic management and organisational culture is interrelated with each and culture of
Coco Cola company will have huge impact on its strategic management. Organisation is
considered as a platform where different individual with various background work collectively in
order to accomplish a common set of goals (Simon, Fischbach and Schoder, 2014). Strategic
management is process which includes mission, vision, objectives, roles and responsibilities for
the success of respective company. Strategies are driving focus and direction where as culture is
emotional habitat through which its strategy lives. Positive and friendly organisational culture
will have huge impact on effective and efficient implementation of strategies and employees
will also contribute their maximum efforts to attain organisational goals. Cultural web refer to a
tool that helps in mapping the culture of organisation as well as understanding various factors
that have influence on organisational culture. Cultural web consist of various elements such as
stories, rituals, symbols, organisational structure, control systems and power structures.
Risk management refers to a process of which helps in managing different factor of risk
as well as accomplishing set goals. It includes process of identifying, analysing, evaluating as
well as managing risk that is associated with business strategies. Strategic risk management
includes wide range of possible events that affect strategies as well as its execution. Process of
managing risk involve steps such as defining business strategy, establishing key performance
indicators, analysing and identifying all unknown risk, establishing risk indicators as well as
providing integrated reporting and monitoring. This process will be very helpful of Coco Cola
company in order to analyse risk as well as take correct action so that desired goal could be
timely achieved (Certo and et.al., 2016). Strategic leadership could be define as a potential of
leader or manager which help them to express a strategic vision for Coco Cola organisation. This
is very helpful in motivating employees to work in effective and efficient manner in order to
accomplish vision. Motive of strategic leader is to encourage all employees of Coco Cola
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company so that they can improve productivity and profitability of organisation. Strategic
leadership required some specific characteristics and quality such as loyalty, motivation, self
control, social skills, compassion and many more.
CONCLUSION
From the above report this can be concluded that it is very important to effective develop
and manage the strategies of organisation. They play a crucial role in growth and development of
company as well as gaining competitive advantage over other rival business. It is essential to
analyse and evaluate micro and macro environment in order to develop strong strategies as well
as gain competitive advantage over other rival companies. They have to manage risk related to
strategies in order to create such strategies which will help in enhancing productivity as well as
profitability of organisation.
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REFERENCES
Books and Journal
Ansoff, H.I. and et.al., 2018. Implanting strategic management. Springer.
Rothaermel, F.T., 2013. Strategic management: concepts. New York, NY: McGraw-Hill Irwin.
David, F.R. and David, F.R., 2013. Strategic management: Concepts and cases: A competitive
advantage approach. Pearson.
Hill, C.W., Jones, G.R. and Schilling, M.A., 2014. Strategic management: theory: an integrated
approach. Cengage Learning.
Hitt, M. and Duane Ireland, R., 2017. The intersection of entrepreneurship and strategic
management research. The Blackwell handbook of entrepreneurship. pp.45-63.
Meyer, G.D., Neck, H.M. and Meeks, M.D., 2017. The entrepreneurship‐strategic management
interface. Strategic entrepreneurship: Creating a new mindset. pp.17-44.
Vogel, R. and Güttel, W.H., 2013. The dynamic capability view in strategic management: A
bibliometric review. International Journal of Management Reviews. 15(4). pp.426-446.
Simon, D., Fischbach, K. and Schoder, D., 2014. Enterprise architecture management and its role
in corporate strategic management. Information Systems and e-Business
Management. 12(1). pp.5-42.
Certo, S.T. and et.al., 2016. Sample selection bias and Heckman models in strategic
management research. Strategic Management Journal. 37(13). pp.2639-2657.
Greco, M., Cricelli, L. and Grimaldi, M., 2013. A strategic management framework of tangible
and intangible assets. European Management Journal. 31(1). pp.55-66.
Aguinis, H., Edwards, J.R. and Bradley, K.J., 2017. Improving our understanding of moderation
and mediation in strategic management research. Organizational Research
Methods. 20(4). pp.665-685.
Online
UK Economic Outlook. 2019. [Online]. Available
through:<https://www.pwc.co.uk/services/economics-policy/insights/uk-economic-
outlook.html#dataexplorer>.
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