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Coca Cola?s Basic Environment

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The Coca Cola Company is termed as the world’s number one beverage company and it owns more than 500 brands. The company is majorly renowned for owning the four top most brands in the soft drink category. These brands include Fanta, coca-cola, sprite, and diet coke. The company boasts of having the largest consumer market in the world of more than 200 countries consuming the company’s beverages. It generates income and revenues by selling syrups, beverage concentrates, and finished beverages. The company is fully committed to build communities that are sustainable, having initiatives that fully aim at protecting the environment, conservation of resources, and boosting the communities’ economic development in areas where the company operates (Hoovers).

Coca Cola’s Basic Legal, Social and Economic Environments

SOCIAL ENVIRONMENT

The social environment touches the cultural aspect of the coca cola company. It is evidently known that many of the U.S citizens practice healthier mode of lifestyles. Therefore, the non-alcoholic beverage industry has been affected greatly hence they are turning to manufacturing diet colas and bottled water instead of alcoholic drinks. The demand for more bottled water and other healthy products is on the rise in the U.S. hence increasing the product sales of the coca cola company. Other substitutes that put pressure continuously on coke are coffee, tea, milk, hot chocolates, and juices. The old age population is increasingly concerned about their health as they want to increase their life span (PESTEL analysis of coke).

The increase in awareness among government agencies, consumers, and public health personnel on health issues associated with inactive lifestyles and obesity brings a big threat in the cola industry. This made the company embark on manufacturing products aimed at curbing obesity. These products include sports drinks, water products, light and diet beverages, juice drinks and juices (PESTEL analysis of coke).

Indications show that sweetened and soda drinks make a major bulk of calories in the diets of Americans. Hence many nutritionists give the advice that coca cola together with other soft beverages when used excessively can be of harm, majorly to young children whereby their consumption of soft drinks is far much in their balanced diet. Continuous intake of coke may bring about health problems as it has a large volume of sugar in it. Addiction to coca cola is a big health problem, since taking of coke daily is known to have an effect to one’s body after several years (PESTEL analysis of coke).

Critics have arisen on the use of the element caffeine in coke drinks because of physical dependence possibility emanating from its intake. Concerns have been raised on the use of corn syrup that has high fructose content to minimize costs instead of using sugar fructose or glucose (PESTEL analysis of coke).

ECONOMIC ENVIRONMENT

Economic environment includes an increase of interest rates causing redundancies, depression of business and lowering of spending rates. Also recession is another economic change that creates an increment of activity to the lower price ranges of a product. In 2008 there was a major global economic downturn. This brought about an increase in food prices, bankruptcy of major established organizations, increment of unemployment, and a worldwide inflation. Consumer power reduced greatly as the level of inflation increased day by day, this posed a great threat to the coca cola industry (PESTEL analysis of coke).

The continuous rivalry between Coke and Pepsi has slowed the growing of the industry whereby management has to respond continuously to changes in demands and attitudes of their respective consumers or else they face the loss of market share due to competition. Predictions show that the growth of coca-cola company is expected to reduce in the U.S as a result of the global economic crisis but this does not deter it from remaining to be the leader in beverage market (PESTEL analysis of coke).

The coca-cola beverage industry is estimated to have its highest sales in foreign countries. These external markets are expected to boost the stable growth and success of the coca- cola company in the near future with their continued operation (PESTEL analysis of coke).

LEGAL ENVIRONMENT

Legal environment consists of pressure groups, laws, and government bodies that limit and influence different individuals and organization. Legal and political changes greatly influence marketing decisions. Some of the legal issues faced by the coca cola industry recently include: In 1970’s, the Indian government asked the coca cola company to avail the formula they use in making their beverages to the local branch of Coca Cola Company of which they refused and stopped their operations in the country for about 16 years. Again in India people demonstrated all over the country demanding that the coca-cola company stops its production as they believed that it was depleting their groundwater. In Europe, the European Union nations were alerted by European commission to ban all coca cola beverages. This response came about after 100 children dying in Belgium due to the consumption of soft drinks that had wrong composition of carbon dioxide. In 2003, a non-governmental organization known as Centre for Science and Environment (CSE) claimed that the coca-cola drinks had toxins like DDT, chlorpyrifos, Malathion, and lindane which could cause immunity breakdown and even cancer (PESTEL analysis of coke).

COCA COLA’S MANAGERIAL, OPERATIONAL, AND FINANCIAL ISSUES OPERATIONAL ISSUES

The company also is known to use multi domestic strategies which aim at producing different products in each country they operate. Hence each country makes their products basing them on the county’s external and internal environment. The following issues are currently affecting the strategic planning of coca cola Company, advertising, culture, politics, financing, language, market research, government interference, labor, transportations among others (MNCs).

The coca cola company provides high quality products as they know that the customers make the backbone of their industry operations. In order to attain a maximum and high quality production, the company employs well skilled employees, use the latest technology, make use of high quality raw materials, and making use of the newly made strategies (MNCs).

MANAGERIAL ISSUES

Role of Board of Directors: this body acts as the ultimate authority in the coca cola company. These directors are either the shareholders, lenders, or owners and they govern the company. Some professionals in the board may help in developing new perspectives, ideas and even providing guidance to the company. They act as the link connecting the company to the environment (MNCs).

Role of C.E.O: he/she is the uppermost crucial strategist and is responsible for the aspects of implementation, formulations, and reviewing of the strategic management aimed at enhancing local responsiveness. He/she acts as the motivator, builder and leader who forms the interlink between the industry and the board of directors. He/she also manages the external relationship and its environment (MNCs).

The chart below shows the current organization organogram of the coca cola company

The Coca Cola Company adheres to the following key principles and core culture values when carrying out their operations. The company economizes and monitors the cost of products quality. Within the company, they carry out customer orientation initiatives. It improves and monitors the effectiveness and efficiency of every business processes. It enhances flexible and professional teamwork, innovation, and work environment. It carries out continuous up-grading to enhance environment friendly and efficient manufacturing technology. The coca cola company carries out strategic formulations in order to achieve their goals

FINANCIAL ISSUES

The coca cola company through its Global research and development office undertakes the overall responsibility of coordinating any research work ideas developed and through the financial department they get helps financially in order to boost and keep up with the rising demand of their products. Hence, they venture into researching of more nutritional beverages which will appeal to their consumers.  The company according to financial reports shows that it has a long term running debt of 15.70 Billion U.S Dollars (Ycharts).

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