Analyze The Specific Business Environment Of Coca â€Cola - Samples

Question: Discuss about the Analyze The Specific Business Environment Of Coca Cola. Answer: Introduction Coca Cola is a fizzy soft drink produced by The Coca Cola Company. It was introduced on 8th May, 1886, approximately 131 years ago in United States. The company also produces other nonalcoholic drinks under the Coke name viz. Caffeine Free Coca Cola, Diet Coke Caffeine-Free, Coca Cola Zero Sugar, Coca Cola Cherry, Coca-Cola Vanilla with special versions of lemon, lime and coffee .It has a strong employee base of 1,23,200 as in 2016 (The Coca Cola Company, 2018). The purpose of this paper is to analyze the specific business environment of Coca Cola and conduct a critical analysis of the firms core competencies and the sustainability of the competitive advantages in the long run. A specific strategy would also be suggested and recommended to match the strengths and distinctive competence of Coca- Cola. Also, the business activities of its main competitors would be evaluated and compared. Business Environmental Analysis: SWOT Analysis of Coca Cola Strengths The Coca-Cola Company has large market share in the beverage industry. It is the biggest amongst the non-alcoholic beverage companies in the world. It operates in more than 200 countries and sells 500 brands of nonalcoholic drinks. In the year 2015, it was declared as the third most valuable brand after Apple and Google in the world. Its revenue was US$ 41.90 Billion in 2016. The Company can influence the buyers through its brand power and marketing campaigns. The company is not dependent over its one or two brands for its revenue. Rather with its vast variety of brands and flavors it is capable to satisfy each and every customers needs and tastes (Sarich, Zaman Misra, 2015). Weaknesses Unlike Pepsi which has developed its food and snack segment, Coca-Cola is yet to develop its food or snack section. This puts it behind Pepsi in terms of competition. Since the buyers are now aware of their health. The company has not addressed to a healthier solution yet. Opportunities Coca Cola can create new products and diverse its present offerings. It has a brand identity, strong customer and supplier base to back this up. It is feasible for the company to find untouched segments to develop the products, especially in the healthy food spaces. Apart from this, the company can focus on the developing countries with humid temperature (Anojan Subaskaran, 2015). Threats The Coca-Cola Company was suspected of using pesticides in their water. With the increasing scarcity of water, the company can face problems in future. The need for creating new, healthier and ecofriendly products has been raised in the current scenario. Since the buyers are looking for healthier options for less sugar, it can hamper Coca-Coals sale if it doesnt act quickly. PESTLE Analysis of Coca-Cola Political Factors Coca-Cola products are regulated under the Food and Drug Administration. The variations in the current laws can prevent the company from distribution of the drinks. The laws related to accounting, taxation, internal marketing and labor provisions can influence Coca Cola in any ways. Economical Factors Economic recession is one of the most crucial factors affecting Coca Cola. During recession, the consumers have less resource to spend and they tend to cut down their personal spending in response to the overall deterioration in the economic activity. Social Factors Since the company operates in diversified cultures, it has adjusted its production and marketing systems to meet the needs of each and every customer. In the present scenario, when people are becoming aware of the health issues, the company should produce healthier products to cater to their needs so that it can survive in the market (Hassan, Amos Abubakar, 2014). Technological Factors Technology has helped the company to a large extent to connect itself to its buyers. The company has implemented the latest machineries to ensure fast delivery of its products and quality product development. Legal Factors Coca-Cola retains its rights related to the business which comprises of the past and future product development with the patent processes (Cross Miller, 2016). Environmental Factors The company has to adhere to the environmental laws as the soft drink manufacturing process requires water to a great extent. Also, the company can take the advantage of the humid climate in developing countries, where it has fewer competitors. Competitor analysis of Coca-Cola Coca-Cola is one of the most reputed beverage brands in the world due to its strong distribution and marketing strategies. It competes against many of its competitors viz. Pepsi, Red Bull, Nestle and Lipton. The details of these companies are as under: Pepsi: Next to Coca Cola is its competitor PepsiCo Inc. It is one of the leading beverage brands operating in more than 200 countries around the world. Its portfolio includes wide range of foods and beverages comprising of 22 brands .As of December 31, 2015 it have employed around 264000 people all over the world. Its core competencies are its diversified products catering to the need of health conscious customers in its beverage and food segments. Unlike Pepsi, Coca Cola has focused only on its carbonated soft drinks which can be a major factor of the sharp fall in the demand for its products in the near future (PepsiCo, n.d.). Red Bull: Red Bull is one of the strongest emerging energy drinks and a largest competitor of Coca-Cola because of its brand value. It is a pioneer to popularize energy drinks to the massive audience. It has large distribution channels and a strong employee base of 11, 865 employed all over the world (Red Bull, 2017). Nescafe: Countries like USA are major coffee drinking nations so Nescafe give immense competition to Coca-Cola in terms of nonalcoholic beverages. Nescafe is a product from brand Nestle. It is among the top most brands selling coffee and breakfast snacks such as Maggie, breakfast cereals etc.It has emerged as one of the strong competitor to the company because of its taste and distribution strategies. Its distribution setup is larger than Coca-Cola because it si sold at the medical shops apart from being sold at the groceries. It has employed around 328,000 all over the world as in 2016 (Nestle, n.d.). Lipton: It is known for its green tea and various flavors of tea. It is one of the top most competitors of Coca Cola especially in the tea drinking countries such as UK, China and India. It operates under its parent company Unilever with a strong employee base of Unilever is 169000 as in 2017. With the raising awareness of the health issues, the people are more inclined towards brands providing healthy drinks such as Lipton (Unilever, 2018). Sustainability of the competitive advantage of Coca-Cola The important factors for competitive success within Coca-Cola have being derived from the SWOT and PESTLE analysis. Their analysis is listed below: Large Distributor base: The Company has large distributor base which is its core competency. Since large distributors have the capability of negotiation thereby making them exclusive supplier for a specific period of time. Also, they have the ability to purchase in bulk, which lowers the cost of sales. It can help the company to hold its market share in the long run (Butler Tischler, 2016). Quality: Quality attributes to two factors viz. the ability of the product to satisfy the wishes and needs of the customers and products which are free from flaws. The personnel working in Coca-Cola is dedicated for working towards highest standards of quality in products, processes and relationships (Boone Kurtz, 2014). Brand image: Establishing a brand loyalty is an important aspect of the beverage industry. Coca Cola has been the largest selling soft drink company and of the most identifiable brands in the world. It is offering 500 brands to its buyers in more than 200 countries. Zero -based work strategy: Due to its Zero -based work strategy , the company was able to realize more than US $600 Million in productivity improvement which was used to invest further in business and also to increase the shareholder returns( The Coca Cola Company, 2016). Recommendations The recommendations for improving the strategies of Coca-Cola for its survival in the long run are as follows: Expansion for the non-carbonated category: The non-carbonated beverage sector is an ever growing dynamic segment of the beverage industry. The company should strategically increase its market share in fast growing segments such as energy drinks and juice- based beverages.Also the company can enter into the healthier drinks segment since the customers are more conscious towards beverages which are not harmful for their health (Gomez,2012). Growth in the emerging market: Russia, China and Brazil are the emerging markets for Coca-Cola. The demand for food and beverages has increased due to the increased economic growth in these countries. Food Safety Issues: The issues related to food and beverage safety are getting intense day by day. Negative publicity related to high levels of pesticides in the beverages can affect the brand value of Coca-Cola. So, the company should adopt appropriate strategies towards its qualitymanagement (Edelstein, 2018). References Anojan, V. Subaskaran, T. (2015). Consumers Preference and Consumers Buying Behavior on Soft Drinks: A Case Study in Northern Province of Sri Lanka. Global Journal ofManagement and Business Research: E Marketing, 15(2). Boone, L.E. Kurtz, D.L. (2014). Contemporary Marketing, Update 2015. Cengage Learning. Butler, D. Tischler, L. (2016). Design to Grow: How Coca-Cola Learned to Combine Scale and Agility (and How You Can Too). Simon and Schuster. Cross, F.B. Miller, R.L.R. (2016). The Legal Environment of Business: Text and Cases. Cengage Learning. Edelstein, S. (2018). Food Science. Jones Bartlett Learning. Gomez, M.B.B. (2012). COCA-COLA: International Business Strategy for Globalization. The Business Management Review, 3(1). Hassan, D.N., Amos, A.A. Abubakar, O.A.(2014). An evaluation of marketing strategies undertaken by Coca Cola Company as a multinational corporation in Nigeria. IOSR Journal of Economics and Finance, 3(2), 5-10. Nestle (n.d.). Nescafe. Retrieved March 4, 2018 from https://www.nestleusa.com/brands/coffee/nescafe Pepsico (n.d.). Performance with Purpose. Retrieved March 4, 2018 from https://www.pepsico.com/About Red Bull (2017). The Company behind the Can. Retrieved March 4, 2018 from https://energydrink-in.redbull.com/the-company Sarich, R., Zaman, R. Misra, C. (2015). Discussion and analysis of the marketing strategy of Coke Zero in the US market. Merici, 1(2015), 45-63. The Coca Cola Company (2016, April 27). Five Strategic Actions. Retrieved March 4, 2018 from https://www.coca-colacompany.com/stories/five-strategic-actions The Coca Cola Company (2018). Who We Are. Retrieved March 4, 2018 from https://www.coca-colacompany.com/careers/who-we-are-infographic Unilever (2018). Lipton. Retrieved March 4, 2018 from https://www.unilever.com/brands/food-and-drink/lipton.html