Coca – cola is among the largest and most popular beverage brand in the world. Coca – Cola was established in Atlanta, Georgia in the year 1886. This brand is ranked among the top non – alcoholic beverage industry along with its marketing strategies, distribution and production of its syrup (Albaum, 2001). The company features many of the brands along with coca – cola such as diet coke, sprite, Fanta, minute maid. This is concluded to be 14 billion dollar revenue.
Coca – cola stands first in the production and the distribution channel in the world. Coca – cola is such a company that has reached over the world. This company came into existence for more than 115 years. The basic aim of the company coca – cola is to upsurge the market share value (Friedman, 1999). This is done by maintaining good relationship with the customer and also with the other people associated with it. Not just this, but the company coca – cola valued the requirements of the customers. The feedback is the most valuable asset that is taken, helps in protecting the assets and hence reduces the risks associated with operating the business.
Coca – cola is a company which owns the rights to Schweppes in name of the Great Britain. The company manufactures the products such as the classic lemonade, bitter lemon, a variety of juices. Manufacturing of the other soft drinks for other brand associated with coca cola such as Capri sun, monster energy drinks, pertiser range of fruit juices. The policy that has been made by coca cola has some of the strategies that the management of the company should follow. Coca cola is focusing upon aiming the national as well as the international market which helps in the growth and development of the company in the overall perspective. This improvement shall lead to a wide range of the markets that includes the political factors and that of the other commitments. The governance is to be incorporated in the international business. Along with this the audit is to be conducted on the environmental policies and the performance of other factors.
The programs along with managing the performance in the international market varies from international market, non-governmental organizations and the overall academics that is providing the counseling to other external stake holders, with their performance and other environmental policies. The economic environment of the business is changing rapidly the business structure and nature of the business since 2005. Coca cola has incorporated the high marketing and other business strategies by various means that is in the way of advertising campaign. This succeeded in year 2006 such that the sale has grown by 35 % rapidly by following this mechanism in such market where the trade has been commenced of coca cola. However in the year 2007 the business strategies such as in the international market has been put into use as a result it has grown the total sales by 39.5% in comparison to the sales of the previous year. Hence, this idea of sales and promotion done in the international market served with more than expected good results, if specifically numbers are analyzed.
In the last year (2007), due to the challenges faced in the international market, the growth in the sale of coca cola was restricted in the United Kingdom as a result the income level of people individually declined. This turned out in such a situation that the people had to suffer because of the non-availability of the jobs in the international market and hence the issue of retrenchment. This has shown about the serious credit crunch to the market of coca cola. Not only was this but the problem of overstocking and decrease in the level of performance and production noticed. In all this credit crunch has shown some severe impact on the portfolio and production strategy that was to be followed in the international market. This has distributed the pull and push strategy of the marketing environment that has resulted into the deterioration of sales by 98.5% when analyzed in comparison to the previous year. However, the issues related to the environment have begun to serve Coca cola with such a good opportunity so that the level of performance has resulted in the appreciation with some 20% net increases in the sales. This is considered to be the period of recovery for the stage of business that has begun in the year 2010. This is the nature of international business in the beverage industry of coca cola. The organizational impact of the external global environment is explained below.
In the business scenario of today, most of the companies are incredulous by the type of changes being done in the external environment. For instance the retail shops of Wal-Mart have faced the threat from the huge discounts. Therefore, there are various organizational factors that impact the external environment can be defined as follows:
The external environment consists of the two areas such as macro and micro environment. The macro environment consists of the uncontrollable and the external factors that have major influence on the decision making of coca cola. PESTEL analysis is a major marketing tool that is used by the researchers and the marketers to analyze and evaluate the external environment of the company. Although the company is considered to be the leading in the beverage industry and still sustain in the competitive advantage (Ball, 2003). The PESTEL analysis is done so that track on competitive strategies can be kept. The factors are explained as below:
These are the factors impacted by the government policies, export import regulations, taxation laws, government intervention, human resource training and development. For the political environment of coca cola the environment remains feasible export and import regulation of the USA, UK and other Asian countries (Bennett & Blythe, (2002). As a result this supports the business for the promotion and development in the international business. The United Kingdom has the support of the governmental as well as the non-governmental association so that they can have the counseling conducted in the right manner.
The economic issues are based on the interest rates, the rate of inflation, foreign exchange rate, economic development this overall impacts the business policy development in an economy. When in an economy the rate of interest is lower the on the bank loans the opportunity on the total investment of the rate of capitalization increases (Cateora & Graham, 2007). The national income of the country can be increased, when the foreign exchange rates are given higher exposure for the exports done from the United Kingdom.
These are the factors that are relating to the changing conditions of the demand and supply of the business that is based on the likes, preferences, habits, opinion of the people that have the impact on the manners, style and fashion. These are such factors that impact the growth of the business directly that is dependent on the potential environmental factors. It is in the hands of the management to build such a policy that could be altered within the time, when other factors changes. As the changes in the habits and other preferences may directly affect the sales turnover of the business. This impact was focused in 2008 with the group of people with lower level of income group.
These are the factors that have the direct impact related to the development of the business. When such technology is improved it has resulted in the higher productivity of the business in the organization. This is done by applying effective marketing strategies and other promotion activities that as a result increase the total level of sales performance of the company. This is done by using an effective, advanced machinery, other equipment and channels of production. Coca cola has experienced the growth of the business through the development in the technology of production in the year 2009.
These are the issues with external environment of the business that can be occurred by the climatic conditions and the temperature conditions in the external factors (Khondker, 2004). This has the direct impact of the business of travel and insurance businesses. The natural calamities like floods, riots and earthquake that ultimately affect the performance level of the business.
The legal issues of coca cola affect the lawful applications. There are consumer laws and other employment laws in UK that plays important role as per the corporate consumer laws that helps in protecting the consumers from defalcations of the sellers. In the early years the minimum wage per hour was £5.73 in UK which has now increased to £5.80 per hour (The Business & Management Review). This has a close impact on the level of performance of the business. This is the impact of the external global environment on the market.
The business has adopted and acknowledged the local culture and diversity along with balancing the need for efficiency, cost effectiveness and customer importance. This is done in the following manner:
To study and analyze the international business and for the success of an organization it is necessary to understand the importance of the role of the culture for the development of the international business strategies. The role of culture, in both the standardized and the localized market the strategies are acknowledged by considering the culture and diversity as an important factor in the international marketing strategy (Kotler, et al., (2009). An organization can have big or small structure but the strategies in it cannot be implemented without following the strategy that is to believe in the mission policy of the organization. Not just this but the ways to achieve and understand the culture of the organization of most important. The CEO of Coca cola has once noted that the culture of the organization is not just one phase of the game, but it is the game (Albaum, 2001).
Culture of the organization is basically an aggregation of the beliefs as well as the mindset of the employees working in coca cola. The manifestation of vision, mission and the principles that fixes the people is equally important. In today’s era of marketing, where the decisions such as acquisition, diversification, merger, sell offs and expansion takes place, understanding and following the local culture is important in strategic decision making is eventually one of the important factor in the organization. Not just this but it supports the efficiency, cost effectiveness and the importance to the customers of coca cola. The local culture to be adopted and practiced in an organization is not an easy task but adopting such culture and diversity in the organization like coca cola helps in development over some period of time (Mcgraw-Hill, 2000). This is many times combined with the active reinforcement and dissemination as the belief of an organization.
This is the basic cultural framework, which has been adapted and acknowledged successfully by coca cola. These are the characteristics of culture in an organization from the perspective of adopting and acknowledging the local culture of the organization.
Coca cola has successfully adopted local culture in the United Kingdom. This resulted in balancing the need of efficiency, cost effectiveness and the customer importance. This mechanism basically works on two things that are simplicity and personalization of the product. Despite of having grown in the global market, coca cola has never lacked behind from being timeless ( Christina, 2008). Adopting the slogans such as “happiness” and “enjoy” has never gone out of the trend and can be translated thorough out the globe easily. This is an important factor by which the local culture has been adapted easily along with balancing the need for customer importance. The next important factor is personalization; coca cola has inculcated excellent ways to speak to the customers in a more personal manner that is the localized level. Initially this was introduced in Australia and now it has grown to 50 more countries. Each of the country has personalized the local culture and diversity with the most popular names of each region that is printed on the bottles and cans in the place of company moniker (Schiffman, (2009). This campaign is an appropriate example of how effectively the local culture has been followed in the global market that balances the customer importance.
Adapting the local culture has helped in the cost effectiveness of Coca cola. The key strategy that has been adapted by coca cola is the GLOCAL strategy (Foglio & Stanevicius, 2007). This is for each unique market, which is global and local. This is done by manufacturing the super quality product that fits the best with the local culture of the product. Not just this but high brand recognition helps in increasing the total revenue of coca cola in the United Kingdom. The company has maximized the local shareholders and the return to it investors by the way of balancing the cost effectiveness whilst adapting the local culture in the organization.
Coca cola enjoys the high scale of the economies and the efficiency that are not highly bound by local culture of the country. The global level of marketing is done. Manufacturing and research results between a global and local products (Holt, Quelch Taylor, (2004). Coca cola aims at the efficiency of the product. It is seen that coca cola does not sell the product but it sells “happiness”. This is the significant part related in balancing the need for efficiency of the product matching its local culture in the particular country. For example coca cola has recently unveiled the new packaging campaign that is considered to be the global policy of the organization (AliRaqi, (2001). That is how the efficiency of the organization has been increased by collaborating with the culture and diversity of the country. That is why the role of culture and diversity is important for the localized marketing strategy.
Conclusion
Hereby it has been concluded that understanding the nature of the organizational impact has been made by the external factors of the global environment that has led the market to perform trade of coca cola. We have found the factor upon which the strategies of coca cola focus that is thinking globally. Localization is the key element that is responsible for the success of coca cola’s international strategy plan. It has been witnessed that coca cola has got succeeded in year 2006 such that the sale has grown by 35 % rapidly by following this mechanism in such market where the trade has been commenced of coca cola. However in the year 2007 the business strategies such as in the international market has been put into use as a result it has grown the total sales by 39.5% in comparison to the sales of the previous year (Quelch, (2003).
Moreover, the effectiveness of the international business has adapted and admired the local culture of the country. Not just this but adapting the local culture of the company is important for balancing the cost effectiveness, the need of efficiency and the customer importance.
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