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Coca Cola Company
The organization of choice for this paper is the Coca-Cola Company that is operating in beverage industry for more than a century principally manufacturing, distributing, and marketing nonalcoholic beverages globally. It mainly offers sparkling and still beverages. The Coca-Cola Company is a USA-based company, headquartered in Atlanta, Georgia and founded in 1886.
Amongst the market leaders in the beverage industry, Coca-Cola Company fights to remain on the top. Keeping up its reputation and serving the masses throughout the globe since the past many decades the company continuously adapts its product and process in order to satisfy the customers to the maximum possible extent. This research paper analyses the organization using the PESTEL analysis and SWOT along with an analysis of the information needs of the organization and how a customer relation management system (CRM) can be integrated into this giant beverage firm that has ruled the beverage market for a long time. The analysis begins with a review of the company mission statement and its goals and objectives which provides a fairly good insight on the working of the company.
The dynamic business environment calls for a fairly innovative business that is easily adaptable to change. However there are certain core ideals that remain constant and continue to provide guidance in the strategic decision making process (Coca Cola Company, n.d). The core values and purpose of the firm to which it remains committed is expressed in its mission statement. The Coca Cola Company has developed a mission statement that follows this essential guideline and addresses the various stake holders of the organization. The mission statement of Coca Cola declares the purpose of the company and is a measure against which actions and decisions are weighed. Coca Cola's mission statement embraces the idea that the company seeks to "create value and make a difference, to refresh the world and to inspire moments of optimism and happiness" for their stakeholders. The Company's mission statement is based on bringing to the world a portfolio of quality beverage brands that can anticipate and satisfy people's desires and needs.
The goals of the organization describe the milestones that they wish to achieve in the nearby future. The Coca Cola Company defines its goals and objectives as:
People: to instill a winning culture within the organization.
Portfolio: creating a product portfolio that ensures customer satisfaction
Partners: collaborating with customers and suppliers to create mutual and long- lasting value.
Planet: build a sustainable environment by producing more environmental friendly products
Profit: provide maximum possible return to the shareholders keeping in mind the responsibilities of other stakeholders as well.
Productivity: responding to the market needs by being a highly effectual, lean and energetic organization
The mission statement of the company effectively sums up the goals of the organization. The statement "create value" can serve as a guideline for various stakeholders. It could mean create value for the shareholders by providing maximum return or to its employees by creating a work culture that is innovative and aspiring or for customers by bringing products in market that enhances customer satisfaction. " Make a difference" can be used to indicate the difference it makes to its customers by ensuring their needs are satisfied or to the difference it is making to the environment by taking steps that ensure the planets sustainability.
External Environment Analysis:
Every business must face a number of uncontrollable external environmental factors in its day-to-day operations (Cola Wars Continue, 1997). These factors not only influence the main internal functions of the business but also the impact the objectives of the business and its core competitive strategies. A PESTEL analysis can be conducted in order to scan the external macro-environment in which Coca Cola is currently operating:
Political and Legal Factors:
Given the very fact that company is operating in the consumer food industry it is not surprising that they are subject to many rules and regulations by the government and the "watch dogs" regarding the quality of the product and the ingredients used. Moreover any changes in laws and regulations including changes in accounting standards and taxation requirements could result in increased compliance costs. Coca Cola Company has also faced intense pressure from the scientific community for the FDA to research the influence of caffeine consumption and to enforce caffeine label warning on the hazards of caffeine intake. Furthermore, the international expansion of the beverage giant has been accompanied by obstacles in global operations including political instability, regulations, price controls, advertising restrictions, foreign exchange controls and lack of infrastructure. For example Coca Cola Company left India after the introduction of "Liberalization policy." Following the trend for healthy food consumption in the United States a number of regulation have been imposed on the company. The impact of such legal issues on the organizations is that they curtail the speed within which the organizations can proceed and adhering to rules and regulations also mean that huge cost needs to be incurred in order to develop and maintain a positive image of the organization.
Social and Environmental factors:
As consumers have started adopting healthier lifestyle practices they are shifting their preferences from carbonated soft drinks (CSD) to diet soda, lemon-line, tea-based drinks and to other popular non-carbonated beverages. This has serious consequences for coca cola Company whose 77% of the products are classified as carbonated soft drinks. This has resulted in the product range being highly elastic to changes in CSD. Coca cola has responded to this by introducing a cola that contains much less sugar and caffeine. A dilemma for Coca Cola Company would be the task of balancing the risk of new innovations with the low growth rates of its established products.
While reviewing the economic factors that might impact Coca-Cola company there is a chance that Coca-Cola's company might have direct and indirect affect in the prices with the variation in the production cost of the bottlers. As Coca-Cola is a multinational company earning more than 75% of its operating income from outside USA it is severely affected by the relative strength of the U.S. Dollar (USD) as a strengthening dollar would result in a negative effect on the company's earnings. The company also faces severe competition from other beverage giants such as PEPSI CO and therefore its ability to gain market share is restricted by the actions of its competitors (Coke vs. Pepsi, n.d).
As the technology has advanced over the last few years Coca Cola Company has been able to use it to its advantage. The company has been more effectively able to advertise its product through various media channels that are now available. The introduction of better and faster machinery has enhanced Coca Cola Company's operations and has enabled it deliver top product quality and speed. Technological advances have made it possible to launch can and plastic bottles that have resulted in increased sales (Hayes, n.d.).
A SWOT analysis of the company is conducted in order to identify a fit between the company's internal resources (strengths and weaknesses) and its external situation (opportunities and threats) and their by create a sustainable competitive advantage.
Coca-Cola is the world's most valuable brand that facilitates customer recall and market penetration.
It has global coverage in more than 200 countries earning more than seventy percent of the revenue from outside USA
It is the dominant market leader of the 20th century
It has a widespread distribution and production facility for non-alcoholic beverages and related products along with heavy advertisement that attracts customers
The company has a staggering market capitalization of 160.13B and quarterly revenue growth of 46.80% accompanied by gross margin of 61.76%
There is a lack of diversification of product line
It has a high financial gearing ratio and thus high financial risk that could result in loss of investor confidence.
The company has an inability to responds quickly to changes in consumer demand
It has adopted a less aggressive marketing approach in the dynamic business environment.
There is an increase in health conscious customers and thus in the demand for non-carbonated drinks
Bottled water drinking has increased by eleven percent (Label Caffeine Content of Foods, 1997).
Joint ventures with fast food restaurants could be established to gain a competitive edge.
The company could diversify into new complementary product lines.
Coca Cola should focus on emerging market economies and thereby increase its global market share.
Coca Cola faces severe competition from PEPSI CO with its diversified product range and aggressive marketing strategy.
There is a highly elastic demand for non-carbonated drinks due to emergence of healthier trends.
Increase in cost, disruption of supply or shortage of raw materials could harm business operations.
Any changes in laws and regulations relating to beverage containers and packaging could increase costs and reduce demand for the company's products.
Any changes in accounting standards and taxation requirements could affect financial results.
Key performance indicators and Information needs of the organization:
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