The mesoeconomic environment of the Coca Cola Company

Coca Cola

No organization exists in a vacuum, but instead, is part of society and culture. This is more extreme in the 21st century due to the process of globalization. Globalization has changed the world of marketing and consumerism. No longer are markets just local, and with the advances in telecommunication and the Internet, customers may be a few miles from the vendor, or a few thousand miles. Organizations have also undergone a change in overall philosophy -- not just moving toward entrepreneurial thought as a way to change their marketing paradigm, but through consumer and corporate expectations of business in a more ethical and sustainable manner. While this is true, and there is even a philosophical paradigm called Corporate Social Responsibility, there has been a reason for the evolution of this change in viewpoint, really beginning in the post-World War II world. The entire premise of globalism, though, teaches us about the consequences to the global environment (not just physical, but social and political) that actions have regardless of where and who makes them. These consequences go far beyond the obvious -- individual environmental impact in a certain area; and move much further into the food chain for both the underdeveloped area and the macro-environment (Schwerin).

For companies like Coca Cola, that have a world brand and ship to almost every country in the world through regional bottling processes, this is particularly true. Natural disasters, inflation, trade balance, and unemployment all factor into the manner in which Coke operates. On a more positive note, though, the company has been in business for so long and has such an iconic brand that it is relatively immune in many ways to global recessions, etc. Coca-Cola produced a study in 2011/2012 looking at the impact of several global economic issues as a way to help understand their business model and macroeconomic issues globally. There are a number of indicators acknowledged by the company. Below are some highlights based on Coke's Strategic Initiatives:

1. Global water sustainability is important from a CSR (Corporate Social Responsibility) paradigm as well as a water use issue within the developing world. Stakeholders of all types find this initiative important and part of viewing the entire globe as an important part of the organization. In fact, the 2011 savings, even with increases sales, amounted to 7B liters of water (thus that 7B liters of savings is enough for the annual consumption of basic water for drinking for 1 million individuals:

2011

2010

2009

Water use efficiency, liters of water used per liter of product

2.16

2.26

2.37

Total liters of water used

293B

294B

300B

% of Coke's system plants in compliance withwaterwater treatment standards

96%

93%

89%

Number of community water partnerships

Countries where projects exist

94

86

70

% of water replenished by Coke based on total water used

35%

33%

22%

(Coca-Cola, 2013).

2. Within the global community, organizations like Coca-Cola are particularly relevant when dealing with global salaries and benefits, shareowner dividends, local capital expenditures and income taxes. All these move back into the community to provide a more robust local economy. When this is combined with chartable contributions one sees how over the course of time, this has an extremely important impact on not only local managers, but stakeholders in general:

2009

2008

2007

2006

2005

Impact in Wages, dividends, goods, etc.

$23.4 B

$22.8B

$21.2B

$17.4B

$16.6B

Charitable contributions

$88M

$82M