Coca-Cola Company

Coca-Cola Company

Currently, Coca-Cola is one of the most famous brands across the world. Since its inception, the company has enjoyed the endless growth by exploiting the rapidly expanding beverage industry. This endless growth is behind Coca-Cola being not only the leading but also the largest beverage company in the whole world. Therefore, Coca-Cola Company can be without doubts be argued to be one of the multibillion-dollar business (Foster, 2015). In regards to the concept of the global share, Coca-Cola is currently operating in more than 200 countries and boast of more than 84,000 suppliers. Though the Coca-Cola is a united state of American based company, the majority of its business income that is over 70% are generated from the outside America (Aliber, 2008). In this paper, Coca-Cola Company will be covered and the manner in which the environmental forces influence its behavior.
Coca-Cola global business environment
Any organization that operates either domestically or internationally should be very careful when scrutinizing the possible environmental factors that can affect them. The Coca-Cola Company, in particular, has numerous environmental factors that are affecting its decisions and behaviors as far as the global marketing is concerned. These environmental factors include sociocultural forces, legal forces, natural resources, political forces, financial forces, trade forces, and environmental sustainability (Foster, 2015). In regards to the sociocultural forces, Coca-Cola Company has experienced a great impact.

One country that Coca-Cola Company has been impacted by the sociocultural forces is India. As a result, Coca-Cola Company has experienced a remarkable competition with the other refreshment drinks. It implies that the Coca-Cola Company has failed to capture the Indian market. This is because they failed to appreciate the culture of the Indians as far as their consuming behavior is concerned. Using Indians as an example, Coca-Cola Company ought to have appreciated the cultures of the region by acknowledging their consumption behaviors and linking their products to such cultures (Elmore, 2013).
The natural resource is another force that has greatly impacted the behavior of the Coca-Cola Company. The ever increasing scarcity of the natural resources has forced the company to appreciate the value of the natural resources when making business decisions. Therefore, the Coca-Cola Company is increasingly evaluating and protecting the natural capital. As a result, the company has decided to work with other organizations such as The Nature Conservancy (TNC) together with the iconic World Life Fund with the aim of conserving the natural resources such as water. Though this strategy has worked considerably well, the company ought to adopt a holistic approach towards the preservation of the natural resources (Stopford, 2011).
Political forces have also affected the behavior of the Coca-Cola Company. The company has engaged in politics indirectly in the countries that they are operating. They have engaged in politics as one of the ways of lobbying for their views to be heard. The company has participated in the political activities by engaging in the political contributions to the political candidates. However, the main factor that the company considers when considering the candidate to support is that the candidate must have the values that are consistent with those of the company as far as the core business issues are concerned. The company has indeed benefited from this strategy. However, they can benefit more if their views are represented both in the government and opposition in the countries where they operate (Elmore, 2013).
Environmental sustainability has also impacted the behavior of the Coca-Cola Company. Because of the desire of the Coca-Cola Company to comply with the requirements of the environmental sustainability, the company has decided to undertake and follow all the policies and norms that relate to the environmental aspects in all the countries that they operate. As the efforts of observing environmental sustainability exercises, the company is currently recycling plastics as the packaging materials. Moreover, the company has also embarked in the water recycling exercises in all of their plants. Besides, the company has also planted thousands of trees across the globe as a way of saving water. It is worth noting that Coca-Cola is a nonalcoholic beverage manufacturer that need large quantities of water. Therefore, the company ought to perfect water recycling and harvesting as a way of water conservation (Elmore, 2013).
As for legal forces, the Coca-Cola Company has been adhering to the rules and regulations of the Food Safety Act both in America as well as in various countries where they operate. Apart from the Safety Food Act, the company is also adhering to the Federal Trade Act as well as the Cosmetic Act, and environmental act. In addition, the company is also observing other regulations that are related to the sales, advertisement, and promotion. The financial forces of the Coca-Cola Company have shaped the overall growth of the company (Elmore, 2013).
On the other side, the financial position of the company has always been dependent on the economic performance of the countries where they operate. Therefore, the economic variables that have greatly impacted the behavior of the Coca-Cola Company in the countries where they operate include interest rates, currency exchange rates, and the inflation rates (Elmore, 2013). As a result, these financial indicators have helped Coca-Cola to decide on the extent of their investments in the countries where they invest. However, the company should not only focus on the financial indicators to dictate on the extent of their investment in a region rather overall viability of the region (Stopford, 2011).
The international business foundation of the Coca-Cola Company
The Coca-Cola Company has its presence felt on the global front. From the early years of the 1920s, Coca-Cola Company has been actively building its global network. Currently, the company is operating in more than 200 countries by producing more than 450 brands in those countries. The secret behind the company success on the global front is very simple. They only provide a moment of refreshment at an affordable price on a daily basis (Foster, 2015). Everywhere you go, there must be at least a Coca-Cola product be it Coca-Cola, Sprite, Fanta, Diet Coke, Dasani and many more products. Therefore, it is understandable that the company for more than 125 years has been creating pleasurable moments for millions of the thirsty consumers across the world on a daily basis (Aliber, 2008).
Apart from its numerous products, the Coca-Cola Company through their global Foundation, the Coca-Cola Foundation as well as the local and regional foundations is reaching the global society with the aim of improving their wellbeing. Besides, working directly with the consumers around the world, Coca-Cola Company is also collaborating with both the governments together with other nongovernmental organizations not only to create but support key projects that are most crucial for the societies. Most of the projects that are commonly undertaken by the company include educational projects, environmental conservation programs, community recycling programs, and fitness and active lifestyle programs for the rest (Foster, 2015).
The Coca-Cola international strategy
The international strategy that is used by the Coca-Cola Company is called international differentiation strategy. Differentiation strategy is a marketing technique that involves the establishment of a strong product identity by the manufacturer. It can also be called a segmentation strategy. Through this strategy, the Coca-Cola Company introduced varieties of the product under the same umbrella of the Coca-Cola brand (Njonjo, 2015). For example, Coca-Cola Company has managed to produce sodas of various varieties that are targeting different market segments with the aim of establishing Coca-Cola as the main soda manufacturer. The success that the Coca-Cola Company experienced using this strategy can be attributed from the fact that they focused on two basic aspects that are branding and cost leadership. Under branding, the company has embarked on rigorous advertisements with the objective of achieving the following: clear message delivery, connecting with the target market emotionally, buyer motivation, the establishment of the loyalty of the buyers, and the establishment of the credibility of the company (Foster, 2015).
Apart from fostering branding as one of the aspects of the differentiation strategy, Coca-Cola as also embarked on cost leadership strategy. Under this strategy, Coca-Cola Company has always focused on becoming the lowest cost producers in all the countries that they operate. As a result, Coca Cola’s products have always remained affordable both locally in the United States of America and abroad. Through the differentiation strategy, Coca-Cola has managed to establish itself as a patriotic image in the countries where it operates (Njonjo, 2015).
Coca-Cola management strategies
The success of the Coca-Cola is without doubt as a result of the well stipulated and implemented management strategies. These strategies can be narrowed down to two types such as integration strategies together with the product and market development. As for the integration strategy, Coca-Cola is employing forward vertical integration as a way of reaching their consumers. Forward vertical management involves expansion of the activities that are geared towards controlling distribution of the products in a single direction (Wang, 2015).
The Coca-Cola Company has greatly benefited from this management strategy because they have managed to experience a steady flow of cash with very little maintenance. Moreover, from this strategy, Coca-Cola Company has integrated with thousands of suppliers and managed to integrate both bottling and marketing. Product and Market Development strategy of the Coca-Cola is the second part of this strategy (Aliber, 2008).
The brand development is the main product and the market development strategy that the Coca-Cola Company has undertaken. Using the brand development, the company has managed to remain relevant for such a long period since its inception. The main method that the Coca-Cola Company has used to develop its brand is by fostering brand loyalty (Wang, 2015). As an effort to remain relevant in the market, Coca-Cola Company decided to redesign its brand development policies. Previously, the company’s brand development strategy focused on three key areas that include affordability, acceptability, and availability. However, the new strategy has focused on the three aspects such as preference, price value, and persuasive penetration. On the other hand, the company has centralized its finances where every region is required to submit their financial forecast plan at the end of each year to the head offices. The submitted financial forecasts are always used as a financial forecast for the year that follows (Wang, 2015).
Ethical issues surrounding the Coca-Cola Company
The accommodative social responsibility stance that the Coca-Cola Company has taken in regards to the retirement compensation is proving to be unethical. Moreover, it has been established that the company is less concerned with the ethical issues of equality when it comes to the retirement compensation for its workers (Stopford, 2011). It is worth noting that the company only exercises adequate funding of its executive retirement compensation as opposed to the other lower level employees. Sadly, both the boards and the top managements are aware of this vice yet they have not shown a meaningful commitment to bring an end to it. Though this is an isolated case, Coca-Cola Company has proved to exhibit Christian values in both local and the international front. They have done this by being compassionate through the Coca-Cola Foundation. The foundation is the main company’s international philanthropic arm where the less fortunate in the global society receive assistance (Stopford, 2011).
References
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Elmore, B. J. (2013). Citizen Coke: An Environmental and Political Strategies of the Coca-Cola
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Foster, R. J. (2015). Globalizing Coca-Cola. Coca-Globalization, 5(4), 33-73.
Njonjo, P. (2015). Coca-Cola: A Multinational’s Perspective. Journal of Management, 1(4), 396
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Stopford, M. (2011). Reputation Management at Coca-Cola and Beyond. Reputation
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Wang, M. (2015). Brief Analysis of Management Strategy Adopted by Coca-Cola Company.
Asian Social Science, 11(23), 21-42.