This paper uses Coca-Cola Company as the case study to explain more about the external and internal environments in business. The Coca-Cola Company was founded in the year 1886. It operates its business in more than 200 nations and has more than 2,700 beverage products. Its products comprise of, sparkling beverages, like waters, juice drinks, sports drinks, teas and energy drinks. It also produces four of the top nonalcoholic beverages. They include coco-cola, Fanta, diet coke and sprite (Regassa, & Corradino, 2011).
The coca cola market analysis The market analysis is responsible for monitoring the company’s both external and internal environment. Coco cola uses this strategy to watch both external and internal factors in regard to its business. This due to the reason that this factors contribute or influence a lot to its achievement and making it remain as the best soft drink industry (Njanja, Ogutu, & Pellisier, 2012). Internal Business Setting The internal business setting and its effects is what is contained within the company’s management.
The essential internal environments that Coca-Cola ensures are put in place include effectiveness in the production procedure, proper organization skills and effective communication networks. To effectively monitor and manage its internal environment, coke conducts assessments of it is operations and responds appropriately to any aspect, which is likely to cause ineffectiveness in any section of the consumer and production procedure (Njanja, Ogutu, & Pellisier, 2012). External Business Environments They are also termed as outer business environment.
The external business environments are more powerful than internal business environment factors. They can affect the entire company and even the entire economy. Coca-Cola is aware that alterations in the external settings can create achievements or threats in its market place. Some of the keenly monitored external business environmental aspects comprise of, customer attitudes, instabilities in the economy and demographic patterns. This can affect the reception given from the customers. Segmentation of the environment
Coca-Cola establishes the segmentation requirements and the people that are most likely to undergo that requirement. Its segmentation is determined by a comparison between the advantages given by their benefits and the requirement of the outlook. Some of the two segments in Coca-Cola that give them the highest influence comprise of: 1. Reduction in expenses by improving productivity, cash flow and manufacturing quality. Coca-Cola has outlooks that monitors economizing and production of mature products at the best time of their life cycles to reduce credit rating problems.
On the other hand, coca cola has prospects that ensures conventionally low profit margins, conventionally high inventory costs and targets individuals that reside in expensive areas. Moreover, it has measures to ensure multi- discipline manufacturing procedures (Njanja, Ogutu, & Pellisier, 2012). 2. Supporting physical activities and sports. Internationally, the Coca-Cola Corporation has a long record of associating itself with sport and activity. It has been the main Olympic Games supporter since 1928 and it on the other hand, engages itself in sponsoring of international sporting events like football.
It sponsored the FIFA world cup that was held in South Africa. It also sponsors majority of the New Zealand events like rugby and netball. At grass root level, it has formed partnership with various non-governmental organizations around the world to nature the talents of students. An example is its sponsoring of Out of School Care and Recreation based in New Zealand. This has made it to increase its familiarity to the public worldwide than any other company. Very few companies involve themselves in sponsoring sporting events, therefore, Coca-Cola uses this strategy to beat them and win the trust of the consumers.
If Coca-Cola continues to engage itself in sponsoring of sporting activities, then it will continue dominating the world in beverage production and consumption. This is due to the reason that, many people around the world use sporting activities like football and athletics as a source of entertainment. Therefore, this remains the best platform of advertising as it has many viewers than any other platform. Threats and opportunities in the Coca-Cola Company The Coca-Cola Corporation uses the SWOT analysis technique to monitor its threats and opportunities.
This has made it remain a complex part of realm culture for a long time. Their products appearance are loaded with over-romanticizing, which attracts a lot of people. Furthermore, its appearances are displayed in T-shirts and hats which make it memorable. This remains one of Coca-Cola’s utmost strength (Sceulovs, & Gaile-Sarkane, 2011). Opportunities Product recognition is the foremost issue affecting Coca-Cola’s competitive position. Its trademark name is recognized well by about 94% of the world’s population at the moment.
The core concern over the past years has been to make its trademark to be better recognized by its consumers or customers. The variation in packaging has on the other hand; affected sales and the company’s positioning, however, a great number of the consumers have not been affected by innovative products. Additionally, its bottling organization also permits it to take advantage of countless emerging opportunities around the globe. This scheme grants Coca-Cola the opportunity to facilitate a large environmental, diverse region.
Threats Presently, the threat of upcoming competitors in the beverage industry is not such extensive. The threat of replacement remains the only big threat. The soft drink business is such strong; however, customers are not essentially married to it. Probable replacements that endlessly put pressure on coke and Pepsi comprise of, coffee, milk, chocolates and tea. Despite coke and Pepsi dominating about 40% of the whole beverage market, the varying health awareness of the market is likely to cause a serious threat.
Though, Pepsi and coke have expanded into these markets, permitting them to contain further vital market shares and counterbalance any losses experienced as a result of fluctuations in the market (Sceulovs, & Gaile-Sarkane, 2011). The competition amid coke and Pepsi has led to an extremely dawdling moving company where the management has to always react to the varying attitudes and requirement from their customers or run a risk of losing the market segment to the competitors.
The biggest threat of all being losing consumes because they may change to other beverages that have little cost and health effect. However, threats can be escaped by minimizing and monitoring the weaknesses. This assists in achieving productivity and effectiveness in the company’s activity. Even if, Coca-Cola’s domestic business and a lot of its international markets are blooming most of them being in Latin America, it has lately reported some reduction in unit case volumes in Thailand and Indonesia as a result of decrease in customer purchasing power (Sceulovs, & Gaile-Sarkane, 2011).
Some of the forces business and how coca cola has managed to remain strong The beverage drink business is extremely profitable for the company which produces the concentrate like Coca-Cola. This is due to the reason that the product sold is not complex to produce. There are many forces behind thriving in this business. 1. Barriers to Entry: The competitors face a difficult in entering the soft drink or beverage market because of, bottling network. Pepsi and coke have authorized business contracts with their prevailing bottlers who have the authority in specific environmental regions in permanence.
These contracts outlaw bottler’s from undertaking new rivaling brands for equivalent products. Moreover, with the current union among the bottler’ plus the backward incorporation with pepsin and coke purchasing significant portion of constructing companies, it is extremely hard for a company to enter and get bottler’s ready to distribute their produce. Therefore, the choice that is only left for them is to build their own bottling plants, which could be extremely expensive, and capital intensive with construction of a new plant going for more than $ 75 million.
