Challenges in the Global Business Environment of Beverage Industry: The of Coca-Cola - Case Study Example

Challenges in the Global Business Environment of the Name of the University: Date: Contents Introduction 3 Beverage Industry (Coca-Cola): Introduction 3 Coca-Cola: Key Issues Critical for Success 4 Coca-Cola: Code of Ethical Conduct 4 Pepsico and Apple & Eve 5 Key Issues Addressed by Pepsico and Apple & Eve 6 Techniques used by Coca-Cola 7 Approaches to Embrace Technological Advancement 7 Challenges faced by Coca-Cola 8 Lobbying Strategy used by Coca-Cola 8 Global Corporate Citizenship Effort 8 Conclusion 9 References 10 Introduction In the international business environment, managers faces different types of challenges and the most critical one is to deal with the ethical issues. The ethical issues exist in all the functional and operational business areas: marketing, operations/production, accounting, management and finance. These issues include plant safety, product safety, advertising practices, business practices, environmental problems, and management of human resources, (Carroll & Buchholtz, 2008). The challenges which the international business environment is facing are the unethical business practices, stiff competition and failure of technology advancement. In few countries, for example in United States the unethical practice is offering bribery to officials and this is considered as highly unacceptable (Bruner et al, 2003). This paper will focus on the challenges faced by the Coca-Cola Company and how the company has eliminated it by using the code of ethical conduct and appropriate strategies. Beverage Industry (Coca-Cola): Introduction The US beverage business is a multifaceted and global combination of various businesses which supply a large amount of energy drinks that is consumed by world population. It includes local, regional and international regulations for the production and sale of soft drinks and other energy drinks, including their quality and safety, advertising and marketing, and business lobbying activities. The US beverage business comprises of soft drinks, sport drinks, juice drinks and energy drinks. The target group is young adults, teenagers and people between the ages of 18-34 years. The company chosen is Coca-Cola which was formed by Dr. John Stith Pemberton and today it is considered as the number one beverage corporation in the entire world. It is the most renowned brand in the world with almost 500 brands and above than 1.6 billion (bn) products are sold to consumers each day in further than 190 countries. It offers variety of nonalcoholic beverages such as light and diet soft drinks, juice drinks, waters, coffees, teas, and sports and energy drinks. To maintain sustainable growth, it was the first company in the US to go global (Lussier, 2011). Other than diet coke and coca-cola, it also sells other commercial brands such as Minute Maid, Dasani water and PowerAde (Ferrell et al, 2009). Coca-Cola: Key Issues Critical for Success The key issues which are critical for success of the Coca-Cola Company are: to capture the sustainable expansion with exact focus on rising global markets in country such as Russia, India, Brazil, and China; to execute innovation enabled approaches; and creating worldwide knowledge centers. Apart from these, the other issues are carrying environmental sustainability promise, ensuring responsible and prudent financial management, following law, order and regulations, brand marketing, people development and franchise leadership (Liebowwitz, 2011). Coca-Cola: Code of Ethical Conduct The code of ethical conduct followed by Coca-Cola Company is as follows: It is mandatory for the employees to pursue the law anywhere they are in the world. Employees must stay away from disagreement of interest. Financial records i.e. the internal transactions as well as external operations must be accurate and timely. Company assets such as computers, work time and materials should not be utilized for personal gain. Suppliers and manufacturers ought to be dealt fairly. Employees should never try to bribe government official. Employees should safeguard the nonpublic information of company. Breaching the code of conduct also includes inviting other workers to violate or breach the code (Francesco & Gold, 2008). Pepsico and Apple & Eve PepsiCo Company is leading the world in line of foods, beverages and snacks since 2011. It was the largest beverage company in the North America and the 2nd largest in world with twenty two one billion dollar of brands. It is positioning itself in terms of sustainable growth (Balakrishnan et al, 2013). Apple & Eve is the largest autonomously owned juice business in the US but it outsources nearly everything its business does. It is due to the reason that the core function of the company is to satisfy the need of people, rather to make the juice. The idea of the company is to provide healthier and natural beverages to people. The company is best in its marketing and selling strategy (Sanker, 2011). Apple & Eve’s Code of Conduct: The Company complies with every rules and regulation where they manufacture their products and also made it compulsory for all manufacturers, vendors, suppliers, business partners and workers to obey every rule in the country they operate. The workers must never try to bribe government official and should safeguard the nonpublic information of the company. The Financial records must be accurate. PepsiCo’s Code of Conduct: The Company is committed towards protecting the natural resources by the help of science as well as innovation. It is partnering with environmental organizations, scientists and local farmers to know how they can make their products in most accountable and ecologically responsive way. Therefore they are encouraging energy use plans and recycling that promotes water and clean air and lessens landfill (Sims, 2003). It emphasizes that the financial records must be correct. It also makes compulsory for the employees to follow the law and order anywhere they are in the world. Comparison between PepsiCo and Apple & Eve: On the basis of the key issues which are critical for the success of Coca-Cola Company it is revealed that these two companies also follows the ethical code of conduct which is common in both of them. However, they also differ in some points. Both the companies follow law and regulation; as well as best in the marketing and selling practice; and keep good track of financial records which is very essential for the company success. However, Apple & Eve does not carry environmental sustainability promise whereas PepsiCo carries it. Key Issues Addressed by Pepsico and Apple & Eve PepsiCo as well as Apple & Eve, both have successfully addressed some of the key issues such as carrying environmental sustainability promise, ensuring responsible and prudent financial management, following law, order and regulations. PepsiCo is also the 2nd largest beverage company in the world after Coca-Cola. The positive outcomes for PepsiCo Company are that it is extending its global portfolio, profitably growing and expanding its nutrition business. Apple & Eve’s positive outcomes are that it is considered as best in its marketing and selling strategy and also growing its business. Recently it has successfully purchased “The Switch Beverage Company” which is also a juice making company. Techniques used by Coca-Cola The techniques used by the company in order to manage environmental issue are to promote the assortment of old PET bottles through awareness programmes, and the company will also offer good prices for their bottles; and the second method was to conduct its operation in such a way that would preserve and also protect the environment. They made compulsory for its suppliers to follow all the environmental laws and regulations anywhere they are carrying their operations in the world (Fernando, 2009). Approaches to Embrace Technological Advancement “Innovate for the Future” is the strategic plan of Coca-Cola (Cokecce, 2014). It has adopted various technological advancement approaches in order to improve its business offerings. The company has launched greener bottles & packaging thereby producing their products with less petroleum. This approach has been so booming that Heinz also adopted this technology of greener packaging. Another approach was freestyle dispenser which allows the company to create its own beverage through choosing from more than hundred drinks in different combinations. The company has also adopted social networking and online advertising method. Challenges faced by Coca-Cola The main challenges faced by Coca-Cola are: to minimize the ecological impacts of sugar and aluminium production, to lower down the higher price of recycling, and to reduce the demand of business on the water supplies. It should also manage the carbon emission of its product in its distribution channel because the liquid products were comparatively heavy and transported for long distance. In order to minimize the challenges the company is following environment safety as well as health rules. Its policy is to conserve fuel, water and energy resources while reducing the wastage (Fernando, 2009). Lobbying Strategy used by Coca-Cola Coca-Cola has been adopting lobbying strategy in order to block the bans of government on their product so that they can maintain a good public relation. It is said that the company is making use of controversial chemical called “Bisphenol A” in linings of the metal cans. They are adopting “using fear strategy” in order to discourage people from selecting Bisphenol A-free packaging product. It means that they are giving choice to people that whether they want more costly product which is frozen/ice-covered or fresh products or foods which is packed in cans. Moreover, they are convincing the government that “Bisphenol A” will not have a bad affect on the health of people (Ewg, 2009). Global Corporate Citizenship Effort The global Corporate Citizenship Efforts used by Coca-Cola are rainwater harvesting, sustainable packaging/wrapping and recycling, reinstating groundwater resources, campaign of “live positively” and helping the communities. The “live positively” operation states that the company delivers quality product which do not have any side effects, to their customers. The “rainwater harvesting” plan was initiated to offer better life for children. This project creates awareness on new green method that will represent the community members towards green business. The rainwater gathered could make a significant contribution towards the accessibility of water used for drinking purpose. The company is trying to portray an image of “environment friendly” and “green” in order to achieve the goal of carrying its environmental sustainability promise (Gwp, 2012). Conclusion This paper lays stress on the key issues and code of ethical conduct of the Coca-Cola Company necessary for its success. Further, it has also explained the techniques and approaches used by Coca-Cola to manage its environmental issues; technological advancement technique to improve its business offerings; lobbying strategy to influence government decision in its favor and global corporate citizenship effort to portray its image of environment friendly. Moreover, it has also addressed the key issues and code of ethical conduct of PepsiCo and Apple & Eve Company. References Balakrishnan, M.S. Michael, I. Birkelund, G.E. & Moonesar, I.A. (2013). Actions and Insight: East Meets West. United Kingdom: Emerland Group Publishing. Bruner, R.F., Eaker, M.R., Freeman, R.D., Spekman, R.E., Teisberg, E.O. & Venkataraman, S. (2003). The Portable MBA. New Jersey: John Wiley & Sons. Carroll, A., & Buchholtz, A. (2008). Business and Society: Ethics and Stakeholder Management. United States of America: Cengage Learning. Cokecce., 2014. Coca-Cola Enterprises. Retrieved from https://www.cokecce.com/corporate-responsibility-sustainability/innovation. Ewg., 2009. Coca-Cola’s Non-Answer on BPA. Retrieved from http://www.ewg.org/kid-safe-chemicals-act-blog/2009/06/coca-cola%E2%80%99s-non-answer-on-bpa/ Fernando, A.C. (2009). Business Ethics: An Indian Perspective. New Delhi: Pearson Education India. Ferrell, O.C., Fraedrich, J., & Ferrell. (2009). Business Ethics 2009 Update: Ethical Decision Making and Cases. United States of America: Cengage Learning. Francesco, A.M., & Gold, B.A. (2008). International Organizational Behaviour. New Delhi: Pearson Prentice Hall. Gwp., 2014. Coca-Cola Funds Rainwater Harvesting in the Mediterranean. Retrieved from http://www.gwp.org/en/gwp-in-action/Mediterranean/News-and-Activities-GWP-Mediterranean/Coca-Cola-Funds-Rainwater-Harvesting-in-the-Mediterranean/ Liebowwitz, J. (2011). Beyond Knowledge Management: What Every Leader Should Know. Florida: CRC Press. Lussier, R. (2011). Management Fundamentals: Concepts, Applications, Skill Development. United States of America: Cengage Learning. Sanker, D. (2011). Collaborate: The Art of We. United States of America: John Wiley & Sons. Sims, R.R. (2003). Ethics and Corporate Social Responsibility: Why Giants Fall. United States of America: Greenwood Publishing Group. Read More