External and Internal Environments - Example

Running head: external and internal environments 4th May External and Internal Environments Choose the two segments of the general environment that would rank highest in their influence on the corporation you chose. Assess how these segments affect the corporation you chose and the industry in which it operates. Political and legal segment Coca Cola Company is known as a global leader in soft drink production and high sales which have made the company to expand globally. Rules and regulations concerning the soft drink are strictly observed. For example the amount of caffeine and carbon that the brands are expected to have as directed by the government. The company is situated in United States but it does not operate in Cuba and North Korea due to legal trade affairs which the company must abide to. Technological segment The company brands are well known globally due to the usage of social media like Facebook and YouTube which are used as advertising tools since the consumers must be aware about the different brands in the market. Technology is a tool that is used by the company to make its consumers aware of the brands thus helping the company to make a lot of sales in different countries. Through the use of social media the company is able to advertise the brands making it more efficient and effectively reach the consumers in different countries though the method is expensive. Being an expensive method of advertising the competitors still use the same method but due to creativity and innovation, Coca Cola Company is able to certify the consumer wants. This is achieved through production of different brands in the market which make it impossible for the competitor to imitate. Considering the five forces of competition, choose the two that you estimate are the most significant for the corporation you choose. Evaluate how well the company has addressed these two forces in the recent past. Industry rivalry In soft drink production Coca Cola Company and Pepsi do play a major role in market share with other few competitors in the market. The other competitors hold very small market share making the two companies to remain high in the market. To remain in the market as the best producer of soft drink, Coca Cola Company has been using various advertising tools so in order to outdo its competitors (Terry, 2005). The company does not consider the price sector and this makes Coca Cola Company to gain market share thus making the industry rivalry to be lowered. Threats of new entrants Though Coca Cola Company is known as best producer of soft drinks in the market that meets the consumers need, there are other companies that are emanating to try and compete with the Coca Cola Company. For example, Pepsi is working harder to make sure that the brands that it produces look similar to those of Coca Cola Company. To eliminate new entrants in the market, Coca Cola Company has created a bottling contracts in all global sales that does not allow the new entrants in the market to manufacture or package like other companies. The bottling system that is used by the Coca Cola Company is not allowed to be used by other companies which produce soft drinks making the new entrants in the market to be low in their market venture. This makes it hard for the new entrants to produce their brands and distribute since rules and regulations must be observed making it hard to penetrate in the market globally. With the same two (2) forces in mind predict what the company might do to improve its ability to address these forces in the near future. In the market rivalry it is best for Coca Cola Company to utilize and make sure that high unique brand that has different taste from that of Pepsi is produced. This will mean that the flavor and taste of Coca Cola Company brands must be unique from other soft drink producers so that the company can be competitive in the market and remain as the largest company with the highest share in the market. The main idea is to make sure that Coca Cola Company flavor and taste should be different from that of Pepsi making Coca Cola Company to be creative and innovative where different brands are going to be produced (Henry, 2008). Market rivalry will be reduced if the company can be creative and innovative in its future advertising. For example, in future the company can spend a lot in the use of social media. This will make sure that new entrant in the market finds it difficult to venture in the market since the expenses of advertising is high for the new entrants. The method of advertising matters a lot when carrying business transactions since there is need to keep consumers aware of the different brands in the market (August 2008). This is normally applied to companies that have invested a lot in the market since advertising is an expensive method especially when using the social media like YouTube and FaceBook. Assess the external threats affecting this corporation and the opportunities available to the corporation. Give your opinions on how the corporation should deal with the most serious threat and the greatest opportunity. Justify your answer. Threats One of the threats that Coca Cola Company face is the legal requirements to disclose negative information on the products labels. For example, Non Governmental Organization (NGO) center for science and environment in 2003 announced that the Coca Cola brands were not proper after checking out cancer causing chemicals in some brands of the soft drinks. This made the company sales to drop. Another threat that the company experience is competition from PepsiCo where they manufacture similar brands like Coca Cola Company. Another threat that Coca Cola Company experience is change in consumer preferences and good eating and drinking habit where consumer see as if they are consuming chemicals. Lastly, new entrants in the market are also a threat to the company. Opportunities One of the opportunities that make the company to remain competitive in the market is the use of digital marketing platform which makes the company to venture and make a lot of sales globally. Another opportunity is the growing need of the consumers to consume beverages that are of high quality and that meet the customer satisfaction. Lastly, growth of the company through acquisitions makes it possible to venture in the market. In my opinion it is important for the company to consider the most serious threat, legal requirements to disclose negative information on the brands where the company should do away with all the chemicals that may cause problems to consumers. Since any negative effect will lead to sales dropping and closing of the Coca Cola Company. The greatest opportunity that I can consider for the company is that Coca Cola Company should continue producing high quality beverages that satisfy consumer wants thus making coca cola to remain at the top of the market and lowering the competition from PepsiCo. Give your opinion on the corporation greatest strengths and the most significant weaknesses In my own opinion one of the Coca Cola Company strengths that are experienced is effective advertising campaign where the company uses social media to advertise the unique brands in the market. Making it possible for the company to keep the consumers aware of the brands thus high volume of sales is experienced in the market. I consider favorite drink as strength in the market where different consumers prefer different brands that consumers feel they are meeting their expectations and needs which make the company to be ranked as the world largest producer of beverages that are of high quality (Sharma, 2008). Coca Cola Company is one of the companies that are associated with a corporate social responsibility where the needy in the countries in which the company is operational benefit from the company social responsibility which makes Coca Cola Company to achieve the strength. I do appreciate the way the company cater for medical expenses for individual with cancer illness and this makes the company to attract more consumers in the market. I admit that after strengths, opportunity and threat Coca Cola Company must have a weakness for example the company seems to focus on carbonated drinks like Sprite, Coke, and Fanta among others which are carbonated. In my opinion it is important for the company to start producing juice products that are not carbonated. Another weakness of the company is negative publicity where the negativity emanates from the competitors since they spread rumors that harmful chemicals are used in manufacturing of different brands. Lastly, I think brand failure is a threat to the company where different amount of revenues keep on fluctuating now and then. Choose the strategy or tactic the corporation should select to take maximum advantage of its strengths, and the strategy or tactic the corporation should select to fix its most significant weakness. Justify your choice. One of the strategy or tactic that can be used by Coca Cola Company is marketing and branding strategy. Branding meets customer satisfaction which makes the products to be accepted in the market. The strategy is of importance to the company since innovation and creativity must be engaged so that the consumer satisfaction can be achieved making the brands to be considered in the market. Production of favorite drinks in the market as a strength should be considered since the company aim of producing the brands is to meet the customer expectations and needs. The marketing strategy that is used is of importance since the use of social media in marketing makes it possible to advertise the brands thus making awareness to the consumers thus achieving high volume of sales. The use of marketing strategy again can be used to fix the most significant weakness like focusing on carbonated drinks and negative publicity can only be eliminated by the use of social media. The use of social media spreads the brands thus making each and everyone to use the Coca Cola brands which will eliminate negative publicity making it possible for the company to sell high volume of products in different market segment. Marketing strategy that is used to advertise using the social media is of great help to coca cola Company which makes it possible to eliminate all the possible weakness of the company. Determine the company’s resources, capabilities and core competencies. Analyze the company’s value chain to determine where they can create value using the resources, capabilities and core competencies. Coca Cola Company has a lot of resources mainly comprising of physical, human and financial resources. The physical resources are the buildings and equipments that are located in different parts of countries where the company is operational. The buildings and equipment play a major role in the company stability where production is sustained. The company does not rent any equipment and thus production cost is also maintained at low level (Zyman, 1999). Human resource is how the employees are trained to meet the company requirement and financial resources play a major role ensuring that the company financial stability assists in production resources. The company capabilities of producing high quality soft drinks that are distinctive from that one of competitor makes the company to remain in the market throughout. The capability to innovate also plays a major role in the company. The company core competence is production of high quality soft drinks that meet the consumer needs and being the most visible company worldwide in distribution of soft drinks brands. The company value chain which is used to create value using resources, capabilities and core competence depends on the suppliers, distributors, retailers and the communities across the operational area help in the growth and stability of Coca Cola Company. The supplier’s retailers and other distributors of the soft drinks play a major role in the company where the employees located in different locations help in distributing of the brands. References August, W. (2008). Coca-Cola Company.  New Georgia: Georgia Humanities Council. Henry, A. (2008). Understanding Strategic Management. New York: Oxford University Press. Sharma, A. (2008).Water in Coca-Cola in India pesticide free. New York: Harper Business. Terry, M. (2005). Coke adds life to health drinks sector.  Scotland: Scotland press. Zyman, S. (1999). The End of Marketing as We Know It. New York: Harper Business Read More