Challenges in the Global Business Environment - Essay Example

Running head: global business environment 20th May Introduction Coca-Cola Company is the marketleader in the soft drink industry globally. Being headquartered in US, the company operates in many countries. Based on its strong brands that are not easily imitated by the competitors, the company has maintained a strong positive relationship with its customers an aspect that has made it to enjoy high sales and profits. Coca-Cola Company has a policy of brand diversification an aspect that has made the company to effectively meet the needs of its customers. Some of the notable types of Coca-Cola brand, one of the best brands globally are Coca-Cola Black Cherry Vanilla, Coca-Cola Zero Caffeine-Free, Coca-Cola Zero and Coca-Cola Cherry Zero. Other brands includes Dasani bottled water, Mezzo mix, Minute Maid, Pepe Rico, Red Flash, Fanta, Sprite and Sunfill among others (Terry, 2005). One of the major issues that Coca-Cola Company maintains in its code of conduct is the use of integrity in its operation that includes avoiding corruption and bribery. By conducting regular anti-bribery audits, the company ensures that it every one is aware on the company policies and any corrupt deal is detected. The second issue is the human as well as working place rights. Coca-Cola Company aims at creating a sustainable business by ensuring that its workers are well treated. Employees are vital company assets thus they need to be well treated. Thirdly, the company success is based on the safety of its consumers and workers. This is undertaken through the Coca-Cola Safety Management System that ensures maximum security in the company premises as well as those of its products. Two major Coca Cola Company competitors are PepsiCo and Nestle. Just like Coca-Cola Company, Pepsico ensures that it performs its duties with a high level of integrity. However, the level at which it address corruption is not as strong as in Coca-Cola (Kwoka, 1977). For example, Guangzhou Pepsi Cola, a subsidiary located in China was involved in a bribery case an aspect that made it to be fined approximately 102,550 U.S. dollars. In terms of human and working rights, PepsiCo emulates human right workplace policy that entails dealing fairly and honestly with the employees in reference to wages, benefits as well as other conditions of employment. In 2012, the company established the human right operating council to ensure that human right policies were strictly followed. Just like Coca Cola Company, PepsiCo ensures that its consumer and workers safety is maintained in order to ensure that its production process is continuous. Nestle, a Switzerland based company business practices are governed by integrity. Additionally, the company ensures that all its activities are fair while at the same time complying with the applicable laws. The company also ensures that it follows human as well as working place rights as a way of making its employees to be motivated. Quality assurance and product safety is one of the major issues that make Nestle Company to be competitive in the beverage industry. The company is committed to providing quality products that meet the needs of its customers. The company good manufacturing practices were established by the company to ensure that all aspects of manufacturing are followed. PepsiCo and Nestle have to some extent addressed the issue of integrity although both have been involved in corrupt deals. For example, in 2002, Nestle Company was involved in a corrupt deal where it was demanding million of dollars in the Ethiopia market. On its part, PepsiCo branch in China, Guangzhou Pepsi Cola was involved in a bribery case that led it to be heavily fined. The two companies have ensured that they maintain strong policies that address human and working rights. As a result, the companies have maintained a productive workforce that has made them to increase their productivity. In terms of safety, PepsiCo and Nestle have maintained strong policies that ensures conducive working environment. However, a safety issue happened in Nestle Company in 2008. Nazar Hussain, a Nestle worker died while he was inside the depalletiser when a colleague started it. It was noted that the company breached the safety measures an aspect that made it to be fined £180,000. If PepsiCo addresses the issue of corruption, the first positive outcome is that it will create positive image on the eyes of the public. Secondly, it will increase its revenue. If Nestle address the issue of safety, it will first create a positive relationship between the employees and the company management. Secondly, it will enhance the employee’s motivation. By not addressing the key issues, PepsiCo will first experience reduced sales. Secondly, it will create negative public image. On its part, by not addressing the issue of safety Nestle will experience two major adverse effects. First it will experience increase in the rate of turnover. Secondly, it will reduce its productivity. In order to ensure that Coca-Cola Company code of conduct remain relevant through the years, it is imperative that first it involves its employees in providing feedback on the ethics policies that the company establishes. This will ensure that the employee’s ideas are adopted. Secondly, the company should ensure that it continues to audit its braches across the globe by use of modern technology as well as giving the public an opportunity to give their views on the conduct of the company. In its effort to create a strong relationship with the communities and the government, Coca Cola Company maintains a strong policy of conserving the environment. First, it maintains a community water program that is designed to ensure healthy and sustainable water sheds. As the result of large volume of water that the company uses in its production process, the company water conservation methods has made experience governments support. The second method that Coca Cola Company uses to conserve the environment is by conservation of natural resources including soil and climate. For example, the company has been engaging in tree planting exercise in Nigeria and Australia as one of its corporate social responsibilities. One of the major strategies that make Coca Cola Company to remain competitive in the international market is advanced technology. For example, the company innovation in the vending channel has made it to effectively serve its customers. Through the vending machines, the customers can now easily redeem their coke rewards more conveniently. Another innovation that the company adopted in 2009 was the establishment of a plant-bottle packaging. Being the first of its kind, the firm made plastic bottle with some of its parts coming from plants. Through the corroboration with Avantium and Virent Inc biotechnology companies, Coca Cola Company has highly improved its products packaging thus maintaining strong positive consumer-brand relationship. Three potential technological challenges that the company could face includes lack of customer awareness on how to use the technology, high costs of running the innovations and imitation by the competing firms. In order to address the problem of low customer awareness, the company should initiate extensive training of its customers on how to use the innovations. In reference to high costs of running the innovations, the company should ensure that it expands its investment in order to get adequate funds to run the technologies. The problem of imitation by competitors can be addressed by ensuring that the company innovations are undertaken by experienced designers without exposing the company private information. Coca Cola Company culture relies on responsible corporate governance. For instance, the company participates in educating US policymakers. Thus, the local and national leaders have increased their loyalty towards the company an aspect that has made Coca Cola Company to enjoy political support. Based on the diversified policies that US adopts, the company has embarked on hiring experienced instructors who train the policy makers on various issues. Due to the high demand of Coca Cola Company brands in the US market, lobbying is appropriate. This is based on the fact that it assists the company in enjoying the government support thus enhancing its expansion and high demand for its products (Kotler and Keller, 2012). On its part, Coca Cola Company complies with all the legal requirements as stipulated by the US government. The political Action Committee is responsible for ensuring that the company complies with the company laws as well as legal reporting requirement as stipulated by the US laws. By supporting government policies as well as assisting local communities, Coca Cola Company has benefited from strong customer awareness and trust resulting to high sales and profits. One of the global corporate citizenship efforts that Coca Cola Company has adopted is joining the UN Global Compact in 2006. Being the largest corporate citizenship initiative in the world, the compact plays a major role in protection of human rights. UN Global Compact also aims at advancing universal principles in the areas of anti-corruption and labor standards among others by bringing together businesses and governments (Paul and Andy, 2011). By becoming member of the UN Global Compact it is an indication that Coca Cola Company is keen on implementing its policies of conserving not only the US environment but also the environments of other countries where it operates. It is worth to note that one of the key goals of Coca Cola Company is to conserve climate and water, thus by joining the UN Global Compact, the company will effectively accomplish its goals. The second global corporate citizenship that the company has adopted is the Coca Cola Foundation. Through the foundation, the company is able to give back to the community. For example, the foundation supports education in reference to higher education, construction of classes and global education. Thus, the company is able to empower the communities making them to increase their income thus increasing their demand for Coca Cola Company products among others. UN Global Compact and Coca Cola Foundation can contribute significantly to the companys sustainable development in various ways. For example, with the increased competition in the soft drink industry, the company will be globally be known by many people due to the company support. In this way, Coca Cola will effectively face off its main competitors in the international market. Additionally, the company will get the support of various countries thus making it to easily establish new branches in the countries it has not effectively entered. As a result, it sales and profits will increase. References Kotler, P and Keller, L. (2012). Marketing Management. London: Pearson Education Limited. Kwoka, E. (1977). Large firm dominance and price-cost margins in manufacturing industries. Southern Econ Journal vol. 44, pp. 183–9. Paul, J and Andy, S. (2011). Auditing Cities through Circles of Sustainability. New York: Macmillan Publishers. Terry, M. (2005). Coke adds life to health drinks sector. Scotland on Sunday (UK). Retrieved May 19, 2014. Read More