The Coca Cola Environmental Impact - Case Study Example

Enterprise Resource Planning: Coca Cola Company Name Institution Date Table of Contents Enterprise Resource Planning: Coca Cola Company 1 Name 1 Institution 1 Date 1 ENTERPRISE RESOURCE PLANNING 14 2 Table of Contents 2 Introduction 3 Basic information of Coca Cola Company 3 The host country environment (UAE) 4 Political Environment 4 Economic Environment 5 Social Environment 5 Technological Environment 6 Legal Environment 6 The Home Country Environment (USA) 6 Political Environment 6 Economic Environment 7 Social Environment 8 Technological Environment 8 Legal Environment 9 Opportunities and challenges by the company in the UAE as pertaining to its strategy formulation and implementation 9 Strategic Recommendations 11 Conclusion 12 References 12 Gupta, A.K., and V. Gorindarajan., (2003). Global Strategy and the Organization. John Wiley & Sons Publishers, 2003. 12 Introduction Globalization and liberalization of markets has enabled companies to cross borders and do business in foreign countries. Global business is diverse compared to domestic business because the business environment transforms when a company crosses global borders. Generally, a company has a good understanding of its domestic business environment, but is less familiar with foreign environment. International business expanded considerably in the 2nd half of the 20th century and this expansion is likely to go on. Corporations operating in international businesses are influenced by the political, legal, social, economic and political environment of both the domestic and host country. The host country environment is intricate and it is very vital for corporations to have an understanding of this environment and to make efficient choices in this environment. This paper looks at the environment in which the Coca Cola Company operates in both home and host countries and the opportunities and challenges faced with in the global business environment Basic information of Coca Cola Company Coca Cola Company is an American multinational beverage firm and manufacturer, marketer and retailer of non-alcoholic beverage syrups and concentrates. The corporation licenses or own and markets over five hundred non-alcoholic beverage drinks, mainly sparkling beverages and also a wide range of still beverages like enhanced waters, juice drinks, juices, waters ready to drink coffees and teas and sports and energy drinks. It markets and owns a variety of nonalcoholic sparkling beverage drinks such as coca-cola, sprite, diet coke, and fanta. With a portfolio of more over three thousand beverages, from regular sparkling beverages to diet beverages, coca cola Company’s variety spans the entire world. Fundamentally, a benchmark for pop culture, the company has earned its reputation in the minds of customers by being a key leader within the world of style and reflecting upon the preferences and tastes of every generation. Always innovative and upfront, the company is always successful in re-inventing itself through updating the lively essence of brand whilst maintaining its position as a daily connection points for people everywhere (Hays , 2004). The host country environment (UAE) Political Environment According to Daniels and Radebaugh (2007), the political environment includes the form of government, government relationship with the business and political risk within a country. Coca Cola Company is greatly influenced by the UAE governmental regulation on the manufacture, distribution and marketing of nonalcoholic beverages. The company is therefore required to maintain a solid standard of regulations and laws established by the government. There exists competitive pricing by Coca Cola’s competitors with local companies such as Dubai Refreshments Company and this is a factor that Coca Cola is supposed to consider when doing its pricing. Importantly, cross border conditions are starkly diverse and thus the company must remain in line with changes and policies of the host country so that it is able to adopt to these changes accordingly. To be successful in a foreign country, a multinational firm depends on the kindness of the overseas government and is required to have a better understanding of every aspect of political government (Daniels, & Radebaugh, 2007). Economic Environment The economic environment is determined by the economic activity of the country as well as infrastructure and education. The economic environment affects virtually every facets of business and a corporation needs to have an understanding of this environment so as to operate effectively globally (Daniels, & Radebaugh, 2007). As the latest economic recession has immensely plunged the economy, Coca Cola Company in UAE has been compelled to restructure its marketing and sales campaigns greatly. Additionally, with diminishing profits, the company has to rethink on how to undertake its operations so as to remain in the beverage industry. Social Environment The social environment immensely impact Coca Cola Company in UAE and as a nonalcoholic beverage company it has to stay in line with stark and strict diversities of UAE cultures. In addition, the company is supposed to communicate its image as both an international and national brand in UAE so that individuals can associate with it. According to Punnett, and Ricks (2004), cultural environment is a vital constituent of global business environment and is usually hard to understand because it is usually unseen. The culture environment is seen as a shared, universally held body of common values and beliefs that establish what is right for a certain group. Technological Environment Technological environment is determined by industrialization level, infrastructure and emergence of novel discoveries. With the arrival of new technological age, Coca Cola Company in UAE has entirely integrated itself with all recent transformations that have occurred (Punnett, & Ricks, 2004). The new technologies have enabled the company to produce new products and improve their marketing campaigns. The company has turned to social media which has permitted for highly interactive engagement of customers with actual time outcomes. Legal Environment The legal environment in which a business operates is determined by governmental legislations. Punnett and Ricks (2004) note that firms operating in foreign countries are supposed to adhere to governmental laws of the host country. There are numerous legal inferences on the beverage industry in the UAE. As a beverage company, Coca Cola is regulated by UAE legislations in the production and marketing of its The Home Country Environment (USA) Political Environment As a nonalcoholic beverage cowpony, coca-cola is within the food group under the food and drug administration. The government has a role to play in the operation and manufacturing procedures of these beverages. On basis of regulation, the government possesses the authority to establish probable fines for corporations that don’t meet the standard law requirement. Political factors that influence the operations of Coca Cola Company include changes in regulations and laws such as taxation requirements, environmental laws and accounting standards either in foreign or domestic authorities and political conditions, particularly in global markets, such as civil conflict and governmental restrictions and changes concerning the capability to relocate resources across boundaries. Other political factors affecting Coca Cola Company include the capability to penetrate developing and emerging markets, that also depends on political and economic conditions as well as their capability to form efficiently strategic business coalitions with domestic bottlers and to promote their distribution networks, technology, sales equipment and production amenities (Kibar, 2008). Economic Environment The economic environment of a company is determined by the impacts national local and global economy which also entails inflation and recession rate. Meeker and Zurkuhlem (2011) argue that the nonalcoholic beverage industry have great sales in nations outside United states and for key soft drink corporations, there has been an economic improvement in main global markets. Presently, because of the global financial crisis, coca cola is able to borrow capital and make investments in other products, as a result of lowered interest rates. In addition, the company can borrow to make advancements in research of technology and new products. Through researching for novel products in a cost effective way, the company can sell the products at a reduced price to make customers to buy more products. Social Environment The social environment in which a company operates is influenced by how transformation in the society influences the company like changing attitudes of market and lifestyle. Majority of US nationals are practicing healthier lifestyles and this has greatly affected the sales of the nonalcoholic beverage sector, since majority of consumers are switching to diet colas like coca-cola zero or light and bottled waters, instead of taking beer and other beverages. Middle aged coca cola customers are concerned with nutrition and also a huge part of the populace is in the range of the baby boomers age. Whilst several consumers are becoming older, they are highly concerned in increasing their longevity. This is greatly influencing the nonalcoholic beverage industry through increasing demand in healthier beverages (Hays, 2004). Technological Environment The advancements in technology have created opportunities for product improvements and new products on basis of production and marketing. Technology has improved the efficiency of the company’s marketing, promotional and advertising programs (Kibar, 2008). The new technological advances of the internet and television that utilize incomparable impacts for advertising via the utilization of media have made products to look more attractive. The entrance of plastic bottles and cans, have raised sales volume for coca cola since they are simpler to carry and dispose. Due to the continuous advancement of technology, there has been emergence of novel machines’ equipment, which has enabled the company to increase its production volume. Legal Environment The operation and production processes of Coca Cola Company are regulated by the global and national legislation. The company attains all rights applicable in nature of its business and each product developments and inventions are usually undergoes patented process. Opportunities and challenges by the company in the UAE as pertaining to its strategy formulation and implementation Coca Cola has the opportunity of operating in UAE through forming strategic alliances with local nonalcoholic beverage companies in the industry. According to Kauser and Shaw, (2004), companies might tap into international market through forming strategic alliances with firms in other nations. Whilst strategic alliances are of numerous forms, some enhance every company to access home market of the other company and thus market its products as an affiliate of the best recognized company. This scheme of international business can also enhance Coca Cola Company to bypass several setbacks connected with internationalization in the host country like different regulatory, social and economic conditions. As a multinational corporation, Coca Cola operates within a global environment unfamiliar in the political, cultural, technological, legal and economic aspect of the host country. Increased competition amongst multinational companies and the entry of other key players in the UAE’s beverage market calls for the design competitive strategies that will guarantee Coca Cola effective performance. According to Allen and Raynor (2004), as business portfolio expand into novel markets with operations in overseas countries, strategic planning models and strategies should continue to adjust with increasingly intricate business organization. Companies operating internationally face several challenges in the formulation of constant strategies that function in local markets whilst supporting goals of the host country. When a company have the economic proficiency to venture into markets in a foreign country, is faced with the challenges and dilemma associated in organizing business structure together with adjusting the corporate strategy in order to accommodate an international business model. Coca Cola Company is also faced with the challenges of international market evaluation. According to London and Hart (2005), whilst several aspects of global strategy formulation and implementation are identical to their local counterparts, several major aspects aren’t and thus diverse schemes and diverse forms of information. Attaining knowledge of global markets is a key difference and a vital portion of formulation of a policy that is applicable in both home and host country. So as to capture a huge market share and thus increase profits and sales in UAE, Coca Cola Company should have a better understanding of the market. At a primary level, the company should examine the market, assess the disadvantages and advantages of the market and choose segments that demonstrate largest potential for growth and expansion. When examining the market, the company must also consider market potential, cultural, regulatory and competition factors of the market. Company’s manager can evaluate UAE market potential through gathering data on gross domestic product, population and per capita gross domestic product of the country. This form of information will enhance Coca Cola managers to establish spending power of customers in the country and establish if this spending power can increase company’s profitability and enable it to effectively compete with other companies (Punnett, 2007). Strategic Recommendations Coca Cola Company should use international strategy to help it compete and operate effectively in UAE. While the company’s top management will develop the global strategy, they should depend on ever level of management for the successful implementation of these strategies. The schemes the company can use to achieve the objectives of these strategies can take several forms (Welch & Wilkinson., (2006). For instance, the company can still develop nonalcoholic beverages along with marketing campaigns to appeal to UAE customers. When developing a global strategy, Coca Cola Company must put cultural, political and economic differences in the home and domestic country. In addition, whilst considering governmental regulations in domestic market, the company should also consider and plan for diverse kinds and levels of multiple currencies, and governmental in the UAE market (Gupta & Gorindarajan, 2003). In order to remain competitive in the UAE market, Coca Cola company must use competitive strategy According to Porter (2002), competitive strategy stipulates the distinct approach which a company intends to utilize so as to be successful in every of its strategic business fields. Competitive strategy offers firms advantages over their rivals in the attraction of customers and defense against the competitive forces. So as to remain competitive in UAE and international markets as well as maintain international market dominance, the company must continually engage in aggressive branding and marketing campaigns. These campaigns must be on line with the particular tastes and preferences and upcoming trends experienced in the market segments. For a multinational corporation, there is the need for the company to reinvent its brand in order to maintain relevance in the markets within which it operates. Conclusion As a multinational corporation operating in both the Unites States and UAE, Coca Cola company is influenced the political, economic, social, legal and technological environments of both nations. Therefore, in order to effectively compete and maintain a market position in UAE, the company is supposed to formulate and implement strategies that will enable it to successfully operate in the foreign country. The management in both regions need formulate policies that will enhance the growth of the company to enable it achieve the highest level of productivity. References Allen, D., and M.E. Raynor. "Preparing for a New Global Business Environment: Divided and Disorderly or Integrated and Harmonious?" Journal of Business Strategy 25, (5): 16–25. Daniels, J.D., and L.H. Radebaugh., (2007). International Business: Environments and Operations. Reading, MA: Addison-Wesley, 1997. Gupta, A.K., and V. Gorindarajan., (2003). Global Strategy and the Organization. John Wiley & Sons Publishers, 2003. Hays C., (2004). The real thing: truth and power at the Coca-Cola Company. New York: Random House. Kauser, S., & V. Shaw., (2004). "The Influence of Behavioural and Organisational Characteristics on the Success of International Strategic Alliances." International Marketing Review 21, 17–52 Kibar, A., (2008). Strategy, structure and control of multinational enterprise in international business environment. New York: GRIN Verlag. London, T., and S.L. Hart, (2005). "Reinventing Strategies for Emerging Markets: Beyond the Transnational Model." Journal of International Business Studies 35( 5): 350–370. Meeker, M., & Zurkuhlem, H., (2011). The Coca-Cola Company: an international perspective. Atlanta Salomon Brothers Inc. Porter, M., (2002) Competitive advantage: creating and sustaining superior performance. New York: Free Press. Punnett, B.J., and D. Ricks (2004), International Business. Cambridge, MA: Blackwell Publishers Punnett, B.J. , (2007)International Perspectives on Organizational Behavior and Human Resource Management. Armonk, N.Y.: MESharpe Inc. Welch, C. and I. Wilkinson., (2006). "The Political Embeddedness of International Business Networks." International Marketing Review 21, (2): 216–231. . Read More

Attaining knowledge of global markets is a key difference and a vital portion of formulation of a policy that is applicable in both home and host country. So as to capture a huge market share and thus increase profits and sales in UAE, Coca Cola Company should have a better understanding of the market. At a primary level, the company should examine the market, assess the disadvantages and advantages of the market and choose segments that demonstrate largest potential for growth and expansion. When examining the market, the company must also consider market potential, cultural, regulatory and competition factors of the market.

Company’s manager can evaluate UAE market potential through gathering data on gross domestic product, population and per capita gross domestic product of the country. This form of information will enhance Coca Cola managers to establish spending power of customers in the country and establish if this spending power can increase company’s profitability and enable it to effectively compete with other companies (Punnett, 2007). Strategic Recommendations Coca Cola Company should use international strategy to help it compete and operate effectively in UAE.

While the company’s top management will develop the global strategy, they should depend on ever level of management for the successful implementation of these strategies. The schemes the company can use to achieve the objectives of these strategies can take several forms (Welch & Wilkinson., (2006). For instance, the company can still develop nonalcoholic beverages along with marketing campaigns to appeal to UAE customers. When developing a global strategy, Coca Cola Company must put cultural, political and economic differences in the home and domestic country.

In addition, whilst considering governmental regulations in domestic market, the company should also consider and plan for diverse kinds and levels of multiple currencies, and governmental in the UAE market (Gupta & Gorindarajan, 2003). In order to remain competitive in the UAE market, Coca Cola company must use competitive strategy According to Porter (2002), competitive strategy stipulates the distinct approach which a company intends to utilize so as to be successful in every of its strategic business fields.

Competitive strategy offers firms advantages over their rivals in the attraction of customers and defense against the competitive forces. So as to remain competitive in UAE and international markets as well as maintain international market dominance, the company must continually engage in aggressive branding and marketing campaigns. These campaigns must be on line with the particular tastes and preferences and upcoming trends experienced in the market segments. For a multinational corporation, there is the need for the company to reinvent its brand in order to maintain relevance in the markets within which it operates.

Conclusion As a multinational corporation operating in both the Unites States and UAE, Coca Cola company is influenced the political, economic, social, legal and technological environments of both nations. Therefore, in order to effectively compete and maintain a market position in UAE, the company is supposed to formulate and implement strategies that will enable it to successfully operate in the foreign country. The management in both regions need formulate policies that will enhance the growth of the company to enable it achieve the highest level of productivity.

References Allen, D., and M.E. Raynor. "Preparing for a New Global Business Environment: Divided and Disorderly or Integrated and Harmonious?" Journal of Business Strategy 25, (5): 16–25. Daniels, J.D., and L.H. Radebaugh., (2007). International Business: Environments and Operations. Reading, MA: Addison-Wesley, 1997. Gupta, A.K., and V. Gorindarajan., (2003). Global Strategy and the Organization. John Wiley & Sons Publishers, 2003. Hays C., (2004). The real thing: truth and power at the Coca-Cola Company.

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