Pest Analysis of Coca Cola - Essay Example

Pest Analysis of Coca Cola Coca Cola is a multinational entity with countless branches globally. This entity has attained global dominance in its industry. The entity has countless subsidiaries globally, which have enabled the entity reach clients in the most remote part of this planet. The entity has massive return thus; the entity is among the leading entities globally. The write up will make a PEST (politically, economically, socially and technologically) analysis of this corporation and determine certain aspects of the organization. In New Zealand, the entity has numerous branches that enable the entity supply its customers with products. It has numerous subsidiaries and associates companies in New Zealand and the Oceanic region. Political Entry in to various countries has culminated in the entity encountering varying political environments. Some of the countries are politically volatile. Consequently, the entity does not invest massively in such countries since it may incur massive losses. The entity prefers to invest in economically and politically stable countries. In such countries, the entity’s faces few risks, which are manageable. The entity also encounters countless laws on labour. The entity addresses this by employees by creating a human personnel department that can address the above concerns. Coca Cola has massive influence on policy matters owing to the level of investment associated with the entity and its capability to employ a massive workforce. The political aspect of this analysis is vital since it reveals political governance issues may affect the entity (Jain, Trehan & Trehan ND, p.88). Economic The entity has massive resources that have ensured that the entity can tap virtually into any market globally. Despite the competition the entity encounters, the entity has adequate resources to launch aggressive promotion campaign, which will ensure that it maintains its market segment. When analysing various aspects of the macro economy, it is vital to analyze the impact of the economy and other economic policy. Most governments have enacted taxation on entities. Consequently, entities have to pay taxes on the returns made. The economic expansion of a country affects entities significantly. However, the impacts of such occurrences seem to have minimal impact on Coca Cola’s revenues. The entity has numerous products, which has ensured that the entities incomes are stable. Therefore, failure in the revenues of one product does not cause a significant decrease in its overall income. The entity demand seems immune to the current economic down fall. Consequently, there is minimal decrease in revenues volumes. However, increases in taxes in any country will result in higher cost of Coca Cola’s merchandise (Jain, Trehan & Trehan ND, p.120). Social In a world where the clients are extremely concerned about their health, refreshment companies may encounter challenges. These challenges include government regulations on constituent of drinks. Government prefer low calorie refreshment since obesity has become a major concern. Additionally, the consumer are more conscious about what the calorie levels of any product they consumer. This has posed challenges to refreshment companies. However, Coca Cola has the capability to provide products, which meet the calorie requirement. This has been a key challenge to entities in this industry. However, it has been an advantage to Coca Cola as it has the expertise to produce products that meet the above requirement (Jain, Trehan & Trehan ND, p.110). Technological Technological advancement has been extremely vital in ensuring that the entity achieves mass production. This has ensured that Coca Cola can meet the massive demand for its product. Additionally, technology has ensured that entity can rebrand its product by introducing new packaging, which has enabled the entity maintain its market share. Technology has also enabled in the automation of selling machines. Thus, the entity does not require personnel to sell it products to its clientele. Overall, technology has ensured that the entity is efficient hence, reducing its costs (Jain, Trehan & Trehan ND, p.249). Views on social responsibility Classical view This model begins by stating that shareholders are the persons that invest their funds in the entity. Consequently, any profits resulting from the entity’s operation should be apportioned to the shareholders only. The management’s basic responsibility is towards the shareholders. Consequently, they should undertake decisions that will maximize the profits of the shareholders. Social responsibility entails undertaking noneconomic activities, which do not maximize the profitability of the entity. To this classical model, social responsibility is the duty of other persons in the society. The resources of an entity should be geared toward profit-motivated undertakings, which will maximize the profitability of the entity (Ruschak 2012, p. 24). Socio economic model The current cohort of managers believes that they do not only have a duty towards the owners, but also the other stakeholders. The other stakeholders include consumers, employees, the society, the government and suppliers. These parties have stakes in a firm hence; it is vital to ensure that the entity attends to their concerns. This denotes the current state of corporate governance, which advocates for this model since they management chooses to undertake charitable activities to which benefits the society. An entity that adheres to this model can consequently undertake activities, which are noneconomic for the benefit of other stakeholders (Ruschak 2012, p.46). The alliance model The alliance model requires managers to facilitate negotiations among the stakeholders. These negotiations should yield amicable solutions that will enable the parties decide on what social responsibility activities to undertake. This model requires the entity’s stakeholders to arrive at a consensus. The consensus will culminate in the entity undertaking economic and noneconomic activities funded by the entity’s finance to benefit a wide range of persons. This process requires the establishment of a balance in expenditure between economic activities and charitable activities. Therefore, the entity remains economically viable while it still embraces corporate responsibility (Ruschak 2012, p.36). Fracking Exploitation of resources is vital since it enables a country to progress. However, the exploitation or resources should not be at the expenses of the community or the environment. In New Zealand, the oil industry has adopted fracking in the extraction of oil. This process entails pumping highly pressured gases and chemicals underground forcing the crude oil out. This process has several disadvantages according to geologists and environmentalist. First, it causes contamination of underground water. As such, the video highlights results from Ohio where water from wells near oil wells that use fracking had substantially higher concentration of methane. Additionally, the procedure entails breaking layers of seismic rocks. Breaking the layers of rocks combined with pumping of highly pressurised chemicals and gases results in pressure build up underground. This pressure build up has triggered seismic instability, which causes earthquakes. The proponents of fracking have elaborated that this mining procedure has improved considerably. The proponents have stated that fracking cannot contaminate underground water since there is massive distance between the depth of fracking wells and level of underground water. The underground water is normally about one kilometre below the surface while the well reaches about three kilometres. This leaves massive layer of rocks between the two minimizing chances of water pollution. Elton Mayo This scholar was among the pioneers of human relations development. His studies evaluated the importance of belonging in a work environment. His research revealed that belong is a more vital factor than monetary incentives. Consequently, it contributes significantly to the motivation of employees in employment. Overall, employees that belong to a group are more productive to those who belong to no group. Bibliography Jain, T, Trehan, M & Trehan, R Business Environment,  FK Publications, New Delhi. Ruschak, K 2012, Corporate social responsibility, Grin Publishers, California. Read More