Description of Coca Cola Company (Term Paper Sample)

Introduction to Management
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Introduction to Management
Description of the Coca Cola Company
The Company is globally leading in the production of soft drinks. Its operations extend to more than 200 states and the brands it sells are about 400 beverages that are non-alcoholic. The company also has the brand that is most valuable globally. The founding of the company was in the year 1886 May and it has survived for more than a century despite times war and peace as well, progression and downfall and times of economic bust and boost. The management group has enabled the company to one among the respected companies as of the late 1990s but beginning in the year 1998 it has been fighting and struggling to control the weaknesses and threats from the external environment. The company operates in 5 major segments in the entire world.
The major segment from which it generates most of its revenue is the North America upon selling finished beverages. The other regions and segments most of their business is from the producer and the selling of concentrates and syrups of the beverage. The major company invests on bottling is based on the operations of companies found outside North America. The segment is one of the aids in which the company can maximise and improve efficiency in production and the efforts in distribution and marketing( Coca-Cola Company, 2012).
Pestel Analysis of the Coca-Cola Company
From previous findings, it has been well known that the Coca-Cola Company leads in the production of non-alcoholic drinks. The soft drinks produced by the company are consumed by more than one million people around the globe. Besides the success of the company, it is still a business that is typical which is affected and, in the same way, it also affects the communities it serves.
The company and other firms have their known flaws and economic strengths that dually may have affected the performance of the company in the future in their business operations. Through the analysis of the constraints to be faced by the company in the future presents an advantageous strategy for the company thought the identification of the factors that might leave a great impact on the company operations.
Pestle analysis is a well-known method that focuses on the external business factors and the surrounding from which the business operates. The PESTLE is initiated for various keywords namely: - Political, Economic, Sociological, Technological, Legal and Environment. The composition of these key terms investigates the transformations in the market (Coca Cola Company, 2014).
Political Analysis
This is a factor that investigates the present and influences that are potential to the business of political pressures. The soft drinks are in the category found by the FDA, and there is part that is played by the government in the activities and operations of the company. The regulations that are put in place by the government such as setting fines for the company not meeting the legal requirements will affect the company sales. The laws and regulations change including the environmental laws and requirements of the taxes will affect the book of the company and the entry into a foreign state.
Also, the nature changes of the business as soft drinks might lead to the gaining of product competitively, and pressures on price and the company have the opportunity to improve the share of sales in the global market. The presence of corrupt government will affect the company’s maximisation of profits since most of the profits will be confiscated by the government. Therefore, the company will be operating at a loss.
Economic Analysis
Analysis of the economy will take into account the local, national and global impact of the economy with the inclusion of inflation rates and recession issues. The fall of the world economy will lead to the company realising minimal sales for this particular duration of time. The inflations rates will affect the company positively or negatively. If the inflation leads to a lowering price of the drinks, it will lead to the company making fewer sales and vice versa. The company also deals indirectly with international bottling company. The process is bureaucratic and this might involve several parties. The process will lead slowing down of the processing and distribution of the soft drinks globally and this might lead to the shortage at certain times (Market Line, 2013.).
Sociocultural Analysis
This mainly analyses the way in which the changes within the society will influence and affect the firm including the change in attitudes and lifestyles present in the market. End users ranging from 37 to 55 years have a major concern with the nutrition. The older generation is also mainly concerned in longevity increase of their life. This changes in lifestyle and nutrition as affected the companies volume of sales and profits realised since the demand for the carbonated drinks went down and the revenues for the company pulled down. (Ramsey and Sohi, 1997)
Technological Analysis
Technology analysis mainly focuses on the point where the introduction and the upcoming techniques in technology are considered and valued. The incorporation of new technology will lead to the production of new products and the enhancement of the product quality in the stages of production and marketing. The improvement of technology will lead to new products being introduced in the market such as the cherry coke that entered the market in the year 1985.
Environmental Analysis
It helps in the examination of the global, local and global environmental concerns. Based on the data obtained from the company the facilities within the company are put into strict consideration based on the laws of the environment as imposed by the States government. The laws ensure the company is involved in the management and conservation of the environment.
Legal Analysis
The process has its main focus on the influence and effect of the national and global legislations to the company’s operations. The company has ensured that has received all the applicable rights that correlate to the nature of their business. ANY new product development and invention has to be undergoing patent processes. This has promoted the process of the company entrance into foreign states and countries (Hnatko et al. ,2014).
Porter’s Five Forces Analysis of the Coca-Cola Company
This is a model of the framework for the analysis of the industry and strategy development of the business. The model helps the company in developing ways in which it maximise the profits despite the presence of limited resources.
Competition within the Industry
The Coca-Cola Company has faced stiff competition from Pepsi Company. To counteract this, it has intensified its strategies in advertising and marketing enabling it to acquire a market niche. The company has been investing large sums of money in advertising and marketing the products. The process has enabled the company to have high equity brand and establishing customer’s strong base of loyalty. This hinders new companies from entering the industry. The company also provides margins to retailers that are significant and enables them to enjoy the players at existence. The company signs contracts to its international bottler companies. This prevents them from signing another contract to another new contract to other brands that might compete with the company brand (Warner, 2011). 
New Entrance Threats
Despite there are many entrance threats, the Coca-Cola Company remains to be the main producer of carbonated drinks in the world. This has been attributed to the zero capital need and there is no switching of consumer cost. The company has established a strong consumer loyalty and brand thus despite there are increasing large amounts of upcoming and new brands getting into the market having similar prices as compared to the coke brands. (History of Coca-Cola, 2014).
Threat of substitute brands and products
There have been many forms and kinds of energy soft drinks in the market. Despite the Coca-Cola products not having unique flavour and tests the company has the strong brand that enables it to survive during periods of an economic bust and boost. There have threats of substitute products in the market due to technology advancement but the company reputation has been made and maintained due to the establishment of strong customer loyalty base and brand. The Pepsi has been the main competitor in the distribution of the soft drinks but the company remains to be the leading supplier of the products. There has been emerging drinks inform of juices but due to the established base of the Coca-Cola Company brands there have been not been able to displace the company’s products in the market(Bensoussan & Fleisher, 2008). 
The bargaining power of suppliers
The Coca-Cola Company has a strong established strong base of suppliers. Despite the suppliers being not differentiated and concentrated there has been low pressure to the company since it has the largest customer base to the supplier of the soft drink ingredients. Therefore, the suppliers have low bargaining power for the supplier of the ingredients to the Coca-Cola Company. It has high pay for the suppliers to avoid them from switching to the supply of the ingredients to other companies having the same brand. The switching cost is very high since the suppliers have signed a contract with the company for a certain period. Therefore, the suppliers find it difficult to switch to other companies in the industry (David, 2005). 
The bargaining power of the buyers
The bargaining power of the end users to the products of the company is very high since they buy the high output of the end products of the com...