20 page paper

Economic growth of a country gives a company a glimpse of high purchasing-power, this is what most marketers use in penetrating the market. Coca-Cola Company uses this tool to market their product across the world, which brought about the 63 different types of currency being used by the company. However, due to constant fluctuation on exchange rate strong or weak currency are some of the determinants of exporting product worldwide which is very important as the company generate 72% of its operating profit outside the United State.

Furthermore, another major economical tool is the interest rate imposed on borrowed money. Changes in interest rate affect the financial status of a company and further investments as it increases total cost, the Coca-Cola company manage to cope with interest rate fluctuation by implementing a derivative instrument. In the case of inflation, the Coca-Cola Company sort their employees with higher wages and salaries in countries with high inflation rate so as to enable them cope with the situation. This increase in wages increase product cost and couldn’t be reflected on the product price due to the competitive and risk of the market, a threat being faced by external environment in most companies.

Social:

The social factors have to do with people’s cultures, traditions, health perception, safety majors, population growth and new trends among the population. A company is not expected to change the social factors but rather, to adapt and adjust to suit these social factors.

This is a very important section as regards to a company like Coca-Cola that has a direct link to the customers, companies of this nature are considered to be B2C. Countries are diversify in terms of culture and tradition, this element have to be absolutely analysed before introducing marketing and introducing products. Coca-Cola Company has about 3300+ different products, in penetrating new market after intensive market analysis the Company start by introducing few of their products based on the social factors of the general population subsequently increasing products based on social factors.

Consumers and government are very cautious on the issue of health and safety, in beverages industries obesity is the most common concern of the public. This concern is mostly raised by younger generations to maintain good physique. According to a study consumer of Coca-Cola are very concern with nutritional content nowadays. This is one threat that the management was able to turn into opportunity by introducing dietary products such as Coca-Cola Zero, Light Coke and Diet Coke.

In a non-alcoholic beverages company, most of the market share comes from youth and children, which is why population growth is being given high emphasis in market analysis and being one of the major factors of social analysis.

Technology:

Technology plays several functions in beverages industry as with the manufacturing new products, packaging product and distribution of products.

Coca-Coca Company rely on its bottling partner for packaging, 83% of case volume produce across the world is being manufactured by bottling partners which the company don’t have total control power over. Therefore, it’s essential for the company to keep a healthy relationship not just with its bottling company but within and outside the entire departments companies involve.

The availability of different Coca-Cola packaging has everything to do with the advance in technology, various vending machines are available all over the world. This led to the production of some stylish non-refillable bottles and cans, which are trending among youth and attractive to children which also serves as a marketing tool for promoting products.

Legal:

Legal laws include, employment law, antitrust law, customer law, health and safety law and discrimination law to mention few.

Various acts and regulations exist in the United State of America some of which includes Federal Food Act, Federal Trade Commission Act, Drug and Cosmetic Act, health and safety Act apart from the upper mentioned Acts several environmental regulations are being implemented within the State some of which include, regulations on advertising, sales and production. Slight alteration in either of the laws, regulations or act could yield to positive or negative impact on the company. Furthermore, violation of any of the upper mentioned laws, acts, or regulations will escalate serious penalty which will affect the company.

Globalization

As studied in (ElAmin,2007) Coca-Cola Company being on a multinational manufacturing business environment with high valuable brand, high market development and vast scope for product development on an international level the company own its national and international operations in an extensive economic segment. This makes the level of company’s turnover as well as the profitability margins proportionate to the company’s expansion and development in the outskirts market. Wide brand expansion is one of the company’s main objectives which is maintain through producing over 260 million bottles of different sizes. Aside from the upper mentioned Coca-Cola product, the company owns Schweppes in the Great Britain name and produces it in different flavors so also other products, which include Capri Sun, and some sparkling fruit juices.

The strategic management policy of the Coca-Cola Company focused toward imprisoning the national and international market for the purpose of quality improvement, developing strength in the international market at the same time holding accountability of environmental strategy on the ground of business operations, performance management and developing environmental standard in an international scale. There is a rapid change in the economic environmental structure over the years; in the year 2005 there was high marketing strategy that was why distribution of products was being done through advertising campaign. This got success and yield to 35% increase in international sales force in the year 2006 while in the preceding year sale strategy was included through promotion techniques in the international market which also yield to an increase in sales with 39.5% more than the previous year.

As defined by (McGrew,2014) in the general scale globalization is a way of eliminating the difference between different countries, continent and economy so as to make it easier to trade and conduct transactions within and between every nation there by putting the whole world under the same umbrella called GLOBALIZATION. This process has been going on over a century particularly in the 1945, but the process has been moving on a slow rate until in the last 20 year when it became much faster due to development and order forces which will be discuses letter on.

According to (James &Peck ,1998) Globalization started in the 17th century with the inventions of new ships which gave Europeans avenue to trade with other centuries on a large scale, comparing to agriculture trade was still a tiny part of the economy as of then. With the recent development and innovations in transport sector such as rails, steam ships and Airplanes. These developments contributed hugely in the sense it shrinks the world and make it more convenient and faster for people to travel across the world and carry out trade, with the presence of the Internet it makes it even much easier to communicate internationally. Decline in barriers to trade between different countries increase international trade that makes the world’s GDP increasing in a steady rate.

Increase in economic integration can be seen to be one of the major benefit gains from the umbrella term Globalization as asserted by (Jeffrey,2003). Economy used to be self-contained in the sense that import and export are mostly independent but rather now with integration between countries’ economies are closely dependent in the sense that importing raw materials for a production. Therefore, recession in an economy of one’s country affect the others. However, consumer markets are more important in the economy, as there is convergence globally in customer tastes and purchasing habit. Hence, businesses operate, and productions are mostly on global preference example is Coca-Cola. Company’s operating in that scale are known as multinational companies, these companies have been existing in small number until recently with the advance in technology and they have brought a great positive change to world GDP as mentioned earlier.

A later study (Jeffrey,2003) shows that fluctuations of monetary capital exchange between countries: This has to do with the policies and regulation concerning transfer of funds between different countries, with this barriers in some countries it makes transactions unattractive in the region but with free movement of funds like in the 90’s huge amount of funds enter United Kingdom form the United State of America.

This is what is known as deregulation, which is also a factor that affects globalization. It’s started in the UK in the 80’s when many policies and rules regarding foreign business ownership where removed and privatization took place, this prompt foreign investors to carry out their businesses across the world. A clear example is the one that took place in the UK, many of their utilities which used to be won by the government are now owned by local and foreign investors.

Rapid development in technological and communication sector is another major driving force of globalization, this development made information open and accessible to everyone and anywhere. This gives investors all over the world a chance to search and take chance of new business opportunities. This is visible due to the presence of faster and cheaper transportation medium.

Transportation medium is now much faster and cheaper, aside from airplanes, containerisation that was developed in the 50’s was a major drive in transporting heavy and huge goods. However, there was a continuous enhancement to shipping technology ever since.

According to Coca-Cola Company’s report (2006) The name Coca-Cola is one of the most popular brands in the world and the company is ranked the largest company in beverages industry today. This is so because the Coca-Cola Company continues to gain growth due to the prompt expanding across the world, the Company operate presently in more than 200 countries with 84,000 suppliers this makes 70% of the company’s turn over to be from other foreign country.

This is possible due to globalization; John Pemberton founds the company in the 1880’s in United State of America with a good reputation of consistency and high quality, in the early stage storekeepers requested for an attractive package with brand recognition. The Coca-Cola Company focus and meets those requests with a brand name Coca-Cola and a red and white attractive package with a uniform taste of product across the country, this became some of the foundation strategy of the company.

Globalization in Coca-Cola Company started in the 1900’s when bottling plants where built in Panama and Cuba as military spread through those regions, this spread prompt the rise in demand of the product. These plants reduced the shipping cost of the product in these regions, the success of these plants swift the Company to build many more across which includes Hawaii, Puerto Rico and Philippines. By the year 1926 the Company established a strong foreign relationship with other countries around the world this gave the company a chance to continue its quest of rapid expansion and mass production of its product across the world by the use of local branches and local partnerships. This expansion continues to take place for several centuries until the end of World war II and Cold war that is when the company was marked as a accurate global corporation.

The paper commenced with a brief introduction of Coca-Cola Company with a detailed analysis of the international market of its products. The paper also examines the global position and structure of the company. Although there were some limitations and challenges being faced by the company, it still maintained its position due to its brand, taste, availability and innovativeness.

Customers are being regarded as the number one factor to be considered in operating under international or local level, unlike before nowadays customers have different varieties of choices between products. Therefore, if a company cannot satisfy his/her desired product they will eventually switch to the other sources. Hence, for any company or organization to endure its market competition they need to put in their best in given customers what the desired because customers are no longer loyal.

Resources:

Ahmad ElAmin (2007). “Coca-Cola reports progress in red environmental impact” William Reed Business Media. United States.