In today’s modern world, environment of business can be defined as combinations of various factors which affect operations of a company either internally or externally. It includes attributes like changing in technology; instability of government, taxation policies, business ethics and more which impact on industrial functions in both positive and negative manner. Therefore, it is necessary for management of an organisation to analyse concept of these factors as well as identify demand and desire of customers. This would help them in creating modifications in activities or add value in products as per requirements in order to gain sustainability at marketplace for a longer period of time. In addition to this, serving high qualitative products and services to people aid in achieving objectives and goals in a proper way. In this assignment, an organisation of UK i.e. Coca Cola has been taken which operates its business at multinational level. This organisation produces food and beverages like soft drinks in various countries (Cascio, 2018). Present report discuss about various enterprises which are classified on the basis of their sizes, scope and structures. Along with this, it also highlights the positive and negative impact of macro and micro environment
P1 Relationship between various functions of an enterprise and its link with objectives and structure of firm
Every business organization operate their business activities at larger scale in which the main aim of firm is to set better success at market place. Along with this, they also operate their activities in order to establish their positive brand image by delivering quality services to its customers. As Coca-Cola is one of the famous and popular brand which operate their entire business activities at global level with the purpose of attaining higher success at market place. Along with this, quality of services is also offered by the company to their customer’s as per their needs and demand which may assist in achieving positive results from the services. It directly contributes in establishing positive brand image (Cai and Yang, 2014). In addition of this, it is also important for business organization to produce quality products and services as per customers’ needs and wants which may help in attaining their business satisfaction level. Business environment and its factors should be analysing by the manager of the company to reduce the negative impact on overall performance of the firm in appropriate manner. Furthermore, macro environment considers various elements like political, legal, economic and legal factors which may leads in attaining desirable goals and objectives of the company. All these are largely affect the entire business activities which evaluate the actual performance of the firm. In this manager play vital role in managing as well as considering all the factors at the time of implementing the policies and strategies. This will aid in attaining positive results in order to enhance the overall performance of the company and at the same time also capture larger market share. In this, various department also play important role in operating all the operations which may leads in attracting number of customers are as follows:
Human resource department: This department is one of the important in which manager play vital role in hiring capable and skilled candidates who can handle all the business activities in effective manner and also put their efforts for attaining better success (Botha, Kourie and Snyman, 2014). By this manager allocate them work as per their capabilities so that they effectively preform and attain better results. In addition of this, HR department also set their process with the purpose of inviting skilled employees who having better knowledge towards the company activities. This will help at the time of taking right decision at workplace. With the help of this company established their positive image and capture larger market share form its rivals. This department is interrelate with marketing division in which marketing manager is responsible for inviting high skilled and capable workforce to accomplished set goals and objectives. With the assistance of this all the workers are effectively perform their task and attain predetermined objectives in allotted time frame.
Research and development: It is one of the important department in business organization which may help in undertaking and effective research to determine the customers’ needs and wants towards the product’s. With the help of this company manufacture their services accordingly in order to attain competitive advantages at market place. Along with this company manager also prepare a questionnaire for collecting relevant information from the customers in relation of company products. This will aid in attaining higher success at market place. In this marketing and R&D department is interrelate with each other in which manager conduct research for analysing as well as determining customers needs and wants. After that they provide all the information to marketing manager to improve their customers base in appropriate manner and at the same time also attain set goals and objectives.
Sales and marketing: Number of methods used by the company to increase their overall sales at market place. In context of Coca cola, they use current machineries at the time of producing their goods and services which may leads in satisfying customers’ needs and wants in most effective manner (Bah and Fang, 2015). Along with this company also use online process to offer their services to their target customers.
Finance: For executing entire business activities, it is important for business organization to keep enough amount of money so that they effective run their customers and use new and innovative technologies. If company wants to buy quality raw material, then they require proper funds which may leads in manufacturing quality services to its customers in order to maximize their profitability level. Both marketing and finance department is relate with each other as finance manager arrange adequate fund for marketing department so that they easily operate their functions. This will directly contribute in accomplishing set goals and objectives in allotted time frame.
- Function based: Under this, every business organization preform their business activities for attaining set goals and objectives in appropriate time frame. Along with this, various department also there in which company preform their task such as production, human resource, marketing and many more. All these are also helps in attaining better success at market place.
- Geographical based: Under this, Coca cola operate their business in business in various regions in order to attain better success at market place. Along with this, firm also perform their task as per specific need and wants to the region which may help them in enhancing the profitability level of this company at market place.
- Product based: In this, company set their segment as per products quality and service which offer to the customers in order to attain their better satisfaction level. For example, company serve food and beverage to their customers as per their needs.
- Customer based: Under this, firm consider customer’s behaviours and manufacture their products and services accordingly. With the help of this company enhance their overall sales by providing better satisfaction to their customers.
Organizational structure play vital role in implementing as well as executing business activities. With the help of this company can easily enhance the chances of attaining success at market place. In context of Coca-cola, they use Matrix organizational structure in which company all the activities and relationship are established on the basis of grid and matrix as well. On the other side, workers have dual reporting responsibility which with functional manager and product manager as well. With the help of this company can easily maintain positive relation with all the function that perform their activities for attaining success.
P2 Positive and negative impact of macro environment upon business organisation
Macro environment has created a huge impact on business of organisation like Coca Cola in a huge manner (Baesens and et. al., 2014). This impact can be described using PEST Analysis as:
- Political Factors: It has been examined that there are ample number of elements under this factor needs to be considered in an appropriate manner. Along with this, government of United kingdom has made various rules and regulations that are related to both employee legislations and some others. Away with this, it is must for Coca Cola to keep on analysing of all the alterations that are being made by government. Employee relation can be improvised of this company through examining all the modifications that are being made by governmental agencies. For an example: if organizations do not keep in mind of all the tax and other policies that needs to be properly taken care.
Positive Impact:If policies of government are in favour with Coca-Cola like trading policies, taxations and more, then it will give opportunity to this firm in expanding its business successfully.
Negative Impact: As Coca-Cola operates its business in many countries therefore, its business is much affected by political factors. As every nation has own set policies and laws, thus, to obey the same and run business accordingly, arise complexity for Coca-Cola.
- Economic Factors: Economic conditions of a country may aid organizations in bringing changes in all the products and services. factor considerably put direct impact on economical condition of an organisation. If an organisation requires tohave high percentage of profitability and it is mandatory for them to fulfilling all requirement of consumers. This helps them in maintaining long term relationships with users. Away from this, it also aid in giving hard competition to rivals at competitive world. Also, this factor can be negative for Coca Cola at the time of increase in rate of taxes. It is one of the important factor which largely affect the overall performance of the company because economy of every nation play big role which define various elements such as tax rates, inflation, income level of the people and many more (Armstrong and et. al., 2015). So that its is important for manager of Coca cola to effective measure and implement within their activities which may leads in attaining better success by establishing positive brand image at market place. Effectively implementation of these elements help company to achieve their set goals and objectives and at the same time also contribute in achieving competitive advantage at market place.
Positive Impact: If economical condition and per capita income is good then it will aid Coca Cola to generate high revenues and increase profitability of business.
Negative Impact: While in case of deflation period or when cash flow becomes low, then it will adversely affect the business performance also.
- Social Factors: both customers and workers fo comes from outside world therefore it is much needed for organisations to consider this element in an appropriate manner so that issues can be resolved. there taste gets changes from time to time. Hence, it is mandatory for Coca Cola to keep on analysing marketplace and find what exactly customers are looking for. There are various elements under this factor are age, salary of an individual, taste and etc. Continuous analysation of what exactly end users are looking for may put positive impact in decision making. Away from this, Rapid changes that are coming may cost much to Coca Cola may become a negative impact as it will put reduce profitable percentage of company.
Positive Impact: High status, lifestyle and preference of people aid Coca Cola to give best quality of products to them. Moreover, by giving contribution in CSR activities, this company will get opportunity to enhance its brand image as well.
Negative Impact: Since products of Coca Cola consists high amount of carbonated water therefore, people refused to intake such drinks which harm their health.
- Technology Factors: In today’s fast technological world, it has been found that innovation and invention help organisations to make their products more creative. It assists companies to replace their existing systems with new technologies. Therefore, in order to enhance profitability and produce better products, Coca Cola has adopted latest technologies in system.
Positive Impact: Innovation and high technologies aid Coca Cola to marketing its products in vast area of marketplace. Through high techniques, its managers can operate business more easily.
Negative Impact: Due to frequent changes in technologies, profit ratio of Coca Cola can be reduced.
P3 Studying on Internal and External Analysis
It has been identified that Coca-Cola has been a renowned name all around the globe. Irrespective of this size it is essential for organisation to conduct SWOT analysis so that internal and external business circumstances could be examined (Agarwal, Grassl and Pahl, 2012). This analytical tool will make an organisation familiar with its strengths and weakness along with identification of opportunities and threats for the business. The SWOT analysis of Coca Cola is as follows:
Strength: These are referred to be the ideal performing domain of an organisation can be referred to be cause of competitive position entertained by business. The primary strengths of this organisation are its brand recognition and equity which makes it stand out from the competition. This organisation sits among one of the most valuable company in the world and recently valued at 79.2 billion. This organisation carries an extremely vast distribution network as it rendering its products in the more than 200 countries worldwide. The marketing strategies which is employed in the organisation are widely appreciated.
Weaknesses: Even though performing on such a major level, this organisation has been exposed to various weaknesses which are to be countered. The primary weakness which emerges as a threat is their competition with Pepsi. There is a intense competition amongst these organisation and resulting in the Pepsi becoming market leader. There is an absence of the variety in the product offering and mainly carries its operations in the soft drink domain exclusively. There were allegation at this organisation relating to unjustified use of water in their operations which is being criticised by the people.
Opportunities: it has been mentioned that this organisation deals exclusively in soft drink segment and carries an opportunity to expand their portfolio by offering diversified product. Coca Cola can venture in snack and health drink segment which is being forecasted as profitable for business. The existing supply chain of this organisation can be further utilised to offer distinct offerings. This organisation can venture into market which are developing and can easily expand their operations by offering existing products and services (Aterido, Hallward-Driemeier and Pagés, 2011). This organisation can make further improvement in its supply chain so that rising costs of transportation can be dealt with in an effective manner. The Coca Cola can further its strengthen its sub brand Kinley as it well appreciated in the market.
Threats: The major threat to this business is growing concern of people towards their health. The people in contemporary market are not very favourable towards consumption of soft drinks which is to be though about (Apavaloaie, 2014). The excessive consumption of water in their operations emerges as a major threat as there is a rising in scarcity of water. The climate change is affecting the supply of water which is impacting operations of this organisation. There is an rise of organisation such as Tropicana, Gatorade and Real brand as they are catering their services in health and energy drinks The rise in of health consciousness is helping these organisation in stealing away market share of this organisation.
P4 Interrelation of Strength and weakness with external Macro factors
Like every other company, Coca-Cola is also having their own strengths and weaknesses. The external factors that are present in the company are having both positive and negative impacts upon the growth of the organisation. It is also known that they are earning most of their revenue from their stores located in several stores located in all over word (Auzair, 2011). Although they having their head office in Unites states but they are able to make their position permanent in the market wherever they are being launched. This company is also considered to have the biggest market share in the beverage industry as over (45% ) of shares are being owned by them. But one of the negative factor associated with it is that they are not at all diversified into different sectors and are only into beverage products only.
Another factor which is required to be considered is the religious belief of people. Since, it is known that people of different countries are having different social norms so in whichever country they go they have to serve their products as per their culture itself (SWOT of Coca Cola. 2018). It has also been suggested that Coca-Coca should meet all the norms given by the government so that all of their products can be sold at an effective manner. They are having a strength that they are using a very good advertising strategy so as to promote their products and services in the market but since their products and services are already famous so they don't need to focus more on this sector rather they should invest this money to innovate new products.
Although they are very famous but the products and services which are produced by them are not considered good for health. They are having so many bad chemicals which can adversely impact the health of an individual (Avramenko, 2012). Coca-Cola is also working for creating their brand awareness as through this they will be able to clear all the rumours that are being spread about the company in the market. It has also been recommended to them that they should keep bringing in new products so that no new competitors can enter into the markets and they will be able to keep their control as well.
It has also been prescribed that Coca-Cola should capitalize on awareness, recognition and loyalty of its customers so that they can get connected with the company for long term basis and develop their relationship with them as well. If they will develop their public relations then they will be able to focus on their growing market segments which will later on help them to deal with their customers as well (Adeoye and Elegunde, 2012). Brand equity of Coca-Cola is very strong. They are considered as one of the leading brand in beverage segment. Coca-Cola is entering in emerging markets like India. This country has highest economic growth rate and purchasing power of people in this nation is also increasing.
From the above mentioned report it can be concluded that business environment is set of internal and external factors which directly affect the overall performance of the company in positive and negative manner. For this, it is important for manager to effectively analyse as well as assess all the factors in order to attain the positive results which directly contributes in attaining better success at market place. With the help of this, company improve their overall performance level and at the same also capture larger market share form its rivals. Along with this, manager also take right decision by considering all the elements at the time of executing business activities which may leads in attaining better success at market place. In addition of this, different functions of business organization also help in accomplishing their goals and objectives which is related with the each other. This will aid in capturing better attention towards the company products and services in order to set their positive brand image at market place.
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