External And Internal Environments {type) To Use As A Writing Model

An industry entails the production of services and goods by availing utilities to customers or transforming inputs into outputs. The outputs of industry are either used by other manufacturers for further production or by consumers in satisfying their desires. Operations in a particular industry might be the generation, extraction, production or transformation of goods and services at a given price level. There three categories in which industry can be subdivided based on the nature of products in subject or the process of producing it. These types of industries entail:
i.)Primary industries
This industry entails creating utility by hauling out raw materials form their natural setting or the growth and development of animals and vegetation using reproduction. This industry is further sub-divided into either genetic or extractive industry. The extractive industry works just as its name suggests. Goods are drawn out from land, air or water and create utility in them. It’s a fundamental segment for many other industries as it supplies them with their raw materials. On the other hand, the genetic industry affiliates itself with the growth and development of animals and vegetation by breeding of animals or multiplying a certain species of flora.
ii.) Secondary Industry
In this category finished goods are made from materials obtained from primary industries. Finals output is obtained by converting semi-raw and raw materials through processing, manufacturing, constructing building products and assembling machinery.
iii.) Tertiary and quaternary industry
Also referred to as service sector, it involves selling skills and services. It may entail selling commodities and products from primary to secondary industries. Examples of those firms in this industry are transportation, health service, entertainment, education, sales, retail, tourism and banking.
The quaternary segment constitutes of the industries providing information services, such as computing, information and communication technologies, consultancy and research, particularly in scientific fields. This industrial sector is the rapidly growing owing to the advancement and innovation of new technology.
Despite not having control over environmental factors a firm can have a fair amount of control over the impact the environmental factors will have over its performance. This is done by anticipating, understanding and responding professionally to external factors by the management of internal factors. For example, although Coca-Cola cannot change the cold weather condition it can manage its stock in such regions as a way of reducing fluctuations the harsh atmospheric conditions could cause.
The general environment that influences operations of Coca-Cola includes: social, technological, environmental, political, legal and economical (Meidutė & Raudeliūnienė, 2011). These half a dozen of external segments affect the corporation from outside its control. The process of assessing how each segment can have an impact on a company is referred to as PESTEL analysis.
Out of the various segments of general environment, the political environment is among the top ranking in influencing the company’s operations. It is usually the direct challenges a firm is posed to by the political parties in power. The rules and regulations passed on by the politicians have a momentous influence on the cost of running a Coca Cola’s operations and the strategies it will employ in marketing its products and services. For instance, there might be a certain law that has set a limit upon which the corporation is not allowed to import beyond.
This will be restricting the firm from fully exploring its potential by increasing its produce. Since Coca-Cola is a universal company the rules set in the various countries, greatly affect the firm. Like in some nations its products are subdued to quotas or heavy taxation. This forces the company to retail its merchandise at a higher price reducing its customers. The industry it is in is also affected forcing smaller companies to quit as they might be incurring losses to t heavy duty induced on them by governments.
The environmental segment also has a great impact when it comes to organization’s operates. It entails factors such as pollution levels, weather patterns and natural disasters. For instance, there might occur an earthquake with when the firm has its processing plants; such an occurrence cannot be prevented yet it will result in losses. Regions prone to calamities such as flooding, hurricanes and tsunamis are hardly ventured by firms in this industry despite there being potential customers in the regions.
There are five forces of competition that govern the returns structure of an industry by determining how the economic value it creates is distributed. It is through exploration of these five forces that it can be noted that an industry growing at a fast rate does not guarantee profits (Grant, 2015). These forces of competition include:
• Industry rivalry — extreme competition leads to reduced profit potential for companies in the same industry as they focus all their resources into outdoing the other.
• The threat of substitutes —availability of different commodities yet they can serve the same purpose limits a firm's ability to raise prices.
• Bargaining power of buyers—buyers being able to impact on prices of products can turn out not to favor a firm
• Bargaining power of suppliers— how high the position of sellers is are there numerous or only a small number of potential suppliers or is there a monopoly.
• Barriers to entry — this refers to how hard or easy it is to enter and leave the industry. What act as a restraint against new competitors?
Out of the above forces, the industrial rivalry is the most significant for Coca-Cola. Pepsi has been an all time business antagonist for the corporation. They have always striving to outdo each other in marketing their products throughout the world. The other force significant to the company is the threat posed by substitute commodities such as yoghurt and fruit juice. However, Coca-Cola has been able to handle all these by investing more in its advertisements. It has used amazing commercials that entice people to appreciate its products and stay loyal to the brand.
In future, the company might maybe introduce a new drink entirely different from the ones t has been producing. By doing so, it might create a monopoly and enjoy its benefits before other new companies venture in. Also by introducing a new product it would have evaded having to compete with rival companies saving on the cost it would have incurred in trying to market itself more.
Despite Coca Cola’s reputation of innovation and its success in decades, it is puzzled with some flaws that pose external threats. Peoples view in regards to a product can be the strength or weakness of the company producing the product. Although most people sing praises for the brand there, exist others who are against the company and the merchandise it produces. Unfortunately, word of mouth is something that cannot be determined or controlled. For instance, people who have not yet tried Coca Cola’s products when exposed to bad opinions and comments regarding the product they are likely to not ever prefer it.
Water is a fundamental ingredient in considerably all of the corporation’s products. It is important in the farm fields from where the company fetches some of its raw materials, and it is also a requirement in the manufacturing processes. And without a doubt water is a resource significant for the prosperity of the communities served by Coca-Cola. However, in most parts of the globe, it is a scarce and limited resource. This poses a threat to the corporation in the long run as it has had to face capacity constraints and cope with a high cost that might severely affect its profitability.
The corporation earns revenues, pays for its expenses, incurs liabilities and owns assets in nations using currencies apart from the U.S. dollar. Since its consolidated financial statements are presented in U.S. dollars, it, therefore, has to convert income, its expenses, revenues, liabilities and assets into U.S dollars at the exchange rates present at the end of each reporting period. Hence an increment or decline in value of the dollar in comparison to the other currencies will affect its net operating income and revenue. Moreover, unanticipated devaluation of currencies in the markets could have an adverse impact on the value the corporation reaps from its assets in those markets.
Coca-Cola has opportunities in the successful brands that it is continuing to pursue and exploit. For instance, it has the opportunity of commercializing it less popular products. With the sufficient finances at its disposal, it can easily put some of its uncommon beverages out in the market. It might turn to be of great benefit if the company starts selling the unpopular products to the same extent it does with the main product. Coca-Cola also has the opportunity of buying out its competition. Although such an opportunity hardly presents itself in business, to Coca-Cola with its power and success it is very possible.
Coca-Cola has attracted quite many countless beverage brands into the industry. The only way of making their profits to be yours too is by amalgamation. Although this might be costly at first, in the long run, it will result in lump sum benefits. Additionally, the corporation will not have to deal with making their product relevant in the competition. Coca-Cola being well known throughout the world has made them want their brand known even better (Stopford, 2011). This is an opportunity that other companies will ever salivate for as Coke continues expounding on the gap between its competitors and itself. Name recognition is a unique factor affecting Coca Cola’s competitive position.
Regarding the threat of water management, the company can initiate projects that will go a long way in not only preserving water but also avoiding its pollution. Governments and other worldwide NGO’s will recognize the work the corporation is doing and come in to support. It will revolutionize the current state of water scarcity in most parts of the world and make it a much better for future generations. Coca-Cola should always take advantage of the opportunity of being recognized by most and make sure to maintain that regardless of the measures it has to take in the industry.
Continuous devotion to producing high-quality Coke products that can be acquired globally is among the greatest strengths of the company. Consumers find it to be amusing that the same quality beverage they enjoy in England can also be found in other nations like South Africa without loss of quality. Product development is another major strength of the corporation. Apart from producing high-quality soft drinks, the company introduces noticeably new flavors to its line of soft drinks.
Although product development is viewed as a strength for the company, it can also be considered as a weakness. Owing to the reason that products the corporation produces are not necessarily healthy. The drinks and soda made by the company have a high concentration of sugar which can result in illnesses if excessively consumed. At the rapid rate at which obesity is becoming a world problem in the current society, people are likely to consume healthier substitutes of Coca-Cola products.
Coca Cola should entice those innovations that develop its products always to come up with new flavors. By doing so, it will be taking advantage of this strength and outdone its competitor. The brand should also keep the record of all the feedback they receive from consumers. Not forgetting to have room for fresh and new talent into their team. These are the people who will be assisting in developing the corporation’s products. A strategy that might be used to fix the weakness of Coca-Cola products being unhealthy is introduced another product that has less sugar concentration. Those looking after their health very much will be sorted out without having to use products from other brands.
Resources and capabilities are the building pillars of any business. Resources are the essential inputs required to create output. They can either be tangible or intangible. Coca-Cola has sustainable and strong financial resources. As a result, the company can use the latest technology in carrying out its operations. It has a large number of staff workers all over the world and tries to keep them motivated as their engagement is crucial for the corporation’s success. Capabilities refer to how resources available are used in production. Coca-Cola is a company that is well capable and competent in marketing its products, hiring workers and conducting its daily operations.
The value chain of the Coca-Cola has five main activities. These are suppliers, customers, operations, services and lastly sales and marketing. Out of roughly 2,400 products, the company markets four of the world’s top sales drink brands. Despite the industry being small and having only two competitors, creativity is an essential marketing strategy in which Coca-Cola should keep investing its capabilities, competence and resources.
References
Grant, R. M. (2015). Five Forces of Competition. Wiley Encyclopedia of Management, 1-4.
Meidutė, I., & Raudeliūnienė, J. (2011). Evaluation of Logistics Centres Establishment: External and Internal Factors. Business: Theory and Practice, 12(2), 175-182.
Stopford, M. (2011). Reputation Management at Coca-Cola and Beyond. Reputation Management, 201-214.