As the popular adage goes, if you fail to plan, you plan to fail. This exemplifies the need for immaculate planning on how any business entity is to chart forward in its endeavors. Businesses are indebted to a number of stakeholders : shareholders, management, employees, suppliers, creditors, the government or local authority, customers, future potential investors, and even the people with whom organizations interact with just to mention but a few. For the needs of the various stakeholders to be met fully as and when they fall due, it calls for concerted efforts by the management of the organization to be operating most efficiently and effectively. The government will require taxes, return on investment for the shareholders, high quality goods and services for customers, timely financial information for the potential investors and corporate social responsibility towards the local community. It is incumbent upon the management to play a pivotal role in meeting the various needs of the organization. It’s worth noting that most successful organizations are led by visionary leaders supported by highly motivated and talented team.
Since most organizations do not operate in monopoly, it is worthwhile to conduct examination on how they may attain competitive edge over their competitors. Its in this regard organizations need to evaluate their Strengths, Weaknesses, and Opportunities (SWOT) Analysis as well as Political, Economic , Social and Technological Analysis (PEST). With special emphasis to the Coca-Cola Company, we are going to implore the importance of planning with SWOT and PEST (Armstrong 25).
SWOT analysis is the internal evaluation of a firm which may include strategies, trends, resources, mission, objectives etc with the aim of identifying specific strengths, weaknesses and its external environment which may include economic, demographic, social & cultural, technological , legal and political as well forces of nature to determine specific opportunities and threats.
PEST on the other hand is a framework for viewing the macroeconomic environment.
Both SWOT and Pest are employed at Coca-Cola Company to attain the desired results for the huge number of stakeholders. The Coca-Cola Company is a world leading manufacturer, marketer, and distributor of non-alcoholic syrups and beverages. The company has over four hundred licensed brands under its name, which includes sports drinks, teas, diet and light beverages, coffees, juice and juice drinks and waters. The company is operating in more than 200 countries and has its headquarters in Atlanta, Georgia. It is estimated that 74 percent of its products are sold outside of the USA. This implies that as a multinational, Coca-Cola is able to benefit from benefits of scale (Armstrong 28).
Business Week and Interbrand recognized the Coca –Cola brand as one of most popular brands in their top 100. Coca -cola brand was valued at $67,000 million in the year 2006, this places them way ahead of Pepsi Cola which is ranked 22 with a brand value of $12,690. This is according to reports released by Business-Week and Interbrand, a branding consultancy in 2006. Despite the company’s strong brand value, it’s threatened by increased competition which could erode its earnings significantly.
One of the strengths of Coca Cola is the fact that it has strong recognition across the world. As the worlds leading brand, the managers will put measures that ensure they continue being at the top in terms of market share. This may entail increased allocation of monies towards campaigns and promotions so as to maintain market share as well as facilitate customer recall and to penetrate new markets. Another major factor that plays to their advantage is economies of scale. With several plants across the globe, Coca-Cola is able to feed its upcoming markets rather easily and thereby ensuring maximum collection of revenues. In terms of operations, Coca Cola owns and operates 32 manufacturing plants throughout the world. Besides this, it has interests in 37 operations with 95 beverage bottling plants located outside the USA (Armstrong 35). The decisions that are to be made in terms of future sustainability of Coca Cola should not be hinged on the current position held by the firm but rather the projected desired results for the future.
With the prior said advantages, Coca Cola is also faced with a number of challenges, which accrue due to their worldwide operations. For instance, the company was accused by the Centre for Science and Technology (CSE) of releasing goods to the masses, which had pesticide residue. This was specifically reported in goods that were sold in India which are thought could have caused cancer. It’s upon this bad light that the management should come up with ways to alleviate the bad image. It has also experienced decline in market share especially in the North America.
There are opportunities for Coca-Cola in the future through acquisitions. This was highlighted in the acquisition of Kerry Beverages, (KBL) back in the 2006 (Armstrong 23). With the proper employment of the SWOT and PEST analysis, the future of Coca Cola can be planned in a much better way to achieve the desired results.
Armstrong, M. Management Processes and Functions, 1996, London. Print
“PESTEL analysis of the macro-environment”. Oxford University Press. 2007. Web.