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Introduction and Coca-Cola Companys overview

According to a report by United State Securities and Exchange Commission (2006)


the Coca-Cola Company was established in Atlanta, Georgia, in the year 1886. The
company is considered to be the world number one non-alcoholic beverages
company, leading in manufacturing, marketing and distribution of its product
(concentrate and syrups). Concentrates and syrups are being sold out to bottling
companies for final dilutions and packaging to consumers, Coca-Cola Company
produces a wide range of about 500 different beverage brands across the world.
In the late 1920s the company begins its journey for globalisation and presently
operating in more than 200 countries following a simple global formula Provide a
moment of refreshment for a small amount of money a million times a day.
The Coca-Cola Company together with the bottling companies forms the best
production and distribution system in the world, the system is designed in such a
way that employees dedicated and put the companys objectives as their number
one priority. Products of this company have proven to be the number one soft
drink in quenching consumers thirst of non-alcoholic soft drinks from Moscow to
Montreal and from Beijing to Boston all over the world for more than 115 years of
its existence. One of the key objective of the company is to increase its market
share-value, which was achieved by operating with associates with the aim of
satisfying customers and valuing customers interest as well as protecting
companys assets and minimizing business ricks.
PESTEL ANALYSIS
A recent analysis polled online written by Annasurmane on PESTL analysis. PESTL
analysis is an mnemonic meaning Political, Economical, Social, Technological and
Legal often use is a tool by companies to analyze the whole EXTERNAL
environment from every angle the company is operating under. Although CocaCola Company is the world leading non-alcoholic beverages company in the world,
its still needs to undertake PESTL analysis to know more about its external
environment, precisely the opportunities out there and it competitors so as to
maintain its customers loyalty and position.
The Political factors establish the extent as to which the serving political policies
and rules influence the economy or rather the business organisation. This policies
and rules include, how much tax is impose, trade tariffs and fiscal policies to
mention few.
The economic factors are the determinants of economic performance that impact
the company in one way or the other, factors such as interest rate, inflation rate,
foreign exchange rate and economic growth. These factors will affect the
companys sales, product price and purchasing power of potentials customers.
The social factors comprises of environmental trends, which includes cultural
trends, population analytics, demographics trends, seasonal trends to mention
few. For example, in the western countries there is high demand of things during
holiday seasons.
Technological factors includes innovations and technological development the
affect the organisational performance in either in positive or negative way. This
can be in form of automation of some organisational.
Legal factors involves both internal and external segment of the organisation,
internal in the sense that the organisation develop some inside laws and
regulations to maintain its operations and dealings while external in the case
where certain law, policies and regulations are imposed to the company by
legislation, government or regulatory agency.

PESTL ANALYSIS FOR THE COCA-COLA COMPANY


POLITICAL:
Political changes in accordance with the ruling government, changes that has to
do with government regulations, majors and policies as to how a companies
should operate and as to how the products should also be. By setting up those
rules and regulations the government intervene with the companys decisions
because the board have to make sure in every decision that is being made those
roles and regulations must in no circumstance be violated, some of which includes
monitory policy, trade restriction, recruiting policy, environmental policy.
The Coca-Cola Company being a non-alcoholic beverages company falls in the
category of what is known as the Food and Drug Administration (FDA), FDA is a
globally recognized agency originated from the United State of America to
monitor and verify ingredients that are being used in manufacturing non-alcoholic
products. The coca-cola company cautiously examine their ingredients to meet up
requirements of the FDA before presenting it for approval.
However, aside from the FDAs requirements other political majors that are being
set in accordance with the jurisdictions of countries includes income tax, import
and export regulations and the uncertainty of political crisis. Political crisis can be
in form of protest, which might affect the demand of products, as well as political
violence that makes it hard for the products to penetrating in political crisis zones.
ECONOMIC:
These are economical factors, which companies uses in forecasting future
decisions on investment. These includes interest rate, inflation, standard of living,
wages, exchange rate, unemployment rate and the overall economic growth of
the country. These economical factors differs in each of the operating countries,
which is why before a company venture any country it has to comprehensively
analysed the economy of the country considering the upper mentioned factors.
Economic growth of a country gives a company a glimpse of high purchasingpower, 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 world wide 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 increase 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 couldnt 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 peoples 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 analyse before introducing marketing and introducing products. CocaCola 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 general
public. This concern is mostly raised by younger generations so as to maintain
good physique. According to a study consumers 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 factor of social analysis.
TECHNOLOGY:
Technology plays several functions in beverages industry as with
manufacturing new products, packaging product and distribution of products.

the

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 dont have total control power over. This is why its 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 let 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 includes, 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 safely 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 definitely affect the company.
SWOT ANALYSIS
According to Berry (2014) SWOT is mnemonic representing Strengths,
Weaknesses, Opportunities and Threats which are considers to be internal and
external factors some of which the company has control over and some of which it
has no control over. This analysis is been used as a tool of auditing of generally
strategic position of an organization.
The factors can be overviewed as follows

Strengths: These are qualities of an organization that facilitate that support the
organization to achieve its mission. These qualities could be what the organization
is versed on or expertise on, these includes individual and team quality of
employee, the diverse qualities that distinguished the organization from its
competitors. Strengths of an organization can be on its brand, financial resource,
human competency, products/services to mention few.
Weaknesses can be regards to the attributes the prevent an organization from
achieving its mission or operating effectively, these weaknesses hinder the
growth and success of the organization. Weaknesses include poor machinery,
ineffective decision-making, deficient research and development capability etc.
Opportunities are usually presented by the external environment within which the
organization operates to take advantage of, when opportunities arise its expected
for an organization to strategized on how to take advantage of it be its in
profitability, brand, customer loyalty, product/service recognition, penetrating new
market etc.
Threats are also attributes presented by external environment, attributes that
have the tendency of jeopardizing the organization. This are sometimes being
mistaken for weakness, but threats are external while weakness are internal
within the organization example of which includes technological changes, increase
in competition to mention few.
SWOT ANALYSIS FOR COCA-COLA COMPANY
Jurevicius (2013) in a site conducted a detailed SWOT analysis of the Coca-Cola
Company using so many factual statistics and evidences in validating the
analysis. As mentioned earlier SWOT analysis comprises of Strengths, weakness,
opportunity and threats, where the strengths and weakness are considered to be
internal factors while the opportunities and threats are the external factors
influencing the company. This will be discussed in details below.
STRENGTHS:
1. Worlds foremost brand: Coca-Cola as a brand is consider to be the global
leading brand, in the year 2006 an international branding consulting firm
ranked Coca-Cola number one brand on the hierarch of top 100 global
brand in the same year week-inter-brand valued the brand at $67,000,000.
The brand is racked far above it competitors in the beverages industry, the
brand following it in the beverages industry is Pepsi which was ranked
number 22 with brand value of $12,690,000. Moreover, aside from being
the number one brand, it owns the top four beverages brand in the world
that include Fanta, Sprite, Coca-Cola, and Diet Coke. This is why the Cocacola brand posses the largest portfolio of product brand in the beverages
industry. This advantage is what the company look at in introducing new
brand example of which are Vanilla Coke, Cherry Coke, and Limon Coke.
Coca-Cola Company heavily invest in promoting the brand over the years,
this is one major advantage the Company uses in penetrating new market
meanwhile strengthening existing markets.
2. Large scale of operations: In the whole world Coca-Cola Company is the
largest beverages company operating with more than $24 000,000,000
(twenty four billion USD), it manufacture, market and distributes its
product in more than 200 countries with approximately 52,000,000,000
(fifty two billon) consumed everyday. The company account for more than
1.4 billion USD in beverages bearing trademarks. These operations are
being supported by strong infrastructures with 32 high standard
manufacturing plants distributed across the world along with 95 bottling
and canning plants outside the United State. In addition the company also
produce bottle water and concentrates juice. This advantage enable the

company to be able to meet up to its high demands of products as well as


increase the companys revenue.
3. Vigorous revenue growth: Coca-Cola Companys revenues double it growth
in Latin America, Pacific Rim and East, South Asia. In the year 2006 its
recorded revenue grew by 20.4% in Latin America, and grew by 10.6% in
East/South Asia and Pacific Rim. Furthermore, the bottling company
accounted for 34.8% of revenue generated during the fiscal year 2006.
This vigorous raise in revenue in those segments contributed effectively in
the overall growth of the Company during the year.
WEAKNESS:
1. Negative Publicity: The Company has been allege to various unethical
related issues which prompt lawsuits against the Company on issues of
human right violations, there have been rapid allegations raised
concerning the Middle East and U.S foreign policy over the years. In the
year 2006, the company received negative publicity concerning
ingredients used for producing its products by CSE (centre for Science and
Environment). The products where asserted to contain pesticide residue.
The President/CEO of Coca-Cola Company Mr. Muhtar Kent received a note
on the 10th of December 2008 from FDA warning him about some of its
product that are violating the Act. Products include Diet Coke, Plus, 20FL
and OZ. Furthermore, Coca-Cola Company has been suit by United State
Consumer Group I early January 2009 against the companys flavours for
Vitamins Water.
2. Slow performance in some regions: In North America Coca-Cola Company
generate about 30% of it total revenue during the fiscal year 2006, this
significantly shows how important this region is to total revenue growth of
the Company. Prior to this study estimate a weak market performance in
this region due to weak trends of sparkling beverages in the region, where
the company recorded a decrease supply in companys warehouse. Slow
performance in this region will defiantly impact the company negatively in
terms of revenue growth and hinder the company in entering the top
growth list of companies.
3. Decline liquidity from operating activities: As recorded in the companys
annual report, there is a clear declination in cash flow from operating
activities in the year 2006. Comparing it to the preceding year in 2006 the
operating activities cash-flow decrease by 7%. Total cash flow generated in
the year 2005 is recorded to be $6,423,000 which decrease to $5,957,000
in the year 2006. The decrease of $216,000,000 is as a result of taxqualified trust, which is set up to promote and fund retiree medical sector.
However, the decrease is also as a result of positive marketing strategy in
the year 2005, which was lacked in 2006. Decline liquidity reduced the
financial investment rate that will positively impact on the total companys
growth.
OPPORTUNITIES:
1. Acquisitions: in the year 2006 Coca-Cola Company acquired Kerry
Beverages (KBL) this made it possible for the company to take control over
manufacturing and distributing its product across Chinese provinces
operating in form of join ventures. Likewise in Germany Apollinaris was
acquired, a company that is engage in sparkling and mineral water. More
also the company owns 100% interest in South African company named
TJC Holdings, more acquisitions where made in Australia and New Zealand
in the year 2006. This acquisition did not only expand the companys
revenue but rather strengthened the companys international operation,
which is an added advantage. Furthermore, as we mentioned earlier robust
international operations increase the companys overall growth and make
it much more easier for the company to penetrate into a new and existing

markets. Coca-Cola Enterprises is one of the biggest bottling company in


North America was also acquired by Coca-Cola Company on 25 th of
February 2010.
2. Emergence of Bottle Water: In beverage market today bottle water is the
fastest growing commodity study has showed that in the year 2006 bottle
water generated revenue of $15.6 billion. This is due to increase in health
concerns, in the years 2006 consumption of bottle water was estimated
around 30 billion volume of litres and statistics expect it to increase in
2010 by 38.6 billion unit.
The value of bottle water is estimated to reach $19.3 billion in 2010 while
the revenue generated by the flavour (slightly sweetened refreshing
flavour) is annually increasing by $10 billion. In the United State Coca-Cola
bottle water Dasani brand is rated to be the third best selling water.
3. Rapid population growth: Rapid increase in Hispanic population across the
United State is an added prospect for the company to snatch so as to
generate higher revenue on products consumption. In the year 2006 its
confirmed that 11.6 million households in United State are Hispanic, where
at the same year census estimated that Hispanic population will increase
to more than 60 million by 2020 (18% of United State Population).
Translating this to buying power, the Nielsen media proclaimed Hispanic
buying power will increase to $1 trillion by the year 2003.
THREATS:
High Competition: Coca-Cola Company being among the non-alcoholic
beverages find its self in highly competitive position in various market within
the United State and outside. PepsiCo is the major competing company to
Coca-Cola Company; other companies include Danone, Krafft Foods, Cadbury
Schweppes, and Nestle to mention few. The presence of these competitors
elevated the factors which include issues of pricing, innovations, brand,
advertising, sales and protection. High competition rate could impact the
companys general performance.
Dependence on bottling companies: The Company generate lion share of it
revenue through sales of concentrates and syrups to many bottling companies
of which the Coca-Cola Company have no total control of. It was approximated
in 2006 that 83% of the total volume unit is been produce and distributed by
various bottling companied across the world.
Health cautious is now becoming major concern among people. In the United
State of America people are searching for different variety of non-alcoholic
beverages and at the same time highly cautious with carbonated and
sweetened drinks are are align to prompt a decline rate in consumption of
those carbonated drinks. The general revenue generated in 2005 by
carbonated drinks decrease by about $63.9 billion USD. Beverages Company
faces criticism for promoting obesity and poor diet to their consumers.
The impact of international business environment on Coca-Cola
Company:
As studied in 2007 (ElAmin) 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 companys turnover as
well as the profitability margins proportionate to the companys expansion and
development in the outskirts market. Wide brand expansion is one of the
companys 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,
Friutiser, monster Appletiser 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.

Globalization:
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 nations 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 more faster due to development and
order forces which will be discuses letter on.
Brief history of Globalization
According to James and Peck (1998) Globalization started in the 17 th 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 more easier to
communicate internationally. Decline in barriers to trade between different
countries increase international trade that makes the worlds GDP increasing
in a steady rate.
Benefits of Globalization
Increase in economic integration can be seen to be on of the major benefit
gain 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. This is why recession in an economy of ones country affect the
others. However, consumer markets are considered to be 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. Companys 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.

Factors affecting Globalization


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 90s 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. Its started in the UK in the 80s 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 own 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 50s was a major drive in
transporting heavy and huge goods. However, there was a continuous
enhancement to shipping technology ever since.
Extent of Globalization on Coca-Cola Company
According to Coca-Cola Companys report (2006) The name Coca-Cola is one
of the must 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 continuer 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 companys turn over to be from other foreign
country.
This is possible due to globalization; John Pemberton founds the company in
the 1880s 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 1900s 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 on 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 continue 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.

Challenges faced by Coca-Cola Company on Globalization.


The road to success has never been smooth and easy. For Coca-Cola Company
the phrase seems perfectly matched, the Company faced a lot of challenges in
some countries as it was trying to globalize. Some countries prohibited the
used of Coca-Cola products with the assertion that the products are health
threatening and cheering obesity, which are two major concern for people
nowadays. Aside from these assertions so many suits had been filed against
the Coca-Cola Company with the allegation of child labour sweatshops other
countries suits the Company for being selective in providing healthcare to
their workers. Another major challenged faced by the Company was the
infiltration of the beverages market by other strong Companies such as Pepsi
and co as analysed by the companys sustainability report (http://www.cocacolacompany.com/sustainability/global-challenges.html).
However, upon the above mentioned challenges, the Coca-Cola Company
remain strong and overcome the obstacles by focusing on its mission to
provide good quality, satisfying and refreshing products to their customers.
The Coca-Cola Company uses a strategy of uniform tastes, which is been
achieved by ensuring strict control of recipes and facilities. This strategy really
helps the Company in overcoming some of the challenges and the Companys
number one goal to be the number one beverages company in the world.
Structures of organisation operating on international scale
Organisational structure
According to an article written by Nordmann (2004) The term organisational
structure is primarily used in defining how organisations structure their
operational tasks. Six key elements are expected for an organisation to
consider in structuring organisational tasks, this includes work specialization,
span of control, decentralization, centralization, departmentalization and chain
of command.
The Simple Structure
The Simple organisational structure is mostly been use in a small businesses
where the owner is likely to be the manager of the business, this structure is
characterized with low degree subdivision of tacks. This made it easy for the
authority to be sided or centralized to a single manager who is assumed to be
the owner of the business. From the name simple structure, its consider to be
simple with little formalization, this makes it flexible, easy to control, more
accountability, fast to coordinate and more economical to operate. However,
as organisation is growing bigger this structure is prompt to so many
challenges due to low level of formalization and high level of decision
centralization this will eventually instigate information overload which drive
ineffective decision making by slowing it down.
The Bureaucracy Structure
Bureaucracy business structure is a pyramidal structure that is often use by
government agencies and public administrations which involved a lot of paper
work with the intent of achieving predefined complex goal efficiently and at
low cost. The structure is characterized with extremely organized structure
with high level of formality and the structure has a strict orderly, highly
efficient and fair line of command at all times with centralized authority as
well. This structure has many layers of line management, flowing from
executives to senior regional managers on to departmental managers flowing
all the way down to supervision officers.

The Coca-Cola company has a similar organisational structure with a distinct


international division which is in the head office commanding the five
continental divisions around the world, this includes Eurasia and Africa Group,
Pacific Group, Europe Group, North America Group and South America Group.
Each of those continental groups has a vice president that assumes the control
of each sub-division. The companys structure is uniformly irrespective of
region or country of operations with rigid command of operations control from
the head office.
Moral and ethical issues faced by organisations operating internationally
According
to
Donaldson
on
a
recent
polled
site
(https://www.karlknapp.com/resource/ethics) Generally, organisation operates
in either production of goods or services by utilizing limited resources to meets
customers needs and wants. The organisational activities is expected to be
carry out in such an efficient way to maximize profitability so as to get back to
the society in a positive way, by so doing the organisation is fulfilling its social
responsibility. In light of globalization, there has been an increase number of
ethical and moral issues facing international organisations, issues of crosscultural situations where many international organisations are being accused
of ethical misconduct in carrying out some of there functions. Most if not all
organisation operating internationally in a cross-cultural setting are being
exposed to divers ethical norm and values which have to be taking care of for
the organisation to succeed. Addressing such ethical issues has never been
easy but it could be influence using some ethical approaches, some of which
include descriptive-prescriptive and normative approach.
Descriptive approach laid more emphasis on taking a deep understanding of
moral reasoning and value of groups and individuals when making decision on
ethical matters, in this approach ethical decision making process is being
influence by different individual, contextual and situational context such as
cultural environment, organisational environment, opportunities and personal
experience.
Ethical standards are often not clear or not defined explicitly in many
countries, which is why moral question of what is right or wrong is still a
dilemma in both local and international market place. This problem is more
complicated in the international scale due to diverse cultural groups, that is
accepted in one country might be rejected in another country. This gave raise
to the issue of universal ethical norms that had been based upon some basic
moral principles that could be used to appraise international organisational
ethics, where violation of such basic moral values could be regarded as a
bridge. Most of this basic morals values are cultivated using a scenarios in
various organisational sub- disciplines which includes retail management,
advertising management, purchasing management, human resource
management and so on.
General ethical and moral issues
internationally include the following:

faced

by

organisations

operating

Bribery: This could be categorised in either traditional small scale or large


scale, which involves the payment of relatively small of large amount of
money to any official to overlook of violate some of his/her
duties/responsibilities or rather to facilitate policies in favour of the giver.
Pricing: The issue as regards to pricing involve differential pricing and
incontrovertible invoice. These include a scenario where buyer will request for
a different price written on the invoice other than the actual transactional
price and secondly for the prices to be unjustly different form the host country.

10

Illegal/immoral activities: Some organisational practices can be seen as illegal


in the hosting country due to the negative effect it has on the country, workers
or customers of the products/services. This includes polluting environment
with organisational by-products or operating in an unsafe environment that
prompt the workers at ricks.
Cultural differences: Their exist a high tendency of cultural misunderstanding
in transactional and exchange processes due to cultural diversification, a clear
business transactional practice could be considered a bribery by other culture
example include political contribution, gift, favours, monetary payment and so
on.
Conflicts between corporate strategy and ethical and social
responsibility
As asserted by European competitiveness report (2008) A corporation being
having a predefine decision making ability on rules and policies is the key
element that makes it mandatory to abide by societys ethical and social
responsibility. Some corporation policies and rules can contradict society
ethical and social principles, which will defiantly bring conflict between the
society and the corporation. A most common conflict that usually arises
between corporations and society is the issues of advertisement.
Advertising is way of broadcasting message through the media with the
intension of reaching out to customers or potential customers in order to
promote certain goods or services. This process is conducted with the aim of
achieving three consecutive goals, which include convincing potential
customers over certain product of services, communicating information to the
general public and constructing some certain values to the society.
This process can bring conflict between the society and the corporation if
either the message is unwholesome to the audience or if the advert is
conveying negative value to the audience. Furthermore, if the message is
unwholesome it can mislead the audience. A clear example is the advert
slogan that uses to exist many year ago Do whatever you want this slogan is
believed to have violate sensibility of the audience which was argued on and
letter modify to Do what you should. The second phase is the conveying
values, which can either be positive or negative. A common positive advert
slogan is You only live once this is inspiring and it teaches the audience the
value of life, on the contrary some does convey negative values. Examples of
such are the hedonism as well as the patriarchy; the hedonism adverts always
encourage the value of material wealth to be the greatest good such adverts
distort the moral and ethical value of human and encourage trend of audience
chasing after brands and materials while some advertisements contains some
violent sexual implication which are some of the reasons why many countries
regulate the type of advert to shown due to these negative influence on
audience. Examples includes, Sweden and Norway prohibit advert of any kind
to children under 12, Greece prohibits adverts on war games, Germany and
Finland prohibits advert of products that children can access and buy directly,
England prohibits adverts starring in children programmes to mention few.
Hence, its expected for the corporations advert to stay within the societys
social norms and encourage significant social values to its audience.

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The legislation, regulation and guidance as to corporate social


responsibility
Feris (1997) These are parameters most managers and government agencies
used to ensure and promote ethical conduct of an organisation, which can be
shaped within the organisation by the managers and outside the organisation
the organisation by government and regulatory agencies.
Legal responsibility in this phase has to do with the rules and regulation
enforce by state legislators, federal regulatory agencies and local town
councils on corporations operations, those embrace what the regulating
bodies as mentioned earlier deems as significant in respect to proper
corporate behaviour. Its expected for every organisation to operate within the
legal framework set by those regulatory bodies wherever the organisations is
located or positioned.
Any organisation that is found to compromise any of those rules and
regulations is likely to be suit by any of these regulatory bodies. Example is
Tenet healthcare; this health organisation had a federal lawsuit on one of its
hospitals for performing excessive cardiac procedure to some client that has to
be settled with $54,000,000 USD. There are several numerous cases of such
federal lawsuit against organisation across the world this is making managers
to be more cautious in abiding by each one of their legal responsibilities. Some
of this laws and regulations include, tariffs, child labour law, import/export
quotas, discrimination law, site regulations, and administrative policies,
International financial reporting standard, OECO, ISGN, ISAR to mention few.

Code of ethics in regards to guidance on corporate social responsibility


Porter (2006) Code of ethics is a formal statement developed by the
organisation revelling the companys stands of social and ethical issues, this
statement is formed primarily to communicate directly to the employees on
certain level of social, moral behaviours and values that are being expected
from them at the same time those that wont be tolerated. This statement
often comes in two categories, the policy based statement and the principal
based statement.
The principal base statement is popularly known as corporate credos which is
developed to address corporate culture, the statement define the fundamental
ethical and social values on companys products quality, employee welfare
and companys responsibilities. The policy-based statement is designed to
address situational techniques to be used in address specific ethical and social
circumstances, which include conflict of interest, proprietary information,
equal opportunities and marketing practice.
Conclusion and recommendations
The report commenced with a brief introduction of Coca-Cola Company with a
detailed analysis of the international market of its products. PESTL and SWOT
analysis was being conducted to identify potential segments the management
needs to focus on in order to achieve its objectives so also the trends and factors
affecting the company on an international scale. The report 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.
It is clear that customers are being regards as the number one factors to be
considers in operating under international or local level, unlike before nowadays
customers have different varieties of choices between products. Therefore, if a

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company can not 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.

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