Assessing the environmental factors affecting firms


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Environmental factors affect businesses and impact every day business marketing decisions. I chose Coca-Cola also known as Coke, as the organization for this environmental factors paper. The inspiration for this paper, comes from the can of Diet Coke sitting on my desk. In this paper, I will touch on the forecasts of high level global and domestic environmental factors that may impact Coca-Cola's marketing decisions. I will also touch on the forecasts of how technology has changed and affected Coca-Cola's marketing decisions. I will explain how demographics and physical infrastructure are important. An analysis of how cultural influences environmental factors along with an analysis of the influence of the Foreign Corrupt Practices Act.

Coca-Cola is one of the leading soft drink companies in the world. When I think of Coca-Cola, I automatically think of the Coca-Cola Polar Bear commercials on television during the winter months, sliding down snow covered slopes and finding their way to the bottom with a cold bottle of Coca-Cola. They are able to demonstrate the ability to successfully trade their products in the global marketplace and still are able to satisfy all of their customers. Whether globally or domestically, Coca-Cola can be seen on billboards, television, in restaurants, magazines, and on the shelves in supermarkets, but despite Coca-Cola's success, environmental factors still affect and change the future of their company.

One article titled "The Beginning of Coca-Cola," talks about how Coca-Cola began marketing in China in 1927. In 1979, Coca-Cola plants were introduced to China again after a 30 year absence since 1930. One environmental factor that the company faced in China was sales. The company found their products were more successful in smaller markets than in larger cities and larger retail chains. To counteract on this factor, the company developed an aggressive marketing campaign that involved new products which were geared towards the people of China. The organization had to also consider the people of China did not consume as much soda as other people in other parts of the world. The company developed a solution. New products were introduced that were specifically designed for China. These new products consisted of non-carbonated beverages and fruit juices that were tailored to the Chinese taste (Shankar, Ormiston, Bloch & Schaus, 2009). The article shows Coca-Cola was successful with the new products that were introduced in China. Although the company must never take anything for granted, constant research is needed to remain successful in the region.

Since the World Trade Organization of 1995, all member nations are obligated to regulate imported goods with all provisions which must be adhered to for domestic production. All countries now have equal opportunities to trade among themselves.

With competitors of Coca-Cola, other entities may be set up around the world that could hurt the beverage giant. As Coca-Cola continues to expand its market, more countries are becoming familiar with the company, and welcoming the organization and the products.

Distribution was another environmental factor that the company faced. Distributing to some retailers required drivers to work longer hours to get the product to the correct destination. Drivers had to travel on badly managed dirt roads which presented a challenge. Sales tracking was also difficult. The organization hired sales representatives to monitor the amount of products sold at different locations. Once the amounts were captured, the results were entered into a database. The representatives had problems finding the locations because of poor geographical locations and much of sales of products were not captured in the database (Shankar, Ormiston, Bloch & Schaus, 2009).

Technological change can influence a business both domestically and globally. Changes in technology are needed to remain a step ahead of the competitor and maintain an effective financial status in the business world (Perreault & McCarthy, 2005). By developing new products to suit customer's needs, Coca-Cola was able to make a positive step forward in their market.

The soft drink company employees a large number of individuals in plants nationwide both domestic and global. The organization also invests millions into China's economy. According to the article, Coca-Cola supports 400,000 jobs in China through retailers, suppliers, wholesalers, and distributors.

The Foreign Corrupt Practices Act was passed in 1977 to prohibit bribery of foreign officials. Coca-Cola is a major soft drink company with ties to many countries. With the reputation of the company the organization must be protected from illegal acts such as bribery. The company must also follow local, national, and international laws. Coca-Cola must adhere to the laws of the country if they plan to remain a supplier in the country (Shankar, Ormiston, Bloch & Schaus, 2009).

Coca-Cola uses many promotional methods to attract the consumer. With the Coke rewards program customers are able to enjoy a beverage and have a chance to win merchandise at the same time. Although Coca-Cola is a well known successful company, marketing mistakes do occur. In the marketing phase, when determining if Coca-Cola should revisit China, more research should have been done to determine the number of people in China who actually drink the beverage. The company could have saved money on promotions and advertisements by just developing the new product from the start. As companies explore the marketing arena, suggestions will be made to expand to a new market or introduce a new product. Careful research must be done to make sure all avenues are examined.

Companies use marketing forecasts to determine important marketing decisions such as expansion or introducing a new product. Coca-Cola like many other companies must be prepared for both a positive and negative forecast. Company's should be able to forecast the probable results of implementing the marketing strategy to apply the quantitative part of the screening criteria because only implemented plans generate sales profits and return on investment (Perreault & McCarthy, 2005).

Companies must be aware of the various changes within a market and must be prepared to monitor market growth, market maturity, and sales decline. Coca-Cola may be a well known leading beverage supplier today but the company must always be aware of the effectiveness of their marketing plan for tomorrow. At current Coca-Cola has been a success in China with drinks tailored to that market. On October 14, 2009, of this year the marketing giant introduced its first dairy drink in China. The beverage is a mixture of fruit juice, milk powder, and coconut bits which will be available to customers in 300 Chinese cities (Shankar, Ormiston, Bloch & Schaus, 2009).

As the forecasts from the articles predict, Coco-Cola will continue to remain a strong and effective distributor in the future for China. By introducing new and improved products, the company will most likely live up to their slogan by allowing customers to open happiness.

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