The main forces in the domestic environment that are affecting the Coca-Cola Company
Describe the nature of international business and the three environments in
which an international company operates in UAE/GCC context and illustrate
the significance of culture
□ 2. Recognize the economic and socioeconomic dimensions of the international
environment in which international company operates
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□ 3. .Demonstrate the importance of government stability and policy continuity and
analyze the forces which affect the availability of labor in the international
environment.
□ 4.Appraise the role of the global strategic planning process in increasing the
effectiveness of any international business
□ 5 .Evaluate the relationship among international environment, competitive
strategy, and organizational structure in UAE/GCC context.
Solution
Coca-Cola Company
The coca-cola company is the world's well-known producer of soft drinks. It operates in
many countries globally selling about four hundred varieties of non-alcoholic beverages
including light beverages, water, juice, energy drinks among other related products. The products
of this company have been proven to be leading soft drinks settling the customer's thirst for non-
alcoholic beverages. One of the primary obligations of the corporation is to diversify its market
share associated with satisfaction of clients and valuation of the clients' interests without
overlooking the company's premises to reduce the possible risks (Hnatko, Zhang, and Sidhu,
2014).
The main forces in the domestic environment that are affecting the organization
The political surrounding in UAE affects the performance of Coca-cola beverages and its
export corporation to some length. For instance, the instability in the political wave, which
emerges at certain moments, affects significantly the changes made on the policies regarding the
importation of the concentrate required in the production of the beverages. This increases the
operational cost of the company.
The economic status of UAE has been stable for a period though sometimes it is faced
with certain challenges. The recent economic indicators show that the economy is growing and
that macroeconomic issue is on the rise though no remarkable increase in the consumer
purchasing power. This implies that any change in the economy of UAE directly affects the
operation of the company.
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Since it a foreign company in the region, the company faces substantial opposition from
some of the Muslim activists. For example, some of the activists still feel the company
humiliates the religion in that, when the name of the company is inverted, it seems to disgrace
the name of the holy city Makkah. This, in reality, is not true or in different terms, it is a
misconception by the associated parties.
Technology is very momentous in the manufacturing of the products. For instance, in the
course of mixing the imported input or syrup, the machines used are also imported. The
accessibility to personnel who understand the operation of the equipment locally is an important
challenge facing the domestic functioning of the enterprise.
The company is also confronted with a problem concerning the investment, such as
investment in the distribution channels to make its operations more efficient. It requires a lot of
investment to motivate retailers to provide adequate space to their products in their premises
especially the coolers. In this case, the company is not in a position to facilitate all its retailing
stores while its competitor, PEPSI promotes its market share through this strategy.
The main forces in the international/ global environment that are affecting the organization
Competition
Whenever any business ventures in any other country, they face competition with some
other local and international brands. Coca-cola Company combats this issue with their quality
commitment and the continued provision of quality products, services, and entertainment to its
customers. Diverse structure, management attitude, and behavior encounter in international
business transactions, they are situations encountered in the global environment, and there is
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recognizable latitude in the mechanisms applied in conducting business in such circumstances.
The coca-cola company has employed some initiatives about these facts in that, a certain amount
of cultural shock takes the course when differences in contract level, communication emphasis,
tempo, and formality of foreign business are encountered (Wild, Wild, and Han, 2014).
Diversification
Diversification is an entrant in the global market in the contemporary beverage industry.
Carbonated drinks are the company's bread and butter business and thus, the coca cola company
need to increase the awareness of the other types of drinks it produces such as the bottled water.
This will aid in maintaining their take of sales in the progressively competitive arena. This is
because; the new competitors in the commerce may win the international market. In addition,
with the recommendable penetration power in the well-developed soft drinks industry, its return
has majorly resulted from the secondary or the new markets. However, the company's acquisition
option in the developed market is very much limited due to the market fortification (Coca Cola
Information, 2013). This deduces that it is quite challenging the company to endeavor vast
acquisitions in all the arenas at disposal.
Legal factors
This has both the internal and external segments of the business. It is internal since the
company its set regulations and policies. The developed insights and rules are aimed at guiding
the operations of the corporation. In the new states encountered in the international market may
totally be against the stipulation of the country in question. Thus, the enterprise has always to
concern and understand the provisions of the foreign country in connection with its operations.
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How environmental forces affect the job of an individual manager within this organization
The various business environmental factors significantly influence the process of
decision-making and policy-making to the management of the organization. All these factors
must be put into consideration in strategizing the endeavors both in the domestic and global
market. For instance, the understanding of the relationship between various states, the culture of
the foreign country contributes substantially to the needs of the management team. However, if
the company is not in a position to meet the needs of its customers, it may be forced to shift to
other products. Hence, for the coca cola company to endure its market in the competitive nature
of the market, they have to consider the need to put into their level best in given customers what
they desire most as a way of showing loyalty to their clients.
How determine the opportunities and threats that its managers must confront
The company determines its opportunities by developing by developing a SWOT matrix
to identify its competitiveness capacity in the entire market. In UAE, the company is well known
across all the ages especially the young people are more attracted to the coke (Vassilopoulou,
Tatli, Ozbilgin, Pinnington, and Alshamsi, 2015). Despite the fact that the company is a business
of soft drinks and with over four hundred brands around the international market, UAE has not
yet had all of them. This implies that the organization has a promising market for the rest of
brands in the country. Threats are also well identified in the matrices. For instance, consumer-
buying ability is a critical menace to the industry of soft drinks. This is due to the emergence of
rivalry between the Pepsi and Coke, which has resulted in a very slow move in the sector, and
thus, the management must progressively respond to the changing attitude and preference of their
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customer or otherwise lose the market share to the competition force. Other tools can also be
incorporated in the process of determining the effects related to various environmental factors.
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Reference List
Coca Cola Information, 2013. Macro Factors Affecting Coca Cola. [online] Understanding The
Market Process. Available at:
https://understandingthemarketprocess.wordpress.com/macro-factors-affecting-coca-cola-
2/ [Accessed 8 Apr. 2016].
Hnatko, C., Zhang, L. and Sidhu, R. 2014. The Coca – Cola Company. [online] Available at:
http://www.sfu.ca/~sheppard/478/syn/1141/Group_F.pdf [Accessed 8 Apr. 2016].
Vassilopoulou, J., Tatli, A., Ozbilgin, M., Pinnington, A.H. and Alshamsi, A.M., 2015.
Identifying Effective Talent Management Policies and Practices in the United Arab
Emirates (UAE). Comparative Political and Economic Perspectives on the MENA
Region, p.292.
https://books.google.com/books?hl=en&lr=&id=noVACwAAQBAJ&oi=fnd&pg=PA292
&dq=international+business+management+skills+in+UAE&ots=PITFOKZD2Z&sig=9m
ZnsN8JiUEo8ssDKKnXEclU4hY
Wild, J., Wild, K.L. and Han, J.C., 2014. International business. Pearson Education Limited.
http://amberton.mylifeblue.com/media/Syllabi/Fall%202014/Undergraduate/BUS4110_E1.pdf
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