Impact of Environmental Factors on Marketing Decisions of Coca Cola

Solution Preview

Impact of Environmental Factors on Marketing Decisions of Coca Cola

In this highly competitive and changing environment, making decision at both domestic and international level is a very complicated task. At the time of making decision, it is important for the management to analyze the external environmental factors (Macro Environment) at both domestic and international level. The goal of environmental scanning is to better understand the threats and opportunities created by the variables and how strategic plans need to be adjust, so that firm can obtain and retain competitive advantages.

According to David Jobber, the macro environment consists of forces that originate outside of an organization and generally cannot be altered by actions of the organization. This macro environmental analysis includes various factors such as demographics, difference in the culture, impact of technology, legal and political, economic environment, etc. (Jobber, 2001).

About Company: Coca Cola

Coca Cola is one of the leading beverage companies of the industry. Coca Cola has business campaigns in all over the world. It serves different types of products and drinks to the customers such as soft drinks, bottled water, tea, sport juices, etc. In order to produce and distributes various drinks and products, Coca-Cola has a franchising model (Coca-Cola Bottling, 2008). It is important on the part of management to accomplish an external analysis to develop effective strategies and make decision as per the domestic and international level.

Coca cola is related to Beverages-Soft Drinks industry, which depends heavily on economic environment for marketing decision. Fortune of industry and business heavily rests on the purchasing power of the people and purchasing power is largely a product of economic environment (Ramaswamy & Namakumari, 2007). According to the news report of Reuters, due to the recession in the U.S economy, Coca Cola has faced approx 4% loss in their quarterly profits in 2008. Net income of Coca Cola also fell $1.42 billion in the second quarter of fiscal year 2008 (Reuters, 2008). The economic factors that affect this industry are conditions of population, their disposable income and purchasing power; trends in income distribution and consumer-spending pattern; economic growth; savings and credit availability; rate of inflation, tax rates & interest rates and exchange rates and behavior of capital markets: the corporate sector and capital market are ...