Most companies in the world today are affected by global factors that have more impact that competition from their fellow companies. Some of the global issues that affect companies as explained by (Dobbs, Manyika & Woetzel, 2015), can be divided into five categories which include political factors, economic factors, legal factors, social factors and technological factors. All these issues require the companies to understand them so that they can come up with good business strategies on how to be efficient. They are also important to ensure that the company understand different cultures of their consumers as well as understand economic and government policies that they need to abide to, to be successful.
Political factors- these factors include the government policies enacted for businesses to abide to. The government sets regulations for companies and this affects the way companies operate.
Economic factors – a change in the global economy will greatly influence how a company will work. These factors include things like inflation, interest rate, and demand and supply chain the market. If there is an increase in economic activity of a company it means the demand for its services will increase also
Legal factors- these factors include the government’s regulations and laws, the company’s social responsibility and the ethical issues that businesses have to abide. Companies should be able to understand these laws and how they will conduct their business in a way that abides to the law. Companies should strictly understand laws regarding health and safety, environment laws and employment laws.
Social factors- these factors majorly reflect on the attitude and behavior of a society. They may include gender, age and lifestyle of individuals, religion, and cultural beliefs of consumers. When companies are setting up structures and strategies they should consider culture diversities involved in the many countries in the world.
Technological factors- technology innovations have helped companies to be efficient in communication, reduction of costs and designing of brand new products. It is important for organizations to keep up with the latest technology trend to remain competitive in the market. Technology has also helped companies to link with customers all over the world by improving communication and efficient distribution of products all over the world.
Global issues facing The Coca-Cola Company
The Coca-Cola Company as described by (Baah & Bohaker,2015, p. 17) is known as a large manufacturer and distributor of non-alcoholic soft drinks and beverages across the world. The company has continuously ensured that most of the countries in the world are able to experience the unique taste of their products. The company introduced the low-calorie drink named diet coke which was a breakthrough in the global business. Over the years, Coca-Cola Company has been able to grow so fast and the company also increased the number of brands they produce. They ensure good customer service and satisfaction by providing good refreshment drinks at affordable prices. The company comprises of a good distribution, network of bottlers as well as a good production system across the entire world. The global issues that have affected the company have made it possible for them to be more efficient, generate more profit and made the company simpler which has helped the growth of the company. The company has experienced a change in its business environment. Some of the issues include, people have started watching their diets and so the company must come up with ways of meeting their needs by producing products that are low on calorie. Some of the major global issues that have affected the company as discussed below;
Technology and innovation
Technology and innovation as emphasized by (Pagani & Pardo, 2017, p. 185) should be highly regarded as important in a company. Coca Cola Company has really embraced the use of technology to develop new products and to redesign some of them to make them better. To also increase their sales, the company has also invested in the use of technology to advertise and market as demonstrated by (Armstrong et al. 2015) their products to attract consumers. The company has been able to come up with bottles that are greener and the packaging. They have been able to produce their products using less petroleum than the previous years. Social media platforms such as Facebook and twitter have enabled coca cola to advertise their products across the world. Their advertisements have been made appealing to consumers.
Embracing technology in this company has led to the development of over 450 different brands which makes the company provides good customer satisfaction across the world as well as gain more growth and profit. Technology has made the company also more efficient since it has helped the company reduce on operation costs and increased their productivity costs. Coca cola has cut down the costs they used in in store promotions and invested in using media to market their product. The company is now aiming to reduce its IT’s carbon foot print to be able to reduce the amount of energy being consumed.
Some of the technologies the company has adopted include; the Lumense Nano sensing technology which was adopted to inspect CO2 if they are any molecules that are contaminants. This has helped them control the quality of CO2 used to carbonate the beverages. 3m technologies light tube technology that has helped to add cooler lightings but at the same time not have an effect to the temperature of the beverages. This technology has also helped reduced the compressors wear and tear as well as reduce carbon footprint. Lastly is the merlin mobility augmented reality technology which has helped in training people on how to maintain and fix coolers by viewing of videos. This has really helped to save on manpower, money and time.
Government policies and attitudes
Government policies and regulations such as taxation and environmental laws greatly influence the business environment of a business. It is mandatory that companies follow the policies that are enacted by the government to operate without any problems. Coca Cola Company is placed under food and drugs administration and they are required to match the standard law requirement as explained by (Fortin, 2016) if not the government can fine the company. Laws such as taxation in different countries around the world affect the company also. Taxation may affect the price of drinks across the world and the global market share of the product in the world. In some cases, government policies may also affect business in that one cannot transfer money form one nation to another and this negatively impact on the business. Laws of energy consumption also affect the company operation since it should abide to the environmental laws to avoid being fines. The company has been able to follow the policies, laws and regulations that are set by different governments in the country to maintain a good reputation for the company.
Cultural factors
The major problem affecting international businesses mostly is the lack of understanding of the culture in different countries. Culture in the company starts with the management since they contribute largely to the achievement of the company’s objectives and goals. Management should offer accountability, integrity, passion, diversity, good leadership to employees and collaboration. To be able to meet the customer needs and work across nations, the company should understand the culture and social influences of people. They should also study the people’s behavior and attitudes on how they consume the product. The company should be able to come up with business models that summarize the behavior, needs and culture of consumers to be effective. Cultural factors may include religion, language, education and social organization and each has a different impact on business since they influence how the customers view and understand the brand.
In India, the people there had a negative thought about Coca Cola Company since it polluted the water sources which interrupted with the farming activities in the nation. Even though this happened, due to the reputation that the company has, people in this country are still taking the drinks especially the youth. On the other side, coca cola has ensured that it has knowledge of different cultures across nations. This has been made successful by including people from different cultures and groups to advertise its brand and providing information and marketing the products to people to enlarge the brands market.
The company in 2008 tried to market their brand in South Korea because they did not understand the culture in the country. They realized that most aged people did not use their social media frequently and only a few of them are able to get online or have blogs. The company found the aged people who frequently used their social media platforms to help them advertise their products widely and make them understand the culture of South Korea to make the company efficient. Good brand advertisement and image helps to attract more consumers across nations and most international business should understand different cultures to be successful.
Social responsibility and related ethical issues
Corporate social responsibility of a company is important to promote business accountability beyond investors and stakeholders. The major areas involved in the corporate social responsibility are workers welfare, society and community and lastly protection of the environment. Giving back to the community is very important to a company to create a good reputation as well as being a good ethical company. The company has come up with ways of giving back to the community which have been helpful. Examples of these projects include; scholarship for senior students in high school who are to join universities as well as different colleges. This was remarkable since it aims at making these students study hard and develop an interest in coming up with their own brands. Another project they came up with is the education on wheels philanthropy which involves education children in a classroom and teaching them on how to critically think through ideas. This has been positively taken by the community since people feel good when a company gives back especially to the children and this will lead to people buying more of their goods.
The company has also come up with ways of taking into consideration the consumer health as explained by (Nestle & Michael, 2000) by coming up with products that are low on calorie such as diet coke and coke zero. It also introduced greener bottles that are made using less petroleum and bottles that are fully recyclable. The company also values its employees and has come up with programs to educate and train to improve their skills and knowledge. The company has also employed people from different cultures and it has ensured that there is equality across all employees. It has promoted leadership and talents among these employees too. The company has also come up with ideas to reduce carbon footprint and it agreed to take actions on climate change and energy consumption
The six major aspects of ethics in coca Cola Company include; environmental protection, provision of jobs, an offering of training and development of the society. To be able to achieve these as described by (Farache, Tetcher & Kollat, 2018, p.145), the company made sure that every person was involved including stakeholders, consumers, NGOS and employees, the company has also created a good healthy environment for the employees and they’re offered satisfaction as well as good wages. For the consumers, the company is marketing its products putting into consideration different cultural diversities. It also produces environmental friendly products so as not to harm consumers. It has also ever been involved in any corruption activities in any way
The company as emphasized by (Faria, Borros and Saureborn 2017), has followed all the ethical requirements that are needed by a company so as to be sustainable. It has made sure that there is a good communication between the company and stakeholders as well as suppliers. There is usually audits in the company that help it to improve on the areas that need improvement. This has made the company successful.
Conclusion
Coca-Cola Company is a company that is involved in international business. It should be able to adjust and adopt all global trends for it to remain competitive in the market. These global issues such as technology have brought growth in revenue and profit in the company by adopting the latest form of technology. The company is also able to produce a wide range of products at minimal cost due to these issues. Most global issues have brought a positive impact on the companies as well as little negative effect such as government policies in countries that involve high taxation on goods.
The company has also been known for providing good services and products to customers by adopting the new global issues and taking them positively. These issues have made the company more successful and influential in the society today. The company should come up with more programs to involve the youth today so that they can also be influential leaders soon.
Multinational companies as mentioned by (Wolfson & Tavor,2017, p. 71) should come up with strategies that will match the global trends to ensure sustainability. Companies should also be able to know the different economic trends of different countries to increase market growth as mentioned by (Baker,Bloom & Davis, 2016, p. 1593).
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