External Business Enviroment

External Business Enviroment

1. Technological Factos

   • The technological factors that influence a business is how the rapid change in production processes and product innovation effect a business.
   • -Global technological innovation has increased at a remarkable pace, revolutionaising the workplace and every aspect of daily life. -With appropriate technology businesses can increase effeciency and productivity, create new products and improve the quality and range of products and services.
   • - If a business wants to be competitve it must adopt the appropriate technology. If it takes a while for them to start to use these technologys their business is likley to fail. The competition will strive to capture greater market share and develop a sustainable competitive advantage.
   • Coca Cola in India
     • -Technology plays and importnat role in the beverage industry.
     • -It produces the concentrated syrup, packing of bottles, filling of bottles and distribution of products.
     • -Coca cola is available in different packages or bottles or cans is the technological advancements which bring availablity of different vending machines all over the world.
     • -The technology helps in production of stylish, colourful, non-refillable cans and bottles which are attracting children and youth.
     • -Coca-cola is dependent on its bottling partners.
       • -Strong relationship with its partners who are involved in the company operations.

2. Political Factors

   • -The political factors that influence a business are how changes in government policies may effect the business
   • -Major political change can lead to business uncertainty or business confidence.
   • - The government implement a federal budget every May which effects every company. If the company doesnt pay its taxes, wages, superannuation ect it can get heavily fined and lose all employees.
   • Coca-Cola in India
     • Government agencies, pressure groups, rules and polices like trade traffic and fisical policies which influence the economy of the country.
     • -The company has to ensure that the rules and regulations are followed in every business decision.
     • - With Coca-Cola being a non alcoholic beverage company it falls under the category of Food and DRug Administration.
     • -Sugar taxes have been introduced in the US to fight obesity.
     • --This has cut sales by up to 10% and increased numbers of people buying water instead.
     • --FDA is a US government agency who monitoe and cross check the ingredients used in the drink . Thus the company has to ensure thats ingredients should meet these guidelines

3. Social Factors

   • - The social factors of a business are how consumers, households and communities behave. -The trends related to cultural, enviromental, demographic, seasonal and population.
   • -Response to changes in taste, fashions and culture can lead to sales, profit opportunities and business growth. -Failure to respond to social changes can threaten business stablitity and viability.
   • -A new trend may evolve in the fashion part of society. Some businesses may ask suppliers for this new trend in their stock, whereas some others who havent heard of the trend, may lose customers because another business is keeping up with the trend.
   • Coca-Cola in India
     • - The youths of India are more health concious and constanly looking for drinks which are refreshing.
     • - India has a rather large younger population which leads to more people being employed and having more money to spend.
     • - The climate in India is hot so people are looking for beverages which are cold and refreshing, which quench thirst.
     • -Youth genersation prefer soft drinks compared to the older generation.
     • - The social factors cannot be changed by the company so it has to adapt and adjust with such factors.
     • - Intensive market analysis then introduce few of their products based on social factors of target country and then gradually increase the products based on the social factors.
     • - The threat company is facing is nutritional value of coca-cola.
       • - Consumers and government are very cautious about obesity caused from the beverage industry.
         • -Coca-cola responded to this threat by introducing drinks like diet coke and light coke.
     • Coca-Cola has understood to succed in the market it must undertand the liking and demographics of its customers

4. Economical Factors

   • - The economical factors that effect a business are the way taxation, government spending, interest rates and exchange rates effect a business.
   • - The state of the economy has great imact on the business. -Policies put in place by the government are aimed at keeping the economy growing steadily.
   • -A new shopping centre opened in town and was in competition with the old shopping centre. Customers would begin to to shop at the new centre.
     • -Businesses at the old centre would close down, employees would be laid off, landlords and suppliers would not be paid.
       • - Eventually the economy would plunge into recession. However new businesses may open, new jobs would be created, landlords and suppliers would gain new customers.
         • The economy of this shopping centre would boom.
   • Coca-Cola in India
     • -Indian economy is quite stable since the introduction of Industrialisation policies.
     • -High GDP and constant improving economic condition of India.
     • -Economic Determinants of a country like interest rates, fluctuation rates, currency exchange rates and economic growth of the nation.
       • -These define sales and price of products and purchasing capacity of the customers.
       • - Helps make decisions related to future inverments.
     • - The major threat to the company is at the time of inflation is with increasing the salaries, the product cost also increases but cannot be imposed on products price because of the market risk and competition.

5. Legal Factors

   • - The Legal factors of a business is the way in which legeslation in society effects a business.
   • -Many business owners face an increasing number of legal obligations in every aspect of thier business. -Laws on taxation, industrial relations, occupational health and saftey, equal employmnent opportunity and anti-discrimination.
   • -If there is a breach of any of the consumer protection provisions of the Trade Practices Act can result in Australian Competition and Consumer Commission taking criminal proceeding against trhe business concerned. - Impose penalities from $220000 for individuals and $1.1 million for companies who breach the Act.
   • Coca-Cola in India
     • -Laws related to employment, consumer, jealth and saftey and discriminations.
     • -Adhere to the rules and regulations of the USA Food Saftey Act and Federal trade Act. -Enviromental acts like waste disposal, pollution checks.
     • -Regulations related to advertising, sales and promotions. If it fails to adhere or follow these laws it would create a negetive impact on the brand image and the company would have to pay serious penalties.
     • -Coca-Cola is the worlds largest and most popular brand in the beverage industry.
       • -Established in 1886 in Atlanta, Georgia
         • -must sustain its competitive advantage through an analysis of its external enviroment