Macro Environment has a number of factors which influences the decision. Be it a decision related to any organization, any business concern or even an individual. Thus it is per se very much necessary to understand the influence of each parameter. The factors which influence a decision are also termed as its environment. The environment can be Internal, can be controlled by the organization; Micro, specific to the industry and is different for different industries; and lastly Macro, generic in nature and impacts the whole business environment.
The Macro Environment includes all the factors which are external to the firm and which cannot be controlled by the organization. And also they are not specific to any industry but influence all the firms but the influence may be at different level. Macro environmental variables include sociocultural, technological, political-legal, economic, and international variables. A firm considers these variables as part of its environmental scanning to better understand the threats and opportunities created by the variables and how strategic plans need to be adjusted so the firm can obtain and retain competitive advantage.
For the given assignment I have chosen Coca Cola Company, India as the company of my choice to identify its macro environmental opportunities and threats. The brands of The Coca Cola Company represent some of the most popular beverage brands in the world. Coca cola is one of the best selling soft drink products on the market. It is sold in hundreds of countries around the world. Recently coca cola had to evolve from the fizzy drinks to a more health conscious product as the lifestyles and cultures of the coca cola products have been changing.
In India, Coca-Cola was the leading soft-drink till 1977 when govt. policies necessitated its departure. Coca-Cola made its return to the country in 1993 and made significant investments to ensure that the beverage is available to more and more people, even in the remote and inaccessible parts of the nation. Coca-Cola returned to India in 1993 and over the past ten years has captured the imagination of the nation, building strong associations with cricket, the thriving cinema industry, music etc. A simple method of PESTAL analysis has been for the company to identify its opportunities and threats.
Political factors – The production distribution and use of many of Coca cola product are subject to various federal laws, such as the Food, Drug and Cosmetic Act, the Occupational Safety and Health Act ads. Like most companies, Coca-Cola is monitoring the policies and regulations set by the government. There are no political issues in this instance. Economic factors – There is low growth in the market for carbonated drinks, especially in Coca-Cola’s main market, North America. The market growth recorded at only 1% for North America in 2004. Market share have declined.
Job cuts because of under-investments. Market capitalization was $128 billion which was almost three times over it main competitor. Socio-Cultural factors – There are changes in consumers’ lifestyles. Consumers are more health conscious. This affects the Coca Cola’s sales of the carbonated drinks as consumers prefer non-carbonated drinks such as tea, juices and bottled drinks. Demand for carbonated drinks decreases and this leads to a decrease in Coca Cola’s revenue. Introduction of product for the health conscious such as coca cola zero with no calories, minute maid fruit drink and propel energy drinks.
Lifestyles of different countries and culture of coca cola Black that is coffee flavored version. Intermediaries are the wholesales and retailer who distribute coca cola products such as groceries globally. Technological – As the technology advances; new products are introduced into the market. The advance in technology has led to the creation of cherry coke in 1985 but consumers still prefers the traditional taste of the original. So the company is mostly focusing on its brand name Coke.
With the advancement in the technology Coca Cola is using all the modern technology to stay ahead in the competitive world. Like for example different media technologies are being used by the company to promote its product among its consumers. The macro environmental threats for Coca Cola can be; a decrease in GDP which can result in lower purchasing powers, a slowdown in the economy, high unemployment rate that can affect the population’s purchasing power, high inflation rate that will result in an increase in price of products, lack of investor confidence in the company’s products. lower exchange rate that lowers income for foreign countries, a change in the government laws that can result in increased worker benefits or new product regulations, development of new technology that can change industry practices, people are becoming more health conscious, there may be logistical problems that delay delivery and there are pressures form stockholders.