The Effect of Changes in the Political and Legal Environments on the Coca Cola Company

Introduction

Companies always operate in a certain environment; the formulation and implementation of business strategy are also restricted by the particular environmental factors. In other words, environment decides the enterprises’ strategy, decisions making, organizational structure and management styles. The environmental awareness has become the starting point of the environment analysis. In general, the corporate strategy has two environment factors to consider, internal and external environments. Furthermore, because the influence degrees are different, the outside environments divide into the macro environment and industry environment.

The productivity and operation of modern enterprises have been increasing impact from the external environment. The strategic management for the organization need has an overall and objectives analysis about the change of the external environment, based the research result to set up the organizational goals and strategy plans. The enterprise and its external operation conditions are in an interaction and interrelated relationship. The purpose of study on the peripheral environment is supporting a chance to the organizations to finger out the possible developing opportunity and potential threat, use them to be the conditions and limitations to develop the business strategy.

Background information:

The Coca-Cola Company was established in 1892, headquartered located at Atlanta, United States Ochoa, is the world's leading owner and marketer of non-alcoholic beverage brands and the world’s largest manufacturer largest beverage company, which has a 48% global market share. Along with the world most valuable brand Coca-Cola, The Coca Cola Company own and market four of the...

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...mpany be influenced. Firstly, the changes in laws and regulations, such as the changes in accounting standards and taxation requirements, they will impact on the capital allocation and the accounting method. And then, the changes in non-alcoholic drink market, the competitive product and pricing pressures may take parts of share of sales from Coca Cola. Furthermore, the political conditions, especially in international markets, include civil unrest or government changes are also impact on the operation of Coca Cola in that market.

These changes of political and legal environments have general negative impact on Coca Cola Company’s running; however, they have a low incidence rate. The company need keep the attention on the changes of political and legal environments, forecast the threat, and make sure the corporation running in a long-standing environment.