BBA 2006

LEADERSHIP AND ENTERPRENEURSHIP

TAN WAH TIONG

940928-14-5531
201565

CHONG KAR YUN

NOVEMBER 2013
NO

DETAIL

PAGE

1.0

Contents

2.0

3.0

Introduction (Coca Cola)

Body (Coca Cola)
- Analysis of macro-environment
- The element of macro-environment
- The impact of macro-environment over the organization

4.0

Conclusion

3-15
16

5.0

References

17

6.0

Coursework

18-22

2.0 Introduction
The Coca Cola Company is the most valuable brand name and worlds largest
non alcoholic beverage company. This company was founded in 1886 in united
state of America. Now it operates in more than 200 countries. Coca cola also
distributes juice, energy drinks, water, and coffee. The company has partnership
with more than 300 bottling and canning company worldwide. Who produce and
sell coca cola beverages worldwide. The bottling partners are responsible for
consumer brand marketing initiatives, handle manufacturing and merchandising.
John pemberrtion invented the original recipe of cocawine. Which was inspired by
vin mariani, a popular cocawine invented by Angelo mariani. John Pemberton
developed coca cola which was non alcoholic version of cocawine. When
Pemberton was making drinks for his friend accidently he added carbonated water.
His friend liked the test and he adjusts the formula. In 1888 company sold by three

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companies. Calder purchased one company with exclusive rights to the cocla cola
formula from Woolfolk Walker, margate dozier and john
Pemberton cut out of competition. In 1982 company started marketing the product
and achieved status of national icon for the USA by its 50th anniversary. Coca cola
started sold bottles in 1894 and cans in 1955. In 1899 Coca Cola Company made
first bottling agreement with Chattanooga and Tennessee. In 1985, company
introduce new coke by changing original formula. Most consumers preferred the
test of original coca cola. Many people stop to buy the Product then company shift
back to its original Formula.

3.0 Body
3.1 Analysis of macro-environment
The macro-environment is the conditions that exist in the economy as a whole,
rather than in a particular sector or region. In general, the macro environment will
include trends in gross domestic product (GDP), inflation, employment, spending,
and monetary and fiscal policy. The macro environment is closely linked to the
general business cycle, as opposed to the performance of an individual business
sector. These closer external constituents are often collectively referred to as the
firms proximate macro-environment to distinguish them from the wider external

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forces found, for example, in the legal, cultural, economic and technological subenvironments.
This consists of people, organizations and forces within the firms immediate
external environment. Of particular importance to marketing firms are the subenvironments of suppliers, competitors and distributors (intermediaries). These
sub-environments can each have a significant effect upon the marketing firm.
The supplier environment
This consists of other business firms or individuals who provide the marketing
firm with raw materials, product constituents, services or, in the case of retailing
firms, possibly the finished goods themselves. Firms, whether they be retailers or
manufacturers, will often depend on numerous suppliers. The buyer/supplier
relationship is one of mutual economic interdependence, both parties relying on
the other for their commercial well-being. Although both parties are seeking
stability and security from their relationship, factors in the supplier environment
are subject to change, such as industrial disputes which will affect delivery of
materials to the buying company, or a sudden increase in raw material prices
which forces suppliers to raise their prices. Whatever the product or service being
purchased by the marketing firm, unexpected developments in the supplier
environment can have an immediate and potentially serious effect on the firms

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commercial operations. Because of this, marketing management, by means of the

marketing intelligence component of its marketing information system, should
continually monitor changes and potential changes in the supplier environment and
have contingency plans ready to deal with potentially adverse developments.
The distributive environment
Much reliance is placed on marketing intermediaries such as wholesalers, factors,
agents and distributors to ensure that their products reach the final consumer. To a
casual observer, it may seem that the conventional method of distribution in any
particular industry is relatively static. This is because changes in the distributive
environment occur relatively slowly, and there is therefore a danger of marketing
firms failing to appreciate the commercial significance of cumulative change.
Existing channels may be declining in popularity over time, while new channels
may be developing unnoticed by the marketing firm. Nowhere has this creeping
change been more apparent over recent years in the UK and other parts of the
world than in the retailing of fast moving consumer goods (fmcg). In the 1960s
well over half of all fmcg retail trade was accounted for in the independent sector
plus a further large proportion to the Co-operative Societies. Nowadays, the sector
represented by the larger food multiples has well in excess of this proportion.

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The competitive environment

Management must be alert to the potential threat of other companies marketing
similar and substitute product whether they are of domestic or foreign origin. In
some industries there may be numerous world-wide manufacturers posing a
potential competitive threat and in others there may only be a few. Whatever the
type, size and composition of the industry, it is essential that marketing
management has a full understanding of competitive forces. Companies need to
establish exactly who their competitors are and the benefits they are offering to the
market. Armed with this knowledge, the company will have a greater opportunity
to compete effectively.

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3.2 The element of macro-environment

There are fives element of macro- environment which is
Demographic environment
1. Worldwide population growthalthough it brings with it inherent risk, it
also presents opportunities
2. Population age mixa strong determinant of needs
3. Ethnic marketseach population group has specific wants and buying
habits
4. Educational groupsfrom illiterates to those with professional degrees

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5. Household patternstraditional household is no longer the dominant

pattern
6. Geographical shifts in populationmigration to safer countries and
different types of areas
7. From a mass market to micromarketsfragmentation is causing companies
to abandon the shotgun approach
Economic environment
1. Income distributionnations vary greatly in their level and distribution of
income. It is related to industrial structure but is also affected by the
political system
2. Savings, debt, credit availabilityaffects consumer expenditures
3. Natural environment
4. Shortage of raw materialsinfinite, finite renewable, and finite
nonrenewable
5. Increased cost of energyoil is a finite nonrenewable resource
6. Increased levels of pollutionindustrial activity will inevitably harm the
environment

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7. Changing role of governmentsenvironmental concern varies by country

Technological Environment
1. Accelerating pace of technological change
2. Unlimited opportunities for innovation
3. Varying R&D budgetsUnited States leads the world in expenditures
4. Increased regulation of technological changecomplex products cause
safety concerns to arise
Political/Legal environment
1. Legislation regulating businesshas three main purposes: to protect
companies from unfair competition, to protect consumers from unfair
business practices, and to protect the interests of society from unbridled
business behavior
2. Growth of special interest groupsnumber and power have increased over
the last three decades, putting more constraints on marketers
3. Cause-related marketing a key marketing outcome
4. Problems perceived that such efforts could backfire if consumers fail to see
a link between the product and the cause

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Social/Cultural environmentthe society in which people grow up shapes their

beliefs, values, and norms of interest to marketers
1. High persistence of core cultural values
2. Existence of subculturesemerging from special life experiences or
circumstances
3. Shifts of secondary cultural values through timeswings from core
values over time that impact marketing efforts
4. Summary

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3.3 The impact of macro environment over the Coca Cola Industry
Over the past years, Coca Cola Company has faced lots of changes in the business
environment. Company create counterpart with American sweet test product
however, it was commercial failure and coca cola change its strategy and return
back to its old formula. Consumers become more health conscious then company
lunch new product to address consumer needs, such as diet coke and coca cola
zero. Company bought bottling business in South Korea which allow to access in
retail store as well as makes easy to entry in Japan, Malaysia and china.
Moreover, china is now largest coke consumer in world. In 2007 coca cola output
of coke in china was 3.6bn tons and it was export 15.3 m tons. By the end of 2007
coke total production in china was 360 million tons. In addition, from 2008 to

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2009 company introduced new plant which capacity was 20 million tons. The
target of chinas coke industry is export large quantity of production countries
such as, India, Brazil, Belgium and Japan. In 2007, china export to Japan 22% of
its total production. This report shows development and positive change in
environment of cokes industry in china. Political factors:
Coca cola, the non alcoholic beverages falls in the category under the FDA (food
and drugs administration) and government has power to set fine for the coca cola
company that didnt meet their standard law requirement. The charges in laws and
regulations, such as taxation requirements, environmental laws and foreign
jurisdictions can affect to their entry in foreign land. The changes in non alcoholic
beverage Business Company might get pricing pressures, competitive product and
their ability to maintain the share in global market. In international market if
government change frequently their might be restriction to transfer funds from one
country to another. However Coca Cola Company is fallowing the rules and
regulation set by government. Since last two years government is so conscious
about the environment. Company adjustments in planets and proper way of
wastage settlement the chance of affected by the protection laws are decline.
Political conditions are overall leave natural effects on coca cola industry. It
impact good for the cocks reputation.

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Economical factors:
Economic analysis explores national and world economy impact as well as
inflation and recession. Economic factors are those factors that affect the
production and sales of the company. If the economy condition is not good at that
time coke decide to increase its price it would impact very negative in the
production of Coke. Non alcoholic beverage industry has highly sales outside the
USA. There has been improvement in soft drink Company in major international
markets like Brazil, Germany and Japan. These markets play great role to growth
of non alcoholic industry.
The country like Pakistan where is the unemployment rate is very much high. In
Pakistan coca cola company employs1800 people. During the last two years, the
company in Pakistan has involved $130 million. If economic variables are positive
of country it impact good otherwise the impact is bad.
Social factors:
Many people are spending healthier lifestyle. Change in lifestyle, population
growth rate and carrier attitudes affect non alcoholic industry so that many people
like to have bottle water and colas instead of beer. The need of healthy products,
bottle water, and juice is more important in the daily life.

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Consumers from the age of 37 to 55 are more concerned with nutrition. Older age
people are becoming more concerned with increasing their long life. This kind of
social trend can affect on demand of non alcoholic beverage industry. Increase in
awareness among consumer and modern life style might be challenge to the coca
cola company. However, company recognized the consumers needs and began to
produce diet coke, like beverage, juice and sport drinks. Many nutritionists advise
that maximum consumption of coca cola might be harmful to health especially to
young children. Drinking of coca cola daily can effect on health after few years.
Technology factors:
The technology of television and internet which affects companies advertising,
marketing and promotional programs. Media advertise product attractively it helps
to increase sales of the product. Introduction of plastic bottles and cans have
increased the sales of coca cola. It is easy to use and bin them. The advancement in
technology led to company crate new product like cherry cock in 1985 but
consumer prefers original test of coca cola so that some time technology can affect
badly.
Coca Cola Company introduces new technology all the time because of
introduction of new machine companys production level increase tremendously.

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Ardagh glass is the latest technological achievement by Coke Company which is

environmentally friendly bottle. It has won several awards for its light weight.
Environmental factors:
Coca cola focused on energy management, water stewardship and climate
protection. The company made progress in these areas but company has lot of
things to do. In 2007, company used approximately 300 billion liters of water to
produce beverage coke is among the worlds largest purchasers of fructose corn
syrup, sugar, coffee, citrus. It has largest consumers of cans and bottles. At the
same time company announced to return to communities and nature. An amount of
water equal how much company used to produce their beverage. Now company
has three objective 1. Recycle the water so it can be return safely to the
environment. 2. Reduce the water consumption level in manufacturing process. 3.
Refill the water in communities through a global network of local partnership.
While the coca cola come up with advance recycling programs company decides
through education they can prevent Littre. Company support keep Australia
beautiful in Australia, keep America beautiful in USA and tidy Britain group in
Britain. Weather and changes in temperature can affect many industries such as
coke. Company also invested on fashionable outfits which are made by recycle
polyethylene terephthalate bottles.

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Legal factors:
Laws, political changes affect firms behaviour. An increase in the minimum
wages of labour and more requirements for firms can influence organization
productivity. Sometime change in laws also creates new opportunities for the
company. There are some legal issue that Coca Cola Company had faced in recent
years. In 1970s coca cola company refuse to share its formula to India therefore
company stop to product locally for 16 years. EU members countries ban the coca
cola due to the poisoning of 100 children in Belgium and cause seems to be wrong
carbon dioxide which was used in coca cola. In 2003, non government
organisation in India said coca cola contained toxins with lindane, and malathion
that may caused breakdown of immune system and cancer. In India (kerala), the
production of coke along with other soft drinks was banded.

Changes and Challenges:

The non alcoholic industry is competitive. Company should carefully consider
below factors which affect financial condition and its future result.

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Awareness may reduce demand of coke:

Government officials and consumers are more concerned and aware about health.
Many press reports indicate that lawyers and consumer advocates have threatened
by company. Furthermore, misleading exercise related to contract to sell soft drink
in school. Consumers are more aware about these issues and negative publicity in
media may reduce the sales of carbonated beverage.
Increase in competition:
The non alcoholic beverage industry is highly competitive. Coke have to compete
with international companies as we as local companies where it function. In many
countries where coke operates including USA, Pepsi is a primary competitor in the
market. Cokes capability to maintain the sales of share or get profit in the global
market or various local markets may be limited because of competitors.
Water scarcity and poor quality
Water is main ingredient for Coca Cola Company. Many part of the world it is also
limited resources. Company consume huge amount of water per year. Demand of
water increase around the world and quality of available water decline this will
increase the production cost of the company and affect on profit.
Change in non alcoholic beverages business environment:

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The business of non alcoholic beverage has been changing because of Consumers
life style, emerging views of health and nutrition, changing consumer needs and
preferences, increase in similar products and price factor. Furthermore, the
beverage industry is being affected by the intermediates, especially in USA and
European countries. If Coca Cola Company is not able to change along with
changing business environment it will effect on companys profit and sales of
share.
Increasing in cost of energy:
Coca cola Companys bottling partners operates huge number of trucks and other
vehicles as well as they use large quantity of electricity, gas and other energy
sources to function the bottling company. Day by day price of fuel is increasing it
will increase in the production cost of coca cola company. So it will affect the
companys profit.
Weather condition:
Weather influence the sales of the coca cola where company function. In summer
more people prefer cold drinks such as juice and sprite however, in winter the
demand of product decrease. Some part of world where most of months
temperature is always high in those places consumption of coca cola is maximum.

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Change is important, long-lasting and disruptive

Changes in company create some opportunities as well as challenges in new areas
of business. Such as, lunch fresh product in the market, company might encounter
with economic crisis and to change the direction of the organization.

Change is continuous process to adjustment:

Change in plans strategies and operations are important for company. Furthermore,
sharing these changes to managers, supervisors and all level employees make able
to them adjust properly to face the changing environment. Moreover, change is an
essential phase in the business world mainly in technology. Use of technologies in
coca Cola Company reduces the operation cost and increase the profit of the
company. There are so many situations company need to change such as
advancement in technology that is being used by other similar companies to
compete with them company should adopt the technology.
In 2007 coca cola modify their product due to people are more concern about
health and fitness. Many people are investing more money in their health in order
to cope with that trend coke lunch their new product named Enviga, which is

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calories burning drink. In addition, Coca Cola Company is ties up with Nestle.
Both companies are dealing with invation and change. In same year, company
change in organisational structure to fulfil the demand and need of the consumers
through assimilating with North American can, bottle and juice company.

4. Conclusion:
The coca Cola Company keep on refresh everybody its touches. The product of
company has multiply to approach of cultural gratitude and understand, this is
main key factor that company introduce its product worldwide. Company entry
and development in international market will be faster.

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Cokes commitment to remain at changing environment proved that they are the
superior among other non alcoholic product. Awareness of environmental issues
and health care might impact on the sales of the company however; creative idea
and strategy help to grow the business. Coke has developed the entire vital
component to expand their business in long term.

5.0 Reference

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- http://www.investopedia.com/terms/m/macro-environment.asp

- www.investopedia.com/terms/m/macro-environment.asp

- https://www.academia.edu/AreYouAnAuthor

- www.google.com

- http://www.ukessays.com

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6.0 Coursework

TAN WAH TIONG

940928-14-5531
201854
016-663906
CHONG KAR YUN

Page 22 of 30

Contributions of Small and Medium Enterprises (SMEs)

Ever since the First Malaysia Plan was introduced in 1966-1970, the SME sector
in Malaysia
has gained a lot of attention due to the government's intention to: turn Malaysia
into an
industrialized country. The New Economic Policy was then introduced in 1971 to
enhance the effort and encourage the growth of SMEs. The government realized
that SMEs play a very important role in the industrialization strategy. Figure 2.2
illustrates the contributions made by SMEs in the economic development of
Malaysia.

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Support the country's industrialization proccss

The country's industrialization proccss is not in the hands of big industries alone.
The countrys industrial sector also depends on the development of SMEs,
especially those that arc located in rural areas. In the Sixth Malaysia Plan (1991-

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1995), SMEs were given a bigger role in helping the country's industrialization
process. The Second Outline Perspective Plan (OPP2) (1991-2000) framework
outlined the role
of SMEs as the backbone of the country's industrialization process. In order to
realize this role, several strategics were developed involving the Ministry of
International Trade and Industry the Ministry of Finance, the Ministry of Scicncc,
Technology, and Innovation, the Ministry ot Human Resources, and the
Implementation and Coordination Unit of the Prime Ministers Office.
Help the country's economic development
In present days, it is undeniable that the industrial sector is very important in
maintaining the
country's economic stability and development. The industrial scctor is expected to
continue
contributing to the country's Gross National Product (GNP). For example, the
electrical and
electronics industry has currently become the major contributor to the country's
export income and GNP. Therefore, SMEs bccomc the backbone ol these
companies by becoming their subcontractors in producing components and spare
parts. This is because most SMEs only support the bigger industries. For instance,
some of the components of PRO TON cars such as plastic parts, tyres,

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windshields, seats, and safety belts arc made by SMEs through their vendor
programme.

Contribute to the development of rural areas

It is known that SNIEs do not need large special facilities or sites. They can build
their factories in rural areas. Factories that are built in rural areas help to provide
jobs for those living in those areas. SMEs also market their products produced by
them which are mainly farm produce. This helps in the development of rural areas
because with the construction of factories, facilities such as roads, utilities, and
infrastructure would be built.
Act as the foundation of bigger industries
In Malaysia, SMEs help in providing support services to bigger industries by
becoming their
supplier of components. An interdependent relationship exists between them as
SMEs supply
raw materials, component parts, and expertise to the bigger industries.
Provide opportunities for entrepreneurial training

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Until today, Malaysia is still lacking in skilled and experienced entrepreneurs to

develop the industrial sector. Hence, a variety of training programmes have been
developed for SME entrepreneurs. These training programmes have increased the
participation of local entrepreneurs in different industries. The skills acquired
through these programmes have helped them explore new areas.
Help in improving - the country's balance of payment
SMEs have been identified as improving the country's balance of payments and
help to increase the Gross National Product (GNP). This is because SMEs belong
to export-oriented industries. These industries try to replace the import industries.
SMEs use technologies that are based locally. A reduction in the import of raw
materials and capital goods would reduce the country's expenditure. Hence, the
unused resources can be utilized for other purposes that can help in the
development of the country.
Provide a positive impact to income distribution
SMEs provide a positive impact to the distribution of national income. Although
the business
operations of SME entrepreneurs are on a small scale, with small capitals and
limited skills,
they play a role in balancing the income distribution in a society. SMEs create a

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high-income,
middle class society that is involved in small businesses.
Increase the amount of funds in the economy
In most cases, SME entrepreneurs depend on the contribution of family members
and friends
for financial resources. They do not need most of the funds that have been set up
for them by
the government and several financial agencies. Hence, these funds can be used for
other
investment opportunities. Furthermore, the funds collected by SMEs will indirectly
increase the overall economic savings.
Help in producing industrial goods more efficiently
Normally, SMEs focus on producing semi-completed products and parts for bigger
industries.
This concept of specialization increases their competency in producing products
for bigger
industries at a lower cost as SMEs incur low operational costs, rent, and wages.
Therefore, they are able to efficiently produce products for bigger industries.
Prevent wastage and encourage savings

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SME entrepreneurs prevent wastage and encourage savings by recycling the assets
of bigge
industries such as machines and equipment. SMEs use highly depreciated
equipment in order to save costs. Help the country's social development SMEs
help in the country's social development by linking individuals living in rural areas
with the rest of the society. At the same time, SMEs have the capability to
restructure the society in rural areas.

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