Executive Summary
Business analysis, especially when it is focused on conducting a study with real client, requires a proper planning because of the need to have actionable solutions that can be used to solve real life problems. In this business analysis, the focus was on the Coca Cola Company, one of the leading beverage firms in the global market. The report has analyzed how a marketing expert can conduct a study of this firm and develop ways that it can use to achieve success in the market despite challenges that exist. Using various theories and models, the paper has analyzed external and internal environment of the firm and how it has remained sustainable in its operations.
Introduction
When conducting a business analysis, a researcher is always interested in obtaining information that can help in addressing a given problem in the business environment. According to Milani (2019), for such a study to be successful, one must clearly understand the goal that needs to be achieved and the process that has to be taken to achieve that goal. It is often necessary to use theories and models to enable the researcher to investigate the issue in a more detailed manner. In this essay, the focus is to discuss the theory behind business analysis and conducting a study with a real client. It is important to note that a research that requires collecting data from a person or a group of people is significantly different from that which wholly relies on secondary data from books and peer-reviewed journal articles.
One has to prepare a data collection tool, identify an individual or individuals to be interviewed using a standard sampling technique, contact and prepare the respondents, collect the raw data, process it, then interpret it to help answer the research question. This essay will specifically discuss the process involved in the business analysis, requirements needed to ensure success, how the actual study is to be conducted, and how to design a team using the team development model. The case will use the Coca Cola Company as the real client upon which the analysis will be conducted.
The Process
When conducting a business analysis, one of the first issues that are to be addressed is the process of actual data collection. When the process is clearly defied, it is easy for the researcher to understand the steps that should be taken to achieve the set goal. The process also helps the reader to determine the validity and reliability of the information presented in the report. The following are the steps that defines the process involved in the business analysis.
Determine Client Needs
The first step is to determine the needs that the client has, which should be realized through the investigation. As mentioned previously, the first activity that should be completed in such investigation is defining the goal. Once the goal has been identified and clearly defined, it is possible to define how other activities will be done (Adnan, 2019). In this case, the business analysis starts with determining what the client wants achieved. The client may be interested in understanding a given trend in the market or the emergence of a new technology that promises to revolutionize the industry. Defining this need will help the researcher to determine where to obtain the needed data.
Understanding Existing Processes
When the need has been identified, the next step in the business analysis process is understanding existing processes. As Milani (2019) observes, research has been an existing process for the past several decades. Scholars have developed standard approaches to conducting research, which have been universally accepted around the world. It is advisable for one to assess some of the common models and templates that have widely been accepted and determine how they can help in achieving success in the new study. Using the existing processes makes a report easy to be understood by a wide variety of audience.
The existing process should be capable of meeting the need of the client that had been set. The researcher should also ensure that the current prevailing forces in the field of study will allow them to use a given standard format of investigation.
Establish Process Performance Targets
Establishing specific process performance targets is needed once the final process of conducting the study has been defined. According to Alam (2018), performance targets should be based on the goals that had initially been defined. In this case, the focus is to break the goal into specific actionable tasks that should be achieved within a specific period. Having small achievable targets is always essential in such a project. Instead of focusing on the primary goal, stakeholders will focus on these small tasks. Every time one task is completed successfully, it will be a motivation to the researcher to complete the next task with a similar level of success.
The systematic approach is meant to ensure that the overall goal is realized with ease. Performance targets may change depending on the forces that a researcher may face. Some new developments may motivate a researcher to reconsider the initial targets. For instance, when the initial stages of the study uncovered a new knowledge that was ignored when developing the initial targets, it will be essential for the researcher to redefine the current performance targets based on the new development.
Develop the New Process
It is important to appreciate the fact that the goal of the study is to meet the need of the client. Sometimes the standard processes and methods may fail to align with the goals that the researcher seeks to realize. Cooke (2018) explains that it is not a mandatory requirement that one has to follow conventional processes and methods of conducting the study. When necessary, it is possible to adjust the structure to meet the specific needs of the client.
However, such changes should be made in a way that makes the report to look professional. It is possible to take a standard format and introduce some changes to it that makes it customized to specific needs. In the process of customization, care should be taken to ensure that the validity and reliability of the document is not compromised. The new process should be based on the performance targets that had been established. The researcher should ensure that the process makes it possible to achieve the goals within the time and resources made available.
Validate and Test New Processes
It is always critical to validate and test the new process to ascertain its ability to achieve the desired goal. The aim of the validation and testing of the new process is to ensure that it is aligned with the fundamental goal of the business analysis. As explained before, a good report should follow a specific standard format that can easily be understood by a wide audience. It means that although the goal is meet the specific needs of the client, the process should not be ambiguous. The client may need assistance of other persons to interpret the report or to implement it in a business setting. When it is ambiguous, it becomes difficult to implement it as would be required.
Requirements Needed to Ensure Success
A business analysis report is often different from a general research report. In this case, the goal is always to address a given issue that a business is facing. It means that the analysis will be geared towards developing actionable solutions. The recommendations provided must be smart (specific, measurable, achievable, realistic, and time-based. It must also take onto considerations the capability of the client. For instance, a business analysis conducted for the Coca Cola Company will be significantly different from that of a small local beverage company. Although the two firms may be operating in the same industry and facing similar challenges, the capabilities of the Coca Cola Company is greater than the small local firm.
It has the financial muscle, a team of highly skilled and experienced employees, and decades of experience working in this industry on a global scale. It has the capacity to employ unique strategies using complex management structure. On the other hand, the small beverage firm may be having a handful employees, some of who may be family members with limited knowledge on issues relating to strategic management. They will require simple solutions to the problems they face. Their solutions should not be financially involving because they may not have the capacity to implement them. The following are the fundamental requirements needed for the success of such business analysis project. These requirements will vary depending on the size of the firm and the specific task that has to be completed for the client.
Time
Time of one of the fundamental requirements needed to ensure success in any form of investigation. Irrespective of the size of the organization (client), any business analysis requires time for it to be completed successfully.
The client will explain to the expert the specific challenge that the organization faces and why it is necessary to find a way of addressing it. If possible, the client may provide proposals on how the problem can be addressed or factors that have to be considered when developing the solution based on the firm’s financial capacity and human resource. The expert will need adequate time to assess the problem, determine the need of the client, and examine the capacity, before developing an effective solution that can meet the desired goal (Alam, 2018). The time needed for the task will depend on the size of the task that the expert has been given.
Knowledge and Experience in the Field of Study
The success of the business analysis will depend on the knowledge and experience of the expert involved in the project. Adnan (2019) warns that when the expert assigned a given task lacks the experience and knowledge in that specific field, then they are more likely to provide misleading information. When an organization is facing a problem in the market, it is prudent to find a marketing specialist who will assess strategies that the firm is currently using and evaluate the current trends in the industry to find a mismatch. The expert will then be in a position to recommend an effective approach to addressing the problem that the company is facing.
If the problem is financial in nature, a finance and accounting expert will be needed to assess the current financial practices of the firm with the aim of proposing an effective solution. The expert should have experience in the field of investigation for them to be helpful in the investigation.
Executive Sponsors and Committee Members
When the business analysis is meant for a corporate entity, one of the requirements of a business analysis research is an executive sponsor. When conducting any investigation, one of the issues that has to be taken into consideration is the resources needed. The process of identifying the participants, contacting them, interviewing, and processing data may require money. The researcher needs to make phone calls, travel to different locations to interview participants, record the interview using audio or video recorder, and sometimes involve experts in the analysis process. Every stage require financing, as Cooke (2018) observes.
Sometimes a researcher is forced to give respondents financial incentives to encourage them to take part in the investigation. When the targeted participants are more than 100 and the process require face-to-face interview, one may need to source for enumerators. These individuals have to be paid upon completion of their job. They also have to be facilitated to contact the participants and to meet with them. An executive sponsor will be needed to provide the needed resources to accomplish the project.
An executive committee may also be needed, especially when the business analysis project is meant for a large organization and the outcome may have a major impact on the success of the organization. The goal of the committee members will be to audit the progress made by the team. The team involved in conducting the analysis will be making regular reports to the committee so that their progress can be audited. The committee will have the mandate of identifying possible weaknesses and deviations in the report. It can then advise the team on changes that they need to employ to ensure that the targeted goal is realized effectively (Adnan, 2019).
When the final report is delivered, the executive committee will be responsible for conducting a comprehensive assessment to determine if the primary goal has been realized. If the report meets the expectation, the committee will deliver the report to the top management unit for the purpose of implantation. They also have the power to suggest further improvements.
The expert must understand how to design a team using the Team development model. Tuckman’s team development model identifies five stages that should be involved. The first stage is forming, where a group of experts with a common goal gather together and agree to work as a unit in achieving a specific goal. The next step is storming, where team members provide suggestions on how a given assignment is to be completed based on the resources available and other factors within the team. Norming is the third step where team members reach a consensus on how to handle different tasks and set acceptable rules that will govern their activities. The fourth step is performing, where each member is delegated a duty and they work together to achieve the primary goal of the team. The last stage is adjourning after the team has completed its intended goal. These steps are shown in figure 1 below.
Conducting Business Analysis
When the resources needed to conduct the investigation have been identified, the next step is to define how the actual analysis would be conducted. The analysis should be based on the defined goals and resources needed for the project. When conducting a business analysis for a small beverage company, the process of conducting analysis will be relatively simple because such an organization may not have numerous departments and employees.
It is common to find some departments merged and the owner playing most of the management roles, with the other employees assigned different manual tasks. In such a case, the focus will be to interview the owner to obtain most of the information needed. However, when the client is a large corporation such as the Coca Cola Company, it may be necessary to have a complex process of the analysis. In fact, such a project will only focus on a specific department of the organization other than the whole firm. It may address a marketing problem, accounting malpractices, procurement issues, or human resource challenges that the firm faces, which compromise its ability to perform optimally. The following are the steps involved in the actual business analysis process.
Current Situation or Issues, Analysis
When the organization is defined, the next step is to conduct a comprehensive analysis of the current situation or issue. The goal is to address the problem that the firm is facing and recommend solutions based on the market forces. Current situation analysis focuses on examining both external and internal factors that the company faces. In this case, the analysis will focus on the Coca Cola Company. The first step will involve analyzing the external environment using theories and models such as PESTEL analysis and Porter’s five forces theory. The internal analysis will be conducted using SWOT analysis model.
PESTEL Analysis
This model of business analysis has widely been used in assessing the external environment of a firm. The first factor that has to be considered when using this model is the political environment. The expert must assess how political activities and leadership of a country affects operations of companies within a given industry. The Coca Cola Company’s home market is in the United States, although the firm operates in the global market.
The political stability in the United States, Canada, and other major markets in Europe and Asia has offered this firm a perfect opportunity to grow. In these markets, it is uncommon to find cases where the political class are interfering with the business community as long as they adhere to the rules and regulations set by the government. Political stability is critical in the normal growth of an industry (Alam, 2018). It defines security and the rule of law in a given market.
The economic environment is another major factor that influences the business environment. According to Wunder (2019), when the economy of a country or a given region is growing, it provides an opportunity for a firm to grow. The growth means that the purchasing power of customers in the target market has increased. The United States and Canada, which are the primary markets for the Coca Cola Company, have experienced impressive economic stability over the past decade. When the global economic recession came to an end in 2009, the two countries have experienced impressive economic growth. The same trend has been witnessed in the European Union, China, India, and Japan, which are the other major markets for the product.
The entire global economy, including that of Africa, has also been growing steadily. It offers this company and the entire industry a perfect opportunity for growth as the size of its market continues to grow. It is important to note that this impressive growth may be affected by the current COVID-19 pandemic. Many economies around the world have been adversely affected by the lockdowns as governments around the world struggle to contain the spread of the virus. Many firms have already recorded massive losses because of the challenges associated with the virus.
The social environment is another factor that a firm cannot ignore when conducting a business analysis. Factors such as cultural practices, emerging trends, and health concerns can significantly influence the purchasing pattern of customers in the market. For a long time, the Coca Cola Company has enjoyed a relative success in the global market because its products do not contravene any major religious or cultural beliefs (Dhir, 2019).
However, that has been changing over the recent past as people are becoming increasingly concerned about health consequences of cola products. Health experts have explained that some of the additives in these drinks such as sugar may have negative impact on one’s health if they are taken regularly (Wunder, 2019). As such, a new trend is emerging, not only in Canada and the United States, but also in other parts of the world, where many prefer non-cola drinks. These health-conscious buyers would rather take water than a cola drink because of the desire to be healthy. Companies in this industry have responded swiftly with products that meet this emerging need.
Technological environment is another area of business analysis that has to be considered. Technology is changing the approach that companies take in the market. For a long time, firms relied on a brick-and-mortar business model of operation. They operated physical offices and stores, and customers had to make physical visits to purchase what they needed. However, the trend is changing as the online marketplace continue to gain popularity around the world (Alam, 2018).
Similarly, the marketing platforms are also changing. Traditionally, firms relied on mass media platforms such as radio, television, and newspapers to reach out to their audience. However, the trend is changing because of technological advances. Social media has become a powerful platform that companies are currently using to reach out to their customers. Facebook, YouTube, Twitter, and Instagram have become powerful platforms of promoting a brand of a firm. The manner in which companies interact with their suppliers and coordinate activities of their employees has also changed. It is essential for the management of the Coca Cola Company to understand how these changes directly influence its operations in the market.
The ecological environment remains an important factor when assessing external forces that affect operations of a company. Environmental degradation, climate change, and global warming have become critical issues among the modern-day ecologists. In the United States and Canada, tough laws have been enacted that prohibit unnecessary pollution of the environment. Firms such as the Coca Cola Company have to follow strict guidelines on how to dispose of their waste products.
They cannot release their industrial effluent before properly treating them based on the guidelines provided by the government. Their emission of greenhouse gases are also subject to regulations as a way of protecting nature. In a country that implements strict environmental laws, a firm must find a way of complying to avoid facing any legal problems (Dhir, 2019). However, that does not mean the firm is at liberty to pollute the environment in markets where there are no such strict laws such as in India and parts of Africa. It should remain committed to protecting the environment, and that may mean setting aside part of its profits in activities such as tree planting, collection of plastic wastes, and innovating ways of managing wastes.
The legal environment is the last but not the least factor that a business analyst has to consider. As Wunder (2019) explains, a firm cannot survive in a lawless environment. It needs a strong legal environment that would protecting from unnecessary attacks, theft, arson, or numerous other malpractices that may threaten its existence. While these laws protects the firm, they also ensure that the same company does not engage in practices that may harm other organizations, customers, the government, or the community where it operates.
The United States and Canada have a strong legal environment that defines how companies should relate with their customers, suppliers, the government, competitors, and any other relevant entity. It is essential for the management of this company to understand and respect laws in each of the country where it operates. Laws in Canada may not be similar to those in India or South Africa. It is the responsibility of the management of the company to understand laws in each of these markets and ensure that its operations are properly aligned with these regulations.
Porters Five Forces
External analysis of a business environment may require one to assess the industry forces. Porters five forces theory is one of the most effective models of assessing factors specific to a given industry. It identifies five areas of analysis that should be considered. The first is the rivalry among the existing customers (Henry, 2018). The assessment of industry rivalry is essential in defining the approach that a firm should take in achieving sustainable growth. In the beverage industry, rivalry among existing companies is intense. The Coca Cola Company’s archrival in the global market is PepsiCo. These two American companies operate in the same market and target the same segments. They also have to compete with other regional and national companies in Europe, North America, South America, Asia, and Africa.
The competition is so stiff that it becomes necessary for this firm to find unique selling points. Factors such as pricing are also critical in developing a pool of loyal customers. The company has been investing heavily in promotional campaigns as a way of strengthening its brand and creating awareness about its products.
The threat of new entrants may also define strategies that a firm takes in the market. In the beverage industry, this threat is real, causing a major concern to the existing players. Although the Coca Cola Company and PepsiCo have managed to hide information about how their cola products are made, some of the new products do not need such secrecy to develop (Lynch, 2018). For instance, one of the most popular products of this company is the bottled water. It is easy for new companies to develop this product, a fact that has successfully eliminated the barrier to market entry. Every time a new company emerges in the current market of these two companies, competition becomes stiffer than it previously was. It means that the firm has to employ effective strategies of managing competition.
The threat of substitute products is another major concern that industry players have to be keen on monitoring. In the beverage industry, this threat is significantly high. Coffee, tea, fruit juice, and milk are some of the alternative drinks that one can use instead of cola products. The main challenge that the Coca Cola Company is facing is that most of these alternative drinks are considered healthy. Health experts have been encouraging people to take fresh fruit juice because of the numerous benefits that they have. At the same time, they have been warning against excessive consumption of cola drinks (Dhir, 2019).
The trend has led to a scenario where alternative products are considered superior to those that this firm offers. If the current trend continues, most of the cola products will become unsustainable in the market as people shift to what they believe are healthy alternatives. It means that the management of this company will need to adjust its product offerings accordingly by increasing its product portfolio. The introduction of water was one of the ways of expanding the portfolio. However, it will be necessary to introduce other products that reflect the changing tastes and preferences of customers in the market.
The bargaining power of buyers is a major issue when developing an effective strategy of operation. According to Lynch (2018), when buyers are presented with numerous choices whenever they want to purchase an item, they tend to become demanding. That is the case in the beverage industry where competition is getting increasingly stiff. When one wants to purchase a drink, they have numerous choices. As such, they tend to take into consideration factors such as price, the strength of the brand, convenience when making their purchases, and any other benefit that they can get. The Coca Cola Company understands that it has to go beyond advertisement. It has to add some features to the product and ensure that all its drinks are priced competitively in the market.
The last factor to consider when using this model to assess the industry is the power of suppliers. When several companies have to rely on a single supplier to make available products that they need, the supplier will have the power to dictate terms of trade because of lack of a strong competitor (Henry, 2018). In the beverage industry, companies often have the ability to source for the materials they need from different farmers across the world.
As such, there is no single supplier that is powerful enough to dictate terms of trade. It is also important to note that when a supplier is dealing with a large organizational buyer such as the Coca Cola Company, the buyer will have a stronger bargaining power. Many farmers would want to sell their products to this giant beverage company. As such, the power of every individual supplier is reduced even further. Figure 2 below summarizes these factors.
SWOT Analysis
When the external business environment has been analyzed, the next step is to conduct an internal analysis of the firm. When assessing the internal environment, issues of concern include the firm’s strengths, weaknesses, opportunities, and threats. One of the biggest strengths of the Coca Cola Company is its strong brand. According to Henry (2018), the Coca Cola Brand has been ranked as the strongest in the beverage industry globally. It is known at a household level, making it easy to sell its products all over the world. Many years of experience is another factor that makes it easy for the firm to overcome competition in the market.
The management can easily assess the current trend and based on the experience of the firm, develop ways of overcoming the identified challenges or tapping into opportunities the market presents. A team of highly skilled workforce has also benefited the company. It makes it easy for the firm to remain innovative and to embrace change with ease whenever it is necessary. The financial strength of the company means that it can easily afford to sponsor new projects and market research.
The firm has some weaknesses that the management will need to address to ensure that the firm’s operations remain sustainable. One of the main weaknesses of the Coca Cola Company is its overreliance on the cola products. Although the firm has made an impressive effort to diversify its product portfolio, its primary products are still the cola-related drinks such as Coca Cola, Fanta, Sprite, and Crest. These products are becoming less popular because of the growing perception that they are not healthy. As such, this firm will need to adjust accordingly. It is also important to note that the firm has been slow in addressing accusations about the negative impact of its activities in some markets. In India, the firm has been accused of utilizing a lot of water that the poor need, creating shortage of this essential commodity.
The market presents opportunities that this firm can tap into as it seeks to achieve growth. The growing market for products such as water presents a new frontier that can enable the company to achieve sustainable development (Kamau, 2017). It is also important to note that as the global economy grows and purchasing power of clients increase, this firm is likely to sell more of its products, which are often classified as leisure products, because of increased disposable income. Emerging technologies in this industry also creates a perfect opportunity for the firm to embrace innovation as it seeks to develop new products in this market. The impact of these opportunities is that they present this company with alternative paths to achieving success despite the numerous challenges that the firm faces.
The last factor under this model is the analysis of threats that a company has to encounter. As discussed above, the biggest challenge that the Coca Cola Company faces is the stiff competition from direct rivals and alternative products. The firm has to find unique selling points to attract and retain a pool of loyal customers. Environmental concerns are also presenting a new challenge that the management has to find a way of addressing. It has been using plastic to package its products.
However, environmentalists have warned against the impact of plastics on the environment. It means that not only are the products becoming less popular, but also the materials used in its packaging. Strains in foreign relations between the United States and China may also affect the ability of this firm to conduct business in the world’s most populous and second largest economy in the world.
Conclusion
When conducting a business analysis, the primary goal is to always develop recommendations that focus on addressing specific problems or taking advantage of a specific opportunity in the market. The recommendations must be presented in s smart way, as discussed above. It may also be necessary to develop an action plan or implementation plan that should be followed to ensure that the intended goals are realized. In this business analysis, the selected client was the Coca Cola Company.
This firm has dominated the beverage market for decades at the global level. PepsiCo has always been its main rival both in the home market and globally. However, the changing tastes and preferences and emerging alternative products poses a real threat to its sustainability. In this paper, these challenges have been identified and in each case, an appropriate action plan proposed that can help the firm to remain sustainable in the market.
References
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Lynch, R. L. (2018). Strategic management. Pearson.
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