Many companies nowadays have employed the active use of corporate social responsibility, being the voluntary activities performed by a company to operate in a social, economic and environmentally sustainable manner. One can beg the question whether the reasons behind CSR are truly out of ethical principle or merely just long term self-interest and profit.

The above motion centred around the implementation of CSR and the intention behind it has been long debated in the business world. In my opinion, CSR is almost always driven by a long term benefit and with increased profits in mind. My conclusion has stemmed from many reasons and examples that I have witnessed. For instance, when companies comply with environmental laws and emission regulations they are usually trying to avoid heavy long term fines. In addition, for a long time companies and businesses have supported local educational institutions bearing in mind that they would eventually benefit from doing so as these students will comprise of the business workforce. Lastly companies always conduct social and charitable programs in order to boost their public image and become more reputable so as to attract a larger consumer base. Businesses always excel and thrive in an environmental situation that is socially, environmentally and economically stable, therefore it is in their best interest to implement CSR in order to make this happen. Hence one can suggest that all of their undertakings towards this is all out of pure self- interest. But that is just my view, however, I’m sure there are companies out there that execute corporate social responsibility solely because it is the right thing to do and there is no monetary gain in mind associated with its implementation. One thing I have noticed is that It is a very difficult task to distinguish between a company utilizing CSR for money or out of pure ethical concern as the lines that separate them are very very thin.

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In order to have a strong business model it is imperative to supplement it with an equally strong understanding and knowledge of the factors that may affect a business from the outside world. A business must be fully aware of its external environment and must anticipate and be ready for any future problems they may encounter.

A vital and beneficial tool for a company to know its outside environment is through a PEST analysis, an analytical tool that provides companies with ability to audit factors such political, economic, socio cultural and technology to gain insights about a company’s environment.

Coca Cola is a multinational cooperation that has actively used the PEST analysis to place them in the dominant financial position they are currently in.

The political analysis of Coca Cola are mostly taxation requirements; the political stability of countries they operate and the environmental laws they have to abide in foreign and domestic markets. In addition, the company must also anticipate for civil conflict and this allows them to initiate strategic business planning.

Sales in the company are largely impacted by economic factors in which they have no control over such as the differentiating labor costs, interest rates, exchange rates and economic growth of the countries they operate in. The Social Aspect is also an essential factor that needs consideration, with more people opting for a healthier lifestyle, coca cola zero sales have increased. The demand for healthier drink alternatives has also been increasing as more and more people are concerned with their nutrition. Media perception and demographic changes also play a role in the social aspect Coca Cola is concerned with.  Lastly technological factors need to be assessed, such as advancing equipment for product manufacturing and design. The company has switched from glass bottles to concentrating production on plastic and cans due to how easy it is to dispose. Also, the promotional side of the company, advertising through social media as a more effective way.

Coca Cola has implemented the PEST analysis in a very effectual manner and is central to their business which has enabled them to gain knowledge to the outside world. This goes to show how the PEST analysis is useful to evaluate the variables outside of the business in which a company has no control. It allows a business to avoid actions that are likely to fail and also seek out potential opportunities.

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References 

https://toughnickel.com/industries/PEST-Analysis-Coca-Cola