This is descriptive PESTEL analysis of Coca Cola which is one of the renowned brand of the world. It has been operating in beverage industry and having huge market share. It has number of products which includes but not limited to; Fanta, Sprite, Diet Coke, Coca-Cola zero, Coca-Cola Life, DASANI,Minute Maid.
Refreshment is necessary for every person and no company can provide a better option than Coca-Cola. Coca Cola is more than a sweetened and carbonated beverage. The company also promotes an exciting lifestyle, and one of the best brand helps to bring happiness to life.
The Coca Cola company is the world famous soft drink company which operates in 200 countries, and the non-alcoholic beverages of at least 400 brands are sold. It is one of the great and most valuable brands which is recognized globally. The successful company came into being in1886, and within a century the company carved its place. The consistent approach and the successful management team keeps on working on its evident and internal weaknesses. Coca cola is one of the businesses that works worldwide.
Factors that affect COCA COLA
Certain factors influence the particular significance of the firm. The economic situation, politics, culture and various laws affect every type of firms indirectly or directly. Coca Cola has been struggling from many time and the environmental factors resulted in the global business to provide revenues and profits. It is the beverages leading brand which is not affected by political or economic changes. It is true that the laws of every country varies and affects the brand image directly. However, cultural factors do play a vital role. A PESTEL analysis of Coca Cola will help to recognize the factors which impact the business globally.
Political Factors
The non-alcoholic beverages from Coca Cola Company lied under the food category. FDA governs the food group. The government role is critical while manufacturing of these products and regarding rules and regulations, there would be potential fines which were set by legislative laws on companies if companies do not fulfill the requirements. Following are the factors which will help Coca Cola Company actually to bring different results to their business.
- Changes in regulations and laws: The various changes in laws such as tax rate, revised tax, new tax law, accounting standards or various environmental foreign or domestic jurisdictions.
- Changes in non alcoholic beverages: Changes in the business environment include the product competitive factors, pricing details, the ability to share the sales and the action of competitors.
- Impact of international market and political condition: include the international markets which include the civil unrest, restrictions to transfer capital across borders and the government changes.
- Ability to develop and penetrate markets: legal considerations and the well reformed political structure must impinge the strategies on Coca Cola Company. The Government of Arab has boycotted the Coca Cola products because of the political dispute.
Economic Factors
The economic factors help to change and satisfy the consumer’s needs. Coca Cola has strived hard to make the products more appealing and have increased the taste which leads the company to earn profits and make enormous revenues. The company of beverages has expanded from the last years and have benefited from cultural perspectives and insights of societies. The company provides are mark able experience to its clients and users. The brand is very committed and one of the competitive beverage company.
According to the Coca cola company report, it has $84 billion of market share with the 50 percent in the beverage industry and 70 percent of income. The satisfying and the exciting brand is the ultimate choice for refreshment. The strong growing economy is doing well. Consumers are switching back to normal habits while going to shopping, malls or restaurants. As the new products will be proposed,
Coca-Cola Company will introduce its products at less price, and definitely, people will spend money for the cheap products. During the year 2001, the US government took measures and changes the economy by 2002. However, Coca Cola noticed this great change and realized that interest rates will definitely increase. They took the low cost loans to fund growth in 2002. The research has been used for development to capitalize strong economy.
Social Factors
Culture and tradition also leave a tremendous effect on the people perception and preferences. Language also plays a major role in culture and brands have to take care of all the slogans and promotional messages so that no wrong meaning must be conveyed. However, Coca Cola did not consider the language aspect and the literal meaning of Coca-Cola in Chinese are “Bite the wax tadpole.”
Changes are a part of marketing, and it is important the products must suit the preference, taste and fulfills every customer needs. Coca Cola team strived hard to improve, change and develop the appeal and have brought improvement in taste. For the Chinese and Japanese market, Coca Cola Company has introduced exclusive drink with the Asian taste. However, many US citizen can enjoy the best beverage without any complaint or issue.
Social factors for the sales of Coca Cola varies
• Many people in US are adopting healthy lifestyle and it has influenced the sales of non-alcoholic drinks. Many people have switched to distilled water and diet colas such as Zero or cola diet.
• The management is also a major concern and the percentage have increased the sales about 43 percent.
• Old people from age 37 to 55 are much concerned about their healthy routine. They adopt better life style and demand for healthier drinks which impacts on life expectancy.
Technological Factors
Technological factors affect the company marketing and the promotional programs. The innovation in technology has improved the sense of marketing and businesses use special effects and rich content to make the products look attractive. Such strategies help to sell out the more products.
The advancement in technology has introduced more inventions and machinery. These machines produce tremendously outstanding products. The company ensures tip quality products and efficient service. Following are the technological factors which impacts the company actual result.
• The great efficient advertisement, promotional programs and marketing will effectively promote the products.
• Packaging design involves the increased sale volume, material used for designing and logo.
• New equipment involves the technology and its advancement. Production will increase with the innovative ideas.
Legal Factors
The legal aspect will focus on legislative effect. The Coca Cola Company is licensed and reserves all rights in their business and development of products. All of the products involved and manufactured are licensed and approved from legislation. However, the factors like caste creed and various factors are taken care of before the product launch.
Environmental Factors
Environmental factors need to be examined to the national, local and world environmental issues. According to the report of Coca Cola Company, the facilities are organized and are monitored strictly. These laws are approved by the legislation as well as imposed by Government.
Study or the analysis of PESTEL, continues, helps to emerge and manage the solutions for different company challenges. The analysis ultimately demonstrates the political, social, legal, technological and economic factors. The study is critical for business and is required to adopt various marketing strategies according to the changing conditions. Coca Cola Company is striving and trying to introduce healthier and best products.
This will inevitably rise the world economy and gear the strength of the dollar in the upcoming years. It might be possible that the company will face water issues and most likely would trouble the production plants of the countries. Every aspect has the sizable and substantial impact on the business of the beverage company. So still a lot of investment and maintenance is required.
References
http://research-methodology.net/coca-cola-pestel-analysis/
https://toughnickel.com/industries/PEST-Analysis-Coca-Cola
http://www.cheshnotes.com/2016/08/coca-cola-pest-analysis/
https://www.academia.edu/9706910/SWOT_AND_PESTAL_ANALYSIS_OF_COCA_COLA