During, the recent decades people have mostly switched from flavored to healthy drinks.

Some societies encourage entrepreneurship while some dont. And for this reason alone, the company has faced a massive amount of backlash from environmental groups. In this highly globalized market, certain factors are of special significance that affects the businesses.

As a result, it has to adapt its marketing strategy to the local markets and their cultures something we also know as brand localization. It is operating in more than 200 countries with owned and independent It has attracted a lot of criticism of the brand. A PEST analysis demonstrates that certain political, economic, social and technological factors are of particular importance for the soda giants business. The purpose of all of these campaigns is to increase the customers engagement and connect with the people at a personal level. Coca Cola makes significant political contributions to comply with the rules and regulations of the governments.

Hopefully, its demand would rise in the upcoming years because the customers are becoming health conscious. Likewise, in 2019, it was named the worst company for plastic pollution in the word by Break Free From Plastic, an environmental pressure group (Petter, 2019). Likewise, the rising cost of raw materials and labour is another important factor affecting the company. their labor practices. The global economic crisis has also affected the company harshly since to many countries Coca Cola is still seen as a luxury item, and in times of crisis such items are bound to lose sales. These programs are designed to help the farmers in Africa and Ghana learn new and more efficient methods of farming. Apart from it, these laws may vary from country to country. However, sometimes political decisions by the U.S government impact on the operations of the Coca-Cola company and many others abroad. Coco-Cola has faced great criticism in India for draining the groundwater. The Legal compliance to the local laws of the countries where it operates is the primary legal hassle that Coca Cola has to face. Coca Cola started closing down its factories worldwide in 2017 to refine and improve its supply chain system. They consume more than 10,000 Cola soft drinks every second of every day throughout the year. Coca Cola promotes the innovative culture by inviting people to play a game to stay forever young, current, and current.

(adsbygoogle = window.adsbygoogle || []).push({}); The Macro environment factors such as inflation rate, savings rate, interest rate, foreign exchange rate and economic cycle determine the aggregate demand and aggregate investment in an economy. Similarly, changes in the political situation of the countries like government changes or any political turmoil can potentially impact its business. The rise of taxes on sugar production in the UK, Its a good thing that the company is moving in the right direction. Countries like North Korea and Cuba still dont allow the sale of Coca Cola in their countries. It aims to explore some of the macro-environmental factors such as political, economic, social, technological, environmental, and legal that have been influencing both the strategic and the operational decisions of the company. Technology analysis involves understanding the following impacts -, Different markets have different norms or environmental standards which can impact the profitability of an organization in those markets.

The global economic and financial crisis of 2007 2009 is a relevant example of an economic factor that greatly impacted the majority of businesses around the globe. You may also like reading SWOT analysis of Coca-Cola and Stakeholders of Coca-Cola. They can impact individual firms competitive advantage or overall profitability levels of the Consumer Goods industry. Simultaneously, Cultural factors are of significance. This may reduce the demand for fizzy drinks; however, it may also increase the demand for healthier drinks. and sells 1.9 billion severing on daily basis. The achieve success in such a dynamic Beverages - Soft Drinks industry across various countries is to diversify the systematic risks of political environment. Later he sold Coca-Cola to a businessman, Asa Griggs Candler. More and more people are becoming health conscious and concerned about the impact of fizzy drinks on their health. Diseases such as obesity are associated with the long-term consumption of Coca Cola and these factors are being brought to light in recent times.

As a multinational brand, the company is operating its business across the world. They use techniques like directly advocating any politicians, making contributions in their campaigns, and joining trade associations. In countries such as India, Coca Cola is being held accountable for completely draining off groundwater in large areas.

Thus, technological factors have an important and sizable impact on the business of Coca-Cola. Other relevant articles for you are: Competitors of Coca-Cola (Competitor analysis), Chilkoti, A. Coca-Cola is also installing solar panels at its production facilities to reduce the companys carbon footprint. Since the current generation is quite health specific, these aerated drinks have been accepted by them. Its because clean and fresh water is a rare and scarce commodity in many parts of the world. Taxi industry is now dominated by players like Uber and Lyft.

Therefore, shortage of water in a given location may impact on its operations. The Coca Cola Company is a leading non-alcoholic Media has also played an important role in changing peoples perception of soda drinks which are mainly seen as loaded with calories.

But the lockdown and shutdown of businesses have decreased the annual revenue and net income of the company by 8.74% and 7.55%. Apart from reducing environmental impact, it also helps with the better brand image. Its corporate ethics are of primary concerns to the company Allegations were made regarding Coca-Cola using pesticides in its products. Political stability and importance of Beverages - Soft Drinks sector in the country's economy. accepted by people. that shape strategy and competitive landscape. unfair manners and also pay wages that are less than the standard in their Two clergymen filed a lawsuit against Coca-cola and the American Beverage Association.

Coca-Cola introduced several low-calorie products to adapt to these changes. It is worth mentioning that many people consider sugary drinks to be a big contributor to many illnesses. Its impact on the businesses cannot be underestimated. The conflict between the Chinese government and the Trump administration resulted in the form of a trade war between the two countries. For instance, it has been thriving extremely well for so long in the USA and Europe because of political stabilities.

Copyright, patents / Intellectual property law. [1] Xinhua News Agency (2003), Available at: http://china.org.cn/english/features/60932.htm, [2] Timmons, H. (2014) Quarts, Available at: http://qz.com/239722/israels-attacks-on-gaza-are-causing-coca-cola-boycotts/, [3] Louth, N. (2012) Moneywise, Available at: http://www.moneywise.co.uk/investing/stocks-and-shares/10-global-companies-who-can-beat-the-economic-crisis, [4] McGrath, M. (2015) Forbes, Available at: http://www.forbes.com/sites/maggiemcgrath/2015/02/10/foreign-exchange-takes-the-air-out-of-coca-cola-fourth-quarter-profit/, [5] The New York Times (2014) Available at: http://www.nytimes.com/2014/03/01/business/challenges-for-coke-to-stay-on-top.html?_r=0, Interpretivism (interpretivist) Research Philosophy. The company has to follow the relevant laws in order to do business in a particular market. However, low resource efficiency still continues to be a

In countries where governments have not yet taken a stance on such issues are also prone to change.

Exchange rates & stability of host country currency.

The business of Coca-Cola is spread over more than 200 countries. The rise of sugar tax on soft drinks in the UK is also a problem for the Coca-Cola company. Any major change in peoples preference and taste can impact the profits of a business. He writes regularly online on a variety of topics. The Coca-Cola Company can closely analyze the following factors before entering or investing in a certain market-. It has got its own ethics and compliance program so that all its associates are compliant whichever part of the world, they are employed in. The brand needs to ensure that it meets all such regulations wherever its products are sold. According to an estimate, Coca Cola sells approximately more than 100 billion plastic bottles annually. Water is a scarce resource and the beverage giant requires it in plenty for production. Water But the demand and interest of the customers have shifted towards the low calories and less sugary drinks.

(2019) COCA-COLA named worst plastic polluter for second year in a row by environmental group, available at: https://www.independent.co.uk/life-style/coca-cola-pollution-plastic-environment-coke-a9168921.html (accessed 26 November 2020), Coca-Cola company (2022) Who we are, available at: https://www.coca-colacompany.com/careers/who-we-are (accessed 27 January 2022). Copyright 2017 - 2025. This detailed PESTEL analysis of Coca-Cola examines some of the external factors that impact on the operations of the Coca-Cola company. From labor to product quality and environment there are several areas where compliance is essential. These factors include the level of economic growth in the country and in the industry, tax rates and currency exchange rates, interest rates, labor costs and others. The villagers alleged that Coca-Cola consumed water in enormous amounts giving rise to a situation of shortage for the villages near its plants. Specifically, as it is illustrated in Figure 2 below, the amount of soft drinks consumption in the US has experienced a steady decline during the past 15 years, at the same time when the level of consumption of bottled water and the sports drinks has increased substantially. This leading Level of corruption - especially levels of regulation in Consumer Goods sector. company is highly dependent on the regulation of taxes in the various countries Legal environment is the last part in the PESTEL analysis of Coca-Cola. After a detailed study of the pestle analysis of Coca Cola, we have realized that the company has good political and legal relations. The brand is also taking steps towards eco-friendly products. Coca Cola sales are impacted by a set of economic factors that beyond of companys control. Many labor unions have claimed that Coca Cola treats its employees poorly and pays low wages to them. It is investing in water-smart agriculture through programs like CARE and RAIN.

According to an estimate bymacrotrends.com, the annual revenue and net income of Coca-Cola in 2020 was $33.471 billion and 8.333 billion dollars. Industrial safety regulations in the Consumer Goods sector. Many Middle Eastern countries still continue to disallow

Social factors that leadership of The Coca-Cola Company should analyze for PESTEL analysis are -, Technology is fast disrupting various industries across the board. Coca Cola currently has 108 million followers on Facebook, 3.34 million followers on Twitter, and such high numbers in other platforms as well. According to a report published bymacrotrends.com, Coca-Cola has had tremendous growth in 2018 and 2019 of 415.54% and 38.64% respectively. https://www.independent.co.uk/life-style/coca-cola-pollution-plastic-environment-coke-a9168921.html, https://www.coca-colacompany.com/careers/who-we-are, Stakeholders in the construction industry, PESTEL analysis of the ecommerce industry. The Coca-Cola Company can use countrys economic factor such as growth rate, inflation & industrys economic indicators such as Beverages - Soft Drinks industry growth rate, consumer spending etc to forecast the growth trajectory of not only --sectoryname-- sector but also that of the organization. Some of the major competitors of Coca-Cola are; Mountain Dew, Gatorade, Nestle, Dr. Pepper Snapple, Parle, Pepsi, Redbull, and many other local brands. Several lawsuits related to quality standards or use of harmful ingredients have also been filed against it in the past. Coca-Cola and its products must conform to the relevant laws in the countries they are sold. Government intervention in the free market and related Consumer Goods.

The purpose is to reduce waste and manufacture environmentally friendly products. This will also be the most difficult area for Coca-Cola to manage. They claim that both of these companies are deceiving the people that carbonated drinks contain a high level of sugar in them. In the past, Coca-Cola has faced a tussle with the law in several areas including the quality and composition of its products to labor practices. As we know that the supply chain and the distribution network is a very important part of the retail industry. Nobody get fired for buying our Business Reports Templates.

Whether it is the processing of water or the packaging of Coca-Cola products, it all requires heavy use of technology. These include, but not limited to the level of political stability in the country, impact of international pressure groups and domestic market lobbying groups and the government attitude towards the industry and the company. Political factors play a significant role in determining the factors that can impact The Coca-Cola Company's long term profitability in a certain country or market. (LogOut/

these ingredients are always rising in prices. Technological advancements such as AI bases analytics and big data operations have also served the brand in deciding markets trends and service chain management processes. The most important political factors which can have a direct impact on Coca-Cola are laws and government regulation of food products.

For instance, one of its bottling plants was ordered to close in northern India in 2014 as local farmers blamed it for using too much water (Chilkoti, 2014). beverage brand has more or less 500 licensed brands of soft and energy drinks, Spanish oil giant Repsol had to face a similar instance. it has its factories based in. The brand revamped all of its social media accounts to prove itself an optimistic brand. The global drive against obesity affected peoples choice of food products. Water scarcity has become a major problem in Africa and such programs are helping local farmers increase their yield against restraints. The economic crisis has passed but the strengthening of the US dollar again means Coca-Cola will feel the pinch. If we study the latest lifestyle and diet statistics, obesity and overweight are two major issues across the world. It allows people to create their drink by using any of the combinations. Some of the main products/services of Coca Cola are; Gold Peak Tea, Honest Tea, Georgia, Mello Yello, Fair Life, Minute Maid, Fanta, Odwalla, Del Valle, Powerade, Simply Beverages, Dasani, Glaceau SmartWater, Sprite, Ciel, Suge, Coke Zero, Glaceau Vitamin Water, Diet Coke, and Zico. Water scarcity would continue to trouble it in the long-term in most of the countries where its production plants are based.

While the technological factors might be in its control, the social, political and economic factors would require it to adopt its marketing strategies as per the changing conditions. (LogOut/ These are crucial for the company to maintain its low price of raw materials and also to ensure that it does not lead to water crisis as a result of its high-water demand.

John Stith Pemberton was the founder of Coca Cola and he established the company on May 08, 1886. . Send your data or let us do the research. Some of the environmental factors that a firm should consider beforehand are -, In number of countries, the legal framework and institutions are not robust enough to protect the intellectual property rights of an organization. Fill in your details below or click an icon to log in: You are commenting using your WordPress.com account. Create a free website or blog at WordPress.com. Similarly, the rising costs of the raw products is an important factor affecting Coca Cola. Coca Cola launched a very successful social media campaign by the name of share a coke. It has one of the highest follower bases throughout the various social media platforms, and it uses these platforms quite actively to campaign for its products. The government regulations put great pressure on the food and drink to use healthy ingredients.

Any increase or decrease in tax rates can affect the profits of any corporation. Some of the legal factors that The Coca-Cola Company leadership should consider while entering a new market are -, Order custom Harvard Business Case Study Analysis & Solution. The basic ingredients and process used to make the end products are the same in all countries; however, the same soft drink may vary slightly in taste due to factors such as temperature and storing conditions (Coca-Cola company, 2022). Technology is another important element to address in the PESTEL analysis of Coca-Cola. We make beautiful, dynamic charts, heatmaps, co-relation plots, 3D plots & more. This massive operations offer the company both opportunities and challenges. For instance, its products are generally affordable for customers in developed countries; however, many customers in developing and poor countries may not be able to afford them. It means that they can freely trade their products in the region. The report also contains application of SWOT, Porters Five Forces and Value-Chain Analyses on Coca Cola , along with analysis of Coca Colas marketing strategy and companys approach towards Corporate Social Responsibility (CSR). Bureaucracy and interference in Beverages - Soft Drinks industry by government. bottling partners, retailers, wholesalers and distributers. There are also cultural issues that are associated

The Coca-Cola Company PESTEL analysis is a strategic tool to analyze the macro environment of the organization. Coca Cola uses some very basic ingredients to produce its products, and

Technological efficiency ensures timely production and an efficient supply chain. It also shows the influence of the company that the ruling government was supporting the brand.

Political or economic changes can negatively impact its profits. The macro-environment factors can impact the Tax laws vary from country to country. There are few specific instances that illustrate the impact of political factors on Coca Cola performance.

Technology is an important factor for the large businesses like Coca Cola. Its because of the covid-19 pandemic in 2020.

Such economic crises impact the customers. However, Coca-Cola has launched low calories and less sugary carbonated soft drinks like Coke Zero and Diet Coke to address this issue. The global environment subjects a corporation to several pressures. Infrastructure quality in Beverages - Soft Drinks industry. There was an incident when Coca-Cola mislabeled its products as blueberry and pomegranate juice, instead of grape and apple juice. Another legal issue that shows possible problems is All these factors are important for generating revenues. For example in United States Texas and Florida have different liability clauses in case of mishaps or environmental disaster. Coca-Cola has been using digital technology to create new consumer experiences via innovative programs. (2018) Coca-Cola CEO says company sees cost pressures from Trumps tariffs, available at: https://www.cnbc.com/2018/07/25/coca-cola-ceo-company-sees-cost-pressures-from-trumps-tariffs.html (accessed 21 November 2020), Marr, B.

Labor costs and productivity in the economy, Business cycle stage (e.g. According to an estimate, the retail value of Coca Colas products like Sugar Zero and Diet Coke has increased by approximately 8% in 2018.

The rising cost of raw materials is a reason for We make the greatest data maps. Economic factors to have a major and direct impact on the business of large and global companies. (adsbygoogle = window.adsbygoogle || []).push({}); PESTEL analysis provides great detail about operating challenges The Coca-Cola Company will face in prevalent macro environment other than competitive forces. In India alone, several protests were staged against the company by citizens and non-governmental organizations. PESTEL analysis of Coca-Cola (The Coca-Cola company). Noncompliance can cost billions in fines and can also result in loss of image. However, the crisis has impacted Coca Cola to a lesser extent compared to many other businesses. There was also a lawsuit of racial discrimination against the company. As we know that the three countries like the US, Canada, and Mexico have a free trade agreement among them.

It

Sitemap, What is PESTLE Analysis? labour unions. Water scarcity is particularly a big problem affecting Coca-Cola. Still, in difficult times as those, Coca-Cola surprised the industry. Efficiency of financial markets Does The Coca-Cola Company needs to raise capital in local market? Despite all the success Coca Cola has a declined revenue in 2018 which shows the negative impact of dynamic external environment in those markets where it is operating.

Change), You are commenting using your Facebook account. While micro environment factors such as competition norms impact the competitive advantage of the firm. The pursuit of healthy lifestyle and increasing level of consumer health concerns towards obesity fuelled by sugar and carbonated drinks can be specified as the most important social change that has direct and significant effect on Coca Cola performance.

It encouraged people to buy a bottle for their loved ones with the customized name of it and ask them to do the same. Education level as well as education standard in the The Coca-Cola Company s industry, Culture (gender roles, social conventions etc.). However, with people moving towards healthier drinks, Coca-Cola had to focus and invest more in its marketing efforts. The Coca-Cola products are mainly popular for their flavors. The cost of other raw products and labor has risen over time. Water scarcity is another major trouble. It shows the companys ambitions and commitment towards the environment and avoids ocean pollution. Over the last 5 years the industry has been transforming really fast, not even giving chance to the established players to cope with the changes. Following the American attacks on Iraq, its revenues were reduced in several countries. Coca-Cola managed to remain relatively unscathed (the effects were felt the most by the financial companies), still, its profits were to some degree affected. All rights reserved. (2014) Water shortage shuts Coca-Cola plant in India available at: https://www.cnbc.com/2014/06/20/water-shortage-shuts-coca-cola-plant-in-india.html (accessed 26 November 2020), Jr, B. alarm.

An Important Business Analysis Tool, GAP Analysis: Definition, Templates, Skills, and Fit GAP Analysis. Their production and packaging as well as distribution, depend heavily on technology. For instance, Burmas government banned the sale of Coca Cola in her country. Environmental factors affecting Coca-Cola.

The consumption of water in huge quantities is a factor that affects Coca Cola in various ways. The company connected with people by using personalized marketing. This is certainly bad for its brand image and the environment. Arguably, fluctuations in exchange rate is the most significant economic factor that has adversely impacted Coca Cola performance in recent years.

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Technological factors affecting Coca-Cola. Heres the pestle analysis of Coca Cola as follows; According to the data published on Coca-Colas website, the company engages in political lobbying over the years.

The company is forced to spend a huge amount of its budget on solving water crisis issues and ensuring that their water demands are met.

As a beverage company, Coca-Cola relies on substantial availability of water. Order Now - The Coca-Cola Company PESTEL / PEST Analysis, Order Now - The Coca-Cola Company Porter 5 Forces Analysis & Industry Analysis, The Coca-Cola Company PESTEL and Environment Analysis, La Martina: Leveraging Polo's Luxury Lifestyle case study solution, The Case of the Unidentified Healthcare Companies -- 2010 case study solution, Grupo Elektra, Spanish Version case study solution, Heineken N.V.: Buckler Non-Alcoholic Beer case study solution, Knoll, Inc. PESTEL & Environment Analysis, Kandi Technologies Group, Inc. PESTEL & Environment Analysis, Kimberly-Clark Corporation PESTEL & Environment Analysis, The Kraft Heinz Company PESTEL & Environment Analysis, Kewaunee Scientific Corporation PESTEL & Environment Analysis, Eastman Kodak Company PESTEL & Environment Analysis, Coca-Cola FEMSA, S.A.B. Definition, Types, Innovative Entrepreneurship Definition, Skills, and FAQs, 5 Types of Communication Explained [How to. pursues developing markets to be its primary zone of expansion. It has initiated other programs too in order to reach the community and empower women. The millennial and Gen-X consumers are readily shifting to energy drinks instead of carbonated drinks due to the health concerns that the latter brings. It lasted for 4 years. Global economic crises of this scale can have a heavy impact on all the major global businesses. If you have liked it, please share it with others to support our work. However, many analysts report that this has not much impacted on sales. The company has come up with a new method of Rain & Care to use less water. It

Entrepreneurial spirit and broader nature of the society. After reading this blog you will be able to understand how multi-national companies grow and extend their business to different countries. An innovative programme like the sip & scan lets consumers unlock experiences and prizes by scanning icons on Coke packages with their mobile phones (Coca-Cola company, 2022). (Coca-Cola is a maker of non-alcoholic beverages) However, apart from the food and beverages related regulations and the quality standards, the business is also subject to the common accounting or business regulations. The company is also moving towards low calories and healthier products. The way in which Coca-Cola managed to retain its profits was surprising. People switch to the purchase of only the basic necessities under such conditions. Starting just $19. smart farming methods such as RAIN and CARE are also applied by Coca Cola that Coca-Cola cannot ignore its importance, particularly in the developing markets. It is worth mentioning that 105 million Facebook followers and many more millions in other social networking sites work as a particularly important data source for the company. Such trends can lead to a decline in the popularity of Coca-Cola products. Pharmaceutical Industry Analysis: How Important is it for Healthcare?