A PESTLE Analysis of the Coca-Cola Company
A PESTLE analysis involves assessing the Political, Economic, Social, Technological, Legal, and Environmental status of a company. This tool is essential in making strategies and familiarization with the external environment in which an organization is operating.
The non-alcoholic beverages are under the FDA category. The government has a role in the manufacturing operations of the products. As far as regulations are concerned, the government sets fines. Coca-Cola monitors the politics and regulations in every country to protect and maintain its brand image. These regulations are made by the government and changes in regulations and laws including foreign jurisdictions, environmental laws, taxation requirements, and accounting standards influences the company’s book including entry in foreign countries (Johnson & Peppas, 2003).
The company is the biggest beverages company and serves more than 1.6 billion people universally in 200 nations. It has large-scale operation centers and distribution channels. There are high sales in countries that are not in the US. An economic improvement has been realized in main soft drink companies in major global markets such as Germany, Brazil, and Japan. These markets are vital for the stable growth and success. Moreover, there has been a low growth in carbonated drinks’ market particularly in North America; the main market (Pendergrast, 2011).
Coca-Cola adapts numerous management skills so as to adapt to different social trends in various countries. As the company has more than 3300 products, it does not introduce all these when entering a new market. A minimum number is introduced depending on the people’s attitude and culture. Governments and consumers are very informed about public health impacts and obesity is the 2nd social factor in the industry. In addition, consumers that are aged 37-55 years are increasingly concerned about their nutrition (Johnson & Peppas, 2003). Therefore, there has been an encouragement to venture in zero calorie and Diet coke soft drinks to as to keep the company’s demand high. The non-alcoholic market is particularly for youngsters and children. In this regard, it is worth considering the age distribution and population growth rate in various countries.
The distribution and manufacture of non-alcoholic drinks is Low-Tech business. Technological contributions play a huge role in packaging. The company is reliant on its bottling partners for a crucial business portion. Almost 83% of the global unit case volume is distributed and manufactured by the bottling partners where the company has no controlling power (Pendergrast, 2011). Hence, the company should ensure a cordial relation with the bottling partners in advertising, marketing, and pricing. Technology has made the company introduce general vending machines globally, come up with new products such as Diet Coke and Cherry Coke, non refillable and recyclable bottles and cans that are popular, stylish, and trendy among youngsters (Johnson & Peppas, 2003).
The company is subjected to regulations and laws such as labor practices, environment protection, contained deposits, labeling and advertising, product safety, and competition in the countries it trades. A number of acts are crucial in the US including Federal Food, Drug and Domestic Act, Occupation Safety and Health Act, the Federal Trade Commission Act, and related regulations and acts (Pendergrast, 2011). Changes in the laws can result to increase capital expenditures and costs, which can influence the distribution and production of products as well as profitability. Product labeling and concerns about particular chemical content and supposed health impacts are key in the company.
The company follows the environmental issues related to different countries’ packaging, distribution, and manufacture of the products. Moreover, it adheres to norms and markets its products appropriately, it strictly adheres to use of renewable plastic (PET) bottles (Pendergrast, 2011).
Johnson, V & Peppas, SC 2003, ‘Crisis management in Belgium: the case of Coca-Cola,’ Corporate Communications: an international journal, vol. 8 iss. 1, pp. 18-22.
Pendergrast, M 2011, For God, country and coca-cola: the unauthorized history of the great American soft drink and the company that makes it, New York, Phoenix.