Detailed and Pointwise Pestel Analysis of Coca-Cola

 

Source: FourWeekMBA

One of the top beverage producers in India, Coca-Cola provides consumers with a variety of delightful, affordable, high-quality drink options, It has a vast network of more than 2.6 million retail locations and serves more than 500 people every second, impacting the lives of millions of customers.

 

Coca-Cola was founded in 1886 and has subsidiaries in more than 200 nations. The brand uses its extensive portfolio, which combines a variety of its international brands with locally acquired names like Thumbs Up, Limca, and Maaza. 

 

These beverages are in various sizes, including 200 ml, 300 ml, 500 ml, 1.5 l bottles, and tetra packs (fountain machines). It has also introduced unique beverages (Georgia, coffee, and tea segments) to expand its market reach. 

 

Pestel Analysis of Coca-Cola

 

Here is a point-wise Pestel Analysis of Coca-Cola. 

 

Political Factors 

 

• Changes in taxation, labor laws, and employment conditions—these situations can affect the sales of Coca-Cola. 

• There are also conditions where the government favors the business of a company and subsidizes it. It can be common for local brands or for brands that are partially owned by the government. Here, Coca-Cola will have to face tough competition. 

• The trade relations of other countries with the US can impact the business of Coca-Cola in that country. For example, due to the trade relations between Burma and the US, Coca-Cola cannot sell its product in Burma.

 

Economic Factors

 

• Competitors starting their businesses with similar carbonated drinks. However, Coca-Cola’s loyal customer base may help the company survive in the competitive market.

• The revenue of Coca-Cola is heavily (70%) dependent on countries outside the US. The market conditions of these countries can have an impact on the development of the country. For example, the pandemic has had an impact on the nation's economic conditions.

• The cost of the raw materials for the beverages and the trade conditions with the suppliers can affect their business.

• The rising cost of problematic trade relations can be a potential risk to the growth of the company.

 

Social Factors

 

• As more consumers gravitate toward healthy options, the brand's ability to generate income may suffer as a result. Coke Zero is one of the company's products, but it needs to offer healthier alternatives to appeal to its customers. 

• Coca-Cola is one of the best-known companies for its campaigns. While branding and running campaigns, they have focused on several social issues. As a result, there is an opportunity to increase consumer numbers while also building a powerful brand.

• Coca-Cola must take into account the preferences of the nations where it has expanded its operations. In Japan, more than 30 different flavors have already been introduced. They may attract more customers with the help of these unusual flavors.

 

Technological Factors 

 

• Research and development of products are required. 

• The more they can invest in developing infrastructure, the more opportunity they have to conduct good research.

• Technological development has also increased the number of smartphone users who are active on social media. The company can use social networking sites for promotion and marketing, which can help strengthen its brand recognition.

• Online surveys can also be used to gather market research about their customers' preferences for new products and services. 

 

Ecological Factors 

 

• They can use alternative easily recyclable materials for their plastic bottle.

• The company can manage waste using cutting-edge technologies, which can improve the company's reputation.

• By initiating innovative campaigns or offering charitable contributions, Coca-Cola can increase its visibility.

• The company has been using water-smart farming methods like RAIN and CARE. It has helped them to attract people who are concerned about the environment.

 

Legal Factors 

 

• There are already several nations that have set a specific range for added sugar in beverages. Coca-Cola should take those into account. The brand has previously paid for the cases and suffered because of its high caffeine level.

• The company must consider employment ethics and the working conditions of its employees.

• They may suffer legal repercussions if they pay less to their employees. 

 

Conclusion

 

For more than a century, the company has not changed. The Coca-Cola Company's corporate name and packaging have changed numerous times throughout the years, but the lineage is still incredibly strong.

 

Written by Garima Jain