Coca Cola Pestel - pestle of Coca-Cola PDF

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pestle of Coca-Cola...

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Ex ec ut i veSummar y

Created in Atlanta, Georgia on 8 May 1886, the first Coca-Cola was described as “delicious and refreshing”. Not much has changed since then, and there’s still nothing better than an icecold Coke to quench your thirst. The Coca-Cola contour bottle, which dates back to 1915, is the most recognized packaging in the world today, and the exact formula is a famous trade secret. Over time the Coca-Cola brand has come to mean more than a drink, achieving celebrity status in many spheres of society. It represents the power of optimism and positive thinking. It is “happiness in a bottle”, it connects people and it brings out the best in the human spirit. The Coca Cola corporation is defined to be the most well known trade mark in the world, and it is justly so. Coca Cola owns over 400 brands that appeal to many different people all throughout the world. They are able to satisfy the needs of all their consumers and make their experiences with Coca Cola better. The Coca Cola products appeal to a wide range of people from all races, genders, and ages. Coca Cola is well known for its worldwide popularity as its products are sold to over 200 counties, while major competitors only sell in several countries, putting Coca Cola ahead of all competition. It is known worldwide and its branding is constantly earned by Coca Cola surpasses all other beverage companies and these funds would over the years, is still growing to this day, and will continue into the future. Many aspects of Coca Cola prove to be superior to that of competitors, ranging from promotional techniques to corporate structure. Some of these aspects include, positioning, market mix strategy, and implementation plan. These aspects place Coca Cola superior to competitors, instigating Coca Coal to aspire higher goals and missions. That’s why Coke is aligned with properties that embody the brand experience. In South Africa, these “feel-good” platforms include football, music, holidays, food and summer. Across a range of media channels, you’ll often hear about the involvement of Coca-Cola in landmark initiatives, like Coca-Cola Football Stars, My Coke Fest, Coke & Food, and much more. Coca-Cola is the only brand in the world to have an entire museum that showcases its history, current reality and future possibility. The New World of Coca-Cola in Atlanta is open to the public and is a “must see” if you are ever in that city. Coca-Cola contains sugar, high carbonation levels and caffeine. It’s real, authentic, original and the best. Its taste is indescribable.

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1 . 0 :I nt r oduc t i on

1.1 Origin of the Report: This report originates as a result of our honorable course teacher Mr. Md. Ariful Hoque (Lecturer, Department of Marketing, Jahangirnagar University) demand to have an report submitted by us for our course report marks. At his request, we, the members of the group wrote this report

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1.2 Object of The Report: Making a clear and thorough “PESTEL” analysis of Coca-Cola. Information regarding political, economical, social, technological, environmental, and legal forces of the brand are taken account for the creation of PESTEL analysis. 1.3 Methodology: As the report is related with business, it is a business research. Hence the report has been prepared based on a research process. To analyze qualitative data we gone through many websites as well as the main website of Coca-Cola, various magazines and journals, many PEST analysis essays. 1.4 Limitations of the Report: Due to long distance we could not visit the premise of “The Coca-Cola Company” to incorporate with the views of the “Top Management” about the performance & marketing opportunities of the company.

2. 0: AnOver vi ew ofCoc aCol a

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2.1 Company Overview: The Coca-Cola Company is an American multinational beverage corporation and manufacturer, retailer and marketer of nonalcoholic beverage concentrates and syrups, which is headquartered in Atlanta, Georgia. The company is best known for its flagship product Coca-Cola, invented in 1886 by pharmacist John Stith Pemberton in Columbus, Georgia.The Coca-Cola formula and brand was bought in 1889 by Asa Griggs Candler (December 30, 1851 - March 12, 1929), who incorporated The Coca-Cola Company in 1892. The company operates a franchised distribution system dating from 1889 where The Coca-Cola Company only produces syrup concentrate which is then sold to various bottlers throughout the world who hold an exclusive territory. The Coca-Cola Company owns its anchor bottler in North America, Coca-Cola Refreshments. The company has a long history of acquisitions. Coca-Cola acquired Minute Maid in 1960, the Indian cola brand Thums Up in 1993, and Barq's in 1995. In 2001, it acquired the Odwalla brand of fruit juices, smoothies and bars for $181 million. In 2007, it acquired Fuze Beverage from founder Lance Collins and Castanea Partners for an estimated $250 million. The company's 2009

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bid to buy a Chinese juice maker ended when China rejected its $2.4 billion bid for the Huiyuan Juice Group on the grounds that it would be a virtual monopoly. Nationalism was also thought to be a reason for aborting the deal. In 1982, Coca-Cola purchased Columbia Pictures for $692 million. It sold the movie studio to Sony for $3 billion in 1989.

Coca-Cola Headquarters - Atlanta, Georgia

2.2 Brief Company Overview: Company Type

Public

Traded as

NYSE: KO Dow Jones Industrial Average Component S&P 500 Component

Industry

Beverage

Founded

1886

Founder(s)

Asa Griggs Candler, John Pemberton created the soft drink/beverage "Coca-Cola", but it was Asa Candler, who founded The Coca-Cola Company.

Headquarters

Coca-Cola headquarters, Atlanta, Georgia, U.S.

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Area served Key people

Products

Worldwide Muhtar Kent (Chairman and CEO) Ahmet Bozer (Exec. Vice Pres.) List of The Coca-Cola Company products

Revenue

US$ 46.854 billion (2013)[1]

Operating income

US$ 10.228 billion (2013)[1]

Net income

US$ 8.584 billion (2013)[1]

Total assets

US$ 90.055 billion (2013)[1]

Total equity

US$ 33.44 billion (2013)[1]

Employees

130,600 (Dec 2013)[1]

Subsidiaries

List of The Coca-Cola Company subsidiaries

Website

Coca-ColaCompany.com

Logo Office at Bangladesh

Crystal Palace (11th Floor), Road No 140, Dhaka 1212, Bangladesh

2.3 Brand Profile: Coca-Cola is a carbonated soft drink sold in stores, restaurants, and vending machines throughout the world. It is produced by The Coca-Cola Company of Atlanta, Georgia, and is often referred to simply as Coke (a registered trademark of The Coca-Cola Company in the United States since March 27, 1944). Originally intended as a patent medicine when it was invented in the late 19th century by John Pemberton, Coca-Cola was bought out by businessman Asa Griggs Candler, whose marketing tactics led Coke to its dominance of the world soft-drink market throughout the 20th century. The company produces concentrate, which is then sold to licensed Coca-Cola bottlers throughout the world. The bottlers, who hold territorially exclusive contracts with the company, produce finished product in cans and bottles from the concentrate in combination with filtered water and sweeteners. The bottlers then sell, distribute and merchandise Coca-Cola to retail stores and vending machines. The Coca-Cola Company also sells concentrate for soda fountains to major restaurants and food service distributors. The Coca-Cola Company has, on occasion, introduced other cola drinks under the Coke brand name. The most common of these is Diet Coke, with others including Caffeine-Free Coca-Cola, Diet Coke Caffeine-Free, Coca-Cola Cherry, Coca-Cola Zero, Coca-Cola Vanilla, and special

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versions with lemon, lime or coffee. In 2013, Coke products could be found in over 200 countries worldwide, with consumers downing more than 1.8 billion company beverage servings each day.

John Pemberton – The Inventor of Coca Cola 2.4 Historical Origins of Coca Cola: Colonel John Pemberton was wounded in the Civil War, became addicted to morphine, and began a quest to find a substitute for the dangerous opiate. The prototype Coca-Cola recipe was formulated at Pemberton's Eagle Drug and Chemical House, a drugstore in Columbus, Georgia, originally as a coca wine. He may have been inspired by the formidable success of Vin Mariani, a European coca wine. In 1885, Pemberton registered his French Wine Coca nerve tonic. In 1886, when Atlanta and Fulton County passed prohibition legislation, Pemberton responded by developing Coca-Cola, essentially a nonalcoholic version of French Wine Coca.

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The first sales were at Jacob's Pharmacy in Atlanta, Georgia, on May 8, 1886. It was initially sold as a patent medicine for five cents a glass at soda fountains, which were popular in the United States at the time due to the belief that carbonated water was good for the health. Pemberton claimed Coca-Cola cured many diseases, including morphine addiction, dyspepsia, neurasthenia, headache, and impotence. Pemberton ran the first advertisement for the beverage on May 29 of the same year in the Atlanta Journal. By 1888, three versions of Coca-Cola – sold by three separate businesses – were on the market. A copartnership had been formed on January 14, 1888 between Pemberton and four Atlanta businessmen: J.C. Mayfield, A.O. Murphey; C.O. Mullahy and E.H. Bloodworth. Not codified by any signed document, a verbal statement given by Asa Candler years later asserted under testimony that he had acquired a stake in Pemberton's company as early as 1887. John Pemberton declared that the name "Coca-Cola" belonged to his son, Charley, but the other two manufacturers could continue to use the formula. On July 5, 2005, it was revealed that Coca-Cola would resume operations in Iraq for the first time since the Arab League boycotted the company in 1968. In April 2007, in Canada, the name "Coca-Cola Classic" was changed back to "Coca-Cola". The word "Classic" was removed because "New Coke" was no longer in production, eliminating the need to differentiate between the two. The formula remained unchanged. In January 2009, Coca-Cola stopped printing the word "Classic" on the labels of 16-US-fluidounce (470 ml) bottles sold in parts of the southeastern United States. 2.5 Brief Overview of Coca Cola: Type

Cola

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Manufacture r

The Coca-Cola Company

Country of origin

United States

Introduced

1886

Color

Caramel E-150d

Flavor

Cola, Cola Cherry, Cola Vanilla, Cola Green Tea, Cola Lemon, Cola Lemon Lime, Cola Lime, Cola Orange and Cola Raspberry.

Related products

Pepsi RC Cola Cola Turka Kola Real Inca Kola Zam Zam Cola Mecca-Cola Virgin Cola Parsi Cola Qibla Cola Evoca Cola Corsica Cola Breizh Cola Afri Cola

Website

www.coca-cola.com

Logo

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3. 0: PESTELAnal ys i s

PEST analysis ('Political, Economic, Social and Technological analysis''') describes a framework of macro-environmental factors used in the environmental scanning component of strategic management. Some analysts added Legal and rearranged the mnemonic to SLEPT; inserting Environmental factors expanded it to PESTEL or PESTLE, which is popular in the United Kingdom. The model has recently been further extended to STEEPLE and STEEPLED, adding Ethics and Demographic factors. It is a part of the external analysis when conducting a strategic analysis or doing market research, and gives an overview of the different macro-environmental factors that the company has to take into consideration. It is a useful strategic tool for

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understanding market growth or decline, business position, potential and direction for operations. The growing importance of environmental or ecological factors in the first decade of the 21st century have given rise to green business and encouraged widespread use of an updated version of the PEST framework. STEER analysis systematically considers Socio-cultural, Technological, Economic, Ecological, and Regulatory factors.

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Political factors are basically to what degree the government intervenes in the economy. Specifically, political factors include areas such as tax policy, labor law, environmental law, trade restrictions, tariffs, and political stability. Political factors may also include goods and services which the government wants to provide or be provided (merit goods) and those that the government does not want to be provided (goods or bads). Furthermore, governments have great influence on the health, education, and infrastructure of a nation. Economic factors include economic growth, interest rates, exchange rates and the inflation rate. These factors have major impacts on how businesses operate and make decisions. Social factors include the cultural aspects and include health consciousness, population growth rate, age distribution, career attitudes and emphasis on safety. Trends in social factors affect the demand for a company's products and how that company operates. Technological factors include technological aspects such as R&D activity, automation, technology incentives and the rate of technological change. They can determine barriers to entry, minimum efficient production level and influence outsourcing decisions. Furthermore, technological shifts can affect costs, quality, and lead to innovation. Legal factors include discrimination law, consumer law, antitrust law, employment law, and health and safety law. These factors can affect how a company operates, its costs, and the demand for its products Environmental factors include ecological and environmental aspects such as weather, climate, and climate change, which may especially affect industries such as tourism,

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farming, and insurance. Furthermore, growing awareness of the potential impacts of climate change is affecting how companies operate and the products they offer, both creating new markets and diminishing or destroying existing ones.

Breakdown on different forms of PEST analysis: STEP PEST in more positive approach PESTEL PEST + Environmental + Legal PESTELI PESTEL + Industry analysis STEEP PEST + Ethical SLEPT PEST + Legal STEEPLE PEST + Environmental + Legal + Ethical STEEPLED STEEPLE + Demographic PESTLIED PEST + Legal + International + Environmental + Demographic LONGPEST Local + National + Global factors + PEST INSPECT Intellectual + Natural + Cultural + PEST

4. 0PESTELAnal ys i sonCoc aCol a

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4.1 Political Factors: Those Non- Alcoholic Beverages like; Coca-Cola, are within the food category, under the FDA (Food and Drug Administration). The government has control over the manufacturing procedure of these products in terms of regulations. Companies who fail to meet the standards of law, are fined by the government. Following are provided some of the factors that are influencing CocaCola's Operations. 

Changes in Laws and Regulations like; changes in Accounting Standards, taxation requirements (tax rate changes, modified tax law interpretations, entrance of new tax laws), and environmental laws either in domestic or foreign authorities.

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Changes in Non-Alcoholic business era. These are; competitive product and pricing policy pressures, ability to maintain or earn share of sales in worldwide market compared to rivals.

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Political Conditions, specifically in international markets, like; civil conflict, governmental changes and restrictions concerning the ability to relocate capital across borders.

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Ability to penetrate emerging and developing markets, that also relies on economic and political conditions, and also their ability to form effectively strategic business alliances with local bottlers, and to enhance their production amenities, distribution networks, sales equipment, and technology.

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The business related environment changing which would lead to pressure developing in terms of pricing and the ability to sustain a level of sales in the market globally while maintaining their competitive edge.

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The market changes which would take place internationally as a result of the political situation changing there. This would include any kind of unrest, change in government and the applying of restriction on movement of goods across country boundaries. This would affect the penetration ability into new markets as well as the old ones. This would also affect the ability to get into alliances which would be advantageous strategically with the local industries as well network related to distribution and also sales.

4.2 Economic Factors: Economic recession can be one of the most important factors that influence Coca-Cola Company. The behavior of consumers changes during recessions. They have less money to spend and cut back personal spending in response to the overall decline in economic activity. Due to this fact, sells of Coca-Cola Company can fall by in Europe as now there is a recession. However, this worldwide company has huge brand awareness, unique selling point and due to this fact sales are still growing, which shows that that the recession didn’t affect sales volume. The change which is economic in nature would be aspects like the change in interest rates which would lead to business depression and would cause redundant and low levels of spending. Like it was seen in the US market despite the fact that it was doing very well it did not take too long for things to take a complete different route as a result of the recession which took place which was

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because the Gross Domestic Product had been negative for two consecutive years. The good part was that it was short lived as a result of the actions taken by the Federal Reserve as well as the Congress. This helped the economy take a U turn and get back to reflect growth which was positive. The cutting down of interest rate by the Federal Reserve helped to promote expansion of companies while increasing the level of debt. As the production and technology costs would go down the products being offered in the market would be at lower prices thus in turn benefiting the consumers. The economic condition as seen in the United States was very badly affected as a result of the September 11 attacks but the economy has recovered now and going back to normal. Time is the best healer for a situation like this. The industry related to non alcoholic beverages is flourishing and growing drastically. Many markets have opened up to for the manufacturers of soft drinks as the economic condition have improved there and can promote their growth as well. This growth would be as a result of high level of profitability while sustaining in a stable manner and also coming up with new and more improved products. Inflation increases cost of production. Consequently, Coca Cola have to face the uncontrollable problem of increasing their pricing. With this increase they risk losing customers who cannot afford their products because it is a desired product not a necessity. For example, in 2002, a 2 liter bottle of coca cola was 99p whereas today a 2 liter bottle costs £1.98. Due to inflation in 11 years the price of an identical bottle of Coca Cola has doubled in price. Alternatively, Coca Cola could be forced to lower their prices to facilitate an increase in consumption whilst taking a less favorable profit margin. 4.2.1...