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Strategic management: The Coca-Cola Company - Essay Example

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The Coca-Cola Company is the world's biggest drinks company, controlling more than half the global market in carbonated soft drinks as well as a substantial chunk of the non-carbonated segment." (adbrands.net) Through PESTLE analysis the impact of changes taking place at a macro economic level on any market/industry caused by Political, Economical, Social, Technological, and Legal and Environmental factor can be reviewed.
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Strategic management: The Coca-Cola Company
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Download file to see previous pages The changes in these regulations, changes in non-alcoholic business environment in the form of actions by the competitors, political conditions in the international markets where the firms would like to penetrate are some of the important factors that affect the industry.
When the US economy is stronger and progressively growing the industry would do well. Contrastingly when the economy is under a recession having a negative GDP growth the consumer spending will get reduced and it will have a serous impact on the beverages industry as well. Increase in rates of interest and depressing business moods in general will have an adverse impact on the growth of the industry.
Changes in styles and attitudes of consumers will have their impact on the sustenance of the growth of any industry especially the non-alcoholic beverages industry. For instance, many of the US citizens have become health conscious and are more inclined to follow a healthier life style. Consumers in the age group of 38 to 65 are also more concerned with nutrition and the effect of their eating and drinking habits will affect the sale of non-alcoholic beverages.
Technological changes that create opportunities for new products and product improvements and new marketing techniques of internet and e-commerce would have a positive impact on the industry and its growth. The effectiveness of the advertising, marketing and sales promotional programs with technological improvements will definitely impact the sale of beverages like Coco Cola. (Purdue) Technological advancement in the information and communication field can also be seen as a distinct opportunity for the company to employ improved manufacturing technologies like Computer Aided Designs and greater improvements in the distribution arrangements can also be attained. (PepsiCo Five Year Marketing Plan)
Legal Analysis

Changes in legislative regime dealing with taxation, corporate affairs and accounting and disclosures can affect the progress of the industry in serious ways. Especially when the major market share is held by Coca Cola and Pepsi there are chances that changes in the legal provisions affect these firms to a large extent.
Environmental Analysis

Stricter environmental regulations may affect Coca Cola and other players in the industry as these firms create a lot of toxic waste and the disposal of the wastage would create problems for the firms. Other environmental regulations may also affect the operations of the firm in the industry.
Five Force Analysis

Using Porter's Five Force analysis the competitive position of the firms in the beverage industry can be studied.
Barriers to Entry - Low
Large spending requirements for advertising, creation of a brand image and brand loyalty, higher margins payable to the retailers for retail shelf space, and fear of retaliation from the large players like Pepsi and Coco Cola act as deterrent to new entrants. Hence the intensity of this force is low.
Bargaining Power of Suppliers - Low
Most of the ingredients are common items like sugar, color, flavor, additives and packaging and there are too many suppliers who would like to cater the requirements ...Download file to see next pagesRead More
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