The global economic and financial crisis of — is a relevant example of an economic factor that greatly impacted the majority of businesses around the globe. However, the crisis has impacted Coca Cola to a lesser extent compared to many other businesses. Arguably, fluctuations in exchange rate is the most significant economic factor that has adversely impacted Coca Cola performance in recent years.
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.
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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. Beverage consumption in the US .
Coca Cola is also greatly impacted by additional range of social factors such as demographic changes, changing family values and family patterns, media perception of the brand and health and welfare of target customer segment…. P: Political change , from one party to another in control- for example the rise in private healthcare and privatisations under Conservative governments.
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Non-alcoholic beverages fall within the food category under the FDA. The government plays a role within the operation of manufacturing these products in terms of regulations.
There are potential fines set by the government on companies if they do not meet a standard of laws. The following are some of the factors that could cause Coca-Cola company's actual results to differ materially from the expected results described in their underlying company's forward statement Changes in laws and regulations, including changes in accounting standards, taxation requirements, including tax rate changes, new tax laws and revised tax law interpretations and environmental laws in domestic or foreign jurisdictions.
Changes in the non-alcoholic business environment. These include, without limitation, competitive product and pricing pressures and their ability to gain or maintain share of sales in the global market as a result of action by competitors. Political conditions, especially in international markets, including civil unrest, government changes and restrictions on the ability to transfer capital across borders.
Their ability to penetrate developing and emerging markets, which also depends on economic and political conditions, and how well they are able to acquire or form strategic business alliances with local bottlers and make necessary infrastructure enhancements to production facilities, distribution networks, sales equipment and technology.
Coca Cola PESTEL Analysis
E: Economic change , for example a recession creating increased activity at the lower ends of product price ranges. Rate of interest rises depressing business and causing redundancies and lower spending levels. Last year the U. However, things changed. Most economists loosely define a recession as two consecutive quarters of contraction, or negative GDP growth.
On Monday 26, the government officially declared that the U. CBS Market Watch.
Officially in a recession. However, because of aggressive action by the Federal Reserve and Congress it will be short and mild.
The economy will return to sustained, positive growth in the first half of The Federal Reserve is doing all that it can help the economy recover. They have cut the interest rate ten times this year. Lowering the interest rates will ultimately excite consumer demand in the economy. Companies will expand and increase use of debt as a result of the low borrowing rates.
Coca-Cola can borrow money for investing in other products as the interest rates are low. It can use the borrowing on research of new products or technology. As researching for new products would cost less the Coca-Cola Company will sell its products for less and the people will spend as they would get cheap products from Coca-cola.
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Before the attacks on September 11, , the United States was starting tot see the economy recover slightly and it is only just recently that they achieved the economic levels. Consumers are now resuming their normal habits, going to the malls, car shopping, and eating out at restaurants.
However, many are still handling their money cautiously. They believe that with lower inflation still to come, consumers will recover their confidence over the next year. The non-alcoholic beverage industry has high sales in countries outside the U. According to the Standard and Poor's Industry surveys, "For major soft drink companies, there has been economic improvement in many major international markets, such as Japan, Brazil, and Germany. S: Social change involves changing attitudes and lifestyles.
The increasing number of women going out to work, for example, led to the need for time-saving products for the home. Many U.