The External Environment Analysis of Coca-Cola

The External Environment Analysis of the Coca Cola

Introduction

The Coca-Cola is a carbonated soft drink sold in stores, restaurants, and vending machines in more than 200 countries. It is produced by The Coca-Cola Company of Atlanta, Georgia, and is often referred to simply as Coke. The external environments of Coca Cola include General environment- Political, Economic, Social, Technology and Task environment- Customers, Suppliers, Competitors and Labor Market.

General environment - PEST Analysis

Political

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 fail to meet the standards of law, are fined by the government. Apart from FDA, the tax policies are also political factor. The company is subjected to income tax policies according to the jurisdiction of various countries. In addition to this, the company is also subjected to import and excise duties for distribution of the products in the country where it does not have the outsourcing units. Political instabilities such as civil conflict, governmental changes, elections, military takeover and restrictions concerning the ability to relocate capital across borders are influencing Coca-Cola’s operations.

Economic

When entering the new country, the economic condition (growth, recession or decline) of that country is very important. The purchasing power of the people is increase when there is an economic growth in the country. It gives the company or the marketer a good chance to market the product. Currently in US, the interest rates are lowered because of the recession. So the company can borrow capital to invest in other products and to research new product and technology. A strong and weak currency exchange rate tends to affect the exporting of the product globally.

Social

The company cannot change the social factors...