PEST Analysis The PEST Analysis identifies changes in the market caused by: Political , Economical, Social and Technological factors. Political Analysis and 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 Coca-Cola’s Operations. 1.
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. 2. 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. 3. Political Conditions, specifically in international markets, like; civil conflict, governmental changes and restrictions concerning the ability to relocate capital across borders. 4.
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. Economic: In 2001, the recession influenced the companies operations, but because of aggressive actions the US Economy estimated to have returned in positive growth in 2002. Currently, because of global recession, Coca-Cola can borrow capital and invest in other products, because the interest rates are lowered.
Also, it can borrow to advance its research of new products and technology. By researching for new products is cost effective, the company could sell its products at a lower price, so its cutomers would purchase more Coca-Cola products at a lower price. Social: The majority of US citizens are excersizing healthier lifestyles. That has strongly influenced the sales of non-alcoholic beverage sector, because many customers are switching to bottled water and diet colas like; Coca-Cola Light or Zero, instead of drinking beer or other beverages.
Additionally, time management is quite 43 % of all households, and it has increased. Customers aged from 37 to 55, are concerned with their nutrition. Also, large portion of the population is within the range of baby boomers age. While many cutomers are getting at older ages in life, they are more concerned in long term increasing their permanence. That will continue to affect the non-alcoholic beverage sector, by increasing the demand, in healthier and other beverages. Technological: Some factors that affect the company’s actual results to vary essentially from the expected results, are the following: 1.
The efficiency of company’s advertising, marketing and promotional programs, The new technology advances of television and internet that use incomparable effects for advertising through the use of media. Those advances make the products seem attractive. This supports the selling promotion of the products. Coca-Cola in media tends to use this technology so, to sell effectively its products. 2. Entrance of cans and plastic bottles in the past, have increased sales volume for the company because they are easier to carry and customers can bin them once they have been used. . Since the technology is advancing continuously there has been entrance of new machineries’ equipment all the time. Because of that, Coca-Cola’s production volume has increased sharply compared to few years ago. 4. CCE-Coca-Cola Enterprises have six factories in Britain by using modern technology equipment so to ensure top product quality and quick delivery. In Wakefield,Yorkshire in 1990, CCE opened one of the Europe’s largest soft drinks factory. That factory has the ability to produce faster the cans of Coca-Cola even faster than bullets of a machine gun.