PESTEL analysis of Coca-Cola is my assignment in my course mg-223(fundamental of management). After reading this blog you will be able to understand how multi-national companies grow and extend their business to different countries. In this blog, I am talking about the PESTEL analysis of Coca-Cola company.
The non-alcoholic beverages brand Coca-Cola operates in the global environment. The global environment subjects a corporation to several pressures. Today, the world market has grown highly globalized. Companies are doing business across large regions spanning several countries. In this highly globalized market, certain factors are of special significance that affects the businesses. Culture, politics, economic situation and even laws are some factors that affect businesses directly and indirectly. Coca-Cola also feels the pinch from time to time. Any change in the global business environment can impact its profits and revenues directly.
Coca-Cola despite being the leading brand in the beverages industry, is not immune to the various political, social or economic fluctuations. Political or economic changes can negatively impact its profits. There are laws and regulations which vary from country to country and affect it directly. Simultaneously, Cultural factors are of significance. The business of Coca-Cola is spread over more than 200 countries. Social and cultural factors acquire a special importance in that case. A PEST analysis of Coca-Cola will determine all these factors which can impact its business in the global environment.
Political:
The most important political factors which can have a direct impact on Coca-Cola are laws and government regulation of food products. For example in the US, the Food and Drug regulations apply to its business. Apart from it, these laws may vary from country to country. Coca-Cola and its products must conform to the relevant laws in the countries they are sold. (Coca-Cola is a maker of non-alcoholic beverages) However, apart from the food and beverages related regulations and the quality standards, the business is also subject to the common accounting or business regulations. Tax laws vary from country to country. The company has to follow the relevant laws in order to do business in a particular market. Changes to these laws can potentially impact Coca Cola’s profits and revenue. Any increase or decrease in tax rates can affect the profits of any corporation. Similarly, changes in the political situation of the countries like government changes or any political turmoil can potentially impact its business.
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