Question

1. Carry out a full PESTEL analysis for ONE of the following companies:
a) British Airways b) Coca-Cola
Provide AT LEAST four relevant points under each category, just as we did in class and explain the reasoning for each point (equal marks are given for each point under this question)

Answer 1

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The Coca Cola brand of non alcoholic beverages operates worldwide. There are many strains on a organization in the global world. Today, the world market has been very globalized. Companies operate in broad areas spanning many countries. Some factors have a particular impact on companies in this highly globalized economy. Some factors impacting businesses directly and indirectly include society, politics, economic conditions and even legislation. Coca Cola, from time to time, still feels the pain. Any change in the global business climate may have significant implications for its income and revenues.

Coca Cola is not immune from numerous political, social and economic changes, since it is the leading brand in the beverage industry. Their income can adversely affect political or economic changes. There are rules and regulations that differ and impact it directly from country to country. Cultural factors are relevant at the same time. The Coca Cola brand is sold in over 200 countries. Social and cultural factors acquire a special importance in that case. A Coca Cola PEST report should analyze all of these variables in the global environment that can affect its business.

Political

Laws and governmental legislation on food resources are the most important political variables that can impact Coca Cola directly. The Food and Drug Regulations in the USA, for example, relate to their company. Besides, these laws can differ between countries. In the countries they are marketed, Coca Cola and its products must confirm the laws applicable. (Coca cola is a non-alcoholic beverage producer) However, the company is therefore subject to specific accounting or business regulations, apart from the laws relating to food and beverage and the quality standards.

Tax regulation varies across countries. In order to do business on a specific market, the company must obey applicable laws. Modification of these laws may theoretically impact sales and income for Coca Cola. Any tax rate increase or decrease will impact any company's income. Anything similar may have an effect on its affairs, changes in the political situation of countries including changes in government or political instability.

Multiple lawsuits have been brought against Coca Cola for the intake of water. Water is scarce and the drink giant requires it to be produced abundantly. People and non-governmental groups have protested against the corporation in India alone. In the state of Kerala in India, several municipal bodies brought a lawsuit against Coca Cola for causing water shortage through consumption.

The villagers alleged that Coca Cola drank large quantities of water and created a shortage in the villages surrounding its factories. Likewise, environmental policy has an effect on the soda giant. Numerous court cases have also been brought against her in the past over product control or the use of hazardous ingredients. Coca Cola was reportedly used in its products with pesticides. These problems may have an effect on their company and profits.

Economic:

The corporations of major and multinational firms are also affected directly in economic circumstances. The latest global financial crisis dramatically reduced corporate income. Coca Cola has succeeded in staying somewhat oblivious (the financial firms have felt the consequences most), but its profits are also somewhat affected. It was interesting how Coca Cola maintained its earnings.

Customers are affected by these economic crises. In these cases, people only buy essential necessities. In order to survive the strain of the economic crisis, most businesses used alternative cost management and cost control measures. However, Coca Cola shocked the industry in tough times like these. These global economic crises may have a significant effect on all the major global companies. Increasing raw product prices can have an significant effect on Coca Cola. Another big issue is water shortage.

Coca Cola requires water for processing in large amounts, but is limited in availability. Other services and job prices have been rising over time. All these factors can have a significant effect on the global brands' businesses and earnings. But supporting the US dollar means that Caca Cola will feel pinched. The economic crisis has gone.

Social:

In business terms, social factors are also just as significant. In the past few decades, many people have moved from fruit beverages to balanced ones. Such trends may lead to a decrease in Coca Cola products' popularity. Any major change in the desires and tastes of individuals will affect a business' income. The ingredients of Coca Cola are most notable for their flavors. However, with people moving towards healthier drinks, Coca Cola had to focus and invest more on its marketing efforts.

The press has played an significant role in shifting the view of people about soda beverages that are seen predominantly as 'carried in calories' The global push to tackle obesity has changed the food preference of people. Overall, the number of processed foods and soft drinks has fallen. People follow more active lifestyles and step away from everything, including soda.

To embrace these improvements, Coca Cola has launched a range of low-calorie products. Coca Cola also has a impact on certain societal trends, such as shifts in attitudes towards US brands or the like. In some nations, his sales declined following the attacks by the United States on Iraq.

Research has already recognized the importance of culture as an important factor in foreign trade. It can not underestimate its effect on companies. In the marketing context the value of culture can also be understood. The value of Coca Cola, particularly in developed markets, can not be ignored. This will also incorporate its marketing plans for local markets and their communities, which is also known as brand place.

Technological:

With big corporations like Coca Cola, technology is an significant factor. Manufacturing and packaging are highly dependent on technology as well as its distribution. Coca Cola will invest heavily in it in order to stay competitive. Technological effective production and reliable supply chain ensure timely delivery. For income generation, all this factors are significant. Although technology may not change every day, much investment and maintenance is required. All of this involves heavy use of technology whether it is the handling of water or the packaging of Coca Cola products. Technological factors thus have a direct and meaningful effect on the Coca Cola market.

Environmental:

In the 21st century industry and also in businesses with an almost negligible or zero environmental impact were essential to sustainable development and environmental issues. It also helps to boost brand awareness in addition to reducing the environmental effects. Coca Cola spends heavily in environmental issues and water conservation. It has developed ambitious sustainability plans for 2020 and aims to achieve these objectives. The business invests with initiatives such as Treatment and RAIN in water intensive agriculture.

These programs enable farmers in Africa and Ghana to learn new and more productive farming methods. Water shortages in Africa have become a major issue and these programs help farmers in Africa increase their yield against restrictions. This has also introduced new programs to meet and motivate women in the society.

Since agricultural products make up a large part of its raw material, however, it operates in different parts of the world to protect the interests of farmers. It focuses on recycling and recycled packaging, in addition to reducing its environmental effects. In addition, environmental considerations have become more relevant as policymakers globally are more focused on environmental issues and have more strict laws in place.

LEGAL:

The enforcement of companies worldwide, and particularly those employed in the international setting, has become an important concern. There are various laws that differ between countries and markets. Failure to comply can result in billions in fines and image loss. There are many areas where compliance is important, from work to product quality and climate.

In the past, Coca Cola has been subject to regulation in a number of fields including product consistency and structure. It has also focused in particular on corporate governance, ethics and legislation. It has its own degree of ethics and integrity so that all its workers comply with the law in every part of the world.

A PEST study shows that certain political, cultural, social and technological factors play a major role in the business of the soda giant. Although technical factors may be under its influence, it should follow marketing strategies as changing circumstances in terms of social, political and economic factors. Power shortage is a big problem for Coca Cola. In most of the countries in which its production plants are located, water shortage will continue to threaten it in long term. This is perhaps Coca Cola's most difficult environment to navigate. Although it has made its way to healthy goods by growing the amount of low calorie drinks and rising development in the world economy, it will continue to bite in a stronger dollar.

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