Eight hundred miles away,another great America symbol was about to be unveiled. Like many people who change historicity Pentameter,an Atlanta pharmacist,was inspired y simple curiosity. One afternoon,he stirred up a fragrant caramel-colored liquid and when it was done,he carried it a few doors down to Jacobs pharmacy put it on sale for five cents about up a glass. Pentameter”s bookmaker,frank Robinson,named the mixture coca cola,and wrote it out in his distinctive script.
To this day,coca cola is written the same way. Len the first year, Pentameter sold Just nine glasses of coca cola a day. A century later,the coca cola company has produced more than 10 billion gallons of syrup. Over the course of three years,which is between 1888-1891 ,Atlanta business As Grids Candler secured rights to the business for a total of about 12 300 about poundings. Candler would become coca cola first president,and tech first to bring real vision to the business and the brand.
Until the asses both small town and big city dwellers enjoyed carbonated beverages at the local soda fountain drug store on April 23,1985,the trade secret “New coke” formula was released,today products of the coca cola company sell than one billion drinks per day. However,even with the above achievements of coca cola and the foundation of coca cola which has been since ears back,the company has its own strength,weakness,opportunity and threats SWOT which are to be considered to be able to compete with the market and adapt to changes.
SWOT analysis is a strategic planning method used to evaluate the strengths, weaknesses, opportunities and threats involved in a project or in a business venture. It invades specifying the objective of the business venture or project and identifying the internal and external factors that are favorable and unfavorable to achieve that objective. The technique is credited to Albert Humphrey, who ked a convention at Stanford University in the asses and asses using ATA from fortune 500 companies.
S – Strengths; attributes if the person or company that are helpful to achieving the objectives.
W – Weakness; attributes of the person or company that are harmful to achieving the objectives.
O – Opportunities; external condition that are helpful to achieving the objectives.
T – Threats; external condition which could do damage to the objectives. Identification of SCOTS are essential because subsequent steps in the process of planning for achievement of the selected objectives may be derived from the SCOTS.
The SWOT analysis is particularly helpful n identifying areas for development. The aim of any SOOT analysis is to identify the key internal and external factors that are important to achieving the objective. The usefulness of SOOT analysis is not limited to profit-seeking organizations. SWOT analysis maybe used in any decision making situation when a desired end-state (objective) has been defined. SOOT analysis may be also used in pre-crisis planning
SWOT AND PESTLE ANALYSIS OF THE COCA COLA and preventive crisis management.
SWOT analysis may also be used in creating a recommendation during a viability study/survey.. The purpose of SOOT analysis is to gather, analyze and evaluate information and identify strategic options facing a community/organization or individual at a given time. SOOT Analysis is a very effective way of identifying strengths and weaknesses, and of examining the opportunities and threats one tends to face-carrying out a analysis using the SWOT framework helps to focus activities into areas where one is strong and where the greatest opportunities lies.
This knowledge id then used to develop a plan of action. The analysis can be performed on the product, on a service, a company or even an individual. F teenyboppers SWOT will give the big picture of the most important factors that influence survival an prosperity as well as a plan to act on. SWOT Analysis is a tool which guides one to see where one stand in terms of Job prospects and career growth. In many competitor analysis, markets build detailed profiles of each competitor in the market, focusing especially on their relative competitive strengths and weakness using SWOT analysis. Rotors referred to these forces as the microenvironment, he said SWOT consist of those forces close to a company that affects its ability to serve its customers and make a profit. A change in any of the forces normally requires a business unit to re assess the market place given the overall change in industry information. The overall industry attractiveness does not imply that every firm in the industry will return the same profitability. Firms are able to apply their core competencies,business model or network to achieve a profit above the industry average.
Porters five forces include three forces from horizontal competition threat of substitute products,threat of established rivals and the threat of new entrants and two forces from vertical competition,the bargaining power obfuscators. Profitable market that yield high returns will attract new firths result in many new entrants,which eventually decrease profitability for all firms in the industry. Unless the entry of new firms can be blocked by an incumbent,the profit rate will fall towards zero. Rivalry is likely to be based on dimension such as price,quality,and innovation,technology advances protect companies from competition.
This applies to products and services. Companies that are successful with introducing new technology are able to change high prices and achieve higher profits. While PESTLE analysis is the macro environment or external environment,they are the factors which are external that will affect the organization it can be new laws,trade barriers,demographic change and government policy changes,etc.
The following can be categories using PESTLE model which are as follows
POLITICAL FACTORS: these can be said to be government policy such as the degree of intervention in the economy,for example what goods and services does a government want a particular organization to [provide? What are the priorities in terms f business support? Political decision can impact on many vital areas for business such as the workforce,the health of the nation and the quality of the infrastructure of the economy such as the road and rail system.
MIMIC FACTOR: tense can include interest rates,taxation changes, economic growth,inflation and exchange rates. Economic change can have a major impact on a firms behavior for example,higher tax rate may deter investment because it cost more to borrow,inflation may provoke higher wage demands from employees and raise costs and also a strong currency may make exporting more difficult because it may raise he price in terms of foreign currency.
SOCIAL FACTORS: any changes which occur in social trends can impacts on the demand for a firms product or any organization services and also the availability and willingness of people to work. Or example demand for sheltered accommodation and medicines has increased where as demand for toys is falling because in the United kingdom now we have a lot of older people.
TECHNOLOGY FACTORS: new technology create new products and new process,MPH players,pods,pad,online gambling and high definition television are all new markets created by technology advances,online shopping,bar coding and imputer added design are all improvements to the way we do business as a result of better technology. Technology can reduce cost,improve quality and to innovation.
ENVIRONMENTAL FACTORS: these includes weather and climate change. Changes in temperature can impact on many industries including farming,tourism endurance. With major climate changes occurring due to global warming and with greater environmental awareness this external factor is becoming a significant issue for various firms to consider.
LEGAL FACTORS: these factors are related to the legal environment in which firms operate. Legal changes can influence the decision of an organization and even the costs of their products and serviceberry different categories of law which falls under legal which are as follows. Nonusers law,employment law,health and safety law. By using PESTLE framework we can analyses the many different factors in an organization external environment,in some cases particular issues may fit in several categories for example the extraterrestrials the creation of monetary policy committee by TTY labor government in 1997 as a body that was independent of government but had the ability to set interest rates was a political decision baths economic consequences,if such scaremongers have tomato decision of where they think it best belongs.
Using PESTLE managers needs to think about which factors are mistakenly to change and which ones will have the greatest impact on them which means each firm must identify the key factors in their own environment. It is also important when using PESTLE analysis to consider the level at which it is applied especially with the big companies who produces different goods and service’s organization like COCA- COLA,may also want to differentiate between factors which are very local,other which are National and those which are global.
Coca cola company is been affected by so many external factors (PESTLE) like economic,social factors,technological factors,environmental factors,and it is also been affected by legal factor to some extents.
THE ECONOMIC FACTOR: when any country economic is poor maybe due to inflation,credit crunch etc,it can affects the price of coca cola products because during this period people will not be bal to afford it,they will prefer to put their money on some more important needs,like food,clothing,accommodation,etc. And this will affects the return of the company because they would not be earning as much as hey use to.
Technological doctors,this can attest the company’s decision because there are different technology I the business world now for example the design on the can or bottle of the different coca cola products may need to be changed due to new technology so as to make the packaging attractive to the consumers of the product and also potential consumers that even if they are not thirsty they will still be attracted to the product in such a way that they are ready and willing to buy so this improvement in technology in the area of packaging can affect the decision of the many and so also social factors which really affects the selling of the products,renewable number of people in the country population right now falls under the age where by beverages drinks like coke are no more good for their health and people who usually buy the products are advice by their doctors not to consume goods like that again which can really affect the sales of the company.
Environmental factors or climatic conditions for example during winter so many people do not consume anything cold so as not to affect their health and visa visa during summer which is mostly hot people consume a lot of drinks and this help increase the sales he sales of the products,so the weather condition of various countries determine the level at which people take cold drinks like coca cola.
Legal factors which can be said to be laws of a particular country can’t the sales of coca cola for example tax payments in the united kingdom,the coca cola of example pay tax in the country and this tax some times affect the price of the product,and some times before you can sell a product in the UK is sometimes different from the way its been package in other country that coca cola resist in sooths affect the packaging of coca cola products for example some flavors of the different products of the company which is sold in the UK may not be found in other countries which coca cola exist in,and also the law of the country can affect the decision making of the company in some specific areas. Apart from the above external factors that affects the decision making of the company they are also the internal factors which affects the company,some of the internal factors or micro environment which can affect the company(coca cola)or which the company operates on can also be categories under external. The internal factors which is the SWOT analysis as to Dewitt the trench,weakness,opportunity?threats.
The coca cola company which have been in existence since decades ago have its own strength,weakness,opportunity and thirtieth affect the decision making process of the company. Strength:coca cola company is a multinational company which have over two hundred company in different part of the world,they are the largest maker of beverages around the world today,the company have been able to achieve a customer base with different kind of products and they produce for every one,the company produce different products which any body of any age can take from coke,fantasy,ginger coke, Eva hey are existing in countries that some of their major competitors are not existing in countries that some of their major competitors are not existing in.
Apart from the above strength they also have their own opportunity which they also use against their competitors one of which is that they have been producing a lot and have been creative no matter your health difficulties there is at least a brand of coca cola that you will be able to take,and also this company make their bottle them selves which gives them a edge over other companies who produce similar products like the company. Threats to the company is that the company nave massive competition ,ten market today is filled with product of similar brand ,and little mistake by coca cola company will be seen as opportunity for their competitor which will affect their status in the market,the weakness of coca cola company is more of internal that is within the organization which can late payments of staffs or employees salary, conflicts among employees of the company which can affect the productivity of the company and if their is no team work in any organization it will be difficult to achieve what the organization as set out to achieve on time.
In conclusion,carrying out a SWOT and PESTLE analysis of a particular organization no matter how big or small the company,is very important because it helps company to know the status of their company in the market and it also enables companies to work on the area of their weakness and it helps in the decision making of the organization so that they would not make decision that will have negative effect on both the organization and the customers or consumers of such organization. Strengths The brands positioning has been very strong as it has been part of many people’s lives for quite some time now. The image of the brand holds a lot of sentimental value for many consumers as well as distributors.
The recognition of the brand is very high as the company has put in a lot of effort towards promotional campaigns for the same purpose and has put them on day to day items like T Shirts and hats. They have portrayed their brand as one which provides quality and enjoyment at the same time. The system which is followed by Coca cola for the purposes of bottling is one of its biggest strengths. They conduct their business which is global but always keep in mind the local requirement and prerequisites. The ownership of the impasses for bottling is local and is looked after by people independent from the company and has the authority to distribute their products. This gives them greater reach and more profitability as their operation is not restricted like of their competitors.
Weaknesses At times their global presence is detrimental to its profitability like seen in the case of their operations in Indonesia and Thailand where their income came down as the power for purchasing of the consumers there went down even though the company was doing well in other markets internationally. The markets which were expected to enervate profits have let the company down due to the unpredictable nature of the environment.
Opportunities Brand recognition is to be explored in order to improve their positioning with regard to the competition. The changes which have taken place in terms of packaging has resulted in major affects on the market positioning of the product.
The consumers have not been affected much by the launch of new product in the market. The system followed by Coca cola has provided a stable platform which has been utilized to tap the opportunities which are infinite in number in order to promote growth all across the world. The growth strategy which is being used is aimed at a large and different zones giving it broader reach. Threats The threat of competitor who is strong enough with regard to its presence is a bleak possibility but not impossible The threat related to substitutes is very strong and is they are constantly trying to tight it They are venturing into other products like juices etc in order to fight it only.
The consumers getting more and more health conscious also poses as problem for the company and they have to modify their products accordingly so that they do not loose out on profitability and consumer base. Diversification of the competitors poses as a major problem for Coca cola. The power which is possessed by the consumers to purchase a product is a major threat for Coca cola or even the entire beverage industry. Every one who is part of this industry has to be on their toes to offer something better than their competitors giving them the edge and helping them improve their share in the market. The consumer’s ability to switch over to other products with no implication for them on cost would have a major implication of the company on the whole and its profitability.
PEST ANALYSIS on Coca-Cola
Political – The change related to the political situation happens with the change of control from one party to another. The agendas or area of interest is different for each party. The implications which are political for Coca cola would be the affect which would be made on the food category under FDA regulations passed by the ruling party. The control by the government would be on the regulations for purposes of manufacture of their products. The fines which would be imposed by the government would have to be kept in mind while carrying out the manufacturing as well as the distribution process.
Some political factors which would have an affect on Coca cola as a company would be Law related changes or even regulatory changes which would lead to change in processes like accounting, tax calculations and laws which are related to environment be it domestic or of a foreign country. The business related environment changing which would lead to pressure developing in terms of pricing and the ability to sustain a level of sales in the market globally while maintaining their competitive edge. The market changes which would take place internationally as a result of the political situation changing there. This would include any kind of unrest, change in government and the applying of restriction on movement of goods across country boundaries. This would affect the penetration ability into new markets as well as the old ones.
This would also affect the ability to get into alliances which would be advantageous strategically with the local industries as well network related to distribution and also sales.
Economic – The change which is economic in nature would be aspects like the change in interest rates which would lead to business depression and would cause redundant and low levels of spending. Like it was seen in the US market despite the fact that it was doing very well it did not take too long for things to take a complete different route as a result of the recession which took place which was because the Gross Domestic Product had been negative for two consecutive years.
The good part was that it was short lived as a result of the actions taken by the Federal Reserve as well as the Congress. This helped the economy take a U turn and get back to reflect growth which was positive. The cutting down of interest rate by the Federal Reserve helped to promote expansion of companies while increasing the level of debt. As the production and technology costs would go down the products being offered in the market would be at lower prices thus in turn benefiting the consumers. The economic condition as seen in the United States was very badly affected as a result of the September 11 attacks but the economy has recovered now and going back to normal. Time is the best healer for a situation like this.
The industry related to non alcoholic beverages is flourishing and growing drastically. Many markets have opened up to for the manufacturers of soft drinks as the economic condition have improved there and can promote their growth as well. This growth would be as a result of high level of profitability while sustaining in a stable manner and also coming up with new and more improved products.
Social – The change which is related to lifestyle as well as attitude would be termed as social change. For example now that more women were going for work the need related to products for usage at home which would reduce time usage came up. One major change socially which has affected Coca cola is the shift to a health centered lifestyle.
Due to this shift the users of soft drinks are shifting to water or diet drinks and thus the need to adapt and launch products accordingly have come up. The aspect related to management of time is also governing the kinds of product which are required with respect to day to day existence. The middle aged consumers are getting very nutrition conscious and regarding the longevity of their life so want to have healthier option availability in terms of beverages. The need for diversification is now becoming a constant requirement to get maximum market positioning and market retention.
Technology – The changes which are related to the technology would lead to the launch of products which are new in the market or would work towards improvements in the existing product.
The use of various new techniques related to marketing would also be used like the internet. The factors in Coca cola which were related to technology and shifted the result from what was expected were – The kind of affect which the promotional techniques or the marketing programs would have on the company and its profitability level. The internet opened a whole new world while broadening the reach of the campaigns. The attractiveness of the products is enhanced and this pushes sales. The fact that use of media Just makes things easier and more convenient. Coca cola being supplied in cans as well as plastic bottled led to the ales going up as they improved in terms of convenience in terms of carrying, storage as well as discarding.
New machinery for production of their products has also come up which has led to improvement in the supply and the quality of the product. The factories which bottle the product offered by Coca cola have improved and some of the can producing companies are supplying cans very fast and efficiently. This has also pushed the availability of the Coca cola products in high quality. Thus this would improves sales, delivery and in turn profitability of the company on the whole. Intention Here for SOOT ANALYSIS on coca-cola Recommendation and Conclusion The company should look into the uncertainty with respect to the availability and sourcing of the materials which help in production of the final product being too high.
The affect on the power related to bargaining with the suppliers would be very low as they are very small in number and thus the suppliers cannot be easily substituted or replaced. The suppliers’ condition has a direct affect on the company. This should be brought down as the supplier while going down might take the company down as well. The best way to better their standing in terms to supplier Coca cola should get into alliances which are strategically viable and do not give away too much of ownership stake. The best way to do that would be through complete take over of a supplier or the process of integration vertically. This would result in the company gaining from the profits of the supplier, would reduce their cost while building a reliable base for the supply of the materials.
This process would cost the company in two ways one the actual process of purchase and the other would be the costs which are bureaucratic in nature. The company should work towards purchase of the companies which mainly supply its raw materials and this would secure their future. This is important because ownership is the only way to have absolute control on any kind of supplier. The supplier ownership would help the core business to maintain its profitability as the uncertainty of the raw material supply is removed completely. The companies rating with regard to credit is high that is the reason they would be able to come up with the finance to acquire the suppliers.
They would come up with the money while incurring very little cost. The process related to making of decisions does not work in sync with the strategic plan of the company or with the structure. The centralized technique which is followed in their process related to making of decisions is not the same as how other things are taking place in the company. The structure in Coca cola is organic while its strategic plan and agendas promote creative techniques and constant involvement of the employees. An improvement process needs to be carried out which betters the process for making of decisions and helps in strategically promoting learning in the organization.
The witching should take place in terms of managers who are in charge of various departments on a regular basis. This would promote thinking which is not mechanical and is more spontaneous and not regular. This would help the managers to push their boundaries as well as improve the culture for learning in the company. The company should also problem solve fast with respect to more pressing issues while showing a strong bond with the community and their promotion. The employees should be involved in the process for decision making as they are the ones mainly affected by any decisions which are taken. This would also help to bring together the skills which are present and link it with the structure of the company.
The managers would have to keep their doors and their minds open to any inputs form the employees and help in the problem resolving process. This would lead to better awareness with respect to all kinds of problems be it big or small. The process for making of decisions would be more timely and would constantly keep reminding the policy makers about the strategic plan which the company is based on. This would also improve the confidence level of the people who hold a stake in the organization. The problems would no longer be seen like obstacles for growth but would Just help to promote leadership, cooperation and help in innovation in terms of processes and technology.
All leadership level would feel involved and responsible for success of the organization. The criticism which the company has received as a result of its partners for bottling in Colombia has to be looked into and tackled. It had led to Coca cola facing heavy penalties as well as strikes. Though it is one of its partners which were involved in the controversy its name is involved so it leads to negative publicity for them as well. The only way out of this mess for Coca cola is to buy over the partners tort bottling. Then they should utilize their experience and contacts to stabilize the situation and convert the negative mindset into a positive one.
The unions and the management would have to resolve issues and work together to improve the image and bring down costs without compromising on quality. This would also lead to improvement in terms of accountability and would help to achieve better dedication of the employees and would streamline operations and stabilize the channel for distribution of the products in the area. The other advantage of this would be that the relationship between the citizens of the country would become better as they would see positive results. The acquisition process would lead to costs for the company in the present situation but would yield very high benefits for them in the future.
Thus it can be easily established that the brand can be easily recognized and its popularity is one of its major assets which gives it the competitive edge over the competitors. It is well established internationally as well. They have worked very hard to keep the brand as obvious and in the face as possible thus making it memorable (Dusks, 2008, up. 0). Many of their products are not that well recognized or made a significant part of their promotional campaigns. Another aspect which they need to tackle is the obsession of the present day consumer with health. They need to do something fast before they loose their consumer base to the competition. The other concern which Coca cola needs to address is that the product has no health benefits and is only detrimental.