A Case Study on Coca -Cola based classwork
Good example of SWOT Analysis and PEST Analysis coursework
Coursework Question: Do the SWOT Analysis and PEST Analysis on a company called Coca-Cola and based on the analysis found , present the best recommendations how the company can perform better in market.
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.
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 sales 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.
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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 of 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 switching 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 for 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 (Dusko, 2008, pp.20). 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. The presence of Coca cola is global but in order to sustain they need to work hard to keep their competitive edge while retaining their consumer base.
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