Introduction  The purpose of this report is to understand and explain why Coca-Cola has become such a successful business, and to analyse the environment which Coca-Cola operates and to look into their business markets. Coca-Cola began when Dr. John Pemberton began to produceCoca-Cola syrup for sale in fountain drinks, the bottling business began in1899 Benjamin F. Thomas, and Joseph B. Whitehead, who secured the exclusiverights to bottle and sell Coca-Cola for most of the United States from theCoca-Cola Company. Since then, Coca-Cola have managed to adapt effectively andefficiently to optimise their revenue. After its introduction, in 1916, the company began bottlingits iconic bottle (still used today), and in 1928, Robert Woodruff, led theexpansion of Coca-Cola overseas when he introduced Coca-Cola to the OlympicGames for the very first time. During the 1980s, social attitudes towardsunhealthy drinks began to change, in response, Coca-Cola introduced Diet Coke.Also during this period, Coca-Cola began to grow rapidly, every year they wereintroduced to another country. Today they lead their market share, with morethan 1.4 billion beverage serving sold each day. External Environment: Coca Cola PESTLE Analysis(P)olitical Within the U.S., the Food and Drug Administration (FDA)includes non-alcoholic beverages such as Coca-Cola within the food category.Governments would regulate the manufacturing procedures of products. Anycompany that fails to meet the government’s standards could possibly receivefines. Coca-Cola must also comply to the Occupational Safety and Health Act andwith local, state, federal and foreign environmental regulation. The followingare key factors that influence Coca-Cola’s operations: Changes in laws and regulations – changes in accounting standards, taxation requirements (change in tax rate, modification with tax law, introduction of new tax laws), and environmental laws in domestic or foreign authorities. Changes in non-alcoholic business – competitive product and pricing policy pressures and ability to earn or maintain share of sales in worldwide market. Political conditions – civil conflict, governmental changes, and restrictions to allow relocation of capital across borders. Ability to compete with emerging and developing markets – this also relies on economic and political conditions, such as civil conflict and governmental changes, as well as Coca-Cola being able to create effective strategic business alliances with local bottlers, and improving their production amenities, distribution networks, sales equipment, and technology. Summary of key factors: Tax policiesTrade restrictions Environmental policies and lawsInfluences derived from the FDAStandards imposed by the stateGlobal political issues (E)conomical One particular example of Coca-Cola tackling economicfactors is at the time of the recession of 2001, where the U.S. government tookextreme actions to improve the economy by 2002. Coca-Cola realised that loaninterest would most likely rise as the economy returned. Therefore, they tookout low-cost loans in 2001, to fund their growth for 2002. The loans were usedfor research and development on new products to capitalise on for a stronger2002 economy. Coca-Cola will have sales impacted by economic factors whichare beyond the company’s control. These factors include: level of economicgrowth within the country and in the industry, tax rates and currency exchangerates, interest rates, labour cost, etc. The financial crisis of 2007 to 2009was another important economical factor which had major impact on manybusinesses around the globe. Yet, Coca-Cola managed to avoid any seriousdamage. Its operating margin remained at industry-front 22% despite the crisis.Fluctuations in exchange rate is one of if not the mostimportant economic factor that has unfavourably impacted Coca-Cola performancein recent years. For example, the devaluation of Venezuela’s currency hadprofits reduced by 55% in this market during the fourth quarter of 2014, thereare also similar instances in other parts of the world. Summary of key factors:Economic growth Employment ratesInflation ratesMonetary policy Consumer confidence (S)ocial Since the 90s, the pursuit for a healthier lifestyle hasbecome more prominent within most households. The health concerns towardsobesity fuelled by sugar and carbonated drinks has been one of the mostimportant social change that has directly affected Coca-Cola.  The image below shows that the amount of softdrinks consumption in the US has steadily declined during the past 20 years,with sports drinks and especially bottled water experiencing an increase duringthe same period. Other additional factors that greatly impact Coca-Cola aredemographic changes, changing family values and family patterns, mediaperception of the brand and health and welfare of target customer. Summary of key factors:Income distribution Demographic influences Lifestyle factors (T)echnologicalThe machinery belonging to Coca-Cola is essential in theproduction of their products. So, it is clear that efficient and productive amachine is vital for the success of the company. New machinery will always bedesigned with the idea of better quality products with high quantitates. Thefactories in Britain will contain the best machineries to ensure that theirproducts are delivered in mass. Constant changes product requirements can forcecompanies to alter their machinery also. Other technological needs include promotion of theirproducts. Coca-Cola and most other companies are now using social media to helprun a cheaper and possibly more effective advertisements but also to connectwith their customers. A notable advertisement was their name campaign, thisproved to be very successful, customers would line up to take photos of bottleswith their name on it. However, this campaign may have not been as successfulwithout the use of social media, websites such as twitter and Facebook helpedencourage the sales of the company as it was trending during that period.  Summary of key factors:International influences Changes in technology (L)egalFocuses on the effect of the national and internationallaws. The Coca-Cola Company receives all the rights of their business and allinventions and productions through the patented process. They are legally boundto the regulations of the FDA or any local authority which they offer theirproducts (and services) They have 7 major partnerships with large companies andcharities such as WWF and Special Olympics GB. Summary of key factors: Taxation policies Employment laws Industry regulations Health and safety (E)nvironmental Water is essential for the production of Coca-Cola, yetclimate change and various other reasons has meant water accessibility isdeclining. If water scarcity becomes too big of an issue, the regions mosteffected will prioritise water over Coca-Cola beverages. This will more thanlikely result in major loss for the company. To combat the issue, Coca-Cola haveclaimed to have adopted a carbon reductive strategy, this includes switching tocleaner energy sources. They are also trying to reduce their environmentalimpact by focusing on collection, recovery, and recycling. Summary of key factors: Regulation and restriction Attitudes of customersInternal environment Corporate culture They define themselves by 7 core values: leadership,passion, integrity, collaboration, diversity, quality, and accountability. The Coca-Cola company includes a worldwide team that isdiverse, talented, and adaptable.  Beinga global business, its is vital for Coca-Cola to embrace and understand boththe marketplace and the workplace. They believe this is critical for theirsustainability.  Programs are adopted toattract, retain, and develop diverse talent; provide support systems for groupswith diverse backgrounds; and educate all members. They strive to ensureinclusive and fair work environment for their associates, who all have tocomplete a diversity training on a regular basis. CocaCola believes that embracing and operating in a multicultural world both in themarketplace and workplace is critical to their company’s sustainability. Insidethe workplace, they try to keep their workforce diverse which includesprogrammes to attract, retain and develop diverse talent from all over theworld. They educate and support people with all backgrounds to master theskills they will need to achieve sustainable growth. Working hard to produce afair working environment for all associates is very important to the company.They believe that communication is key to create better understanding for theircolleagues, suppliers, customers, stakeholders, shareholders and to creategreater success in the marketplace Coffee chains such as Starbucks and CostaCoffee are on the rise. They offer a healthier alternative than Coca-Cola’scarbonated drinks. They will not massively hurt Coca-Colas performance howeverthey will make a dent to its beverage market. Corporate social responsibility (CSR) and ethicsExamples of CSR include:Sustainability: for example, how the waste a businessproduces is recycled so that it does not impact on the environment. Donating to charity: either giving moneydirectly or allowing employee’s time to support worthy causes and projects. Coca-Cola have committed to donating at least 1% of their annualincome for mostly charitable causes every year. Coca-Cola released a reportwhich includes details of the programs and initiatives which they will support.The below image illustrates the distribution of their fund for 2013. MajorCSR programs and engagements participated by the company include the following:Educating and empowering workers: During 2013, Coca-Cola wasmentioned in 26 notable lists, including the World’s 25 Best MultinationalWorkplaces 2013. This is recognition for their efforts towards the workforce, agreat way to promote the company. Labour and human rights: Providing stakeholders opportunityto inform perceived violations of Code of Business Conduct, Workplace Rights orother violations. Spreading the power in the company decreases the chances ofcorruption. Health and safety: 94% of company-owned facilities complywith Coca-Cola Workplace Rights Policy. The rate of lost-time incidentdecreased in 2013, dropping to a low of 1.9. A company wants its employees tostay safe and healthy. Environment: Coca-Cola improved their energy efficiencyimproved by 20% compared to 2004. 100 service vans in the US have beenconverted into efficient hybrid-electric vehicles. Coca-Cola had also announceda program to reduce their carbon footprint by 25% by 2020.   Coca-Cola also announced its commitment tobalance its water usage by 2020. In 2013 the company has replenished anestimated 68% if the volume of its finished beverages and returned about 108.5billion litres of water to communities and the nature. They have also increasedtheir water usage efficiency. Since 2010 to 2013, it had improved by 8%. Other initiatives: In 2014, Coca-Cola helped empower morethan 865,000 women as part of the 5by20 program. The program has the aim toachieve economic empowerment of 5 million women by the year 2020. Coca-Cola hasalso supported over 290 physical activity programs in nearly 125 countries andterritories. PlantBottle packaging is a development program with the aim tomake plastic bottles partially made from plants. To market more appropriately,Coca-Cola does not advertise its products directed younger than 12 years old.They also do not buy advertising that is directed at target audiences with morethan 35% children younger than 12.  Ethics Coca-Cola’s ethics and compliance program are their “Code ofBusiness Conduct”. It requires honesty and integrity in all matters. All theirAssociates and directors are required to read and understand the Code, so theycan follow its precepts in the workplace and larger community. Competitive environment Competition Coca-Cola is essentially a monopoly, Pepsi is its only real competitor. They both have similar taste, colour, and price so without telling it would be hard to distinguish between the two. Places such as Cinemas and small attractions tend to sell Pepsi over Coke, this is because Pepsi is generally cheaper. Coca-Cola also has many indirect competitors such as Tropicana, Nescafe, Starbucks, Costa, Red Bull, etc. Coffee chains such as Starbucks and Costa Coffee are on the rise. They offer a healthier alternative than Coca-Cola’s carbonated drinks. They will not massively hurt Coca-Colas performance however they will make a dent to its beverage market. Customer are starting to become more aware of health issues revolving around drinking Coke, so healthier alternatives are becoming more popular over time. Coca-Cola SWOT AnalysisStrengths Brand Equity –  Coca-Cola was awarded Interbrand in 2011 which is the highest of its kind. The vast presence and unique brand identity is one of the costliest brands with the highest brand equity. Company valuation – One of the biggest and most valuable companies in the world, and has a valuation of around 7.2 billion dollars. This includes the brand value, factories, and assets found across the world. Vast global presence – Coca-Cola is present in 200 countries but is likely to be in every country due to its vastness. Largest market share – Coca-Cola is basically a monopoly with Pepsi as its only serious competitor yet still very far behind. Notable beverages owned by Coca-Cola include: Thums up, Sprite, Diet Coke, Fanta, Limca, and Maaza. Customer loyalty –  It has a strong history, which over time has built customer loyalty. Most of their drinks have a large fan following so people will prefer those drinks to alternative ones. The quality of their good makes it harder for customers to find a subsidy. Distribution network – Coca-Cola has the largest distribution network which is due to its constant demand.   WeaknessesCompetition with Pepsi – Pepsi is constantly trying to outdo Coca-Cola. Without Pepsi, Coca-Cola would certainly be the absolute market leader, on the over hand they ensure Coca-Cola sustains its performance. Product Diversification is low – The products which Coca-Cola offer is limited to soft drinks. This keeps them in one market which is too saturated for any major improvements. Absence in health beverages – The social stance on soft drinks is becoming more negative, people are more aware of the health risks involving obesity for example. Carbonated drinks are a major fat intake, and Coca-Cola is the largest manufacturer of carbonated drinks. Water management – Coca-Cola has faced criticism in the past due to lack of its water management.   Opportunities Diversification –  Changing or adding products will improve the options for Coca-Cola’s customers. This will also ensure larger revenue due cross selling their products. Developing nations – Developing countries have a market which is nowhere near as saturated as the developed countries. This leaves a massive gap in the market, Coca-Cola can take advantage of this and make massive profit. Packaged drinking water –  bottles water has seen a massive increase in popularity. Coca-Cola who own Kinley (a bottled water company) could focus more on expansion with that company to increase their market share. Supply chain improvement – Their business is based of transportation and distribution therefore its in their interest to always improve this section. Market the lesser selling products – Coca-Cola own a vast number of other products, some of which have yet to reach their potential. If they focused more on their over products, they can increase their overall revenue.     ThreatsRaw material sourcing – The only major threat to Coca-Cola is water. The problem is the increasing scarcity of water sources. Climate change, and regions within various countries facing water scarcity may cause a forced decrease in Coca-Cola products in favour of needed water. Indirect competitors – Coffee chains such as Starbucks and Costa Coffee are on the rise. They offer a healthier alternative than Coca-Cola’s carbonated drinks. They will not massively hurt Coca-Colas performance however they will make a dent to its beverage market.   Competitive advantageCoca-Cola have a secret recipe which is arguably much bettertasting than its competitors. They are constantly developing new products andimproving current ones, they also offer vast number of brands, over 400, inover 200 markets worldwide. There distribution system is one of the mostadvance and efficient which allows Coca-Cola to be accessible to billions ofpeople worldwide. They manage to offer products in locations other companieswouldn’t even consider selling. An example would be Africa, its common to see ashop selling Coca-Cola which would appear to be in the middle of nowhere. Theirproduction technique is extremely efficient, the cost of making is a fractionof the cost of selling, and this leaves a high profit margin. Cola-Cola leadthe market by a massive majority, this allows Coca-Cola to control the cost oftheir products, and they can therefore alter the price for maximum revenue. Influences Influences on demandCoca-Cola have been verysuccessful at distributing their products to the right locations, at the righttime, and at the right price. Being affordable for the majority is one of thekey factors to their success, this includes constantly being on high demand.The affordability and accessibility is what makes it such an appealing optionto consumers. What also helps them is their high brand awareness withoperations in exactly 200 countries. All these factors contribute to theirmajor popularity, they are an established beverage, affordable to everyone, andtrusted by its loyal customers.  Cola-Cola is an internationalcompany; therefore, the GDP varies significantly between each country. Forexample, A farmer in rural India would have much less spending money thansomeone working in the city. Coca-Cola will increase the price for regions withhigher GDP compared to regions with lower GDP. Coca-Cola has only one serious competitor with is Pepsi,both have very similar taste, colour, and price. The difference is very smallbut because of brand loyalty the more popular choice would be Coca-Cola.Distributors such as cinemas, small shops, and attractions know that thedifference is very minimal, so they would prefer the cheaper option which isusually Pepsi. During the summer, cold beverages are usually preferredover hot drinks, this is the most profitable time for Coca-Cola. The demandduring the winter would therefore be much higher compared to the summer. Influences on supplyTheproduction of Coca-Cola relies massively on water supply to produce theirdrinks. Unfortunately, this is a resource that is declining at an increasingspeed. If the need for water becomes too critical than it is possible forCoca-Cola to be forced to decline their production, which will damage theirrevenue. Coca-Colaemploy thousands of workers, all of them will expect to be treated fairly. Ifthe company fails to do so then there is a chance of a strike. This could bevery damaging as their whole production process could stop, for aninternational company like Coca-Cola this could cost millions. The companybuys many different materials, the prices of them will constantly change.Events such as warfare could increase material prices significantly. This mightresult in Coca-Cola decreasing their production amount, which most likely wouldnegatively impact their revenue.  Coca-Colareceives no government support… Elasticity Coca-Cola top drinks are inelastic. This is because they arean establish company who have been around for over some 100 years. During thattime, the customers trust, and loyalty has grown so much, lots of people wouldstill pick Coca-Cola over Pepsi even if the price is higher. Places such astheme parks, cinemas, or service stations, the product is even more inelasticas people seem to be more willing to pay extra for the product. Different market structuresIn the market Coca-Cola operate, they have a monopoly overit. This means they have full control over the prices, for example, if they putthe price down on their drinks other companies competing with Coca-Cola will beforced to do so as well. This does however mean a more saturated market,Coca-Cola will struggle to improve revenue within that market. Pricing and output decisionsEconomic factors such as inflation increases the price ofproduction. This would lead to Coca-Cola raising the price of their products.This might cause customers to seek other products. Coca-Cola is not a necessitybut rather a luxury, in America the price of 2Litre coke cost 99 cents but asrisen to $1.98 today. All these factors contribute to the price of the productgoing up. Natural forces such as fossil fuels will increase in pricewhich increases the cost of transportation. On top of transportation, bottlesare also made of raw materials that contain petroleum and fossil fuels. Thisincreases the cost of production. They are trying to reduce the cost ofproduction by introducing Plantbottle. Other soft drink companies such as Pepsi have similarpricing and sales figures. Another competition factor are sub products(Starbucks, Red Bull, etc)Conclusion In this conclusion, I will explain why Coca-Cola is stilldominating the market, and how they manage to maintain their position. I willalso put forward ideas which could improve the business even further.The company is massive, and owns many other major companiesalong with it, they vary from soft drinks to water itself.  Coca-Cola for a long time has been theworld’s leading manufacturer, marketer and distributer of non-alcoholicbeverages. The company sells four of the five top selling drinks including DietCoke, Fanta and Sprite. It is the most recognisable brand throughout the World.It operates in more than 200 different countries, and has a workforce from over200 different nationalities, who communicate in over 100 languages. Theyoperate as local business partner, providing quality in the marketplace,enhancing the workplace, preserving the environment and strengthening thecommunity. All these factors contribute massively to their success. From itsbirth in 1886 by Dr. John S. Pemberton sales averaged 9 drinks a day in itsfirst year to now over 1 billion a day. Coca-Cola are one of the most popular companies around, theyhave massive customer loyalty but also strong brand awareness. It doesn’tmatter what country you live in, it’s almost guaranteed that someone nearbywould know what Coca-Cola is. It’s believed that almost 1.9 drinks are soldevery day, a staggering 2/7th of the World’s population. Throughout the years Coca-Colahave had to adapt many times to match the constantly changing expectations oftheir customers. Social change in recent years has meant the company has had totake a more healthy approach, healthier alternatives include: coke zero, anddiet which both are much healthier than Coca-Cola. Coca-Cola life is supposedlymade from all natural resources. Coca-Cola are also tackling global warming byintroducing electrical transportation, rather than using fossil fuels. Coca-Cola are extremelysuccessful within the soft drink market, they have been dominating it since the1940s, however the market is saturated and so the room for improvement is verysmall. However to further their revenue the company could diversify theirproducts, for example: healthy drinks, sports drinks, bars, etc.Technology change Social change Successful Not so successful Past changes What will happen for future References https://toughnickel.com/industries/PEST-Analysis-Coca-ColaPEST analysis for Coca-Colahttps://research-methodology.net/coca-cola-pestel-analysis/PESTLE analysis for Coca-Cola and image (1)https://classroom.google.com/c/NTEyMzY2NjYzMFpaCSR https://research-methodology.net/coca-cola-corporate-social-responsibility/CSR and image (2)http://www.coca-colacompany.com/our-company/workplace-overview/governance-ethics/governance-and-ethicsethicshttps://www.marketing91.com/swot-coca-cola/SWOT analysishttps://www.scribd.com/doc/113892116/pestel-analysis-of-coca-colaPESTLE analysis for Coca-Cola http://www.coca-colacompany.com/our-company/diversity/workplace-culturecorporate culture https://elmer1385.wordpress.com/2016/03/03/factors-that-affect-pricing-decisions-coca-cola/Pricing and output decisions http://businesscasestudies.co.uk/coca-cola-great-britain/within-an-arms-reach-of-desire/marketing-strategy.htmlmarketing strategy https://s3-eu-west-1.amazonaws.com/tutor2u-media/subjects/economics/diagrams/econ-market-structure-summary.jpgmarketing structures chart Get Help With Your EssayIf you need assistance with writing your essay, our professional essay writing service is here to help!Find out more