Political &

Macro Environment Impact

On

Coca Cola
International Management Assignment 01

Hard Facts about coke

Introduce by John
Pemberton in 1886 @
Atlanta

Operational Reach 200+

countries by 2012

Company Associates with

90500 workers in plants

Coca-Cola currently offers

nearly 600 brands in over
200 countries or territories

worlds largest beverage

company selling more than
1.7 billion beverage
servings each day

Invest millions of dollars for

enhancing human life
around the globe through
CSR project.

Global Beverages Market

Global Beverage Market
CAGR
4.6%

$1.35

$1.04

$0.90

Current trends in the

Beverage Industry
The beverage industry experienced a
CAGR of 2.5% up to 2009

2010

2013

2017

Global Beverage Market US D Billion

Bottle water to continue the soft drink

market with a projected growth rate of
5.4%

Non-Alcoholic Beverages - Market Share %

Others; 24%
Coke; 47%

Ready to drink tea and Asian specialty

will be the fastest growing soft drink
segments with an expected growth rate
of 9% and 14%

Cadbury; 8%

Pepsi; 21%

Global Energy drinks markets has

surged by 14% growth in 2011 .
Current average growth rate is 10% Z

Beverages Market in Sri Lanka

The Food and Beverage industry is a very important sector
of Sri Lankan economy as it contributes around 10% of the
GDP.
Non-Alcoholic Beverages - Market Share In Srilanka %
Others; 7%

Current trends in the Local

Beverage Industry

Fresh Fruit juice and Herbal Drinks has

seen a significant growth rate of 20%
in 2012

Pepsi; 10%

Coke; 40%

Gradual decline in carbonated drinks

consumption
Volatility in the Supply Chain with
higher input costs for key commodities.

CCC; 43%
Coke

CCC

Pepsi

Others

Increased number of innovative

products introduced to the market . In
2012 only, 20 new products have
entered the Sri Lankan Market

PESTEL Analysis

PESTEL Political Factors

Tax policies -import and excise duties

Trade restrictions
Environmental policies and laws
Influence derived from the FDA (Food and
Drug Admin)

Standards imposed by the state

Global Political issues

PESTEL Economic Factors

Rupee depreciation
Increased trade deficit
Fluctuating Interest Rates

changed 6 times

(Oct11 Jul13)

Fluctuating Inflation rates 9.8%

(Jan13)
Hike in freight and import taxes Commodity Levy Amendments Effective From Aug13

Special

PESTEL Social Factors

Shift towards in healthier life styles

Increased aging population worldwide
Alcohol content (Rumor amongst ethnic
groups)

Pressure from social groups Use local

products
High Calorie content

PESTEL Technological Factors

Technology gap shrink caffeine,

phosphoric acid levels
Coca Cola Sri Lanka yet to launch
Earth Friendly Bottling Technology
Traditional Bottle crates used
Absence of vendor machines in Sri
Lanka
Dependency in Sole Bottling Partner
Technology in Sri Lanka

Source Company Corresponding data

PESTEL Environmental Factors

Water Usage
Material used for packaging /
distribution
The contents of coke- (Eg Pesticides in the Coke
ingredients in India)

Improper Waste Management

PESTEL Legal Factors

Adhering to the local / International

laws
Advertising and labelling related laws Recent
Highly volatile legal environment locally
Legal issues -environmental and health
concerns

SWOT Analysis
Leader in the beverage
market
Successful Marketing
Campaigns
Brand Reputation and
Customer Loyalty
Extensive distribution
channels
Bargaining power over
supplier
Effective CSR
Bottled water
consumption growth
Increasing demand for
healthy beverages Diet
Coke
Growth through
acquisitions
New emerging markets
(BRIC) attracted by more
consumption

Significant focus on
carbonated drinks
No Clear Diversification
Many brands with
insignificant amount of
revenues
High debt levels
Changes in consumer
preferences
Water Scarcity in the
world
Legal requirements to
disclose negative
information on labels
Inflation of the
economies appreciation
of the dollar value

Key Drivers
Government Taxes and Duty Tariffs
Influences from other Higher Authorities FDA/SLICA/Health
Ministry
Consumer Behavior/Perception Change More Health conscious
of life styles
Local & Global technology advancement
More recyclable More Efficiency Minimize environment
pollution
Volatile market condition Competition/localism
Negative Publicity

Key Strategies
Operation Strategy

Financial Strategy

Marketing Strategy

.Economies of Scale Shopper Engagemen

trengthen Distribution
Self Entrepreneurship
More Distribution

Higher Market Share

Different Packaging

Tactful Media Campaig

Consumer Activation

Experience curve benefit

Marketing Differentiat
Strengthen BTL Activity

Developed know how Segmentation

Visibility
Supply Chain Benefits Product Portfolio
Shop branding
Coolers and Crate Display
Bill Boards/Dealer Boards

CSR against Negative

Advance Technology
Training & Development
Skill development

Latest Machine
Enhance Productivity

Global CSR Projects

Diverse &
Inclusive Culture

Water
Stewardship in
Africa

Sustainable
Packaging &
Recycling

Energy
Conservation &
Climate Change
Product Portfolio
& Well Being

CSR Project in Srilanka

Say We Care is and Coca-Cola Employee
volunteerism project

Some Completed project

are,
Play area in the Maharagama Cancer hospital
Renovations

to

the

Ranaviru

Sevana

Ragama Hospital
Sanitation facilities to Schools
Mahamaya
Girls'
School

in

Hikkaduwa,

reconstructed complete
by Coca-Cola with an investment of Rs. 50 million.
(Reference: Daily FT, March 26, 2013)

Recommendation
Market Penetration
Further Development
of Distribution
SKU Development
(PET)

Product
Development
Low Calorie products
Organic Drinks
Low Sugar Products
Energy Drink

Market Development
Further Development
of Distribution
SKU Development
(PET)

Diversification
Step in to Water
Industry