Political & macro enviroment impact on coca cola
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Transcript of Political & macro enviroment impact on coca cola
Political & Macro Environment Impact
OnCoca Cola
International Management Assignment 01
Introduce by John Pemberton in 1886 @ Atlanta
world’s largest beverage company selling more than 1.7 billion beverage servings each day
Operational Reach 200+ countries by 2012
Coca-Cola currently offers nearly 600 brands in over 200 countries
or territories
Company Associates with 90500 workers in plants
Hard Fact’s about coke…
Invest millions of dollars for enhancing human life around the
globe through CSR project.
2010 2013 2017
$0.90$1.04
$1.35
Global Beverage Market
Global Beverage Market USD Billion
CAGR 4.6%
Coke47%
Pepsi21%
Cadbury8%
Others24%
Non-Alcoholic Beverages - Market Share %
Current trends in the Beverage Industry
The beverage industry experienced a CAGR of 2.5% up to 2009
Bottle water to continue the soft drink market with a projected growth rate of 5.4%
Ready to drink tea and Asian specialty will be the fastest growing soft drink segments with an expected growth rate of 9% and 14%
Global Energy drinks markets has surged by 14% growth in 2011 . Current average growth rate is 10% Z
Global Beverages Market
Beverages Market in Sri Lanka
Coke; 40%
CCS, 43%
Pepsi; 10%
Others; 7%
Non-Alcoholic Beverages - Market Share In Srilanka %
Coke CCC Pepsi Others
Current trends in the Local Beverage Industry
• Fresh Fruit juice and Herbal Drinks has seen a significant growth rate of 20% in 2012
• Gradual decline in carbonated drinks consumption
• Volatility in the Supply Chain with higher input costs for key commodities.
• Increased number of innovative products introduced to the market . In 2012 only, 20 new products have entered the Sri Lankan Market
The Food and Beverage industry is a very important sector of Sri Lankan economy as it contributes around 10% of the GDP.
PESTEL Analysis
Tax policies -import and excise dutiesTrade restrictions Environmental policies and lawsInfluence derived from the FDA (Food and Drug Admin)
Standards imposed by the stateGlobal Political issues
PESTEL – Political Factors
Rupee depreciationIncreased trade deficitFluctuating Interest Rates – changed 6 times (Oct’11 –Jul’13)
Fluctuating Inflation rates – 9.8% (Jan’13)Hike in freight and import taxes - Special Commodity Levy Amendments Effective From Aug’13
PESTEL – Economic Factors
Shift towards in healthier life stylesIncreased aging population worldwideAlcohol content – (Rumor amongst ethnic groups) Pressure from social groups – Use local productsHigh Calorie content
PESTEL – Social Factors
Source – Company Corresponding data
Technology gap – shrink caffeine, phosphoric acid levelsCoca Cola Sri Lanka yet to launch Earth Friendly Bottling TechnologyTraditional Bottle crates usedAbsence of vendor machines in Sri LankaDependency in Sole Bottling Partner Technology in Sri Lanka
PESTEL – Technological Factors
Water UsageMaterial used for packaging / distributionThe contents of coke- (Eg –Pesticides in the Coke ingredients in India)
Improper Waste Management
PESTEL – Environmental Factors
Adhering to the local / International lawsAdvertising and labelling related laws - RecentHighly volatile legal environment - locallyLegal issues -environmental and health concerns
PESTEL – Legal Factors
SWOT Analysis
•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
•Bottled water consumption growth•Increasing demand for healthy beverages – Diet Coke•Growth through acquisitions•New emerging markets (BRIC) attracted by more consumption
•Leader in the beverage market •Successful Marketing Campaigns•Brand Reputation and Customer Loyalty•Extensive distribution channels•Bargaining power over supplier•Effective CSR
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
Operation Strategy
Strengthen Distribution. Self Entrepreneurship More Distribution
Strengthen BTL Activity Visibility Shop branding Coolers and Crate Display Bill Boards/Dealer Boards
Training & Development Skill development
Financial Strategy Marketing Strategy
Economies of Scale Higher Market Share Different Packaging
Experience curve benefit Developed know how Supply Chain Benefits
Advance Technology Latest Machine Enhance Productivity
Shopper Engagement Tactful Media Campaign Consumer Activation
Marketing Differentiation Segmentation Product Portfolio
CSR against Negative
Key Strategies
Water Stewardship in Africa
Sustainable Packaging & Recycling
Energy Conservation & Climate Change
Diverse & Inclusive Culture
Product Portfolio & Well Being
Global CSR Projects
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)
Market Development Further Development of Distribution SKU Development (PET)
Product Development Low Calorie products Organic Drinks Low Sugar Products Energy Drink
Diversification Step in to Water Industry