Analysis of the factors determining Coca-Colas continued profit

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Coca cola is the one of the biggest producer, marketer and distributor which has the largest marketer chain in the world and also Coca cola is considered most valuable company in the world.

Coca cola mostly produce and markets non-alcholic sparkling drinks and their four brands have taken the place in the top of the world brand list, in addition they markets and manufacturer of water, juices, teas, coffees and also energy and sport drinks.

Whats more, Coca cola has the uniqe distribition chain of drinks which is considered as a model system for many company and they are serving to consumers in 220 countries and each they serve to around the 1.7 billion people on every single day.

Income by selling drinks company, generates revenues and cash flows as well as concentrates and syrups and finished beverages.

Even Coca-Cola, the world's largest beverage company and its macro environment, opportunities and threats must be considered in. They must analyze their Political, Economic, Social, Environmental and Legal Factors in order to capture fast-changing world.

Political Analysis

Non-alcoholic beverages, food falls under this category within the FDA. In terms of government regulation of these products will play a role in production operations. If these laws do not conform to a standard of potential government fines is set for the company.

Coca-Cola Company's actual results and the expected factors that could cause results to differ are presented below by the company ...


Changes to the law regulations, accounting standards, taxation requirements changes, and also (tax rate changes, new tax laws and revised tax law interpretations), and including the domestic or foreign countries, environmental laws .

soft business environment changes. Without this limitation, competitive products and pricing pressure and the ability to acquire or sell shares in global market competition lead of the actions can be considered to maintain.

Changes in the non-alcoholic business environment. These include, without limitation, competitive product and pricing pressures and their ability to gain or maintain share of sales in the global market lead of action by competitors.

political movements, especially changes in the international market, especially the state and civil unrest related to the transition indicated in cash challenges ..

Political conditions, especially in international markets, including civil unrest, government changes and restriction on the ability to transfer capital across borders.


Their ability to penetrate developing and emerging markets, which also depends on economic and political conditions, and how well they are able to acquire or form strategic business alliances with local bottlers and make necessary infrastructure enhancements to production facilities, distribution networks, sales equipment and technology.

A threat that the Coca-Cola Company had to face recently due to the changes in the political factors was the War against Iraq made USA and UK very unpopular in Middle East as well as in other Muslim countries. Because Coca-Cola is known as the very American company, this had a huge effect on the sales of its products.

Economical Analysis

Last year the US economy was strong and nearly every part of it was growing and doing well. However, things changed. Most economists loosely define a recession as two consecutive quarters of contraction, or negative GDP growth. In 2008, we are witnessing a global economic crisis which was suggested by several important indicators of economic downtown worldwide. These included high oil prices, which led to both high food prices (due to a dependence of food production on petroleum, as well as using food crop products such as ethanol as an alternative to petroleum) and global inflation; a substantial credit crisis leading to the bankruptcy of large and well established investment banks as well as commercial banks in various nations around the world; increased unemployment; and the possibility of a global recession.

As the inflation rate grows higher and higher, consumer buying power will represent a key threat in the industry. The rivalry between Pepsi and Coke has produce a very slow moving industry in which management must continuously respond to the changing attitudes and demands of their consumers or face losing market share to the competition. In addition, consumers can easily switch to the other beverages with little cost or consequence.

Social Analysis

Many people nowadays are practicing healthier lifestyles. This has affected the non-alcoholic beverage industry in that many are switching to bottled water and diet colas instead of beer and other alcoholic beverages. The need for bottled water and other more convenient and healthy products are in important in the average day-to-day life. Possible substitutes that continuously put pressure on Coke include tea, coffee, juices, milk and hot chocolate.

Consumers from the ages of 37 to 55 are also increasingly concerned with nutrition. There is a large population of the age range known as the baby boomers. Since many are reaching an older age in life they are becoming more concerned with increasing their longevity. This will continue to affect the non-alcoholic beverage industry by increasing the demand overall and in the healthier beverages.

Increasing awareness among consumers, public health professionals and government agencies of the potential health problems associated with obesity and inactive lifestyles represents a significant challenge to the Coca-Cola industry. The company has recognized that obesity is a complex public health problem. Their commitment to consumers begins with the company's broad product line, which includes a wide selection of diet and light beverages, juices and juice drinks, sports drinks and water products.

Coke has hot lot of sugar by which continuous drinking of Coca-Cola may cause health problems. Being addicted to Coca-Cola also is a health problem because drinking of it has an effect on your body after few years.

Technological Analysis

The effectiveness of company's advertising, marketing and promotional programs. The e new technology of internet and tv which use specific effects for advertising through media. They make some products look attractive. This helps in selling of the products. This advertising makes the product attractive and is being used in media to sell their products. As the technology is getting advanced there has been introduction of new machineries all the time. Due to introduction of this machineries the production of the Coca-Cola company has increased tremendously then it was few years ago. A latest technical achievements made by the Coca-Cola Company was the new environmentally friendly version of the iconic "Coca-Cola" Contour bottle which has won number of awards for its light weight.

Environmental Analysis

The Coca-Cola system's environmental commitments are focused on the areas in which they have the most significant opportunities to make a difference - water stewardship, sustainable packaging and energy management and climate protection.

In 2007, the company used approximately 300 billion liters of water in their plants to produce beverages. To meet their water needs while helping to conserve watersheds and improve community water access; water stewardship leads the list of the companies' sustainability efforts. In 2007, Coca-Cola announced their aspirational goal to return to communities and nature, an amount of water equal to what is used in the company's beverages and their production. Coca-Cola calls this water neutrality.

Coca-Cola vision is to advance a packaging framework in which their packaging is no longer seen as waste, but instead as a valuable resource for future use. To realize this zero waste vision, they have been guided by a commitment to continuous improvement. They continues to make strides by advancing packaging initiatives focus on reduce, recover and reuse. They invested in designing and producing sustainable fashion apparel made from recycled PET bottles too.

Legal Changes Analysis

Marketing decisions are strongly affected by developments in the political and legal environment. This environment is composed of laws, government agencies and pressure groups that influence and limit various organizations and individuals. Sometimes these laws also create new opportunities for business. Here are some legal affairs that Coca-Cola had to face recently:

The European Commission has alerted EU member countries to ban Coca-Cola drinks because of recent poisoning of 100 children in Belgium and cause seems to be the wrong carbon dioxide which was used in the soft drinks. In 2003, the Centre for Science and Environment (CSE) a non-governmental organization, said Coca-Cola contained toxins including lindane, DDT, malathion and chlorpyifos - pesticides that can contribute to cancer and a breakdown of the immune system.