Thursday, February 21, 2013

General Environment

Demographic: Coca-Cola should target nearly all age groups from around five years old, where children can understand messages, to senior citizens who enjoy drinking diet soda or juice/tea. They should target both males and females but focus on males because they typically drink more liquid and drink more unhealthy products like soda. Of course women are still important as they will drink more juice, water or tea. All races and ethnicities should be considered as a possible target market for Coke. They should also focus on all income levels besides the lower-lower class because soda and other drinks are a luxury item and life can be lived without it.

Sociocultural: This aspect of Coke's general environment is very important and threatens the longevity of the brand as their main product, soda pop, is being labeled as extremely unhealthy with all of the high fructose corn syrup. Coke can battle these claims and focus on their healthier beverages or healthier aspects of their soda like no calories or made with natural cane sugar. More women in the workforce is excellent for Coca-Cola because more women are going to need caffeine to stay awake and will look to soda, hopefully, to get their fix. With cultural trends focusing more on fitness, Coke can narrow in their focus on their fruit/sport drinks. While people in general have a greater concern for the environment, Coke can use recycled bottles/materials. They could also make a slender bottle made with less plastic. Depending on individual family formations, if the family have kids, they will not drink as much soda because they do not want to be a bad example for their kids. Instead they will drink more juice and water.

Political: The increase in minimum wage will no doubt add costs as Coke will have to pay workers more for their services. Also with the FDA requiring food label disclaimers, this increases costs and labor for the Coca-Cola Corporation.

Technological: The chemical engineering of drinks could definitely change in the future as new technological processes arise. It is possible to get a younger demographic into Coke products by using online games and shows with new internet technology. Computer aided systems may help ease the logistic side of things for Coca-Cola. With population and global warming on the rise (potentially), there is going to be more people with warmer weather and therefore there will be more people drinking more beverages.
Wireless communications will allow for more feedback and ease the communication between sales associates and Coke's accounts. The growing technology will no doubt push Coke's product and will allow Coke to do greater research regarding materials and allow them to find and produce the best and lowest price point products.

Economic: With interest rates being quite low right now, it would be an excellent time for Coca-Cola to lock in a fixed rate. Unemployment rates are still high an with less people working, there is less money to spend on luxury items like soda. CPI may hurt Coke as inflation could hike the prices of soda/juice. Changes in the stock market like other stocks struggling, will help Coca-Cola as more people will buy their strong stock.

Global: Free trade agreements between countries makes it easier to sell or produce internationally.
With an increase in globalization of business in general, everything is becoming more global and easier to sell/trade.

Porters Five Forces model of industry competition: The five forces of Porters model of industry competition are suppliers, buyers, potential entrants, substitutes and industry competitors. Coke has some bargaining power as they do a lot of business with the supplier of raw goods. The buyers of Coca-Cola's products have a lot of bargaining power because there is a large corporation that sells mostly all of the same products that Coke does, and that company is Pepsi Co. There is minimal potential or threat of new entrants into the beverage industry as Pepsi and Coca-Cola own a lot of the brands out there today. The substitutes force of Porter's model is an aspect that should concern Coca-Cola the most. With people changing their thought on healthy food and drinks, Coke needs to be careful so that other products or services are not produced that outdate or replace one of their existing products. There is a huge industry competitor as previously mentioned, Pepsi Co, who is one of, if not the only true competitor with Coca-Cola.

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