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Coca-Cola Case Study

Company Overview

Coca-Cola drink was created in May 1886 by Dr. John Pemberton in Atlanta, Georgia. In 1891, entrepreneur Asa G Candler gained ownership of the Coca-Cola business. Ernest Woodruff bought Coca-Cola for $25 million in 1919.

Coca-Cola gradually grew and became one of the world’s largest soft drinks company. Although Coca-Cola also deals with non-carbonated drinks, its primary products are carbonated drinks.

PEST Analysis

The PEST Analysis is an analysis to examine the macro-environment of Coca-Cola’s operations (Johnson, Scholes and Whittington, 2008).

Political

Like most companies, Coca-Cola is monitoring the policies and regulations set by the government. There are no political issues in this instance.

Economic

There is low growth in the market for carbonated drinks, especially in Coca-Cola’s main market, North America. The market growth recorded at only 1% for North America in 2004.

Social

There are changes in consumers’ lifestyles. Consumers are more health conscious. This affects the Coca-Cola’s sales of the carbonated drinks as consumers prefer non-carbonated drinks such as tea, juices and bottled drinks. Demand for carbonated drinks decreases and this leads to a decrease in Coca-Cola’s revenues.

Technological

As the technology advances, new products are introduced into the market. The advance in technology has led to the creation of cherry coke in 1985 but consumers still prefers the traditional taste of the original coke.

Porter’s Five Forces

Porter’s Five Forces are the five forces that make up the competitive environment. It is used to better understand Coca-Cola’s competitors and operations (Please refer to Diagram1) (Porter, 1998).

Threat of Entry

It is not easy for new competitors to enter the industry and compete with Coca-Cola, thus the threat of entry is low. High capital is required to enter the industry and to sustain the business in the long run. It is also difficult to secure...