Political Analysis and Factors
The Food and Drug Administration (FDA) regards non-alcoholic beverages such as Coca Cola as within the food category. The government regulates the manufacturing procedure of these products. Companies that fail to meet the government 's standards are subject to fines. Coca Cola is also subject to the Occupational Safety and Health Act and to local, state, federal, and foreign environmental regulation. Following are some of the factors that are influencing Coca Cola 's operations:
1. Changes in laws and regulations: Changes in accounting standards, taxation requirements (tax rate changes, modified tax law interpretations, entrance of new tax laws), and environmental laws either in domestic or foreign authorities.…show more content… Coca Cola took note of this, and realized that loan interest rates would likely rise as the economy returned. Thus, they took out low cost loans in 2001 to fund growth in 2002. They used the loans for research and development on new products to capitalize on in a strong 2002 economy. Currently, as global growth is slowing, Coca Cola may be watching for a similar opportunity.
Social Analysis and Factors
Social factors that affect the sales of Coca Cola 's products include the following:
1. The majority of people in the US are showing increasing interest in healthy lifestyles. That has strongly influenced the sales within non alcoholic beverage sector as many customers switch to bottled water and diet colas such as CocaCola Light or Zero.
2. Time management is a concern for 43 percent of all households, a percentage that has increased over the years.
3. Customers from ages 37 to 55 are concerned with their nutrition. Also, a large portion of the population is baby boomers. As they become seniors, they are more concerned about life choices that will impact their life expectancy. That will continue to affect the non alcoholic beverage sector by increasing the demand for healthier…show more content… Because of these new technologies, Coca-Cola 's production volume has increased sharply compared to that of a few years ago.
2.2.3 Key Strategic Objectives and Challenges
• Acquisition targets in developed markets:
Coca-Cola already has strong penetration in major soft drinks markets, which typically offers limited acquisition opportunities due to market consolidation. Much of the future volume growth is likely to come from secondary markets such as Vietnam and Indonesia. Coca-cola may be better advised to set its sights on larger acquisition targets in untapped regions such as the Middle East and Africa and some secondary markets.
• Diet Products Cannibalising standard variants:
Rising awareness of soft drinks-related health issues, in particular sugar levels, has sparked a trend for “better for you” beverages globally. As for Coca-colas’ carbonates, some countries saw standard cola are being cannibalised by low calorie colas and this represents a challenge. Coca-cola must continue to sustain growth in standard cola and expand low calorie