They also have tax policies and regulatory pressure on them. Aim is to take convenient decision on firm’s progress. Political decision affects the economic, social, environmental and technological issues Economic : The company has to deal with rising labor and operational costs. The inflation rate, Importing laws , Exchange rates and the Interest rates are the major economic factors which affects more. As Starbucks imports coffee from frequent countries they have to be aware of changing imports laws.
Coca-Cola have a high market share, competitor pressure has forced customer sensitivity to price to be fairly high, sales volume is of course high and profit margin is fairly low as the Coca-Cola products are fast moving consumer goods. The price strategy is based on the customers’ psychology. Research and development new beverage packaging and product portfolio of Coca-Cola is one of the solutions for Coca- Cola to expand competition. It can help gain brand value and improve the customers’ satisfaction. Improve packaging by beautiful and creative design, useful to create new feeling for customer: unique, funny, style and fresh.
Later on Pepsi introduced the Pepsi Challenge where the consumers were blinded to taste between Coca-Cola and Pepsi and everyone seems to prefer the taste of Pepsi to Coca-Cola. Since, the market share of Pepsi was increasing fast, Coca-Cola decided to come out with something new. After taking into considerations that the taste was the key factor that led to the success of Pepsi. Therefore, in 1985 Coca-Cola introduced a new product called New Coke replacing the old Coke. After the introduction of New Coke, people started going against the New Coke as many felt that Coca-Cola was considered part of their lives and felt that something was taken away from them.
Consequently, Coke and Pepsi has indirectly been granted a power over various retail channels like convenience stores, vending machines, etc. These channels are highly fragmented, have limited power and cannot bargain over prices. This ensures that these two companies receive the most favourable margins on their products. An industry analysis by Porters Five Forces reveals that the soft drink industry has historically been favourable for profitability. The industry is very profitable, more so for the concentrate producers than the bottler’s.
So, drinking soda makes you even hungrier/ thirstier. A study was done on children, and proved that drinking one serving of soda per day increased their risk of obesity by sixty percent. Some simple reasons soda is unhealthy are, it is purely empty calories, and you may become addicted. In addition, the high percentages of sugar in soda can cause liver disease, insulin resistance (diabetes), and heart disease. It also may cause Leptin resistance.
Social: Changing consumer preferences and increase in disposable income have disrupted the retail industry. Additionally, demand for Socio-Cultural: Due increasing double income families, there is an increase in demand for ready-to-heat and ready-to-eat foods. Technology: Over the last few years, technology has advanced in leaps and bounds. Big retailers such as Wal-Mart use technology to drive down their cost and to improve operational efficiency. If Loblaw wants to compete with Wal-Mart, it should start upgrading its IT infrastructure.
Irish consumers show a desire for more sugar-free options for non-carbonated types of drinks. 34% of RoI consumers would be interested in trying more carbonated drinks containing natural sweeteners such as honey instead of sugar (Mintel, 2015). Taking the research results from the carbonated drinks, we can infer that consumers have an overall distaste to sugar and thus apply this research to our non-carbonated coffee drink. The two age cohorts that should be targeted are 35-44 year olds and 16-24 year olds as these are the largest consumers of caffeinated products (Mintel, 2013). The Irish population is also aging with the middle aged and older segment doubling by 2046, therefore we can position our product in a market that has significant potential for growth (Passport, 2016).
This article tells us about the riot that took place in Singapore and now the government of Singapore plans to restrict public consumption of alcohol and also reduce hours for its retail sales from next year. Alcohol is a demerit good; a demerit good is a good or service whose consumption is considered unhealthy, it has negative effects on the consumers themselves. Restricting the retail hours would help decrease the consumption to a very small extent because the people who want to drink alcohol would go and bulk buy at the time when shops are open. Bulk buying is when people buy large quantities of goods and often negotiate for discounts. High consumption of alcohol shows that there is an existence of market failure.
Coca Cola is a company engaged in the single space of non-alcoholic beverages, but this limits it enough in this era where the market has become highly competitive. Also, the production of nutritious drinks could increase the incomes as the healthy lifestyle is very popular these days. Nevertheless, these proposals belong to product development strategy of Ansoff matrix analysis and it would be better to be described thoroughly. Product development is related with new products in an existing market. Its main focus is to launch new products which will attract more and more consumers and will make the corporation more competitive.
PEST Analysis Political Instability. The political situation of Pakistan is not satisfactory. Due to the rapid change in the Government every government sets its own new trade policies. Govt. should apply sustainable policies for the beneficial of the exporters as well as the investors.