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Introduction
Coca Cola is one of the few successful global brands in the World. Since the year 1980 Pepsi Cola started to challenge the dominance of Coca Cola and turned to be the main rival. And in the year 2005 for the first time in the history of both companies, Pepsi Cola was valued higher than Coca Cola. There are a lot of reasons why it happened, mainly because Coca Cola rely too much on carbonates market which is declining at the moment. Another reason is the number of failed new products and some poor investment decisions.
PEST analysis for Coca Cola
Political
• 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 very American company, this had a huge effect on the sales of its product.
• 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 coca cola soft drinks.
• Recently there were demonstrations all around the India, protestors demanded Coca Cola to stop production. Demonstrators believe that Coca Cola is depleting groundwater.
Economical
• Disposable income of consumers has increased by 4.2% and it had a positive impact on sales.
• Recently against the pound, the dollar was down more than 0.55% at $0.52, while against the euro it was down 0.58% at $0.77. There is a fear of inflation because of the weakening dollar.
• Bank of England reported that in order to meet its 2% inflation rate in t ...