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Coke has been the leader in the soft drink industry for decades. Coke has a strong customer loyalty base, while appealing to new customers through effective marketing. In recent years, the soft drink industry has changed with consumers becoming more health conscious. With the consumer market changing, soft drink sales have dropped and the demand for healthy drinks are in demand. To be able to make up the difference of the drop in sales, Coca-Cola needed to come up with some innovative new products and marketing strategies that would appeal to a new market of the beverage industry.
In the last decade, PepsiCo. has gained leverage on Coca-Cola, because Pepsi made beverages that appealed to the changing consumer market. In two thousand-four, Pepsi owned fifty-two point three percent of the market in China after Coke produced a plant there (SinoCast, 2004). Coca-Cola has faced struggles in the past decade due to the lack of effective marketing and new product development. The individuals that were making the decisions for Coca-Cola were focusing on their best seller Coke and Diet Coke, and discovered that two products were not enough to keep the corporation running.
When using the PESTEL analysis, the first key component is to do an environmental scan (Finch, 2012). PESTEL is an acronym known as the six environmental factors which are the framework (Finch, 2012). The six environmental factors are political, economic, social, technological, environmental, and legal (Finch, 2012). The PESTEL analysis is based upon understanding forces and trends and can pertain to any given industry (Finch, 2012). Coca-Cola did not do any environmental scan, and solely relied upon the traditional beverages and marketing that Coca-Cola had always used. oke 2. PepsiCo not only began to distribute health conscious beverages, such as juices, teas, coffees, and water they also began distributing snack foods. PepsiCo has even implemented a relationship with schools which incorporates responsible advertising practices, like offering healthy foods and beverages. PepsiCo also became a member of the International Food & Beverage Alliance, which has to be met by certain standards in food and beverage distribution.
The proper execution of the PESTEL analysis is a tool that would give PepsiCo an advantage as it delves in market penetration, market development, and product development. The PESTEL analysis would confirm market trends, and internal and external factors, which would allow the organization to do more specific research and create the ability to make adjustments in order to reflect a gain in the industry. The PESTEL analysis is the answer as to how PepsiCo had the ability to act on a changing market and fully benefit from the changing market.
A decade ago Coca-Cola began its struggle in the beverage industry, when reality hit Coca-Cola made adjustments, offered new products and adapted to the market. Five years from now, Coca-Cola has to remain competitive by changing with the market, and producing products that appeal to the current consumer interest. Not only will Coca-Cola have to be creative with products, marketing is also another challenge.
Marketing has changed with technological advances, today marketing is more than a television commercial, or a billboard there are now various channels and strategies in hich to reach and appeal to consumers. Coca-Cola is known for sticking to traditional marketing and product, which has eventually put them behind their competitor. Technology is utilized in many different forms and will continue to increase as technology is an ever changing industry. Technology is a tool that should be utilized it can be cost effective and reach a new market segment. The weakness of the beverage industry is that consumers continue to become more health conscious, even down to the ingredients that make the food or beverage they are consuming.
There have been studies done that lead researchers to believe that aspartame causes cancer. There are studies that lead researchers to believe that Splenda in large and prolonged quantities can also lead to cancer. These ingredients are commonly used in different types of beverages that are distributed by various companies. With the recent studies of various ingredients, the government controls food and beverage production which also means that everything has to be made public knowledge (on a label).
The strengths are that of which Coca-Cola has the ability to produce beverages that appeal to the health conscious consumer. The investment into new products will allow Coca-Cola to remain competitive and appeal to new consumers as well. Along with new beverages, Coca-Cola should also explore new avenues in to growing markets and invest in them. With the financial power that Coca-Cola the investment to tap into new frontiers.
There are many opportunities for growth given that marketing and product development are the focus of the future of the company. oke 4. The future of Coca-Cola relies upon the decision to continually evaluate the six major factors into success and future success of any business. Frequent environmental scanning is necessary to execute the analysis of how and what changes need to be made. With the constant adjustments to product development and marketing strategies in place to accompany the changing times, it enables the best utilizations of products and marketing.