Soft drink manufacturing Case Study

Researching with the help of the PESTEL’S model will help in the identification of the political, economic, legal, technological, social and ethical factors that affect the industry. Political Factors One of the major political factors that affect the industry is the government regulation when it comes to the process of manufacturing and processing. A number of policies were introduced, after the number of people that lost their lives after consuming a product from the soft drink manufacturing industry. These policies were to ensure that the government carefully scrutinizes all the production and manufacturing procedures to ensure that they are of the highest standards possible. Moreover, the industry is favored by the political stability that lies between the American and the western countries. In this case, if the customers may decide to stop purchasing these products and services, the profitability would turn to huge losses leading to a steep decline in the sales of the company.

Additionally, the industry also has to endure with the high-interest rates when it comes to the repayment of loans and debts that the industry owes to either the bank or other affiliate organizations that have helped in the growth of the whole company. The high-interest rates will affect the process in which the industry would be able to reap benefits and profits off its past investments. The changes in the interest rates may vary depending on the regulatory policies that are provided at a global level by the government and the board heading the industry. In this case, the consumer ability would affect the interest rates that would be used by industry when it comes to the selecting and setting prices for the products manufactured. Another social factor that directly influences and fosters growth within the industry is the customs and perceptions regarding the use and purpose of soft drinks.

In most of the countries, it has become a necessity that people and other guests are welcomes with a soft drink before getting to feast on the main meal (Brogi et al. Other countries always make it a mandate that the guests to ceremonies and events are welcomed by soft drinks and other products from the soft drink manufacturing industry. In doing so, most of the people publicly allow the carbonated/ soft drinks to become part of their life hence generating profits and more shares for the entire industry. Technological Factors With the rapid technological evolution, new technologies have been launched into the market hence creating awareness about the industry and its products. One of the legal factors is the presence of legal regulations and laws that directly affect the accounting standards, the production, and taxation of some of the products produced within the industry.

Most of these laws and legal regulations have been set to ensure that the high-quality standards are maintained. There are also laws that have been set to ensure that the industry follows a legal channel/ route when it comes to the safety measures that are used in the packaging and distribution of the products from the industry. In order to oversee the entire process, there are a number of bodies and agencies that have been created to help in the administration and monitoring of the products that come from the industry. One of the agencies involved in the monitoring process is the Federal Trade Commission which ensures that all the businesses conducted by the industry comply with the legal set standard and the legal environment of the business conducted. Assignment Part 2 Porter’s Five Forces The soft drink manufacturing industry goes through a number of challenges which prevents it from making profits.

Using Porter's five forces model, we can be able to identify the problems that the industry faces. Below is an analysis of the soft drink manufacturing industry using Porter's five forces model. The Threat of New Entrants To begin with, the threat of new entrants hasn’t been a big issue for the soft drink industry due to its market dominance over the past few years. This dominance prevents new market start-ups that may have better products from making any profit out of its high-quality soft drinks. In this case, the soft drink industry can use the digital and print media platform to notify its customers of the products that they are selling. Apart from the hard and non-alcoholic drinks present in the market, the soft drink industry has few competitors.

This means that it will have fewer cases where substitutes pose a threat to the whole industry. Bargaining Power of Customers Regarding maintaining the profitability within the whole company, the customer plays a big role in determining whether this happens. In this case, the customers have the power of making demands and requests which may cause a change in the operations within the industry. In this case, some of the firms in the industry may transact some businesses that are which are illegal or do not follow the laws that have been enacted to ensure the presence of fair competition. Bargaining Power of Suppliers The bargaining power of the suppliers, in this case, can be referred to as the market inputs of the industry. The supplier plays a major role in ensuring that the industry makes good and quality products that will be more viable in the market.

In this case, the suppliers to the industry control the business since they are in charge of the transportation of the raw materials and machinery that to be used in the manufacture of the products. In order to bring a balance and reduce the bargaining power of the suppliers, having multiple suppliers would be efficient since it would also reduce the dependence on one supplier (Greer, 2018). O4. The industry demonstrates an improvement of the economy due to the high GDP in the industry as a result of an increased purchase of soft drinks. O5. The soft drinking culture makes almost mandatory for events and parties to have soft drinks, thus giving rise to purchasing power. O6. Stiff competition policies have affected the industry reducing the annual profit due to reduced net income.

T2. Presences of government regulations when it comes to regulating the prices and taxation have greatly affected the growth of the industry. T3. The rise in the Interest rates has acted as a discouragement hindering expansion and growth of the industry. T9. Most of the waste materials from the industry are non-biodegradable hence resulting in environmental pollution. T10. The increased production and recycling costs have discouragement many partners in the industry from making more products. O11. Dominance in the market has also increased the chances of retaliation from the competitor industries. O17. There is a sustainable competitive advantage that favors the competitors allowing them to launch their new products on the market. O18. The competitors also have bargaining leverage when it comes to negotiating with the dominating parties. T14. There is higher supplier solidarity hence making it hard for a bad customer to get another good supplier T15.

There are lower entry barriers hence creating more opportunities for new businesses to join the industry. T16. The availability and accessibility of the distribution services make it easy for new entrants to market their products. Groupe Danone, and The Kraft Heinz Company (Coca-Cola Company, 2017). In terms of revenues, Coca-Cola is worth 35. billion dollars. Mondelez International Inc. revenue return is 25. Its marketing strategy has greatly contributed to the company’s ability to listen to the needs of their clients and offer beverages that are consumed at any given occasion of personal preferences. In order for the company to achieve its stated mission, the company has introduced visionary goals which articulate with the corporate philosophy. Thus, its vision includes “Being a reliable working environment for its staff, introducing a portfolio that includes different brands that meet customer needs, establishing mutual loyalty among its partners, raking on top as a fast and effective moving company, maximizing shareholders returns based on their responsibilities and making a difference in their market of operation” (Journey Staff, 2017).

Based on the fact that Coca-Cola is among the leading firms in the manufacturing of nonalcoholic beverages across the globe, it has efficient personal that is committed to achieving the mission of the company (Pratap, 2016). The company runs the business through addressing the needs of the people through a diverse setting. The company has pursued this strategy from the time of its implementation. Thus, it's the company keeps a close eye on internal efficiency in order to ensure that all its products are manufactured at less cost. It emphasizes on standardization of its products during the manufacturing process, when doing packaging, and marketing. By ensuring that all its brands meet legal standards based on its tight internal control during manufacturing is essential to its success strategy (Vrontis and Sharp, 2017). Thus, from the perspective of a business level strategy, differentiation strategy remains the leading strategy based on the unique value proposition and taste.

This strategy is essential for helping the company attain its objectives based on low-cost leadership, "business level strategies", differentiation among other strategies. All of these strategies are aligned with the mission and vision of the company at the point of implementation. Evaluation of Competitors’ Strategies Mondelez International Inc. seems to be a close competitor of Coca-Cola Company and applies the growth strategy as part of its successful strategy. The company achieves this through effective management of crucial aspects of consumer trends in order to maximize its profits. Apart from Mondelez International Inc. as a top competitor of Coca-Cola Company, Groupe Danone is yet another potential company with a competing spirit in the market. Groupe Danone Company tends to base its business strategies towards marketing with an objective of improving its market share in the beverage industry.

Thus, in order to create awareness of its brand, the company focuses on various marketing strategies such as the target segment, positioning, and segmentation. In relation to the target segment, the company aims to make its products available o attractive audience once their needs have been explored. Based on its business strategy, the company is focused on manufacturing improved products that their customers love. The company tends to achieve this through product renovation, nutrition resources, and innovation. In order to maintain competition, the company works to ensure that its products meet consumer demands all the time. The company is committed to offering better products in order to improve its brand awareness through the people involves in its objective to make better communities through its brand and improve its competitive advantage. Based on the beverage industry, Coca-Cola Company and its competitors are prominent and successful based on each company's ability to implement fresh ideas into their business.

The company was proven guilty for subjecting African American employees to low payment with non-African Americans with similar job position and performance. The worst scenario is that the top board of governors had knowledge about the issue for a period of four years and yet did nothing to improve the situation (Essays, UK, 2013). Despite the fact that the company denied the allegations, the public was strong and reacted effectively towards the case. The company was forced to pay approximately 193 million dollars to settle this lawsuit related to racial discrimination and come up with a diversity council in an attempt to protect its public image. As soon as the company was done clearing discrimination lawsuit, it was involved in yet another lawsuit just three years down the line. Therefore, some of these legal lawsuits that have involved Coca-Cola Company through the decisions leaders make have untarnished the name of the company and impacted its profits in its various operation markets due to product recall for safety investigation (KillerCoke.

org, 2018). Coca-Cola Current Financial State Despite cases of tax charges that the company has had to battle, the company reported improved quarterly benefits in its product such as coffee, teas, and vitamin water. The current financial condition of the company seems to steadily improve despite its loss of $2. billion as a result of charges against violation of new tax policies. B $1. B $1. B $2. B $11B Quick 3. ROA 14. Its ability to sell its products to various social class groups gives its brand high demand and in return boosting the market holding of the company in its areas of operation. The organization is also equipped with an effective brand portfolio based on its ability to introduce selling brands such as Lilt Zero, Zero Sugar, Powerade Zero, among other beverages. Its extensive network for its product distribution has helped the company attain great customer loyalty due to its flavorful drinks (Jurevicius, 2018).

The company has invested heavily in its marketing as well as advertising strategies in order to engage more customers to the brand while striving to maintain the current ones. Also, the company has the power to come up with a new product since they have the finance, identity, manufacturing power, and customers, and evaluation to support this. It has a large market share due to its famous brand and as a result, its popularity makes the company maintain its competitive advantage. S3. Has diversified portfolio products and as a result, accessing a number of cultures and groups based on a customer's taste. S4. Through its organic revenue, the company is likely to grow strong and further in an attempt to maximize on its strengths. S10. The Company has made moves toward making their brand more sustainable for the future growth of its business and environment.

S11. Coca-Cola has a large Customer loyalty hence being able to easily command a large following. S12. Coca-Cola is considered among the most valuable beverage companies across the globe and it, for this reason, its commands high "Quick Ratio and an ROA” than its competitors. S18. The organization is also ranked among the top bottling company due to its ability to hold approximately more than 700,000 employees. S19. The company is also on the way to becoming a growth-oriented business in order to be stronger enough to adapt to changing circumstances fast. W5. The company suffers from cases of currency fluctuations in the various markets of operation worldwide. W6. It is affected by high rates of debt, thus affecting the company’s profits due to high borrowing costs. W7. The issue with pesticides in the beverage has affected the brand image of the company in its areas of operation.

W13. It encounters health issues resulting in the avoidance of its brands and as a result, affected based on reduced purchasing power. W14. The company also suffers from a lack of health beverages to combat cases of obesity in its products. W20. Poor decision from its leaders resulting in stagnant situations that ends up affecting the organization. Table 3 Coca-Cola Company’s Strengths and Weaknesses Table Strengths Weaknesses Political S1. The company has a global presence with a unique brand. W1. Coca-Cola consists of a strong distribution network due to the high demand for its products across the globe. W3. Strong competition resulting in reduced market advantage. W4. Cases of financial shortage due to large fines hence affecting the budgeting of the company. S7. Effective marketing strategies that are meant to win the hearts of their customers.

W9. Reduced access to raw material such as water due to its current scarcity. W10. The issue with pesticides in the beverage has affected the brand image of the company. W13. It encounters health issues resulting in the avoidance of its brands. Table 4 Porter’s Five Force Analysis Strengths Weaknesses Customers S11. Customer loyalty to command a large following. Coca-Cola has invested largely in its advertising budget in order to compete effectively with its competitors. W16. The company has low product diversification with only one segment of drinks. New Entrants S16. The company also operates as a multicultural organization hence enjoying various opportunities in these regions of operation. A well-established employee, thus offering strength appropriate for running the business. W19. Increased regulatory scrutiny problems globally. W20. Poor decision from its leaders resulting in stagnant situations that ends up affecting the organization.

Coca-Cola Company has a good name and rank in the beverage industry and focusing on fulfilling its mission statement is among its techniques to continue growing even further. Its popularity due to its customer demand fulfillment worldwide continues to improve the development of the company both in terms of finance and brand awareness. Coca-Cola’s vision statement demonstrates the framework that the company uses as a roadmap in order to achieve its mission. This is accomplished by envisioning what the company intends to achieve as success in order to maintain stability, quality, and growth. Its stated vision reads, “Be a highly effective, lean and fast-moving organization. O3 reflects the company’s ability to command high consumer cost through their brands and as a result increasing the company's income. However, this cannot be achieved if not for O1 that provides the company with a safe place in their business world due to political stability in its areas of operation.

The organization as shown in S7 demonstrates strong marketing techniques that are specifically targeting its customers in an attempt to win their hearts. This explains why in S11 the company has a loyal customer base that has grown to a large following. This is probably because of S14 that demonstrates the company’s brand identity in the market that the people have identified with it worldwide. S17 supports the fact that the company is valuable across the globe as a result of helping it maximize on the losses incurred through making numberless sales. S18 shows that the organization is among the leading bottling company with almost 700,000 employees worldwide that work to ensure the company produces effective products. According to T 19, the company has high chances of its buyers switching due to health issues that have been associated with the drinks.

In an attempt to keep its customers, S9 demonstrates the organization efforts to franchise its products to meet the growing consumer demands and with fewer health effects. According to T1 and T2, the company suffers from cases of competitive policies as well as governmental regulations. O16 indicates that the market has limited competition due to signs of competitors retaliating. With a large portfolio of products, Coca-Cola is sharply focused on introducing more brands that are sugar-free and less harmful to the health of its consumers so that to continue serving its customers. Weakness/Threats Strategies W16 suggest that the company is limited only to one segment of beverage drinks and as a result suffering from cases of low diversification of its products. This implies that its top competitors such as Peps that have a segment that includes manufacturing snacks and food that go with their drinks (Reuters, 2018).

The fact that Coca-Cola lacks brands that can be consumed alongside its beverage brand result to W15 that includes the company’s inability to shift based on the needs of its customers. However, the company has introduced a variety of products to reduce this impact and maintain its market advantage. ST2 S9,T1,T2,S4 ,S19 Regardless of the changing government regulation and tax rates, Coca-Cola is focused on improving its business in order to adapt to any circumstance upon popping up. WO1 W8, W9, O7, O8 The company is focused on becoming more efficient in its management through the application of various technologies. The aim is to reduce some of its operating cost and improve profits. WO2 O16,W13,O12,W12 Despite various failures in some of its products due to a bad image, the company’s record to produce quality brands favors its presence in the beverage industry.

Also, part of its effort to increase efficiency is its investment in brands and other business segments that will bring more returns to its shareowners. Coca-Cola Company is also focused on improving customer as well as employee experience through simplifying its services. The aim of this strategy is to create exciting brands that are productive, fun and fulfilling to its customers so that to spark curiosity and encourage more sales for business growth and innovation. The company is also keen on achieving its business model that entails manufacturing refreshing brands. This is evident based on the fact that the company is among the leading in the beverage industry with brands such as coffee, sports drinks, juices, water, hydrated drinks among other non-alcoholic beverages (The Coca-Cola Company, 2018). com, 2012). Having wrong employees occupying the right seats can hold the company back due to the failure of a crucial organization process as a result of poor decisions.

Thus, evaluating employees can be done through assessing their current skills, behaviors, knowledge, and results to ensure that they have what it takes to take the organization to the next level. The purpose of this recommendation is to ensure that Coca-Cola Company remains among the leading non-alcoholic beverage manufacturer in the industry. Having the right talent occupy the right seat is beneficial to the company in terms of growth and profit-making through its sharp innovative manufacturing process that the talented team leads to ensure high productivity is reached. Coacher, M. A. Guerrero-López, C. M. Molina, M. The impact of economic, political and social globalization on overweight and obesity in the 56 low and middle-income countries.  Social Science & Medicine, 133, 67-76. Greer, G. Win in India: An Analysis of Market Entry Strategy Into India’s Food and Beverage Industry.

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