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Coca Cola External Environment Analysis

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Coca Cola is an American corporation, which has diversified its operations on the global platform. The flagship company of Coca Cola has launched various nonalcoholic beverages and syrups. The invention of Coca Cola was undertaken by pharmacist John Stith Pemberton, which has made the formula of Coca Cola, having the view on the health perspectives of people and intended to get the patent of medicine for its company’s production. The company then acquired by the businessman Asa Griggs Candler, who has taken the company from the local area to the wide geographical boundaries. With the intensive marketing strategies of the company, the company have achieved a wide market area all over the world. The company has covered the global market with the same taste of their soft drinks, which is the standard taste. The company have achieved this success and the standard taste by supplying the concentrate of the soft drink to the bottlers contacted by the company and bottlers further supply the drinks by adding sweeteners and filtered water to wholesalers, distributors and retailers. The standard taste of Coca Cola has driven from the main components, Coca leaves and kola nuts. The main formula of Coca Cola is the trading secret of the company. they have also experimented with various flavours and beverages. All the bottlers have to acquire the license from the company to sell their products. The marketing of the company has impacted the environment of American culture. Coca Cola has started the concept of Santa Claus. Which has widely famous throughout the world.

External market analysis of Coca Cola:

The external business environment analysis of the company is more important and necessary to analyze as compared to internal environment analysis. The external market environment can impact the company as well as the overall economy. It can make or mar the company. the external environment creates opportunities for the company to grow and develop their operations and increase the profitability, as well as the threats, are imposed from the external environment of the company. with the external analysis, the company can get the knowledge about the threats to be imposed on the company, thus the company can prepare itself to face the threat by using their internal strengths and overcoming weaknesses. The external environment of the company consists of the attitudes of customers, the instabilities of the economy and the patterns of demographics of the customers and potential customers. Thus, the external environment of the company can be analyzed by conducting the PESTLE analysis.
PESTLE is the analysis tool, through which the marketers or researchers evaluate the different perspectives of the external environment of the company. The factors are political, economic, social, technological, environmental and legal.  The business of any company got affected by these factors.

Political environment:
The political environment consists of the impact of all the rules and regulations provided by government agencies, the stability of the government and the fiscal policy of the economy. Coca Cola is the nonalcoholic beverage company under the food industry of the economy which is regulated by the Food and Drug Administration. The FDA of US government ensures the use of proper healthy products of the company. it is also the duty of Coca Cola to follow the guidelines provided by the FDA. As Coca Cola is an international company, they have to follow the specific directions of all the countries they are operating in not only the food-related regulations, other laws have to be followed by Coca Cola such as income tax laws, export and import laws, GST regulations and act according to the political crises faced by the economy they are dealing with.

Economic analysis:
The economic determinants of the company affect the operations of the company such as the interest rate of the economy, fluctuation rates, economic growth of the economy and the major impact of the currency exchange rates on the profitability of the company. Coca Cola manages the risk of the change in interest rates by dealing in the derivative instruments. Not on the part of the company, the economic growth of the economy has a major impact on the purchasing power of the citizens of the country. The more disposable income will increase the demand for the products of the company. thus, Coca Cola estimates the demand for their products on the basis of the economic factors.

Social factors:
The social factors such as culture, demographics, season, traditions and population determined the impact on the functioning of the company. the company have to analyze all these factors to produce and experiment with the existing and new products. Coca Cola has a product range of more than 3000 products which are based on the social preferences of the society.

Technology factors:
In the food industry, technology also plays an important role in manufacturing as well as packaging of soft drinks. To attract the customers of different demographics, Coca Cola supplies their beverages in the bottles and cans of different size and style. Which create a major impact on the satisfaction level of the company.

Legal factors:
The legal environment of the company is based on the legal laws of the company. the various laws formulated by the government are as food safety act, federal trade act, waste management act, environment protection act etc. the rules provided under these acts determines the operations of the company.

Environment factors:
The environment factors have an impact on the operations of the company. as the company has to follow the regulations to maintain the quality of the environment. Such as waste management, use of organic products, water wastage protection etc. use of disposable bottles.

Conclusion: the external environment has a major impact on the operations of Coca Cola, the external environment consists of Political, ecological, social, technological, legal and economic environment.

External Environment Analysis of Coca-Cola. (2019). Retrieved from
Nyakang'i, E. (2019). Coca-Cola: External and Internal Environments market analysis | Kenyayote. Retrieved from
Frue, K. (2019). PESTLE Analysis of Coca Cola. Retrieved from

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