Water is a scarce resource and the beverage giant requires it in plenty for production. Most companies used alternative measures for cost cutting and cost reduction in order to bear the pressure of economic crisis. This analysis is used to assess these four external factors in relation to your business situation. Similarly, the rising costs of the raw products is an important factor affecting Coca Cola. Jennifer Post Jennifer Post graduated from Rowan University in 2012 with a Bachelor's Degree in Journalism. What kind of analysis can be conducted for this type of organization? The international business is subjected to the political stability.
Such economic crises impact the customers. Some laws may affect your business in the country of your operation. Or will it be expensive to hire skilled labor? Economic: Market analytics should examine the short and long term state of the business. Culture, politics, economic situation and even laws are some factors that affect businesses directly and indirectly. These tools complement one another and are often used together. Step 3: Brainstorm Threats It's also important to think about how these changes could undermine your business.
That makes it a must for you to give a thought to the threats your business may face. Other social trends like change in attitude towards American brands or other similar factors also affect Coca Cola. It has initiated other programs too in order to reach the community and empower women. How is this likely to change in the next few years? Hence, it is a must for you to do the pestle analysis of the external environments. During, the recent decades people have mostly switched from flavored to healthy drinks.
For example, consumer laws, safety standards, labor laws etc. Tax laws vary from country to country. Share your experience and knowledge in the comments box below. It may do lots of good for your business in a short span of time. I am clueless and would like to know from were do i need to start and any references or guidance you could provide me.
Globally, junk food and soda beverages have faced a decline in sales. Politics may affect the operations as well. Coca Cola needs water in very large amounts for production, but its availability is limited. Economical Environment: Economic environment is main element of business environment. I would be most grateful. Operations in international markets involve the study of unpredictable changes in foreign exchange rate. While technology in this area might not change daily, it requires lots of investment and maintenance.
In this highly globalized market, certain factors are of special significance that affect the businesses. You will also learn what your competitors do to survive. He's been using his knowledge on strategic management and swot analysis to analyze the businesses for the last 5 years. However, there will always be factors outside of your control affecting how your business operates. Any change in the global business environment can impact its profits and revenues directly.
The Coca Cola products are mainly popular for their flavors. The cost of other raw products and labor has risen over time. Also consider the advantages and issues people face in the area of your operations. The framework has undergone certain alterations, as gurus of Marketing have added certain things like an E for Ethics to instill the element of demographics while utilizing the framework while researching the market. Social and cultural factors acquire a special importance in that case.
Introduction of Pepsi products in the international market requires an in depth study of the local social structure. The main legal aspects you look in this analysis are the employment, taxation, imports, and export. Without the relevant and vast information, your pestel analysis would be a waste. Environmental: Sustainability and environmental concerns have grown central to business in the 21st century and even for the companies with near zero or zero environmental footprint. Covering all these aspects make your economic element of pestle analysis complete. Political or economic changes can negatively impact its profits.
The Internet, for example, has changed the way we bank, pay our bills, search for goods and services, book holidays, undertake study, and shop. I really want a guideline as to how I should perform a P. Hence, you must give a thought to all of it while writing the P of the Pest analysis. Any increase or decrease in tax rates can affect the profits of any corporation. All of these impact how consumers buy houses, cars, etc. Factors Political factors Political factors indicate to what extent the Government influences in the economy.