PEST on Coca Cola Beverages Pakistan Ltd

Current Scenario

Like juices, Milo cold coffee, drinks, Shezan products e.g. squashes, tetra pack juices are also sort of threat but not the direct threat for Coke because they provoke health consciousness and physical fitness. Although Coke has converted their attack on health issues by offering Diet Coke and Minute Maid. And on the other hand the direct rival of Coca Cola, Pepsi has come up with Pepsi Max in order to counter the health issues. Total beverage market share of PEPSI is 53%, Coca Cola 37% and others 10 %( Ali Imran Chaudary Nov 15, 2009).

PEST on Coca Cola Beverages Pakistan Ltd

Political

Coca-Cola management is not happy with the Govt. tax laws. As company is offering different products like Coke, sprite, Fanta and they have to import Different concentrate for each product so this factor in the end causing Coca Cola to pay heavy taxes. Last government was giving rebate to Coca Cola but the present government is not giving any kind of rebate

Economical

The fluctuations in Pakistan economy also effect Coke market position. Because of high inflation and low purchasing power Coke is unable to capture many potential customers of the large Pakistani population who have to struggle hard to make both ends meet rather than afford the luxury of drinking Coke as often as they would like to. The current interest rate is very high and this is really affecting Coca Cola because they are doing business on credit this factor in the end increase there cost.

Social

Coke a customer oriented company, always takes steps for the welfare of its consumers. It also helps the needy and knowledge seeking people with fewer resources by providing them books, scholarships & opportunities to work. It has launched a program in Gujranwala and Rahim Yar Khan where it provides basic education to children. It has also launched programs to increase awareness about the conservation of water & natural resources, climate changes, waste environment education & recyclable products.

Technology

The new methods of filling the bottles, the refrigeration methods, the disposable bottles, the PET bottles all made so many changes in the beverage industry. Coke is adopting all the new technologies available. Coke is providing refrigerators, visichest coolers and many more for keeping the bottles chilled, as they claim in the subcontinent "thanda matlab Coca Cola". Coca Cola Company got the technology of dispensers so they give Coke to people that is as fresh from the fountain. Coca Cola Company has opted the technology for the usage of PET bottles. Coca Cola Company is producing new packaging sizes with differentiated packaging with the help of new technology everyday.

Recommendation

Coca Cola should have an agreement with the government to give tax relaxation on their concentrates. This will reduce the cost of the products resulting increase in the market share. This leverage will allow Coca Cola to increase investment in Pakistan.

References

http://www.dailytimes.com.pk/default.asp?page=story_24-12-2003_pg7_16

http://www.finance.gov.pk/admin/images/survey/chapters/07-Inflation08.pdf

http://online.wsj.com/article/SB122651842006321337.html?mod=googlenews_wsjs