PEST analysis was used to analyse Coca-cola soft drink in the USA.

Political Political analysis looks at the current and possible influences from political forces. The Coca Cola operate in the non-alcoholic beverages industry which falls in the category under the Food and Drug Administration (FDA). This means the government plays a role within the operation of manufacturing these products. By means of regulations, the government has the control to put potential fines for the companies that do not meet the law requirements. Changes in laws and regulations, for example accounting standards, taxation requirements and environmental laws and foreign jurisdictions might affect the company. On addition, changes in the nature of business as non-alcoholic beverages can gain competitive product and pricing pressures and the ability to improve or maintain the share in sales in global market as a result of action by competitors. The political situations of the country are also considered in the study, especially governmental changes that affect their ability to break in the developing and emerging markets that involves the political and economic conditions. Coca Cola continuously monitoring the policies and regulations set by the government -Political (legal/environment) Opportunities 1- Environmental protection -water resources and wastewater treatment regulations. Now a day there is a big concern regarding water. So many regulations is expected to be issued by the government to control water using. Because most of the soft drink facilities are equipped by water treatment unit and recycling, this will give them advantage in the market.

-Political (legal/environment) threat 1- Food and drink consumer protection regulation and laws. Coca cola soft drink industry is subject to laws and regulations from different government bodies; for example, Federal Food, Drug, and Cosmetic Act and the Federal Trade Commission Act. On 10 Dec.2008 warning letter was issued to Coca cola that the Coke label is in violation of the Federal Food, Drug, and Cosmetic Act. Thus, this will affect them negatively. 2- Non-refillable containers eco-taxes or fees. A non refillable container is still used (cans) by Coca cola in soft drinks. They must pay eco-tax or fee. Probably this fee will affect their profit and operation. Because it could be increased, the eco-tax is a threat now and in the future. 3- Increases in income tax rates or changes in income tax laws The expected increase in the income tax would impact their cash flow negatively.

Economic The economic analysis looks at the impact of local, national and world economy changes including issues such as recessions and inflation rates. The non-alcoholic beverage industry has high sales in countries outside the U.S. therefore for big soft drink companies such as Coca Cola economic improvements in the international markets can be an opportunity for success and stable growth. Growth in, Coca Colas main market, North America, has been low for carbonated drinks. -Economic Opportunities 1-Becuase of the uncertainty of all economic indicators in USA, there is no clear opportunity. -Economic threat 1- Continuing uncertainty in the credit and equity market conditions. The credit crisis and financial condition, along with the current unfavorable economic environment in the USA would affect both coca cola and there soft drink bottling partners ability to access credit markets on favorable terms, and maybe this will reduce their credit ratings. As a result this would have negative impact on coca cola profitability. 2- The decrease in availability of consumer credit resulting. The financial crisis led to the reduction in consumer credit. This enforce consumer to control their spending according to priority, because soft drink is not necessity their reduce spending on it so this would reduce the demand for it. 3- The rise in the unemployment rate. According to US department of labour report on 8th July 2011, Since March, the number of unemployed persons has increased by 545,000, and the unemployment rate has risen by 0.4 percentage point. Probably this would affect their purchasing power, and they will bay what they need not what they want. 4- Raw materials and production inputs price. Although coca cola had declared that the price of soft drink will increase by 3% to 4% less that its main competitor who will increase the price by 3% to 5%, this increase could affects its sales volume. Social This looks at the changes in society and the ways they affect the company for example changes in peoples attitudes and lifestyle towards the organizations products. Some segments of Coca Colas Consumers are diet concerned. Their concern is mainly to increase their longevity and this change in lifestyle would mean that the non-alcoholic beverage industry will have to enhance their products by mean of making it healthier to suit the health concerned consumers. Not enhancing products to suit consumers demands or concerns could form a threat by means of increasing the demands for healthier beverages and decreasing it for carbonated drinks. This decrease in demands for carbonated drinks will pull down revenues for companies in this industry such as Coca Cola.

-Social Opportunities There are not many opportunities within this for Coca Cola to gain except of using the brand name and the loyalty of the USA citizens to the brand as an American brand. This is done by sponsoring many different social activities in many various communities. -Social threat 1- Health Concerns and Obesity One of the major social issues which can have an effect on demands for some of Coca Colas products is obesity and health concerns. Community health concerns linked to obesity, mostly among young people are increasing. Furthermore, consumers are encouraged by some health associate, campaigners and dietary guidelines to cut down their sugar-sweetened beverages consumption. Rapid shifts in the non-alcoholic beverages business environment are driven by, beside other things, changes in consumer preferences, including obesity considerations and health and nutrition worries. These changes in consumers preferences are effecting: Users needs and tastes; Consumer lifestyles; and Competitive products and pricing pressures.

In addition, our industry is being affected by the trend toward consolidation in the retail channel, particularly in Europe and the United States. If we are unable to successfully adapt to this rapidly changing environment, our share of sales, volume growth and overall financial results could be negatively affected. Financial Crisis Changes of consumer credit resulting from the financial crisis, as well as general unfavourable economic conditions, might also cause consumers to reduce their discretionary spending, which would reduce the demand for non-alcoholic beverages and negatively affect the Coca-Colas net revenues and profitability. Changes in Bottling Law The current Coca Cola bottling system offers non-refillable, recyclable containers. In the United States there are various legislations requiring that deposits, taxes or fees be charged for the selling, marketing and using of certain non-refillable beverage containers. On addition, there are anticipations that similar legislations or regulations may be proposed in the future at local, state and federal levels. Consumers worries and views about environmental responsibility and related publicity could result such legislations or regulations been adopted and implemented on a large scale in any of the major markets in which Coca Cola operate. This could affect Coca Cola companys costs or require changes in its distribution model, which could reduce net operating revenues or profitability.

Weather Conditions Weather conditions have influence on sales in the markets in which Coca Cola operate. For example cold or rainy weather during the summer can have a temporary impact on demands for our products resulting lower sales, which could have an adverse effect on our results of operations for such periods 2- Obesity and other health concerns. Society is becoming more sensitive with regard to obesity and health, and there are some researchers who linked between obesity and sugar- sweetened/other nutritive sweeteners which used in soft drink. Thus , this may reduce the soft drink consumption. 3- Consumer preferences is changing. The soft drink business is changing rapidly because consumer tastes and needs are evolving, so this fast change would be threat unless they manage to follow it doing change pro actively.

Technological Technology focuses on introducing or emerging technological techniques which could bring value to the organizations products. This analysis can create opportunities for new products or improvement to existing products by means of marketing and production. Technology is advancing rapidly and new products are introduced into the market. Technology creates opportunities for companies which are capable of taking the lead in using the latest technology techniques. -Technological opportunities Technology is to bring enormous benefits to Coca-Cola. Coca-Cola originated as a soda fountain beverage in 1886 selling for five cents a glass. Early growth was impressive, but it was only when a strong bottling system developed that Coca-Cola became the world-famous brand it is today. The Coca-Cola bottling system grew up with roots deeply planted in local communities. This heritage serves the Company well today as people seek brands that honour local identity and the distinctiveness of local markets. As was true a century ago, strong locally based relationships between Coca-Cola bottlers, customers and communities are the foundation on which the entire business grows. Accompany With economic development and the development of soft drinks increased investment in technology, many incumbent firms have developed new products or existing products in the taste and composition and other aspects of improvement, there are many companies in this way into the drink industry. But Coca-Cola retains the "mysterious 7X goods", the ingredients of Coca-Cola is still the dark secret. In packaging technology, bottled and canned technology in recent years has made significant development for the entire beverage industry also provides favourable conditions

Coca-Cola plant in the USA's 431 staff employed approximately 72,000 people. Most of the employees are mobile workers, the company with 55,000 vehicles and 2.4 million freezers, vending machines and beverage vending machines. With the growing competition in the market, Coca-Cola Company needs a more effective way to help employees collaborate, improve efficiency, so more information can flow seamlessly across the enterprise, so that sales staff can have more time to face the customer. The company's worldwide distribution pattern of requiring employees and executives on the road every week to spend a lot of time, held various internal meetings. Using Microsoft's Online Services technology, the Coca-Cola can use online meeting tool meeting, and as a cross-regional, collaborative platform across time zones, thus reducing the large number of travel costs.

The competitive environment of coca-cola soft drink Porters Five Forces

1-Threat of new entrants -The advertising and marketing cost is very high, so for new entrance it could be very expensive. Cocacola USA has been investing a lot of money annual in marketing about SDG. Accordingly it builds a very good brand and loyal customers. This is barrier for new comers. -Coca-cola has been in the market for along time and it has a very good knowledge about the market, customers behavior and all information in relation to cost reduction, so it can adapt a price war strategy against any new comers. Probably the new comers will face price war. - If new players plan to do bottling by franchising strategy they would face problems because Coca-cola has a wide bottling franchisor network and they manage to keep good relationship with them. In addition, if new comers plan to build bottling plan it would be very expensive and they will need huge capital to invest.

2- Bargaining power of suppliers Generally in the coming years increase in the cost, disruption of supply or shortage of ingredients or packaging materials is expected, so the supply issues must be managed carefully. -Limited number of suppliers for some chemicals Some of the soft drink chemicals ingredients, such saccharin and ascorbic acid, as well as some of the packaging containers, such as Aluminum cans, are available from a limited number of suppliers; thus, these suppliers have power on Coca-cola.

-There are many sweetener suppliers The raw sweetener (form of sugar) is available from many local companies, and historically Coca-cola hasnt face supply problems. Although the price is changing, it has no ad hoc price. Coca-cola signed a multi-years agreement supply with their suppliers. 3-Bargaining power of buyers

4-Competitive rivalry Coca-Cola was the top US soft drinks manufacturer in terms of both volume and value in 2010. It is the market leader, followed by PepsiCo, as its main competitor, in the beverage industry. Coca-Cola continues to develop new brands to energise its loyal consumer base, with varying degrees of success. Coke Zero, for example, appears to be here to stay, whereas Coke Black flopped miserably. While consumers are shifting away from standard regular colas, they are still purchasing many of these companies lower-calorie products. Coca-Cola has a long-standing contract with McDonalds to provide beverages for its restaurants, which gives the company a significant advantage in on-trade sales. However, in April 2009, the Dr Pepper Snapple Group announced a multi-year agreement with McDonalds that will expand availability of Dr Pepper and Diet Dr Pepper in its US restaurants. Similarly, Pepsi has a lifetime contract with Yum! Brands, with its restaurant chains that include KFC, Pizza Hut, Taco Bell, Long John Silvers and WingStreet. The company has shifted its focus to the consumers desire for health and wellness products to stem this decline Coca-Cola has a large advantage in fountain on-trade sales over its rival PepsiCo, due in part to PepsiCos history of restaurant ownership. PepsiCo Inc owned several chained fast food outlets, including KFC, Taco Bell and Pizza Hut, until 1997. As a result, many rival chained restaurants chose Coca-Cola rather than PepsiCo to be their exclusive supplier, because they did not want to help rival restaurant owners profit. Pepsis divestment of its restaurant arm Tricon in 1997 was largely in response to this competitive disadvantage. -trade position, the company has introduced two very innovative on-trade concepts. Coca-Colas Freestyle machine was launched in August 2009. It is a software-driven fountain dispenser where consumers can create more than 100 sparkling and still branded beverages from one dispenser. The Freestyle machine is slowly being rolled out, initially tested in Atlanta and San Diego. The Freestyle machine is now in its Pilot phase at over 125 locations in four markets with the goal of 15 markets by the end of 2010. The company also introduced the Fresh Flex machine that makes more than 18 different kinds of iced tea, offering greater variety. The Fresh Flex machine allows users to add a variety of sweeteners and flavours to its Gold Peak branded iced black or green tea. The Fresh Flex machine, which began testing in 2009, is currently in 40 restaurants in the US.

The relationship with Groupe Danone Waters is illustrative of a key strategy for Coca-Cola. The company has long-established relationships with its bottlers, distributors and most retailers, and can offer entry into more outlets than any competitor. As such, it enters into partnerships with other soft drinks manufacturers when it cannot easily develop products of its own for particular categories.

In 2009, Coca-Cola announced a new fountain beverage machine, the Freestyle. The Freestyle machine is a dispenser that can deliver 120 different kinds of drinks. In 2010, the dispenser moved

on to phase two of its roll-out, extending to fast casual dining restaurants and a host of cities across the US. With the Freestyle machine, consumers can choose from a variety of Coca-Cola branded products to create unique flavour combinations.

(Fountain drinks account for more than 70% of on-trade volume, and have been a consistent, reliable staple
for the industry. Furthermore, in fast food restaurants, a fountain beverage may be included in the meal package; therefore, a consumer might reward him or herself with a carbonated beverage, or be disinclined to choose water when that is typically the beverage that costs the least. Also, in venues such as cinemas, the concessions entice a consumer to upgrade to a bigger size for a minimal difference in price.)

As the popularity of flavoured and functional waters, juices and sports drinks persists, many carbonates companies are revisiting their flavourings in an effort to compete with these products. PepsiCo introduced Sierra Mist Ruby Splash, a ruby grapefruit-flavoured version of the companys lemon-lime soft drink. The Coca-Cola Cos Fanta Orange brand was reformulated to contain 100% natural flavours. The company will also reformulate the Fanta Apple and Fanta Grapefruit products to include 100% natural flavours. As stated above, a cherry version of 7-Up was launched and there were plans for a pomegranate extension at the end of 2009. Carbonates manufacturers, like Coca-Cola Co and PepsiCo Inc, are expected to continue to emphasise their healthier products, such as sparkling juices and functional waters. Both companies have participated in acquisitions of healthier products, such as coconut water, and continue to look for new opportunities to expand their portfolios to offer healthier beverages. Increased scrutiny from consumer advocacy groups will also increase pressure on manufacturers to move away from promoting unhealthy carbonates. Among carbonates, its likely that these companies will focus their marketing efforts on core brands. Consumers still purchase a high volume of carbonates and will tend to show loyalty towards brands they know and trust.