Swot and pestle analysis of coca cola việt nam (1)

Currently, coca cola Vietnam grasps that customers over 40 years old tend to care about their health and are not suitable for carbonated soft drinks with too much sugar, so Coca-Cola cur

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I Introduction

As an insights junior strategist and completed a detailed analysis of coca-cola vietnam Besides coca-cola vietnam is looking to expand their distribution channels so that their company becomes the leading beverage enterprise in vietnam, so a specific strategic analysis is needed Therefore, this study will study both externally and internally, showing that it is very reasonable to expand distribution channels to contribute to the development of coca-cola vietnam Besides, to research the field in which coca-cola vietnam does business and develop insights and predict future growth potential, it is necessary to analyze pestle factors Not only that, in order to determine the company's position in the market and potential opportunities to expand distribution while minimizing risks and threats to the business, this study needs to do a swot analysis

1 Definition of each element PESTLE

1.1 POLITICAL factors

This is all about how the government intervenes in the economy and to what extent Government policy, political stability or instability in foreign markets, foreign trade policy, tax policy, labor law, environmental law, trade restrictions, and so on are all examples of this

- Government Policies: Every Year, There Is A Task To Develop New Laws And Ordinances And Always Have New Policies To Encourage Investment Enterprises In Order To Attract Investment, The Government Has Shifted From A Direct Intervention Mechanism To An Indirect Regulatory Mechanism By Law Through Impact On The Business Environment For Example, The Government Always Creates The Most Favorable Conditions For The Development Of Vietnamese Coca-Cola, Such As Minimizing Administrative Procedures And Creating A Transparent Investment Environment For Foreign-Invested Enterprises To Develop In Vietnam Male Furthermore, The Government Helps Organizations In Two Main Ways: Monetary And Administrative Help

- Foreign Trade Policy: In The Context Of The Trend Of International Economic Integration Deepening, For The First Time, The Law Has Affirmed The Right To Freely Trade In Export And Import For Traders Who Are Organizations Economic Organizations With Foreign Investment Measures To Certify The Origin Of Goods And Circulate Freely Under Newly

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Signed Free Trade Agreements Such As The Trans-Pacific Partnership (Tpp) And The Asean Trade In Goods Agreement (Atiga) For Example, Coca-Cola Vietnam Enjoys Special Preferential Import Tax Rates Under The Asean Trade In Goods Agreement (Atiga) Under Circular No 165/2014/Tt-Btc

-Tax Policy: Although Vietnam Coca-Cola Is Always In The Top Of High Tax Paying Enterprises In The Country But Since The End Of 2019, Coca Cola Vietnam Has Committed

A Violation Of False Declaration, Leading To A Lack Of Tax Payable According To Regulations, So It Has To Pay A Fine Of More Than Vnd 821 Billion

Economic variables have a big influence on how a company runs its operations and how lucrative it is Economic growth, interest rates, currency rates, inflation, consumer and business disposable income, and so on are all factors

- GDP: Coca-Cola has the economic sectors in Vietnam that have the greatest impact on profitability and overall appeal Higher GDP means more disposable money, which means more Coca-Cola sales in Vietnam Coca-cola Vietnam contributed 3,500 billion VND to the national gdp between 2016 and 2018, or roughly 0.11 percent of the country's GDP (coca cola company, 2019)

- Inflation rate: can have an impact on Coca-Cola product demand in Vietnam Higher inflation may force Coca-Cola Vietnam to increase prices in lockstep with inflation, resulting

in weaker brand loyalty and continual cost-cutting initiatives In these circumstances, cost- based pricing may be a poor strategy For example, the price of coca in 2016 was just 8k/1 can of coca-cola, but today it is over 10k after only approximately 5 years, indicating a 25 % increase in inflation

- Employment rate: high unemployment rate is also inevitable because it takes away the inevitable income of consumers, and will hurt coca-cola's position in vietnam A high unemployment rate will lead to a decrease in coca-cola's sales in vietnam and affect the company's overall profit and revenue But thanks to the development of coca-cola vietnam, it has created 80,076 annual average jobs, of which 2,370 employees are created from direct business activities (coca cola company, 2019)

- Interest rate: fluctuations in interest rates may result in higher or lower costs for the purchase or sale of goods and services provided by coca-cola in vietnam Higher interest rates hurt consumers' disposable cash

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1.3 Social factors

Socio-cultural variables are the aspects of the population's common beliefs and attitudes Population increase, age distribution, health consciousness, career preferences, and other variables are among them These variables are especially interesting since they have a direct impact on how marketers perceive customers and what motivates them

- Changing social patterns and consumer needs: Coca-Cola Vietnam targets potential customers with the age from 10 to 35 years old These young consumers are the segment that coca cola has been aiming for since its inception and development For example, products and advertising campaigns like "share a coke" are always aimed at young people Currently, coca cola Vietnam grasps that customers over 40 years old tend to care about their health and are not suitable for carbonated soft drinks with too much sugar, so Coca-Cola currently does not create products with low sugar, pure and diet coca like Coca zero, Coca light

- Level of education: Social trends in higher education have allowed companies like Coca- Cola in Vietnam to access more skilled human resources Higher education also helps consumers better understand the different products of companies like Coca-Cola in Vietnam

1.4 Technological factors

Technological factors affect marketing and the management thereof in three distinct ways such as producing goods and service, distributing goods and services, communicating with target markets

- Changing social patterns and consumer needs: Coca-Cola Vietnam targets potential customers with the age from 10 to 35 years old These young consumers are the segment that coca cola has been aiming for since its inception and development For example, products and advertising campaigns like "share a coke" are always aimed at young people Currently, coca cola Vietnam grasps that customers over 40 years old tend to care about their health and are not suitable for carbonated soft drinks with too much sugar, so Coca-Cola currently does not create products with low sugar, pure and diet coca like Coca zero, Coca light

- Level of education: Social trends in higher education have allowed companies like Coca- Cola in Vietnam to access more skilled human resources Higher education also helps consumers better understand the different products of companies like Coca-Cola in Vietnam

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1.5 Environmental factors

Environmental variables are those that are impacted by the environment around them, as well

as the impact of ecological factors With the increased importance of CSR (Corporate Sustainability Responsibility) and sustainability, this factor is becoming increasingly important to how businesses must operate Climate, recycling techniques, carbon footprint, waste disposal, and sustainability are all factors to consider

- Effects of Climate Change: The weather in Vietnam is often prone to hot climate, so Coca- Cola consumption is a lot, so the climate is also a factor that helps contribute to the success of Coca-Cola in Vietnam Male

- Recycling policy: Coca cola's recycling policy in Vietnam market has taken place in recent years For example, in 2020, Dasani bottled water is a beverage product with packaging made from 100% recycled plastic Besides, Coca-Cola also introduced the message "Recycle Me"

on product packaging to inspire consumers to participate in recycling activities

- Environmental sustainability: Coca-Cola Vietnam also identifies areas of concern and challenges in incorporating environmental sustainability into the company's performance and strategy In addition, Coca-Cola Vietnam gives clear instruction in the core procedures and leadership roles of the company surname on how companies may build superior harmony between ecological and social operations

1.6 Legal factors

Health and safety, equal opportunity, advertising standards, consumer rights and regulations, product labeling, and product safety are all legal considerations It is obvious that in order to trade successfully, businesses must understand what is and is not lawful When a company deals internationally, this becomes a very difficult topic to master because each country has its own set of rules and regulations

- Labor Law: Labor law refers to the guidelines in regulations that establish standard and minimum conditions These include identification with human work Labor law includes aspects of minimum working age, salary and bonus over time at least, Coca-Cola Vietnam must pay attention to these laws in recruitment

- Law of discrimination: Coca-Cola Vietnam ensures to avoid cases of inequality or so-called non-treatment based on age, impotence, sex, national origin, race, religion an individual's religion and sexual orientation

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- Health and Safety Law: Coca-Cola in Vietnam is required to provide a protected working environment for employees The workplace safety and welfare law develops guidelines to address injuries and personal injuries that occur in the work environment All Coca-Cola activities in Vietnam should be designed to protect the physical and mental health, protect workers and the workforce employed

2 PESTLE important to business

PESTLE analysis is important to businesses because PESTLE provides objective factors about external factors In each criterion is a number of factors such as law, physical environment, technology, society, politics Existing businesses like Coca-Cola Vietnam will find the analysis results extremely valuable as the information can determine whether to expand

or just merge PESTLE analysis can help determine if a particular province

or region has profitable business potential Any market has the potential for good or bad, and analysis helps to balance everything in a very objective balance

3 Positive and negative

Political - Government policy: minimizing

administrative procedures and creating a transparent investment environment

- Foreign trade policy: in the context of covid, imported raw materials are difficult

- Tax policy: Coca was fined more than 821 billion in tax

Economic - GDP: is one of the companies that

contribute the highest goips to Vietnam's GDP Besides, the proportion is about 23.7% of the total investment capital of the whole society, contributing nearly 20% of GDP

- Employment rate: increased when Coca-Cola opened a factory

- High inflation rate in just 5 years increased to

Fluctuations in interest rates can lead to higher costs

Social - Coca-Cola Vietnam targets potential

customers with the age from 10 to 35 years old

-Access to more skilled human resources Technological - The expansion of the Internet and

online business has eliminated many intermediaries

- Social media to reach out to consumers Environmenta

l

- Recycling policy in 2020 Dasani bottled water is a beverage product with packaging made from 100% recycled

- The effect of climate change on the consumption

of products of each season is different

- Clearly identify areas of concern and obstacles to

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plastic integrating environmental sustainability into

corporate performance and strategy Legal - Ensure the avoidance of cases

of inequality or so-called non- treatment based on age, helplessness, gender, race, religion -The Workplace Security and Welfare Act develops guidelines to address injuries and personal injuries that occur in the work

environment

- Labor law includes aspects of minimum working age, minimum salary and bonus over time

III SWOT analysis

III.1 External Factor Evaluation (EFE) Matrix

Strengths

Diversifying into complementary food products 0,06 2 0,12

Improving economic conditions after economic meltdown 0,08 3 0,24

High technology in production and packaging system 0,07 3 0,21

Weaknesses

There is Low growth rate in the carbonated drinks market 0,05 2 0,1

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Increasing demand for non-carbonated products 0,07 1 0,07 increasing inflation is causing demand for the products to fall 0,04 2 0,08 Increasing prices of raw material such as sugar and metals 0,04 2 0,08

- In the assessment of external factors (EFE) in strength, the factor that consumers pay attention to health with a weight score of 0.11 has shown that Coca Vietnam needs to pay attention to the trend and consumer health Moreover, the increase in inflation is a factor that greatly affects industries such as Coca because the price of products increases, customers will choose other products that are more suitable for money

-The ratings in the external matrix refer to how Coca Cola Vietnam's current strategy responds effectively to opportunities and threats The growth of people's spending in Vietnam is considered

outstanding because according to the statistics of the General

Statistics Office, the CPI in Vietnam increased by about 1.47%

compared to 2020 despite the Covid-19 epidemic rapidly

developing Diversification of products is rated as average because Coca-Cola now has too many product lines and customers have too many choices, so they do not want to diversify products at Coca- Cola

-Coca Cola received an overall score of 2,73 which shows that the company's strategies are effective in exploiting opportunities and are always prepared for threats such as Covid-19 The company should continue to promote and improve its strategy and focus more

on how to take advantage of opportunities especially the expansion

of distribution channels

3.2 Internal Factor Evaluation (IFE) Matrix

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score Strengths

Enormous distribution and production facilities 0,09 3 0,27

Heavy advertising and promoting activities 0,07 3 0,21

Weaknesses

The negative image involved in the suspicion of tax

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-Inner Elements (IFE) is a highly rated brand with a weight score of

0.09 because the brand has been around for a long time and is well

known all over the world Besides, Coca-Cola is one of the

companies with large long-term debt, so the weighted score is 0.05

-The ranking in the internal matrix refers to the strength or

weakness of each element in Coca-Cola Vietnam Coca-Cola's brand

is a key strength because Coca-Cola's brand value as of 2020 is $57

billion, demonstrating Coca's popularity and recognition with

customers The negative image related to the tax evasion case is a

major weakness that will worsen the image of Vietnamese Coca-Cola

in the eyes of consumers, leading to an impact on the population

-The company received an overall score of 2.80, which indicates that

the company's strategies have been effective in exploiting

opportunities or defending against threats The company has

focused to develop distribution channels and increase the qualified

workforce Besides, long-term debt is also a big problem for Coca-

Cola Vietnam, so the weighted score is 0,05

1 Cross-selling through stores, supermarkets or online W3O2 Improve the customer service

3 New services S2O3: Enhancing new drinks according to channels

4 Alliances/co- healthy trends

branding S3O4: Strengthen advertising programs

everywhere

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choice (price) - Workplace diversity - The legal framework changes and

2 New entrants - Competent and committed human the introduction of new and stricter

Strengths and Opportunities

- Expanding retail channels: Coca - Cola Vietnam to increase brand awareness should have

expanded many retail channels in remote areas and no longer just focus on big cities

Moreover, due to the prolonged epidemic, Coca Cola Vietnam also uses e-commerce

channels to reach customers

- Nowadays, people are paying more and more attention to their own health, so they often

tend to choose healthy drinks Therefore, coca Vietnam also offers product lines such as Coca

Light and Coca Zero

- To raise brand recognition, Coca Vietnam has used a variety of media to promote its goods,

including social media, television, newspapers, signs, leaflets, catalogs, and brochures

- Management Regulations and Business Environment - Coca-Cola Vietnam operates in a

highly regulated environment As a result, businesses must manage the environment by

cultivating tight ties with lobbying organizations and political networks

- Having a diverse product range allows a company to extend its consumer base while also

compensating for losses in one product category with gains in another In addition, a strong

online presence on numerous social networking sites, active and efficient social media

management, and the creation of strong client connections are all important

- Coca-Cola Vietnam can boost overall company performance by gaining access to lower-

cost raw material sources A company's competitive posture may be improved in a variety of

ways, including decreased prices, increased accessibility, and improved brand image

- Brand Strength and Brand Awareness - Coca Vietnam has some of the most recognized

brands in the domestic market in which it operates Therefore, brand identity plays an

important role in attracting new customers looking for solutions in adjacent industries

-A well-designed and integrated IT infrastructure may boost operational efficiency and

provide insight into current market trends Competent and dedicated human resources may be

a major source of competitive advantage, particularly in service-based businesses

-In a competitive market, high product quality enhances brand loyalty and helps Coca-

success Cola's in Vietnam

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Weakness and Opportunities

- With the market having a lot of new products of competitors, Coca Vietnam also needs to come up with new products to be able to meet the needs of the market

- There are still negative feedbacks about customer care service on Coca Vietnam's websites

So, it can be improved to create positive word of mouth on different social networking sites

- Coca-Cola Vietnam can reduce work stress and boost employee morale to create new products by harnessing the creative thinking ability of the workforce

- Customer dissatisfaction - Although the demand for the product has not decreased, there are still customer complaints that are not effectively resolved It is reflected in the reviews on various online platforms Will cause negative word of mouth about the business and affect business growth

-In a competitive market, high product quality promotes brand loyalty and Coca-performance Cola's in Vietnam

- Poor inventory management: Coca-Cola is a beverage, so it is usually consumed in large quantities in the summer A shortage or too much inventory can lead to shortfalls in cash or insufficient current assets, which negatively affects liquidity position and is bad for the business as a whole

- Environmentalists may criticize the corporation for its inadequate waste management methods and failure to integrate sustainability into its commercial operations

- Coca-decision-making Cola's in Vietnam is excessively slow, resulting in significant delays

in delivering new goods to the market, and poor project management procedures might jeopardize internals

Strengths and Threats

- Coca-Cola Vietnam's access to lower-cost suppliers of raw materials can help Coca-Cola overcome the threat posed by rising inflation

- Coca-Cola's qualified and committed human resources in Vietnam can overcome the labor shortage problem in the market

- Workplace diversity can help an organization see globalization as an opportunity instead of

a threat due to high cross-cultural intelligence

- Increasing market size and changing consumer preferences Over the past decade and a half, the market size has grown at a rapid rate So, Coca Vietnam tried to diversify by using different brands, then adding different features based on customer preferences

- The technological environment is shifting - The rise of Machine Learning and Artificial Intelligence is altering the technological landscape in which Coca Vietnam operates Coca