PESTLE Analysis of COCA Vietnam

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Table of contents
1. Introduction...............................................................3
2. PESTLE
PESTLE in general ......................................................3,4
PESTLE of COCA Vietnam.............................................4,5,6,7,8,9,10,11
Positive and Negative of Pestle..........................................11,12
3. EFE ...........................................................................13,14
IFE............................................................................14,15,16
4. SWOT ........................................................................16,17,18,19,20,21
5. Justify the important of PESTLE and
SWOT.........................................................................21,22
6. Conclusion.....................................................................22,23
7. References .....................................................................23
8. Slides..............................................................................24
I. Introduction:
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Coca-Cola Vietnam is a famous beverage corporation not only in Vietnam but also around the
world. Coca Vietnam must focus on external variables through PESTLE analysis and direct
influence factors through SWOT analysis to better understand the market and make reasonable
moves to develop the company.
II.
1. PESTEL analysis
PESTLE is an acronym that stands for POLITICAL, ECONOMICAL, SOCIAL,
TECHNOLOGICAL, LEGAL, and ENVIRONMENTAL. It gives a bird's-eye way of seeing the
globe from numerous aspects that one wishes to check and monitor while adopting a certain
concept or plan, allowing the organization to develop to be profitable and powerful.
This helps companies recognize external impacts that can influence internal decision making.
Understanding the potential impact of these external factors on their organization can help their
organization prepare more effectively. The company can develop ways to mitigate risk while
maximizing opportunities.
Political Factors
These factors influenced how much a great nation has on the financial system or a specific
business. Discrimination law, consumer rights, competition legislation, labor law, and
safeguarding law are all included. These characteristics can directly contribute to and impact a
company's operations or objectives. Furthermore, this component is critical in controlling
overhead expenses and consumption for the company's goods or activities. A government, for
example, may impose a new tax or service charge, altering the entire operating income process
of businesses. Tax proposals, monetary policies, tariff barriers, and other political motivations
sanctions during a budgetary year can all have a positive impact on the business environment
(economic environment).
Economic Factors
Growth of the economy, interests, trade, hyperinflation, and hourly wages, poverty wages,
regular hours, jobless (local and national), credit markets and standards of housing are all
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elements to consider. These are characteristics of an economy's success that have a direct impact
on a corporation as well as long-term consequences.
Social Factors
Regional standards and practices, awareness of health, mortality rates, demography, career
orientations, health, and security are all social elements to consider. These characteristics assist
businesses in better planning their data insights and direction.
Technological Factors
Technical variables take into account the rate of technological evolvement, which might have an
impact on the market or sector. This factor could include Automation, Technological growth,
Advancement and Innovation.
Environmental Factors
Environmental variables encompass all aspects of physical surroundings as well as general
wildlife protection regulations. Temperature, recycling techniques, environmental impact,
sewage treatment, and stewardship are all factors to consider.
Legal Factors
The current economic environment can influence an industry's policies and guidelines, as well as
employment, security, and restrictions. Regulations, consumer rights, health and security, global
as well as trade legislation and laws restricting are all factors to consider.
2. PESTEL analysis for Coca VN
Political factors
-Government policies:
In comparison to many of its neighbours, such as Cambodia, Vietnam has a high level of
political stability. The reason for this is that Vietnam's economic policies are still viable because
the country has just one governing coalition. As a result, the company is more likely to build a
solid and long-term growth plan without concern for abrupt political decisions disrupting its
operations.
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-Taxation:
Businesses in Vietnam must pay a variety of taxes, some of which are extremely particular.
Value-added tax and excise duty are two typical levies that businesses must pay to the
government. Taxes have a significant influence on a company's value.
Coca-Cola Vietnam Beverage Co., Ltd. has paid the original tax amount of more than VND 471
billion in which Coca Vietnam company has to pay a value-added tax of 10%, equivalent to 60
billion dongs, besides, corporate income tax is more than 359 billion dongs, tax paid on behalf of
foreign contractors is nearly 52 billion dongs (Nguyen,2020).
Economic factor
The income of Vietnamese customers is projected to decline, particularly during the Covid-19
epidemic, as is their purchasing power, and the structure of the items purchased is still relatively
poor owing to expenditures. Almost, Spending Food or equipment meant to enhance health and
prevent toxicity. However, because some consumers earn a lot of money, they have a lot of
money to spend, resulting in a gap between their income and their expenditures. In addition,
differences in purchasing power are mirrored in social classes. Most people in major towns or
developed cities will have more advantages and income sources than those in the countryside,
plain, or mountainous places.
-Income tax: The influence of federal taxes on a company's profitability is significant. Coca-Cola
Vietnam was punished and had to pay a tax of more than 860 billion VND in 2020. As a result,
the corporation must have suitable procedures in place to lower the amount of tax owed, but they
must be legitimate.
-Consumption patterns:
Vietnam's economy is fast growing. This is advantageous to the firm's management. Coca-Cola
Prime Minister Muhtar Kent noted that this is still an appealing market where newcomer
consumption represents 19 per cent, or almost 20% of the overall world average when unveiling
a commitment of more than US$250 million in Vietnam over the next two years.
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- GDP Trend & Rate of Economic Growth:
The GDP growth rate is steadily increasing, especially as Vietnam becomes more inventive and
rich. However, because inflationary pressure will become more widespread, businesses or
corporations will be held much more accountable. The Coca-Cola Company may take advantage
of this trend by expanding its product line and focusing on new markets. Tracking changes in
how customers spend and buy, as well as new pricing suggestions, is a good place to start.
In the first half of 2021, Vietnam's GDP grew at a steady rate of 5.6 per cent. However, as the
sickness progressed, the situation grew more difficult. As a result, GDP in the third quarter of
2021 is predicted to fall quite severely by 6.1 per cent -6.2 per cent year on year, the worst drop
since Vietnam emerged compiling and reporting monthly basis GDP. This puts enterprises in
Vietnam, large and small, under strain and forces them to confront massive difficulties that have
occurred and will occur in the future. F&B bears a huge effect as one of the most significant
roles in the economy. Customers' spending cuts are concentrated on necessities, and non-
essential foods are gradually reduced. Furthermore, because the disease is complex, tour
operators are no longer as popular as they once were, and the quantity of items sold has
drastically fallen. This poses a danger to the food and beverage business in general, as well as
Coca-Cola Vietnam specifically (P.V,2021)
- Inflation rate:
Vietnam has a remarkably growing annual inflation rate. Although it is also controlled by the
state, its extent has an effect on company performance, especially product prices. Furthermore,
the consumer price index in Vietnam's economy has varied over the years, having an unforeseen
impact on demand for Coca-Cola.
In order for businesses like Coca-Cola to thrive in Vietnam, the market must have a low inflation
rate. A modest rate of inflation would also aid corporate growth while also boosting confidence
in the economy and purchase habits. As a result, the economy will gain traction, and total
discretionary income will increase. On the 27th of October, according to Reuters, Coca-Cola Co
(KO.N) raised its full-year earnings estimates on Thursday, citing increased prices and
consumption for its beverages throughout the world to balance rising costs caused by supply
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