Industrial and PESTLE Analysis of Coca-Cola Singapore Beverages Pte Ltd


Added on  2019-09-30

46 Pages11401 Words116 Views
Industrial Analysis Coca-Cola Company is the world's largest beverage company. Coca-Cola Singapore BeveragesPte Ltd is a subsidiary of the Coca-Cola Company. They own over 500 nonalcoholic beveragebrands that include soft drinks , water, flavoured waters, juices, ready to drink teas and coffees,sports drinks, dairy and energy drinks. Their top four brands that they own are Coca-Cola, DietCoke, Fanta and Sprite. These branded beverages products are available to consumersworldwide through a network of company owned manufacturing factories and distributionoperations. They also work with independent bottling partners, distributors, Wholesalers andalso retailers. It is considered to be the world’s largest beverage distribution system. Recently,the company has announced to shut down it’s bottling plant at Tuas, Singapore. PESTLE AnalysisBelow shows the external implications on the soft drinks industry in Singapore, Which provides an insight on what Coca Cola can do in their marketing mix to improve their company.Pestle Analysis PoliticalStrong intellectual property protection provide Coca Cola with a conducive business environment to conduct its R&D and production innovation operations. With Singapore's pro-business policy, accountings standards, low tax rate, impartial legal system, good business infrastructure and strategic location it provide Coca Cola with a conducive business environment to set up its Asia Pacific regional headquarter.EconomicalSingapore’s small, trade-dependent economy went through a cyclical downturn and is not expected to pick up significantly in 2017. Water prices to increase by 30% by 1 July 2017Increased cost of natural gas, causing an average 6.1% increase in electricity tariff for 2nd quarter of 2017. Social/CulturalIn Singapore, people tend to focus on their health. People tend to choose drinks with healthier choice label on it. Coca Cola Singapore has product like Coke Zero where they contain zero sugar. It was recently awarded the healthier choice label on it.Coca Cola is also impacted by the additional range of cultural influences such as mediaperceptions of the brand, diet patterns and also the family values. Coca Cola has been diligently following their policy of not targeting their advertising to childrenPeople in Singapore tend to consume more Soft-drinks during Chinese New year, Hari Raya and Deepavali.

TechnologicalCoca Cola possesses top-of-the-line machinery in Britain in order to ensure quick and efficient delivery and high quality product development.Over the last decade, the level of technology has skyrocketed. Currently the best way to advertise and promote a brand is through social media and opinion leaders. Coca cola has taken advantage of this by holding campaigns and promoting it through all forms of social media such as Twitter, Facebook and Instagram. By having their brand logo all over different social media platforms, the Coca Cola brand is able to continue having top-of-the-mind awareness from their target audience.LegalCoca Cola has to abide by the Sales of Food Act in the manufacture, production and distribution of its product. The Act defines food, prohibits the sale of foods which are contaminated, unsafe or unfit for human consumption, as well as pre packed foods which are not properly labelled or labelled in a misleading manner.Competition Commision of Singapore regulate and enforce the Competition Act to ensure dominant firms like Coca Cola do not distort or restrict competition as competition often provide benefits for consumer and economy in general. Singapore had signed double taxation agreements with 67 countries as of December 2015. The agreements will help transnational companies avoid being taxed twice. Moreover, the agreements are likely to smoothen capital flows. EnvironmentalCoca cola system’s environment has certain commitments that are being focused on areas which show significant amount of opportunities that make a difference and they are – water stewardship, sustainable packaging, energy management and climate protection.Coca cola is striving to introduce healthier and better products. This eventually risethe world economy and gear the strength of the dollar in the upcoming years.It can also be possible that company may face water issues and mostly will affect the production plants of the countries. Many aspects has quite an effect on the business of the beverage company. Huge amounts of investment and maintenance may be required due to these environmental factors.Other environmental factors such as climatic conditions can affect the consumptionof the product. For instance, during cold weather most people do not consume cold beverages in order to avoid health problems. However, the people tend to consumea lot of cold beverages during summer. These changes affect the sales of the company.Opportunities (Based on PESTLE)With the strong laws in place in Singapore, Coca-cola is free to innovate safely without the worry of other companies stealing ideas.

A low tax rate allows a higher profit margin.Cultural influences of people consuming more soft drinks during festive season.More citizens are involved with social media, Coca-Cola has more way to advertise and build brand awareness .Technology has advanced, more efficient way is introduced to manufacturing products.Threats (Based on PESTLE)Rising costs as water price increase by 30% and increased cost of natural gas2017 was predicted to have a slow economy in SingaporePeople are looking for healthier choiceStrict laws are enforce in SingaporeSizeThe table below indicated the customers segments that Coca-Cola has potential to do business with, along with name of company and the size of each segment.Size of Market and Segments Size: Number of Businesses in SingaporeCompanies with Largest Market Share in the industry Wholesalers / DistributorsTotal Establishments : 36 Wholesalers/ Distributors(Yellowpages.com.sg, 2017)ItradeRadha ExportsKen Hong Sen Pte LtdOn-Trade Restaurants: 2,660Fast food outlets: 470Food caterers: 407Others (e.g. coffee shops): 3,723http://www.singstat.gov.sg/docs/default-source/default-document-library/statistics/visualising_data/food-and-beverage-services-2015.pdfMcDonald's’ - 16.6% KFC - 5.9% Subway - 2.7% Pizza Hut - 2.7%Crystal Jade - 2.5% http://www.euromonitor.com/consumer-foodservice-in-singapore/reportOff-Trade 940 Unique Business303 Supermarket16 Hypermarkets621 Convenience Stores(DBS VICKERS SECURITIES ,2015)NTUC Fairprice - 50.2%Sheng Shiong - 17.7%(DBS VICKERS SECURITIES, 2015)

Although Coca-Cola has various customer segments, these are the largest customer segment listed at current and in the next 5 years. Projected GrowthBelow indicates the projected growth of each segment as well as the areas which have struggled in revenue over the last 5 years.Projected Growth of Target Market: Evidence:Wholesalers / DistributorsThe growth of Wholesale trade rose by 6.8 by the end of the fourth quarter in 2015, which lead to the extension of growth of 6.5 percent in the previous quarter. For the whole of 2015, the sector expanded by 6.1 per cent, faster than the 2.1 per cent growth in 2014. ("Wholesale And Retail Trade" 2015).Food EstablishmentsDespite being the top in fountain sales in 2016, certain fast food outlets which have exclusive tie-ups with the company did not perform well. Fast food outlets include Long John Silver, Burger King and Yoshinoya. As the company’s brands are packaged as part of their value meals, Coca-cola Singapore’s sales may be affected by their poor performance. The Singapore Restaurant Industry has been growing at a decelerating rate since 2010, with a growth of only 0.9% in 2014, recording a S$5.7 billion market value.The Singaporean Restaurant industry is expected to have a value of S$6.8 billion and a growth of 19.3% between 2014 and 2019. Off-Trade The Singapore Food and Grocery retail market has constant growth in the last 5 years. The growth percentages ranges from 3% to 6.6%. The market value at year 2015 was $16,899.5 MillionIn the Singapore Food and Grocery retail market, drinks are made up of 11.3%

In 2020, the Singaporean Food & Grocery Retail Market is forecast to have a value of $15,859.5 Million, an increase of 29% since 2015(Marketline, 2016)Singapore population is increasing over the years thus the spending for Food and Beverages will increase. The potential for Coca-Cola will be huge if done correctly. Competitors :Yeo Hiap Seng Pte Ltd StrategyYeo’s is using a diversification strategy that operates a network ofmanufacturing facilities in Hong Kong, Singapore, the US, Indonesia,Malaysia, Cambodia and China. The company markets and distributestheir products across Asia and various other countries. (Marketline, 4-10)Value PropositionYeo’s manufactures, sells, distributes and exports beverages, sauces,canned food, Instant noodles and non-alcoholic drinks. Under theirbeverage products, they carry juice drinks, isotonic drinks, energy drinks,soda carbonates, flavored drinks and tea drinks. Yeo’s take carefulmeasure to make sure their products are fresh by using Tetra Brik asepticcontainers using UHT process. Yeo’s understand what the current marketneeds, they launched a product called ‘Chrysanthemum Tea Light whichhas 40% less calories compared to the normal Chrysanthemum Tea Drink.(Marketline, 2016)Distribution PerformanceYeo’s mainly operates through these three geographic segments:Singapore; Malaysia and Indonesia; and other countries. The operations inSingapore are production, distribution, export of beverages, sauces,canned food, provision of vending machine and sale. For Malaysia andIndonesia, their operation is production, market and sale. They have a

headquarter at each country to provide support to each individual markets.This is good as they can communicate with no language barrier.(Marketline, 2016)Marketing Communications PerformanceYeo’s marketing communications channel ranges from Facebook,Instagram, Twitter, Website, Linkedin page, and youtube channel. One oftheir channel that they are most active is the facebook page. They have34,000 followers on facebook. What’s unique about their marketing plan isthat they have various Instagram account to cater to different countries.This is to target different target markets with unique marketing contents.The Youtube channel is used to educate people on how to use theirproducts which I feel it’s very useful as most people buy their cookingproduct but they might not know how to use it. Their social media channelsare also used to run activities to keep their customer engage. They runlucky draws from time to time to get repeat purchases. Some of their socialmedia page are not regularly updated.Opportunities·Yeo’s branding are not as strong as Coca-Cola·Yeo’s social media page are not regularly updated·Yeo’s product are for sale in many country but their marketing campaign in the countries are not active.Threats·Yeo’s has individual headquarters at each country·Yeo’s has a wide geographical presence·Yeo’s has a broad product and brand offeringsPepsiCo StrategyPepsiCo is the second largest player in the global food and beverageindustry. They offer a diversified range of products. The company’s genericcompetitive strategy is strategy is based on the need to address marketpressure from its biggest rivals, including the Coca-Cola company.Ferguson, E. (2017)

Value PropositionIn Singapore, PepsiCo produces, markets and distributes carbonated drinks, iced/Rtd tea drinks and sports drinks. Pepsi-Cola, Evervess, Mug and Mirinda are some of brands under the company’s portfolio. PepsiCo does not innovate locally, all drinks are standardized and sold globally, following the US headquarters. (Marketline, 2016) Distribution PerformancePepsiCo is a US-based food and beverage producer which is split into 6 major divisions across the world. PepsiCo Asia, Middle East and North Africa (AMENA) includes all beverage, snacks and food businesses in the three regions. Leading brands are marketed, sold, and distributed either independently or in conjunction with third parties. (LEONG, 2017)The branded products are being sold to authorized bottlers, independent distributors and retailers. Etika is the exclusive PepsiCo franchise for both Malaysia and Singapore. The group markets and distributes Pepsi’s renowned brands such as Pepsi, Mirinda and 7up. (Pepsico, 2017)Marketing Communications PerformancePepsiCo’s has a wide range of marketing communication tools. Several tools include Facebook, Instagram, official site and other traditional form of advertisement. PepsiCo has an official Facebook page, where more generic contents are posted. Some other countries also have their own Pepsi facebook page (e.g. Pepsi Thai), these pages generates more localized content suited for their own local market. PepsiCo does not have its own Facebook page in Singapore. Pepsi’s YouTube page currently has over 783,000 subscribers, with contents uploaded weekly. The contents are mainly targeted for the Western markets. On top of that, PepsiCo extensively uses media and print advertising to transmit marketing message to the targeted consumers. The ads occasionally contains comparative campaigns aimed at damaging the brand image of Coca-Cola, Pepsi’s main rival. Pepsi does not have a strong marketing presence in Singapore.

(Dudovskiy, 2017)OpportunitiesPepsiCo’s branding are not as strong as Coca-Cola PepsiCo does not have a local social media presence. Pepsi is always known as the second best soft drink while Coke is always the first. PepsiCo does not manufacture its own products in Singapore, it’s franchised by Etika. ThreatsPepsiCo’s marketing tactics are known to be more focused (targeting a younger crowd) compared to Coca-Cola (targeting mass market). PepsiCo has a more flexible franchise network compared to Coca-Cola. PepsiCo has a broad portfolio of products. PokkaStrategyBeing the third largest off-trade (Ready-to-drink) soft drink company in Singapore, Pokka offers a variety ofdifferent drinks in their product range. In order to upkeep their position as a market leader in RTD teas, Pokka strategically installed vending machines at as many locations in Singapore as possible; from shopping centers, offices, schools to factories. This strategy helps in making sure their products are readily accessible to their customers on a daily basis. (Pokka.com.sg, 2017)Value PropositionAs seen in the table below, Pokka leads the market in RTD tea with a whopping 49.3% in value share. Their RTD teas and carrot juice are their best sellers, both of which have remarkably healthy benefits in comparison to their other competitor’s RTD soft drinks. Pokka also prides itself in its real brews and all of their tea varieties are freshly brewed.Distribution PerformanceWith the Fast Moving Consumer Goods business constantly evolving, Pokka are also constantly continuing to invest in warehousing facilities, manpower and new technology to further boost

End of preview

Want to access all the pages? Upload your documents or become a member.

Related Documents
Supply Chain of the Coca Cola Company Assignment

Products of Coca Cola Coca Cola

Identification of the Global Operations Management Processes of Coca Cola UK

Marketing Communication of Coca Cola

Coca Cola: Business Management and Innovation Techniques

Management Economics - Coca Cola