Coca-Cola Vietnam: Strategic Analysis via PESTLE, EFE, IFE, SWOT

This report provides a comprehensive analysis of Coca-Cola Vietnam, utilizing PESTLE, EFE, IFE, and SWOT frameworks to evaluate its strategic position. The PESTLE analysis examines the political, economic, social, technological, legal, and environmental factors influencing the company's operations in Vietnam. The report delves into the impact of government policies, economic growth, consumer behavior, technological advancements, and legal regulations. The SWOT analysis identifies Coca-Cola Vietnam's strengths, weaknesses, opportunities, and threats, providing a holistic view of its competitive landscape. The inclusion of EFE and IFE further strengthens the analysis by evaluating external and internal factors. The report highlights key findings, discusses the importance of these analyses, and provides insights into the company's strategic planning and decision-making processes, offering a valuable resource for understanding Coca-Cola Vietnam's market dynamics and future prospects.

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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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chain disruptions. After a 16 per cent gain in third-quarter revenue, the company's shares rose 2.3
per cent to $55.70, attributable to a recovery in demand for its beverages due to the restoration of
public gatherings such as cinemas, parks, and cafes (Kumar, 2021).
Social factors
- The income distribution has a huge impact, indicating Coke's business model and effective
strategic guidelines. A person's financial condition and capacity to spend on shopping determines
their ability to shop, pick, and pay for beverages. People with greater incomes will spend a lot of
money on things they enjoy, and they are typically prepared to spend more on beverages.
People's incomes are low; thus they are often hesitant or scared to spend money on trivial costs
that they believe are unnecessary. Per capita income in metropolitan regions and industrial zones,
where the economy is expanding, will always be higher than in other locations, and they will
always spend a huge amount of money. Coca-Cola users are often dominated by large cities such
as DaNang, HaiPhong, and other major cities in Vietnam. As a result, coca sales in urban areas
are increasing faster than in rural areas.
-Users choose soft drinks and diet bottles over high-volume beverages such as beer or wine.
Non-alcoholic sales have risen since then, indicating that customers' lives are steadily increasing.
The majority of the population is under the age of 25. Many customers are more concerned about
their long-term health. It has become a requirement that manufacturers have to deal with.
Demographics, economic distribution, people's lifestyle, social status... are some other aspects.
Soft drinks are becoming more and more popular among young Vietnamese. Vietnam's Coca-
Cola beverage market is catching up with the rest of the world.
- Demographics play a significant role. The population has an impact on beverage consumption
on the worldwide market. Population nature will fuel a significant increase in the soda market
over the next fifteen years.
Technology factors
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- Research and Development Investment Levels: It is more possible to construct a self-sustaining
ecosystem that supports innovation if there is a high level of investment in technological
development. Coca-Cola Vietnam can take advantage of this position to employ the finest and
brightest in the industry. The Coca-Cola Company constantly monitors and updates the User's
information. This demonstrates concern and after-sales concern for guaranteeing client
happiness. When customers utilize the company's product line, studies are conducted to examine
their habits, income, and return, as well as their requirements, interests, and wellbeing. Coca-
Cola distinguishes itself from others by delivering goods and services that are most appropriate
to its consumers' age and wants. This gives it a significant competitive edge.
Vietnam's investment in innovation and innovation averaged 0.35 percentage from 2002 to 2017,
with a minimum of 0.19 per cent in 2002 and a top of 0.54 per cent in 2017. The most current
statistic is 0.54 per cent, which was recorded in 2017. The global average in 2017, based on 90
countries, was 1.05 per cent. Analyze changes over time using the national comparator, or look
at the global rankings for that indicator. Coca-cola, for example, is continually monitoring and
updating data from its customers. This is done in order to satisfy customers. People's activities,
earnings, and capacity to afford were investigated, as well as their flavour and health needs.
Based on the results of the mass research, Coca-Cola presented goods and facilities that were
most adapted to the customer's lifestyle and needs. Diet Coke is one such instance
(https://www.theglobaleconomy.com/Vietnam/)
-The Society's Level of Acceptance of Technology: Before introducing new goods, Coca-Cola
Vietnam must assess the extent of the social acceptability of technology. Frequently, businesses
join the area without the infrastructure required to sustain the innovation approach.
-In terms of processing and manufacturing, high technology offers a number of benefits. In order
for a company to continue to grow, it must use its resources more and more efficiently. This will
necessitate considerable technological progress and innovation. Furthermore, the Coca-Cola
industry needs greater inventiveness and deeper, more personal collaboration. Coca-system
Cola's will be able to respond to changing market demands by speeding up advancements in
manufacturing and treatment processes such as water, product packaging, and materials. In late
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2007, Coca-Cola launched a series of active activities as part of a system to minimize global
environmental impact. The sustainability of the new global system to conserve water and protect
the climate also was established and approved.
-Using social media: Businesses like Coca-Cola in Vietnam have also begun to utilize social
media for recruitment purposes, reflecting the altering trends in the corporate sector towards
social media. Moreover, Corporations in Vietnam, such as Coca-Cola, have started to use digital
platforms for recruiting, showing a shift in the finance industry toward media platforms.
Environment factors
-Recycling aims to make the most of limited water resources while diminishing waste that is
produced by all industrial production. The Company works with approved reusing organizations
and public authorities to attain this goal. Garbage control includes the disposal of waste
generated during manufacturing, as well as post-consumer items such as bottles and cans... To
handle garbage sensibly and optimally, company will need a complex system with modern
technology and a staff of highly qualified experts to sort and recycle the waste. Remaking not
only reduces costs, but it also benefits the environment, leaving the globe pollution-free. Aside
from these tasty Coca-Cola goods, a sewerage system in the manufacturing process is quite
useful.
- Influence of Climate Change: Coca-Cola Vietnam's business strategy and supply chain will be
affected by climate. If the production process is rigid, for example, it might result in blockages if
supplies from one region of the world are delayed due to unexpected climatic change.
- Energy consumption: Coca-Cola encourages low-carbon commodities, which means less sugar
in beverages and less environmental damage. Furthermore, the organization implements a zero-
waste policy while supporting and pushing change toward a more sustainable future. To become
more ecologically conscientious, Coca-Cola analyzed their carbon footprint using innovative
digital technology services such as Carbon Trust. Our plastic bottle weight has decreased by 38%
since the end of 1993. Coke's glass bottles are recycled 36 percentage points, while aluminum
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alloys are 50% recycled. In 2011, the company launched fully recyclable bottles and jars
packaging made from renewable plant-based materials, reducing dependence on fossil fuels.
Legal factors
-Product safety: Buyers are most concerned about the safety of items. Coca-Cola is attentive to
the health, quality of its products and services all of the time. Coke's core requirements for
ensuring safety and quality include effective governance and respect to applicable laws and
regulations. Coca-good Cola's name has been preserved and enhanced. It does, however, need
continual efforts to adopt these standards in order to bring the best products and services to
market, especially in such a competitive sector as Vietnam.
- Environmental protection rules: national environmental law is a legal requirement for all
industrial businesses, particularly those in the food and beverage industry. The direct causes of
environmental pollution include raw fuel, chemicals after usage, and black emissions. It is
generated by the manufacturing process of enterprises, which has a significant impact on the
flora and fauna, including soil, water, and air. The state has sanctions in place for treating
hazardous waste and controlling the maximum quantity of hazardous waste that can be dumped
into the environment. Depending on the severity of the waste emitted, if it is so hazardous that
the neighboring water supply becomes contaminated, the corporation will face a severe
punishment, including jail time. This is quickly becoming the most significant barrier for
businesses in general, and for businesses in Vietnam in particular. Some firms have broken this
environmental protection rule, and they have been penalized based on the extent of the harm.
This makes a lot of sense, especially in a country as heavily populated as Vietnam. Coca-Cola is
fully aware of the problem, and they prioritize environmental protection policies. Furthermore,
Coca-Cola is always implementing environmental protection measures in order to win the
confidence and support of its customers.
- Business Laws: Before entering a foreign market, Vietnam Coca-Cola must determine what the
business rules are and how they differ from those in its home market.
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-Competitive law: The state has passed a competition legislation in order to provide a safe and
fair environment for enterprises. Enterprises in the same industry that assure and meet
competition legislation properly will have a solid environment. In Vietnam, however, the contest
is still a stub. The impact of advertising, unfair practices and restrictions on competition...
However, it continues to improve. To solve these problems, the government created a legal
system. It's also true that Coke must adhere to design standards - it's one of the world's largest
protected trademarks, after all. Coca-Cola has effectively designed and produced a 36-page
brochure that must be perfect and engaging to address these issues. Consistent style and bold
colors on text bring the text to life.
Positive and negative of pestle for Coca Vietnam
Factors Positive Negative
Political Government policies Taxation
Economic Consumption patterns
GDP Trend & Rate of
Economic Growth
Inflation rate
Social Demographics
Awareness of health
Demographics
Purchasing behavior
The earning distribution
Technology Research and Development The use of social networks
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Investment Levels
The Society's Level of
Acceptance of Technology
High technology
(any controversy such as tax
evasion can spread quickly,
widely and difficult to
control).
Environmental Energy consumption Garbage control (Recycling)
Legal Competitive law
Product safety
Environmental protection
rules
III.
a. EFE matrix:
Opportunities and Threats
No.
O or T
Factors Weight Ranking Multiply WxR
1
O
Increase in
Consumption
Expenditure
0.08 4 0.32
2
O
Consumers from the
middle class are
becoming more
prevalent
0.06 4 0.24
3
O
In the production and
packaging technique,
0.05 3 0.15
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