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

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.
II.

PESTLE 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.

1.2 ECONOMIC factors
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, costbased 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 CocaCola 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 CocaCola 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 CocaCola 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

Economic

Social

Technological

Environmenta
l

POSITIVE
- Government policy: minimizing
administrative procedures and creating a
transparent investment environment.

NEGATIVE
- Foreign trade policy: in the context of covid,

imported raw materials are difficult.
- Tax policy: Coca was fined more than 821
billion in tax
- GDP: is one of the companies that
- High inflation rate in just 5 years increased to
contribute the highest goips to Vietnam's 25%
GDP. Besides, the proportion is about
Fluctuations in interest rates can lead to higher
23.7% of the total investment capital of costs
the whole society, contributing nearly
20% of GDP
- Employment rate: increased when
Coca-Cola opened a factory
- Coca-Cola Vietnam targets potential
customers with the age from 10 to 35
years old.
-Access to more skilled human resources
- The expansion of the Internet and
online business has eliminated many
intermediaries
- Social media to reach out to consumers
- Recycling policy in 2020 Dasani
- The effect of climate change on the consumption
bottled water is a beverage product with of products of each season is different
packaging made from 100% recycled
- Clearly identify areas of concern and obstacles to

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plastic
Legal

III.
III.1

- Ensure the avoidance of cases
of inequality or so-called nontreatment 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.

integrating environmental sustainability into
corporate performance and strategy
- Labor law includes aspects of
minimum working age, minimum salary
and bonus over time

SWOT analysis
External Factor Evaluation (EFE) Matrix

Factors

Weight Rating

Weighted score

Consumption Expenditure Increase

0,08

4

0,32

Advertisement of unpopular products

0,05

2

0,1

Health conscious consumers

0,11

3

0,33

Partnership with food chains

0,07

2

0,14

Diversifying into complementary food products

0,06

2

0,12

Improving economic conditions after economic meltdown

0,08

3

0,24

Widen market

0,07

4

0,28

High technology in production and packaging system

0,07

3

0,21

Vietnamese labor is cheap in large scale

0,09

4

0,36

There is Low growth rate in the carbonated drinks market

0,05

2

0,1

Intensive competition

0,06

3

0,18

Strengths

Weaknesses

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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

not yet diversified products for health

0,06

2

0,12

Total

1

2,73

- 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 CocaCola.
-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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Factors

Weight Rating Weighted
score

Strengths

Strong brand

0,13

4

0,52

Broad variety of products

0,08

4

0,32

Strong financial position and profits

0,09

4

0,36

Enormous distribution and production facilities

0,09

3

0,27

Competent workforce

0,12

3

0,36

Heavy advertising and promoting activities

0,07

3

0,21

Geographical Expansion

0,08

3

0,24

Dispute above wholesale prices

0,06

1

0,06

Bigger long-term debt

0,05

2

0,1

Some products have low sales

0,06

2

0,12

The negative image involved in the suspicion of tax
evasion

0,1

1

0,1

Similar taste

0,07

2

0,14

Total

1

Weaknesses

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2,8


-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 CocaCola Vietnam, so the weighted score is 0,05.
3.3 SWOT analysis

Opportunities

1 Cross-selling
2 New markets
3 New services
4 Alliances/cobranding

Strengths
1 Existing brand
2 Existing customer base
3 Existing distribution

Weaknesses
1 Intermediary use
2 Strong seasonal demand
3 Cross-channel support

S1O2: Expanding many retail channels
through stores, supermarkets or online
sales platforms
S2O3: Enhancing new drinks according to
healthy trends
S3O4: Strengthen advertising programs
everywhere

W2O1: New product development
W3O2 Improve the customer service
W1O2: Selling on e-commerce
channels

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Threats
1 Customer
choice (price)
2 New entrants
3 New
competitive
products
4 Channel
conflicts

- Suppliers that offer raw material at a
lower cost
- Workplace diversity
- Competent and committed human
capital

- Inflation increases the cost of
production
- The legal framework changes and
the introduction of new and stricter
regulations
- Threats of potential competitors

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 lowercost 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 Cocasuccess 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

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Vietnam can take use of these advancements to increase efficiency, lower costs, and alter
operations.
- E-commerce and social media-oriented business model, linking with local suppliers and ecommerce platforms such as tiki, shopee, lazada to help Coca Vietnam reduce market entry
costs new and reach customers. It can also lead to crowdsourcing of different services and
consumer-oriented marketing based on data and buying behavior.
-Recycling programs created by Coca-Cola Vietnam such as "recycle me" have created a
beautiful image of environmentally friendly products for customers.
- Vietnam's GDP will increase to 7% in 2020 so increasing disposable income of customers
and increasing number of affluent customers can be seen as an opportunity to introduce more
high-end products. Not only that, customers may start to like new and innovative
products/services due to changing tastes.
Weakness and Threats
- Inflation of money in Vietnam can be a threat to businesses because raising the price of the
product will risk reducing the consumption of the product by consumers.
- Vietnam has now introduced some changes to the legal framework and the introduction of
new and stricter regulations will be more difficult for businesses than before.
- There are not many competitors in the same industry of Coca in Vietnam but they are all
strong and they are always developing in terms of strategy and products, so competitors are
always a big threat to customers. vs Coca-Cola Vietnam
- The changing legal framework and the introduction of new stricter regulations pose a great
threat to Coca-Cola in Vietnam. It makes compliance with legal standards more complex and
challenging for the business organization. The inability to comply with changed regulations
increases the risk of costly lawsuits.
A shortage of skilled workers in the market can make it difficult for an organization to attract
talent with the right skills.

- The increasing number of direct and/or indirect competitors affects the organization's ability
to maintain and expand its customer base.
- A protracted Covid-19 outbreak causes worsening economic conditions, which undermine
corporate profitability and, in turn, customer spending and purchasing power.
- Inflation increases production costs and affects the profit of Coca-Cola Vietnam.
-Coca-Cola has far too many rivals. Coca-key Cola's competitors include Pepsi, Number One,
and others, with several goods such as 7-Up, Mirinda, and others directly competing with
Coca-Cola.
IV.

Evaluation

Because rural regions account for over 70% of the population in Vietnam, it is correct that
Coca-Cola Vietnam offers a distribution channel expansion plan based on the pestle and swot

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variables examined above. As a result, this is always a lucrative market for brands,
particularly Coca-Cola. Rural market, distant places, many fields, residential areas are far
apart, each residential area has 1-2 food shops, 1 market, making it difficult to buy a bottle of
Coca-Cola, thus Coca-Cola has developed a marketing strategy. Coca-Cola is now
establishing sales pages on Facebook, Google, and electronic apps to reach customers over
the internet more flexibly during the Covid-19 period. Besides, it is also possible to see CocaCola ads in all provinces and cities across the country to help people increase their awareness
of coca-cola products. Human resource development is also a right strategy of Coca-Cola
Vietnam to contribute to the expansion of distribution channels. Each year, Coca-Cola invests
more than 1.4 million USD (equivalent to more than 30,000 billion VND) in recruitment and
human resource development activities. Therefore, Coca-Cola is always at the top of the list
of the best places to work in Asia in general and Vietnam in particular. Besides, Coca-Cola

Vietnam can expand many retail channels through stores, supermarkets or online sales
platforms to easily reach more customers in remote areas. Coca-Cola also needs to come up
with new products to suit the taste of other regions because each region will have a different
taste and preference. Moreover, Coca-Cola Vietnam needs to improve customer service when
it comes to customer complaints or questions.
V. Inconclusion
In short, expanding distribution channels is very reasonable to develop Coca-Cola Vietnam
because in remote areas in Vietnam, there are still some places that do not have access to
Coca-Cola products. Besides, the government also supports the expansion of distribution
channels such as faster paperwork and preferential policies. Not only that, the expansion of
distribution channels also helps people in remote areas get jobs and reduce unemployment in
Vietnam.
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En.cocacolavietnam.com. (2021). Coca-Cola Vietnam Rolls Out “Recycle Me” Message On
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PERSON

COCA-COLA VIỆT NAM
Expand distribution channel

NGUYỄN THỊ THU TRANG

F14G-381

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