The Coca-Cola Controversy in India and Using the PESTLE Tool for Business Expansion

Background on the Coca-Cola controversy in India

In a separate development, sales of Coca-Cola have been hit by suggestions that its drinks produced in India contained higher levels of pesticide residues than was healthy! A large number of bodies have joined in the local community's campaign demanding the plant be closed down and that tests be carried out on Coca-Cola to assess its safety. A lawsuit to this effect was thrown out in August, which prompted Coca-Cola to issue an angry comment claiming that the reports were scurrilous,  unnecessarily scared large numbers of Coca-Cola's customers and put thousands of jobs in its plants throughout India at risk. Coca-Cola claims to employ in excess of 5,000 people in the country, not to mention the many thousands that are linked in some way to the product.

Analysis

There are a number of issues relating to this incident that demonstrate the ethical and moral issues surrounding business.

·Coca-Cola has become one of the most popular drinks in India.

·Coca-Cola's business in India leads to a wide range of direct and indirect employment related to the business as a result of $1 billion (£520 million) worth of investment by the company.

·Coca-Cola claims that its activities are entirely legal.

·What conflicts arise between the responsibilities that Coca-Cola has to the environment and the local community, and to its shareholders, suppliers and employees?

·How much pressure would local council officials be under to give Coca-Cola a clean bill of health, as some would suggest?

Exercise: Organise yourselves into groups of four.

Imagine that you are senior executives of a large, successful, and wealthy international firm selling beer and wines. You want to expand your business even further, and are thinking about investing in the United Kingdom. Use the ‘PESTLE’ tool to think about some of the things that might be important to you: Make a list under these headings.

Tip: You can use your phones/laptops to search for ideas.

Political Factors:

Tip: think about – what’s happening now, and what are the big issues? What kind of government is there? Is it safe/stable?

Economic Factors

Tip: think about – what’s happening now, and is the economy doing well or badly? Do you have a lot of competitors?

Social Factors

Tip: think about – what do you need from the people of this country? Will they be interested in your product?

Technological Factors

Tip: think about – what kind of technology do you need to make, transport, market, & sell your product?

Legal Factors:

Tip: think about – what’s changing in the laws, what are the big issues? What kind of laws are out is there? Is it safe/stable?

Environmental Factors:

Tip: think about – what’s happening within the environment?  What are the pressing environmental issues in the UK now?

Tell the rest of the class a) what are the most important factors under each heading, b) whether there are more threats or more opportunities for your firm in this country, and c) will you invest?