A popular soft drinking selling company, Coca-Cola is an American company that was formed during the year 1892 and currently involved mainly in production and sale of concentrate and syrup for Coca-Cola. It is a sugared carbonated drink and is a symbol of American tastes. The company also sells various citrus beverages and soft drinks. The brand has about 2800 products and exists in about 200 countries. Coca-Cola is the major producer and distributor of beverages in the world and the biggest corporations in the United States.
The SWOT analysis of Coca-Cola differentiates the brand’s main strengths, weakness, opportunities, and threats that provide a chance for the company to investigate these parameters as what they should modify to scale more. This article presents you with an understanding of where Coca-Cola stands.
Before we begin the discussions on the SWOT analysis of Coca-Cola, just listing out the gist of the background of the company Coca-Cola.
The following points provide you a bit of Coca-Cola’s background:
- The company is known as the name Coca-Cola Company.
- Coca-Cola was established during the year 1892 and it is headquartered in Georgia, United States.
- The company logo is shown in Image 1.
- The company has about 61,800 employees working for them.
- The main aim of the company is to make use of the company’s assets in the form of financial strength, brands, unparalleled distribution system, global reach, and strong commitment for the associates and management. The brand strives to be more competitive and to increase the growth in a way that would create value for the company’s shareowners.
The SWOT analysis of Coca-Cola talks about the strengths that the company has and its ways to avoid its weakness. It talks about the foreseeable threat that the business can come across and its various ways to get the maximum benefit from the opportunities in the international market. To make sure that Coca-Cola meets the long-term competitive advantage it must address the various concerns highlighted in the SWOT analysis of Coca-Cola.
This SWOT analysis of Coca-Cola highlights the point to have a strong brand image
Let us discuss on the SWOT analysis of Coca-Cola.
Strengths in the SWOT Analysis of Coca-Cola
- Strong Brand Value – Coca-Cola is the top popular brand that has a unique brand identity. The soft drinks are the most-selling drinks in the era. Every person right from small children to elders love this drink and is aware of this brand. No party completes without serving this drink. This is the main strength of the brand. It has a strong brand value across the globe.
- Leading Market Among the Beverage Industry – Being the largest beverage company that is non-alcoholic, the company serves about 1.9 billion of the total 60 billion servings of the beverage of many other types taken across the world per day. The Coca-Cola Company owns, produces, distributes, and sells about 500 types of beverage brands in about 200 countries. It’s few advantages over its competitors are:
- Economies of scale
- Market power over its competitors
- Strong buyers
- Wide reachability
- Global Reach – The brand is sold in about 200 countries and per day having about nine million servings of the brand’s products. The company has presented more than 500 new products worldwide. The products have a few variations of the Coca-Cola beverage like the following:
- Coca-Cola Vanilla
- Cherry Coca-Cola
- The Coca-Cola brand is known to touch every demography and lifestyle.
- Great Customer Loyalty and Brand Association – This brand connects with customers emotionally. This brand is linked with happiness and has strong customer loyalty. Customers would love their specific tastes. For the customers, it would be tough to identify a substitute for this drink. This brand has a huge fan following apart from other beverages in the industry. Customers keep purchasing this drink for parties, movie theatres, while at travel, etc.
- Largest Brand Valuation – The brand is listed as the top three Global brands on Interbrand’s annual ranking. It has an estimated brand value of about $79.96 billion and has been able to retain its brand’s top value for many years. Owing to its excellent brand value, this is indeed a great strength to the Coca-Cola brand.
- This Brand has a Leading Market Share – The two main largest manufactures of soft drinks in the world are Coca-Cola and Pepsi and among the two, Coca-Cola ranks the largest market share. The various other beverages like Diet Coke, Coke, Sprite, Limca, and Mazza are the brand’s highest growth drivers.
- Strong Distribution Network – Yet another brand’s strength is its strong distribution network. Coca-Cola is seen as the most efficient and has the most widespread distribution network across the world. For its bottling to be set up, it has connected with about 250 bottling partners across the globe. Its largest distribution network is because of its great demand in the market for its beverages. As such due to its effective distribution network, Coca-Cola has been able to gain a very high market presence.
- Acquisitions – During the year 2016, Coca-Cola has acquired Ades, which is the largest beverage brand that is based out of soy. AdeS is in Latin America. Having acquired this company, Coca-Cola has expanded its beverage portfolio by extending more products.
- Good ROI – Coca-Cola has been comparatively successful for executing new projects and has generated good returns by building many new revenue streams.
- Reliable Suppliers – Coca-Cola has a strong supplier base of raw materials and this has enabled the company and kind of bottlenecks with respect to the supply chain.
- Strong Competitor with Pepsi – The biggest rival for Coca-Cola is Pepsi. If there was no Pepsi, Coca-Cola would have been a clear market leader among the beverages company. Pepsi has been a strong competitor to Coca-Cola. Both the brands compete against each other strongly and it might not be possible that Pepsi would give it up easily.
- Product Diversification – As compared to Pepsi, Coca-Cola product diversification is quite low. Pepsi has launched a few snack items like Kurkure and Lays that are liked by many people. Coca-Cola has not launched any of such products in this segment. These kinds of product diversification would make Pepsi perform more than Coca-Cola.
- Health Concerns – Carbonated drinks are related to health concerns. It has more sugar in the drinks and results in the main health issues like diabetes and obesity. Coca-Cola is the biggest producer of carbonated drinks and these kinds of drinks have been prohibited by many health experts. This becomes a debatable issue for the brand. Moreover, Coca-Cola has not formulated any health solution or substitute for this issue yet. This is a huge weak point for the brand.
- Water Management – The brand has faced a lot of criticism in the past because of water management issues. Many groups have raised complaints in Coca-Cola due to its huge usage of water even in regions where there was a huge scarcity of water. Also, people have blamed Coca-Cola for mixing its product with pesticides in the water to clear out the toxins. This is a huge weak point for the brand and Coca-Cola must work on with its water management techniques.
- Invest more in Technology – Coca-Cola must invest more in new technologies and try to expand more. It must try to place more money in technology that is used to integrate the process across. Currently, the brand’s investment is not at par with the company’s vision.
Opportunities in the SWOT Analysis of Coca-Cola
- Introduce New Products and Expand its Segments – Coca-Cola should see an opportunity for new products in food segments like Pepsi. This would contribute to its revenue and it could also come out from any carbonated drinks. So, Coca-Cola should find out new products and try to the extent its segments wider for gaining more opportunities in the market.
- Increase its presence in Developing Nations – There are many regions where the climate is hot and consume more cold drinks. The brand should find out such regions and gain more entry into these areas. When the presence in such areas is increased, then it would do wonders for the brand. Few examples of such regions are the Middle East, African countries, and many more.
- Improvise on the Supply Chain System –Coca-Cola’s business is wholly dependent on the supply chain and logistics. The prices related to fuel and transportation are on the rise always. Hence, Coca-Cola should find out many advanced and improved distributions systems that could get more opportunities for the brand. When a new supply chain is introduced, the processes would move faster and would have a huge impact on it.
- Packaged Drinking Water – Coca-Cola has many packaged drinking water brands. One such brand is Kinley. This is an ideal expansion point for Coca-Cola. There sees an opportunity to expand and get more drinks in the market that are healthy. This would reduce criticism from people.
- Online Channel – The brand can get more customers from the online channel. Over the past years, the company has invested a huge amount in the online platform. This investment has earned a new sales channel for the brand. Over the next few years, the company can make use of this opportunity to understand their customer better and can serve the customer needs by using analytics.
- Market the Low Selling Products – In the Coca-Cola product portfolio, there are many products that is not accepted in the market. Coca-Cola should focus on those products and market them as well. By marketing it more, the sales would increase thereby helps with its revenue.
Threats in the SWOT Analysis of Coca-Cola
- Water Controversy – There was a lot of criticism over the brand’s water management. There were many environmental and social groups that have mentioned that the Coca-Cola company has a huge water consumption in the areas where there is a shortage of water. Also, there is an allegation against the company that Coca-Cola is polluting water and is mixing with pesticides to clear away toxins. This is a huge threat to the brand and reduces its reputation.
- Packaging Issues – It was reported during the year 2017 that Coca-Cola has been using single-use plastic bottles that are not good. Also, it has faced criticism over its renewable and recycling issues. This threat has damaged the brand’s reputation.
- Indirect Competition – There are many kinds of beverages that are a huge threat to the brand. Various coffee chains like Café Coffee Day, Starbucks, Costa Coffee are increasing. These beverages chains provide a healthy competition to Coca-Cola’s products. Even though it is not seen as a big competitor, it would give a dent to these kinds of beverages industry. Also, health drinks like Tropicana and Real Fresh and many energy drinks steal the market share of Coca-Cola indirectly way.
- Face Lawsuits – The company is likely to face many lawsuits in its various markets. The threat sees when there are many diversified laws and continuous fluctuations with regards to various standards of products in the respective markets.
- Shortage of Skilled Workforce – In a few global markets, there is a shortage of a skilled workforce that is a threat to the brand’s steady growth. This would impact the growth of the brand in such areas thereby increasing the profit of the brand.
The SWOT analysis of Coca-Cola mentioned in this article has highlighted the main strengths of the brand that comes up from its strong brand identity, extended global reach, huge brand value, dominant market share, and acquisitions. The major weakness is seen in its strong competitor Pepsi, less product diversification, and drinks that lead to huge health concerns.
Coca-Cola sees a huge opportunity in case it introduces new products and on segment diversification, increasing its presence in the developing nations, and introducing many packaged drinking water. The threat is seen with its packaging and its indirect competitors.