SWOT Analysis of Coca Cola focuses on (S) Strengths, (W) Weakness, (O) Opportunities, and (T) Threats. Internal Factors Strengths and Weaknesses and External Factors Opportunities and Threats are discussed in this article.
SWOT Analysis is a proven management tool that helps organizations such as Coca Cola to assess the market of Softdrinks and its success against rival companies. Coca Cola has been one of the leading beverage companies.
Coca Cola was originated from Atlanta, Georgia and it is a world-famous beverage manufacturing company. The company has a huge employee base of 62600 employees.
Coca cola is a brand used in homes, restaurants, hotels, shops, offices, etc. You name it and Coca cola would have been heard from the place. Coca cola has a wide arsenal of products. Below is a SWOT Analysis of Coca cola.
Coca cola has a large assortment of merchandise. Let’s discuss the SWOT Analysis of Coca Cola.
Coca Cola SWOT Analysis
Founded: 29th January 1892; 128 years ago in Atlanta, Georgia, U.S.
Founders : John Stith Pemberton
Strengths in the SWOT Analysis of Coca Cola – Coca Cola SWOT Analysis
- Company’s Aim: Company is giving special emphasis on manufacturing, marketing, retailing of soft drinks, fruit juices, and Water.
- Promotions: Aggressive Promotional strategies have made Coca Cola as No.1 Softdrink manufacturers.
- Net Income: Company’s Net Income is 8.70 Billion US Dollars.
- Company valuation – Coca cola, one of the world’s most valuable companies, is valued at around $79.2 billion. This valuation includes the brand value, the numerous factories and assets spread all over the world, and the entire cost and profit of Coca cola ‘s operations. Brand Equity – Interbrand gave the highest brand value award to Coca cola in the year 2011. With its vast global presence and unique brand identity, Coca cola is definitely one of the most preferred brands with the highest mark equity.
- Vast global presence – Coca cola is present in around 200 countries worldwide. Chances are, any country you ‘re heading to will find coca cola in that market. This vast global presence of coca cola also helped build the mammoth brand name.
- Largest market share – The soda category has only 2 Major rivals – Pepsi and Coca cola. Coca cola is the clear winner and hence has the highest market share. Coca Cola ‘s growth drivers include coke, thumbs up, sprite, diet coke , limca, fanta,and maaza amongst all drinks.
- Fantastic marketing tactics-unlike Pepsi , Coca cola still seeks to capture the heart of the people. Coca cola targets people of all ages where Pepsi ‘s goal is constantly changing and targeting young people. The targeting is also done by well-liked celebrities – such as Amitabh Bacchan, Aishwarya Rai, Sachin tendulkar, and Aamir Khan etc.
- Customer Loyalty-Coca cola has a lot of customer loyalty with such strong products. The aforementioned products like Coca cola and Fanta have a huge following of fans. People are going to choose some soft drinks over others. Because of Coca cola’s fine taste it is difficult for the consumer to find alternatives.
- Distribution network – Coca cola has the largest distribution network due to the demand for its goods in the country. At the other hand Coca cola has been able to maintain such a strong market share because of this efficient distribution network.
Weaknesses in the SWOT Analysis of Coca Cola – Coca Cola SWOT Analysis
- Competition with Pepsi – Pepsi for Coca cola is a pain in the flesh. Had it not been for Pepsi, Coca cola would have been the strong market leader. The rivalry is intense in these two brands and we don’t think Pepsi can give up too easily.
- Product diversification is low – Coca cola is missing from that segment, where Pepsi has made a smart move and diversified into the snacks segment with products such as Lays and Kurkure. The segment is also a strong revenue generator for Pepsi and would have been an extra revenue driver for the company if Coca cola had been present in this segment.
- Absence of health drinks – When you watch the television, you ‘d know that today, obesity is a huge issue impacting people. The business environment is changing and people are taking action to make sure they don’t get obese. Carbonated drinks are one of the key causes of fat consumption and Coca cola is the biggest Carbonated Beverage producer. The inference is that beverage consumption in developed countries could fall as people prefer a healthy alternative.
- Water management – Coca cola has been getting flak in the past because of its water control problems. Several groups raised lawsuits in the name of Coca cola due to their vast water consumption even in water-scarce regions. At the same time, people also blamed Coca cola for mixing pesticides to clear contaminants in the water. And for Coca cola water quality needs to be stronger.
Opportunities in the SWOT Analysis of Coca Cola – Coca Cola SWOT Analysis
- Diversification – Diversification is the health and food industry would improve Coca cola ‘s offerings to its customers. This would also ensure that current customers get better profits by cross-selling their goods. The supply chain that distributes its drinks can also sell such snacks, sharing the expense of the supply chain.
- Developing nations – Although developed nations have a high Coca Cola presence, these countries are moving slowly towards healthy beverages. The joy of carbonated beverages and soft drinks is still being brought to developing countries, however. Countries like India, which are developing and having a hot summer, find cold drink consumption nearly doubled during summers. The higher consumption in developing environment can thus be a good opportunity for Coca cola to capitalize on.
- Packaged drinking water-With hygiene being a major factor in water use, Packaged drinking water has made its way into the minds of the people. Coca cola has a presence though Kinley in the packed drinking water segment. Though Kinley ‘s expansion is slow as of now, Kinley has enormous expansion potential. Thus Coca cola as a business will concentrate on Kinley ‘s growth as a brand and take it to the level of confidence that Bisleri has.
- Improvement of the supply chain – Supply chain can be a major cost sinkhole with ever-increasing transport costs. The whole business of Coca Cola is focused on transport and distribution. Improvements in that field will always be necessary. Coca cola will also keep strict control of its supply chain and continue to change to reduce costs.
- Market the Lesser Selling Products – There are many items in Coca Cola’s product range that have not gained recognition on the market. Coca Cola also needs to focus on marketing those products. Coca cola is understood to have made several expenses to launch those products. The promotion and subsequent increase in the selling of such goods would thus boost Coca cola ‘s revenues.
Threats in the SWOT Analysis of Coca Cola – Coca Cola SWOT Analysis
- Sourcing of raw materials – The only danger to coca cola is water. Coca cola ‘s vulnerability was the alleged use of pesticides or massive water use. The challenge here, though, is that water scarcity is on the increase. With the changing climate, and regions of different countries facing water scarcity, somebody might sooner or later raise their fingers at drink companies. Thus, water sourcing is a feature that can crash on Coca cola ‘s head anytime. If water is limited or rationed, Coca cola may suffer a major decline in its revenue and distribution capacity. The same may also have an influence on its arch competitor Pepsi.
- Indirect rivals – coffee chains are on the rise including Starbucks, Costa Coffee, Café Coffee Day, … These chains offer the Coca colas carbonated drinks a healthy competition. They may not be a major coke rivalry but they’re giving their soda business a dent. Similarly, wellness drinks like Real and Tropicana and energy drinks like Red Bull and Gatorade implicitly rob off-market share.
- Local Competitors: Local Softdrink Manufacturer can be a major threat to the company.
- Government Policies: Change in government policies regarding preservatives, Pet Bottles, etc can be a major threat to the company.
- Declining Share Prices can be a major threat.
- People are shifting towards local beverages like Fresh Lime Water and Natural Juices for increasing immunity can also be a big threat.
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