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You should understand the past and plans to learn about Coca-Cola’s SWOT Analysis. Coca-Cola is a multinational beverage corporation in the United States.
Coca-Cola is the market leader in the soft drink industry. It is one of the most recognizable brands in the world. Coca-Cola is available everywhere, be it in your home, in stores, in hotels, or in restaurants.
Coca-Cola is a multinational beverage corporation that manufactures and sells soft drinks, syrups, and other nonalcoholic beverage concentrates. Coca-Cola is now a leading name in the soft drink industry.
Coca-Cola is a company that makes carbonated soft drinks. Since its establishment, Coca-Cola has been a leader in the soft drink industry.
94% of the population in the world recognizes Coca-Cola as a famous and iconic brand due to the iconic red and white Coca-Cola logo.
Reports have stated that more than 10,000 soft drinks are consumed every second of every day in the United States.
Coca-Cola SWOT Analysis
Coca-Cola was founded in Atlanta, Georgia, in 1886. It is no wonder that Coca-Cola became the world’s most famous and well-known brand.
James Quincey is currently the CEO of this multinational corporation. His primary focus is strengthening its business strategies and products.
It has undergone many changes over the years to improve its quality of life and customer service by engaging in experiments and collaborative projects. The company currently employs around 150,000 people worldwide.
Coca-Cola operates through a system of franchise distribution. Keep things consistent, and using modern marketing strategies, are the keys to the company’s success and limelight.
Coca-Cola began as a small company in 1886 and has struggled with different adversity ever since.
Coca-Cola outlines how the company that owns one of the most iconic brands turned around and became the world’s second-largest manufacturer of soft drinks.
This report reveals the company’s strengths, weaknesses, opportunities, and threats. If you want to know the strengths and weaknesses of Coca-Cola, then you’ve come to the right place.
Coca-Cola Strength
A SWOT analysis’s first section examines the organization’s strengths. A company can gain an advantage over its competitors by focusing on these factors. Companies have strengths that give them an edge over their competitors.
The following is an analysis of what contributed to Coca-Cola’s market dominance in the beverage industry.
Strong Brand Name
The brand value increases greatly with a company’s level of brand awareness. The more valuable a brand is, the better it is in the market.
Coca-Cola is the most well-known brand among all corporations. It operates in more than 200 countries where billions of people live.
Brand awareness can help a company introduce new products or sell existing ones more quicker. It also means that it will need to spend less money on advertising.
Coca-Cola is a highly popular brand that has a unique brand identity. Its soft drinks are the most sold in the history of mankind.
The Coca-Cola Company sold its first Coca-Cola drink in 1886. It is the most valuable brand in the world.
Coca-Cola became the world’s largest company producing nonalcoholic beverages in terms of revenue, with the most recognizable brand in the industry.
The Coca-Cola brand is the 4th most valuable brand in the world, worth US$69.733 billion, and Forbes ranks it fifth with US$56.4 billion for both brands.
Coca-Cola sells other recognizable brands, such as Sprite. Sprite is valued at 4.8442 billion dollars and ranks 90th among the most valuable brands in the world.
Large Consumer Base
It is beneficial for any company to have a large customer base. The business is successful because it generates income for the business. A huge customer base helps the company generate huge amounts of revenue and makes it profitable.
Coca-Cola is one of those brands that have a large customer base.
Coca-Cola products are sold in over 200 countries every day. Almost every country consumes over 1.6 billion bottles of its products.
Any company that has a large customer base has a competitive advantage. It will help them maintain their company for many years.
Coca-Cola products are sold in more than 200 countries. It is estimated that people consume around one billion servings of Coke per day.
Coca-Cola has introduced over 500 new products globally. Some of these products are variations of Coca-Cola drinks like Cherry Coca-Cola.
Some of these products are variants of Coca-Cola beverages, such as Coca-Cola Vanilla and Cherry Coca-Cola. The brand’s features are well known because they touch all styles and demographics.
Worldwide Presence
Almost every shop and department store in every country where the Coca-Cola Company is present sells Coca-Cola products.
Coca-Cola is present in more than 200 countries worldwide, providing the company with a huge market share. This has led to the brand being recognized as the world’s largest beverage company.
Coca-Cola products are distributed in more than 200 countries around the world. Due to political sanctions, North Korea and Cuba are not included but are everywhere.
The Coca-Cola Company has used some of the most innovative and localized distribution methods to reach remote areas.
Coca-Cola products are sold in 200 countries daily and serve more than 1.9 billion people.
Huge Advertisement Budget
For 2017, 2016, and 2015, the Coca-Cola Company spent US$3.958 billion, US$4.004 billion, and US$3.976 billion on advertising.
Coca-Cola’s advertisement expenses represented 11.2% of the company’s total revenue in 2017. Coca-Cola Company is the world’s largest advertising company. It spent over $3.6 billion in 2017 alone.
An advertising budget of a large amount gives the company an edge over its competitors, and it’s the same with Coca-Cola.
- The advertising campaign helped Coca-Cola introduce new products.
- Promotes the brand and Increases sales.
- More customers are attracted to Coca-Cola’s brand through advertisement.
- Inform consumers about product features, advantages, and benefits.
- Educating the public about the company’s services and products.
- Advertising helps to attract more customers and encourages them to spend more money on other products. It results in more sales.
The company spent more than $6.2 billion on marketing in 2017, which generated revenue of $35.4 billion. Coca-Cola spends approximately $4.25 billion annually on advertising and marketing. It has one of the largest marketing budgets in the beverage industry.
Coca-Cola Company has the largest advertising budget and strong marketing abilities, enabling it to attract customers and sell more products.
Customer Loyalty and Brand Association
Coca-Cola Company is focused on being strong in leading franchises, bottling, and distribution operations.
Coca-Cola relies upon its bottling partners to pack its syrups and concentrates into bottles and to sell, distribute and market its products.
Most bottling partners have a limited number of distributor licenses for selling and distributing Coca-Cola products in a specific geographic area.
There is no doubt that Coca-Cola is a brand that has an emotional connection with the American people. There is a strong sense of loyalty among Coca-Cola’s customers and its association with happiness.
Coca-Cola products are well known, and customers quickly recognize the taste of each brand. It is difficult for a company such as Coca-Cola to find new products to replace its existing ones.
Coca-Cola and Fanta have a larger fan following than many other beverage companies in the beverage industry.
The Coca-Cola Company provides promotional and marketing services to its bottling partners, which they highly value.
Coca-Cola will invest in one of the bottling partners to take over the business if it is underperforming in a market.
Coca-Cola Company uses its resources and expertise to help the bottling partner perform better before returning the control to the bottling partner.
Coca-Cola Company products are distributed to over 200 countries. Coke’s product sales were nearly 29.2 billion units during 2016, 2017, and 2015, respectively.
The Coca-Cola Company owns a large global distribution network that competes with PepsiCo.
Coca-Cola Weaknesses
There are certain areas where a brand is weak and that it should improve to be able to grow further. Some businesses have weaknesses in areas that they do not have or in which their competitors are better than them.
They are considered to be the critical factors that hinder the growth of any company. Companies constantly strive to improve their weaknesses. This may cause the company to be ruined.
Coca-Cola has weaknesses, but those are all strengths that could be turned into strengths. Here are the weaknesses identified by Coca-Cola in its SWOT Analysis.
Strong Competition with Pepsico
Companies must be cautious about competitors because they could steal their market share. There is a lot of competition in the food and beverage industry.
Pepsi is the largest competitor of Coca-Cola. Pepsi is Coca-Cola’s biggest rival; without it, Coca-Cola would have been the clear market leader in the beverage category.
Coca-Cola has to contend with direct and indirect competitors in the soft drink market, such as hot drinks, bottled water, and other drinks that contain a lot of water.
Coca-Cola also tries hard to counter the aggressive behavior of its biggest competitor, Pepsi-Co. This is what has earned the Coca-Cola Wars its name.
PepsiCo is the second largest company in the beverage industry with a market capitalization of approximately $188.6 billion, while Coca-Cola, the second largest in the beverage industry, has a market capitalization of approximately $185.8 billion.
Coca-Cola has had a big fight with its biggest competitor, Pepsi. Coca-Cola and Pepsi sell similar products, so the two companies constantly go head to head.
Pepsi is a tough competitor for Coca-Cola, so the company must exercise caution. A mistake by Coca-Cola can cause Pepsi to take over all of the market shares that it holds.
Low Product Diversification
PepsiCo has made a smart move by diversifying into the snack segment with products like Lays and Kurkure, but Coca-Cola is missing.
Pepsi is a good revenue driver from selling carbonated soft drinks. Those products would have been a revenue generator for Coca-Cola if they were in that segment.
Coca-Cola earned more than US$35 billion from selling carbonated soft drinks in 2017.
In 2016, carbonated soft drinks (CSD) accounted for 69 percent of Coca-Cola’s unit case sales.
Sixty percent of the company’s unit volume in the United States was caused by sales of carbonated soft drinks, while sales of still drinks caused 38 percent.
Coca-Cola’s sales of carbonated drinks in the United States are declining dramatically.
Consumers are increasingly choosing unsweetened drinks with fewer calories, such as water or coffee, due to studies showing that sugary drinks can harm your health.
The Beverage Marketing Corporation says that demand for carbonated soft drinks (CSD) has decreased for the past 11 years.
In 2006, an average American consumed 50.4 gallons of carbonated soft drinks. This number decreased by 25.6% to 37.5 gallons in 2017.
It is predicted that this number will decline by 25.6% in the coming years, to 37.5 gallons. It is expected that the demand for carbonated soft drinks will continue to decline over the next few years.
It is apparent that many consumers prefer to drink carbonated drinks; therefore Coca Cola is likely to be the company’s biggest weakness. It heavily relies on carbonated soft drinks such as Coke, Diet Coke, and Fanta to generate revenues.
Smaller companies are less likely to depend on carbonated drinks for revenue, so their revenues might also be impacted by changing consumer tastes.
Coca-Cola should stop relying on sparkling beverages and begin marketing still beverages that are more profitable and healthier for consumers.
Environmental Waste
The issue of global warming and climate change has recently gained prominence on a global level. There are governments all over the world that are taking global warming seriously and are taking all possible measures to protect the environment.
Coca-Cola is one of the four largest consumer brands producing half a million tonnes of plastic yearly. Coca-Cola will suffer tremendous reputation damage if it starts to use plastic bottles that are meant to be thrown away.
Coca-Cola is one of the largest companies contributing to global warming and greenhouse gas emissions.
Unethical Business Practices
Coca-Cola has been heavily criticized for its business and environmental practices. Some areas where it has received most of the most criticism are:
- Its products cause obesity and other illnesses.
- The advertising and marketing practices it uses do not gain the trust of its customers.
- It is its policies toward the environment.
- Lobbying and bribing officials at several government offices and health organizations.
- High water usage. Monopolistic business practices.
- Monopolistic business practices.
- A large amount of water usage.
The size and impact of Coca-Cola on the industry draw the most attention when it comes to its business practices.
There has been an improvement in Coca-Cola’s business and environmental practices in the last year, and fewer people are criticizing the company, but many scandals have damaged its reputation in the past.
According to a study conducted in 2015, people should exercise more than cut calories, which the organization criticized. It was hoped that researchers would shift the blame from food and drink to exercise and exercise alone.
If a business is critical of other businesses, it can result in negative publicity, damaging their image and sales.
Opportunities For Coca-Cola
A company has many opportunities if it reaps many benefits. If the companies take advantage of these opportunities immediately, they will benefit greatly.
This article will give us a look at the opportunities ahead for Coca-Cola. Coca-Cola may gain a competitive advantage if it avails of these opportunities.
If Coca-Cola takes advantage of its opportunities, it will be able to grow its market share significantly and become a market leader. Every brand has the potential to increase its business by improving many areas.
Brands have the opportunity to expand geographically, make better products and communicate better. The following are the opportunities for Coca-Cola that have been identified as a result of its SWOT Analysis.
Expansion in Emerging Markets
It is often said that expanding internationally is the best way to grow a business. However, there are many advantages to doing business in developing economies.
Businesses can expand into many developing economies to benefit financially from the current economic situation.
Coca-Cola has experienced a substantial increase in personal income in many countries worldwide. The company experiences growth in regions where it had previously concentrated its expansion efforts. This creates the opportunity for expanding into underexposed markets in emerging economies.
Coca-Cola should expand its operations in emerging economies to gain financial benefits from business in these regions. Many Asian and African countries are thirsty for cold drinks.
Coca-Cola can take advantage of this situation. Coca-Cola can profit from this natural phenomenon by expanding its business in certain emerging markets.
Coca-Cola has a great opportunity to increase its presence in European, Middle Eastern, and African markets.
The Coca-Cola Company generates 16.8 percent of its revenue from Europe, the Middle East, and Africa.
Many hot climate regions require many cold drinks. It Is excellent having a presence in emerging markets, such as the Middle East and Africa. The Middle East and African countries are good examples of this.
Plastic waste reduction
Plastic waste can cause terrible problems for the environment. Coca-Cola needs to reduce its plastic production drastically.
Plastic is not biodegradable and will never decompose in water or soil. People burn plastic to decompose it, which creates more CO2, which causes global warming.
Coca-Cola produces 200,000 plastic bottles every minute; that is a lot of plastic. Coca-Cola continues to be in hot water because it uses plastics in its manufacturing.
If Coca-Cola reduces the amount of plastic it produces, its image will improve, which will help increase the demand for Coca-Cola products.
Businesses across all industries are increasingly recognizing the importance of consuming smartly. Coca-Cola is one of the major contributors to plastic pollution around the world.
Coca-Cola products are still produced using plastic bottles, which is a very common thing to do. This gives Coca-Cola Company a chance to change its image by targeting not only reducing the use of single-use plastics in its products but also reducing the amount of plastic in its supply chains.
Coca-Cola plans to have 100% recycled plastic by the year 2030. However, returning to glass packaging offers a greater opportunity for recycling plastic. 60% of the plastic used by Coca-Cola is recycled.
Introducing new products and reducing sugar content
Coca-Cola can introduce new products in the food and drink category just like Pepsi did. Also, the company can diversify into the market for snacks and healthy drinks.
Coca-Cola can also increase its revenue and help build a good brand image. They can also diversify away from carbonated drinks.
Coca-Cola has been introducing products that reduce the sugar content in its drinks; so far, 28% of its volume sold was of low-calorie beverages.
Coca-Cola now has an alternative product line besides carbonated drinks. Introducing a new product to a market that has been established for beverages costs roughly seventy-seven million dollars.
Carbonated drinks are one product-specific market that can be effectively diversified to reduce the risk of downturns.
The Coca-Cola Company leverages its vast and efficient distribution network to sell similar products to carbonated drinks, such as snack foods.
Launching a new product costs approximately seventy-one million dollars in an industry where many drinks and snacks are sold.
Innovation in Supply Chain
Coca-Cola is searching for ways to become more efficient in its distribution strategies. Global supply chains are developing and innovating continuously.
Coca-Cola is using blockchain technology to produce a supply chain and distribution network, taking advantage of the technological advancements that are taking place.
The use of blockchain technology, along with digital currencies like Ethereum, will help Coca-Cola improve the efficiency of its supply chain and ensure that all parties are held accountable.
The Coca-Cola Company’s supply chain handles more than 160,000 orders per day.
The Coca-Cola business is dependent on its logistics and supply chains. There has been an increase in transport costs and fuel prices for some time now.
Due to this, there may be some interesting opportunities for developing advanced and better distribution systems.
Focus on Health Drinks
The rising trend toward healthy eating and continuing epidemics of obesity and diabetes drive consumers away from sugary drinks and other drinks that consumers perceive to be healthier.
These include beverages formulated from natural ingredients such as tea and coffee. These include healthy drinks people drink from a glass of water or teas and coffees prepared from scratch.
Coca-Cola is entering the market for hot beverages by acquiring Costa Coffee.
Coca-Cola has a presence in the bottled water market through its stake in Dasani. There is further potential for growth in this sector.
The health drinks industry is estimated to have a value of 478 billion US dollars.
Threats For Coca-Cola
Threats are the last section of the SWOT analysis for Coca-Cola. In this section, we will identify some threats to Coca-Cola. Any organization must be able to identify and deal with threats from the outside.
I believe threats are those negative factors that negatively impact a business’s performance. Some factors such as increased competition from other companies, changes to government policies, or the availability of other products or services can be considered threats. Threatening factors can affect other organizations. The threats that Coca-Cola faces are listed below.
Here are some external factors that threaten the Coca-Cola brand.
Lawsuits
If a company is doing bad publicity, it can damage its reputation. They constantly try to avoid controversies and lawsuits because they directly affect their financial position.
Coca-Cola is facing a lawsuit for its use of plastic. The lawsuit also accuses the company of misleading the public about the recycling rate of its bottles.
Coca-Cola and other major beverage manufacturers are being sued for contributing to plastic pollution in the Pacific Ocean.
A California environmental group is suing Coke and three other companies for contributing to plastic pollution.
Coca-Cola is accused of misleading the public about the recycling rate of its single-use plastic bottles.
Reduced Demand for Unhealthy Products
According to the latest annual report of Coca-Cola, obesity is the number one threat that is affecting the company.
There is a growing concern among consumers, public health professionals, and government agencies about the health problems associated with being overweight.
Public health and obesity issues continue to be a threat to the company. Other health issues are being discussed, resulting in increased taxes on sugar-sweetened beverages or other government programs that would reduce consumption or raise revenue.
Obesity concerns have significantly affected certain beverage segments, including carbonated soft drinks, the largest Coca-Cola drink market.
Company revenues decreased by 15.4%, from US$41.863 billion in 2016 to US$35.410 billion in 2017. This decrease is due to the decision by consumers to purchase healthier drinks and consume them.
It is not predicted that the obesity concerns will disappear anytime soon, and The Coca-Cola Company will see its sales decline or only slowly grow because of it.
Water usage controversy
Coca-Cola is often criticized for its water usage. Many environmental groups have claimed Coca-Cola earns enormous money by wasting water in water-limited regions.
Some believe Coca-Cola is polluting water and mixing pesticides with water to remove harmful contaminants.
Coca-Cola will pay more for its primary production input, water, as freshwater resources worldwide become more scarce.
Coca-Cola will need to improve its production process to use less water to produce a liter of Coca-Cola product. A company’s operations will need to reduce water consumption to remain profitable and in operation.
Coca-Cola requires 91 liters of water to make 100 liters of its cola brand.
Direct and Indirect Competition
Coca-Cola’s annual report states that rivalry is one of the most important threats to the company.
The beverage industry is highly competitive, with much smaller, large, and multinational companies competing for market share.
The beverage industry competes on various levels, including prices, advertising, product innovation, production efficiency, packaging, and equipment.
Pepsi Co.’s brand is the largest competitor in the beverage industry, but many other beverage manufacturers compete indirectly with Coca-Cola. They include Starbucks, Nescafé, Nescafé, and others.
Starbucks, Costa Coffee, Tropicana, Lipton Juices, and Nescafe, are indirect competitors of Coca-Cola, which could seriously challenge its market position.
Coca-Cola Company’s primary market is very competitive. Numerous competitors are constantly competing for market share.
Every year, the carbonated soft drink market shrinks significantly. PepsiCo and Coca-Cola are among the major companies competing for a smaller market share.
There is a much faster growth rate for RTD teas, energy drinks, and bottled water than for The Coca-Cola Company’s brands.
Increasing health awareness
The health consciousness of consumers is increasing, and they are avoiding products with unhealthy ingredients more and more.
Customers could switch from Coca-Cola to healthier alternatives offered by competitors, decreasing revenues and profits.
The sales of Coca-Cola’s core volume-based products will decrease if the company doesn’t develop new healthy brands or acquire companies that offer healthier alternatives.
North American drinkers have reduced their carbonated soft drinks by 19% since 2008.
People are becoming more aware of the health issues caused by unhealthy lifestyles. Coca-Cola products contain unhealthy sugar content, which may risk the brand.
Coca-Cola produces many different carbonated drinks under its name, but the main ingredient in all these products is sugar.
Coca-Cola customers will start drinking more water and switching to healthier drinks. But that could result in a loss of sales for the company since its market share will be lost.
Final Words on Coca-Cola SWOT Analysis
Coca-Cola is experiencing a decline in sales and profits due to its reliance on carbonated drinks and the falling demand for sparkling drinks.
The Coca-Cola Company is the largest manufacturer of nonalcoholic beverages. Its brand portfolio is also among the largest in the world.
Coca-Cola Company should continue to improve its beverage portfolio by introducing more healthy drinks to the market.
Investing in beverage bottling and distribution partners would aid the company in reaching more consumers around the world.
Nevertheless, its strengths are no longer enough to help the company overcome its major weakness – relying on carbonated drinks to generate most of its revenue.
The demand for sparkling and sweet drinks is also declining. Moreover, consumers purchase fewer Coca-Cola, Pepsi, and other sparkling beverages from the company. Its product sales are also declining significantly.
Coca-Cola Company did not realize that was a weakness when it was only a threat to the company, and now it needs to improve its strategies quickly to overcome the weakness.
Fewer beverage markets can generate significant revenues and earnings for Coca-Cola, so the company has to diversify into other product markets.
The Coca-Cola Company has great expertise in producing and selling alcohol-based drinks.
The company could use its expertise to enter the snack market. There are many opportunities in the snack market where the company could also benefit from its expertise.
Coca-Cola could easily enter these markets by acquiring new and successful brands.
Other significant threats to Coca-Cola could harm the company in the future. Coca-Cola may also be hit hard by soda taxes, water scarcity, and obesity concerns.
