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SWOT Analysis of Coca-Cola Company

Posted by mbalectures | Posted in Principles of Marketing | 165 views | Posted on 30-10-2010

Tagged Under : Coca-Cola swot analysis Coca-Cola Company SWOT Analysis, Coke SWOT, SWOT Analysis of Coca-Cola, SWOT Analysis of
Coca-Cola Company, SWOT Analysis of Coke, SWOT of Coke

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Coca-Cola is the world’s largest soft-drink company which manufactures and markets non-alcoholic beverage concentrates and syrups. Besides the well known
Coca-Cola and Coke brands the company offers more than 500 brands in over 200 countries or territories and serves 1.6 billion servings each day. It is
headquartered in Atlanta, Georgia.

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11/12/2010 MBA Lectures » Blog Archive » SWOT Analysis of Coca-Col…

Strengths

1. Coca-Cola is the world’s most valuable brand and has strong brand loyalty.
2. Wide variety of Coca-Cola products is sold in the restaurants, stores and vending machines over 200 countries.
3. Coke is the dominant market leader of the global soft-drink industry right through the 20th century.
4. Coke primarily competes on advertising and differentiation and has the high market share.
5. Coca-Cola has enormous distribution and production facilities of non-alcoholic beverages and related products.
6. Joint venture with Nestle has resulted in the formation of Beverage Partners Worldwide (BPW).
7. The company has strong financial position and profits throughout the history. Its average ROE (return on equity) for the past five years is 37.08% whereas
its ROC (return on capital) is 33.6%.
8. Coca-Cola has the heavy advertising and promoting activities.
9. More than 70 percent of revenue comes from outside the United States.
10. Enormous number of loyal customer’s and brand equity all over the world.

Weaknesses

1. New coke formula leading to a backlash which results in bad image of coke.
2. The company is facing high burden of external debts for the last few years. In 2002, long-term debt of the company was 2700 million dollars.
3. Product offering is restricted to beverages.
4. In November 2009, because of a dispute over wholesale prices of Coca-Cola goods, Costco blocked the replenishment of their shelves with Diet Coke
and coke.
5. Coca-Cola has discontinued its many products after few years of launching such as New Coke, Coca-Cola with Lemon, Coca-Cola with Lime, Coca-
Cola Blak, etc. which result in bad image of the brand.
6. Coke has taken less aggressive market standing in today’s changing economic surroundings.
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Opportunities

1. Bottled water drinking has increased 11 percent.

2. Consumers prefer to drink new smaller beverage products that are not sold on a mass scale.
3. One of the biggest opportunities is to diversify into the non-carbonated drinks such as coffee, water, juices, etc.
4. The company can offer the hygienic products due to increasing number of health conscious consumers.
5. European market and China show marvelous potential for growth.
6. The economic conditions are improving globally after economic meltdown 2007-10.
7. Diversify into complementary food products which will ultimately increase the drink consumption.
8. Coca cola should increase its partnership with fast food chains.

Threats

1. There is Low growth rate in the carbonated drinks market in North America which is the main market of Coca-Cola.
2. There is a problem with Coke to raise its prices by an edge that would permit it to keep pace with inflation.
3. Huge numbers of substitutes such as beer, water, juices, coffee etc are accessible to the end consumers.
4. Pepsi is the strong competitor which competes with advertising and differentiation.
5. Since the consumer lifestyle is changing rapidly and they are becoming more health conscious therefore there demand is shifting towards non-carbonated
products such as juices, tea and bottled drinks.
6. Many smaller players are furious competitors which are also creating the competition severe.
7. The prices of raw material such as sugar and metals used in manufacturing of cans are increasing rapidly.
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8. Carbonated drink revenues have been decreasing due to association of sugar to obesity and lofty fructose lump syrup to heart disease.
9. Pepsi has more diversified selling beverage and food products as compared to the Coca Cola.
10. Coca Cola is facing various regulations in respective countries around the globe.

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