SWOT ANALYSIS OF COCACOLA COMPANY (2014)

SWOT ANALYSIS (2014)

Swot Stands for strength, weakness, opportunities and threats. Swot analysis is an overall

evaluation of a company current state by looking at its strength, weakness, opportunities and

threats.

Swot analysis is considered to be a source of information for strategic planning which aims to

develop full awareness of the company situation that will help in strategic planning and

decision making of the company.

COCACOLA COMPANY PROFILE

The Coca-Cola Company is a global company with some of the world's most widely

recognized brands

It is the largest non alcoholic beverage company in the world with over 550 brand names

offering in over 200countries; they produce everything that is of food and beverages including

tea, orange juice, energy drinks such as monster, sports energy drinks and carbonated drinks

The company was born in Atlanta, Georgia in 1886 by Dr John s Pemberton who is the

inventor of the Coca-Cola beverage. The brand name and logo of the “Coca-cola” was

suggested by Dr Pemberton’s bookkeeper called Frank Robinson.

Some of the Coca-Cola brands are produced and sold worldwide like Sprite and Fanta, while

some brands are produced and sold for specific countries, For example Ambasa is a milk-

based soft drink sold by The Coca-Cola Company in Japan.

Coca-Cola also operates on franchise business in which it produces syrup for beverages that

are sold to its franchisee in different countries that produce Coca-Cola products.

Name Coca-Cola Company

Logo

Industries Served Food and beverages

Target group All age group from kids to adults

Positioning of the product A beverage brand for the entire family

Geographical areas served Worldwide

Headquarters U.S.A, Atlanta , Georgia

Current CEO Muhtar Kent

Revenue $ 48.01 billion (2012)

Profit $ 9.01 billion (2012)

Employees 146,200 (2012)

Estimated consumer serving per day 1.5 billion

Associates 90500 worldwide

Mission To refresh the world, To inspire

moments of optimism.

SOME OF THE COCA-COLA BRANDS

STRENGTHS

Strengths are features of the business that provide an advantage over others in the industry. It

includes organizational capabilities such as processing capabilities, financial resources,

Products and services and customer locality.

Coca-Cola company strength include the following

1. BRAND RECOGNITION AND REPUTATION WORLDWIDE

Coca Cola is an extremely recognizable company. Its products have Global reach with

presence in over 200 countries.

Popularity is one of its superior strengths that are incomparable with other companies. Coca

Cola is known very well worldwide. It's branding is easily recognized. Their products are well

known to major parts of the world and customers accept the products.

Coca-Cola is the leading player in the global beverage industry that is found everywhere in

the world.

2. EXTENSIVE DIVERSIFIED RANGE OF PRODUCTS

Coca-Cola sells and manufactures many different products including carbonated drinks and

energy drinks.

The company produces several products that are known worldwide and some products that are

produced on specific countries, for example Ambasa is a Soft drink sold in Japan and Korea,

Apollinaris is a German naturally sparkling mineral water owned by Coca-Cola,

Bibo is a Fruit flavored juice produced in Turkey, South Africa, Mozambique and Canada.

3. STRONG MARKETING AND ADVERTISEMENT

Coca-Cola has got the best incredible marketing teams that have excellent marketing and

advertisement techniques. They dedicate themselves on each and everything within their

capability and power in order to sell their products.

The major technique they use in their advertisement and marketing techniques is by

associating celebrity and brand amassadors in their advertisement, For example now there is

coke studio which basically advertise cocacola using celebrities in form of songs, In Tanzania

there is Lady Jay dee, Diamond and others in different countries

Other advertisement techniques include

I. T-shirts and hats that people do wear, they normally do get them during promotion of Coca-

Cola

II. Football stadiums of different countries in the world

III. Effective and efficient packaging technique that attracts customers and giving emphasis

on recycling and reusing

IV. Televisions and radios advertisement. For example there was this advertisement of Coca-

Cola on TV which identifies Coca-Cola as a beverage for the whole family; this

advertisement shows the whole family having a feast on a table with Coca-Cola as their drink.

Coca-Cola advertisement can also be found in movies, both international movies and our own

Tanzanian movies.

Also In Dar es salam one of the marketing technique used by Coca-Cola to encourage

consumption of its product is the acquisition of free call time minutes for Vodacom users if a

customer buys a Coca-Cola. When a customer buys the product, he will get the offer by

peeling the plastic of bottle cap, get the numbers, send them to the Vodacom Company and

obtain the minutes.

4 .STRONG MARKET SHARE IN BEVERAGE

Coca-Cola is considered to be the world largest market share that holds the largest beverage

market share in the world which is about 40%. Its major competitor Pepsi covers 31% and

the remaining shares are covered by other companies.

5. CUSTOMER LOYALITY

Another strength which is very important to Coca Cola is customer loyalty. Eighty percent of

their profit comes from 20% of their loyal customers.

Many people/families are extremely loyal to Coca Cola. It would not be rare to constantly

find bottles and cases of a product such as coke in a house. It seems that some people would

drink coke religiously like some people would drink water and milk. This is an improbable

feat. Customers will continually purchase these products, and will probably do so for a very

long time. If two parents were good Coca Cola drinkers, this will be passed down do their

children as they grow loyal to the company. With Coca Cola’s ability to sell their product all

over the world, customers will continue to buy what they know and what they like which are

the Coca Cola products.

6. WELL KNOWN SPONSORS ON IN THE WORLD

Coca-Cola are well known sponsors in the world. They have Long association with

international sports events, sponsorships etc

Coca-Cola have sponsored different Olympics games in different countries

The Coca-Cola Company is one of the longest-standing corporate partners of FIFA, Coca-

Cola is the official sponsor of Fifa World cup

7. STRONG DISTRIBUTION NETWORK

Coca-Cola has Strong and efficient supply chain network, ensuring that all the products are

available even on the most places in the world including Africa, Asia, America and Europe

markets.

It has the largest distribution network because of the demand in the market for its products.

On the other hand, due to this successful distribution network, Coca cola has been able to

command such a high market presence.

WEAKNESS

These are characteristics that place a company at a disadvantage relative to others; they

reduce the capability of the firm to attain its goals and future growth. Weakness include poor

technologies, Poor employee performance and limited financial resources..

Coca cola consist of the following weaknesses

1. ABSENCE IN HEALTH BEVERAGES AND FOCUSING

Coca-Cola does not produce any health beverage; Most of their products are not good to

health and results to obesity since they contain large amount of calories. Societies are now

becoming aware of obesity harmful effects, the business environment is changing and people

are taking measures to ensure that they are not obese, this means the consumption of

beverages in developed countries might go down as people will prefer a healthy alternative,

hence lost of customers to coca-cola company if they don’t produce health beverages.

2. COMPETITION WITH PEPSI THAT OUTSALES COCA-COLA IN SOME AREAS

Pepsi is usually in second to coke in sales. It out sales Coca-cola in some markets areas, for

example in Oman and Saudi Arabia they prefer Pepsi rather than Coca-Cola. Also in India

and Pakistan they prefer Pepsi, Pepsi seems to sponsor most of the cricket teams in India and

Pakistan

3. NEGATIVE PUBLICITY

The presences of traces of pesticides in the cola beverages have caused damage to the brand

image. People have blamed Coca cola for mixing pesticides in the water to clear contaminants

Negative publicity occur in India during September 2007 where Coca-Cola was accused of

selling products with pest side residue. This reduced the Coca-Cola market in India as well as

some places in the world.

Also on water management issues several groups have raised lawsuits in the name of Coca

cola because of their vast consumption of water even in water scarce regions

OPPORTUNITIES

Opportunities refers to chances which arise that can make a company earn greater profit in its

business environment

They occur when an organization can take benefit of the current situation in its environment

to plan and execute strategies that enable it to become more profitable. The following are the

opportunities of the Coca-Cola company.

1. INCREASING SALES OPPORTUNITIES ON DEVELOPING NATIONS

Developing nations such as India and Tanzania do have hot summer. The consumption of cold

drinks in these places during hot summer is almost doubled. Thus the higher consumption in

developing business environment can be a good opportunity for Coca cola to increase its

revenue

2. BOTTLED WATER CONSUMPTION GROWTH

With hygiene becoming a major factor in the consumption of water, packaged drinking water

has found its way into people’s mind. Coca cola has a presence in the packed drinking water

segment though Kinley. Although Kinleys expansion is slow as of now, Kinley has a huge

potential of expansion. Thus Coca cola as a company should focus on the expansion of Kinley

as a brand and take it up to Bisleri ‘s level of trust

3. SUPPLY CHAIN IMPROVEMENTS

Supply chain can be a major cost sink hole with the transportation costs always rising. Coca

cola’s complete business is based on transportation and distribution. There will always be

possible improvements in this area. Thus Coca cola should keep strict watch on its Supply

chain and keep improving to bring the cost down

4. INCREASING DEMAND FOR HEALTHY FOOD AND BEVERAGES

The marketing of healthy beverages and food is widely seen and it is still growing in demand.

The company can try to create and provide more healthy drinks in the market since people in

the world are paying more attention to their health at present. Healthy drink markets will have

great potential in the future. If Coca-Cola can produce healthy beverages and food in the

future, it will obviously boost its revenue

THREATS

Threats are elements in the environment that can cause trouble to the business. Threats

include competitors, changing customer needs, Changes in government regulations and

Changes in economic of the country.

Coca cola does face the following threats.

1. INTENSE COMPETITION

Coca-Cola is getting intensive competition from different manufactures both locally and

internationally. Pepsi is the leading competitor of Coca-Cola; Hence Coca-Cola should have

innovative ideas in order to make its past customers to stay, grab more future customers and

to continue leading the beverage market industry worldwide.

For example In Tanzania Coca-Cola faces local competition from Bakhresa and Mohd

Enterprises Company,

2. CHANGING HEALTH CONSIOUSNESS OF THE SOCIETY

There are changes in consumer preference in the society, Societies focus on drinking health

beverages. People are changing their altitudes and keep their mind on consuming health

drinks in order to avoid diseases such as obesity.

Today, there is a trend of consuming healthy drink and many existing drink companies have

tried to invent a great variety of innovative drinks. If the Coca Cola Company only insists on

providing tasty soft drinks and little healthy drinks, its sales must be affected.

3. WATER SCARCITY

Water is the major threat to Coca cola. The threat here is that water scarcity is on the rise,

with the climate changing, and regions of various countries facing scarcity of water, sooner or

later someone might raise fingers on beverage companies.

If water is limited or rationed, Coca cola can experience a major downfall in their revenue and

capacity of distribution.

All in all this a Swot analysis of the Coca-Cola that identifies some of the strength, weakness

opportunities and threats of the company