SWOT Analysis of Coca Cola (2019)

Company: The Coca-Cola Company
CEO: James Quincey
Year founded: 1886
Headquarter: Atlanta, USA
Number of Employees (Dec 2018): 62,600
Public or Private: Public
Ticker Symbol: KO
Market Cap (March 2019): $194.156 Billion
Annual Revenue (Dec 2018): $31.85 Billion
Profit |Net income (Dec 2018): $6.43 Billion

Products & Services: Coca-Cola | Diet Coke | Coke Zero | Ciel | Dasani | Del Valle | Fanta | Fair life | Georgia | Gold Peak Tea | Honest Tea | Mello Yello | Minute Maid | Odwalla | Powerade | Simply Beverages | Glaceau Smartwater | Sprite | Suge | Glaceau vitamin water | Zico
Competitors: Pepsi | Dr Pepper Snapple | Mountain Dew | Gatorade | Nestle | Redbull | Parle

Fun Fact:Did you know that Coca-Cola originally contained traces of Cocaine?

An Overview of Coca-Cola

The market leader in the soft drinks industry, Coca-Cola is one of the most renowned brands across the world. Be it your home, office, shops, hotels, bars or restaurants, Coca-Cola is everywhere!

94% of the world’s population recognizes the brand instantly by its red and white Coca-Cola logo as per Business Insider. More than 10,000 soft drinks from Coca-Cola are consumed every second of every day on average.

Coca-Cola was established in 1886 in Atlanta by John Pemberton. Within a few years, Coca-Cola became the most recognized, renowned, and widely distributed brand in the world. Currently, James Quincey is the CEO of this mega corporation.

Read on to discover more about the world’s renowned beverage brand through this Coca Cola SWOT analysis.

SWOT Analysis of Coca-Cola

The following is a SWOT analysis of Coca Cola:

Coca-Cola Strengths – Internal Strategic Factors

1. Strong brand identity – Coca-Cola is a highly popular brand with a unique brand identity. Its soft drinks are the most-selling drinks in history.
2. Highest brand equity – Coca-Cola is undoubtedly one of the most renowned brands with the highest brand equity. It was also awarded ‘highest brand equity award’ in 2011 by Interbrand.
3. Extended global reach – It is sold in more than 200 countries with 9 billion servings per day of Company products. It has introduced more than 500 new products globally. Some of these are variations of Coca-Cola beverage, like Coco Cola Vanilla and Cherry Coca-Cola. Its brands are known to touch every lifestyle and demography.
4. Greatest brand association and customer loyalty – Coca-Cola is considered one of US’s most emotionally-connected brands. This valuable brand is associated with ‘happiness’ and has strong customer loyalty. Customers can quickly identify their particular taste. Finding its substitutes is difficult for them. Moreover, Coca-Cola and Fanta have a huge fan following than other beverage names in the industry.
5. Largest Brand Valuation – Coca-Cola is listed as the 3rd Best Global Brand on Interbrand’s annual ranking. Having an estimated brand value of $79.96 billion, it has retained the top position for many years.
6. Dominant Market Share – Out of Coca-Cola and Pepsi, the only two largest manufacturers of soft drinks in the beverage segment, Coca-Cola has the largest market share. Coke, Sprite, Diet Coke, Fanta, Limca, and Maaza are the highest growth drivers for Coca-Cola.
7. Unparalleled distribution system – Coca-Cola has the most efficient and most extensive distribution network in the world. The company has nearly 250 bottling partners globally.
8. Acquisitions – Coca-Cola acquired AdeS in 2016. AdeS is the largest soy-based beverage brand in Latin America. Through this acquisition, Coca-Cola expanded its ready-to-drink beverage portfolio.

Coca-Cola Weaknesses – Internal Strategic Factors

1. Aggressive competition with Pepsi – Pepsi is the biggest rival of Coca-Cola. Had it not been Pepsi, Coca-Cola would have been the clear market leader in the beverage.
2. Product diversification – Coca-Cola has low product diversification. Where Pepsi has launched many snacks items like Lays and Kurkure, Coca-Cola is lagging in this segment. It gives Pepsi leverage over Coca-Cola.
3. Health concerns –Carbonated drinks are one of the major sources of sugar intake. It results in two grave health issues – obesity and diabetes. Coca-Cola is the biggest manufacturer of carbonated beverages. Many health experts have prohibited the use of these soft drinks. It is a controversial issue for the company. However, Coca-Cola hasn’t devised any health alternative or solution for this problem yet.

Coca-Cola Opportunities – External Strategic Factors

1. Introduce new products and diversify its segments – Coca-Cola has the opportunity to introduce new offerings in health and food segments just like Pepsi. It can contribute to their revenue, and they can branch out from carbonated drinks.
2. Increase presence in developing nations – Many regions with hot climate have the highest consumption for cold drinks. Thus, increasing presence in such locations can be excellent – Middle Eastern and African countries are a good example.
3. Bring advanced supply chain system – Coca Cola’s business is entirely dependent upon logistics and supply chain. Transportation costs and fuel prices are always on the rise. Thus, coming up with some advanced and improved systems for distribution can be an opportunity.
4. Packaged drinking water – Coca-Cola owns several packaged drinking water brands like Kinley. There is a great potential for expansion in this segment for Coca-Cola. There is an opportunity to expand and bring more healthy drinks in the market to avoid people’s criticism.

Coca-Cola Threats – External Strategic Factors

1. Water usage controversy – Coca-Cola has faced many criticisms over its water management issue. Many social and environmental groups have claimed that the company has a vast consumption of water in water-scarce regions. Besides, people have alleged that Coca-Cola is polluting water and mixing pesticides in water to clear contaminants.
2. Packaging controversy – Greenpeace censured Coca-Cola in its published report in 2017 for its use of single-use plastic bottles. It has also been criticized over its recycling and renewable sources.
3. Direct and indirect competition – Although direct competition from Pepsi is clear in the market, however, there are many other companies which are indirectly competing with Coca-Cola. Starbucks, Costa Coffee, Tropicana, Lipton juices, and Nescafe, are the indirect competitors of Coca-Cola which can threaten its market position.

Recommendations

Based on the above SWOT analysis of Coca-Cola, we can conclude that Coca-Cola has a definitive market position in the soda industry. However, it is recommended to bring more innovative changes.

Some recommendations are explained as follows:

1. Stepping into the food market – Coca-Cola needs to introduce new products in snacks and food segments.
2. Focusing on health-related matters – It should bring some solution to address the rising health concerns from social activists.
3. Improving its water management system and dealing with the criticisms from environmental agencies.
4. Expanding into developing countries with humid temperatures – There are many products of Coca-Cola like Fuze Tea, Dasani and Hi-C which aren’t distributed in many developing countries. Coca-Cola needs to increase the distribution of such products.
5. Increasing the distribution of packaged drinking water like Kinley.
6. Working on sustainability and green marketing It can improve its brand image in the market.