Coca Cola SWOT analysis: what are the strengths, weaknesses, opportunities and threats of one of the biggest companies in the world? Continue reading for more!
If you hear the word Coca-Cola, there is a high chance that almost all members of your household, even those in different age brackets, will recognize the international brand’s name. This is no surprise as about 94% of the world population is aware of the company’s outrageously famous red and white logo.
Coca Cola started as a company that sells carbonated drinks but has since grown to become one of the largest brands in the world, with multiple categories of products being sold under its banner.
Considering Coca Cola is a behemoth of a brand, it can be hard to digest the fact that it is not immune to weaknesses and threats in the corporate world. While Coca Cola clearly has unmatchable strengths and opportunities in the market, there is also a range of weaknesses and threats to the business.
Below is a detailed analysis of this international brand, its position in the market, and what the future holds for it. In this article, we will discuss one of our favorite SWOT analysis examples: Coca Cola.
Coca Cola: an overview
The Coca Cola Company was founded by Dr. John Pemberton in the year 1886. The brand, on average, sells about 10000 drinks each second every day. The company was started in the city of Atlanta. It has a current net income of about $10 billion and annual revenue of about $39 billion.
The company is currently running under the leadership of CEO James Quincy. Coca Cola is one of the most popular non-alcoholic drinks in the world, but the company is no longer limited to selling Coke only. It also sells teas, orange juices, and other soft drinks like Sprite.
Here is a snippet of information that you might not know about Coca Cola. The soft drink initially had some traces of cocaine in the beverage.
Vintage Coca Cola: Delicious and refreshing. Article: Coca Cola SWOT analysis.
Let’s move on to the Coca Cola SWOT analysis.
1. Strengths – where Coca Cola shines bright
The strengths of the company, as defined by our Coca Cola SWOT analysis, are that it soars high and trumps market competition. This is what the competitors should beware of.
1.1. Strong brand equity and high brand valuation
There are few beverage companies that can compare to the wide audience reach and market value of the brand Coca Cola. It takes up 3.2% of the share of the entire beverage market and serves in over 200 countries. The products come in a range of 500 different non-alcoholic drinks.
Coca Cola is also a big sponsor of activities, like sports tournaments and concerts, which increases its popularity among the audience. The company stands as one of the most recognized brands in the world, which gives it a few clear advantages in the market.
Due to high revenue and several sub-companies sharing the cost, Coca Cola can produce and sell its products at a cheap rate. This gives the benefit of economies of scale.
The wide reach also allows the Coca Cola brand to influence buying decisions of the audience. Since it is very popular among people, the brand can also cut better and cheaper deals with suppliers.
There are about 1.9 billion servings of Coca Cola done per day, and this high demand puts the company in the sixth spot of the best brands in the world, just behind Apple, Amazon, Microsoft, Google, and Samsung. Since the brand already has a high value and recognition, it is easier for Coca-Cola to launch new products in the market.
Coca Cola is currently valued at over $74 billion, and it has its assets spread all over the world. This is a very strong market position which gives it a wider choice of options such as in terms of suppliers to work with.
Given all the facts, brand value and identity are certainly the top strengths in Coca Cola SWOT analysis.
1.2. The commanding market share
There are two big brand names that dominate the market when it comes to selling carbonated beverages – Coca Cola and Pepsi. However, Coca Cola takes the lead in the market share of the soft drinks market.
In North America alone, Coca Cola has a 35% market share. Sprite, Fanta, Coke, and a few other products are the leading sellers in the market.
1.3. Customer loyalty due to brand connection
Emotional connection to a brand is the leading cause of customers remaining loyal to the brand, and Coca Cola is a brand people connect to emotionally. It has been in the market for a long time and is a part of almost every happy occasion in people’s lives, which has made customers remain loyal to it for years.
1.4. An efficient distribution system
Coca Cola has one of the most effective and efficient distribution systems of local and global distributors, which is necessary when product is sold in remote areas of the world as well. The company has 225 bottling partners and 900 bottling plants worldwide.
1.5. Acquisition and portfolio changes
The Coca Cola Company is a huge and profitable brand. If it is threatened by too much competition, the company can tackle it by going through tactful acquisitions. Coca Cola acquired Costa Coffee to enter the market of tea and coffee.
It also took over Dasani juice. Through acquisitions and rearrangement of its portfolio, Coca Cola has repositioned itself in the market and reduced competitors from 400 to 200.
2. Weaknesses – where Coca Cola should buckle down
This is the second tier in the Coca Cola SWOT analysis. Weaknesses are the points that need to be worked on, and it is the place where competitors can hit the hardest.
2.1. Health concerns over coke products
Many health experts worldwide have advised against drinking Coke products due to their high sugar content. These beverages have been linked to high cases of diabetes and obesity.
There are about ten teaspoons of sugar in 12 ounces of Coca Cola. The company has some alternatives to diet drinks, but the unhealthy tag has stuck with it.
2.2. Non-sustainable practices
Coca Cola has been named as one of the four biggest corporate contributors to climate change and global warming due to the disposal of plastic bottles.
More than 45% of the products of Coca Cola are packed in PET plastic bottles. Couple this with the high-water content in Coke beverages which contributes to a high wastage of water.
2.3. No diversification in other market segments
Coca Cola hasn’t made many attempts to launch into new market segments. Pepsi, on the other hand, has entered the snack market segment. This gives it leverage over Coca Cola.
2.4. Stiff brand competition
Coca Cola faces severe direct and indirect competition in the beverage market. There is direct competition from other carbonated drink companies as well as indirect competition from hot drinks, like teas and coffees. PepsiCo has remained one of the biggest competitors of Coca Cola.
Coca Cola SWOT analysis: differentiating from competitors
3. Opportunities – expansion and growth possibilities for Coca Cola
This is the part of the Coca Cola SWOT analysis where the company has the potential to grow and become stronger. It provides new avenues for the brand. Every weakness is an opportunity for businesses, so it’s important to identify the opportunities in a SWOT analysis correctly.
3.1. Mark presence in emerging markets
Coca Cola only has 16.8% of its revenue coming from European, Middle Eastern, and African countries. Middle Eastern, Asian, and African countries have some of the hottest regions in the world, and they consume cold drinks.
As such, there is a great opportunity for the brand to expand into these emerging markets.
3.2. Focus on sustainable practices and healthy products
Coca Cola can shift to more sustainable packaging options from single-use plastics. It can also go for reusable plastics or glass bottles, which is a significantly better option. Coca Cola should try to expand more into the healthy beverage market.
It has a few healthy products, such as bottles of drinking water, under its name, but it needs to do more in this sphere.
3.3. Introduce efficient supply chain
A huge part of Coca Cola’s business is dependent on supply chains. However, the current models use traditional logistics practices, which increases costs and is not as efficient.
Coca Cola should focus on bringing new technological tools into the supply chain, such as blockchain technology, on making it more efficient.
3.4. Acquisitions in new directions
Coca Cola should direct its resources to gain new startups and SMBs and enter into new, emerging markets through them. It can open up new paths for Coca Cola.
Coca Cola SWOT analysis: taking new directions
4. Threats – factors that can topple over Coca Cola
This part of the Coca Cola SWOT analysis focuses on threats the brand faces from various directions in the market.
4.1. Controversy due to water scarcity
Water is a limited resource, and using it in high quantities for a product that creates health issues has built up a huge controversy around the brand.
4.2. Lawsuits for adding to pollution
Coca Cola has lawsuits against it and a few other companies for causing a large amount of plastic pollution. It is also being sued for misleading the public about the reuse ability of its single-use bottles.
4.3. Increased health consciousness
People are becoming increasingly health-conscious and moving towards nutritious and healthy drinks like fruit water, plain water, and more. This has reduced Coca Cola’s revenues.
Coca Cola SWOT analysis: consumers are becoming more conscious about their health
4.4. Uncertain economic times
The pandemic and other factors have created uncertain economic times, which has led to a reduction in the revenues for many global brands. As restaurants, theaters, and other places of leisure closed down, demand for the beverage decreased. These uncertainties have also affected supply chains.
Key Takeaways From Coca Cola SWOT Analysis
There are a few major takeaways from the Coca Cola SWOT analysis. The company needs to focus on becoming more pro-health and sustainable. It needs to take responsibility for the environmental havoc it has caused and modify practices to reduce water consumption and plastic bottles.
The Coca-Cola SWOT analysis also shows that the brand needs to find healthy alternatives. There are several opportunities for growth in emerging markets and by expanding into new market segments where competition is less stiff.
By profiting from the latest technology and renewed practices, Coca-Cola can retain its position and become an even stronger brand as the loyal customers want to continue to “Taste The Feeling.”
