Coca Cola Swot Analysis

Coca-Cola is a carbonated soft drinks sold in stores, restaurants, and vending machines throughout the world. It is produced by The Coca-Cola Company of Atlanta, Georgia, and is often referred to simply as Coke. Originally intended as a patent medicine when it was invented in the late 19th century.

Swot Analysis

A SWOT analysis is commonly used in marketing and business in general as a method of identifying opposition for a new venture or strategy. 

Short for Strengths, Weaknesses, Opportunities and Threats, this allows professionals to identify all of the positive and negative elements that may affect any new proposed actions.

Strengths
The best global brand in the world in terms of value. According to Interbrand, The Coca Cola Company is the most valued ($77,839 billion) brand in the world. Coca Cola holds the largest beverage market share in the world (about 40%). Coca Cola’ advertising expenses accounted for more than $3 billion in 2012 and increased firm’s sales and brand recognition. Coca Cola serves more than 200 countries and more than 1.7 billion servings a day. The firm enjoys having one of the most loyal consumer groups.

The Coca Cola Company is the largest beverage producer in the world and exerts significant power over its suppliers to receive the lowest price available from them. Coca Cola is increasingly focusing on CSR (Corporate Social Responsibility ) programs, such as recycling/packaging, energy conservation/climate change, active healthy living, water stewardship and many others, which boosts company’s social image and result in competitive advantage over competitors.

Weakness

The overall consumption of soft drinks is stagnating and Coca Cola Company will find it hard to penetrate to other markets (selling food or snacks) when it will have to sustain current level of growth.Nearly $8 billion of debt acquired from CCE’s acquisition significantly increased Coca Cola's debt level, interest rates and borrowing costs. The firm is often criticized for high water consumption in water scarce regions and using harmful ingredients to produce its drinks. Coca Cola currently sells more than 500 brands but only few of the brands result in more than $1 billion sales. Plus, the firm’s success of introducing new drinks is weak. Many of its introduction result in failures, for example, C2 drink

The business is still focusing on selling Coke, Fanta, Sprite and other carbonated drinks. This strategy works in short term as consumption of carbonated drinks will grow in emerging economies but it will prove weak as the world is fighting obesity and is moving towards consuming healthier food and drinks. Unlike most company’s competitors, Coca Cola is still focusing only on selling beverage, which puts the firm at disadvantage. 







Opportunities

Consumption of bottled water is expected to grow both in US and the rest of the world. Due to many programs to fight obesity, demand for healthy food and beverages has increased drastically. The Coca Cola Company has an opportunity to further expand its product range with drinks that have low amount of sugar and calories. Consumption of soft drinks is still significantly growing in emerging markets, especially BRIC countries, where Coca Cola could increase and maintain its beverages market share. Coca Cola will find it hard to keep current growth levels and will find it hard to penetrate new markets with its existing product portfolio. All this can be done more easily through acquiring other companies.

Threats 

Consumers around the world become more health conscious and reduce their consumption of carbonated drinks, drinks that have large amounts of sugar, calories and fat. This is the most serious threat as Coca Cola is mainly serving carbonated drinks.
Water is becoming scarcer around the world and increases both in cost and criticism for Coca Cola over the large amounts of water used in production.
Some Coca Cola’s carbonated drinks have adverse health consequences. For this reason, many governments consider to pass legislation that requires disclosing such information on product labels. Products containing such information may be perceived negatively and lose its customers. Coca Cola’s gross profit and net profit margin was decreasing over the past few years and may continue to decrease due to higher water and other raw material costs. PepsiCo is fiercely competing with Coca Cola over market share in BRIC countries, especially India. The business significantly relies on the carbonated drinks sales, which is a threat for the Coca Cola as the market of carbonated drinks is not growing or even declining in the world.