Introduction
Coca-Cola Company SWOT analysis discloses how the organization controls its iconic brands and uses its competitive advantages to be one of the world’s largest beverage manufacturers. In essence, this SWOT analysis identifies vital strengths, weaknesses, opportunities, and threats that directly affect the company.
Strengths
Coca-Cola is one of the most popular brands in the world with a unique brand identity. The most-selling drinks are the company’s soft drinks, and they are loved by consumers ranging from small children to older adults (Panigrahi, 2020). Everybody is aware of this brand, and no single party can happen without participants being served with this drink. Having a solid brand value is the main strength of the company’s products.
Leading market share in the industry
The entity is the largest non-alcoholic beverage company serving close to 1.9 billion across the world every day. The company deals with approximately 500 types of beverages in over 200 countries (Panigrahi, 2020). The advantages the company has over its competitors are strong buyers, enjoys economies of scale, and wide reachability (Amati, 2019).
Customer Loyalty
The brand has emotionally linked with customers, and it connects with happiness to enhance excellent customer loyalty. Ordinarily, customers have a specific preference for particular tastes, and most of them do not have substitutes for this soft drink (Amati, 2019). The brand has more followers than other companies in the beverage industry. Intrinsically, customers continue to purchase Coca-Cola drinks whenever they have parties, theatres among other events.
Strong Distribution Network
Apart from having a solid distribution network, it must be efficient to enable a widespread distribution network. For instance, bottling requires connecting with at least 250 bottling partners worldwide (Panigrahi, 2020). Coca-Cola has the largest distribution network due to the high market demand for its drinks. A considerable market presence is gained due to an effective distribution network.
Weaknesses
The biggest competitor for the company is Pepsi, and without Pepsi, the company would be leading in the beverage industry. The competition has been stiff between Coca-Cola and Pepsi for decades. Both brands are the biggest rivals in the market. Pepsi can’t give up easily, denying Coca-Cola the opportunity to be a clear market leader in the industry.
Product Diversification
Coca-Cola is performing dismally in product diversification as compared to Pepsi. Pepsi launched some snack products, such as Lays and Kurkure, liked by many customers (Amati, 2019). In comparison, Coca-Cola has never diversified by launching such products that would be liked by many people. Thus, this kind of product diversification would make Coca-Cola perform less than Pepsi.
Health Concerns
Coca-Cola is the leading manufacturer of carbonated drinks across the globe. However, these carbonated drinks have been associated with severe health issues like obesity and diabetes (Chu, 2020). Several health experts have prohibited using these drinks, and the brand has become debatable. Moreover, the company has not formulated health solutions or alternatives to this issue, which is the brand’s weak point (Chu, 2020).
Opportunities
Coca-Cola should take this opportunity to introduce new products like Pepsi to expand its food segments in the market. New products might be different from carbonated drinks and would contribute to more revenues. So, the company needs to introduce new products to the extent of its market segment.
Improve on the Supply Chain
Coca-Cola entirely depends on the distribution and transportation of products as the central supply chain system. Transportation costs are due to the constant rise of fuel prices and technicalities in different distribution channels (Panigrahi, 2020). Therefore, the company needs to get other advanced distribution systems for the brand to get more opportunities. The introduction of a new supply chain would ensure that all processes move faster, and there would be a significant impact on the supply chain.
Increase its market presence in developing countries
Many countries across different regions experience the hot climate, and their people would consume more cold drinks. Coca-Cola needs to find such countries and enter into those regions, including African countries and the Middle East (Amati, 2019). Increasing the presence in such places would give the brand more opportunities to do wonders.
Threats
Over the years, the company’s water management has received a lot of criticism. Many environmental and social groups have claimed that the brand is leading water consumption in areas facing water shortage (Chu, 2020). The company is also accused of polluting water by mixing pesticides to do away with toxins. Intrinsically, it is a significant threat to the company and damages the brand’s reputation.
Indirect Competition
There are various types of beverages that are part of the threat to the company. Numerous coffee chains, such as Starbucks, Café Coffee Day, and other chains, are increasing over time (Chu, 2020). These drinks aggressively compete with the brand’s products and somehow reduce sales in both the short and long term. Even though these beverage chains are not depicted as a significant threat to competition, they dent the beverage industry. Indirectly, health drinks, including Real Fresh, Tropicana, and other energy drinks, take away the brand’s market share (Chu, 2020).
Packaging Issues
Renewable and recycling issues are some of the criticisms that the company is facing. There was a damning report in 2017 that the company is reusing its plastic bottles, which is not good. It is a threat to the company’s reputation and it is not suitable for marketing the brand.
Recommendations
Coca-Cola should compete in the new beverage age to advance its booming international and domestic market for noncarbonated drinks. The company should compete outside the sector of carbonated beverage to make it competitive in the beverage industry. Besides, the brand needs to change and adapt to the demands of young consumers and health-conscious customers. The organization needs to position itself to face the challenge of the needs of the new generations of consumers.
The recommendation for the company is to commit to offering industry leadership in the health arena. It should do an excellent job for shoppers and consumers to innovate and create value. Essentially, the beverage industry should create value, and demands for beverage products should suit the population demographics. The young generation and baby boomers shape the industry by demanding energy drinks, while the aging generation focuses on preventing certain health conditions. Coca-Cola should understand this dynamic market needs to get the opportunity like the Gatorade brand. Moreover, Coca-Cola should develop strategies to outsmart and reduce stiff competition from Pepsi by investing heavily in diversification and health-conscious brands (Panigrahi, 2020). Winning this Pepsi competition is vital for the company to maintain its leadership position in the beverage industry.
Conclusion
While the challenges facing Coca-Cola Company are many, it possesses excellent promises for the future. The company’s expansive size, leverage, and financial strengths position it to take advantage of worthy acquisitions. The brand appeal and customer loyalty ensure that the company would still be at the top as the beverage provider. The company’s vast distribution network enables it to have better values and succeed in the burgeoning market going forward.
Coca-Cola Company thrives on but does not make change for decades and serves as the reason for weaknesses and threats. It has to show interest in change to remain competitive in the market regardless of its performance. The company should be ‘boundaryless’ where people can share ideas and insights to advance growth (Panigrahi, 2020). It has to understand the emerging trends in the beverage sector and evaluate options to deal with issues in today’s marketplace. To remain competitive in the industry, there is a need to reduce overdependence on carbonated soft drinks and diversity into noncarbonated soft drinks (Amati, 2019). It is possible to be a total beverage company by addressing opportunities, weaknesses, and threats to move towards a learning entity eventually.
Finally, the most valuable asset owned by the brand is the taste of its beverages advanced by the robust marketing strategies. The company thrives to offer healthy beverages and conserve the environment in the future for the upcoming generations. It has to digitize its whole business enterprise to fit in the dynamic system. Coca-Cola is recommended to deliver healthy products to satisfy the needs of young generations and health-conscious people. Furthermore, the company should introduce snacks and expand various product categories to attract new consumers to the market. The entire Coca-Cola leadership needs to rely on strategic thinking instead of strategic planning to sustain being a true beverage leader in the market.
References
Amati, J. (2019). Strategic performance analysis through Financial Statement and Stock Market Data. The Coca-Cola case.
Chu, B. (2020). Analysis of the Success of Coca-Cola Marketing Strategy. In 2020 2nd International Conference on Economic Management and Cultural Industry (ICEMCI2020) (pp. 96-100). Atlantis Press.
Panigrahi, V. (2020). An Organisation Study On The Coca-cola Company (Doctoral dissertation, CMR Institute of Technology. Bangalore).
