SWORT ANALYSIS -1-

A case study analysis for Coca Cola Company

Name of the student

University affiliation

Name of the instructor

Course

Date of Submission

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TABLE OF CONTENT

EXECUTIVE SUMMARY .................................................................................................................................. 3

Introduction

................................................................................................................................................... 4

Strengths

....................................................................................................................................................... 4

A Large financial base

...................................................................................................................... 4

Strong and diversified brand portfolio

.............................................................................................. 4

Strong promotion and advertising techniques

................................................................................... 5

Strong patent portfolio

...................................................................................................................... 5

Weaknesses

................................................................................................................................................... 5

Relying on carbonated drinks that lack diet value

............................................................................ 5

Foreign materials in the drinks

.......................................................................................................... 6

Undiversified product portfolio to non-beverages

............................................................................ 6

A large product portfolio of carbonated drinks that leads to brand dilution

..................................... 6

Opportunities

................................................................................................................................................. 7

Reluctance of competitors to participate in sponsorship of environmental conservation strategies

. 7

Most new companies do not survive for long in the industry

........................................................... 7

Availability of new inventory management technology

................................................................... 7

Threats

.......................................................................................................................................................... 8

Rising pay levels

............................................................................................................................... 8

Lawsuits against the company

.......................................................................................................... 8

Tough laws on conservations

............................................................................................................ 8

Unstable exchange rates

.................................................................................................................... 8

Cost and scarcity of materials

........................................................................................................... 9

SWOT analysis summary ............................................................................................................................... 9

Recommendations ...................................................................................................................................... 10

Conclusions ................................................................................................................................................. 10

REFERENCES ................................................................................................................................................ 11

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EXECUTIVE SUMMARY

The Coca Cola Company was established by in 1886 by John Smith Pemberton who was

a pharmacist. The company began as an accidental discovery of syrup, a caramel-colored liquid

and mixed with carbonated water by Pemberton which he sold at five cents a glass. The company

has now transformed to being among the leading manufacturers of non-alcoholic beverages and

has more than five hundred product brands. The efficient management of the company has lead

to its globalization in more than 200 countries.

The purpose and object of this paper is to determine the potential of the company in

remaining significant in the beverage industry by carrying out a SWOT analysis which basically

as the acronym suggests aims at establishing the strength, weakness, opportunities ant threats

that affect the business.

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Introduction

SWOT is an acronym of the analysis of Strengths, Weakness, Opportunities and Threats

facing a company in order to deduce its significance within the industry it operates. Whereas the

strengths and weaknesses fall under the internal or micro environments which are in the direct

control of the company, opportunities and threats fall under external or macro environments

which are beyond the control of the company . The following is a SWOT analysis

for Coca Cola Company.

Strengths

A Large financial base

It has been established that since 2007 Coca Cola Company has been growing at a rate of

5-7% annually (Sander & Bobo, 2011). If this is the case, it means that the company has a strong

financial ability to offer competitive pay to the staff, cater for aggressive marketing, timely

payment for suppliers and cater for the general operations of the company. With these factors

combined, the company can acquire a competitive advantage over the competitors by producing

more that will attract a larger market share.

Strong and diversified brand portfolio

The company has more than 500 branded products, especially carbonated drinks, which

have been able to command loyalty among customers worldwide. This means that at least one of

their products is known worldwide (Bouchoux, 2001), and the company will, therefore, gain a

competitive advantage by commanding share of the heart and the share of the mind of many

users of their products.

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Strong promotion and advertising techniques

The company has one of the best marketing strategies in the world which it has done

through strategies like sponsoring global events such as Olympics, creating flavored sports

drinks, running mega-million dollars promotions that aim at enlightening both new, potential as

well as existing customers on price changes of their products and new packaging. Additional to

these schemes, the company also rewards loyal customers with free branded items like T-shirts

and umbrellas. These excellent marketing strategies have facilitated its undisputed entry into

virgin markets by the competitors and hence acquiring a competitive advantage (Mooij, 2010).

Strong patent portfolio

For any company to survive in the market it must be able to legally protect its intangible

abilities (Bouchoux, 2001). To enable its customers distinguish its products from those of the

competitors, the Coca Cola Company owns the sole rights to produce “contour” bottle design

which has a unique shape. The Company also has patented their logo design and trademarks. The

patenting of the coca cola making formula also ensures that the rival companies cannot use it in

case it is leaked by some employees.

Weaknesses

Relying on carbonated drinks that lack diet value

Though a product could be performing well in the mother country, it is not a guarantee

that the same will replicate in foreign countries due to global variation of preferences and also

competition from local products (Czinkota & Ronkainen, 2007). The Coca Cola Company seems

to be mostly focused on the production of carbonated drinks whereas consu ers’ preference is

shifting towards dietary soft drinks which are considered more nutritional. This weakness can

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result to competitors taking the opportunity thus acquiring a competitive advantage over the

Company.

Of late, negative publicity has targeted Coca Cola with accusation of using potentially

health-hazard ingredients such as carbon and acid sugars on making drinks thus promoting

diabetes and obesity.

Foreign materials in the drinks

Recent discovery of foreign materials in their drinks by consumers has also dented their

image with the public wondering whether the company actually monitors health and safety

precautions during the production the drinks (Nowak, 2010). This affects demand for products

by consumers in such situations, of which the competitors can take advantage.

Undiversified product portfolio to non-beverages

Whereas other competitors such as the Pepsi Co. Inc have diversified their products to

include consumable food and snacks, Coca Cola Company relies on manufacturing and selling

beverages which is declining demand in the market (Pride & Ferrell, 2012). This means that in

case of a beverage set back in the market, Coca Cola might have to close whereas Pepsi Co. Inc

will be a bit safer.

A large product portfolio of carbonated drinks that leads to brand dilution

Provision of many carbonated products in the market has made the company unable to give

proper individual attention of consumer needs in the market (Lamb, 2009). These have resulted

to some products performing poorer than others. This resulted to the Company spending a lot of

resources on production of products without any positive response from the market.

SWORT ANALYSIS -7-

Opportunities

Reluctance of competitors to participate in sponsorship of environmental

conservation strategies

Most companies that produce drinks have not actively participated in the sponsorship of

social activities. It has been established that those companies that give back to the society in

terms of scholarships, environmental conservation and others, perform better due to the creation

of a positive image about the company (Crowther & Capaldi, 2008). Coca Cola can seize this

opportunity and gain a competitive advantage of good company image over the competitors

Most new companies do not survive for long in the industry

Most of the new companies that venture into the industry do not survive for long. This is partly

due to the reason that the cost of production of packaging bottles is expensive that actual

production of drinks (Bachmeier, 2009). Therefore, new companies find it difficult to remain in

operation after most of their bottles get broken by consumer and never returned for re-bottling.

With the large financial base that Coca Cola has, it can seize the opportunity to take over such

small firms that fail to thrive.

Availability of new inventory management technology

The main problem for a multinational company and for companies with dense logistics of

supply is to manage the inventories for all their branches. As a result, laundering and

embezzlements have been rampant and undetectable. However with technological advancement,

it has become very easy to manage large inventories thus maximizing profits through reduced

frauds. Coca Cola can seize this opportunity to acquire the new and expensive technology at a

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faster pace than the competitors. This way, the company will always have a competitive

advantage over its competitors.

Threats

Rising pay levels

With rising economic hardships, employees are demanding for better pays, shorter

working hours and fit working conditions which increases costs of production thus shrinking

profit margins (McEachern, 2002). This has affected the company which has a large workforce.

Lawsuits against the company

An increasing number of health specialists and human rights activists are seeking legal

intervention on the Co pany’s carbonated and sugary beverages claiming they are contributing

to health hazards such as diabetes and obesity (Pride, Hughes, & Kapoor, 2008.).

Tough laws on conservations

The Company uses plastic bottles for packaging which is becoming an environmental

concern. These and emissions from the company may results to heavy fines being imposed on

them to counteract the behavior in the near future (William, James, & Jack, 2008).

Unstable exchange rates

Since most of the subsidiary companies of Coca Cola are based outside USA, fluctuations

of strength of the dollar compared to other currencies affects the profits share of the domestic

company in cross-border transactions (Chris Phillips, 1994).

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Cost and scarcity of materials

There is rising cost of production due to rising costs of raw materials such as water and

sugar, which are key ingredients in the manufacture of beverages (Hoskisson, 2008). This can be

due to increased demand of the same materials by other companies in similar businesses or

fluctuations in exchange rates. Recently in India, where Coca Cola had a branch, citizens staged

a demonstration complaining that the company was depleting underground water. As a result of

water being a major ingredient in its operation, the Company had to shut down its operations

(William, James, & Jack, 2008).

SWOT analysis summary

Strengths



A Large financial base



Strong and diversified brand portfolio



Strong promotion and advertising

techniques



Strong patent portfolio

Weaknesses



Relying on carbonated drinks that lack

diet value



Foreign materials in the drinks



Undiversified product portfolio to non-

beverages



A large product portfolio of carbonated

drinks that leads to brand dilution

Opportunities



Reluctance of competitors to

participate in sponsorship of

environmental conservation strategies



Most new companies do not survive for

long in the industry



Availability of new inventory

management technology

Threats



Rising pay levels



Lawsuits against the company



Tough laws on conservations



Unstable exchange rates



Cost and scarcity of materials

SWORT ANALYSIS -10-

Recommendations



The Coca Cola Company should diversify its products in the market like the rival Pepsi.

This will enable it to penetrate new markets and also withstand a setback in case the

beverages are not responding in the market positively.



The company should also carry out aggressive marketing and advertisement to raise the

profile of the non-performing products.



The production department should ensure that packaging as well as the mixing of the

ingredients is done at the highest hygiene standard possible. This is because apart from

poor reputation from the customers, it may involve legal expenses in terms of

compensation to the complainants.



The Company must also focus on using more environmental friendly packages and better

energy so as to conserve the environment.



The company must aim at keeping away from legal tussles by complying with the set

regulations since can affect its reputation.

Conclusions

The numerous advertisements and events sponsorship that the company engages justifies

its commitment of ruling the beverage industry. In addition, the patenting of the intellectual

rights has made the company unique in terms of packages and choice of flavors thus enabling

customers to identify its products easily.

SWORT ANALYSIS -11-

REFERENCES

Bachmeier, K. ( 2009).

Analysis of marketing strategies used by PepsiCo based on Ansoff's

theory.

nc en erlag b

The SWOT Analysis.

o erlag nc en erlag

Bouchoux, D. E. ( 2001).

Protecting your company's intellectual property : a practical guide to

trademarks, copyrights, patents & trade secrets.

New York: AMACOM.

Chris Phillips, I. D. (1994).

International Marketing Strategy: Analysis, Development and

Implementation.

Routledge : Routledge .

Crowther, D., & Capaldi, N. (2008).

The Ashgate research companion to corporate social

responsibility.

Aldershot, England ; Burlington, VT : Ashgate.

Hoskisson, R. E. (2008).

Competing for advantage.

Mason, OH: Thomson/South-Western , .

Lamb, C. W. (2009).

MKTG.

Toronto: Nelson Education.

McEachern, W. A. (2002).

Economics : a contemporary introduction.

Mason, OH: South-

Western Cengage Learning.

Mooij, M. K. (2010).

Global marketing and advertising : understanding cultural paradoxes.

Los

Angeles: SAGE.

Nowak, C. (2010).

Managing Diversity.

nc en erlag b

Pride, W. M., & Ferrell, O. C. ( 2012).

Marketing.

Mason, Ohio: South-Western Cengage

Learning.

Sander, P. J., & Bobo, S. (2011).

The 100 best stocks you can buy 2012.

Avon, MA: Adams

Media.

SWORT ANALYSIS -12-

William, P., James, H. R., & Jack, K. (2008). Boston ; New York: Houghton Mifflin Company

cop.

Coco Cola Swot Analysis

Prompt to Clone This Coco Cola Swot Analysis

Apply this example's core structure, strategic pacing, and structural hierarchy directly to your own topic.

What are you generating today?

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