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.
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 Billio

 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

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 Purpose, Mission, Vision, Values and Goals
Purpose:
Refresh the world. Make a difference.

Mission:
• To refresh the world in mind, body and spirit
• To inspire moments of optimism and happiness through our brands and actions
• To create value and make a difference.

Vision:
Our vision is to craft the brands and choice of drinks that people love, to refresh them in body &
spirit. And ne in ways that create a more sustainable business and better shared future that
makes a difference in people’s lives, communities and our planet.

Values:
Our shared values guide our actions and describe how we behave in the world:
• Leadership: The courage to shape a better future
• Collaboration: Leverage collective genius
• Integrity: Be real
• Accountability: If it is to be, it's up to me
• Passion: Committed in heart and mind
• Diversity: As inclusive as our brands
• Quality: What we do, we do well

Goals:
We have developed a set of goals, which we will work with our bottlers to deliver:
• People: Inspiring each other to be the best we can be by providing a great place to work
• Portfolio: Offering the world a portfolio of drinks brands that anticipate and satisfy people's
desires and needs
• Partners: Nurturing a winning network of partners and building mutual loyalty

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• Planet: Being a responsible global citizen that makes a difference by helping to build and
support sustainable communities
• Profit: Maximizing long-term return to shareholders, while being mindful of our overall
responsibilities
• Productivity: Being a highly effective, lean and fast-moving organization.

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 Macro and Micro Environmental

SWOT Analysis
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 Interbrain’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.

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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 healthier 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-

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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

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 Porter’s Five Forces Analysis

1. Who Are its Main Rivals?

2. When you think of Coca-Cola and its competitors, Pepsi is probably the first name that
comes to mind, and rightfully so. The two companies have been in competition since the
late 19th century.
3. Their marquee products are very similar in ingredients and taste, though many consumers
swear loyalty to one brand or the other. Both issue their product in a dizzying array of
flavors and variations.
4. There is one notable difference. Pepsi owns Doritos, Lay's, Cheetos, Tostitos,Fritos, and
Lay's, among other food brands. If everybody swore off soft drinks tomorrow, Pepsi
could still thrive selling salty snacks.
5. Coca-Cola, on the other hand, has stuck to beverages. But it owns some beverage brands
that might surprise some of their customers, like Minute Maid, Powerade, Gold Peak Tea,
Dasani, and vitaminwater.
6. Coke is betting that, if people swear off soft drinks, they've still got to drink something.
And its worth noting that their focus is on healthy alternatives.

Other Competitors
7. Coca-Cola also competes directly against the Dr. Pepper Snapple Group. In addition to
those two name brands, the company also owns a surprising range of beverages including
Orangina, RC Cola, Hire's Root Beer, and Nehi.
8. The upshot on the question of its rivals: As consumer tastes and trends shift, Coca-Cola
could be left vulnerable, but the brand has a loyal following and the company has hedged
its bets by moving with the beverage trends. The risk in this area is moderate.

2. How Likely Is a New Entrant to the Industry?

 There are new entrants to the beverage industry all the time, but can they gain a foothold
to equal Coke or Pepsi? The two companies between them have locked down licensing
deals with every fast-food chain. They've gained significant shelf space in every
supermarket and mini-market.
 A new name would have to have a very positive and very viral image or spend a fortune
to create the type of brand recognition Coca-Cola enjoys.
 It seems more likely that either Coke or Pepsi would buy the newcomer and add it to the
mix. But anyone investing in Coca-Cola should at least keep an eye on the latest trends in
non-alcoholic beverages.

3. What Could Buyers Purchase Instead?

 Coca-Cola also has to contend with what buyers could purchase instead of its products.

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  If the rise of Starbucks has shown anything, it is that people really do love a cup of coffee
in the right environment. Coca-Cola has a stake in Green Mountain Coffee Roasters, the
maker of Keurig, possibly for this reason.
 Buyers can also choose beverages such as freshly made smoothies or fresh-pressed juices
instead of Coca-Cola's bottled beverages. As more people become
 health-conscious, the threat that buyers will substitute a different drink for Coca-Cola
looms as a real possibility.

4) What Bargaining Power Do Buyers Have?

 When it comes to the bottled beverages market, buyers have a fair amount of bargaining
power, and this affects Coca-Cola's bottom line directly.
 Coca-Cola does not sell directly to its end users. It mostly deals with distribution
companies that directly service fast-food chains, vending machine companies, college
campuses, and supermarkets.
 Demand leads the purchases, but Coca-Cola also has to keep an eye on that end price.
Ultimately, that means it has to sell its products to distribution networks at prices low
enough that they can sell to the end-user at a competitive price.
 Moreover, Coca-Cola's pricing has to stay somewhat consistent with each outlet.
McDonald's does not sell a Coke for 99 cents one day and $1.03 the next. As Coca-Cola's
cost of goods sold (COGS) fluctuates due to materials, transportation, or manpower,
either the beverage company or its distributors have to absorb the loss.
 This is a real risk, but it is one that every other entrant in the beverage mass market
would face

5) What Bargaining Power Do Suppliers Have?

 This is the final competitive force to consider: Coca-Cola’s suppliers. As big as the
company is, and as many long-term contracts as it must have with suppliers, the cost of
its ingredients is not entirely within the company's power.
 In particular, sugar is a commodity and its price varies over time. One season's poor
harvest could affect sugar prices and increase Coca-Cola's raw materials costs.
 Thanks to contracts the company likely has in place, the effect would be minimal unless
those poor harvest conditions lasted for several years

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 Example of Porter’s Five Forces Analysis

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Internal Capabilities and Strengths

Capabilities of Coca-Cola:

 First, the strong financial resources of Coca-Cola are mentioned. With such a financial
strength, they can proceed to develop the market on a large scale in many countries. The
money’s used to build infrastructure, staff training and development of the distribution
network. Even they can fully bear the losses for a long time to invest into the potential
market. More particularly, Coca-Cola had lost 10 consecutive years in Vietnam with a
total of about 200 million States. However, they have continued to announce further $
300 million investments in Vietnam for three years from 2013 to 2015. Furthermore,
they can use the financial resources to implement various advertising strategies by ads
on television, newspapers, magazines and posters. In fact, Coca-Cola advertising budget
in 2011 reach to $ 3.2 billion.
 In addition, Coca-Cola owns an efficient organizational capability. They can run more
than 100 thousand people and offers the accumulation of more than 500 brands of soft
drinks in nearly 200 countries around the world. Their products appear almost in
restaurants, supermarkets, cinemas, school or even vending machines on the road. Coca-
Cola always knows how to shorten the distance of the customer with their products.
 Coca-Cola is one of the three most valuable brand in the world. Brand reputation is
being established after more than one century. It can be considering as core competency
of Coca-Cola.
 They have a lot of loyal customers. Thus they can earn stable profits from these loyal
customers to develop company. Besides brand name awareness of Coca-Cola is much
higher than other competitors. Other customers tend to choose familiar products.
Therefore, Coca-Cola simply based on their reputation was able to create a clear
competitive advantage.
 Vertical scope is an essential segment of Coca-Cola’s methodology. Coca-Cola’s
fundamental target is to create value and increase organic growth of the organization
through better control over its operations. Coca-Cola’s central capabilities that
effectively push the firm forward are established in organizational strategy, quality,
innovation, and prevalent marketing skills. To accomplish this objective Coca-Cola
utilizes their prevalent promoting and marketing skills, consumer loyalty, and capacity
to effectively build external partnerships. Likewise, marking and client dependability
have been driving variables of Coca-Cola’s prosperity, be that as it may, CEO Quincey,
has turned the organizations strategy to concentrate more on the lifeline of the
organization…innovation and the consumer.

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Internal Strengths of Coco Cola:
 Brand Equity – Interbrand in 2011 awarded Coca cola with the highest brand equity
award. Coca cola with its vast global presence and unique brand identity is definitely
one of the costliest brands with the highest brand equity.

 Company valuation – One of the most valuable companies in the world, Coca cola is
valued around 79.2 billion dollars. This valuation includes the brand value, the
numerous factories and assets spread out across the world and the complete operations
cost and profit of Coca cola.
 Vast global presence – Coca cola is present in 200 countries across the world. Chances
are, any country that you go to, you will find coca cola present in that market. This vast
global presence of coca cola has also contributed to the building of the mammoth brand
name.
 Largest market share – There are only 2 Big competitors in the beverage segment –
Pepsi and Coca cola. Out of these 2, coca cola is the clear winner and hence has the
largest market share. Amongst all beverages, Coke, Thums up, Sprite, Diet coke, Fanta,
Limca and Maaza are the growth drivers for Coca Cola.

 Fantastic marketing strategies – Coca cola unlike Pepsi always tries to win peoples
heart. Where Pepsi’s target is continuously changing, and is targeted towards
youngsters, Coca cola targets people of all ages. The targeting is also done by celebrities
who are well liked – for example – Amitabh Bacchan, Sachin tendulkar, Aishwarya Rai,
Aamir Khan etc
 Customer Loyalty – With such strong products, it is natural that Coca cola has a lot of
customer loyalty. The products mentioned above like Coca cola and Fanta have a huge
fan following. People will prefer these soft drinks over others. Because of the good taste
of Coca cola, finding substitutes becomes difficult for the customer.

 Distribution network – Coca cola has the largest distribution network because of the
demand in the market for its products. On the other hand, due to this successful
distribution network, Coca cola has been able to command such a high market presence.

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Strategy – Corporate / Business / Functional

Corporate Level Strategies

A corporate strategy is essential for guiding a company’s performance in its overall business
activities as well as resource allocation in order to achieve the established goals of the business.
The company has been keen on developing new products every time it enters a new market. At
one point Coca-Cola was known to be a company operating in a market dominated by
carbonated soft drinks.

However, over time, the company began producing new products such as Sprite, Fanta and Diet
Coke, which are non-carbonated, and that have eventually become the key products of the
company. Besides, in order to further penetrate the market, the company has widened its
business definition into what is called ‘ready packaged liquid refreshments’ (Campbell & Goold,
2014). Through embracing this consideration, the company has grown beyond the usual
carbonated soft drink (CSD) market and joined markets such as fruits juices, ready to drink tea
and bottled water.

Business Level Strategies

Differentiation Strategy

The company embraces differentiation strategy in order to remain unique in the market and
separated from its competitors. Through differentiation strategy, the company makes unique and
valued products for its customers. The company has unique capacities to customize its products
in order to ensure that they meet the wants and needs of its target markets. For instance, the
company satisfies the needs of old health conscious consumers by providing Diet Coke, Odwalla
products and Vitamin water. On the other hand, it meets the needs and expectations of young
consumers by providing vanilla coke and cherry coke, which are flavored and PowerAde
products of Coke (Saul, 2010). It is also worth noting that the management at Coca-Cola
Company continues investing a lot of time and money into research in order to acquire a clear
comprehension of the various segments in the market in respect to age, income and lifestyle in
order to achieve accurate development and marketing for its products.

In terms of packaging, differentiation strategy has and continues playing a significant role by
helping Coca-Cola products continue remaining adaptable to different market segments (Saul,
2010). In this regard, functional packaging has been essential for making products appear in
different forms and sizes. This includes product appearance fountain drink dispensers, aluminum
cans, and plastic and glass bottles. Besides, the company also uses different sizes and shapes of
the cans and bottles in order to ease operations in vending machines. The company also makes
sure that it uses recyclable packaging materials in order to promote its commitment to the
sustainability of the environment. Packaging materials are well labeled to make consumer
identification easier. Apart from product differentiation, the company also embraces image

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differentiation whereby it emphasizes its logo to achieve this. The logo is essential for
establishing the name of the brand in the minds of consumers.

Marketing Strategies
Marketing segmentation

Coca-Cola makes strong choices regarding the kinds of markets it requires targeting in order to
promote its sales. A market segment refers to a group of product or service consumers possessing
unique characteristics in a collective manner. For instance, the company satisfies the needs of old
health conscious consumers by providing Diet Coke, Odwalla products and Vitamin water. On
the other hand, it meets the needs and expectations of young consumers by providing vanilla
coke and cherry coke, which are flavored and PowerAde products of Coke (Coca-Cola, 2013).

Promotion Strategy

The company considers certain levels of emphasis regarding public relation, advertising,
technological changes, sales promotion, personal selling etc. During advertisement; for instance,
Coca-Cola employs a number of phrases such as “enjoy”, “drink Coca-Cola”, “always Coca-
Cola”, “Life tastes good” and many more. These advertising strategies have played an essential
role in ensuring that the brand successfully reaches global markets (Campbell & Goold, 2014).
Besides, these advertisement techniques enable consumers to remain informed of the
significance of Coca-Cola products.

Price Strategy Trade Promotion

Coca-Cola Company does offer incentives to retailers and middlemen mostly in form of free
empty bottles and free samples. This encourages such retailers and middlemen to keep pushing
the product further into the market (Campbell & Goold, 2014). This is one of the reasons why
Coca-Cola is more common in the market than other brands. In other words, it is a “Seen and
Sold” scenario. The company is also involved in sponsoring various sporting events and in so
doing; it grows its market share.

Considering these business-level strategies, differentiation strategy is the most significant

strategy that can drive the company into long-term success. Through differentiation strategy, the
company can make unique and valued products for its customers. The company has unique
capacities to customize its products in order to ensure that they meet the wants and needs of its
target markets. Besides, through differentiation strategy, the company can capitalize on the
weaknesses of its competitors in order to gain a competitive advantage.

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Conclusion
Coca-Cola Company embraces differentiation strategy in order to remain unique in the market
and separated from its competitors as one of its business-level strategies. In this case it embraces
both product and image differentiation strategies. The positioning of Coca-Cola regarding cost
leadership strategy is as a result of learning, knowledge as well as experience in matters of
production as well operational processes. Production of new products for new markets and
globalization are some of Coca-Cola’s key corporate strategies. Following an analysis of the
competitive environment, the most significant competitor of Coca-Cola is PepsiCo Inc.
Following the analysis of the business-level and corporate-level strategies of the two companies,
Coca-Cola Company is most likely to remain successful in the long-term as compared to
PepsiCo, Inc.

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