SWOT of Coca Cola

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Coca cola is a brand which is present in households, shops, hotels, offices, etc. You name
it, and the place would have heard of Coca cola. Coca cola has many products in its
arsenal. Here is the SWOT analysis of Coca cola.
Strengths in the SWOT of coca 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.
Weaknesses in the SWOT of coca cola
Competition with Pepsi – Pepsi is a thorn in the flesh for Coca cola. Coca cola would
have been the clear market leader had it not been for Pepsi. The competition in these
two brands is immense and we don’t think Pepsi will give up so easily.
Product Diversification is low – Where Pepsi has made a smart move and
diversified into the snacks segment with products like Lays and Kurkure, Coca cola is
missing from that segment. The segment is also a good revenue driver for Pepsi and had
Coca cola been present in this segment, these products would have been an additional
revenue driver for the company.
Absence in health beverages – If you watch the news, you would know that obesity
is a major problem affecting people nowadays. The business environment is changing
and people are taking measures to ensure that they are not obese. Carbonated beverages
are one of the major reasons for fat intake and Coca cola is the largest manufacturer of
Carbonated beverages. The inference is that the consumption of beverages in developed
countries might go down as people will prefer a healthy alternative.
Water management – Coca cola has faced flak in the past due to its water
management issues. Several groups have raised lawsuits in the name of Coca cola
because of their vast consumption of water even in water scarce regions. At the same
time, people have also blamed Coca cola for mixing pesticides in the water to clear
contaminants. Thus water management needs to be better for Coca cola.
Opportunities in the SWOT of coca cola
Diversification – Diversification in the health and food business will improve the
offerings of Coca cola to their customers. This will also ensure that they get better
revenue from existing customers by cross selling their products. The supply chain which
is distributing their beverages can also distribute these snacks thereby sharing the load
of Supply chain costs.
Developing nations – Although developed nations have a high presence of Coca cola,
these countries are slowly moving towards healthy beverages. However developing
countries are still being introduced to the delight of carbonated drinks and soft drinks.
Countries like India which are developing and have a hot summer, find the consumption
of cold drinks almost doubled during summers. Thus the higher consumption in
developing business environment can be a good opportunity to capitalize for Coca cola.
Packaged drinking water – With hygiene becoming a major factor in the
consumption of water, Packaged drinking water has found its way into peoples mind.
Coca cola has a presence in the packed drinking water segment though Kinley. Although
Kinleys expansion is slow as of now, Kinley has a huge potential of expansion. Thus
Coca cola as a company should focus on the expansion of Kinley as a brand and take it
up to Bisleri ‘s level of trust.
Supply chain improvement – Supply chain can be a major cost sink hole with the
transportation costs always rising. Coca cola’s complete business is based on
transportation and distribution. There will always be possible improvements in this
area. Thus Coca cola should keep strict watch on its Supply chain and keep improving to
bring the cost down.
Market the lesser selling products – In the product portfolio of Coca cola, there are
several products which have not found acceptance in the market. Coca Cola needs to
concentrate on the marketing of these products as well. It is understood that Coca cola
has made several expenses to launch these products. Thus, the marketing and
subsequent rise of sale of these products will help revenue of Coca cola.
Threats in the SWOT of coca cola
Raw material sourcing – Water is the only threat to Coca cola. The weakness of Coca
cola was the suspected use of pesticides or vast consumption of water. However, the
threat here is that water scarcity is on the rise. With the climate changing, and regions of
various countries facing scarcity of water, sooner or later someone might raise fingers
on beverage companies. Thus, Water sourcing is an axe which can fall anytime on the
head of Coca cola. If water is limited or rationed, Coca cola can experience a major
downfall in their revenue and capacity of distribution. The same can affect its arch rival
Pepsi as well.
Indirect competitors – Coffee chains like Starbucks, Café coffee day, Costa coffee are
on the rise. These chains offer a healthy competition to Coca colas carbonated drinks.
They might not be a big competition for Coke, but they do give a dent to its beverage
market. Similarly, health drinks like Real and Tropicana as well as energy drinks like
Red bull and Gatorade are stealing away the market share indirectly.