SWOT Analysis of Coca Cola Case Solution

Understanding what a SWOT analysis is

The SWOT analysis is a strategic management tool used to assess the current internal and external environments of a business and/or company. This assessment and review then helps management in the decision making process for the business, thereby shaping its strategic direction. The SWOT analysis works by identifying the strengths, weaknesses, opportunities and threats of and for the business.

Coca Cola

The Coca Cola Company was founded in 1892 in Georgia. In 1919, the company was formally incorporated. As of now, Coca Cola is the leading beverage house and company globally, with a brand portfolio of over 500 non-alcoholic beverage brands in the categories of water, enhanced waters, juices, carbonated drinks, ready to drink teas and coffees as well as energy and sports drinks. The Coca Cola Company also owns leading global brands of Coca Cola, Diet coke, Fanta and sprite – all in the category of nonalcoholic beverages, and carbonated drinks.

SWOT analysis and decision making

Coca Cola has been able to strategically move forward, and stay relevant through continuous analysis of the external environment, and business and consumer trends, as well as change internally as and when needed. Both these responses have been facilitated through focus on the SWOT analysis.
After reviewing the strengths, weaknesses, opportunities, and threats for a business, the SWOT matrix helps in decision making by allowing the business to draw multiple strategies in the directions of:

• Strength-opportunity (SO) strategy
• Weakness-opportunity (WO) strategy
• Strength-threat (ST) strategy
• Weakness threat (WT) strategy

SWOT analysis of Coca Coal – a simple and easy guide towards understanding the strategic position of Coca Cola, and pointing at probable future strategies using the SWOT analysis 50

 

SWOT analysis – strengths of Coca Cola

The SWOT analysis is used for identifying the strengths of a business, to help it establish them more strongly and take advantage of them.  Being an old plyer in the industry with relative competitive advantage, the SWOT analysis has notified the strengths of Coca Cola as:

Strong brand image and market position

The company has a strong brand image because of high quality products as well as strong consumer penetration. The same reasons have also allowed it to maintain a strong leadership position in the market with high sales, and high brand shares

Strong global distribution network

The company’s success has also resulted because of the strong distribution network of the company which is independently owned or contracted by the company. The company has strong marketing reach and distribution in over 200 countries across the world. This distribution network is controlled by the brand itself through the controlled bottling and distribution operations of Coca Cola across the globe.

High investment in R&D

The company continuously invests in R&D to innovate and provide consumers with new and novice products, and product innovations. The company’s R&D also helps it innovating its marketing practices, and making it more relevant to the consumers.

Innovativeness

The high level of innovation in product and marketing strategies of the company is also a strength which has allowed it to stay ahead of competition.

High quality products available at affordable prices

The company’s promise of quality has not been compromised over the years. The Coca Cola company has maintained a strong focus of quality in taste and packaging in its product manufacturing and marketing. In addition, being a global distributor for drinks, the company has also ensured that the quality of the products is matched with equally attractive and affordable prices for the masses.

Focus on customer

The company maintains a strong focus on the consumer, and makes sure that it responds to the changing consumer trends and demands across the globe.

High brand recognition and brand recall

The company also finds strength in high brand recall ad high brand recognition by masses and all consumer segments from countries from cross the world.

Strong brand equity

With its strong financial position, and a strong record of brand performance and high sales, the company also has a high brand equity which is important in supporting its investments in the R&D functions, the distribution, as well as in supporting new product launches by the company.

Strong bargaining power over suppliers

The company is a giant in the beverage industry, with leading position. With high consumption by the masses, as well as strong customers in the restaurant business, as well as other industries, the company exudes high bargaining power over suppliers. This is because cost of switching will be negligible for the Coca Cola company but the blow will be felt severely by the suppliers.

Strong experience in acquisitions and mergers

The company has strong experience in global and international markets, and is also an experienced player with respect to mergers and acquisitions. This is a strength because the company has experience with working with other organisational cultures, and blending it into their own.
 
 

SWOT analysis – weaknesses of Coca Cola

The SWOT analysis is also a useful tool for assessing the weaknesses of the Coca Cola company. This identification of weaknesses is important because it will help the company devise means of overcoming them, as well as deflecting them in probable future strategic directions. Weaknesses identified for Coca Cola with the SWOT analysis are:

Water related issues

The company has been subjected to a number of problems because of the water issue –where the company has been blamed for creating water shortages through its operations across different regions of the world. This negative limelight has impacted the company’s reputation adversely to an extent.

Bad PR owing to high sugar content in products – resulting in media backlash for health related issues such as obesity

The company has also come in negative lime light because of high levels of sugars found in its products. The recent health and wellness trend that has occurred over the world has put the company in bad light because of this, and has blamed it amongst other fast food items for increasing obesity rates. This has resulted in negative PR for the company.

High dependence on carbonated drinks

The Coca Cola Company has a high dependence on carbonated soft drinks for its revenue streams. In the same light, the company has also launched a number of failed products, or products that have become question marks for the company in its portfolio. The company’s negligence regarding them can be a problem in the future.

High debt

Though the company has gained significant experience and assets in the various mergers and acquisitions that it has carried out, Coca Cola has also been subjected to high levels of debt because of this. The high level of debt is damaging to the star brand equity of the company, and must be addressed at the earliest...