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Coca-Cola is an American non-alcoholic beverage company, which operates in almost every country in the world. This global beverage company sells a wide range of soft drink products, primarily carbonated and caffeinated soft drinks and still beverages such as flavored and enhanced water, fruit juice and juice-based products. Being the largest beverage company in the world, Coca-Cola is often studied by business management students for their college essay. In this article, we have conducted a thorough SWOT analysis of Coca-Cola, in which we have discussed about the strength, weakness, opportunity and threats. It can be referred as a help to write essay on Coca-Cola. The SWOT analysis can help you identify the internal and external factors affecting the business venture of the company.

Coca-Cola SWOT Analysis

Strength Weakness
  • Globally recognized brand, with strong brand image
  • Strong financial position with high revenue generation
  • Diversified portfolio of non-alcoholic beverages
  • Patented formulas
  • High dependence of suppliers, bottling plants and distributors
  • Backlash for using over usage of water in certain communities
  • Fluctuation of revenue over the past years
Opportunity Threats
  • Diversification into ready-to-eat snacking products
  • Adopting vertical integration to gain more control over the supply chain and product quality.
  • Improving competitive advantage through inorganic expansion
  • Threat of competition from rival brands, especially PepsiCo
  • Increasing trend in obesity has driven consumers to avoid carbonated soft drinks
  • Exposure to international political factors

Strength

The strength of Coco-Cola lies primarily in its brand image. In terms of brand value, according to Forbes, Coca-Cola holds the 6th rank among all the global companies, with a brand valuation of USD 64.4 billion. No other beverage company holds such high brand value. This indicates towards strong brand image of the companyamong its stakeholders, especially the customers. A strong brand image can help the company to build a strong competitive advantage in the market through differentiation.

Coca-Cola’s strength also comes from its financial position. Being the largest beverage company in the world, Coca-Cola has a strong financial position in the industry. As of 2019, the company has earned USD 34.33 billion in revenue and USD 8.92 billion in net income. The strong financial position allows Coca-Cola to invest in new product development, aggressive marketing mix strategies and to strengthen its competitive advantage even further.

Coca-Cola operates with a highly diversified portfolio of product categories and brands. This diversification approach has enabled the company to meet a much wider range of customer needs and preferences. At present, Coca-Cola offers sparkling soft drinks, waters and hydration beverages, juice, dairy and plant-based products, teas and coffees. The wide range of beverage products allows the company improve its revenue generation, by catering to a large customer base.

The company has a range of patented formulas for its beverage products, which are its intellectual properties. These inimitable resources offer great differentiation among other market players and allows the company offer unique experience to the consumers.

Weakness

Despite of being the world’s largest beverage company, it has certain key weaknesses that you need to study for your professional essay writing. The business operations of Coca-Cola are largely dependent on its suppliers and bottling partners. The company sources certain essential raw materials from various suppliers and partners with third party bottling plants for bottling and packaging. This lack of vertical integration makes exposes the company to high bargaining power of suppliers and it also reduces the control of the company over its supply chain. Dependence on suppliers, bottling partners and distributors also reduces the ability of the company to quickly react to market changes.

Coca-Cola has faced various criticisms for its operational activities. In various developing markets, it has been alleged that the massive water consumption by the Coca-Cola plants have led crunch in drinking water for the local community. This is a massive backlash for the company, which claims to adopt sustainable means to run its businesses.

The revenue of Coca-Cola is largely dependent on the sale of its carbonated drinks, which is often considered as an unhealthy beverage, due to high calorie content. A close look at the revenue generation trend of Coca-Cola reveals that the sales revenue has fluctuated over the years instead of being a steady rise. This can be quite concerning for shareholders and investors, who may hesitate in investing more into the company, which has high financial uncertainty.

Opportunities

Coca-Cola has significant growth opportunities in diversifying its business into food and snacks sector, just like its rival PepsiCo. Coca-Cola can focus on introducing healthy snacking options for health-conscious consumers. Studies have shown that there is a rising trend in health consciousness among the consumers, especially in the western markets. This brings potential opportunity for the company to increase its revenue generation.

As mentioned previously, Coca-Cola is highly dependent on its suppliers for running its business. It can benefit greatly from adopting vertical integration strategy. This can offer great opportunity for the company to improve its supply chain by deploying advanced technologies. Moreover, Coca-Cola can also establish its own bottling plants, which will allow the company to constantly measure the quality of the product. This as a result will help the company to avoid quality issues, such as the pesticide scandal in the Indian market.

Coca-Cola has the opportunity to improve its presence into the international markets through inorganic expansion. It can make strategic acquisitions of local beverage brands, in order to expand its product portfolio. Moreover, this approach will also enable the company to meet the preferences and needs of the local customers in the host markets.

Threats

The most concerning threat faced by Coca-Cola comes from other rival brands. While writing papers in college about Coca-Cola, it should be noted that Coca-Cola is threatened by PepsiCo, which is its biggest rival. The market players in the soft drinks industry often adopt aggressive marketing mix strategies to improve their market share. Coca-Cola and PepsiCo have often engaged in ambush marketing. The cutthroat rivalry between these companies is a serious threat faced by Coca-Cola. The company constantly have to develop new marketing strategies to maintain its brand image and attract more customers than its rivals.

The increasing trend in obesity among the consumers, especially in the western markets have triggered healthy consumption habits, where people are avoiding consumption of carbonated beverages. This trend can have a massive impact on companies like Coca-Cola, whose primary revenue generation comes from carbonated beverages, such as the classic coke. In order to cope with the falling demand for the carbonated drinks, the company needs to come up with alternative products that can appeal to the increasing demand for healthier consumption.

Coca-Cola also faces threat from local governmental bodies in the international markets. Since, the company operates in the international markets, it faces potential threats from its exposure to political factors. Sudden changes in business regulations and policies can lead to severe disruption in the supply chain of the company.

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