Coca-Cola SWOT Analysis

Company overview: (Source: Hoover’s Inc, a Dun & Bradstreet Company)

Reading: Coca-Cola SWOT Analysis | Coca-Cola Strengths & Threats 2021

The Coca-Cola party be the big nonalcoholic beverage manufacture indium the world, indium which information technology present and engage in two hundred different country. information technology own some of the most popular stigmatize indiana the non-alcoholic commercialize among vitamin a portfolio of more than five hundred different brand, admit Coca-Cola, diet coke, fairy, and Fanta. indium addition to the core carbonate beverage class, information technology besides produce urine, bottle tea and coffee, juice, sport drink, dairy, and plant-based beverage. approximately top brand indiana those class admit Dasani, infinitesimal maid, Powerage, and honest tea. more than sixty-five % of information technology sale be from outside of the U.S.

Coca-Cola Strengths 2021: 

• A leader in global carbonated drinks.

  Coca-Cola’s leadership position in the carbonated beverage provides substantial manufacturing and distributing efficiency over any rival. According to Euromonitor, Coca-Cola’s current volume-based market shares of 44.3% in the USD 314 billion market has stayed steady over the past ten years, thanks to its leading brands in the business. The runner-up in this market shares war is Pepsi, with 19.1% of the total sale. Coca- Cola dominates the soft drink market in both Western and Eastern Europe, North America, and the Asia-Pacific region. 

• Coca-Cola owns half of the Top 10 carbonated brands.

  Coca-Cola’s heavy investment in its leading brands has brought its popularity among consumers. In 2019, it spent USD 3.3 billion on advertising, a 1% increase over that of 2018. According to Euromonitor data, the top 10 carbonated brands, bases on market shares, are Coca-Cola, Pepsi, Sprite, Fanta, Diet Coke, Coca-Cola Zero Sugar, Mountain Dew, 7-Up, Mirinda, and Diet Pepsi. Coca-Cola owns five brands on the list, accounted for 39% of the market in 2019, and the rest belongs to its greatest rival Pepsi. Among them, Coca-Cola is the most popular soft drink brand that enjoys 22.9% of the sales, followed by Pepsi’s 9.3%.

   

• Bargaining power and supply chain efficiency.

  Thanks to its massive market share and dominant position in the market, Coca-Cola possesses a high bargaining power over its suppliers and business partners. As a result, Coca-Cola can negotiate better trading terms and become more flexible in its operation. Coca Cola owns a bottling business that generates about 10% of revenue annually that specializing in bottling Coca Cola’s product and those of its partners and sell them to distributors and wholesalers worldwide. By controlling its supply chain from production to distribution, Coca-Cola can improve its efficiency and eliminate middlemen that could affect operating costs.

     

• World-class Marketing Campaigns.

  Coca-Cola is famous for its advertising campaigns that can be dated back many decades. It continues to keep its brand on top of consumers’ heads by heavily investing in advertising. Every year, it spends about USD 4 billion on marketing.

     

• Diversified product portfolio.

  By owning many brands that are not soft drinks, from ready-to-drink coffee and tea, bottled water, juice, dairy, and plant-based drink, Coca-Cola is transforming itself into an all-around beverage company in the effort to reduce its dependency on sugary carbonated beverage sales. Its most recent acquisition, Costa Limited, which is a coffee chain that originates in the U.K, has proven Coca-Cola’s determination in expanding strongly into different beverage categories.   

Coca-Cola Weaknesses 2021: 

• Highly dependent on sales of soft drinks.

  Despite the vast portfolio of product offerings, soft drink is still the majority of Coca-Cola sales, accounted for 70% of Coca-Cola’s worldwide unit case volume. As a result, its sales and profit are trending lower every year as traditional sugary drinks have fallen out of favor from consumers in the developed market. Over the past five years, sales have decreased by more than 30% and net income followed the same trend. 

   

• Lack of innovation.

  In recent years, Coca Cola only tries to catch up with new brands on consumers’ new trends, such as La Croix with its sparkling water. Coca-Cola should develop its Research & Development plan which anticipates what consumers would want and develop new products.

   

• Exposure to foreign exchange rate risk.

  With more than 60% of income comes from outside of the U.S, Coca-Cola has to be on top of its hedging strategy to be able to control the gain and loss due to exchange rate fluctuation. Hedging instruments also incur some expenses.  

Coca-Cola Opportunities 2021:

• Focus on healthy, non-alcoholic beverages to diversify its income source away from soft drinks.

  In recent years, Coca Cola has acquired Topo Chico, a premium sparkling water company, introduce Honest Tea and Vitaminwater to the international market. 

• Rebrand and launch new marketing campaigns targeting new consumer groups for existing products.

  Millennials, for many years, have abandoned Coca Cola products in favor of more trending drinks. Recently Coca Cola launched a new marketing campaign for Diet Coke’s new flavor to appeal to this age group. Coca Cola could apply a similar strategy to juice and ready-to-drink tea and coffee to attract young working professionals. 

     

  Read more : The Coca-Cola logo: a history from 1886 to today

• Concentrate on serving developing markets.

  Coca Cola has some success in serving a rising beverage demand from developing markets and reduce its reliance on the saturated developed markets. For example, the coconut water brand Zico has recently been offered to the Asian market and has received a positive sales signal. There is a vast untapped developing market that Coca Cola can offer its current products by utilizing its well-known brands, in combination with its vast distribution network, to capitalize on a finished beverage. Moreover, its high-profit-margin business of selling beverage concentrates and syrups to bottlers has proven efficient and provide Coca Cola with higher pricing power.   
   

• New market in the North America segment.

  The U.S bottled water and its subcategory, flavored-seltzer, can result in a new competition and opportunity for Coca Cola to expand its sale and soak up more market shares on its home turf. The market is estimated to be USD 23 billion and sales volume is rising to match demand from consumers who seek low-calories carbonated drinks. Coca Cola has already had a plan to launch hot sparkling water in early 2020 with some versions offer caffeine for consumers who seek an alternative to coffee. Coca Cola also owns a premium sparkling water brand, Topo Chico and Coca Cola is expected to push sales from Topo Chico as well as its smart water line with antioxidant and alkaline. Coca Cola currently holds 10.4% shares of the U.S bottled-water category, a figure that slightly decreases compares to that of 2018. The seltzer market is a war between PepsiCo’s Bubly, National Beverage’s LaCroix, Nestle’s Perrier, Polar, and Coca Cola. The still (non-carbonated) water accounts for 70% sales of the whole market, where Coca Cola’s Dasani brand can take advantage of it.        

Coca-Cola Threats 2021: 

• Change in consumer taste in the developed markets.

  Sales have plummeted over the past few years due to the new health-conscious trend to reduce sugary drinks intake and switch to a healthier alternative. Soft drinks account for 70% of Coca Cola unit case volume worldwide. 

• Product saturation in mature markets.

  Consumers have grown tired of the same product offering from Coca Cola and they would want to see some new product or at least a refreshed image to the old brands.  

• New government regulations on soft drinks.

  In many countries, the government has issued new laws regarding the sales of soft drinks and its sugar content to fight obesity among children and teenagers. Some countries put a new layer of tax on the sales of soft drinks while others dictate how much sugar should be in one unit of carbonated drink. New regulations will affect Coca Cola profit as it will pay more tax and reformulate beverages to comply with new regulations. 

Coca-Cola SWOT Analysis Conclusion 2021:

overall, Coca-Cola constitute adenine valuable company that buttocks provide stable income through dividend and some diversification to current portfolio due to information technology low risk compare to the U.S livestock grocery store. manoeuver indiana a ripen diligence, however, there cost many opportunity for Coca-Cola if information technology be will to invest more inch research & development, angstrom well american samoa boom information technology product oblation to newfangled developing market. information technology besides need to keep associate in nursing eye on new regulation american samoa the government about the world experience start the war on fleshiness, and soft drink equal consider the main perpetrator .

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References :

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Euromonitor international. ( 2019 ). Coca-Cola cobalt, The in gentle toast. Euromonitor international. Shea, K. ( 2020 ). Coca-Cola research. Bloomberg intelligence .

The Coca-Cola caller. ( n.d. ). recover from The erythroxylon coca colon company : hypertext transfer protocol : //www.coca-colacompany.com