Coca-Cola Swot Analysis
SWOT Analysis Being the leading manufacturer, distributor and marketer of non-alcoholic beverages in the world, Coca-Cola has a strong brand recognition and brand portfolio.
The company owns more than 400 brands, including sports drinks, teas, juices, and energy drinks. Coca-cola operates in more than 200 countries, with 75% of profits coming from abroad (Hoover, 2009). The company ranks well ahead its closest competitor Pepsi, with brand equity of $67 billion compared to Pepsi’s $13 billion.
However, Coca-Cola is threatened by intense negative publicity and sluggish performance domestically. Strengths •Global recognition, the world’s leading brand of carbonated soft drinks •Fast growth internationally •Strong manufacturing and distribution channel •Consumer loyalty Weaknesses •Sluggish performance domestically •Slow response to customers’ evolving tastes •High turnover rate Opportunities •Continuous international expansion •Changing demographics of the US, new target markets •Growing market for healthy drinks Smaller regional competitors struggling to exist Threats •Intense competition •Slow growth in market for carbonated beverages •Economic downturn influencing consumers’ purchasing power •Evolving consumer preferences •Negative publicity Strengths Coca-Cola has a 90% brand recognition world-wide. The company has the leading brand value and a strong brand portfolio.
The overall success allows brand extensions to achieve popularity (Cherry Coke, Coca Cola Zero, Diet Coke with Lime). Over the years, the company has invested heavily in brand promotions.
In 2006, Coca-Cola spent $2. 6 billion on print, radio, internet and television advertisement (TheCoca-ColaCompany.
com, n. d. ). Using various types of packaging (glass, plastic, aluminum cans, as well as offering different sizes) adds value to products by increasing shelf life, minimizing breakage, reducing handling and transportation costs. Coca-Cola is the first company to announce global plans to include front-of-pack energy labeling for its products, making it easier for consumers to make an informed decision, based on individual nutrition preferences.
Striving for sustainability in business, Coca-Cola plans to increase overall production efficiency by seven per cent by 2015.
Expanding and investing internationally is responsible for 75% of the company’s profits. New lucrative markets, such as China, Thailand, Pakistan, and Russia offer new growth opportunities. Weaknesses The company has reported losses in revenue for several quarters (Geller, 2009). The global economic downturn has also influenced Coca-Cola’s ability to grow revenue in such important markets as Russia and Eastern Europe, as well as domestically.
Negative publicity impacts the company both in the US, and globally.
Public health professionals are increasingly concerned about the potential health problems associated with obesity and inactive lifestyles, which poses a significant threat to the industry as a whole, and Coca-Cola specifically (Kent, 2009). The company’s high turnover rates influence the overall performance of its franchises and partners (Roberts, 2008). Opportunities The global economic downturn may present an opportunity for Coca-Cola, as smaller competitors struggle to survive on the markets.
Successful acquisitions of such companies, along with continuous international expansion, create unique opportunities for Coca-Cola to target new markets. Various brand and category extensions fill the subsequent niches, allowing consumers to freely choose from the company’s brand portfolio. Promoting the brand at global events, such as the Olympics, create a distinct opportunity to deliver the message of the brand to health- and nutrition-conscious customers (Ebner, 2009).
Threats While Coca-Cola reports losses, PepsiCo’s profits rose 9% in the last quarter.
PepsiCo’s strategic alliance with Anheuser-Busch may attract a new market segment, thus having a potential of negatively influencing customer loyalty (Geller, 2009). Shifting consumer demographics and demands impact Coca-Cola’s avenues for growth. Marketing Objectives As stated on the company’s official website, Coca-Cola has implemented a “2020 vision”, which is a set of long-term strategies that provide the company with tools to succeed (TheCoca-ColaCompany. com, n. d.
). Focusing on the market and being prepared to its changes are among Coca-Cola’s top priorities.
Understanding the current market trends and evolving tastes of consumers, the company strives to utilize its best knowledge in developing products that evolve with the market conditions (Hoover, 2009). Paying close attention to the needs of consumers, customers, and franchise partners, recognizing the forces behind changes, prepare the company for the future. It is essential for the company to set realistic goals and marketing objectives in order to follow through with the marketing plan and succeed long-term.
Focusing on products, sales and marketing, the following objectives should be set: •To maintain the current U. S. market share, building on customer loyalty •To increase the international market share by successful acquisitions and utilizing the current strong manufacturing and distributing systems •To develop new products, thus penetrating new markets and focusing on consumers’ evolving tastes •To minimize negative publicity by associating the brand with important global events •To successfully fight competition by expanding brand portfolio and utilizing the company’s sophisticated marketing capabilities.