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SWOT Analysis of Coca Cola

Coca Cola SWOT 2024 | SWOT Analysis of Coca Cola

Company: The Coca-Cola Company
CEO: James Quincey
Year founded: 1886
Headquarter: Atlanta, USA
Number of Employees (Dec 2022): 82,500
Public or Private: Public
Ticker Symbol: KO
Market Cap (March 2023): $258 Billion
Annual Revenue (Dec 2022): $43.0 Billion
Profit |Net income (Dec 2022): $9.54 Billion

Products & Services: Coca-Cola | Diet Coke | Coke Zero | Ciel | Dasani | Del Valle | Fanta | Fair life | Georgia | Gold Peak Tea | Honest Tea | Mello Yello | Minute Maid | Odwalla | Powerade | Simply Beverages | Glaceau Smartwater | Sprite | Suge | Glaceau vitamin water | Zico
Competitors: Pepsi | Dr Pepper Snapple | Mountain Dew | Gatorade | Nestle | Redbull | Unilever | Heineken | Diageo |

Fun Fact:

Did you know that Coca-Cola originally contained traces of Cocaine?

An Overview of Coca-Cola

The market leader in the soft drinks industry, Coca-Cola is one of the most renowned brands across the world. Be it your home, office, shops, hotels, bars or restaurants, Coca-Cola is everywhere!

94% of the world’s population recognizes the brand instantly by its red and white Coca-Cola logo as per Business Insider. More than 10,000 soft drinks from Coca-Cola are consumed every second of every day on average.

Coca-Cola was established in 1886 in Atlanta by John Pemberton. Within a few years, Coca-Cola became the most recognized, renowned, and widely distributed brand in the world. Currently, James Quincey is the CEO of this mega corporation.     

Read on to discover more about the world’s renowned beverage brand through this Coca Cola SWOT analysis.

SWOT Analysis of Coca-Cola

The following is a SWOT analysis of Coca Cola:

Coca-Cola Strengths – Internal Strategic Factors

  1. Strong brand identity – Coca-Cola is a highly popular brand with a unique brand identity. Its soft drinks are the most-selling drinks in history.

  2. High brand valuation – Coca-Cola is undoubtedly one of the most renowned brands with a high brand value. According to Interbrand annual report, Coca Cola is ranked 6th best global brand in 2021 with a brand value of $57 Billion. Other top ranking companies on the list are Apple at #1, Amazon at #2, Microsoft at #3 Google at #4 and Samsung at #5 position. [1]

  3. Extended global reach – It is sold in more than 200 countries with 1.9 billion servings per day of Company products. It has introduced more than 500 new products globally. Some of these are variations of Coca-Cola beverage, like Coco Cola Vanilla and Cherry Coca-Cola. Its brands are known to touch every lifestyle and demography.

  4. Greatest brand association and customer loyalty – Coca-Cola is considered one of US’s most emotionally-connected brands. This valuable brand is associated with ‘happiness’ and has strong customer loyalty. Customers can quickly identify their particular taste. Finding its substitutes is difficult for them. Moreover, Coca-Cola and Fanta have a huge fan following than other beverage names in the industry.

  5. Dominant market share – Out of Coca-Cola and Pepsi, the only two largest manufacturers of soft drinks in the beverage segment, Coca-Cola has the largest market share. Coke, Sprite, Diet Coke, Fanta, Limca, and Maaza are the highest growth drivers for Coca-Cola. 

  6. Unparalleled distribution system – Coca-Cola has the most efficient and most extensive distribution network in the world. The company has nearly 225 bottling partners and about 900 bottling plants globally.

  7. Acquisitions – Coca-Cola has a long list of strategic and profitable acquisitions including Costa coffee chain, Fairlife (Milk Products), Fuze Tea, AdeS, and many more. Through these acquisitions, Coca-Cola expanded its ready-to-drink beverage portfolio. [2]
  8. Repositioning portfolio – Coca-Cola Company has repositioned and reduced the numbers of its global brands from 400 to 200 brands in 5 major categories such as :
    • Coca Cola 
    • Sparkling Flavors
    • Nutrition, Juice, Dairy & Plant
    • Hydration, Sports, Tea & Coffee
    • Emerging 

Coca-Cola Weaknesses – Internal Strategic Factors

  1. Aggressive competition with Pepsi – Pepsi is the biggest rival of Coca-Cola. Had it not been Pepsi, Coca-Cola would have been the clear market leader in the beverage.

  2. Product diversification – Coca-Cola has low product diversification. Where Pepsi has launched many snacks items like Lays and Kurkure, Coca-Cola is lagging in this segment. It gives Pepsi leverage over Coca-Cola.

  3. Health concerns –Carbonated drinks are one of the major sources of  sugar intake. It results in two grave health issues – obesity and diabetes. Coca-Cola is the biggest manufacturer of carbonated beverages. Many health experts have prohibited the use of these soft drinks. It is a controversial issue for the company. However, Coca-Cola hasn’t devised any health alternative or solution for this problem yet.

  4. Lawsuits – Trust is undermined whenever the company is accused of wrongdoing. Coca Cola is facing a patent infringement lawsuit for using a dispenser that can recognize users and customize drinks based on their preferences. [3]

  5. Overdependence on Third-Party Technology Providers – Coca Cola’s operations rely heavily on the technological expertise of third-parties. The company signed another five-year deal with Microsoft to supply business software. [4]

  6. Environmentally Destructive Packaging – In the 2020 TearFund report, Coca Cola was named as one of the four world’s largest consumer brands that are contributing immensely to global warming and carbon emissions by using throwaway plastic bottles. [5]

  7. CEO of Coca-Cola Aims to Reduce Cherished Coke Products – James Quincy, the current CEO of Coca-Cola and a renowned businessman, has recently been bombarded with disgruntled grievances of Coke fans. The complaints are coming in because of the CEO’s shocking decision to permanently discontinue some of the most popular products from Coca-Cola’s diverse product portfolio. Coca-Cola aims to eliminate in-demand and popular products such as Tab (a diet drink), Odwalla (a smoothie brand), and the loved coconut water Zico.

Coca-Cola Opportunities – External Strategic Factors

  1. Introduce new products and reduce added sugar – Coca-Cola has the opportunity to introduce new offerings in healthy drinks and food segments just like Pepsi. It can contribute to their revenue, brand image and they can branch out from carbonated drinks. According to its recent annual report, Coca-Cola has been evolving and prioritizing the reduction of sugar in its beverages and so far 28% of its volume sold was low or no-calorie beverage.  

  2. Increase presence in developing nations – Many regions with hot climate have the highest consumption for cold drinks. Thus, increasing presence in such emerging markets can be excellent – Middle Eastern and African countries are a good example.

  3. Bring advanced supply chain system – Coca Cola’s business is entirely dependent upon logistics and supply chain. Transportation costs and fuel prices are always on the rise. Thus, coming up with some advanced and improved systems for distribution can be an opportunity.

  4. Packaged drinking water – Coca-Cola owns several packaged drinking water brands like Kinley. There is a great potential for expansion in this segment for Coca-Cola. There is an opportunity to expand and bring more healthy drinks in the market to avoid people’s criticism.

  5. Expand through Acquisition – Although different sectors offer lucrative opportunities for growth, quick entry into these markets can be a challenge. Recently, Coca-Cola’s growth was driven by some of its recent acquisitions like Costa Coffee, Aha sparkling water and it can do it again. It has the financial resources to acquire startups or SMBs in emerging markets and exploit the numerous opportunities they present. [6]
  6. Partners with Constellation Brand – One of the world’s biggest non-alcoholic beverages brand teams up with Corona manufacturers Constellation Brands to make alcoholic Fresca cocktails. It seems like a good maneuver by Coca-Cola in an ecosystem where a handful of non-alcoholic brands are diversifying their product portfolios. 

    Moreover, both companies are looking to grab a bigger market share for the much-in-demand spirits-based cocktail drinks. Following the news of the partnership, Constellation Brands’ share went up by 1%.

  7. Coca-Cola introduces its very First TikTok challenge across the US – Coca-Cola enters the TikTok stratosphere, announcing the company’s first-ever TikTok challenge in the US. It’s an excellent move for the company to enhance its brand recognition further.

TikTok is a huge platform with over 1 billion monthly active users. Debuting its first TikTok challenge, Coca-Cola has also collaborated with Grammy-nominated music artist ‘Khalid’ to sing the challenge’s first opening song. Moreover, Coca-Cola will also collaborate with choreographer Jalaiah Harmon, the young woman behind the famous Renegade Dance.

Coca-Cola Threats – External Strategic Factors

1. Water usage controversy – Coca-Cola has faced many criticisms over its water management issue. Many social and environmental groups have claimed that the company has a vast consumption of water in water-scarce regions. Besides, people have alleged that Coca-Cola is polluting water and mixing pesticides in water to clear contaminants.

2. Pollution Lawsuit – Coke and three other companies are being sued by a California environmental group for contributing to plastic pollution. In the lawsuit, Coca-Cola is singled out for misleading the public about the recyclability of its single-use plastic bottles. [7]

Source: Statista

3. Direct and indirect competition – Although direct competition from Pepsi is clear in the market, however, there are many other companies which are indirectly competing with Coca-Cola. Starbucks, Costa Coffee, Tropicana, Lipton juices, and Nescafe, are the indirect competitors of Coca-Cola, which can threaten its market position.

4. Economic Uncertainty – The recent events have negatively affected business operations, supply and distribution chains, and devastated revenues of many global companies. In 2020, Coca Cola’s revenues declined drastically as restaurants, theaters, and other venues that contribute about half of its revenue remained closed due to the global crisis. [8]

5. Increasing Health-Consciousness – Consumers are increasingly adopting healthy lifestyles and avoid products with unhealthy ingredients. The increase in health-consciousness can reduce Coca Cola’s sales and profits as customers migrate to healthier options offered by competitors. [9]

6. Coca-Cola Recalls Sodas and Juices over Possible Contamination – According to Food Safety News, Coca-Cola announced a recall of its Minute Maid and Coke products over possible contamination issues. According to reports, the brands that have been recalled include Maid Berry Punch, Strawberry Lemonade, and Fruit Punch.

The products were found to contain metal bolts and washers. The company recalled all 59-oz cartons that were distributed. Moreover, Coca-Cola also recalled 12-oz coke cans over possible “foreign contaminants.”

SWOT Analysis of Coca-Cola
SWOT Analysis of Coca-Cola

Recommendations

Based on the above SWOT analysis of Coca-Cola, we can conclude that Coca-Cola has a definitive market position in the soda industry. However, it is recommended to bring more innovative changes.

Some recommendations are explained as follows:

  1. Stepping into the food market – Coca-Cola needs to introduce new products in snacks and food segments.
  2. Focusing on health-related matters – It should bring some solution to address the rising health concerns from social activists.
  3. Improving its water management system and dealing with the criticisms from environmental agencies.
  4. Expanding into developing countries with humid temperatures – There are many products of Coca-Cola like Fuze Tea, Dasani and Hi-C which aren’t distributed in many developing countries. Coca-Cola needs to increase the distribution of such products.
  5. Increasing the distribution of packaged drinking water like Kinley.
  6. Working on sustainability and green marketing It can improve its brand image in the market.

 References & more information

  1. Interbrand Ranking 2021. Best Global Brands: Coca-Cola. Interbrand
  2. Johnston, M. (2020, June 1). 5 Companies Owned by Coca-Cola. Investopedia
  3. Law360 (2020, April 6). Fed. Circ. Weighs Undoing Coca-Cola Soda Dispenser IP Win. Law360
  4. Nellis, S. (2020, April 27). Microsoft wins a five-year deal with Coca-Cola to supply business software. Reuters
  5. Win, L. T. (2020, March 31). Bottling it? Plastic pollution from Coca-Cola, PepsiCo fuels emissions. Reuters
  6. Scully, J. (2020, January 31). Coca-Cola’s growth in 2019 driven by trademark Coke beverages. Food and Beverages
  7. McCormick, E. (2020, February 27). Coke and Pepsi sued for creating a plastic pollution ‘nuisance.’ The Guardian
  8. Balu, N. (2020, April 21). Coronavirus lockdowns to hurt Coca-Cola’s second-quarter sales. Reuters
  9. Askew, K. (2020, January 15). Shifting Away from Sugar: What’s the outlook in 2020? Food Navigator

 Tell us what you think? Did you find this article interesting? Share your thoughts and experiences in the comments section below.

Brianna Parker

She is a creative writer, corporate storyteller and global brand consultant, who has a unique combination of a business and creative mindset.

3 comments

  • Hi i want to use your work as a example but i can not find the date and author or that work, could you help me please

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