SWOT analysis of Coca-Cola

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Coca-Cola is the world’s largest beverage company. It is a name which is present virtually everywhere. I am sure you have seen Coke in households, shops, airlines, hotels, restaurants, offices, and many other places. Coca-Cola has its presence in more than 200 countries (Coca-Cola, 2017). This article focuses on SWOT analysis of Coca cola. However, if you would like to know more about SWOT analysis in general, you should find our article ‘SWOT analysis – how to use SWOT analysis’ useful.

SWOT analysis of Coca-Cola

SWOT stands for strengths, weaknesses, opportunities and threats. Like all other organisations, Coca-Cola has its own strengths and limitations.

Strengths

Coca-Cola is the world’s largest beverage company, which reaches out to people in more than 200 countries (Coca-Cola, 2017). Such a global reach is a great strength for the company. Wherever you go, you are highly likely to see the presence of Coca-Cola in there. Together with its bottling partners, Coca-Cola employs more than 700,000 people around the world (Coca-Cola, 2017).

Coke was the leading carbonated soft drink brand in the United States in 2015 (Statista, 2017). Coca Cola was the UK’s best-selling brand with sales topping £1.1 billion in 2016 (MGN Limited, 2017). Likewise, it has the largest market share in many countries around the world.

Customers have a variety of choices as Coca-Cola offers more than 500 brands. Coke, Sprite, Diet coke, Fanta, Coca-Cola Zero, and Smart water are some of the famous names which are behind the success of the company.

Intensive distribution strategy and the world’s largest distribution network have certainly played a big role in Coca-Cola’s global success. The company uses owned/controlled distributors, as well as independent bottlers, wholesalers, and retailers to take its products to customers. This has helped Coca-Cola to reach out to even remote and not easily-accessible areas of its global markets.

Coca-Cola has great marketing strategies. It uses a variety of media to promote products to its customers. The company targets people of all ages and uses celebrities for its adverts.

Weaknesses

Though Coca-Cola is the market leader in many countries, some of the ingredients it uses, drew a lot of criticism. For example, some people may have allergic reactions to ingredients such as aspartame, sucralose, and saccharin that are found in Diet Coke and Coke Zero. Likewise, some of the drinks contain artificial colourings which can lead to certain illnesses (Michaels, 2013).

While some of the products e.g. Coke, Fanta, and Sprite are extremely popular, many of Coca-Cola’s products are somewhat unknown. It is evident from the company’s low profile advertising campaigns for those products. Let me ask you a question. How many of you know ‘Honest Lemon Flavoured Herbal Tea with Honey’ or ‘Appletiser’ are Coca-Cola products?

Opportunities

Diet Coke, Coke Zero and Coke Life accounted for almost 45% of Coca Cola’s UK sales in 2015. Clearly, the company has good opportunities in low and no sugar products. Coca-Cola can materialise these opportunities through further market penetration. Market penetration is one of the four strategies developed by Ansoff. If you would like to know more about Ansoff matrix in general, you should find our article ‘Understanding Ansoff matrix – an example of Coca-Cola’ useful.

Coca-Cola should carry out robust marketing campaigns to promote its less popular products. This will help the company generate more revenues and market shares. In addition, as consumer behaviour shifting towards healthier living, it offers Coca-Cola more opportunities to explore.

Threats

Coca-Cola and other similar companies have been blamed for obesity crisis and some illnesses in many countries. Obesity rates are on the rise in USA, UK and many other both developed and developing countries. Therefore, consumer awareness drives may encourage some customers to shy away from Coca-Cola.

It will be useful here to consider some legal issues as well. For example, the UK government has published draft legislation for a tax on sugar-sweetened drinks, which is set to begin from April 2018 (BBC, 2016). The estimates are that the new tax could add 18p to 24p to the price of a litre of fizzy drink. This could directly affect the sale of Coca Cola and other beverage company’s products.

To conclude, this SWOT analysis of Coca-Cola shows that the company can pursue a lot of opportunities even though it is facing a number of challenges. Its market size, geographical reach, brand recognition, customer loyalty, and financial resources have made it one of the top powerful brands in the world.

We hope this article on SWOT analysis of Coca-Cola has helped you explore strengths, weaknesses, opportunities and threats for the Coca-Cola Company. You may also like reading Marketing mix of Coca-Cola and SWOT analysis of Apple. If you liked this article, please share it by clicking on the icons below.

The article publication date: 21 October 2017

Further reading/References

BBC (2016) UK pushes ahead with sugar tax, available at http://www.bbc.co.uk/news/health-38212608 (Accessed 20 October 2017)

Coca-Cola (2017) About us, available at http://www.coca-cola.co.uk/about-us (Accessed 20 October 2017)

Michaels, J. (2013). Slim for Life. NY, New York: Harmony Books

Photo credit: Pixabay

Author: Jo David

Jo David has years of experience both in the UK and abroad. He writes regularly online on a variety of topics. He has a keen interest in business, hospitality and tourism management.