SWOT analysis of Coca-Cola
This detailed SWOT analysis of Coca-Cola aims to provide the readers with a comprehensive insight into Coca-Cola. It aims to identify Coca-Cola’s strengths and weaknesses. The opportunities and the threats facing the company are also discussed in detail.
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, 2019). 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.
Strengths of Coca-Cola
Coca-Cola is the world’s largest beverage company, which reaches out to people in more than 200 countries (Coca-Cola, 2019). 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, 2019).
Coca-Cola has been the leader in the USA soft drink market for a long time (Statista, 2019). It 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. It is famous for its guerilla marketing techniques. Its logo is recognised by 94% of the world’s population. The company targets people of all ages and uses celebrities for its adverts.
Weaknesses of Coca-Cola
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 for Coca-Cola
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 to Coca-Cola
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. As long as competition is concerned, the biggest threat facing Coca-Cola is PepsiCo.
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.
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Last update: 17 November 2019
BBC (2016) UK pushes ahead with sugar tax, available at http://www.bbc.co.uk/news/health-38212608 (Accessed 20 October 2017)
Coca-Cola (2019) About us, available at http://www.coca-cola.co.uk/about-us (Accessed 16 November 2019)
Statista (2019) Soft drink market share by company in the U.S. from 2004 to 2018, available at: https://www.statista.com/statistics/225464/market-share-of-leading-soft-drink-companies-in-the-us-since-2004/ (accessed 16 November 2019)
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.