SWOT analysis of Coca Cola

This is a Coca Cola Company SWOT analysis for 2013.

Company background

Name The Coca Cola Company
Industries served Beverages
Geographic areas served Worldwide
Headquarters U.S.
Current CEO Muhtar Kent
Revenue $ 48.01 billion (2012)
Profit $ 9.01 billion (2012)
Employees 146,200
Main Competitors
PepsiCo Inc., Dr Pepper Snapple Group, Inc., Unilever, Groupe Danone,
Kraft Foods Inc., Nestl S.A. and others.

The Coca Cola Company is the largest beverage business in the world serving more than 200 countries and offering
more than 500 brands.

Coca Cola SWOT analysis 2013
Strengths Weaknesses
1. The best global brand in the world in terms of
value ($77,839 billion)
2. Worlds largest market share in beverage
1. Significant focus on carbonated drinks
2. Undiversified product portfolio
3. High debt level due to acquisitions
3. Strong marketing and advertising
4. Most extensive beverage distribution channel
5. Customer loyalty
6. Bargaining power over suppliers
7. Corporate social responsibility
4. Negative publicity
5. Brand failures or many brands with insignificant
amount of revenues
Opportunities Threats
1. Bottled water consumption growth
2. Increasing demand for healthy food and
beverage
3. Growing beverages consumption in emerging
markets (especially BRIC)
4. Growth through acquisitions
1. Changes in consumer preferences
2. Water scarcity
3. Strong dollar
4. Legal requirements to disclose negative
information on product labels
5. Decreasing gross profit and net profit margins
6. Competition from PepsiCo
7. Saturated carbonated drinks market

Strengths
1. The best global brand in the world in terms of value. According to Interbrand, The Coca Cola
Company is the most valued ($77,839 billion) brand in the world.
2. Worlds largest market share in beverage.Coca Cola holds the largest beverage market share in
the world (about 40%).
3. Strong marketing and advertising. Coca Cola advertising expenses accounted for more than $3
billion in 2012 and increased firms sales and brand recognition.
4. Most extensive beverage distribution channel. Coca Cola serves more than 200 countries and
more than 1.7 billion servings a day.
5. Customer loyalty. The firm enjoys having one of the most loyal consumer groups.
6. Bargaining power over suppliers. The Coca Cola Company is the largest beverage producer in
the world and exerts significant power over its suppliers to receive the lowest price available from
them.
7. Corporate Social Responsibility (CSR). Coca Cola is increasingly focusing on CSR programs,
such as recycling/packaging, energy conservation/climate change, active healthy living, water
stewardship and many others, which boosts companys social image and result in competitive
advantage over competitors.
Weaknesses
1. Significant focus on carbonated drinks. The business is still focusing on selling Coke, Fanta,
Sprite and other carbonated drinks. This strategy works in short term as consumption of
carbonated drinks will grow in emerging economies but it will prove weak as the world is fighting
obesity and is moving towards consuming healthier food and drinks.
2. Undiversified product portfolio. Unlike most companys competitors, Coca Cola is still focusing
only on selling beverage, which puts the firm at disadvantage. The overall consumption of soft
drinks is stagnating and Coca Cola Company will find it hard to penetrate to other markets (selling
food or snacks) when it will have to sustain current level of growth.
3. High debt level due to acquisitions. Nearly $8 billion of debt acquired from CCEs acquisition
significantly increased Coca Cola's debt level, interest rates and borrowing costs.
4. Negative publicity. The firm is often criticized for high water consumption in water scarce regions
and using harmful ingredients to produce its drinks.
5. Brand failures or many brands with insignificant amount of revenues. Coca Cola currently
sells more than 500 brands but only few of the brands result in more than $1 billion sales. Plus, the
firms success of introducing new drinks is weak. Many of its introduction result in failures, for
example, C2 drink.
Opportunities
1. Bottled water consumption growth. Consumption of bottled water is expected to grow both in
US and the rest of the world.
2. Increasing demand for healthy food and beverages. Due to many programs to fight obesity,
demand for healthy food and beverages has increased drastically. The Coca Cola Company has
an opportunity to further expand its product range with drinks that have low amount of sugar and
calories.
3. Growing beverages consumption in emerging markets. Consumption of soft drinks is still
significantly growing in emerging markets, especially BRIC countries, where Coca Cola could
increase and maintain its beverages market share.
4. Growth through acquisitions. Coca Cola will find it hard to keep current growth levels and will
find it hard to penetrate new markets with its existing product portfolio. All this can be done more
easily through acquiring other companies.
Threats
1. Changes in consumer tastes. Consumers around the world become more health conscious and
reduce their consumption of carbonated drinks, drinks that have large amounts of sugar, calories
and fat. This is the most serious threat as Coca Cola is mainly serving carbonated drinks.
2. Water scarcity. Water is becoming scarcer around the world and increases both in cost and
criticism for Coca Cola over the large amounts of water used in production.
3. Strong dollar. More than 60% of The Coca Cola Company income is from outside US. Due to
strong dollar performance against other currencies firms overall income may fall.
4. Legal requirements to disclose negative information on product labels. Some Coca Colas
carbonated drinks have adverse health consequences. For this reason, many governments
consider to pass legislation that requires disclosing such information on product labels. Products
containing such information may be perceived negatively and lose its customers.
5. Decreasing gross profit and net profit margins. Coca Colas gross profit and net profit margin
was decreasing over the past few years and may continue to decrease due to higher water and
other raw material costs.
6. Competition from PepsiCo. PepsiCo is fiercely competing with Coca Cola over market share in
BRIC countries, especially India.
7. Saturated carbonated drinks market. The business significantly relies on the carbonated drinks
sales, which is a threat for the Coca Cola as the market of carbonated drinks is not growing or
even declining in the world.
Competitive Analysis
Definition: Identifying your competitors and evaluating their strategies to determine their strengths and weaknesses
relative to those of your own product or service
A competitive analysis is a critical part of your company marketing plan. With this evaluation, you can establish what
makes your product or service unique--and therefore what attributes you play up in order to attract your target
market.
Evaluate your competitors by placing them in strategic groups according to how directly they compete for a share of
the customer's dollar. For each competitor or strategic group, list their product or service, its profitability, growth
pattern, marketing objectives and assumptions, current and past strategies, organizational and cost structure,
strengths and weaknesses, and size (in sales) of the competitor's business. Answer questions such as:
Who are your competitors?
What products or services do they sell?
What is each competitor's market share?
What are their past strategies?
What are their current strategies?
What type of media are used to market their products or services?
How many hours per week do they purchase to advertise through the media used in this market?
What are each competitor's strengths and weaknesses?
What potential threats do your competitors pose?
What potential opportunities do they make available for you?
A quick and easy way to compare your product or service with similar ones on the market is to make a competition
grid. Down the left side of a piece of paper, write the names of four or five products or services that compete with
yours. To help you generate this list, think of what your customers would buy if they didn't buy your product or
service.
Across the top of the paper, list the main features and characteristics of each product or service. Include such things
as target market, price, size, method of distribution, and extent of customer service for a product. For a service, list
prospective buyers, where the service is available, price, website, toll-free phone number, and other features that are
relevant. A glance at the competition grid will help you see where your product fits in the overall market.
How to Write a Competitive Analysis
by Michael Knowles
There are few documents that get the attention of product planners and marketers the way that a competitive
analysis does. A good competitive analysis is a scouting report of the actual market terrain that your company must
navigate in order to be successful. And there is no person better equipped to write one than a market-savvy technical
writer.
To write a good competitive analysis, you must:
Be objective.
Conduct fearless and thorough research.
Write well.
If you're like most successful technical writers I know, you have these skills already. So, how do you put these skills
together to do the job?
A competitive analysis covers five key topics:
Your company's competitors.
Competitor product summaries.
Competitor strengths and weaknesses.
The strategies used by each competitor to achieve their objectives.
The market outlook.
A List of Competitors
The analysis begins with a list of your company's competitors. Most of the time, such a list is comprised of what your
company considers to be its chief competitors. However, there may be other companies that indirectly compete with
yours, ones that offer products or services that are aiming for the same customer capital.
You will also want to include information on companies that may be entering your market in the coming year. Once
you have compiled the list, you can highlight those companies that will be the greatest challenge.
Competitor Product Summary
Analyze the competition's products and services in terms of features, value, and targets. How do your competitor's
sell their wares? How do they market them? Customer satisfaction surveys conducted by the trade press can help
you tremendously. How do customers see your competition? Ask your sales force for information -- they can be your
best source of information about your competitor's customers.
It's likewise important to include information on how competitors distribute and advertise their products. You will want
to talk about product quality and, where possible, find out how they are staffed.
Competitor Strengths and Weaknesses
As you put together the list of competitor strengths and weaknesses, be objective. You'll do your company no good if
you allow bias toward your own products and services to cloud your judgment. Try to see the competition's products
as though you were the competitor. What makes their products so great? If they are growing rapidly, what is it about
their product or service that's promoting that growth?
You can find this information in a variety of ways. Certainly there are numerous Internet resources you can use -- the
competitor's Web site is always a good start. The trade press is an invaluable resource, but don't do all your research
through the Internet. Make some phone calls, talk to the journalists and consultants who are active in the industry.
These people are a lot easier to find than you'd think, and they are often happy to share facts and opinions with you.
Competitor Strategies and Objectives
Observe how your competitors market themselves through press releases and advertising. Quarterly and annual
reports reveal a great deal of information, too. But more than likely you'll have to do quite a lot of footwork to nail your
competitors down.
Interviews of journalists and consultants can be valuable. You will have to go to many different sources to get a
complete picture. What about your competitors' customers? Good sales people will know who they are and can help
you get this sort of information. It takes practice and a little shrewdness on your part to piece together a complete
picture of strategies and objectives. Focus on the facts, be persistent, and trust your intuition to help you.
Market Outlook
What is the market for your company's product like now? Is it growing? If so, then there are likely quite a few
customers left to go around. If on the other hand the market is flat, then the competition for customers is likely to be
fierce. Your company will find itself scrambling to win market share. Is the market splintering -- is it breaking up into
niches?
The outlook portion of your analysis may seem like prognostication, but it's really a measure of trends. By the time
you've done most of your research, you'll have enough information to determine what the outlook really is.
Writing a competitive analysis can be a challenging and interesting piece of work. You'll learn a lot about your
industry and in the process become a more valuable resource for your company or clients.