SWOT ANALYSIS: Strengths Coca-Cola has been an intricate part of American culture for over a century.

The
product’s image is laden with sentimentality, and this is an image many people have taken deeply to
heart. The Coca- Cola image is displayed on T-shirts, hats, and collectible memorabilia. This extremely
recognizable branding is one of Coca-Cola’s greatest strengths. “Enjoyed more than 685 million times a
day around the world Coca-Cola stands as a simple, yet powerful symbol of quality and enjoyment”
(Allen, 1995).
Additionally, according to Bettman, et. al, (1998) Coca-Cola’s bottling system is one of their greatest
strengths. It
allows them to conduct business on a global scale while at the same time maintain a local approach. The
bottling
companies are locally owned and operated by independent business people who are authorized to sell
products of the
Coca-Cola Company. Because Coke does not have outright ownership of its bottling network, its main
source of
revenue is the sale of concentrate to its bottlers (Bettman, et. al, 1998).
Weaknesses: Although domestic business as well as many international markets are thriving (volumes in Latin
America were up 12%), Coca-Cola has recently reported some "declines in unit case volumes in
Indonesia and
Thailand due to reduced consumer purchasing power." According to an article in Fortune magazine, "In
Japan, unit
case sales fell 3% in the second quarter [of 1998]...scary because while Japan generates around 5% of
worldwide
volume, it contributes three times as much to profits. Latin America, Southeast Asia, and Japan account
for about 35%
of Coke's volume and none of these markets are performing to expectation (Mclean, 1998).
Opportunities: Brand recognition is the significant factor affecting Coke’s competitive position. Coca-Cola’s brand
name is known well throughout 90% of the world today. The primary concern over the past few years has
been to get this name brand to be even better known. Packaging changes have also affected sales and
industry positioning, but in general, the public has tended not to be affected by new products (Allen,
1995).
Coca-Cola’s bottling system also allows the company to take advantage of infinite growth opportunities around the
world. This strategy gives Coke the opportunity to service a large geographic, diverse, area (Bettman, et. al, 1998).
Threats: Currently, the threat of new viable competitors in the carbonated soft drink industry is not very substantial.
The threat of substitutes, however, is a very real threat. The soft drink industry is very strong, but
consumers are not
necessarily married to it. Possible substitutes that continuously put pressure on both Pepsi and Coke
include tea,
coffee, juices, milk, and hot chocolate (“Cola Wars”, 1991).
Even though Coca-Cola and Pepsi control nearly 40% of the entire beverage market, the changing
health-
consciousness of the market could have a serious affect. Of course, both Coke and Pepsi have already
diversified into
these markets, allowing them to have further significant market shares and offset any losses incurred due
to
fluctuations in the market (“Cola Wars”, 1991).
Consumer buying power also represents a key threat in the industry. The rivalry between Pepsi and Coke
has produce a very slow moving industry in which management must continuously respond to the
changing attitudes and demands of their consumers or face losing market share to the competition.
Furthermore, consumers can easily switch to other beverages with little cost or consequence (“Cola
Wars”, 1991).

The PEST analysis examines changes in a marketplace caused by Political, Economical, Social and
Technological
factors.
P: Political change, from one party to another in control- for example the rise in private healthcare and
privatisations
under Conservative governments.
Political Analysis for Coca-Cola

Non-alcoholic beverages fall within the food category under the FDA. The government plays a role within
the
operation of manufacturing these products in terms of regulations. There are potential fines set by the
government on
companies if they do not meet a standard of laws.
The following are some of the factors that could cause Coca-Cola company's actual results to differ
materially from the
expected results described in their underlying company's forward statement:-
? Changes in laws and regulations, including changes in accounting standards, taxation requirements,
(including tax
rate changes, new tax laws and revised tax law interpretations) and environmental laws in domestic or
foreign
jurisdictions.
? Changes in the non-alcoholic business environment. These include, without limitation, competitive
product and
pricing pressures and their ability to gain or maintain share of sales in the global market as a result of
action by
competitors.
? Political conditions, especially in international markets, including civil unrest, government changes and
restrictions
on the ability to transfer capital across borders.
? Their ability to penetrate developing and emerging markets, which also depends on economic and
political
conditions, and how well they are able to acquire or form strategic business alliances with local bottlers
and make
necessary infrastructure enhancements to production facilities, distribution networks, sales equipment
and technology.
E: Economic change, for example a recession creating increased activity at the lower ends of product
price ranges.
Rate of interest rises depressing business and causing redundancies and lower spending levels.
Economic Analysis for Coca-Cola
Last year the U.S. economy was strong and nearly every part of it was growing and doing well. However,
things changed. Most economists loosely define a recession as two consecutive quarters of contraction,
or negative GDP growth. On Monday 26, the government officially declared that the U.S. has been in
recession since March. (CBS Market Watch. " U.S. Officially in a recession." Rex Nutting. [nov 26,2001].
www.cbsmarketwatch.com)
However, because of aggressive action by the Federal Reserve and Congress it will be short and mild.
The economy
will return to sustained, positive growth in the first half of 2002.
Future Outlooks
The Federal Reserve is doing all that it can help the economy recover. They have cut the interest rate ten
times this
year. The rate now lies at a 40-year low of 2%. Lowering the interest rates will ultimately excite consumer
demand in
the economy. Companies will expand and increase use of debt as a result of the low borrowing rates.
Coca-Cola can
borrow money for investing in other products as the interest rates are low. It can use the borrowing on
research of new
products or technology. As researching for new products would cost less the Coca-Cola Company will sell
its products
for less and the people will spend as they would get cheap products from Coca-cola.
Before the attacks on September 11, 2001, the United States was starting tot see the economy recover
slightly and it is only just recently that they achieved the economic levels. Consumers are now resuming
their normal habits, going to the malls, car shopping, and eating out at restaurants. However, many are
still handling their money cautiously. They believe that with lower inflation still to come, consumers will
recover their confidence over the next year.
The non-alcoholic beverage industry has high sales in countries outside the U.S. According to the
Standard and Poor's Industry surveys, "For major soft drink companies, there has been economic
improvement in many major international markets, such as Japan, Brazil, and Germany." These markets
will continue to play a major role in the success and stable growth for a majority of the non-alcoholic
beverage industry.

S: Social change involves changing attitudes and lifestyles. The increasing number of women going out to work, for
example, led to the need for time-saving products for the home.
Social Analysis for Coca-Cola
Many U.S. citizens are practicing healthier lifestyles. This has affected the non-alcoholic beverage
industry in that
many are switching to bottled water and diet colas instead of beer and other alcoholic beverages. Also,
time
management has increased and is at approximately 43% of all households. (http://www.cdf-mn.org). The
need for
bottled water and other more convenient and healthy products are in important in the average day-to-day
life.
Consumers from the ages of 37 to 55 are also increasingly concerned with nutrition. There is a large
population of the
age range known as the baby boomers. Since many are reaching an older age in life they are becoming
more concerned
with increasing their longevity. This will continue to affect the non-alcoholic beverage industry by
increasing the
demand overall and in the healthier beverages.
T: Technological change - creates opportunities for new products and product improvements and of course new
marketing techniques- the Internet, e-commerce.
Technological Analysis for Coca-Cola
Some factors that cause company's actual results to differ materially from the expected results are as follows:
? The effectiveness of company's advertising, marketing and promotional programs. The new technology
of internet and television which use special effects for advertising through media. They make some
products look attractive. This helps in selling of the products. This advertising makes the product
attractive. This technology is being used in media to sell their products.
? Introduction of cans and plastic bottles have increased sales for Coca-Cola as these are easier to carry and you can
bin
them once they are used.
? As the technology is getting advanced there has been introduction of new machineries all the time. Due
to
introduction of this machineries the production of the Coca-Cola company has increased tremendously
then it was few
years ago
? CCE has six factories in Britain which use the most stat-of the-art drinks technology to ensure top
product quality and
speedy delivery. Europe's largest soft drinks factory was opened by CCE in Wakefield, Yorkshire in 1990.
The
Wakefield factory has the technology to produce cans of Coca-Cola faster than bullets from a machine
gun.