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The Coca-Cola Company SWOT & PESTLE Analysis

ID : 52415153| Jul 2018| 15 pages

COMPANY PROFILE -Coca-Cola

Business Sector :FCMG, Non-alcoholic beverages

Operating Geography :United States, North America, Global

About Coca-Cola :

The Coca-Cola Company incorporated in 1892 is the world's largest beverage company. It manufactures and markets nonalcoholic beverage concentrates and syrups and also finished sparkling soft drinks and other nonalcoholic beverages. The concentrates and syrups are sold to authorized bottling partners who process them to sell as finish products. The company and its partners referred to as the ‘Coca-Cola system’ sold 29.2 billion product units in 2017. Coca-Cola’s mission statement as per their website is “To refresh the world in mind, body and spirit, to inspire moments of optimism and happiness through our brands and actions and to create value and make a difference”. The company’s objective as per their annual report is “To use our formidable assets — our brands, financial strength, unrivaled distribution system, global reach, and the talent and strong commitment of our management and associates — to achieve long-term sustainable growth.”

Coca-Cola Revenue :


$35,410 million (FY ended December 31, 2017) (y-o-y growth – Almost 15% loss)
$41,863 million (FY ended December 31, 2016)

Ownership / Major shareholders :

Berkshire Hathaway 9.39%, Vanguard Group 6.68%, State Street Corp 3.38%, BlackRock 3.29%, Capital World Investors 3.29%. (As of 31st March 2018)

Competitive Analysis of Coca-Cola

SWOT
PESTLE
The SWOT analysis of Coca Cola is presented below in a nutshell.
Strengths
Weaknesses
1. Market leader in the non-alcoholic beverages sector
2. Innovative marketing campaigns
3. Vast brand portfolio
4. Strong distribution network
5. Loyal customer base
1. Absence in other food and beverage segments
2. Insensitivity towards water management
3. Health concerns associated with carbonated drinks
Opportunities
Threats
1. Product diversification
2. Acquisition of niche competitors
3. Penetration in markets of developing nations
4. Major opportunity in bottled water e-commerce and delivery segment
1. Competition with PepsiCo
2. Indirect competition
3. Increasing taxes on sodas and sugary soft drinks
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Detailed SWOT Analysis of Coca-Cola

Strength

1. Market leader in the non-alcoholic beverages sector: The Coca-Cola Company (TCCC) is the largest non-alcoholic beverage company in the world. According to the Annual Report of The Coca-Cola Company, it is a global brand that is identified and appreciated in virtually every country of the world. Around 94% of the world’s population is its consumer. TCCC boasts of more than 500 brands which position it as the world’s largest total Beverage Company. It enjoys the number one value position in non-alcoholic ready-to-drink beverages, as well as in sparkling soft drinks; juice, dairy and plant-based beverages; water, enhanced water and sports drinks; and ready- to-drink tea and coffee. It owns world’s top five non-alcoholic sparkling beverage brands: Coca-Cola, Diet Coke, Fanta and Sprite.

2. Innovative marketing campaigns: The Coca-Cola Company has never failed in winning hearts across boundaries with its innovative and unconventional marketing campaigns. In 2017, TCCC was the largest advertiser in the beverage industry in the world. It spent around US$6.2 billion (or 17.5% of total revenue in 2017) in marketing and generated a revenue of US$35.410 billion. Since 2014, the “Share a Coke” campaign has brought in new innovations and surprise-and-delight experiences to keep fans coming back. From the addition of more brands and names on more packages (including tie-ins with passion points like NCAA March Madness and the FIFA World Cup), to the launch of an e-Commerce site (ShareaCoke.com) where fans can order custom glass bottles, to the introduction of a first-ever sticker label, to work towards integrating music into the campaign. 2018 brings with it a new version of Share a Coke which emphasizes on the role Coca-Cola plays in the special summer moments. A new creative campaign called “That’s the MIX” will mark the celebration of The MIX by Sprite Tropic Berry, a new sparking soft drink, available only at McDonald’s. The Coca-Cola Happiness Machine, Super Bowl 2012, Coke Zone, Tweet Your Christmas Wish, The Friendship Experiment, King of the Recycle and The Ahh Effect are some of the notable marketing campaigns that Coca-Cola successfully launched. Coke Studio Pakistan has grown into The Coca-Cola Company’s largest digital asset with more than 1 billion views, 3 billion minutes of viewing time and a 14 percent engagement rate.

3. Vast brand portfolio: The Coca-Cola Company, being the world’s leading non-alcoholic company, has a very extensive and valued brand portfolio. It owns and distributes over 500 different brands and offers beverages for every taste in seven beverage categories including Carbonated Soft Drinks, Bottled Water, Juice & Juice Drinks, Sports Drinks, Tea & Coffee, Energy Drinks & Shots and Alternative Drinks. TCCC’s portfolio our company’s portfolio consists of 21billion-dollar brands, 18 of which are available in reduced, low or no-calorie options. The billion-dollar brands of TCCC include Coca-Cola, Diet Coke, Coca-Cola Zero, Fanta, Sprite, Dasani, Vitamin water, Powerade, Kinley, Minute Maid, Simply, Del Valle, Georgia Coffee, Smart Water, Ice Dew, Ayataka, Schweppes and Gold Peak. Most of these world-famous brands make TCCC a leader in value share positions across multiple categories. The most popular beverage from TCCC is the Coca-Cola.

4. Strong distribution network: The Coca-Cola Company is not only appreciated for its extensive brand portfolio but also for its excellent distribution network. Its robust supply chain network ensures the availability of each of its products in the remotest of areas. TCCC has around 250 bottling partners all over the world which support its exceptional distribution capabilities. Its global distribution network feeds around 27 million customer outlets across more than 20 different channels in more than 200 countries.

5. Loyal customer base: People choose Coca-Cola’s brands not only for refreshment but also for the shared value they create for their shareowners, suppliers, customers and consumers. Its innovative marketing campaigns over years have played a vital role in the retention of its customers. Coca-Cola has always worked towards involving people and establishing a better connect with them, unlike other beverage companies. TCCC already enjoys a strong position in the market due to the trust people have in its brands.

Weakness

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Opportunity

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Threat

1. Competition with PepsiCo: While Coca-Cola still owns the market in the non- alcoholic beverages sector, there are chances that this shift to the healthier beverages and the competition with Pepsi can soon displace it from its position. It is a known fact that water is a scarce resource in many areas now and it is going to very adversely affect the beverages companies. Now, TCCC, which is a dedicated beverages company will find it near to impossible to survive in the market while PepsiCo can still function without its beverages brands considering the fact that it has many popular and revenue fetching products like Lays, Kurkure, Doritos, Quaker Oats, etc. in its food segment. Therefore, it is important for The Coca-Cola Company to diversify its product portfolio.

2. Indirect competition from alternate beverage segments: Although companies like Starbucks, Dunkins, Barista are not direct competitors of Coca-Cola but they sure eat into the market share of Coca-Cola. Dabur's Real and PepsiCo's Tropicana are also perceived to take over a majority of the market in the coming decade. Being the healthier alternatives, they are increasingly getting popular.

3. Increasing taxes on sodas and sugary soft drinks: A tax is levied on the manufacturers of the drinks which contain high sugar in UK. Other nations that have introduced similar tax laws are Mexico, France and Norway. Drinks with more than 8g per 100ml will face a tax rate equivalent to 24p per litre while those containing 5-8g of sugar per 100ml will have to give a tax of18p per litre. This has in turn affected the price of the drinks for the consumers. Studies have shown that this tax has already started showing larger decreases of soft drinks in households. Thus, people prefer to buy more of the untaxed drinks.

Major Competitors :

PepsiCo, Dr Pepper Snapple Group, RedBull, Nestlé Waters, Groupe Danone, Mondelez International, Kraft Heinz, Suntory and Unilever

Major Brands :

Coca-Cola, Diet Coke, Fanta, Sprite, Dasani, Georgia, Ice Dew, Powerade, Simply, I LOHAS, Del Valle, Glacéau, Ayataka, Fanta Schweppes, Gold Peak, Aquarius FUZE TEA, Minute Maid. The company has an overall portfolio of more than 500 owned or licensed nonalcoholic beverage brands.

Key Business Segments / Diversification :

Coca-Cola
Carbonated Soft Drinks Bottled Water Juice & Juice Drinks Sports Drinks Tea & Coffee
Energy Drinks & Shots Alternative Drinks

Recent Acquisition / Mergers / Alliance / Joint Ventures / Divestitures :

Name
Business Segment
Year
Type
Objective/Synergy Achieved
HansenNon-energy drink brands2015AcquisitionOwnership of Monster’s non-energy business will strengthen Coca-Cola’s presence in craft beverages segment.
ZICOCoconut water2013AcquisitionEstablishes presence in premium bottled coconut water segment
Source: Company website and other reliable sources. The detailed table is available in the Complete Report.
SWOT & PESTLE (combined)
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TABLE OF CONTENTS
DELIVERY AND FORMAT
WHY CHOOSE US?
References used in Coca-Cola Analysis Report

1. https://www.coca-colacompany.com/annual-review/2017/index.html
2. https://www.coca-colacompany.com/sustainability
3. https://www.bbc.com/news/health-43659124

Copyrights and Disclaimer

The Coca Cola Company SWOT and PESTLE analysis has been conducted by Astha Gaur and reviewed by senior analysts from Barakaat Consulting.

Copyright of The Coca-Cola Company SWOT and PESTLE Analysis is the property of Barakaat Consulting. Please refer to the Terms and Conditions and Disclaimer for usage guidelines.