The Coca-Cola Company SWOT & PESTLE Analysis

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.

Political

1. Political contributions made in compliance with laws and regulations: Coca-Cola has to ensure that all the political contributions that it makes via its Political Action Committee are done in compliance with laws, regulations and corresponding legal requirements for reporting, with senior government relations leaders and senior legal counsel leaders reviewing and approving all political contributions.

2. Changes in the political scenario of a country: Changes in Government tax policy, accounting, trade limit, environment policy, labor laws etc. can affect the distribution and position of Coca-Cola in the market. Political turmoil like civil conflicts wars can severely disrupt the market for the company. The countries which are politically quite unstable require an MNC like Coca-Cola to employ an adaptable strategic management system for a longer period of time to combat the changing political factors.

Economical

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Social

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Technological

1. Use of technology in production: There are 6 factories of Coca-Cola Enterprises (CCE) in the UK and each of them uses modern and efficient technology to ensure the quality of the product and its delivery in or before time. One of Europe's largest aerated drinks factories is in Wakefield, Yorkshire. This factory has the capacity and potential to produce cans of Coca-Cola at a rate faster than a machine gun can fire bullets.

2. Digital technology to analyze the opportunities: Coke's digital ecosystem gathers all the data and the Coca-Cola North America's Decision Science and Data Strategy Center of Excellence analyses this data and uses it to get a big- picture view of the opportunities. It is trying to make sure that its beverages are within an "arm's reach of desire". It is embracing the growth of e-commerce by letting the customer’s order online or via a mobile app and get the beverages delivered to their doorstep. Another use of digital technology by Coca-Cola to create new customer experiences is through innovative programs such as Sip and Scan which lets them unlock experiences and prizes by scanning icons on Coke packages with their mobile phones. The MyCoke platform of Coca-Cola lets the outlets and stores to restock their beverage inventories and also order further online.

Legal

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Environmental

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