The Coca-Cola Company SWOT & PESTLE Analysis
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 :
As of March 2018, the major shareholders of the company are as follows –1) Berkshire Hathaway 9.39%
2) Vanguard Group 6.68%
3) State Street Corp 3.38%
4) BlackRock 3.29%
5) Capital World Investors 3.29%
Competitive Analysis of Coca-Cola
| 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 |
| 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
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Major Competitors :
PepsiCo, Dr Pepper Snapple Group, RedBull, Nestlé Waters, Groupe Danone, Mondelez International, Kraft Heinz, Suntory and UnileverMajor 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 :
Recent Acquisition / Mergers / Alliance / Joint Ventures / Divestitures :
| Hansen | Non-energy drink brands | 2015 | Acquisition | Ownership of Monster’s non-energy business will strengthen Coca-Cola’s presence in craft beverages segment. |
| ZICO | Coconut water | 2013 | Acquisition | Establishes presence in premium bottled coconut water segment |
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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
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The Coca Cola Company SWOT and PESTLE analysis has been conducted by Astha Gaur and reviewed by senior analysts from Barakaat Consulting.
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