Coca Cola is a Brand Which is Present in Households

8/9/2019 Coca Cola is a Brand Which is Present in Households

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Strengths in the SWOT of coca cola

Brand Equity Interbrand in 2011 awarded Coca cola with the highest brand

equity award. Coca cola with its ast global !resence and unique brand identity is

definitely one of the costliest brands with the highest brand equity.

Company valuation One of the "ost aluable co"!anies in the world# Coca cola

is alued around $%.2 billion dollars. This aluation includes the brand alue# the

nu"erous factories and assets s!read out across the world and the co"!lete

o!erations cost and !rofit of Coca cola.

Vast global presence Coca cola is !resent in 200 countries across the world.

Chances are# any country that you go to# you will find coca cola !resent in that

"ar&et. This ast global !resence of coca cola has also contributed to the building of

the "a""oth brand na"e.

Largest market share There are only 2 'ig co"!etitors in the beerage seg"ent (e!si and Coca cola. Out of these 2# coca cola is the clear winner and hence has the

largest "ar&et share. )"ongst all beerages# Co&e# Thu"s u!# S!rite# *iet co&e#

+anta# ,i"ca and -aaa are the growth driers for Coca Cola.

Fantastic marketing strategies Coca cola unli&e (e!si always tries to win

!eo!les heart. Where (e!si/s target is continuously changing# and is targeted towards

youngsters# Coca cola targets !eo!le of all ages. The targeting is also done by

celebrities who are well li&ed for ea"!le )"itabh 'acchan# Sachin tendul&ar#

)ishwarya ai# )a"ir han etcCustomer Loyalty With such strong !roducts# it is natural that Coca cola has a

lot of custo"er loyalty. The !roducts "entioned aboe li&e Coca cola and +anta hae

a huge fan following. (eo!le will !refer these soft drin&s oer others. 'ecause of the

good taste of Coca cola# finding substitutes beco"es difficult for the custo"er.

Distribution network Coca cola has the largest distribution networ& because of

the de"and in the "ar&et for its !roducts. On the other hand# due to this successful

distribution networ Coca cola has been able to co""and such a high "ar&et

!resence.

Wea&nesses in the SWOT of coca cola

Competition with Pepsi (e!si is a thorn in the flesh for Coca cola. Coca cola

would hae been the clear "ar&et leader had it not been for (e!si. The co"!etition in

these two brands is i""ense and we don/t thin& (e!si will gie u! so easily.

Product Diversiication is low Where (e!si has "ade a s"art "oe and

diersified into the snac&s seg"ent with !roducts li&e ,ays and ur&ure# Coca cola is

"issing fro" that seg"ent. The seg"ent is also a good reenue drier for (e!si and

had Coca cola been !resent in this seg"ent# these !roducts would hae been an

additional reenue drier for the co"!any.


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!bsence in health beverages If you watch the news# you would &now that

obesity is a "a3or !roble" affecting !eo!le nowadays. The business eniron"ent is

changing and !eo!le are ta&ing "easures to ensure that they are not obese.

Carbonated beerages are one of the "a3or reasons for fat inta&e and Coca cola is the

largest "anufacturer of Carbonated beerages. The inference is that the consu"!tion

of beerages in deelo!ed countries "ight go down as !eo!le will !refer a healthy

alternatie.

"ater management Coca cola has faced fla& in the !ast due to its water

"anage"ent issues. Seeral grou!s hae raised lawsuits in the na"e of Coca cola

because of their ast consu"!tion of water een in water scarce regions. )t the sa"e

ti"e# !eo!le hae also bla"ed Coca cola for "iing !esticides in the water to clear

conta"inants. Thus water "anage"ent needs to be better for Coca cola.

O!!ortunities in the SWOT of coca colaDiversiication *iersification in the health and food business will i"!roe the

offerings of Coca cola to their custo"ers. This will also ensure that they get better

reenue fro" eisting custo"ers by cross selling their !roducts. The su!!ly chain

which is distributing their beerages can also distribute these snac&s thereby sharing

the load of Su!!ly chain costs.

Developing nations )lthough deelo!ed nations hae a high !resence of Coca

cola# these countries are slowly "oing towards healthy beerages. 4oweer

deelo!ing countries are still being introduced to the delight of carbonated drin&sand soft drin&s. Countries li&e India which are deelo!ing and hae a hot su""er#

find the consu"!tion of cold drin&s al"ost doubled during su""ers. Thus the

higher consu"!tion in deelo!ing business eniron"ent can be a good o!!ortunity

to ca!italie for Coca cola.

Packaged drinking water With hygiene beco"ing a "a3or factor in the

consu"!tion of water# (ac&aged drin&ing water has found its way into !eo!les "ind.

Coca cola has a !resence in the !ac&ed drin&ing water seg"ent though inley.

)lthough inleys e!ansion is slow as of now# inley has a huge !otential of

e!ansion. Thus Coca cola as a co"!any should focus on the e!ansion of inley as a

brand and ta&e it u! to 'isleri 5s leel of trust.

#upply chain improvement Su!!ly chain can be a "a3or cost sin& hole with the

trans!ortation costs always rising. Coca cola/s co"!lete business is based on

trans!ortation and distribution. There will always be !ossible i"!roe"ents in this

area. Thus Coca cola should &ee! strict watch on its Su!!ly chain and &ee! i"!roing

to bring the cost down.

$arket the lesser selling products In the !roduct !ortfolio of Coca cola# there

are seeral !roducts which hae not found acce!tance in the "ar&et. Coca Cola needs


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to concentrate on the "ar&eting of these !roducts as well. It is understood that Coca

cola has "ade seeral e!enses to launch these !roducts. Thus# the "ar&eting and

subsequent rise of sale of these !roducts will hel! reenue of Coca cola.

Threats in the SWOT of coca cola

%aw material sourcing Water is the only threat to Coca cola. The wea&ness of

Coca cola was the sus!ected use of !esticides or ast consu"!tion of water. 4oweer#

the threat here is that water scarcity is on the rise. With the cli"ate changing# and

regions of arious countries facing scarcity of water# sooner or later so"eone "ight

raise fingers on beerage co"!anies. Thus# Water sourcing is an ae which can fall

anyti"e on the head of Coca cola. If water is li"ited or rationed# Coca cola can

e!erience a "a3or downfall in their reenue and ca!acity of distribution. The sa"e

can affect its arch rial (e!si as well.

&ndirect competitors Coffee chains li&e Starbuc&s# Caf6 coffee day# Costa coffeeare on the rise. These chains offer a healthy co"!etition to Coca colas carbonated

drin&s. They "ight not be a big co"!etition for Co&e# but they do gie a dent to its

beerage "ar&et. Si"ilarly# health drin&s li&e eal and Tro!icana as well as energy

drin&s li&e ed bull and 7atorade are stealing away the "ar&et share indirectly.

Company Background

Name The Coca-Cola Company

Logo

Industries served Beverage (more than 500 brands)!"


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#eographic areas served $orld%ide (more than &00 countries)!"

'eaduarters tlanta* #eorgia* +nited ,tates

Current C. /uhtar ent

1evenue 234653 billion (&0!7) &3&8 decrease over 2360!9 billion (&0!&)!"

:ro;it 26563 billion (&0!7) 36&8 decrease over 2


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beverage distribution system. Beverages bearing trademarks owned by or licensed to usaccount for ). billion of the appro/imately !0 billion beverage servings of all typesconsumed worldwide every day.

e believe our success depends on our ability to connect with consumers by providing them

with a wide variety of choices to meet their desires# needs and lifestyle choices. 1ur successfurther depends on the ability of our people to e/ecute effectively# every day.

1ur goal is to use our Companys assets our brands# financial strength# unrivaleddistribution system# global reach# and the talent and strong commitment of our managementand associates to become more competitive and to accelerate growth in a manner thatcreates value for our shareowners.2

'1T

The Coca Cola Company '1T analysis ,)!'trengths eaknesses

3/tensive and diversified product portfolio4dvertising and marketing capabilities'trong partnerships with bottling companies5eading player in the global beverages

industryBrand recognition and reputation'trong partnership with 6c%onalds

3/tensive distribution channels

7oor 89% capabilities8ising debt levels%ependence on income and profits from the

(.'.&ocus on soft carbonated beverages

Criticism and negative publicity

1pportunities Threats

rowing alcoholic beverage industry3/pansion of ready-to-drink coffee products

in the (.'. market

4c;uisition of 4ri


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3/hibit ). Dearly advertising budget for ma$or beverage companies

Company ,)? ,), ,))

The Coca Cola Company >?.,++ billion >?.?@, billion >?.,!+ billion

7epsiCo =nc.A? >).@@? billion >).?+ billion >).,! billion

%r 7epper 'napple roup =nc.A@ >@*+ million >@*) million >@+ million

'ource: Companies financial reports

=n addition# companys total marketing e/penses reached >+. billion or )@.0 of totalrevenue in ,)?. The companys marketing budget is not the largest when compared to therivals budgets# but its the one that is used the most effectively.

3/hibit ,. 6arketing e/penses for ma$or beverage companies in ,)?

Company 6arketing e/penses Total revenue o

The Coca Cola Company >+. billion >@+.*!@ billion

7epsiCo =nc.A? >[email protected] billion >++.@)! billion

%r 7epper 'napple roup =nc.A@ >?.+)* billion >!.0 billion

EestlF '.4.A! >, billion Gappro/.H >! billion Gappro/.H

EST Analysis

The PEST analysis identifies changes in the market caused by political, economic, social, and

technological (PEST) factors.

Below is the PEST analysis for the oca!ola ompany, a global enterprise that has ranked as

one of Fortune"s top #$ most admired companies for the past consecuti%e fi%e years.

Political Analysis and Factors

The &ood and 'rug dministration (&') regards non!alcoholic be%erages such as oca!ola aswithin the food category. The go%ernment regulates the manufacturing procedure of these

products. ompanies that fail to meet the go%ernment"s standards are subect to fines. oca!ola

is also subect to the *ccupational Safety and +ealth ct and to local, state, federal, and foreign

en%ironmental regulation. &ollowing are some of the factors that are influencing oca!ola"s

operations

). Changes in laws and regulations-changes in accounting standards, taation

re/uirements (ta rate changes, modified ta law interpretations, entrance of new ta laws),

and en%ironmental laws either in domestic or foreign authorities.


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,. Changes in non-alcoholic business era-competiti%e product and pricing policy

pressures and ability to maintain or earn share of sales in worldwide market compared to

ri%als.

?. Political conditions, specifically in international markets-ci%il conflict, go%ernmental

changes, and restrictions concerning the ability to relocate capital across borders.

@. Ability to penetrate emerging and deeloping markets-this also relies on economic

and political conditions, such as ci%il conflict and go%ernmental changes, as well as oca!

ola"s ability to form effecti%ely strategic business alliances with local bottlers, and to

enhance their production amenities, distribution networks, sales e/uipment, and technology.

Economic Analysis and Factors

'uring the recession of 0$$#, the 1S go%ernment took aggressi%e actions to turn the economy

around by 0$$0. oca!ola took note of this, and reali2ed that loan interest rates would likely rise

as the economy returned. Thus, they took out low!cost loans in 0$$# to fund growth in 0$$0.

They used the loans for research and de%elopment on new products to capitali2e on in a strong

0$$0 economy. urrently, as global growth is slowing, oca!ola may be watching for a similar

opportunity.

Social Analysis and Factors

Social factors that affect the sales of oca!ola"s products include the following

#. The maority of people in the 1S are showing increasing interest in healthy lifestyles. That

has strongly influenced the sales within non!alcoholic be%erage sector as many customers

switch to bottled water and diet colas such as oca!ola 3ight or 4ero.

0. Time management is a concern for 56 percent of all households, a percentage that has

increased o%er the years.

6. ustomers from ages 67 to 88 are concerned with their nutrition. lso, a large portion of

the population are baby boomers. s they become seniors, they are more concerned about

life choices that will impact their life epectancy. That will continue to affect the non!alcoholic

be%erage sector by increasing the demand for healthier drinks.

Technological Analysis and Factors

Some factors that cause a company"s actual results to %ary from epected results include

). The efficiency of a company!s adertising, marketing, and promotional programs-

&or eample, tele%ision, web, and social media ad%ertising are constantly e%ol%ing. The

ability of a company to effecti%ely promote their products through these channels impacts

sales.

,. Packaging design-9n the past, the introduction of cans and plastic bottles increased

sales %olume for the company due to how easy these containers were to carry and dispose.

?. "ew e#uipment-Because the technology is continuously ad%ancing, new e/uipment is

constantly being introduced. Because of these new technologies, oca!ola"s production

%olume has increased sharply compared to that of a few years ago.


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@. "ew factories-oca!ola Enterprises (E) has si factories in Britain that use modern

technology to ensure the /uality and speedy deli%ery of product. 9n #::$, E opened one

of Europe"s largest soft drinks factories in ;akefield,

Documents

Coca Cola is a Brand Which is Present in Households