Coco cola SWOT analysis

Strengths
Brand Awareness: The Coca-Cola Company is one of the most widely recognized brands across
the globe. Its signature logo, classic red & white colors, and world-famous jingle resonate with
consumers of all ages. There are two key players in this sector of the beverage business, one
being Coca-Cola, while the other remains PepsiCo, Inc. (PEP). That said, Coca-Cola maintains
its position in the top post as the clear-cut winner. Although both businesses constantly jockey
for increased market share, Coca-Cola has the edge here. The beverage producer also garners a
core following customers, as many consumers that deem themselves fans of its products tend not
to shift toward other brands. Going forward, the companys vast financial resources ought to fuel
its sizable marketing efforts and increased product innovation, which should propel market-share
gains over the long haul.
Robust Distribution Network: Coca-Cola makes its products available to individuals in more
than 200 countries through the worlds largest distribution network. Its ability to utilize
company-owned/-controlled distributors, as well as independent bottlers, wholesalers, and
retailers has no parallel. This system enables KO to closely manage costs, rapidly introduce new
items into the marketplace, and saturate various geographic locations. Moreover, its meaningful
network allows for an enhanced level of quality control and safety for its goods. The stable
distribution platform has been a boon for expansion in recent years, as the company has sought
to reach new customers in remote locations. These diverse operations have aided market
presence, volumes, deliveries, and product introductions during a crucial span.

Weaknesses
Water Management: Water is a main ingredient in substantially all of the companys products. It
is vital to the production of the agricultural ingredients on which the business relies and is
needed in KOs core manufacturing processes. Also, this resource is critical to the prosperity of
the communities Coca-Cola serves. Water is a limited resource in many parts of the world, facing
unprecedented challenges from overexploitation, as well as rising demand for food and other
consumer and industrial products whose manufacturing processes require water. These events
increase the risk of pollution, poor management, and effects stemming from climate change. As

the demand for water continues to climb around the world, and water becomes scarcer, the
overall quality of available water sources may very well deteriorate markedly, leaving the CocaCola system to incur higher costs or face capacity constraints that could adversely affect its
profitability or net operating revenues in the long run.
Foreign Currency Fluctuation: The Company earns revenues, pays expenses, owns assets, and
incurs liabilities in countries using currencies other than the U.S. dollar, including the euro, the
Japanese yen, the Brazilian real, and the Mexican peso. In 2014, it used 70 functional currencies
in addition to the U.S. dollar and derived $26.2 billion of net operating revenues from operations
outside the United States. Because its consolidated financial statements are presented in U.S.
dollars, Coca-Cola must translate revenues, income and expenses, as well as assets and
liabilities, into U.S. dollars at exchange rates in effect during or at the end of each reporting
period. Therefore, increases or decreases in the value of the U.S. dollar against other major
currencies affect its net operating revenues, operating income, and the value of balance sheet
items denominated in foreign currencies. In addition, unexpected and dramatic devaluations of
currencies in developing or emerging markets could negatively affect the value of the beverage
providers earnings from, and of the assets located in, those markets. Weaknesses in some
currencies might be offset by strengths in others over time due to the geographic diversity of the
companys operations. Moreover, KO also employs derivative financial instruments to further
reduce its net exposure to foreign currency exchange rate fluctuations. However, it cannot fully
hedge the impact from fluctuations in foreign currency exchange rates, particularly the
strengthening of the U.S. dollar against major currencies or the currencies of large developing
countries.

Opportunities
Diversification: The Company has been hard at work utilizing its ample war chest to build a
presence in rapidly-growing beverage categories. Currently, it owns 16% of Keurig Green
Mountain and is developing a fresh Keurig Kold device that is set to debut this fall. Keurig,
famous for pod-based, hot drinks intends to feature Coke-branded products for its upcoming
platform. In addition, Coca-Cola recently finalized its purchase of a 17% stake in Monster
Beverage. The deal provides the company with access to a popular energy drink growth segment.
All told, we anticipate these transactions will bolster the top and bottom lines immediately. These
joint ventures also deliver Coca-Cola with established inroads to a younger customer base.
Looking ahead, KO will probably aim to forge increased relationships with coffee, energy, and
health drink businesses.
Extended Reach: The population continues to increase at a steady clip. In order to capitalize on
this fact and consumers shift toward healthier living Coca-Cola has focused on bolstering a

variety of its business lines. Areas such as India and China have ramped up demand for the
companys latest juice and coffee offerings. Too, developing countries face hefty clean water
shortages, which ought to result in surging demand for the companys bottled water goods. These
business segments have increased at double-digit rates in the past year, highlighting an elevated
need for beverages other than Coca-Colas traditional drinks. We believe Coca-Cola remains
dedicated to differentiating its portfolio and delivering emerging markets with various beverage
staples over the long term.

Threats
Nutritious Selections: Its been no secret that soft drink providers have suffered some of late. A
cultural shift toward natural and organic products has led many to opt for nutritional waters,
smoothies, and various healthy beverage options. Thus, core soda offerings that include high
amounts of sugar, or diet items with artificial sweeteners, have fallen out of favor with buyers.
Whats more, this trend does not seem likely to abate, as consumers continue to boost their
knowledge of proper dietary requirements and exercise programs. Further, many health
professionals have called for the elimination of foods and beverages containing lofty amounts of
sugar, since these products place individuals at an elevated risk of becoming obese, developing
diabetes, and suffering from heart disease. Also, a negative perception of these beverages has
surged due to federal regulators desire to place excess taxes on sodas and sugary soft drinks.
Indirect Competition: Although companies such as Starbucks (SBUX) and Dunkin Brands
Group (DNKN) do not compete directly with Coca-Cola, these businesses do place a dent in the
companys market share. The chains offer customers healthier alternatives, unique choices, and
customer loyalty rewards that are not easily matched by Coca-Cola. In addition, smaller
franchises and retail chains provide patrons with private-label substitutes for traditional Coke
products, which allow these businesses to deliver beverages at a lower price. Industry data
suggest potential customers will continue to be pulled away from basic drink selections in favor
of customizable options that carry a greater nutritional benefit.
Conclusion
While the number of challenges facing Coca-Cola are abundant, this company does possess a
good deal of promise for the future. Its overall size, leverage, and financial resources have it well
positioned to take advantage of worthwhile acquisition targets. Too, the companys brand appeal
and cult-like following insure that it will probably remain a top-tier beverage provider going
forward. Coca-Colas vast distribution network should enable better volumes ahead and success
in burgeoning markets. All told, conservative investors wanting a reliable source of income and a
bit of capital gains exposure might want to give The Coca-Cola Company a glance.

Coca cola BCG matrix Analysis

BCG matrix relies on 2 dimensions: market growth and market share. The basic notion behind it
is that the higher the market share of a specific product has or the faster the products
marketability grows, the better it is for the industry. Placing appropriate products in the BCG
matrix, results in 4 categories, in the business portfolio of an industry. The four categories
include the Stars, cash cows, dogs, question marks .
So as per BCG matrix model coca cola different products have in different position. The star products of coca cola are
Thumbs up , Maaza , Kinely. The products which are in cash cow are limca , coca cola. The questioned mark
products are of coca cola are fanta and sprite. The products which are at dogs are diet coke , minute maid.
So as a conclusion coca cola invest profits for future growth and for earning more of market share and profits. When
company use cash cow strategy , company use profits to finance new products and growth elsewhere. In question
mark position company either invest heavily in order to push the product to star status , or divest in order to avoid it
becoming a dog.
.

PORTERS FIVE FORCES ANALYSIS

Rival Competitors
When you think of Coca-Cola and competitors, Pepsi is probably one of the first rivals to come
to mind, and rightfully so. The two companies have been in competition with each other since
the late 19th century. They have very similar ingredients in their marquee products and some
very similar offerings: Coke and Pepsi. The two companies also have similar non-soda interests,
such as orange juice and bottled water. Pepsi also owns Doritos, Quaker Oats and Rice-A-Roni,
which changes the way it competes. Most notably, if trends go against soda and bottled drinks,
Pepsi may be able to hedge its bets with its other lines. Coca-Cola does not have the same
opportunity.
Coca-Cola also competes directly against the Dr. Pepper Snapple Group. While Dr. Pepper
Snapple does not have a cola, it does feature some big brands in the soft drink and juice markets,
including its namesakes Dr. Pepper and Snapple as well as A&W Root Beer and Sunkist. In some
ways, not having a cola could work to the Dr. Pepper Snapple Group's advantage. As popular as
Coca-Cola is, a trend towards beverages with less caffeine could leave its sales in that product
line depressed.
As consumer trends shift, Coca-Cola could be left vulnerable, but the beverage company does
have a loyal following. The risk in this area is moderate.

New Entrant to the Industry

New entrants to the beverage industry are another possibility. While companies such as CocaCola and its rivals do have special licensing deals, including having their products sold in fast
food chains, and different distribution deals, another company could gain a foothold if it hit into
the trends at the right time. Granted, it would have to have a very positive and very viral image
or spend a fortune to create the type of brand recognition Coca-Cola enjoys, but it is not
impossible.
Moreover, as consumers move towards healthier options, it would not necessarily have to be a
single new entrant that causes a problem for the beverage behemoth. Several new entrants to the
industry at once could fragment it to the point that it affects Coca-Colas bottom line. As smaller
companies attempt to enter the beverage market, this threat becomes more of a possibility. It may
not be very likely, but anyone investing in Coca-Cola should at least keep an eye on the
competitive landscape.

Buyers Purchase Instead

Similarly, Coca-Cola also has to contend with what buyers could purchase instead of its
products. For instance, customers could start drinking coffee instead of Coke. If the rise of
Starbucks has shown anything, it is that people really do love coffee in the right environment and
with the right flavorings. Coca-Cola does have a stake in Green Mountain Coffee Roasters, the
maker of Keurig, possibly for just this reason.
Buyers could also choose beverages such as freshly made smoothies or fresh-pressed juices
instead of Coca-Cola's bottled beverages. As more people become health-conscious, the threat of
a trend forming in which buyers substitute a different drink for Coca-Cola products becomes
more of a possibility. Again, Coca-Cola is popular the world over, but investors need to make
sure they are aware of the competitive landscape in which the company operates if they are going
to make informed decisions about whether to invest and how long to hold on to their investments
if they do.
Bargaining Power of Buyers

When it comes to the bottled beverages market, buyers have a fair amount of bargaining power,
and this affects Coca-Cola's bottom line directly. Coca-Cola does not sell directly to its end
users. Instead, it mostly deals with distribution companies that service fast food chains for
fountain services, vending machine companies, college campuses and grocery stores. Demand
leads the purchases, but Coca-Cola also has to keep an eye on what that end price will be.
Ultimately, Coca-Cola has to sell its products to distribution networks and other customers at
prices low enough that they can sell to the end user at a price that keeps them coming back.

Moreover, Coca-Cola's pricing is also somewhat consistent with each outlet. After all,
McDonald's does not sell a Coke for 99 cents one day and $1.03 the next. As Coca-Cola's cost of
goods sold (COGS) fluctuates due to materials, transportation or manpower, either the beverage
company or those companies to which it distributes have to absorb the changes in price.
Bargaining Power of Suppliers

This leads to the final competitive force: Coca-Colas suppliers. As big as the beverage company
is, and as many contracts as it likely has with its suppliers securing pricing, suppliers still have
some power, and some of it may be out of their hands. After all, sugar is a commodity; like other
commodities, its price varies over time and with availability. A few natural disasters could affect
sugar cane harvests and impact Coca-Cola's raw materials costs. Thanks to contracts the
company likely has in place, the effect would be minimal unless those disasters occurred
repeatedly over the course of several years.

Case studies
1
The story:
Coca-Cola is the worlds best-known beverage company. It traditionally manufactured
concentrates, syrups and powders and sold them to authorized bottling partners, who converted
them to finished products and sold them to distributors, wholesalers and retailers. Its core
product offering is sparkling beverages but also includes still beverages such as water, juice and
energy drinks.
From its inception, the company was based on a franchise model the Coca-Cola System
whereby Coca-Cola would sell concentrate to its many bottling partners worldwide. While CocaCola managed the overall brand strategy, concentrate production and some large multinational
customers such as McDonalds, the bottlers manufactured the final branded products, handled
merchandising and distribution, and worked closely with local customers.

The challenge:
In developed markets, the growth of the sparkling drinks industry from the 1970s to the 1990s
came to a halt.
At the same time, competition was intensifying from beverage companies that produced still and
health-oriented drinks, as consumers became more health-conscious. Many of the challengers

were small businesses, enabling them to be more nimble and innovative than multinational
organizations like Coca-Cola.
The companys franchise business model was also under pressure. The bottlers incentive was to
use the precious concentrate in low-volume, high-margin products, whereas Coca-Colas profits
were linked solely to the volume of concentrate sold to bottlers, rather than the price paid by
customers. This was creating increased friction in the relationship between Coca-Cola and the
partners on whom it relied.
An additional challenge was responding to the environmental impact of transportation and
packaging.

The response:
First, Coca-Cola focused on rejuvenating its core product line. The successful launch of Coke
Zero, a diet variation of the drink pitched at men (Diet Coke or Coke Light is principally aimed
at women) added volume and revenue growth.
Second, the company made key acquisitions in the non-carbonated drinks sector to expand its
presence in the growing market. These included a deal for Glaceau, maker of Vitamin water, and
a stake in Honest Tea, the organic iced tea producer.
Third, the company co-operated more closely with its partners. Coca-Cola recognized that many
of the bottling companies had become big businesses in their own right, with independent
shareholders to worry about, and tried to find new ways of working together to the advantage of
both sides.
For example, an incidence approach to pricing was used more often, whereby both Coca-Cola
and the bottler shared in the profit made by the combined system, rather than a fixed price per
unit for concentrate.
Fourth, Coca-Cola acquired the bottling operations of CCE, its US bottler. This was significant
because it signalled that the company was moving away from a one-size-fits-all-markets business
model. The franchise system might have worked when the company produced just one product,
but as its output expanded to include every non-alcoholic beverage category, it had to evolve.
Finally, Coca-Cola embraced sustainability with initiatives to conserve water in its
manufacturing, materials in its packaging and even electricity in the millions of coolers it has
dotted around the world.

Key lessons:
First, growth can be found in mature or stable categories. The success of Coke Zero underlines
that. Rather than focus exclusively on categories where other companies are growing fast,
companies should consider how they can rejuvenate core businesses.
Second, companies should be flexible with regard to their business model. To drive innovation in
the US, Coke needed to change the way its products were manufactured and distributed.
The writer is a professor of marketing at IMD.

2
Author(s):
Marilyn M. Helms (Sesquicentennial Chair and Professor of Management in the School
of Business, Dalton State College, Dalton, Georgia, USA)

Citation:
Marilyn M. Helms , (20112011)

DOI
http://dx.doi.org/10.1108/20450621111172980

Downloads:
The full text of this document has been downloaded 463 times since 2011

Abstract:

Title
Emerging entrepreneurship in Cuba

Subject area
Entrepreneurship; tourism and hospitality.

Student level/applicability
Junior or senior-level business students as well as graduate-level (MBA and/or EMBA)
classes in entrepreneurship, small business management, strategic management,
international business or international economics.

Case overview
Cuban tour guides working for the communist Castro Government dream of working for
themselves or leaving for the USA. Their story is contrasted by a visit to Cuba as told by
a US business professor.

Expected learning outcomes

To compare entrepreneurship under capitalism that is slowly relaxing their communistic
rules, to learn more about the island of Cuba and its potential for tourism and new
venture creation, to understand the legal, social, political, historical and cultural barriers
to entrepreneurship, to hypothesize or brainstorm potential new ventures for Cuba.

Supplementary materials
Teaching notes; photos also available upon request from the author.

Keywords:
Entrepreneurialism, Cuba, Tourism, Nascent start-ups, New venture
creation, Communism, Capitalism

Publisher:
Emerald Group Publishing Limited

Acknowledgments:
Disclaimer. This case is written solely for educational purposes and is not intended to
represent successful or unsuccessful managerial decision making. The author/s may have
disguised names; financial and other recognizable information to protect confidentiality

Articles
1
Author(s):
Ross D. Petty (Division of Accounting and Law, Babson College, Babson Park,
Massachusetts, USA)

Citation:
Ross D. Petty, "CocaCola brand protection before World War II it's the real
thing!", Journal of Historical Research in Marketing, Vol. 4 Iss: 2, pp.224 - 244

DOI
http://dx.doi.org/10.1108/17557501211224430

Downloads:
The full text of this document has been downloaded 957 times since 2012

Acknowledgements:
Professor Petty wishes to thank the Babson Faculty Research Fund for its support of this
project.

Abstract:
Purpose
This paper aims to discuss the early brand protection efforts of CocaCola.

Design/methodology/approach
The paper examines the hundreds of trademark infringement challenges brought by
CocaCola in courts and before the US Patent and Trademark Office and develops a
tripartite system of categorizing these challenges by primary legal issue.

Findings
Company developed several innovations in brand identity protection including
challenges to a wide variety of similar names, logos and packaging, the use of detectives
in service settings and the use of consumer psychological evidence in legal proceedings.
Ultimately, it protected it name against those rivals that closely imitated both words in its
name or words similar to Coca or Coke. However, it was unable to obtain exclusive rights
to the word cola which became the generic designation for such drinks.

Practical implications
Even today, the scope of Coca brand protection efforts provides a useful model for
modern brands. This work also presents and summarizes important historical data.

Originality/value
This study examines Coca brand protection efforts and legal challenges in much greater
detail than previous historical works on Coca

Keywords:
Coca cola, Trade marks, Brand protection, Brands

Type:
Research paper

2
Author(s):
James Espey

Citation:
James Espey, "Strategy in the Making: A Case Study", Marketing Intelligence &
Planning, Vol. 9 Iss: 3, pp.2 - 52

DOI
http://dx.doi.org/10.1108/EUM0000000001098

Downloads:
The full text of this document has been downloaded 701 times since 2006

Acknowledgements:
Note: This paper was subsequently published in International Marketing Review, Volume
8 Number 4, 1991

Abstract:

A case study is given of International Distillers & Vintners (UK) Limited (IDV (UK)) and
an assessment made of the viability of translating theory into practice in the real world
the importance of having a strategy, of strategic planning, and having a success factor as
a key component of an organizations competitive advantage. Following the appointment
of a new managing director at IDV (UK) in 1982, three goals were established: (1) to
more than double profits within five years; (2) to increase return on capital employed by
almost 50 per cent within five years; and (3) to be the outstanding wine and
spirit company in the UK. A sound strategy was required to achieve these goals. The
historic background of the organization is given and the strategic position of IDV (UK) in
relation to its competitors and market share is described. A review of the state of the
market is given and possible areas for expansion discussed. The quality and pedigree of
certain brands and the quality and strength of leadership are proposed as the success
factors upon which IDV (UK) could build. Details are given of how the organization built
upon these factors to achieve strategic success; the lessons learned; and the level of
achievement and success in the marketplace.

Keywords:
Alcoholic drinks industry, Market share, Strategic
planning, Strategy, Brands, Leadership, Marketing strategy

Type:
Research paper

Publisher:
MCB UP Ltd

3
The beverage giants Coca-Cola and PepsiCo have given millions of dollars to nearly 100
prominent health groups in recent years, while simultaneously spending millions to defeat public
health legislation that would reduce Americans soda intake, according to public health
researchers.
The findings, published on Monday in the American Journal of Preventive Medicine, document
the beverage industrys deep financial ties to the health community over the past five years, as
part of a strategy to silence health critics and gain unlikely allies against soda regulations.
The studys authors, Michael Siegel, a professor at the Boston University School of public
health, and Daniel Aaron, a student at Boston Universitys medical school, scoured public
records including news releases, newspaper databases, lobbying reports, the medical literature
and information released by the beverage giants themselves. While some of the incidents cited in
the study already have been reported by news organizations, the medical journal report is the first
to take a comprehensive look at the industrys strategy of donating to health organizations while
at the same time lobbying against public health measures. The study tracked industry donations

and lobbying spending from 2011 through 2015, at a time when many cities were mulling soda
taxes or other regulations to combat obesity.
We wanted to look at what these companies really stand for, said Mr. Aaron, the studys coauthor. And it looks like they are not helping public health at all in fact theyre opposing it
almost across the board, which calls these sponsorships into question.
Continue reading the main story
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Mr. Aaron said that the industry donations created clear-cut conflicts of interest for the health
groups that accepted them.
The report found a number of instances in which influential health groups accepted beverage
industry donations and then backed away from supporting soda taxes or remained noticeably
silent about the initiatives.
In one instance cited in the study, the nonprofit group Save the Children, which had actively
supported soda tax campaigns in several states, did an about face and withdrew its support in
2010. The group had accepted a $5 million grant from Pepsi and was seeking a major grant from
Coke to help pay for its health and education programs for children.
Responding to the new research, Save the Children said, in a statement, that the group in 2010
had decided to focus on early childhood education, and that its decision to stop supporting soda
taxes was unrelated to any corporate support that Save the Children received.
When New York proposed a ban on extra-large sodas in 2012, the Academy of Nutrition and
Dietetics cited conflicting research and didnt support the effort. The academy accepted
$525,000 in donations from Coke in 2012. The following year it took a $350,000 donation from
the company.
The academy said it no longer has a sponsorship relationship with the beverage firms.
The N.A.A.C.P. and the Hispanic Federation have publicly opposed anti-soda initiatives despite
disproportionately high rates of obesity in black and Hispanic communities. Coke made more
than $1 million in donations to the N.A.A.C.P. Between 2010 and 2015, and more than $600,000
to the Hispanic Federation between 2012 and 2015. The groups did not respond to requests for
comment.
The beverage industry is using corporate philanthropy to undermine public health measures,
said Kelly D. Brownell, dean of the Sanford School of Public Policy at Duke, who was not
involved in the new research.
The American Diabetes Association accepted $140,000 from the company between 2012 and
2014. The American Heart Association received more than $400,000 from Coke between 2010
and 2015. And the National Institutes of Health received nearly $2 million from Coke between
2010 and 2014.

In a statement, the heart association said the group is leading efforts to reduce consumption of
sugary drinks, and the group has advocated for increased taxes on sugary drinks.
To achieve our goals, we must engage a wide variety of food and beverage companies to be part
of the solution, the statement said. The soda sponsorship does not have any influence on our
science and the public policy positions we advocate for.
Coke referred questions about the study to their trade group, the American Beverage Association.
We believe our actions in communities and the marketplace are contributing to addressing the
complex challenge of obesity, the beverage association said. We stand strongly for our need,
and right, to partner with organizations that strengthen our communities.
The beverage association said it disagreed with public health advocates on discriminatory and
regressive taxes and policies on our products.
In a statement PepsiCo said it is incorrectly painted as a soda company, when only a quarter of
our global revenue comes from carbonated soft drinks.
We believe that obesity is a complex, multifaceted issue and that our company has an important
role to play in addressing it - which includes engaging with public health organizations and
responding to consumers demand for healthier products, the statement said.
The New York Times last year reported that Coke had paid for scientific research that
downplayed the link between sugary drinks and obesity. After that article was published, the
beverage giant released a database showing that since 2010 it had spent more than $120 million
on academic research and partnerships with health organizations involved in curbing obesity.
From 2011 to 2015, Coke spent on average more than $6 million per year lobbying against
public health measures aimed at curbing soda consumption, according to data from the
nonpartisan Center for Responsive Politics. Pepsi spent about $3 million per year during that
period, and the American Beverage Association spent more than $1 million each year, the study
found.
In 2009 alone, when the government proposed a federal soda tax to curb obesity that would help
finance health care reform, Coke, Pepsi and the American Beverage Association spent a
combined $38 million lobbying against the measure, which ultimately failed.
When the mayor of Philadelphia proposed a soda tax in 2010, the beverage industry offered $10
million to the Childrens Hospital of Philadelphia if the tax proposal was dropped. The City
Council voted down the measure, and the beverage association later made the donation.
Philadelphia did ultimately impose a soda tax this year. The beverage industry filed a lawsuit in
September, calling the tax illegal. The industry also is spending millions on advertising
campaigns against soda taxes that are on the ballot in at least four cities this November three in
Northern California, and one in Boulder, Colo.

Marion Nestle, a professor of nutrition, food studies and public health at New York University,
said the paper shows that soda companies want to have it both ways appear as socially
responsible corporate citizens and lobby against public health measures every chance they get.