COCA COLA SWOT ANALYSIS 2013

Strengths
The best global brand in the world in terms of value ($77,839 billion)
Worlds largest market share in beverage
Strong marketing and advertising
Most extensive beverage distribution channel
Customer loyalty
Bargaining power over suppliers
Corporate social responsibility

Weaknesses
Significant focus on carbonated drinks
Undiversified product portfolio
High debt level due to acquisitions
Negative publicity
Brand failures or many brands with insignificant amount of revenues

Opportunities
Bottled water consumption growth
Increasing demand for healthy food and beverage
Growing beverages consumption in emerging markets (especially BRIC)
Growth through acquisitions

Threats
Changes in consumer preferences
Water scarcity
Strong dollar
Legal requirements to disclose negative information on product labels
Decreasing gross profit and net profit margins
Competition from PepsiCo
Saturated carbonated drinks market
Strengths

1. The best global brand in the world in terms of value. According to Interbrand, The Coca Cola Company is the
most valued ($77,839 billion) brand in the world.

2. Worlds largest market share in beverage. Coca Cola holds the largest beverage market share in the world (about
40%).

3. Strong marketing and advertising. Coca Cola advertising expenses accounted for more than $3 billion in 2012
and increased firms sales and brand recognition.

4. Most extensive beverage distribution channel. Coca Cola serves more than 200 countries and more than 1.7
billion servings a day.

5. Customer loyalty. The firm enjoys having one of the most loyal consumer groups.

6. Bargaining power over suppliers. The Coca Cola Company is the largest beverage producer in the world and
exerts significant power over its suppliers to receive the lowest price available from them.

7. Corporate Social Responsibility (CSR). Coca Cola is increasingly focusing on CSR programs, such as
recycling/packaging, energy conservation/climate change, active healthy living, water stewardship and many
others, which boosts company social image and result in competitive advantage over competitors.

Weaknesses

1. Significant focus on carbonated drinks. The Coca Cola Company is still focusing on selling Coke, Fanta, Sprite and
other carbonated drinks. This strategy works in short term as consumption of carbonated drinks will grow in
emerging economies but it will prove weak as the world is fighting obesity and is moving towards consuming
healthier food and drinks.

2. Undiversified product portfolio. Unlike most companys competitors, Coca Cola is still focusing only on selling
beverage, which puts the firm at disadvantage. The overall consumption of soft drinks is stagnating and Coca Cola
Company will find it hard to penetrate to other markets (selling food or snacks) when it will have to sustain
current level of growth.

3. High debt level due to acquisitions. Nearly $8 billion of debt acquired from CCEs acquisition significantly
increased Coca Cola's debt level, interest rates and borrowing costs.

4. Negative publicity. The firm is often criticized for high water consumption in water scarce regions and using
harmful ingredients to produce its drinks.

5. Brand failures or many brands with insignificant amount of revenues. Coca Cola currently sells more than 500
brands but only few of the brands result in more than $1 billion sales. Plus, the firms success of introducing new
drinks is weak. Many of its introduction result in failures, for example, C2 drink.

Opportunities

1. Bottled water consumption growth. Consumption of bottled water is expected to grow both in US and the rest of
the world.

2. Increasing demand for healthy food and beverages. Due to many programs to fight obesity, demand for healthy
food and beverages has increased drastically. The Coca Cola Company has an opportunity to further expand its
product range with drinks that have low amount of sugar and calories.
3. Growing beverages consumption in emerging markets. Consumption of soft drinks is still significantly growing in
emerging markets, especially BRIC countries, where Coca Cola could increase and maintain its beverages market
share.

4. Growth through acquisitions. Coca Cola will find it hard to keep current growth levels and will find it hard to
penetrate new markets with its existing product portfolio. All this can be done more easily through acquiring other
companies.

Threats

1. Changes in consumer tastes. Consumers around the world become more health conscious and reduce their
consumption of carbonated drinks, drinks that have large amounts of sugar, calories and fat. This is the most
serious threat as Coca Cola is mainly serving carbonated drinks.

2. Water scarcity. Water is becoming scarcer around the world and increases both in cost and criticism for Coca
Cola over the large amounts of water used in production.

3. Strong dollar. More than 60% of The Coca Cola Company income is from outside US. Due to strong dollar
performance against other currencies firms overall income may fall.

4. Legal requirements to disclose negative information on product labels. Some Coca Colas carbonated drinks have
adverse health consequences. For this reason, many governments consider to pass legislation that requires
disclosing such information on product labels. Products containing such information may be perceived negatively
and lose its customers.

5. Decreasing gross profit and net profit margins. Coca Colas gross profit and net profit margin was decreasing
over the past few years and may continue to decrease due to higher water and other raw material costs.

6. Competition from PepsiCo. PepsiCo is fiercely competing with Coca Cola over market share in BRIC countries,
especially India.

7. Saturated carbonated drinks market. The company significantly relies on the carbonated drinks sales, which is a
threat for the Coca Cola as the market of carbonated drinks is not growing or even declining in the world.
 Samsung SWOT analysis 2013

Strengths
Hardware integration with many open source OS and software
Excellence in engineering and producing hardware parts and consumer electronics
Innovation and design
Focus on environment
Low production costs
Largest share in mobile phones and 2 place in smartphones sales
Ability to market the brand

Weaknesses
Patent infringement
Too low profit margin
Main competitors are also largest buyers
Lack its own OS and software
Focus on too many products

Opportunities
Growing Indias smartphone market
Growing mobile advertising industry
Growing demand for quality application processors
Growth of tablets market
Obtaining patents through acquisitions

Threats
Saturated smartphone markets in developed countries
Rapid technological change
Declining margins on hardware production
Breached patents
Apples iTV launch
Price wars
Strengths

1. Hardware integration with many open source OS and software. Samsung is focused on producing devices
which can be integrated with most of the software and OS. This gives Samsung products an edge over Apples (its
arch rival) devices, especially as Android and other OS are gaining market share when iOS and OS X are losing it.

2. Excellence in engineering and producing hardware parts and consumer electronics. Samsung is the
number 1 by market share in televisions and mobile phones sales and some of the hardware parts (processors,
memory chips, etc.). This was largely achieved due to excellence in engineering and both efficient and effective
production.

3. Innovation and design. In 2011, Samsung ranked second on the list of US top patent assignees. More patents
strengthen Samsung position among its competitors. The firm also won many awards for the design of its products,
proving the superior advantage over the competitors.

4. Focus on environment. Samsung focuses on producing environment friendly products that are free from PVC
and BFRs (currently only MP3 and mobile phones). It also develops various recycling programs that are awarded
for their success. Thus, Samsungs focus on environment gives it an edge over its competitors in the eyes of its
customers.

5. Low production costs. Samsung has set up its production facilities in low cost countries. This allows producing
goods with low production cost and benefit Samsung as it can offer lower price and earn higher margins.

6. Largest share in mobile phones and 2 place in smartphones sales in the world. Samsung Electronics have
achieved large market share in many products they sell, especially in mobile phones, smartphones, semiconductors
and television sets. Large market share has its advantage, bargaining power, that Samsung can use to further
reduce costs and demand for better contract conditions.

7. Ability to market the brand. Samsung is named as top rising brand by Interbrand and is the 9th most valuable
brand with value nearly $33 billion. It has risen by 40% from 2011 to 2012. This was mainly achieved due to
companys ability to market the brand in sporting events and social contributions.

Weaknesses

1. Patent infringement. Samsung is infringing Apples and some other firms patents, thus, damaging its
reputation and having to pay a huge amount of money in damages.

2. Too low profit margin. Samsung Electronics is the largest technology company in the world in terms of
revenues but it has a low gross profit and net profit margins. Although its smartphones business is quite profitable,
Samsungs profit margin is low due to its semiconductors sales and aggressive price cuts.

3. Main competitors are also largest buyers. Apple, Sony, Dell, HP are the main buyers of Samsung Electronics
products as well as the firms main competitors. Such situation would be favorable to Samsung (if competitors
could not find complementary products and would form a relatively low share Samsungs revenues) because it
could use its bargaining power over competitors. Due to reverse conditions (competitors can find complements
and they form a relatively high share of firms revenues) Samsung cannot use its bargaining power over
competitors as it can easily lose its customers and sales.

4. Lack its own OS and software. Software and OS production has a high profit margin, can increase integration of
companys products and brand loyalty. Without strong software and OS Samsung is at disadvantage over its
competitors.
5. Focus on too many products.Samsung Electronics serves 4 different industries with many different products in
them. Samsung is at disadvantage over its competitors because it loses a focus when competing in too many
industries and too many products.

Opportunities

1. Growing Indias smartphone market. Indias smartphone market is one of the least penetrated among
Asia/Pacific countries. Samsung has a strong presence in Indias market and could use this opportunity to expand
its sales.

2. Growing mobile advertising industry. Samsung could develop advertising platform for its mobile devices and
significantly benefit from this lucrative market.

3. Growing demand for quality application processors. Samsung is one of the key manufacturers of application
processors for smartphones and tablets. The growing demand for these products requires best quality application
processors that only Samsung provide.

4. Growth of tablets market. Tablets market is expected to grow in double digits over the next few years.
Samsung has a strong position in tablets market and could expand it by introducing newer, better quality tablet
models, such as its current galaxy line.

5. Obtaining patents through acquisitions. The key to Samsungs competitive advantage is the large portfolio of
patents. Patents can be discovered by engaging in costly R&D or through acquisitions of other firms.

Threats

1. Saturated smartphone markets in developed countries. Smartphones market in the developed economies is
saturated and the sales will not be growing at a high rate.

2. Rapid technological change. The serious threat that Samsung and the other tech companies are facing is a
rapid technological change. Companies are under the pressure to release the new products faster and faster. The
one that cannot keep up with the competition soon fails. This is especially hard when the company wants to
introduce something new, innovative and successful.

3. Declining margins on hardware production. Samsung is the second largest semiconductors producer where
the profit margins are very thin, thus weakening the whole companys figures.

4. Breached patents. Samsung Electronics has many patents which are often used by its many competitors. Such
situation makes it hard to find out which companies benefit from Samsungs technology but do not pay for the
rights to use it.

5. Apples iTV launch. Apples iTV is the next big lunch from Apple, which may hurt Samsungs TV sales.

6. Price wars. Samsung has a very low gross margin on many of its products and is already selling some of them
with significant price cuts. Competitors could follow price cutting strategy too and induce price wars, which would
erode Samsungs profit margin to 0%!