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Coca-Cola SWOT Analysis

Considered one of the powerhouses controlling the beverage industry, Coca-Cola is a carbonated-drink manufacturing company valued at $74 billion. In 1886, John Stith Pemberton, a chemist, created the soda. He combined caffeine from kola nuts and cocaine from the coca leaves to create a stimulant. The coca and kola are the ingredients that gave rise to the product moniker and the advertising of Coca-Cola as a “healthy tonic.”

Coca-Cola has been using varied advertising since it first began to grow its market share. As a result, it has grown into one of the greatest recognizable brands around the globe. Most of the company’s output is syrup concentrate, sold to numerous bottlers with exclusive markets worldwide. According to Business Insider, 94% of people worldwide can immediately recognize the brand because of the red-with-white Coca-Cola logo. Below is the swot analysis for Coca-Cola .

Below, there are the strengths of Coca-Cola:

Strong Brand Identity

Coca-Cola is popular because of its strong brand identity. According to an analysis, it is one of the most substantial world-class companies, with a brand strength index of 93.3 out of 100. From product packaging to design and content,  it is evident that Coca-Cola puts creativity and quality into its products. This, in turn, inspires and attracts more customers. In addition to making quality products, Coca-Cola has a massive impact on television and online marketing campaigns. This has made Coca-Cola more than just a  brand to become an Icon, and its products are the most selling in history.

Strong Brand Value

Since its founding in 1886, over a hundred years ago, Coca-Cola is currently valued at 97.7 billion U.S. dollars, making it one of the brands with the highest value globally. Over the years, the company has developed unique strategies like customized bottle designs, festive season designs, and other flashy designs to attract shoppers. This keeps the product in consumers’ minds all through the year. It has also led to an increase in its brand value. Additionally, the company uses sub-branding strategies to market different varieties of products. An Interbrand report ranked Coca-Cola as the 6th best global brand.

Global Reach 

Making sales in over 200 countries and approximately 1.9 billion servings daily, Coca-Cola has a global reach. The company has achieved international success by providing refreshments with a minimal amount of money. Coca-Cola has over 16 million customers worldwide and keenly focuses on enhancing value for its customers. Also, Coca-Cola strives to understand the needs of its consumers and customers in different locations. Also, Coca-Cola is known to have introduced over 500 new products, some of which are variations of the Coca-Cola beverage. Ultimately, the success of Coca-Cola depends on its ability to satisfy consumer beverage demands and add value to its customers.

Market Share

Coca-Cola has the largest market share. According to a report, Coca-Cola products are sold in more than 200 countries. The report also shows that out of 50 billion different beverages served worldwide in a day, beverages owned or licensed by Coca-Cola amount to approximately 1.9 billion. Overall, beverages with the Coke or Coca-Cola trademark dominate the soft drink market. Recently, Coca-Cola was named the first company to surpass £1 billion in annual sales. It commands a more prominent market presence in the carbonated soft drink area. Though rivalry exists between Coca-Cola and Pepsi, Coca-Cola has emerged as the dominant beverage provider.

Repositioning Portfolio

There are varieties of brands under Coca-Cola that are currently in circulation in the world. This is because the company produces carbonated drinks and other types of drinks. Therefore, Coca-Cola repositioned and also reduced its global brands before splitting them into five (5) major product categories:

• Plant, nutrition juice, and diary;
• Sparkling flavors;
• Hydration sports tea and coffee.

Hence, when launching products, the country’s culture is usually considered.

Brand Association

In the U.S., Coca-Cola is one of the most “emotionally connected” brands. The brand has strong customer loyalty, and customers are easily attracted to a particular taste, making it difficult to get substitutes quickly. Also, it has a close consumer-supplier relationship and entertaining adverts that trend in the media. In addition, the use of international stars, athletes, and actors made Coca-Cola a famous brand. Moreover, it has more followership than any other beverage brand. Therefore, Coca-Cola is a product known in almost every home worldwide.

Distribution System

Coca-Cola’s efficient distribution system has the most extensive distribution network globally, with approximately 225 bottling partners and 900 bottling plants worldwide. The company can be described as “a Global Business that operates on a local scale.” The company produces and sells beverage bases, concentrates, and syrups to bottling companies, who further process, package, and distribute the beverages to partners and clients who sell the products to the consumers. The process is always closely monitored by Coca-Cola. Most times, the bottling companies are partially owned by Coca-Cola and can only bottle their products. In addition, Coca-Cola sells directly and indirectly; direct selling by supplying to shops and outlets through their transport and indirect selling by maintaining the wholesale in the region.

Acquisitions

Coca-Cola has a record of profitable company acquisitions, which are made strategically. These acquisitions include the Costa Coffee chain, Fuze Tea, Fair life, and many others. With these acquisitions, Coca-Cola has been able to diversify its beverage portfolio.

Competition With Pepsi

Coca-Cola could have been the only market leader in the beverages industry had Pepsi not been. Pepsi is known as the most significant rival Coca-Cola is known to have. Although Coca-Cola has always subdued Pepsi for a long time, since Pepsi began intense marketing and product promotion, Pepsi’s capitalization moved up and slightly surpassed Coca-Cola in 2004. Also, the pricing method in Pepsi is based on consumer demand, while Coca-Cola sets its prices to be similar to their competitor. The competition has been between Coca-Cola and Pepsi since they joined the soft drink industry. Since then, Coca-Cola has spent millions on its marketing and innovation.

Product Diversification 

Coca-Cola has low product diversity, whereas Pepsi has launched various products, which include food, snacks, and also beverages. This gives Pepsi an edge over Coca-Cola.

Health Issues 

Two major health problems — Diabetes and Obesity —, caused by high sugar consumption, can be traced back to the intake of carbonated drinks since it is the primary source of sugar consumption. Many health experts warn consumers against consumption and suggest banning these drinks. This has been a major, controversial issue for Coca-Cola, the biggest carbonated beverage manufacturer. However, Coca-Cola is yet to bring a health-friendly alternative or a solution to this problem.

Infringement Lawsuits

Coca-Cola has faced several lawsuits, which may have left doubts in the minds of consumers. It also might negatively impact its credibility. One of the significant lawsuits faced by Coca-Cola is the infringement on a patented, internet-enabled, freestyle drink dispenser. A Texas-based RCDI filed the lawsuit in 2015. Though Coca-Cola had earlier won the suit, a Federal Circuit panel, in 2020, brought the case back to life and canceled Coca-Cola’s patent win against the earlier Georgia Federal judge ruling. A Californian environmental also sued Coca-Cola, Nestle, and Pepsi for creating a plastic pollution “nuisance.” Additionally, the company has been sued for misleading people that their plastic is recyclable. Other lawsuits Coca-Cola engaged in include Thumbs up a trademark, “ZERO” trademark, 1983 copyright infringement, and many others. 

Overdependence on Third-Party Technology Providers

Coca-Cola seeks to enhance its productivity and profitability through technology and innovation. It uses technology in product development, better product placement and personalization, data analytics, and advertising. However, Coca-Cola outsources the IT support it needs. It also needs technology for its supply chain to thrive. It is, therefore, a significant disadvantage that most of their technology comes from third parties. Coca-Cola outsources its technological needs to companies like Virent, Powerade, Avanium, and Gevo. In April 2020, Coca-Cola partnered with Microsoft and signed a 5-year deal for cloud technology and business software. It would be making use of Microsoft’s Azure Cloud Platform, customer service software, as well as Microsoft’s 365 apps, which include Microsoft Teams. 

Environmentally Destructive Packaging

Coca-Cola has been reportedly greenwashing its plastic packaging. Companies’ claim of “ocean-bound” and “recyclable” plastic was an excellent example of greenwashing. This is because there is no substantial proof of how Coca-Cola, along with some other brands, tackled the situation. An article by The Guardian reports that Coca-Cola has been declared the worst plastic polluter due to an estimated 3 million plastic packaging annually. In response, Coca-Cola pledges to ensure 25% reusable product packaging. In other words, plastic would be gathered and reused. It is envisaged that by 2030, Coca-Cola will have met this goal globally. 

Reducing Cherished Coke Products

The CEO of Coca-Cola, James Quincey, has been slammed for killing some of the most beloved coke brands. Quincey had cut down the number of the brand’s products in half, killing favorite brands such as smoothie brand Odwalla, drink Tab, and Zico coconut water. About 200 brands in total fell into the lot. A previous attempt in 1985 had failed, making Coca-Cola refrain from cutting off brands. The danger in a brand ambassador is that loyal customers can get disappointed and turn to competitors. Also, it is foolproof that loyal customers shouldn’t be toiled with. With this product reduction, Coca-Cola should prepare to lose some of its loyal customers.

Coca-Cola Opportunities

Here, there are the opportunities Coca-Cola can leverage on:

Extension of The Ready-to-drink (RTD) Coffee Industry in the United States

RTD coffees had the highest growth rate among liquid beverage categories in the U.S. between 2013 and 2017, as is contained in the Beverage Marketing Corporation Report. The Coca-Cola Corporation subsidiary in Japan introduced the Georgia RTD coffee brand to the market in 1975. Georgia was a hit in Japan, and in 2009, the business brought the name to the United States. Currently, Asians living in the U.S. are the primary consumers of these coffees. Although the market is relatively tiny, Coca-Cola could continue advertising its Georgia brand to gain market share for RTD coffee in the United States. Additionally, numerous smaller, rapidly expanding RTD coffee companies could be quickly acquired to grow the business’s RTD caffeine portfolio and its share of the market.

Add New Goods to the Market and Lessen Added Sugar

Coca-ability Cola’s to produce beverages that satisfy the needs of consumers who care about their health is another asset. People are increasingly switching to healthier choices like less sugary drinks and water due to consumers’ obsession with health. Coca-Cola will profit from such a trend if they enter this market because it can raise its earnings and market share. This trend is rapidly gaining popularity. Like Pepsi, Coca-Cola has the chance to expand its product lineup in the healthy beverage and snack categories. Coca-Cola has prioritized reducing the sweetness in its drinks, and as of now, 28% of its volume sales have been low- or no-calorie beverages, according to its 2018 yearly report.

Profits from the Declining Value of the U.S. Currency

Every multinational corporation, including The Coca-Cola Company, is impacted by currency exchange rates. The company generated $20.683 billion of its revenue outside the United States in 2017. This indicates that most of The Coca-Cola Company’s profits come from sources other than the U.S. dollar. Therefore, for the business to compute its total income and send its revenues back to the U.S., other currencies must be changed to the U.S. dollar. This is where a weak U.S. dollar, or in other words, the currently declining U.S. dollar exchange rate, is a financial opportunity for the company. In addition to raising international profits, a weaker dollar makes a company’s products more affordable and alluring to customers overseas. It also allows Coca-Cola to increase global sales and geographically diversify its income.

Leveraging TikTok

Coca-Cola launches its first U.S. TikTok challenge and joins the TikTok stratosphere. It’s an excellent move for the business to increase brand awareness. With more than a billion active members, TikTok is a powerful platform. Coca-Cola also worked with Grammy-nominated musician “Khalid” to sing the challenge’s first opening tune as it debuted on TikTok. Additionally, Coca-Cola is open to working with Renegade Dance creator Jalaiah Harmon, a young lady. 

Entry into the Alcoholic Beverage Sector

Coca-Cola primarily serves the non-alcoholic beverage industry, though it did introduce its first alcoholic beverage, “Chu-Hi,” in Japan in 2018. This market is currently experiencing slow growth. The business competes fiercely across all non-alcoholic beverage market segments where it already has operations. There is limited space for Coca-Cola to expand its beverage business quickly. A new expanding chance for the company is to enter the alcoholic beverage sector. Tequila is one of the alcohol industry’s segments with the quickest growth. To reach USD $2.7 billion, tequila sales increased by more than 9% in 2017 alone. In 2021, the American tequila market was valued at USD $8 billion. Coca-Cola may decide to enter the market for alcoholic beverages to diversify its product line. The business could quickly boost sales and diversify its holdings by utilizing its expertise in creating and selling drinks. 

Coca-Cola Threats

Below, there are Coca-Cola’s threats:

Water usage controversy

Over the years, Coca-Cola has strived to attain an eco-conscious producer position. However, their effort might not be effective in the face of climate change and potential water scarcity. With an estimate of 1.9 billion servings, Coca-Cola is reported to make use of over 300 billion of water yearly. Coca-Cola announced it had met global water neutrality five years before the scheduled time. It is worth skepticism of this claim because while Coca-Cola might be enjoying the PR from international neutrality, they might also be the gap for community inequality. Furthermore, it is equally important to consider sugar, another primary ingredient in coke. It takes a substantial amount of water for the soil to produce sugar.   

Pollution Lawsuit

Coca-Cola is a significant polluter with its non-biodegradable packaging. In June 2021, Earth Island Institute filed a lawsuit against Coca-Cola, stating that they use deceptive marketing by proclaiming that they are a sustainable and environmentally friendly company when in the true sense, they are the major contributor to plastic pollution globally. Coca-Cola was favored in the lawsuits, as criticism was directed at aspirational claims that were vague and immeasurable. In 2020, Coca-Cola also faced a case along with other leading companies that use plastic bottles. A Californian environmental group filed this lawsuit. They were further charged to be held responsible for pollution caused to the oceans and Earth. 

Fierce competition

Coca-Cola stands distinctly and firmly in the market. However, it is not immune to fierce competition. Coca-Cola’s direct competition comes from soft drinks producers such as Pepsi, Red Bull, etc. Indirect competition often comes from wine and beer companies such as Starbucks, Lipton juices, Costa coffee, Tropicana, Nescafé, and Nestle. While these indirect competitors don’t produce the same product as Coca-Cola, they have other soft drink alternatives for their customers. Direct competitors, of which Pepsi is major, make the same or similar products and target the same customers. 

Economic uncertainty

One of the biggest concerns of many companies, including Coca-Cola, is economic uncertainty. In 2016, Coca-Cola reported a decline in revenue in 28 countries, which includes Nigeria and Russia. In 2020, due to the pandemic, sales declined, though not as much as anticipated. Coca-Cola will experience revenue in 2022 due to the price increase. However, it shares in the global economic uncertainty due to inflation, currency volatility, pandemic-related mobility restrictions, and geopolitical tensions.  

Increasing Health Awareness

Sugary soda drinks have held less appeal to consumers due to increased health consciousness. Informed consumers are also turning to healthier drinks. Some alternatives include low-or-no-sugar carbonated beverages, iced tea, sports drink, energy drink, ready-to-drink coffee, sparkling water, energy drinks, juices, and dairy. To tackle this, Coca-Cola has stepped up its game with non-carbonated beverages and “Zero” sugar Coke. This results in the costs accrued in packaging, data analytics, marketing, supply chain, and technology. It is also challenging for the company to surmount criticisms and doubts about the ingredients of Coke and how safe it is.

Possible Contamination  

In November 2021, Coca-Cola voluntarily recalled Minute Maid drinks with the explanation that they might contain washers or metal bolts. The Food and Drug Administration, responsible for keeping the foods consumed safe, made the report. About 7,500 cases of Minute Maid were recalled. Other products involved in the recall are Sprite and Coke. Furthermore, Coca-Cola recalled some wrongly boxed zero coke, which might contain full sugar. The devastating effect of recalls is distrust in the brand. Consumers may not buy products from them in the future. Besides brand degradation, the recall often results in financial losses as companies affected will have to replace defective products and, worst still, handle lawsuits.

Since John S. Pemberton founded Coca-Cola in 1886, the business has steadily expanded and emerged as the largest beverage manufacturer in the world. Although its income has not significantly increased over the past ten years, it continues to lead the world in the selling of non-alcoholic beverages. Because it meets particular market and customer demands, the company continues to operate in that situation. It has developed a strategy to accomplish its objective and guide the business toward success in light of growing health and obesity concerns, making it well-known worldwide. Additionally, Coca-Cola has carefully and meticulously implemented its tactics in alignment with its leadership, culture, and organizational structure to align with its purpose. To boost sales and offer customers value, the company uses story-driven marketing strategies such as the Share-A-Coke campaign. However, Coca-Cola can exponentially grow its revenue by ensuring it meets current health trends and satisfies the lawsuit demands.

Who is Daniel Pereira ?

I love understanding strategy and innovation using the business model canvas tool so much that I decided to share my analysis by creating a website focused on this topic.

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SWOT Analysis of Coca-Cola (6 Key Strengths in 2023)

This Coca Cola SWOT analysis reveals how the company controlling one of the most iconic brands of all time used its competitive advantages to become the world’s second largest beverage manufacturer.

It identifies all the key strengths, weaknesses, opportunities and threats that affect the company the most. If you want to find out more about the SWOT of Coca Cola, you’re in the right place.

Learn how to do a SWOT analysis .

Company Overview

Business Description

The Coca-Cola Company business overview from the company’s financial report:

“The Coca-Cola Company is the world’s largest beverage company. We own or license and market more than 500 nonalcoholic beverage brands, primarily sparkling beverages but also a variety of still beverages such as waters, enhanced waters, juices and juice drinks, ready-to-drink teas and coffees, and energy and sports drinks.

We own and market four of the world’s top five nonalcoholic sparkling beverage brands: Coca-Cola, Diet Coke, Fanta and Sprite. Finished beverage products bearing our trademarks, sold in the United States since 1886, are now sold in more than 200 countries.

We make our branded beverage products available to consumers throughout the world through our network of Company-owned or -controlled bottling and distribution operations as well as independent bottling partners, distributors, wholesalers and retailers — the world’s largest beverage distribution system.

Beverages bearing trademarks owned by or licensed to us account for 1.9 billion of the approximately 60 billion beverage servings of all types consumed worldwide every day.

We 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. Our success further depends on the ability of our people to execute effectively, every day.

Our goal is to use our Company’s assets — our brands, financial strength, unrivaled distribution system, global reach, and the talent and strong commitment of our management and associates — to become more competitive and to accelerate growth in a manner that creates value for our shareowners.” [1]

You can find more information about the business in The Coca Cola Company’s official website or Wikipedia’s article .

Coca-Cola SWOT Analysis

1. Dominant market share in the beverage industry

The Coca-Cola Company is the largest non-alcoholic beverage company in the world. It serves 1.9 billion or 3.2% of the total 60 billion beverage servings of all types consumed worldwide every day. [1] The company owns, distributes and sells over 500 various non-alcoholic beverage brands in over 200 countries.

Figure 1. Largest beverage companies in the world in 2017

Source: Beverage Industry [2]

Only PepsiCo and Nestlé can compare to The Coca-Cola Company’s sheer size and the market share in the non-alcoholic beverage segment. Being large and having dominant market share has a few advantages over competitors:

• Economies of scale. Economies of scale allow the company to share its fixed costs over hundreds of brands and billions of servings, making each drink as cheap as possible.
• Market power over suppliers and competitors. Due to its size, The Coca-Cola Company can exercise its market power over suppliers by requiring lower prices from them. The company can also use its size to affect the competition by underpricing some of its items, acquiring the smaller competitors or saturating the market with many of its own products.
• Power over the buyers. Unlike some of its smaller competitors, the Coca-Cola brand and the company’s other signature drinks have an enormous brand recognition all over the world. The company can influence consumers’ buying decisions through its brand power and massive marketing campaigns more easily than most of its smaller rivals.
• Wide audience reach. The Coca-Cola Company’s distribution network allows the chain to reach more customers than most of its rivals could reach. According to the company, the company serves 1.9 billion servings a day, more than any other competitor in the world. Wide audience reach does not only help the company to target more customers and increase brand awareness, but also to introduce new products more easily.

2. Diversified product portfolio with 21 billion-dollar brand

The Coca-Cola Company owns and distributes over 500 different brands, which is the most extensive beverage brand portfolio in the whole industry. The company offers beverages for every taste in 7 beverage categories:

• Carbonated Soft Drinks
• Bottled Water
• Juice & Juice Drinks
• Sports Drinks
• Tea & Coffee
• Energy Drinks & Shots
• Alternative Drinks

Figure 2. Largest beverage brand portfolios

Source: Companies’ financial reports and official websites [3][4][5][6]

The most popular company’s drink is Coca-Cola. Coca-Cola trademark (includes Diet Coke, Coca-Cola Zero, Coca Cola Life and other beverages bearing Coca Cola name) accounted for 45 percent of the company’s worldwide unit case volume for 2017. [1] While Coca-Cola is the most important product, it is only one of the 21 billion-dollar brands that the business owns. The company’s billion-dollar brands include:

• Diet Coke/Coca-Cola Light
• Coca-Cola Zero
• Minute Maid
• Georgia Coffee
• Minute Maid Pulpy
• Vitaminwater

Figure 3. The Coca-Cola Company’s billion-dollar brands

Source: The Coca-Cola Company [7]

No other business in the beverage industry owns as many billion-dollar brands as The Coca-Cola Company.

What does a diversified portfolio provide for the company? First, The Coca Cola Company depends less on one or two of its beverages to generate the majority of its revenue. Second, with so many beverage drinks in so many flavors, the business can satisfy every consumer’s needs and tastes. Third, if the demand for one of the company’s beverages falls sharply (as it is now with Coca-Cola) the business can rely on other beverages to generate higher sales.

Few of The Coca Cola Company’s rivals can enjoy such a diversified brand portfolio, which provides strong competitive advantage over the rivals.

3. The largest advertising budget among the competitors

The Coca-Cola Company’s annual advertising spending was US$3.958 billion, US$4.004 billion and US$3.976 billion in 2017, 2016 and 2015, respectively. [1] Advertising expenses accounted for 11.2% of total revenue last year. In 2017, The Coca-Cola Company was the largest advertiser in the beverage industry in the world.

Figure 4. The Coca-Cola Company and its competitors’ advertising expenses 2015-2017 (in US$ billions)

Source: The respective companies’ financial reports [1][4][5]

The company’s large advertising budget provides competitive advantages such as:

• helping to introduce new products to the market;
• promoting the brand;
• informing consumers about the product’s features;
• communicating the brand’s message to the public;
• increasing sales.

In addition, the company’s total marketing expenses reached US$6.2 billion (or 17.5% of total revenue in 2017), generating US$35.410 billion in revenue. It is one of the largest marketing budgets in the beverage industry.

With its largest advertising budget and strong marketing capabilities The Coca-Cola Company is able to attract more customers and generate higher sales than most of its rivals.

4. The most recognizable beverage brand in the world

The Coca Cola Company sold its first Coca-Cola drink in 1886. [7] Since then, the company has become the world’s largest non-alcoholic beverage company in terms of revenue with the most recognizable brand in the industry. According to Interbrand [8] and Forbes [9] , Coca-Cola brand is 4 th and 5 th most valuable brand in the world, worth US$69.733 billion and US$56.4 billion, respectively. In addition to the Coca-Cola brand, the company distributes and markets other recognizable brands, most notably, Sprite. Interbrand [8] values Sprite brand as the 90 th most valuable brand in the world, worth US$4.842 billion.

The brand value is closely related to the brand recognition. Usually, the more valuable a brand is the better it is recognized worldwide. The Coca-Cola company, which operates in over 200 countries, where billions of people live, enjoys some of the greatest brand awareness among all global corporations. Brand awareness also helps to introduce new products or sell the current ones faster as the company needs to spend less money on advertising.

Figure 5. The Coca-Cola Company’s brand value 2000-2017

Source: Interbrand [8][10][11][12][13]

No other Coca-Cola Company’s rival have such a valuable and recognizable beverage brand strengthening the company.

5. Strong partnerships with bottling companies leading to some of the most extensive distribution channels in the industry

The Coca-Cola Company emphasizes its franchise leadership and its bottling and distribution operations as key capabilities and strengths. [1] The company’s business model relies on partners to bottle its syrups or concentrates into packages and to distribute, sell and market its products. Usually, only one bottling partner holds a license to sell and distribute The Coca-Cola Company’s products in a certain geographic area.

On the other hand, the bottling partners rely on The Coca-Cola Company to develop and introduce new products and to provide promotional and marketing services. If one of the bottling partners is underperforming in the market, the company usually invests in that partner to take control. The Coca-Cola Company then uses its expertise and resources to improve the partner’s performance before returning control back to the partner.

The Coca-Cola Company’s products are distributed and served in more than 200 countries. The company uses its bottling partners to distribute and sell its products worldwide, via what is known as the ‘Coca-Cola system’. This system sold 29.2, 29.3 and 29.2 billion unit cases (24 eight-ounce servings) of the company’s products in 2017, 2016 and 2015, respectively.

The Coca-Cola Company’s five largest bottling partners (Coca-Cola FEMSA, Coca-Cola European Partners plc, Coca-Cola Hellenic, Arca Continental and Coca-Cola İçecek) account for 41% of the company’s total unit case volume. These bottlers distribute the company’s beverages to over 50 countries.

Except PepsiCo, no other company can match The Coca-Cola Company’s extensive distribution network.

6. A partnership with McDonald’s

The Coca-Cola Company does business with many restaurants, but its relationship with McDonald’s is unique. McDonald’s is the only client that has its own division inside The Coca-Cola Company, making it the most important client for the company. According to Gelles from the New York Times [17] , no restaurant can sell Coca-Cola drinks for a lower price than McDonald’s, even if that means losing the customer to PepsiCo.

The Coca-Cola Company doesn’t reveal how many of its sales come from McDonald’s restaurants, but its employees state that sales from McDonald’s are only behind sales from the U.S., Japan and Germany. [17]

While such a relationship is a weakness during the years when McDonald’s sales decline, it becomes a strength during growth years. For the last 3 years, McDonald’s Systemwide sales increased from US$66.226 billion to US$78.191 billion, [35] which means higher sales for The Coca-Cola Company.

This situation is likely to continue in the near future, making it easier for the company to grow its sales.

1. Strong reliance on carbonated soft drinks to generate the majority of the company’s revenue

In 2017, The Coca-Cola Company earned US$35.410 billion of which at least 70% or over US$24 billion were earned through selling various carbonated soft beverages. Carbonated soft drinks (CSD) represented 69 percent, 69 percent and 70 percent of the company’s worldwide unit case volume for 2017, 2016 and 2015, respectively. Of the U.S. unit case volume, 62 percent was attributable to CSD and 38 percent to still beverages.

Figure 6. Worldwide unit case volume share by product category

Source: The Coca-Cola Company financial report [1]

Currently, the demand for CSD is declining considerably in the U.S., which is the company’s single largest market. Due to the various studies that stress the negative health effects from drinking sugary sparkling beverages, [14] consumers’ preferences are shifting from CSD to low calorie unsweetened beverages, such as water, tea and coffee.

According to Beverage Marketing Corporation data, [15] the market for CSD has been declining for the past 11 years. In 2006, an average U.S. consumer drank 50.4 gallons of CSD per year. In 2017, this number declined by 25.6% to 37.5 gallons. [15] The report also indicates that CSD market will likely continue to decline over the next few years as well.

The declining demand for CSD is the major company’s weakness as it heavily relies on carbonated soft drinks such as Coca-Cola, Diet Coke, Sprite and Fanta for the majority of the sales. The company’s rivals, which rely less on CSD for their revenue, are less affected by the changing customer preferences.

In order to return to growth, The Coca-Cola Company should minimize its dependence on sparkling beverages and heavily invest into and market still beverages, which are more profitable for the company and healthier for consumers.

2. Criticism over business practices

The company receives a lot of criticism from various groups, governments and consumers over its business and environmental practices, such as:

• the impact of its products on obesity
• questionable advertising and marketing practices
• its policies towards the environment
• lobbying and ‘bribing’ government officials and health organizations
• high water usage
• monopolistic business practices

While the Coca-Cola isn’t the only beverage company receiving criticism for its business practices, it’s size and impact on the industry draws the most attention. In recent years, The Coca-Cola Company has improved its business and environmental practices and has seen less criticism for it, but its reputation still suffers from previous scandals.

In 2015, it has been criticized for funding a research, which argued that people should exercise more instead of cutting their calorie intake. [16] The research was trying to shift the responsibility away from the various foods and beverages that added to obesity.

Such criticism of a business results in negative publicity, which damages a company’s brand reputation and its sales.

Opportunities

1. expansion of ready-to-drink (rtd) coffee products in the u.s. market.

According to the Beverage Marketing Corporation Report, the fastest growing liquid beverage segment in the U.S. during 2013-2017 was RTD coffees. [18][19][20][21] In 2017, RTD coffees was the fastest growing beverage segment in the U.S. beverage industry, growing by an impressive 12.3%. [22] The RTD coffee segment grew 6 times faster than the entire U.S. liquid beverage market, which grew by 2.1% only in 2017.

Figure 7. RTD coffee growth compared to the growth of the whole liquid beverage market in the U.S.

Source: Beverage Marketing Corporation [18][19][20][21][22]

While, the beverage industry as a whole grew only by 11.3%, RTD coffees grew by a staggering 70.7% over the last 5 years.

In 1975, The Coca-Cola Company’s subsidiary in Japan launched RTD coffee brand, named Georgia, into the market. Georgia became a success in Japan and the company introduced the brand to the U.S. in 2009. These coffees currently mainly sell to Asians in the United States. The company also expanded its Gold Peak RTD tea brand, which offers cold-brew RTD coffee as well. In addition to its own brands, The Coca-Cola Company now sells Dunkin’ Donuts Iced Coffee beverages across the U.S.

Although the segment is relatively small, The Coca-Cola Company could further promote its Georgia brand in the U.S. market to establish itself as the RTD coffee leader in its home country. There are also many smaller growing RTD coffee brands that could be easily acquired and would increase the company’s RTD coffee portfolio and the market share in the RTD coffee market.

2. Growing tequila market with many smaller brands that can be easily acquired

The Coca-Cola Company almost exclusively operates only in a non-alcoholic beverage (it has launched its first alcoholic drink in Japan called “Chu-Hi” in 2018) market, which at the moment is growing slowly. The company already operates in every segment of the non-alcoholic beverage industry and faces stiff competition in each product category. There is little room for Coca-Cola to grow its beverage business and do it fast.

Another growing opportunity for the company is to venture into an alcohol industry (we suggested this opportunity back in 2015). An alcohol industry grew by 1.7% in the U.S. in 2017. [23] It was an eighth consecutive year of growth in the market. The market is worth around US$80 billion in the U.S. alone. An alcohol market is huge with many different segments in the market, including:

• Malts (beer, cider);
• Wines (table wines, champagne, sparkling wines);
• Spirits (vodka, whisky, rum, tequila, brandy, gin).

Currently, one of the fastest growing alcohol industry’s segment is tequila. Tequila sales grew by 9.9% in 2017 [24] to US$2.7 billion. The market for tequila is expected to be worth US$8 billion in the Americas (including North and South America) by 2021. [25] There are many smaller brands in the market that could be acquired easily.

Figure 8. Top-selling tequila brands in the U.S. in 2017

Source: Statista [26]

The Coca-Cola Company could expand its product offerings by venturing into the alcoholic beverages market. By leveraging its expertise in producing and selling beverages the company could easily increase its revenue and diversify its portfolio.

3. Coconut water market is expected to reach US$8.3 billion by 2023

Consumer trend for healthy beverages have pushed the water market growth to the new levels. According to Beverage Marketing Corporation, [15] volume sales of bottled water grew by 7% in 2017. This allowed water to become the most popular beverage category in the U.S. for the second consecutive year. [15] One of the subcategories that pushed the bottled water to the No.1 spot in the beverages was a growing demand for plant-based waters, mostly coconut water.

Consumers, who are looking for the alternatives to healthy hydration often choose plant based waters, which offer better flavor, natural ingredients and less sugar. Plant-based water market is dominated by coconut water, which is experiencing a significant growth both globally and in the U.S. By various estimates, coconut water market is expected to grow from US$2.4 to US$8.3 billion globally by 2023. [27][28]

The Coca-Cola Company currently owns ZICO coconut water brand, which is the leader in coconut water market. [29] Nonetheless, PepsiCo is trying to dominate the market with its own O.N.E. coconut water brand and a potential acquisition of Vita Coco, another leading coconut water brand.

Therefore, The Coca-Cola Company should try to increase its efforts to dominate this niche market, which the potential to become a very significant market in 5-10 years.

4. Savory snack market will see tremendous growth over the next three years

Since its inception in 1886, The Coca-Cola Company has been selling only beverages to its customers. Due to the declining sales of its main carbonates soft drinks, Coca Cola has little room to grow its beverage business in the current beverage market. The company has to find new growth venues in other markets. Therefore, it could venture into the market closest to the beverages – snacks. PepsiCo is selling snacks in addition to the beverages and sees a significant success due to the ability to cross-sell beverages and snacks. Out of the 22 billion dollar brands that PepsiCo owns, 7 are savory snack brands. [30]

That’s the market The Coca-Cola Company has an opportunity to invest in. According to Euromonitor International, [31] the savory snack market was worth US$46 billion in the U.S. in 2016 and is expected to reach US$50 billion in 2021. That’s US$4 billion growth in just 5 years. The report from Euromonitor International also predicts that global savory snack market will see even faster growth than the U.S. market.

Figure 9. Comparison of savory snack market share by regions

Source: Euromonitor International [31]

The Coca-Cola Company has never sold food or a snack product, but it has many advantages over the rivals in the market. First, it has the skills in manufacturing, marketing, managing supply chain and a huge advertising budget. In addition, the company’s debt isn’t extremely huge and while the capital is still cheap, the company has many opportunities to acquire smaller but growing savory snack brands.

Coca Cola Company’s move to the savory snack industry would allow to diversify its portfolio even further and would increase the company’s sales.

5. The declining U.S. dollar exchange rate could positively affect the company’s revenue and profits

Currency exchange rates affect every multinational company, including The Coca-Cola Company. In 2017, the company earned US$20.683 billion or 58.4% of its revenue outside of the U.S. [1]

Figure 10. The Coca-Cola Company’s geographic revenues

Source: Company’s financial report [1]

This means that The Coca-Cola Company currently receives the majority of its profits in currencies other than the U.S. dollar. Other currencies therefore have to be converted to the U.S. dollar in order for the company to be able to calculate its total revenue and transfer its profits back to the U.S. This is where a weak U.S. dollar, or in other words, the currently declining U.S. dollar exchange rate is a financial opportunity for the company.

A weak dollar does not only increase the profits from foreign countries but also makes the company’s products cheaper and more attractive to the customers abroad. It also provides an opportunity for The Coca-Cola Company to expand its sales outside of the U.S. and diversify its geographic revenue.

In 2017, the U.S. dollar declined in value against other currencies for the first time in 5 years. Current forecasts indicate that the U.S. dollar exchange rate is going to continue to decline against other currencies in 2018 as well. This means that The Coca-Cola Company’s products will become even cheaper abroad and its revenue and profits from outside the country are likely to increase when converted to U.S. dollars.

1. Obesity concerns may reduce demand for some of the company’s products

According to The Coca-Cola Company’s financial report [1] , obesity concerns are the no.1 threat that is affecting the company:

“There is growing concern among consumers, public health professionals and government agencies about the health problems associated with obesity. Increasing public concern about obesity; other health-related public concerns surrounding consumption of sugar-sweetened beverages; possible new or increased taxes on sugar-sweetened beverages by government entities to reduce consumption or to raise revenue; additional governmental regulations concerning the marketing, labeling, packaging or sale of our sugar-sweetened beverages; and negative publicity resulting from actual or threatened legal actions against us or other companies in our industry relating to the marketing, labeling or sale of sugar-sweetened beverages may reduce demand for or increase the cost of our sugar-sweetened beverages, which could adversely affect our profitability.” [1]

Obesity concerns are already significantly affecting some of the beverage segments, mainly carbonated soft drinks segment, which is the largest Coca-Cola’s market. In 2017, the company sales have decline by 15.4% from US$41.863 billion in 2016 to US$35.410 billion in 2017. The decline is mainly attributed to the consumers’ choice to buy and consume healthier drinks. This threat is not going away anytime soon and The Coca-Cola Company will see its sales declining or growing only slowly because of it.

2. Extension of ‘soda tax’ to more cities or states in the U.S.

In 2015, Berkeley was the first U.S. city to pass the sugar-sweetened beverage tax. [34] The tax, which applies to all the beverages containing sugar is aimed at reducing the demand for pricier sweetened beverages. The ‘soda tax’ proponents argue that the tax should result in lower obesity rates or at least, people choosing healthier beverage options, such as water.

A few studies were done to research the effect ‘soda tax’ had on people’s buying choices and overall demand. According to the American Journal of Public Health, [33] the demand for sugar-sweetened beverages in Berkeley declined by 21%, while water consumption increased by 63%. Other studies confirmed more or less the same results. [32]

Since, the first sugar-sweetened beverage tax was passed in Berkeley, more cities joined and as of March 2018, the tax is implemented in 6 U.S. cities, with two more cities joining by the end of the year. [34]

Sugar-sweetened beverage tax may heavily affect The Coca-Cola Company, which still heavily relies on soft carbonated drinks to generate the majority of its revenue. If the tax will prove to have positive effects on health, it could gain huge support across the country and more cities and even states may pass it. This would result in hundreds of millions of lost revenues for The Coca-Cola Company.

3. Water scarcity and its poor quality could negatively impact The Coca-Cola Company’s production costs and capacity

Water is the key ingredient in all of The Coca-Cola Company’s products. The company states that it needs about 3.12 liters of fresh water to make 1 liter of Coke. Water is also required to grow agricultural products, which are used as ingredients in many of the company’s beverages. [1]

Water is scarce and is likely to become even more so due to climate change, growing populations, overexploitation, increasing demand for food products, increasing pollution and poor management of waste water. Demand for water is increasing everywhere and it is becoming even harder for The Coca-Cola Company to access clean and cheap supplies of drinking water, resulting in increased production costs and lower profitability. The company also receives a lot of criticism and negative publicity over its high use of drinking water near communities. In the future, water scarcity will become an even more significant problem that will negatively impact the company’s operations.

4. Increased competition and their capabilities could hurt The Coca-Cola Company’s business

According to The Coca-Cola Company’s financial report, rivalry is one of the key threats affecting the company. The beverage industry is a highly competitive industry consisting of numerous small, large and multinational companies. Businesses in the industry compete on many factors, including pricing, advertising, sales promotion programs, product innovation production efficiency and packaging, as well as vending and dispensing equipment. [1]

Competition in The Coca-Cola Company’s main market intensifies significantly every year. The carbonated soft drinks market is shrinking each year and the same number of rivals, including The Coca-Cola Company and PepsiCo, are competing for ever smaller market share.

In addition, newly growing beverage industry segments such as RTD coffees, RTD teas, energy drinks and bottled water, are seeing an increasing number of market entrants experiencing much faster growth than The Coca-Cola Company’s brands.

In the near future, The Coca Cola Company will experience declining sales and profits because of its reliance on carbonated sales and the declining demand for sparkling beverages.

The Coca Cola Company is still the largest non-alcoholic beverage company managing the largest beverage brand portfolio in the world. The company should continue strengthening its beverage portfolio by introducing healthier beverages to the market. Further investing into the partnerships with bottling companies and distribution partners would also allow the company to reach more consumers worldwide.

Nonetheless, all of the strengths now barely help the Coca Cola Company to outweigh its major weakness – reliance on carbonated drinks to generate the majority of the revenue. The demand for sparkling sweetened beverages is declining. Consumers are demanding healthier beverages and the demand for the company’s main brands, such as Coca Cola, Pepsi, Fanta and other sparkling beverages, is falling significantly.

The Coca Cola Company hasn’t prepared for this weakness when it was just a threat and now has to remedy the situation fast. Few of the beverage markets offer significant growth opportunities, therefore, Coca Cola Company has to venture into other product markets.

The Coca Cola Company could use its expertise in producing and selling beverages in alcohol market. Snacks’ market would also benefit the company as there are some growth opportunities in it. The company could easily enter any of these markets by acquiring new successfully growing brands.

There are also some significant threats that may hurt the business in the future. Soda taxes, water scarcity and growing obesity concerns could significantly impact the company’s revenue and margins.

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• SWOT Analysis of Ford (5 Key Strengths in 2023)
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Coca Cola SWOT 2024 | SWOT Analysis of Coca Cola

Company:  The Coca-Cola Company CEO:  James Quincey Year founded:  1886 Headquarter:  Atlanta, USA Number of Employees (Dec 2023):  79,100 Public or Private: Public Ticker Symbol:  NYSE: KO Market Cap (Jul 2024):  $274.42 Billion Annual Revenue (Dec 2023): $45.7 Billion Profit |Net income (Dec 2023): $10.7 Billion

Products & Services:  Coca-Cola | Diet Coke | Coke Zero | Ciel | Barq’s | Dasani | Del Valle | Fanta | Fair life | Fresca | Georgia | Gold Peak Tea | Minute Maid | Peace Tea | Powerade | Simply Beverages | Glaceau Smartwater | Sprite | Suge | Glaceau vitamin water Competitors:   Pepsi | Dr Pepper Snapple | Mountain Dew | Gatorade | Nestle | Redbull | Unilever | Heineken | Diageo |

Fun Fact: Did you know that 2.2 billion servings of Coca-Cola beverages are consumed worldwide every day?  Did you know that Coca-Cola originally contained traces of Cocaine?

Table of Contents

An Overview of Coca-Cola

The market leader in the soft drinks industry, Coca-Cola, is one of the most recognized brands worldwide. Be it your home, office, shops, hotels, bars, or restaurants, Coca-Cola is everywhere!

94% of the world’s population recognizes the brand instantly by its red and white Coca-Cola logo. Coca-Cola says more than 2.2 billion servings of their many products are consumed in 200 countries every day.

Coca-Cola was established in 1886 in Atlanta by John Pemberton . Within a few years, Coca-Cola became the most recognized, renowned, and widely distributed brand in the world. 

When it was introduced, Coca-Cola contained small amounts of cocaine from coca leaves and caffeine from kola nuts.  These two ingredients gave the product its unique name.  

In addition to Coca-Cola and other carbonated beverages, the company also makes and sells juices and other non-carbonated beverages and has moved into alcoholic beverages with the introduction of hard seltzers. 

Currently, James Quincey is the CEO of this mega-corporation.      

Read on to discover more about the world’s renowned beverage brand through this Coca-Cola SWOT analysis.

SWOT Analysis of Coca-Cola

Coca-Cola Strengths – Internal Strategic Factors

1. strong brand identity .

Coca-Cola is a highly popular brand with a unique brand identity that gives it a significant competitive advantage .  

With its contouring and curves, the iconic Coca-Cola bottle shape is instantly recognizable. It was originally designed in 1915. The font, also highly identifiable and associated with Coca-Cola, is Spencerian Script , which has been around since about 1850. The Coca-Cola logo, with a simple red and white color scheme, is also instantly recognizable and hasn’t changed much since it was created in 1887.

2. High Brand Valuation 

Coca-Cola is undoubtedly one of the most renowned brands and has a high brand value. According to Interbrand’s 2023 annual report, Coca-Cola is ranked 8th best global brand, with a brand value of $58 Billion. Other top-ranking companies on the list are Apple at #1, Microsoft at #2, Amazon at #3, Google at #4 and Samsung at #5 position. [ 1 ]

3. Extended Global Reach  

Coke is sold almost everywhere. It is available in nearly 200 countries, with sales of 2.2 billion servings per day of company products. It has introduced more than 500 new products globally. 

Some of these have been  variations of Coca-Cola beverages, like Coca Cola Vanilla and Cherry Coca-Cola, while others are quite different, including other carbonated beverages like Sprite and non-carbonated offerings, including juices, and iced tea and coffee. Its brands are known to touch every lifestyle and demographic.

4. Greatest Brand Association and Customer Loyalty 

Coca-Cola is considered one of the US’s most emotionally-connected brands. This valuable brand is known for advertising campaigns that feature happiness and joy ,  and has strong customer loyalty. Customers can quickly identify their particular taste, and finding substitutes is difficult for them. Moreover, Coca-Cola and Fanta have a huge fan following – larger than other beverage names in the industry.

5. Dominant Market Share

By far the two largest manufacturers of soft drinks in the beverage segment are the Coca-Cola Company and Pepsico. Coca-Cola has the largest market share , although Pepsi is not far behind. Coke, Sprite, Diet Coke, Fanta, Limca, and Maaza are high-growth drivers for Coca-Cola.

6. Extensive  Distribution system

Coca-Cola has an extensive and efficient distribution network. The company has about 200 bottling partners and about 950 production facilities globally. It operates in nearly every Country in the world.

7. Acquisitions 

Coca-Cola has a long list of strategic and profitable acquisitions, including the Costa coffee chain , Fairlife (Milk Products), Fuze Tea, AdeS, and many more. Through these acquisitions, Coca-Cola expanded its ready-to-drink beverage portfolio.

8. Repositioning Portfolio  

The Coca-Cola Company has repositioned and reduced the number of its global brands from 400 to 200 brands into five major categories such as:

• Sparkling Flavors
• Hydration, Sports, Tea & Coffee
• Juice, Nutrition, Dairy & Plant

Image source: Coca-cola annual report

9. Strategic Partnerships 

Coke’s visibility and brand power are strengthened by a number of partnerships and sponsorships. One of its most visible sponsorships is its partnership with the Olympic Games . Coke has been a sponsor of every Olympics since 1928 and also sponsors the Paralympic Games.

Coca-Cola also supports local sports events and organizations at different levels in many parts of the world, including Nascar, the NCAA, and FIFA.

10. Expansion Through Acquisition

Coca-Cola’s growth has been helped by some of its recent acquisitions like Costa Coffee and Aha sparkling water.  

The company can continue to acquire strategic businesses as it has the financial resources to acquire startups or SMBs in emerging markets and exploit the numerous opportunities they represent. 

11. Capitalizing on Huge Social Media Potential

Social media outlets have massive reach, and Coca-Cola has begun to tap into this potential. Increased social media collaborations and initiatives have the potential to reach billions of consumers. 

TikTok for example is a huge platform with over 1 billion monthly active users . Coca-Cola entered the TikTok stratosphere when it announced the company’s first-ever TikTok challenge in the US. It’s an excellent move for the company to enhance its brand recognition further.

In the TikTok challenge, Coca-Cola collaborated with Grammy-nominated music artist ‘Khalid’ to sing the challenge’s first opening song and choreographer Jalaiah Harmon, the young woman behind the famous Renegade Dance.

12. Partnerships with Alcohol Brands

Coke is already a well-known mix for alcoholic beverages, and there is a significant opportunity to leverage this fact. The global ready-to-drink spirits-based cocktail drink market was valued at $853.2 billion in 2022 and is anticipated to grow at an impressive 14% CAGR between 2023 and 2030.  

Coke recently teamed up with Constellation Brands to make alcoholic Fresca cocktails . It seems like a good maneuver by Coca-Cola in an ecosystem where a handful of non-alcoholic brands are diversifying their product portfolios. Increased moves in this area represent significant opportunities for sales.

Coca-Cola Weaknesses – Internal Strategic Factors

1. product diversification .

Coca-Cola has low product diversification . While it has introduced new products, not all of them have been successful. When products fail to resonate with customers, it impacts the company’s growth strategy.  

2. Overdependence on Third-Party Technology Providers 

Coca-Cola’s operations rely heavily on the technological expertise of third parties. The company signed another five-year deal with Microsoft to supply business software.

3. Cherished Coke Products Discontinued  

James Quincy, the current CEO of Coca-Cola and a renowned businessman, was bombarded by messages from disgruntled Coke fans. 

The complaints stemmed from the CEO’s shocking decision to permanently discontinue some of the most popular products from Coca-Cola’s diverse product portfolio . Coca-Cola eliminated in-demand and popular products such as Tab (a diet drink), Odwalla (a smoothie brand), and the beloved coconut water Zico .

4. Dependence on US Market for Soft Drinks    

Despite some product diversification, a big chunk of the company’s revenue still comes from soft drinks. By far the biggest market for soft drinks is the US. Any disruption in that market could have negative consequences for Coca-Cola.

Source: Statista

Coca-Cola Opportunities – External Strategic Factors

1. consumers prefer healthier options.

The health and wellness food market in the US alone is anticipated to reach $1.48 billion by 2027 . In the forecast period (2021 to 2027) that’s a CAGR of 7.23%.

Coca-Cola has the opportunity to introduce new offerings in the healthy drinks and food segments, just like Pepsi . This can contribute to the company’s revenue and brand image and allow it to branch out from carbonated drinks and salty snacks to healthier options.  

2. Emerging Markets  

Emerging markets represent some of the largest opportunities for growth in cold beverage sales.  For example, Africa is projected to be the fastest-growing market for carbonated soft drinks, according to Mordor Intelligence . The predicted CAGR between 2024 and 2030 is 8.12%, compared to 4.73% globally.

An increased presence and expansion of product offerings in such emerging markets can be an excellent source of growth for the company.

3. Consumers Demanding Packaged Water

Coca-Cola should further expand into the growing market for packaged drinking water. The global packaged water market was valued at $333.2 billion in 2023 and is projected to reach $538.9 billion by 2032 – an impressive 5.67% CAGR.

Coca-Cola owns some drinking water brands like Dasani and Kinley , but Coca-Cola has great potential for expansion in this segment. 

Coca-Cola Threats – External Strategic Factors

1. lawsuits .

Trust is undermined, and reputation is damaged whenever the company is accused of wrongdoing. 

C oca-Cola, not unlike other large companies, has faced a number of lawsuits for a variety of reasons.  Among them:

• As owner of Simply Orange, Coca-Cola has been named in a lawsuit claiming the product contains hazardous compounds.
• Another lawsuit alleges Coca-Cola’s marketing of margarita-flavored hard seltzers implies the beverage contains tequila when it does not.
• Coca-Cola is facing a patent infringement lawsuit for using a dispenser that can recognize users and customize drinks based on their preferences.

In order to limit the potential damage lawsuits would do to Coca-Cola, it’s imperative they continue to manage each one closely and to get ahead of them publically whenever necessary.

2. Water Usage Controversy & Other Environmental Concerns

Coca-Cola has faced many criticisms over water management issues. Many social and environmental groups have claimed that the company consumes vast amounts of water in water-scarce regions. Besides that, people have alleged that Coca-Cola is polluting water and mixing pesticides in water to clear contaminants.

3. Direct and Indirect Competition 

Coca-Cola faces ongoing intense competition from PepsiCo, and some analysts feel Pepsi has a chance to out-grow Coca-Cola. They point not to increased sales of carbonated beverages but to PepsiCo’s broad and expanding line of snacks. 

Among the popular snacks contributing to Pepsi’s growth are Lay’s Potato Chips, Ruffles, Sun Chips, Doritos, and Cheetos.

Although direct competition from Pepsi is clear in the market, there are many other companies which are indirectly competing with Coca-Cola. Starbucks , Tropicana, Lipton juices, and Nescafe, are the indirect competitors of Coca-Cola, which can threaten its market position .

4. Economic Uncertainty 

Recent global events negatively affected business operations supply and distribution chains, and devastated revenues of many global companies. In 2020, Coca-Cola’s revenues declined drastically as restaurants, theaters, and other venues that contribute about half of its revenue remained closed due to the global crisis. Although there has been a recovery, economic conditions remain variable.

5. Increasing Health-Consciousness 

Consumers are increasingly adopting healthy lifestyles and avoiding products with unhealthy ingredients . 

The increase in health consciousness can reduce Coca-Cola’s sales and profits as customers migrate to healthier options offered by competitors.

6. Coca-Cola Recalls 

In December of 2023, Coca-Cola recalled thousands of cans of Diet Coke, Sprite, and Fanta . The cans were sold in parts of the Southern US, and the company said the cans could contain ‘foreign material.’ 

In 2024, the company had to take some Powerade variety packs off the shelves over concerns they may contain a ‘foreign metal object’, in particular a stainless steel ring.

Earlier, According to Food Safety News , Coca-Cola announced a recall of its Minute Maid and Coke products over possible contamination issues. According to reports, the brands that were recalled included Minute Maid Berry Punch, Strawberry Lemonade, and Fruit Punch.

The products were found to contain metal bolts and washers . The company recalled all 59-oz cartons that were distributed. Moreover, Coca-Cola also recalled 12-oz coke cans over possible “ foreign contaminants .”

Continued recalls could have a devastating impact on sales if consumers no longer trust the quality of Coca-Cola products. 

7. Health Concerns 

Carbonated drinks are one of the major sources of sugar intake. It results in two grave health issues – obesity and diabetes. Coca-Cola is the biggest manufacturer of carbonated beverages in the world. 

Many health experts have prohibited the use of these soft drinks. It is a controversial issue for the company and one that does not have a quick or easy solution.  The introduction of sugar substitutes to reduce sugar content in products has its own controversies, with some studies linking artificial sweeteners to many health hazards. However, Coca-Cola hasn’t devised any health alternative or solution for this problem yet.

8. Environmentally Destructive Packaging 

In the 2020 Tearfund report , Coca-Cola was named one of the four world’s largest consumer brands that are contributing immensely to global warming and carbon emissions by using throwaway plastic bottles. [ 5 ]

Recommendations

Based on the above SWOT analysis of Coca-Cola, we can conclude that Coca-Cola has a leading  market position in the soda industry. However, it is recommended the company make more innovative changes.

Some recommendations are explained as follows:

• Stepping into the food market – Coca-Cola needs to introduce new products in snacks and food segments of the market in order to compete with Pepsi’s strength in this area
• Focusing on health-related matters – Coca-Cola should find solutions to address the rising health concerns from social activists about sugar content and other issues.
• It should improve its water management system and deal with criticisms from environmental agencies concerning water use and quality.
• Expanding into developing countries with hot temperatures – There are many Coca-Cola products like Fuze Tea, Dasani, and Hi-C, which aren’t distributed in many developing countries . Coca-Cola needs to increase the distribution of such products in new and unsaturated markets.
• Increasing the distribution of packaged drinking water like Kinley.
• Working on sustainability and green marketing can improve Coca-Cola’s brand image in the market.

 References & more information

• Interbrand Ranking 2023. Best Global Brands: Coca-Cola . Interbrand
• Johnston, M. (2020, June 1). 5 Companies Owned by Coca-Cola . Investopedia
• Law360 (2020, April 6). Fed. Circ. Weighs Undoing Coca-Cola Soda Dispenser IP Win . Law360
• Nellis, S. (2020, April 27). Microsoft wins a five-year deal with Coca-Cola to supply business software . Reuters
• Win, L. T. (2020, March 31). Bottling it? Plastic pollution from Coca-Cola PepsiCo fuels emissions . Reuters
• Scully, J. (2020, January 31). Coca-Cola’s growth in 2019 was driven by trademark Coke beverages. Food and Beverages
• McCormick, E. (2020, February 27). Coke and Pepsi sued for creating a plastic pollution ‘nuisance .’ The Guardian
• Balu, N. (2020, April 21). Coronavirus lockdowns to hurt Coca-Cola’s second-quarter sales . Reuters
• Askew, K. (2020, January 15). Shifting Away from Sugar: What’s the outlook in 2020 ? Food Navigator
• Coca-Cola Company (retrieved 204) The Coca-Cola System
• NBC News (2023, December 13) Coca-Cola Contamination Recall
• Consumer Lab (2024, April 10) Powerade Recall
• Business Research Insights (2024, February) Health And Wellness Food Market Size, Share, Forecast To 2031(business research insights.com)
• Grandview Research (2024, May 17) Ready To Drink Cocktails Market Size & Share Report, 2030 (grandviewresearch.com)
• Mordor Intelligence (Retrieved July 2024) Carbonated Beverages Market
• Custom Market Insights (Retrieved July 2024) Bottled Water Market

 Tell us what you think? Did you find this article interesting? Share your thoughts and experiences in the comments section below.

Brianna Parker

She is a creative writer, corporate storyteller and global brand consultant, who has a unique combination of a business and creative mindset.

Cancel reply

Hi i want to use your work as a example but i can not find the date and author or that work, could you help me please

there you go… Author name: Brianna Parker Last updated: March 14, 2023

Thankyou so much Brianna you deserve the world

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Coca Cola SWOT Analysis For Strategic Decision Making

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• Marketing Mix Strategy
• Five Forces
• Business Lists
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• SWOT Analysis
• Food & Beverages
• Coca Cola SWOT Analysis

Here is a detailed SWOT analysis of Coca Cola covering strengths, weaknesses, opportunities and threats .

Coca Cola Strengths

• Coca Cola is one of the biggest beverage brands in terms of reach and sales
• Popular subsidiary brands like Coca Cola, Sprite, Fanta, Kinley, Minute Maid, Schweppes etc. have strengthened the Coca Cola's brand and have diversified the growth across these brands
• Coca Cola which is headquartered in Atlanta, Georgia, USA has a global reach and is present in over 200 countries
• The company has more than 500 brands on offer across various categories like sparkling, water, coffee, tea, dairy etc.
• Coca Cola has employee strength of around 1,50,000 people globally including the US, UK and most of the countries around the globe.
• Strong and efficient supply chain network, ensuring that all the products are available even in the most remote places
• The financial condition of the brand is always consistently strong
• Strong brand recall of all Coca Cola products through advertising and marketing by associating with celebrity brand ambassadors
• CSR activities in the field of water conservation and recycling, education, health etc.
• Effective and efficient packaging technique giving emphasis on recycling and reusing
• Coca Cola has long association with international sports events, sponsorships, theme parks etc.
• Coca Cola has always adapted to changing market conditions e.g. the brand is now moving towards sugar free options, juice, water etc.
• The company is constantly innovating to safeguard the environment by from using 100% recycled material
• The Coca Cola Foundation has been instrumental in developing businesses in many countries as it part of the CPG industry world wide.
• Coca Cola also has diversified into coffee through its acquisition of Costa coffee making it even stronger in its portfolio of beverages
• It also has brands of teas and dairy in its portfolio.
• Coca Cola is also trying to explore healthier options

Above are the strengths in the SWOT Analysis of Coca Cola. The strengths of Coca Cola looks at the key internal factors of its business which gives it competitive advantage in the market and strengthens its position.

Coca Cola Weaknesses

• Strong competition in the aerated drinks segment from PepsiCo means constant fight over market share for Coca Cola
• Coca Cola and related soft drinks brands have been linked now with high sugar content and many health concerns are being raised, this becomes a weakness worth looking at
• Coca Cola does not have a food business unlike its competitors like PepsiCo, it is only limited to beverages as of now
• Overdependence on 4-5 major brands like Coca Cola, Sprite etc.

These were the weaknesses in the Coca Cola SWOT Analysis. The weaknesses of a brand are certain aspects of its business which it can improve.

Coca Cola Opportunities

• Increase its reach in untapped countries and market can boost Coca Cola
• Market and popularize the less known products
• Acquiring other companies can strengthen Coca Cola's place in the industry further
• Diversify its product portfolio by entering into snacks industry to compete with PepsiCo
• Launching a full fledged health drinks line of business

Above we covered the opportunities in Coca Cola SWOT Analysis. The opportunities for any brand can include prospects of future growth.

Read more about Coca Cola

• Coca Cola Marketing Mix & Strategy
• Coca Cola PESTLE Analysis
• Coca Cola Porter Five Forces Analysis
• Coca Cola Competitors

Coca Cola Threats

• Health consciousness amongst people avoiding aerated drinks can adversely affect Coca Cola
• Difficulty in complying with different government regulations and norms in different countries
• Inflation, economic slowdown and instability
• Strong competition can lead to reduced market share

The threats in the SWOT Analysis of Coca Cola are as mentioned above. The threats for any business can be external factors which can negatively impact its business.

Hence this concludes the Coca Cola SWOT analysis.

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About Coca Cola

The table below gives the brand overview along with its target market, segmentation, positioning & USP

This article has been researched & authored by the Content & Research Team which comprises of MBA students, management professionals, and industry experts. It has been reviewed & published by the MBA Skool Team . The content on MBA Skool has been created for educational & academic purpose only.

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