SWOT analysis of Coca cola task1b (Strengths (Dominant market share in the…
SWOT analysis of Coca cola task1b
Dominant market share in the beverage industry
Economies of scale.
Wide audience reach.
Market power over suppliers and competitors.
Power over the buyers.
Diversified product portfolio with 21 billion-dollar brand
Fantastic marketing strategies
Distribution network:It has the most extensive marketing and distribution network in the world with presence in more than 200 countries with 1.8 billion drinks being sold every day.
Strong advertising presence with more than 3 million dollars being earmarked every year.
The company is increasing focusing on CSR programs like energy conservation, water recycling, packaging etc. This has helped it to build a socially responsible image of the company.
Competition with Pepsi
The product portfolio of Coke unlike that of Pepsi is highly undiversified. While Pepsi has diversified in both food and beverages, Coke has concentrated only on drinks. This singular focus on carbonated drinks may cost the company if markets for such drinks shrink in future
Absence in health beverages
Carbonated beverages are one of the major reasons for fat intake and Coca cola is the largest manufacturer of Carbonated beverages. The inference is that the consumption of beverages in developed countries might go down as people will prefer a healthy alternative.
Coca cola has faced flak in the past due to its water management issues. Several groups have raised lawsuits in the name of Coca cola because of their vast consumption of water even in water scarce regions. At the same time, people have also blamed Coca cola for mixing pesticides in the water to clear contaminants. Thus water management needs to be better for Coca cola.
The company has 8 billion dollars of debt in the market which is another negative point.
although Coke sells more than 500 types of product; yet only a few products result in more than 1 billion dollars sales.
Countries like India which are developing and have a hot summer, find the consumption of cold drinks almost doubled during summers. Thus the higher consumption in developing environment’s can be a good opportunity to capitalize for Coca cola.
Supply chain improvement
Supply chain can be a major cost sink hole with the transportation costs always rising. Thus Coca cola should keep strict watch on its Supply chain and keep improving to bring the cost down.
Packaged drinking water
Market the lesser selling products
In the product portfolio of Coca cola, there are several products which have not found acceptance in the market. Coca Cola needs to concentrate on the marketing of these products as well. It is understood that Coca cola has made several expenses to launch these products. Thus, the marketing and subsequent rise of sale of these products will help revenue of Coca cola.
Entry into packaged food
Raw material sourcing
Water is the only threat to Coca cola. The weakness of Coca cola was the suspected use of pesticides or vast consumption of water. However, the threat here is that water scarcity is on the rise. With the climate changing, and regions of various countries facing scarcity of water, sooner or later someone might raise fingers on beverage companies.
Coffee chains like Starbucks, Café coffee day, Costa coffee are on the rise. These chains offer a healthy competition to Coca colas carbonated drinks. They might not be a big competition for Coke, but they do give a dent to its beverage market.
One of the serious threats comes from the popular perception that sugar based drinks lead to various health problems. The company will not prosper if this perception battle is not won.
in developed countries are already saturated.