4.2 Strategic Plan Draft

Running Head: SWOT ANALYSIS 2

SWPT ANALYSIS 2

SWOT Analysis

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Friday, March 26, 2021

SWOT Analysis:

The SWOT analysis reveals all the internal and external factors of the organization. The internal factors include the strengths and the weaknesses of Coca Cola. The external factors include the opportunities and threats that Coca Cola faces. The company is affected deeply due to these factors (Salar & Salar, 2014).

Strengths:

1. Dominant in the beverage industry:

Coca Cola is one of the biggest beverage companies in the whole world. It has a large and dominant market share which has helped it to gain competitive advantage. It provides more than 1.9 billion people with the cold drinks like Coke, Fanta and Sprite each day. Coca Cola has 500 nonalcoholic brands that are sold to 200 countries all around the world.

2. ECOS:

Coca Cola enjoys the perks of the Economies of scale. Due to a large number of sales, the fixed cost of the brands under the name of Coca Cola is very low, making all the drinks cost less. In this way, they can generate a large amount of revenue (Salar & Salar, 2014).

3. Power over the competitors and suppliers:

Coca Cola is one of the biggest beverage companies. Due to the company's vast size, it has excellent market power over its competitors and suppliers. The suppliers ask for lower prices which help them achieve economies of scale. Coca Cola can also acquire small markets to increase their market share. Figure 1 show the revenue of Coca Cola in 2017 which equals to 35.410 billion dollars. It can be seen that Coca Cola is ranked on number 2.

Figure 1

Source: (Baah & Bohaker, 2015)

4. Power over buyers:

Coca cola is widely recognized worldwide compared to the small competitors who have little market share. Thus Coca cola has immense power over the buyers as they have good brand image and brand awareness. This impacts the consumers purchasing intentions. Coca Cola has very good marketing strategies which keeps its customers up to date.  

5. Audience reach is high:

The distribution network of Coca Cola is very efficient, which reaches a large number of people easily. They have a faster system than their competitors which give them an edge over them. In one day Coca Cola serves more than 1.9 billion people. It can be seen from this that they are very efficient in their delivery system, which is advantageous for them.

Weaknesses:

1. Competition with Pepsi

Coca Cola has an aggressive competition with Pepsi. They are one of the biggest rivals. People who think that Coke has higher prices or bad quality switch to Pepsi. If Pepsi was not in the market, Coke could have been a monopoly (Ramadhan & Sofiyah, 2013).

2. Product diversification:

Coca Cola has a low product diversification which means that they have few items in their portfolio. Pepsi has a large range of snacks, including Lays, Kurkuray and Wavy chips, which can be advantageous for Pepsi. It can have a negative impact on Coke.

3. Health Issues:

Carbonated drinks are hazardous for health as they have a great amount of sugar intake. Two of the major problems that can be encountered are obesity and diabetes. The use of fizzy drinks has been banned in many countries. People are getting aware as well. This has led to a decrease in the sakes of Coke as well. The diet coke is also considered dangerous for diabetic patients as it says that it is sugar-free but contains sugar content (Ramadhan & Sofiyah, 2013).

4. Water management

Coca Cola had to face a lot of criticism due to the water issue. There are chances of water scarcity in the next few years. Many lawsuits against Coca Coola have been set, which says that Cola has a great water consumption, which may lead the countries into scarcity. People have also blamed them for putting pesticides into the water. Cola needs to maintain good water management to keep its market share (Cola & Schweppes, 2014).

5. Negative publicity.

There has been a lot of negative publicity of Coca Cola due to the water management issues and the use of carbonated drinks. People are suffering from many health issues like diabetes and obesity.

Opportunities:

1. Introduction of new products

Coca Cola should diversify into making new products in the health and food sector like Pepsi has many other product lines. It will increase Coke's market share and thus increase in the revenue (Renz & Vogel, 2016).

2. Presence should be increased in developing countries:

Coca Cola has a significant presence in the developed countries. They should also focus on developing countries to increase their market share and revenues. Many regions have very high temperatures in the summers. Coca Cola should focus on these countries like Middle Eastern countries.

3. Advancement in Supply Chain:

There should be an advanced supply chain management system that will decrease the delivery and fuel costs. In this way, the transportation cost will decrease, giving economies of scale to Coca-Cola. It will be an opportunity if they come up with the supply chain advancement.

Threats:

1. Water consumption controversy:

Coca-Cola has been facing water management issues for a long time. Many nonprofit organizations and sustainable development groups have set a lawsuit against Coca-Cola due to the great use of water which could lead to scarcity. Thus the water issue controversy can affect the reputation of Coke widely (ABBASI, 2017).

2. Packaging Issue:

Coca Cola uses extensive plastic for single use bottles. It is not considered to be environmentally friendly. The packaging issue has been criticized by many Ngo's. They have also threatened Coke to take action against them.

3. Competition

Coke has been facing much direct and indirect competition from Pepsi and other smaller brands. It can have an impact on the market position of Coke.

4. Strong value of Dollar:

Coca Cola income comes from the countries outside the United States. When there is a greater preference towards the Dollar, it can decrease the other currencies that negatively impact Coke's revenue (Baah & Bohaker, 2015).

References:

ABBASI, H. (2017). Marketing Strategies Of Coke: An Overview. Kaav International Journal of Economics, Commerce & Business Management, 4, 194-199.

Baah, S., & Bohaker, L. (2015). The Coca-Cola Company. Culture, 16, 17.

Cola, C., & Schweppes, C. (2014). The Coca Cola Company. Human Rights Policy.

Ramadhan, A., & Sofiyah, F. R. (2013). Analisis SWOT Sebagai Landasan Dalam Menentukan Strategi Pemasaran (Studi Kasus McDonald’S Ring Road). Jurnal media informasi manajemen, 1(4).

Renz, F., & Vogel, J. (2016). Analysis of The Coca-Cola Company.

Salar, M., & Salar, O. (2014). Determining pros and cons of franchising by using swot analysis. Procedia-Social and Behavioral Sciences, 122, 515-519.