Situation Analysis (SWOT)
Internal SWOT analysis
Strengths
The first strength of Coca Cola Company is its global brand, which dominates soft-drink market. According to Kalakumari and Sekar (2014), the company has established markets in over 200 countries globally and offers more than 500 brands of soft-drink. The second strength is that the company has gained considerable customer loyalty globally because it produces over 500 brands of soft-drinks, which meet unique tastes and preferences of customers. The third strength is that the company employs a vertical integration strategy, which ensures that it produces, distributes, retails, and markets its own products. The vertical integration strategy does not only reduce operating costs and increase efficiency, but it also secures the patented concentrates. The fourth strength is that the company employ elaborate and extensive marketing strategies, which has made it expand market share and increase sales.
Weaknesses
Overreliance on carbonated drinks is a weakness that Coca Cola Company has in the soft-drink industry. In the event that consumers shift to non-carbonated drinks, the company would experience massive losses. Another weakness of the company is that it has negative publicity regarding health. Malik et al. (2010) report that sugars and sweeteners in soft-drinks contributes to weight gain, obesity, and diabetes. In this view, increased awareness among consumers has created a negative perception of the company, as the manufacturer of unhealthy soft-drinks.
External SWOT analysis
Threats
A major threat that Coca Cola faces in the soft-drink market is stiff competition from Pepsi Cola. Paracha et al. (2012) state that Pepsi Cola is a major competitor of Coca Cola because it is present in over 150 countries and has diversified into the food industry. As the company bottles water, scarcity of water in some countries threatens its lucrative venture in the provision of drinking water. Shrinking market share and dynamic consumer preferences are other threats that the company faces in global markets.
Opportunities
Changes in consumer behaviors have increased the demand for healthy drinks and food. Coca Cola should diversify into healthy food and soft-drinks, which have low sugar content, free from unhealthy sweeteners, and contain essential vitamins and minerals such as niacin, vitamin B12, zinc, and magnesium (Paracha et al. 2012). Increasing consumption of bottled water is another opportunity that the company needs to optimize. Gandhi (2014) state that developing countries have a huge demand for carbonated drinks. Hence, the company should also take the opportunity of the emerging markets in developing countries.
Impact analysis of (SWOT)
Impacts on Coca Cola
Analysis of strengths indicates that Coca Cola is leading in the soft-drink industry and market. The impacts of the analysis are that Coca Cola needs to optimize its strengths, such as a global brand and customer loyalty, to survive in the competitive global markets. Regarding the weaknesses, the impacts are that the company needs to diversify its products and improve its publicity. Since competition and scarcity of water are major threats, the company should offer healthy products and participate in the conservation of water sources and bodies. Analysis of the opportunities shows that the company requires to satisfy the demand for healthy soft-drinks and food, and promote sustainability of water resources.
Impacts of SWOT analysis on the operation, policies, and strategies
Analysis of strengths indicates that Coca Cola need to employ both vertical integration and horizontal integration strategies in its operations. Concerning weaknesses, the company should diversify its operations into healthy food and soft-drinks. Moreover, the company needs to undertake extensive marketing to improve its publicity by changing negative perceptions about its products (Foster 2013). As Pepsi Cola offers stiff competition in the aspect of diversification, it implies that Coca Cola should diversity into the food industry. To overcome the threat of water scarcity, Coca Cola requires to undertake corporate social responsibility of conserving water sources and bodies, and thus, enhance its water supply in various parts of the world. Due to changes in consumer behavior, the company needs to exploit the opportunity and offer healthy food and soft-drinks to its consumers. Moreover, Coca Cola should exploit emerging markets of carbonated drinks in the developing countries.
References
Foster, R 2013, ‘Things to do with brands: Creating and calculating value’, Journal of Ethnographic Theory, vol. 3, no. 1, pp. 44-63.
Gandhi, K 2014, ‘A study on brand personality of Coca-Cola and Pepsi: A comparative analysis of the Indian market’, International Journal of Conceptions on Management and Social Science, vol. 2, no. 2, pp. 2357-2387.
Kalakumari, T & Sekar, M 2014, ‘A conceptual framework of marketing strategies in Coca-Cola’, Global Journal of Commerce & Management Perspective, vol. 3, no. 1, pp. 153-157.
Malik, V, Popkin, B, Bray, G, Despres, J, Willett, W & Hu, F 2010, ‘Sugar-sweetened beverages and risk of metabolic syndrome and type 2 diabetes’, Diabetes Care, vol. 33, no. 11, pp. 2477-2483.
Paracha, A, Waqas, M, Khan, A & Ahmad, S 2012, ‘Consumer preference Coca Cola versus Pepsi-Cola’, Global Journal of Management and Business Research, vol. 12, no. 12, pp. 1-5.