|Basic SWOT Matrix|
|Internal Factors (inside the company)|
|Strengths (+)||Weakness (-)|
|Solid brand Identity||1||Product diversification|
|High brand equity||2||Aggressive competitors|
|Large global reach||3||High health concerns|
|Great customer loyalty||4||Water management|
|High brand association and brand valuation||5||Foreign currency fluctuation|
|Dominant market share|
|External Factors (outside the company)|
|Opportunities (+)||Threats (-)|
|Diversification and new products||1||Nutritious selections|
|High presence in developing countries||2||Indirect and direct competition|
|Extended reach||3||Waste management controversy|
|The advanced and innovative supply chain system||4||Packaging controversy|
|Packaging drinking water||5||Raw material sourcing|
Coca Cola Swot Analysis
SWOT analysis is a framework that has been used in evaluating the competitive position of a company as well as developing its strategic plan. A SWOT analysis examines the external and internal factors as well as the current and future potentials. SWOT helps the business to identify what it is doing right or wrong as well as what the organization needs to change. This has been an effective planning approach that enables the organization to develop a strategic plan to meet goals, keep the business relevant, improve operations and meet goals thus gaining a competitive advantage from various sources.
Coca-Cola has been the market leader and the most recognized brand in the soft drinks industry across the world. High brand identity, strong brand equity, and an extended reach have built an extensive collaboration which has built a distinctive competency for Coca-Cola company (Shtal et al., 2018). The company has been able to build its brand to have dependability and respectability. They have built strong manufacturing and distribution networks that have been extremely successful. Its leading position has enabled the company to gain a competitive advantage.
Coca-Cola has faced aggressive competition from Pepsi which has improved its business model through diversification in other products such as snacks and food. Therefore, Coca-Cola is behind Pepsi in terms of competition. Health concerns have also influenced the operations of Coca-Cola since soft drink consumers have been concerned with diabetes and obesity since soft drinks have been a big influencer of health complications (Chua et al., 2020). The product diversification of Coca-Cola is low as compared to its competitors thus lagging the company behind. Waste management issues have influenced the operations of the company as well as led to strong criticism and lawsuits that have damaged the brand image.
Coca-Cola has several opportunities that it can leverage to build its competitive advantage. For instance, the brand can develop new products and diversify their current products as well. Globally, there has been a population increase over the last two decades. Coca-Cola needs to capitalize on this through extended reach as well as the consumer shift towards healthy living patterns. Coca-Cola should integrate modern technologies in its supply chain to improve its performance such as embracing automation and robotics.
The sourcing of raw materials has also been a challenge due to sustainability and environmental impact issues. Coca-Cola has faced a lot of criticism linked to water management issues (Chua et al., 2020). Environmental and social groups have claimed that the firm has a high water consumption in water-scarce regions. Relatively, it has been alleged that Coca-Cola has polluted water and mixed pesticides that have led to contamination of water. Indirect and direct competition from companies such as Nescafe, Pepsi, and Starbucks have influenced the performance of Coca-Cola. Its market position has been threatened by the development of cafes that have healthy alternatives.
Coca-Cola’s strategic management should pay attention to product diversification such as stepping into the food market to compete effectively with internal and external competitors. They should also focus on the sustainability of their value chain to eliminate criticisms and environmental impacts in their operations. Coca-Cola also needs to focus on health-related solutions to address health concerns. These approaches are effective in improving the brand image of the market as well as their competitive advantage in the market.
Chua, J. Y., Kee, D. M. H., Alhamlan, H. A., Lim, P. Y., Lim, Q. Y., Lim, X. Y., & Singh, N. (2020). Challenges and Solutions: A Case Study of Coca-Cola Company. Journal of the Community Development in Asia, 3(2), 43-54.
Shtal, T., Buriak, M., Ukubassova, G., Amirbekuly, Y., Toiboldinova, Z., & Tlegen, T. (2018). Methods of analysis of the external environment of business activities.