SWOT Analysis On Coca Cola: Key Insights

One of the most celebrated carbonated drinks in the world is Coca Cola. It has a presence in almost every country and does not require much marketing now! Looking at the success of any company, we often forget how the journey started and what the roadblocks were. Every successful company has been battling specific weaknesses and threats in the market as well. Moreover, there is always scope for improvements and opportunities for the company to expand.

In this article, I will try to provide an in-depth SWOT analysis on Coca Cola for the year 2023. I would aim to cover every aspect in detail and to the point.

Before performing a SWOT analysis of any company, it is better to have a quick overview and a little history. Let us begin with that but in brief!

A Brief Overview Of Coca-Cola

Coca-Cola is a carbonated soft drink. It was invented in 1886 in Atlanta, Georgia, US. The name Coca-Cola refers to the two original ingredients of the drink. The coca leaves and kola nuts (a source of caffeine). If we closely look at the ingredients, here are they

• Carbonated water
• Sugar
• Caffeine
• Phosphoric acid
• Caramel color (E150d)
• Natural flavorings

Apart from this, the current formula of Coca-Cola remains a closely guarded trade secret.

Three Quick Fun Facts About Coca-Cola

1. The First US city to serve coca cola was Atlanta.
2. Coca-Cola was the first Olympic sponsor.
3. Coca-Cola spends more money on advertising than Microsoft and Apple combined.

BCG Matrix For Coca-Cola

To understand a BCG growth matrix, I recommend reading our in-depth article here! However, I am listing a few pointers that would help you get a basic understanding.

Stars - Product with high growth and high success rate opportunity.

Question Mark - New product in the initial phase. Opportunities still lie to be discovered.

Cash Cow - Old products with an established market dominance

Pet - Products with low success as of now.

Here is a quick BCG matrix for Coca-Cola

Business Model Of Coca Cola

As this article focuses more on the SWOT analysis on Coca Cola, I will try to summarize the business model of Coca Cola in a few points.

• Direct sales of beverages to consumers. The beverages include the Coca-Cola main drink along with other subsidiary drinks such as Fanta, minute maid, Diet coke, and many more.
• Coca-Cola also earns from licensing fees from bottling and distribution partners.
• As Coca-Cola is a well-established brand, it has Investments income from other businesses too. You can see Coca-Cola’s investments in many other businesses from different domains.

Coca-Cola’s annual revenue for 2022 was $43.004B, an 11.25% increase from 2021.

SWOT Analysis On Coca Cola

Let us begin with the SWOT analysis on Coca-Cola.

Strengths Of Coca-Cola

1. Dominant Brand Value

The Coca-Cola brand is an internationally acclaimed brand. You can find this brand in almost every other part of your life. Coca-Cola has a different and strong brand value as compared to its competitors. Since its inception in 1886, Coca-Cola has been the frontrunner in carbonated beverages. Coca-Cola drinks are the highest-selling drinks in world history. Not only Coca-Cola beverages but also other subsidiary drinks are among the top-selling drinks every year. If you look at the numbers, Coca-Cola’s brand was valued at 97.9 billion U.S. dollars in 2022. This is the highest for any soft drink company in history. The market share of Coca-Cola is around 46% in the entire world. This actually means it makes up roughly half of the competition out there in the market.

Moreover, based on Interbrand’s “best global brand” study of 2020, Coca-Cola was the world’s sixth most valuable brand. Also, the top five brands in the list were from domains other than the beverage industry. Coca-Cola is also ranked No. 87 in the Fortune 500 list of the largest United States corporations by total revenue. Adding to this, around 1.8 billion consumers consume Coca-Cola beverages every single day across the globe in more than 200 countries.

2. Strong Investments And Acquisitions

Coca-Cola is under the parent company – The Coca-Cola Company. The company has spread its wings across many different markets and niches. You can see a lot of products under the same company. They have acquired a lot of businesses and invested in a lot of growing products.

Here are some of the business acquisitions done by the Coca-Cola company

• International Beverages Pvt. Ltd.
• Diamond Beverages Pvt. Ltd.
• Coca-Cola Enterprises
• Coca-Cola Beverages Philippines
• Coca-Cola FEMSA
• Coca-Cola Bottling Shqipëria
• Refreshment Products Finland Oy
• Coca-Cola AG, Deutschland
• Embotelladora Andina
• Thums Up

Coca Cola company has invested in non-beverage assets also. Coca-Cola has a soft drink-themed tourist attraction in Atlanta. Apart from this, it has also acquired Columbia Pictures in 1982.

Adding to all this, Coca-Cola is the leading sponsor for brands and events across the globe. You can find Coca-Cola sponsorship in events related to almost every domain.

3. Remarkable Logistics And Operations

When you are a company serving more than 1.8 billion customers in almost 200 countries, the strongest aspect of your business needs operations. Coca-Cola has one of the largest distributors and strongest networks of logistics and operations. Coca-Cola has around 900 factories in different parts of the world. Adding to this, they have 225 bottling partners. All these partners are manufacturing a variety of bottles for all brands coming under the Coca-Cola company.

4. Diverse Product Portfolio

Many people forget the other brands managed by the Coca-Cola company. It provides them with premium revenue returns along with a stable financial position. As of 2022, the Coca-Cola Company offers more than 500 brands in over 200 countries. Some of the well-known brands that are acquired by the Coca-Cola company are

• Coca-Cola Classic
• Diet Coke
• Dr. Pepper
• Sprite
• Fanta
• Coca Cola Zero
• Powerade
• Minute Maid
• Dasani

Weaknesses Of Coca-Cola

1. Environmental Waste Production

All countries are introducing regulations for sustainable development and manufacturing. Under this aspect, the companies are trying hard to not exceed the limits and stay within the environment-friendly limits. One of the most concerning elements in nature today is “plastic”. The most electronic waste consists of plastic that is not degradable and causes havoc in the entire nature. If we talk about the top companies that produce the most plastic waste, Coca-Cola comes in the 4th position.

Coca-Cola has been subjected to repeated criticisms by nature welfare organizations for plastic waste. Moreover, in the current era where countries are prioritizing sustainable development, it has led to some negative impacts on the brand image. When Coca-Cola started, much research was not available to calculate how much plastic and contamination Coca-Cola did to nature. However, many implementations have been taken by the company to counter this and things are starting to change.

2. Health Issues And Regulations

Coca-Cola started in 1886. At that time, there was less medical research available in the medical institutes on the health impacts of consuming Coca-Cola. However, as of now, multiple pieces of research prove that Coca-Cola is a carbonated drink that is not healthy in any aspect. It contains no nutritional value and just some elements that can lead to an unhealthy lifestyle. This has proven to strike the brand value of Coca-Cola. Although, you will see most people still consuming this beverage, the research on health hazards has seriously impacted the brand.

As per the research, Coca-Cola is pure sugar and the other ingredients combined together may lead to obesity and diabetes. Even one or two colas a day could increase your risk of type 2 diabetes by more than 20%. As Coca-Cola contains sugar in high amounts, the intake is linked to high blood pressure, high cholesterol, and excess fat, all of which increase the risk of heart disease. The health factors surely become a weakness for the brand as it provides no health benefits in any manner.

Opportunities For Coca-Cola

1. Include Health Beverages Or Alternatives

As discussed, one of the primary weaknesses of Coca-Cola is the adverse effects of the drink on the health of any individual. This weakness also poses a great opportunity for the brand. The Coca-Cola brand can come up with a healthy variation of its beverage. Considering the brand’s value and large distribution network, people would love to try a new product that is healthy.

Many people would think that “Diet Coke” is a great variant and a healthy option. Honestly, as per medical research, the answer remains a “no”. It still contains many artificial sweeteners that would have adverse effects on your health. Adding to all this, a healthy Coca-Cola beverage is quite a challenge. Having a similar taste with the use of healthy ingredients is a tough task to manage.

2. Minimize Plastic Waste Production

As I mentioned earlier, Coca-Cola produces a lot of plastic waste. Due to this, they are liable to pay and face many lawsuits across the entire year against many countries and organizations. If Coca-Cola can find a suitable alternative to plastic production, this can reduce its cost and open new markets as well. Many efforts have been taken by the company to counter this notion.

The company has started using recycled plastic for its upcoming manufacturing cycles. Apart from this, they have also established recycling facilities and units to accelerate the recycling process.

3. Expand Business In Other Beverages

The highest earning and revenue-generating beverage for the company is Coca-Cola itself. However, as I mentioned, the company has over 500 more brands in the food industry. The company can leverage its brand value and loyal customer base to market the other brands. Many of the other beverage brands under Coca-Cola are healthy and can contribute more to the company’s revenue numbers.

If you remember the first part of the article, a quick fact about Coca-Cola is that it spends more on advertising than Microsoft and Apple combined. But most of the marketing efforts are directed at Coca-Cola and a few other top brands under it. Most brands are still not getting the same marketing pace as others. If this can be done, this would be a great market to capture and expand sales.

Threats To Coca-Cola

1. Stiff Competition From Competitors

Like every company, Coca-Cola has its own share of competitors in the market. It faces fierce competition from many brands across the globe. The competitors include international companies and local beverage companies both. Many local beverage drinks are sold directly to consumers through brick-and-mortar or e-commerce platforms. This ensures transparency and a great consumer experience. One of the biggest competitors is Pepsi. It has a great market share and is the second most-sold beverage drink in the world. It is close to Coca-Cola in revenue and brand value.

Apart from the direct competitors, many people are switching to different beverages only for health reasons. Many local brands have seen a great increase in their sales only because they offer a healthy and tasty alternative to Coca-Cola. Although this doesn’t affect the company’s revenue numbers a lot, it still harms the brand image in an indirect manner.

2. Country-Wise Government Regulations

Coca-Cola is the largest distributor of a drink that is available in more than 200 countries. Now, this fact appears to encourage consumers to think about the massive sales they do every day. Yes, it is true. However, the backstory for operating in many countries at the same time is quite difficult for the company. The company has faced many lawsuits from various countries related to taxation, plastic production, and even health concerns over the ingredients used in the beverage. The drink’s coca flavoring, and the nickname “Coke”, remain a common theme of criticism due to its relationship with the illegal drug cocaine.

The company has been accused and faced many lawsuits as well. In 2014, it was accused of 27 Clean Air Act violations at a Minute Maid plant in Michigan. PETA also criticized Coca-Cola for funding invasive experiments on animals including one study in which experimenters cut into the face of chimpanzees to study the animals’ nerve impulses used in the perception of sweet taste.

A Quick Overview Of SWOT Analysis On Coca-Cola

Bottom Line

This was a detailed yet still brief SWOT analysis on Coca Cola. I have covered the business model of Coca-Cola along with a BCG matrix as well. If you look at the SWOT analysis, there are many strengths to opportunities on which the company is working. However, threats and weaknesses are common in any business and Coca-Cola also faces them. Moreover, Coca-Cola has been quite adaptive to lawsuits, health concerns, and more in its practices. Despite being challenged by many competitors and lawsuits, the company still is the largest and the most celebrated beverage brand in the world. Coca-Cola is a remarkable example of adapting to the current times and continuing the business without losses.

Previous Post:

SWOT Analysis For McDonald In 2023