Coca-Cola’s Internal and External Environment

Introduction

The Coca-Cola Company is a beverage company that was founded in 1886. Currently, it has a worldwide presence in the manufacturing and distribution of non-alcoholic beverages of diverse brands. This article performs an analysis of the strengths, weakness, opportunities, and threats that determine the success of this company. This analysis touches on a variety of conditions, both internal and external, that are instrumental in the operations and success of the company. These factors underlie the company’s operational efficiency, marketability, innovation, competition, and economic factors, among many others. Identifying the strengths, weaknesses, opportunities, and threats are important in informing the company to strategize and formulate appropriate policies that are important for its success.

Internal Strengths of Coca-Cola

The major internal strengths of the Coca-Cola Company that have been instrumental to its success include its world-leading brands, the large scale of operations and vibrant revenue growth. The company’s brand is strong and recognized worldwide. It has a global presence in more than 250 countries and works in partnership with many companies across the world. This increased brand recognition and large scale of operation drive the company’s growth. The company also boasts of a diverse portfolio of product brands, including the Coca-Cola zero for the health-conscious consumers. The formidable brands give Coca-Cola an edge in new and existing markets. The worldwide presence also means that the company has enormous distribution and production facilities that give it an edge against the competitors. Given its strong brand and global presence, the company has a large scale of operations. This makes it the leading manufacturer, distributor and marketer of non-alcoholic beverages. This enables Coca-Cola to penetrate new markets with relative ease and increase its revenue generation potential.

Coca-Cola Company is also actively involved in many corporate social responsibility activities that serve to boost its brand image. The company’s driving policy is the safeguard of climate and preservation of natural resources such as energy and water. Continuous technological innovation has also been integral in the company, enabling it to meet the high demand for its products. The company has invested in effective and efficient packaging techniques such as the use of recyclable plastic bottles, thus enhancing the rate at which its products are sold. The company also uses the internet and television to compete in advertising and differentiation, enabling it to acquire a high market share.

Internal Weaknesses

The company’s weaknesses mainly stem from negative publicity, the decline in revenue from operating activities and sluggish performance in some regions. Legal and political issues in various countries of operation often give the company negative publicity, thus hindering its growth. The refusal of the company to reveal its productivity formula has made some countries like India to ban its products. The company has also been accused of selling products that are unsuitable for human consumption. For instance, the company’s products were banned from being marketed in Belgium after it was alleged that they caused the death of many children. These negative publicity issues, therefore, affect the revenue generation potential of the company. Negative economic environments of the country of operation also affect Coca-Cola’s market potential. Depending on the economic condition of a particular country, the company is often forced to review the products’ prices upwards, subsequently leading to low business transaction.

External Opportunities

Across the world, the consumption of non-alcoholic drinks is very high. Thus the company can capitalize on this high consumption rate to expand significantly. The company could also grow by increasing its partnerships with other companies and diversify its product portfolio to include other beverages and snacks. The increasing demand for healthy products could inform the company to introduce new products with a focus on nutrition and healthy, contributing to market growth and increased revenue.

The company could also enhance and maintain its global presence by tapping into unreached markets, opening and acquiring new plants and being more aggressive in marketing in areas that have marvellous potential. Continuous technological innovations form the core pillar to the advancement of the company. The increasing environmental consciousness could also inform Coca-Cola to invest more on the beverage containers to appeal to the consumers. Creating many initiatives, such as social events and sponsorships, could also help the company build its brand image.

External Threats

Intense competition and slow growth present the major threats to the Coca-Cola Company. Raising prices in response to inflation and economic conditions of the country of operation has the potential of affecting the company sales and giving competitors an edge. The changing consumer lifestyles and the increasing health consciousness have made many people shun the carbonated drinks in preference of water and more nutritious drinks. This subsequently affects the market for non-alcoholic beverages, contributing to slow growth. The huge number of substitute products available, such as beers and water, poses a big threat to the company through intense competition. The company also has to contend with various policies in the countries of operation. Some of these policies have led to a decline in the company’s sales and revenue, thus hampering its growth.