The Coca-Cola Company in 2012: SWOT Analysis

The internal and external environment of an organization determines its level of success (Zurkuhlen, 1987). An organization needs to conduct a SWOT analysis regularly for it to remain competitive. An organization should know its weaknesses for it to make the necessary improvements from an informed point of view (Griffin, 2011). Organizations use their strengths to gain an advantage over their competitors, and this can not happen if they do not know some of their strengths. Every company has got its opportunities and threats that need to be highlighted for the benefit of an organization. The Coca-Cola Company is among the most successful organizations in the world whose operations can be affected in a great way if its management fails to conduct a SWOT analysis regularly (Griffin, 2011). This paper will analyze the internal strengths and weaknesses of the Coca-Cola Company and at the same time, examine its external opportunities and threats.

Coca-Cola is a very big multinational company with operations in over 200 countries (Baines, 2012). This is a sign of a company with quite a several internal strengths. Brand loyalty from customers is one of the major strengths of Coca-Cola. The company has many customers around the world who automatically choose Coca-Cola products from a variety of other brands because of loyalty. The company is well established and has been around for the last 125 years. The company has a very strong financial base, and its value is estimated to be $167 billion (Hays, 2005). The high returns that the company receives are attributed to the fact that it operates in markets that are experiencing tremendous growth due to the high purchasing power of consumers. The Coca-Cola Company has positioned itself strategically in almost all regions across the world. The company has been paying out dividends to investors in time for the last 26 years, and this has continued to attract new investors (Baines, 2012). Coca-Cola has been raising its dividends consistently since it started paying out dividends. Very few companies around the world can manage to do what Coca-Cola does when it comes to paying out dividends. The non-volatile nature of Coca-Cola’s stock is among the most notable strengths that the company enjoys (Hays, 2005).

The Coca-Cola Company has got internal weaknesses that hinder its growth despite being of the best-performing companies in the world (Griffin, 2011). The company operates in both slow-growth and fast-growth markets because it is an international brand. The overall growth of the Coca-Cola Company is normally affected in a great way by regions with slow market growths like North America and certain parts of Europe (Hays, 2005). Despite being an international brand, there are some regions where the company is not well established. It is quite obvious that the Coca-Cola brand may not be famous in such regions. There have been some complaints from customers that the sugar content in the majority of Coca-Cola’s products is very high and therefore not good for the health of customers (Baines, 2012). This is a major weakness for the company because customers may shift to other brands that are good for their health. Customers who are concerned about their health can not go for products with high sugar content. The Coca-Cola Company is yet to exploit the beverage market according to its capacity because it has a very small number of sub-industries when it comes to the beverage market (Baines, 2012).

The Coca-Cola Company has got a lot of opportunities because it is a well-known brand across the world (Zurkuhlen, 1987). The company is always in a better position when it comes to acquisitions, and this is according to recent developments. The Del Valle brand is among Coca-Cola’s latest acquisitions which provide the company with a good opportunity for expansion (Baines, 2012). The fountain dispenser machine has been a source of attraction for many Coca-Cola customers across the world because customers can access beverages without much struggle. The future is very bright for the Coca-Cola Company because of innovations like the fountain dispenser machine. The company can distribute its products in every corner of the world in the shortest time possible because it has a distribution network that is extensive and effective (Baines, 2012). The Coca-Cola Company has many opportunities that are related to the overall growth of the energy-drink market in recent years. This means that the company will continue to enjoy a considerable customer base (Griffin, 2011).

Competition from rival beverage companies is Coca-Cola’s greatest threat (Baines, 2012). The Pepsi Company has been Coca-Cola’s main competitor in the soft-drink market for many years. The soft drink market has continued to suffer in recent years due to high taxes and size limitations. The fight against obesity is a great threat to the Coca-Cola Company because many people are advised to avoid using Coca-Cola products because of its high sugar content (Griffin, 2011). The growth of the Coca-Cola Company has also been affected by the rise in ingredient prices. Weak currencies have also reduced the company’s margins in certain markets. Weak currencies and the ever-rising ingredient prices have reduced the company’s profit margins (Griffin, 2011).

References

Baines, P. (2012). Essentials of marketing. London: Oxford University Press.

Griffin, R. (2011). Fundamentals of management. New York, NY: Cengage Learning.

Hays, C. (2005). The real thing: Truth and power at the Coca-Cola Company. New York, NY: Random House Publishing.

Zurkuhlen, H. (1987). The Coca-Cola Company: An international perspective. New York, NY: Solomon Brothers Inc.