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SWOT is an essential framework that examines the competitive advantage of the company with respect to strengths, opportunities, threats and weakness (Dekhil, Jridi and Farhat 2017). Here, SWOT analysis of Coca-Cola is conducted.
Brand value is the principal strength of the company. It is very popular sweet beverage among the customers around the world. The soft drinks of the company are bestselling products in the world. The company has the highest brand equity. 9 billion servings per day is offered to the customers based in 200 countries in the world. Another strength of the Coca-Cola is the extended global reach with the introduction of more than 500 new products (Kimathi 2016). Some of the popular products of the company include Cherry Coca-Cola and Coca-Cola Vanilla. Brand association and customer loyalty are key strengths of the company. It is an emotionally connected brand that associates with the happiness. Strong customer loyalty prevents the customers to choose other substitute products. It is the 3rd largest global brand and the brand value of the company remained 79.96 billion US dollars (Shtal et al. 2018).
One of the major competitors of the company is Pepsi that is considered as the weakness for the company. These two companies are market leaders in the soft drink market across the world. The lack of product diversification may create hinder to the growth of Coca-Cola. Pepsi diversified the business with the launch of snacking items such as Kurkure and Lays, where Coca-Cola lagging behind (Cheptegei and Yabs 2016). There is a serious health concern linked with the products of the Coca-Cola. The sugar intake increases due to the sweet carbonated soft drink of the company. Therefore, it is determinantal for the health issues like diabetes and obesity. As the company is the biggest producer of the soft drinks in the world, the controversies related to health concerns of the products has created problem for the company. Moreover, it is also suggested for the brand to bring healthy substitute products in the market to overcome the weakness.
The competitive advantage of the Coca-Cola can be enhanced through the diversification of the products of the company. The company has the opportunity to diversify in the different segment like Pepsi to tap the large market share (Gertner and Rifkin 2018). As a result, it will contribute significantly in the rise in revenue of the company. The multinational company can also tap the opportunity of expansion in the other countries of the world. The emerging countries offer a significant opportunity for the companies due to the higher demand and large customer base. The increasing presence of the Coca-Cola in the African, Asian and Middle eastern countries will act in favor of the company. The business model of Coca-Cola entirely relies on the supply chain and logistics. As the fuel prices and transportation costs bring problems for the company, the incorporation of the advanced supply chain system will support the growth of the business (Odukah 2016). The expansion of the business in the category of packaged drinking water will act in favor of the business of Coca-Cola. The company may capable of bringing healthy products in the market.
Water is an essential component used for the manufacturing of the products of the Coca-Cola. The company has faced criticism related to the water management issues. The vast consumption of water for the manufacturing of products of the Coca-Cola in the water-scarce region has led to the controversies. Furthermore, the allegation like mixing pesticides in water and polluting water against the Coca-Cola has acted as the threat for the expansion and growth of the company (Coburn and McCafferty 2016). There is also a packaging controversy against the company due to the use of the plastic bottle for selling products. The criticism against the company was also there for the recycling and renewable resources. Threat for the company is there in both direct and indirect competition. Direct competition from the Pepsi may hamper the market position of the company. The market position of the company is also threatened by the indirect competitors such as Lipton Juices, Costa Coffee, Nescafe and Tropicana. In the long run, these competitors can tap the potential customer base of the company with the inaugretation of new and innovative products in the market (Ling 2017). Therefore, the company must take steps to counter these threats and continue to dominate the market of beverages across the world.
PESTLE is a vital framework that helps to examine the macro business environment of a company (Sultan et al. 2019). Here, the factors that affect the macro environment of Coca-Cola is scrutinized.
Political conflicts and instability adversely impact the business growth. On the other hand, political security and stability positively impact the business growth of a company. The political environment of the US is stable and secure, which act in the favor of the business of Coca-Cola (Ammari and Jaziri 2016). It can be highlighted that the political conflicts of the US with other countries of the world also hamper the business of the company. In recent years, the trade war between the US and China has lowered the sale of the products of the Coca-Cola in the China. The sale of Coca-Cola is banned in Burma due to the trade sanctions between the US and Burma. Therefore, macro business environment of the company has impacted by the political environment.
Headquarter of Coca-Cola is in United States. Therefore, the strong economic background of the US economy supports the growth of the business. Thus, it boosts the macro business environment of the company. The trade ties between Mexico, Canada and US supports the business growth of the Coca-Cola with the help of free and fair-trade agreement between the countries (Njoroge 2017). Other developed countries are also acted as the important market for the Coca-Cola. The demand for the products of the company also remained high in the emerging markets across the world. China is a key emerging market that has increased the sale of the products of Coca-Cola.
Social factors contribute largely in affecting the macro environment of a business. Coca-Cola took initiatives like social campaigns to the connection with the customers stronger. It helps the company to reach to the customers easily (Pagani and Pardo 2017). The online store of the company allows the customers to customize their products through putting their name on bottle. These initiatives of the company have made it an optimistic brand on the social media platform. On the other way, it has also become difficult for the company to stay away from any kind of controversies due to the online presence.
Technology is a crucial factor that impacts the macro business environment of a company. In this context, it cannot be denied that Coca-Cola is a technologically advanced company. It has experimented with its product line with the help of technological advancement. Moreover, the innovation driven culture has boosted the growth and expansion of the business. In order to connect with the customers in a better way, the company took the route of social media platforms. Coca-Cola also protects data of the customers for market research, which in turn helps the company to gain insight about the tastes and preference of the consumes in the long run (Abbasi 2017). The freestyle dispenser of the brand allows the customer to select the products according to their choice.
The carbonated sugary drink of the Coca-Cola may result in health risks. Thus, the company has faced legal issues in related to the selling of unhealthy beverages to the public. Another setback faced by the company include protests from the labor unions for paying low wages and treating employees inappropriately (Farooq et al. 2021). As a result, there were various legal actions taken against the company due to it illegal practices. It was allegedly discriminate its employees on the basis of race. The legal environment of US and other countries of the world put burden on the company to correct the illegal practices. There was also allegation against the company for misusing the packaging label and misguiding the customers with wrong product ingredients.
Environmental factors are major contributor that affect the macro business environment of a company. Here, the macro business environment of the Coca-Cola is affected by the environmental factors such as use of plastics and pesticides in water. The company has faced major packaging controversy due to use of plastic bottles for selling the products (Singaram et al. 2018). It has also been criticized over its renewable and recycle resources. The vast consumption of water, polluting water and mixing pesticides in water has also brought issues for the company. The company must take actions to lower its carbon footprint through the reduction of use of plastic bottles and water. These practices of the company will secure the macro business environment in the long run.
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