Coca-Cola SWOT Analysis
- The refranchising efforts of Coca-Cola and other structural changes, although initially causing uncertainty and resulting in as much as an 18 to 19 per cent headwind to the top line, with the expected stable growth for the firm’s core business remaining strong (Forbes, 2017b).
- Organic revenue for Coca-Cola is predicted to grow by a further 3% in 2017, and a strong operating performance is further expected to drive a 7% to 8% growth in comparable currency neutral income prior to taxes (Forbes, 2017b).
- Coca-Cola is a global brand that is recognised in virtually every country of the world, and which is recognised by 94% of the world’s population (Coca-Cola, 2016).
- Coca-Cola is ranked in the list of the top organisations in terms of multicultural opportunities, which is important in a globalised and internationalised world, as well as being named on the top corporations for women’s business enterprises list (Coca-Cola, 2016).
- Along with their bottling partners, Coca-Cola ranks in the top ten private employers holding more than 700,000 system employees across the globe (Coca-Cola, 2016).
- The organisation has a massive operational reach, which includes over 200 countries worldwide, and spans across five operating regions; namely Europe, Middle East and Africa Asia Pacific; Latin America; North America and Bottling investments (Coca-Cola, 2016).
- While the core performance of Coca-Cola remains solid in the second quarter results of the firm, the top line and earnings per share took hits as a result of the refranchising of the organisations bottling operations across geographies (Forbes, 2017b). The company’s first quarter results were also affected negatively by this refranchising, with net revenue falling 11% year on year (Forbes, 2017b).
- Coca-Cola is currently in a time of structural change which has resulted in the uncertainty of the organisations stability and a fall in sales growth, due to the transition from being a capital-intensive organisation with refranchising plans aimed at China and North America, and structural changes in Africa and Europe (Forbes, 2017b).
- Across the globe, a number of popular supermarkets and fast food outlets which have traditionally been served by Coca-Cola are terminating contracts and severing their ties with the brand. This can be seen by the decision of Dominos Australia to ditch Coca-Cola in favour of their rivals Pepsi, and retailer Woolworths refusing to stock Coke’s newest zero sugar soft drink (Devlin and Davis, 2017).
- Coca-Cola have recently expresses their intent to become a business which is more growth-orientated, and is able to adapt more quickly to changes in consumer behaviour (Roderick, 2017). Where the first instances of innovation within the brand have been successful, in terms of the double-digit revenue growth experienced with Coca-Cola’s Innocent smoothies brand in Europe, and the Coca-Cola Zero sugar soft drink, focusing on innovation will enable the brand to remain successful and maintain its competitive advantage in an increasingly changing and complex world (Teece, 2010).
- With Coca-Cola already taking the first steps to make their products more sustainable, an opportunity for the organisation to consider in the future is a new business model focused on the circular economy, whereby resources are kept in a perpetual and benign cycle as opposed being sent to landfill or dumped after first use (Boyd, 2017).
- While Coca-Cola are attempting to improve the sustainability of their product design by utilising recycled materials in their production of bottles, critics warn that this is a half-hearted response at rectifying the organisations brand image when a lot of the time, it is the distinctive bottles of Coca-Cola that wash up on the beaches (Sauven, 2017). In this case, a threat is presented to Coca-Cola in that should consumers sense that the organisations attempt at sustainability are just ‘greenwashing’, as in trying to cover up their non-environmentally friendly behaviour, then a boycott might be likely (Mahoney et al., 2013).
- While Coca-Cola continue to work on their brand, their main competitor Pepsi do the same, with Pepsi currently working to prioritise its premium products and establish a larger ecommerce presence; a considerably different strategy to Coca-Cola which may be more successful with the increased visibility that ecommerce will bring the brand (Gee, 2017).
- Associated Press. (2017) ‘African-American pastors sue Coca-Cola over soda health risks.’ Daily Mail. [Online] [Accessed on 16 July 2017] http://www.dailymail.co.uk/news/article-4697442/2-pastors-file-suit-against-Coca-Cola-soda-health-risks.html
- Bedard, P. (2017) ‘Obesity becomes worldwide epidemic, US is the fattest.’ Washington Examiner. [Online] [Accessed on 26 July 2017] http://www.washingtonexaminer.com/obesity-becomes-worldwide-epidemic-us-is-the-fattest/article/2629712
- Boyd, O. (2017) ‘Is it fair to blame Coca-Cola and big corporations for our waste crisis?’ The Guardian. [Online] [Accessed on 2 August 2017] https://www.theguardian.com/sustainable-business/2017/aug/02/coca-cola-big-corporations-waste-crisis-plastics-recycling-packaging-circular-economy
- Coca-Cola. (2016) ‘Who we are- infographic.’ [Online] [Accessed on 22 July 2017] http://www.coca-colacompany.com/careers/who-we-are-infographic
- Coca-Cola. (2017) ‘Political Engagement Policy.’ [Online] [Accessed on 22 July 2017] http://www.coca-colacompany.com/investors/political-engagement-policy
- De la Mere, T. (2017) ‘Brexit could trigger worse crash than 2008, says Vince Cable.’ The Guardian. [Online] [Accessed on 17 July 2017] https://www.theguardian.com/politics/2017/apr/29/brexit-could-trigger-worse-crash-than-2008-says-vince-cable#img-1
- Devlin, P. and Davis, A. (2017) ‘Dominos ditches Coca-Cola for rivals Pepsi- a day after Woolworths refused to Stock Coke’s new sugar free drink.’ [Online] [Accessed on 18 July 2017] http://www.dailymail.co.uk/news/article-4673604/Dominos-ditches-Coca-Cola-Australia.html
- Forbes. (2017a) ‘How Coca-Cola’s ‘Bridge’ Program Can Help Over The Long Run.’ [Online] [Accessed on 17 July 2017] https://www.forbes.com/sites/greatspeculations/2017/07/07/how-coca-colas-bridge-program-can-impact-its-performance/#33ed1c105207
- Forbes. (2017b) ‘Refranchising likely to again be a drag on Coca-Cola’s Earnings.’ [Online] [Accessed on 24 July 2017] https://www.forbes.com/sites/greatspeculations/2017/07/24/refranchising-likely-to-again-be-a-drag-on-coca-colas-earnings/#3ef29a061231
- Gee, R. (2017) ‘Pepsi sees ‘infinite possibilities’ in ecommerce.’ Marketing Week. [Online] [Accessed on 17 July 2017] https://www.marketingweek.com/2017/07/11/pepsi-to-prioritise-premium-products/
- Latchem, R. (2017) ‘Reform producer responsibility scheme says Coca-Cola.’ MRW. [Online] [Accessed on 19 July 2017] https://www.mrw.co.uk/latest/reform-producer-responsibility-scheme-says-coca-cola/10021741.article
- Mahoney, L. S., Thorne, L., Cecil, L. and LaGore, W. (2013) ‘A research note on standalone corporate social responsibility reports: Signaling or greenwashing?’ Critical perspectives on Accounting, 24(4), pp. 350-359.
- Oppenheim, M. (2017) ‘Donald Trump presses a red button on his desk and a butler brings him a Coke.’ Independent. [Online] [Accessed on 17 July 2017] http://www.independent.co.uk/news/world/americas/donald-trump-oval-office-desk-red-button-butler-coke-white-house-us-president-a7703056.html
- Ramakrishnan, S. (2017) ‘Coca-Cola to sell Coke Zero in U.S.; profit beats.’ Reuters. [Online] [Accessed on 26 July 2017] http://www.reuters.com/article/us-coca-cola-results-idUSKBN1AB1HJ
- Roderick, L. (2017) ‘Coca-Cola: We need more courage to become a growth-orientated business.’ Marketing Week. [Online] [Accessed on 26 July 2017] https://www.marketingweek.com/2017/07/26/coca-cola-courage-growth/
- Sauven, J. (2017) ‘If you care so much, Coke, why aren’t your bottles 100% recycled?’ The Guardian. [Online] [Accessed on 19 July 2017] https://www.theguardian.com/sustainable-business/2017/jul/13/coca-cola-plastics-pollution-oceans-bottles-packaging-recycling-pr-fizz-greenpeace-john-sauven
- Teece, D. J. (2010) ‘Business models, business strategy and innovation.’ Long range planning, 43(2), pp. 172-194.
- The Guardian. (2017) ‘Coca-Cola to close South Australia factory with loss of nearly 200 jobs.’ [Online] [Accessed on 17 July 2017] https://www.theguardian.com/australia-news/2017/feb/22/coca-cola-to-close-south-australia-factory-with-loss-of-nearly-200-jobs
- Thomas, L. (2017) ‘Coca-Cola’s earnings, sales top wall street expectations with more healthy drinks on tap.’ CNBC. [Online] [Accessed on 27 July 2017] https://www.cnbc.com/2017/07/26/heres-everything-you-need-to-know-about-coca-cola-earnings.html