Coca-Cola SWOT Analysis: Past to Present

A. Company

In 1886 a pharmacist by the name of John S. Pemberton created the Coca-Cola drink. The name of the drink comes from the cocaine from the coca leaf in which it was made from. After much success “Coca-Cola” was registered as a trademark in 1893. (The Coca-Cola Company, 2018). “In 1978 Coca-Cola became the only company allowed to sell cold packaged beverages in the People’s Republic of China” (The Coca-Cola Company, 2018).

In our current day Coca-Cola is the number one selling non-alcoholic beverage company with about .

4 billion in revenue in 2017. The runner up being PepsiCo Inc. with $29.85 billion in 2017. (Jurevicius, 2018). The company is now in over 200 countries around with world with about a 94% coca cola recognition. Overall, the Coca-Cola original drink has earned the company nearly 40% of its total revenue. (Coca-Cola, 2017). Now, the company also owns 13 other brands, each earning at least $1 billion per year. (Jurevicius, 2018).

With the new CEO, James Quincey, the company was hoping to see more no- and low-sugar drink options and explore drinks in a variety of categories. At the time the new CEO took over, the company had goals to expand in a few different drink options including: sparkling, juice and plant based, enhanced drinks and sports drinks, and ready to drink coffee and teas. Coca-Cola was also hoping to introduce mini cans. A large reason for healthier drink options and smaller cans is because the company is in support of the World Health Organization and recognize that sugar consumption is an on-going problem. (Staff, 2017).

The Coca-Cola Company provided a number of goals to reach by 2020 and current statistics in their 2017 sustainability report. The company hoped to reduce the carbon footprint of the “drink if your hand” by 25%. They wanted to give at least 1% of their annual operating income back to local communities and in 2017 they have surpassed that goal by 0.6%. By 2017 the company has 2.4 female entrepreneurs economically empowered across the global value chain, with a goal of 5 million women by 2020. This number of women jumped from 1.5 million from 2015 to 2016 and another 700,000 by 2017. By 2017 the company had reached 87% of bottling partners that were complying with the guiding principles with a goal of 98% by 2020. Coca-Cola hoped to return 100% of water to nature and communities. They have already beat this goal with 150% by 2017. (Coca-Cola, Coca Cola Journey, 2017)

B. Customers

Based on the information found at Coca-Cola Brand Snapshot it looks as though buyers of Coca-Cola are amongst all age ranges with the numbers being quite close, but the highest range is under age 24. Buyers are predominantly Hispanic, make under $20,000 per year, and have not attended college. It also looks as though most customers are buying the product from a dollar store or from a grocery store. (Coca-Cola, n.d.).

In 2006 Coca-Cola launches the My Coke Rewards program for its customers. Basically, all you do is enter a code found on a marked Coca-Cola package on the website in exchange for virtual points. These points could be redeemed for prizes or sweepstake entries. This rewards program ended in 2017 and the company donated any unused points to charity. The company now uses the Sip and Scan program. The customer simply scans the code on the product to redeem perks or sweepstakes. (Sip & Scan, 2018).

a. Psychographics (attitude toward product, toward brand)

b. Current level of customer satisfaction

c. Buying behavior (what they buy, when they buy, sensitivity to price)

d. Other customer Issues (what changes have we seen with these customers, why don’t non-buyers buy)

C. Context

In 2016, Lawrence Lewitinn wrote “Coca-Cola CEO: This is one of the Biggest Issues facing the World Today” discussing the state of the economy at the time. Lawrence explained that “the International Monetary Fund (IMF) made its third cut in less than a year on its projections for global growth, in part because of concerns over China” (Lewitinn, 2016). Although China’s 2015 growth rate was the slowest it has been in over 25 years, Coca-Cola’s CEO at the time, Muhtar Kent didn’t see this as a problem and continued to invest in the county (Lewitinn, 2016). He did however, see a threat with Coca-Cola’s largest consumer: the middle class. Kent sees a huge problem with the number of being unemployed at the time, stating that not everyone needs to have a college degree as long as they are provided with the appropriate training. (Lewitinn, 2016).

The Coca-Cola company has dealt with its fair share of legal issues and threats. In 2017 a non-profit group, Praxis Project sued Coca-Cola for alleged deceptive marketing, accusing the company of claiming they have no- or low-sugars while they are actually linked to type 2 diabetes and obesity. (Kell, 2017). In 1985, the company tried to release a new flavor of coke called “New Coke”, but it turned out to be a disaster, receiving thousands of complain calls and even protests to bring back the original formula. (The Real Story of New Coke, 2014). Through out the years, Coca-Cola has been involved in a number of lawsuits surrounding health factors, which is no surprise considering the amount of caffeine and sugars in these types of beverages.

Another threat this company has faced concerns the water used to produce their beverages. At one point the company was alleged to be using pesticides in their water. Luckily, it doesn’t seem that this hurt their sales. Secondly, the concern with water grows. Due to a change in climate, water is becoming more limited in some areas and this creates a concern for the company as water is a key ingredient in their beverages. This is why it might be smart for Coca-Cola to explore the idea of creating products other than drinks. (Frue, 2016)

D. COLLABORATORS

a.

E. COMPETITORS

As stated above, the Coca-Cola Company really only has two competitors, PepsiCo Inc and Nestle S. A. Although Pepsi is nearly $6 billion behind Coca-Cola, they have something that Coca-Cola doesn’t: food products. Pepsi has Lays chips, Ruffles, Tostitos, etc. putting them above Coca-Cola in some aspect of competition. A limited water supply would have a significant affect on Pepsi as well, but at least they still have their food products to help keep them afloat.

F. SUMMARY

Strengths: strong brand identity, strong customer loyalty, global production,

Weaknesses: Carbonated drinks and the contribution to the obesity epidemic, competitors (Pepsi)

Opportunities: branch out away from drinks, create food products, move into more developing countries

Threats: allegations of pesticides in water, limited water supply,

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