SWOTAnalysis: The Case of Coca-Cola Company
Itis a publicly held American multinational beverage company which hasbeen in existence for over 130 years. The company enjoys a worldwidemarket with few exceptions like North Korea and Cuba. By the end ofits 2015 financial year, the organization recorded a total revenue ofUS$44.294 billion and a net income of US$7.351 billion (Hansen,2016). It is said to have employed over 123000 employees by June2016.
High marketing and advertising capability. This helps the organization t easily, quickly and conveniently reach the target market.
Largest market share at least 40% of the total global market share (Grant, 2016). This gives it high bargaining power and clout.
A variety of brands to offer more than 500 brands in the market. This minimizes the probability of the typical customer’s failure to purchase goods from the organization when they need an alternative.
Strong financial base. It enables the company to have an easy time when executing the necessary operations.
High level of corporate social responsibility. It enhances the organization’s public relations making it acceptable by the community.
Identification of traces of pesticides in the company’s brands it damages the brand’s image to a considerable extent
Stiff competition from Pepsi brands. This implies that the organization needs to continue setting aside more funds not only to retain the current market share but also to attract new customers.
Over-investing in the beverage industry and ignoring related products lines such as snacks and fast foods. This puts the organization at the risk of collapsing and experiencing other challenges associated with failure to diversify.
The company also experiences negative publicity. This is mainly associated with its products and normally leads to decline in sales.
Quality improvement customers hope that the content of the company’s products will be reviewed to suit the current heath needs.
Advanced innovation on packaging. Some of the currently used designs by the Coca Cola are superb but to keep to date with time the company must ensure continuous improvement even in the packaging.
The opportunity to acquire other companies this may be adopted as a diversification or expansion strategy
The opportunity to diversify to the snacks industry remains open to the company. Diversification is important as it ameliorates the risks associated with dealing with a single product line (Setyawati & Santoso, 2016)
The rising health consciousness. People may decide not to buy the product anymore.
Challenges in complying with different government regulations in the different countries. This implies that the company may easily fall into legal complications
The fact that the company operates in different economic regions insinuate that the inflation, economic slowdown, and instability would be experienced.
Competition from the second largest competitor, the Pepsi Company. It threatens the organization’s market share.
Thistool assists the marketing and management teams to solve problems inthat it helps them to understand their business in a better way. Witha detailed understanding of the business, the two teams stand abetter position to maximize and capitalize on the strengths andopportunities while at the same time they minimize the weaknesses andthreats. Business goals and strategies can be planned and achieved ina better way when this tool is available. The tool creates awarenessin the whole organization on what should be taken advantage of(strengths), what should be addressed (weaknesses), what should becapitalized on (opportunities) and what should be deterred (threats)(Flamholtz & Randle, 2016). With this, team members purpose toachieve the respective goals every day thereby solving the problems.In most cases, problems revolve around threats and weaknesses. Thistool is, therefore, useful in problem-solving since it helps themarketing and management teams to point out the problems (threats andweaknesses) clearly.
Basedon my research and the SWOT analysis, I recommend that theorganization should seek to diversify its activities. Other productlines such as snacks can be adopted to ameliorate the risk andproblems that come along with single product line operations. It is,also, recommended that the organization should lay down strategy toensure that the people’s growing concerns on the health wellness ofits products are resolved. The company should either seek to betterthe product, and if the concerns are misconceptions, then it shouldcome out clear and inform members of the public. The marketingstrategies should be formed around bettering the brand’s image andpositioning the organization (Hansen, 2016). People are beginning tolose trust in the company’s products due to health concerns. Thefocus should be laying down strategies to regain this trust. It isalso recommended that the company should fasten its intention to movefrom a centralized management structure to a decentralized one. Adecentralized structure is essential in easing the challenges thatare associated with the fact that the company operates in differenteconomic regions. With a decentralized structure, the management ofeach subsidiary stands a better position to resolve economic problemssuch as inflation, economic slowdown and political instability(Grant, 2016).
Flamholtz,E. G., & Randle, Y. (2016). Growingpains: Building sustainably successful organizations.
Grant,R. M. (2016). Contemporarystrategy analysis: Text and Cases edition.John Wiley & Sons.
Hansen,J. T. (2016). Constructing a Product Brand Identity: The Case ofCoca-Cola.
Setyawati,D. R., & Santoso, I. (2016). Value Chain Analysis on theLogistics Management as the Basis for Strategy Formulation toIncrease Customer Satisfaction (Case Study in PT. Coca-Cola AmatilIndonesia-Plant East Java). AGROINDUSTRIALJOURNAL,1(1).