Coca cola swot analysis or pestle analysis
The Coca-Cola Company (KO), founded in 1892 in Atlanta, Georgia, makes beverages globally. American biochemist and scientist John Pemberton invented Coca-Cola in 1886. Candler bought the company in 1889. The company sells non-alcoholic beverage concentrates and syrups. Bottling franchisees invest money to bottle and distribute concentrates and syrups to wholesalers and retailers in certain regions.
Coca-Cola owns bottling operations, but franchisees worldwide bottle most of it. These franchisees can operate independently but must follow Coca-Cola’s quality requirements for product consistency. Coca-Cola franchisees receive syrups, concentrates, and other beverage bases, as well as management guidance on quality control, advertising, financing, marketing, technical help, and employee training. Coke provides franchisees with technical support and training. The current Fortune 500 puts Coca-Cola 88th with $37.27 billion in net operating revenue. It has 86200 employees worldwide.
Perhaps Coca-Cola’s greatest asset is its name. This SWOT analysis discusses the company’s internal advantages. Coca-Cola can easily direct customers to its social media platform because it is the world’s most successful beverage company. According to “The Food Institution Report” from 2017, the company has the most social media involvement among non-alcoholic beverage brands. Coca-Cola’s offline media presence influences brand advocates. The company’s social media ads also portray all ethnicities, nations, and other diverse groups equally. Coca-Cola History, 2020 states that the company operates in over 200 countries.
It has the highest likes (107 million) on Facebook, the most popular social media platform. Each article illustrates the company’s innovation in bringing together people of all ages and demographics, which attracts customers. According to Reinartz and Saffert (2014), Coca-Cola’s social media inventiveness attracts attention and improves attitudes. The company can try numerous marketing tactics without worrying about customer feedback. Coca-Cola benefits from its well-known brand name, diversity in advertising, and creative marketing efforts.
Businesses can make better decisions when they know their vulnerabilities. Instagram video ads are not made by Coca-Cola. This social media platform is especially popular among young adults. Tran’s 2020 research found that 75% of US 18–24-year-olds use Instagram. Failure to submit Instagram videos may hurt future business decisions. Kallas (2018) found that over 80% of organisations that use video creation in their marketing initiatives have a higher ROI.
Many have also noticed that Coca-Cola does not have a regular plan for posting consistently on Facebook, Instagram, and Twitter. The company values conventional media over online ones. According to Stein (2013), a Coca-Cola senior marketing executive does not think social media will boost sales. It would be a huge mistake for the corporation to ignore social media and let competitors gain an advantage. Coca-Cola is less consistent with social media marketing than PepsiCo. Coca-Cola markets on social media. Thus, the company must improve its social media marketing.
Social media gives Coca-Cola several opportunities to advance its mission and vision. Interactions with others present opportunities for the firm. Facebook, Instagram, and Twitter are growing fastest. Facebook clearly has the most important subscribers of all social media networks. According to Clement (2019), 330 million people use Twitter, 1 billion use Instagram, and 2.5 billion use Facebook. All of these facts show how important social media is for brand awareness in enterprises.
If they can master various platforms, organisations can improve value and revenue from their diverse user groups. Coca-Cola reaches its target audience through various channels. About 107 million people follow Coca-Cola on Facebook. Facebook has yet to reach 2.393 billion of its 2.5 billion users. Use materials with a predetermined audience to save time and effort and boost effectiveness. People are changing their behaviour due to social media. It is happening worldwide, even in the US. Coke is set to capture social media’s biggest potential.
The SWOT analysis’s final component, “threats,” addresses the company’s external issues. Coca-Cola joins the social media marketing race late. The company’s biggest competitor is PepsiCo. This competition is fierce on Instagram and other social media platforms. PepsiCo is taking advantage of Coca-Cola’s lack of videos on social media to get an edge in the battle. PepsiCo posts articles and videos on its website and interacts with customers.
The competitor is consistent and values its audience. Coca-Cola posts photos with few words. PepsiCo uploads in two days, Coca-Cola in six. PepsiCo has a better grasp on social media and might overtake Coca-Cola if it does nothing. Therefore, Coca-Cola must engage in training and manage its social media presence to avoid falling behind its customers and competitors in technology.
The PESTEL analysis considers food laws and regulations political because they affect Coca-Cola. Countries have different laws. US-Burma trade sanctions first barred Coco-Cola sales. The sale occurred in 2012, sixty years after the sanction was lifted. Cuba and North Korea ban Coca-Cola due of politics. Coke’s canned goods have been harmed by the US-China trade war. Cost pressure is mounting from steel and aluminium tariffs.
Coke dominates the carbonated beverage industry economically. In the third quarter of fiscal year 2019, net revenue grew 8% despite tariff-induced price hikes. The Nigerian Chi Ltd. acquisition cut margins. Under the new US-Mexico-Canada trade agreement, the company expects fair trade. Customers choose low-calorie drinks. Coca-Cola reports an 8% increase in diet coke and zero sugar retail value. According to its CEO, Coca-Cola Zero Sugar had its best year and fastest growth in 2018. Demand for these goods should rise.
Coca-Cola has historically used social marketing. It popularised #sharecoke in 2014. Find bottles with names you relate to, gift them to family and friends, then post about it on social media using “share coke.” Store-bought Coca-Cola bottles can be personalised. We formed customer-product partnerships.
Coke has tested various tech products. Japanese ready-to-drink frozen drinks will debut. Company values innovation. It promotes Coca-Cola and online gaming. It leverages social media to stay current. Freestyle dispensers allow customers mix drinks in different flavours. The corporation archives market research data to learn consumer preferences. The product seems necessary after online advertisement.
Coca-Cola being sued in numerous countries for its caffeine levels. Labour unions said the corporation mistreated and underpaid workers. The company’s mislabeling of apple and grape juice as pomegranate and blueberry juice caused a huge issue. Corporations sue employees for racial discrimination. Air, water, and packaging contamination damage the company. Commercial ethics should come first. Coca-Cola prioritises their issues.
Analysis of Porter’s Five Forces:1. Supplier leverage: Coca-Cola suppliers have minimal negotiating power with customers. Another reason is that there are many vendors and Coco-Cola conversion costs are low. Despite Coca-Cola’s ease of switching suppliers, switching away from it is harder. This means any supplier could lose money, even if the odds are low. Forward integration is unlikely for most providers.
2. Customers have little bargaining leverage with Coca-Cola. Individual clients usually buy in small quantities and are not market-focused. Compared to other soft drinks, Pepsi and Coca-Cola are similar. The majority of their flavours are similar. Customers are loyal to each brand even though they don’t have to pay much to switch. Coca-Cola customers aren’t price-sensitive.
3. The risk of new brands entering the market: Many beverage industry characteristics inhibit new brands. Brands cannot grow overnight. There is a lot of investment potential. From management to sales and marketing, everything costs money. Even if local brands start small, marketing and hiring require significant financial investment. This sector has mediocre client loyalty, thus improving it will take time. Thus, new entrants may be able to compete with Coca-Cola on a smaller or local scale, but building a brand on par needs a large investment of financial and human resources.
4. Competition from substitutes: Coca-Cola’s main competitors include Pepsi, fruit juices, and other hot and cold drinks. Many items can replace Coca-Cola. One can get many juices and hot and cold drinks on the market. Customers can transfer providers easily. Additionally, alternative products are generally high-quality.
5. Coca-Cola and Pepsi are two major beverage firms. Coca-Cola and Pepsi compete. Key players are competing fiercely. The few lesser players pose little competitive risk. Both major competitors are similar in size, products, and strategies. Due to their limited diversity, many brands compete fiercely on price. People know about Coca-Cola’s controversy. So. Existing companies have severe competition, which is powerful.
1. Its Product:
Coca-Cola has 500 still and effervescent drink brands. Over 3,900 drinks are available. its most essential offering Coca-Cola is a globally valuable brand due to its popularity. It has 21 billion brands, 19 of which are low-calorie or calorie-free.
2. Coca-Cola distributes beverages over a wide network. It sells items in over 200 countries in six operating zones: Europe, Latin America, North America, the Pacific, and Africa. Coca-Cola sells 1.9 billion servings daily. The company has always relied on its bottling partners for packaging and distribution.
3. Price: Coca-Cola’s major beverage competitor is Pepsi. Prices are comparable for both brands. Prices are just right—not too cheap to indicate bad quality or too high to be affordable for most clients. Coca-Cola prices build brand loyalty. Coca-Cola and Pepsi’s pricing competitiveness has increased due to lower carbonated soft drink consumption. Price drops as bundles grow. Customers who buy more Coca-Cola pay less.
4. Advertising: The most successful beverage firms spend a lot on advertising to boost sales and revenue due to fierce competition. Coca Cola spent $4 billion on advertising and marketing in 2016. In 2018, marketing spending reached $4.1 billion. It uses traditional and innovative methods to promote its brands. Coca-Cola’s 2016 taste the emotion campaign united all its brands. By selling its flagship product as a single brand, Coca-Cola has changed its marketing strategy. Besides television, billboards, and other public locations, the corporation advertises on social media and the internet.
STP analysis—customer analysis
Segmentation: This approach seeks to understand the market, find opportunities, and capitalise on them by using current competitive advantages or creating new ones. Coca-Cola categories customers by these traits:
Geographic Segmentation: The company divides the worldwide market by geography. Leaders of the many divisions in major regions of the world report to the parent corporation. Each division has extensive activity management autonomy.
Place of consumption: the company splits the market by where consumers drink drinks. Most people consume in theatres, train stations, restaurants, and other public venues.
Product type: the company segments the market by the products customers bring to the store. The market generates most of the money, while non-cola products are being promoted more.
Coca-Cola divides their market by demographics to better serve customers. Targeting market categories is based on age and income.
Coca-Cola targets many demographics with its ads. Coca-Cola’s major market is 10–25-year-olds, while its secondary market is 25–40-year-olds. Diet cola and its variations target health-conscious consumers, whereas regular Coca-Cola targets flavor-seeking people. Coca-Cola targets health-conscious consumers with its non-cola beverages. Sprite is marketed at high school and college students, while Limca is aimed at working youth.
Positioning: The corporation markets its goods as refreshing and thirst-quenching. Coca-Cola’s latest slogan, “little drops of joy,” promises happiness. The things create memories of enjoying time with friends and family and daily life.
1. Pepsi: Pepsi is definitely a strong Coca-Cola competitor. Both companies have strong distribution and marketing and sales systems, which is why they compete so hard. Because of this, these two have the biggest market share worldwide.
2. Red Bull: Red Bull is a fast-growing energy drink and a major Coca-Cola competitor. Red Bull’s slogan, “Red Bull gives you wings,” is famous. Bar culture, where Red Bull can be added to numerous beverages, is its main draw. Red Bull’s distribution system is well-known.
3. One of the most popular fruit-flavored carbonated beverages is Fanta, another Coca-Cola subsidiary. Many countries sell nearly 100 Fanta varieties. Fanta is also known for its distinctive message to its target audience in each country it operates.
4. Previously a competitor to 7-Up, Sprite today dominates the soft drink market. Though owned by Coca-Cola, Sprite is a strong competitor. Sprite’s simple formula has won Limca’s market and garnered massive fanbase.
Coca-Cola has a high gross profit margin. Management believes their product is valuable and can be changed. Since they create the syrup and supply it to bottlers to be placed into single-serve containers, their online price is low for the technology sector.
Coca-Cola is credited with starting the commercial beverage industry. The 130-year-old company wants to maintain market dominance. Rethinking and reestablishing a corporate strategy for innovation should prioritise customers. Coca-Cola believes customer loyalty is vital to its existence.
The Coca-Cola Company aims “to refresh the world; to inspire moments of optimism and happiness; to create value and make a difference” (2017). Coca-Cola will achieve this by “driving revenue and profit growth, investing in our brand and business, becoming more efficient, simplifying our company, and refocusing on our core business model” (The Coca-Cola Company, 2017). To expand and succeed, the business must identify and handle important problems and emerging trends in its future strategy.
The 2020 vision comprises long-term goals and a plan to lead competition. These suggestions can help Coca-Cola raise public awareness of unknown and healthier brand items, build a new customer base, and work with other companies leveraging their big presence and marketing tactics. The company’s brand and profitability will improve. This will give them an edge and possibly drive out competition.