Nowadays, due to the globalization and development of economic relationships, every organization should follow certain strategies in order to stay competitive in the market. It is also significant to analyze the strategies that are used by companies to assess where an organization stands, what measures bring advantages, and what methods cause negative consequences. One of the most effective tools that can be utilized in management is SWOT. SWOT analysis is a tool that identifies weaknesses and strengths, as well as opportunities and threats of an organization that may affect its projects, employees, or products (Dergisi, 2017).
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The SWOT analysis is vital to strategic management as it assists in developing its strengths, maximizing responses to opportunities, overcoming threats, and reversing weaknesses. In addition, it serves as an excellent tool, which helps to set objectives of the company and identify its core competencies (Tuncay, 2015). All these actions support the company in the achievement of competitive advantage in the market, which ensures the usefulness of the SWOT strategy. In this paper, the SWOT analysis of the Coca-Cola Company will be conducted.
The analysis can be divided into two parts, namely, internal strengths and weaknesses and external threats and opportunities. In the context of this work, five strengths of the Coca-Cola Company are presented. They include the solid financial position of the organization, utilization of high-tech equipment, management, aimed to achieve high customer loyalty, employment of highly qualified marketers, and expansion of beverage portfolio.
All these factors impact the company positively as they give the organization competencies and a competitive advantage. For example, the stable financial position ensures the extension of global reach, which increases the number of customers and enhances the company’s status in the market. The expansion of the product portfolio also plays a crucial role in the achievement of the dominant position by the company among its competitors.
Thus, in 2016, Coca-Cola acquired Ades, a famous Mexican beverage brand (Shoup, 2017). It helped to diversify the list of the products, enhance its popularity in Latin America, and match the competition from the producers of health drinks. Therefore, the most critical strengths of Coca-Cola that help to stay competitive in the market are the stable financial position of the company and the strong product portfolio.
The primary weaknesses of the company are a low presence in health drinks, the inability of manufacturers to invent unique qualities for their products, and water management issues. In terms of the company’s presence in health drinks, Coca-Cola managed to produce sugar-free beverages, such as Diet Coke or Coke Zero Sugar (Singaram, Ramasubramani, Mehta, & Arora, 2019). However, people’s awareness of the negative impact of soda is still rising, which may bring adverse outcomes for the company.
Also, the inability of manufacturers to create a new concept that would allow positioning their beverages as unique products lead to the emergence of competitors. Pepsi can serve as an excellent example of a competitor who managed to produce similar items as the company. Overconsumption of water is another problem that should be resolved by Coca-Cola. It can be achieved by the establishment of a new low water consumption manufacturing system. Dependence of the organization on currency fluctuations and low product diversification can also be included in the list of the company’s weaknesses as they lead to the loss of profit.
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There are some opportunities that can be used by Coca-Cola to improve its position in the market and increase revenue. For example, the company does not take any significant measures in terms of competing with its main contestant, Pepsi. Therefore, it is necessary to think about possible actions that could help the company to deal with competitors. Also, Coca-Cola can strengthen its competitive advantage through product diversification and focus on the manufacturing of healthier beverages.
For instance, it could start manufacturing snacks and concentrate on the production of bottled water. Moreover, it can be suggested to improve brand awareness and popularity of the products through marketing strategies. In addition, even though the company reached many countries around the world, it is still not presented in some developing areas. It would be beneficial for Coca-Cola to establish the distribution of its beverages to underdeveloped regions as well.
The main threats of the company include people’s awareness of the negative consequences that are brought by the consumption of Coca-Cola beverages and competition from the Pepsi brand. Other risks consist of indirect competitors, such as Starbucks or Costa Coffee, and the criticism of Coca-Cola by environmentalists because of its high consumption of water. In addition, the company faces a threat related to packaging controversy. Sometimes, Coca-Cola utilizes single-use plastic bottles, which makes it impossible for recycling. It goes against the policy of sustainable marketing and causes resentment in society.
Therefore, it can be concluded that even though Coca-Cola is a popular company that is recognized in different parts of the world, there is still room for improvement. The most critical item that needs immediate attention to improve strategic management is the development of the product portfolio, which implies the production of healthier beverages. It is also significant to take measures to overshadow the main competitor of the company, Pepsi, and resolve the issues with water management.
In addition, the improvement of a sustainable marketing system is a crucial task that should be prioritized by the company. All these issues should be resolved as soon as possible because otherwise, the company will face more serious problems, such as the loss of customers’ trust and decrease in profit.
Dergisi, U. (2017). SWOT analysis: A theoretical review. The Journal of International Social Research, 10(51), 994–1006.
Shoup, M. (2017). Coca Cola acquires AdeS soy drink brand from Unilever. Web.
Singaram, R., Ramasubramani, A., Mehta, A., & Arora, P. (2019). Coca Cola: A study on the marketing strategies for millenniums focusing on India. International Journal of Advanced Research and Development, 4(1), 62–68.
Tuncay, M. (2015). SWOT analysis in strategic management and a sample application in public. International Research Journal of York University, 2(3), 276–301.