Introduction
Coca-Cola is the largest company producing beverages, and its strengths are reflected in its daily operations. First, the company extensively works on its influencing strategies by managing and creating new advertisement campaigns, relations with the public, and posts on social media. The Coca-Cola Company was the world’s biggest advertiser in the beverage sector in 2017 (Xiao & Zhang, 2020). Moreover, Coca-Cola every day works on strengthening its brand image and recognition. The Coca-Cola company has some of the most well-known brands among all multinational corporations because it works in more than 200 nations with billions of residents. More readily than most of its smaller competitors, the corporation can influence consumers’ purchasing decisions thanks to its strong brand recognition and extensive marketing initiatives. Brand recognition and brand value are strongly linked since, usually, a brand’s global recognition increases with its value.
Next, due to the distribution network of The Coca-Cola Company, the chain can reach more customers than the majority of its competitors. More than any competition in the globe, the corporation claims to serve 1.9 billion servings every day (Xiao & Zhang, 2020). A large audience helps the business not only target more customers and raise brand awareness but also makes it easier to introduce new items. The company’s high advertising budget offers competitive advantages like assisting in the launch of new items; marketing the brand; educating consumers about the qualities of the product, spreading the brand’s message to the general public, and boosting sales. The Coca-Cola Company can draw in more people and produce more sales than most of its competitors because it has the greatest advertising budget and outstanding marketing capabilities.
The Coca-Cola Company highlights its bottling and distribution operations as important competencies and strengths, along with its franchise leadership. The company’s business model depends on partners to package and transport its syrups or concentrates as well as sell and market its goods. A license to market and distribute The Coca-Cola Company’s goods in a specific region is often only held by one bottling partner. There are many restaurants with which The Coca-Cola Company does business, but its connection to McDonald’s is special. McDonald’s is The Coca-Cola Company’s most significant client because it is the only customer with a separate division. No restaurant can sell Coca-Cola beverages for less than McDonald’s, claims Gelles from the New York Times, even if doing so results in the customer switching to PepsiCo.
Weaknesses
In the U.S., the company’s single-largest market, the demand for CSD is currently sharply dropping. Consumer preferences are evolving away from CSD and toward low-calorie unsweetened beverages, including water, tea, and coffee, as a result of numerous studies that highlight the detrimental health impacts of consuming sugary effervescent beverages. The Coca-Cola Company should lessen its reliance on sparkling beverages and substantially invest in and advertise still beverages, which are healthier for customers and more profitable for the business. Although the Coca-Cola Firm is not the only beverage company facing criticism for its business methods, it receives the most attention due to its size and influence on the sector. The Coca-Cola Company has received less criticism for its business and environmental practices in recent years, but its reputation still suffers as a result of earlier controversies (Xiao & Zhang, 2020). It received criticism in 2015 for supporting a study that promoted increasing physical activity over calorie restriction. Such corporate criticism generates negative press, which hurts a company’s sales and brand reputation.
Opportunities
A new expanding possibility for the business is to enter the alcoholic beverage sector. In the U.S., the alcohol sector expanded by 1.7% in 2017. The market had grown for the eighth year in a row. The market alone in the U.S. is estimated to be worth over $80 billion (Xiao & Zhang, 2020). The Coca-Cola Company may decide to enter the market for alcoholic beverages to diversify its product line. The corporation could simply boost sales and diversify its holdings by utilizing its experience in creating and selling beverages.
The Coca-Cola Company subsidiary in Japan introduced the Georgia RTD coffee brand to the market. At the moment, Asian Americans in the U.S. are the biggest consumers of these coffees. The business also increased sales of its Gold Peak RTD tea line, which also includes cold-brew RTD coffee. The Coca-Cola Company now distributes Dunkin’ Donuts Iced Coffee products across the United States in addition to its brands. Although the industry is relatively tiny, The Coca-Cola Company might continue to advertise its Georgia brand to gain market share for RTD coffee in the United States. The company’s RTD coffee portfolio and market share in the RTD coffee market might both be expanded by purchasing numerous smaller, rapidly expanding RTD coffee companies.
Threats
One of the main risks facing The Coca-Cola Company, according to its financial report, is competition. The beverage industry is a fiercely competitive sector with lots of small, big, and international businesses. Pricing, advertising, sales promotion initiatives, product innovation, production efficiency, packaging, as well as vending and dispensing equipment are just a few of the numerous areas where businesses in the sector compete. The main market for The Coca-Cola Company sees a tremendous increase in competition every year. The market for carbonated soft drinks is getting smaller every year, and the same number of competitors, including The Coca-Cola Company and PepsiCo, are fighting for a less and smaller portion of the market. Additionally, there are more and more market entrants in emerging beverage industry areas, including RTD coffee, RTD tea, energy drinks, and bottled water, which are growing far faster than The Coca-Cola Company’s brands.
Reference
Xiao, Z., & Zhang, J. (2020). The Analysis of Effectiveness of Cost Control Strategy on the Profitability of Coca-Cola Company From Year 2015 to 2017. Management, 8(3), 232-239.