The Coca-Cola Company’s Environmental Analysis


This report contains an in-depth analysis and description of the environment of the Coca-Cola Company and an individual marketing plan that is linked to the company’s strategies and plans for the global market, their alignment with goals, and resource opportunities. The company’s strengths and weaknesses are highlighted in the context of its strategies and offer recommendations for improving weaknesses, assessing the quality of strategic plans and comparing with the only equally large player in the market – PepsiCo.

Coca-Cola is the largest company in the carbonated soft drink market with a wide range of flavors worldwide. The company is committed to protecting the environment and improving working conditions for its employees and has one of the most recognizable brands in the world. The company’s primary goal is to quench the customer’s thirst and take the lead in the beverage market in every country in the world (Coca-Cola Company, 2021). In addition, the company highly values the social well-being of the region, where Coca-Cola provides jobs and sells products. Finally, caring for the environment is also an essential issue in the company (Bodden, 2008). Since Coca-Cola uses a massive scale of raw materials, it uses a lot of territory and materials. The fulfillment of these resources should be the primary goal of the company.

A look at the significant Coca-Cola programs in the US actually confirms their social mission. The company fights for racial equality helps diverse communities and provides better and safer working conditions even during a pandemic (People Values – Coca-Cola Company, 2021). Social responsibility is spelled out in the company’s central slogan: “People are at the center of everything we do, from our employees to those who do our business to the communities we call our home.” Environmental issues are more vividly highlighted for purposes on company websites in other countries. For example, Coca-Cola Australia has launched a wastewater replenishment program and recycles every plastic bottle and tin that can be sold by 2030 (FAQs – Coca-Cola Company Australia, 2021). Consequently, critical analysis has shown that social issues are more often raised in developed countries, while in developing programs, the emphasis is on environmental issues. Both the first and second facts confirm the strategy and mission of the company with a slight geographical difference.

Environmental Analysis

At first glance, it may seem that the company has reached its peak, and there are no further opportunities for expansion, or they are insignificant on the scale of the industry. However, in-depth environmental analysis shows that Coca-Cola has its weaknesses and some threats that need to be addressed.

In this paper, using the PESTLE macro-trend environmental analysis, the main external factors influencing the activities of the Coca-Cola Company are identified. Among the political and legal, first of all, it is the duty to comply with the requirements of the FDA. Any food, environmental, and quality control laws may affect this company. Changes at the state level regarding taxation, antitrust, and trade law are also reflected in Coca-Cola’s operations. Moreover, Coca-Cola adheres to the provisions of the United Nations declaration and grants several rights to create and regulate ethics in employees’ working environment (Supplier Guidelines – Coca-Cola Company, 2019). It can be concluded that these factors are carefully considered in the company and even go beyond the minimum compliance with obligations, which in turn affects economic and social factors.

Since Coca-Cola is an international company, economic factors affecting sales take into account the economic specifics of each country: unemployment rate, currency stability, and inflation. Social factors in this company are more often aimed at expanding the range of tastes, including the cultural characteristics of the countries and the preferences of the health-conscious customers. Process factors in production are associated with environmental factors, and more recently, for example, are aimed at reducing dependence on oil (Panagiotopoulou, 2017). In connection with the current trend of increasing attention to environmental protection, the company correctly prioritizes, which reduces the possible impact of threats from environmental factors and political factors that regulate legislation in this area.

The current situation in the global market shows that the closest competitor to Coca-Cola is Pepsi. Keurig Dr. Pepper, Red Bull, Monster Beverage, and other companies produce juices, teas, coffee, and dairy drinks (Dai, 2021). The threat of substitution stems from the trade power of consumers: Coca-Cola products are distributed anywhere in the world, from small shops to large restaurants (Eldred, 2008). The ability to buy from multiple locations demonstrates the perceived bargaining power of the buyer (Hyman & Tohill, 2018). At the same time, the trade power of suppliers is leveled by the company due to the high availability and low cost of raw materials (Ling, 2017). Due to the high activity and competition in almost the entire global market, the threat of new competitors that can reach the same indicators of the number of employees and annual turnover is negligible.

Coca-Cola has long crossed the threshold when a company needs customer segmentation. This paper will look at geographic and behavioral segmentation. The latter includes people whose behavior in the market is regulated by taking care of their health. Here, the company has succeeded not only in creating Diet Coke but also continues to occupy a leading position in the sale of pure water (Brei, 2018). The example of Asian countries most clearly illustrates geographic segment adjustment. Here segmentation intersects with behavior and is dictated by the culture of the country’s behavior. The highest relative value of vending machines per capita is found in Japan and China, which considers the residents’ focus on saving time and contributes to the automation of the production chain (Bowers et al., 2017). In addition, Coca-Cola, entering the Indian market, first suffered losses and lost the competition to Pepsi (Singaram et al., 2019). However, a deeper analysis of customer segmentation allowed us to make the right decisions for the return of profits. Consequently, the company has a wealth of international experience, as evidenced by increased sales and successful marketing efforts.

The SWOT model highlights the opportunity itself, the brightest by the company itself. Since the early 2000s, Coca-Cola has been actively trying to conquer the market for still drinks through mergers and acquisitions (Abbasi, 2017). Therefore, among the opportunities that stand out are the expansion of geographic activity and the desire for a “company that produces drinks for every occasion” (Coca-Cola Company, 2021). Threats come from three possible reasons: a lack of fresh water, an unstable political or economic situation in the countries of sale, and, finally, medical research confirming the harm of products (Ling, 2017). Consequently, the company should focus more on environmental issues that can directly affect the success of Coca-Cola’s future operations.

Threats are a reflection of the company’s weaknesses, including popular beliefs about soda and water management dangers. It should also include a strong competitor in the face of Pepsi Co, which, unlike Coca-Cola, began to capture the food and snack market in different regions of the world (Alahi & Bass, 2018). Strengths are represented by brand uniqueness, customer loyalty, worldwide presence, comprehensive product line, and the largest soft drink chain in the global market (Ling, 2017). In the VRIO model, Coca-Cola resources allow focusing not only on classic production and marketing goals but also on environmental protection and programs to improve working conditions. Moreover, only Pepsi Co is close enough to the company in terms of development and turnover. Hence the rarity in terms of the model is relatively high. The above strengths of the company allow us to state that the organization, according to the VRIO model, is also at a high level. Concerning reproducibility, the secret formula of the recipe for the famous drink has been successfully defended for many years and, consequently, many other technological and business processes within the company. In other indicators of reproducibility, Coca-Cola with Pepsi Co maintains its competitive parity.

Given that Coca-Cola has spread geographically to virtually the entire world, new market opportunities should be sought in qualitative rather than quantitative aspects. To compete more successfully with Pepsi Co, the Coca-Cola Company should consider entering regional food and snack markets. Rich international experience and qualified employees make it much easier to enter a new market. Advertising and marketing campaigns will be able to consider and apply the approach taken by competitors of Pepsi Co in aggregating advertising for their brands (Jallow, 2021). This vector of development not only echoes but also expands the current policy to which the company is striving – “to create drinks for any occasion,” which has been recognized by the company for a long time (Isdell & Beasley, 2011). Entering this market provides more opportunities for the development of the entire production chain. In each particular country, based on the company’s current successes, can lead to an improvement in the economic situation.

The competitive moment is also preserved in actions aimed at protecting the environment. While Pepsi Co sets plans to achieve a specific result by a particular year, Coca-Cola takes a different approach, expanding its activities more precisely (PepsiCo Mission and Vision, 2021). In terms of coverage of these events, Pepsi Co’s approach looks more advantageous, given the setting of more global and significant goals that are important to the world. Therefore, Coca-Cola should leverage its customers’ loyalty, brand awareness, and support of the current trend in environmental protection, develop approaches to eliminate its threats and publicize these activities to the broader public.

Marketing Plan

The company’s mission is to create brands and drinks that appeal to people and refresh their bodies and spirit (Coca-Cola Company, 2021). At the same time, particular emphasis is placed on doing sustainable business with an eye to the planet’s future. Like any other company, Coca-Cola strives to maximize its profits and maintain its industry pace. The short-term goals reflect the company’s desire for customer satisfaction and the development of a service sector for the least active customer segments. In the long term, the company seeks to conquer the entire beverage market by eliminating its main competitor and expanding its geography to the whole world.

Coca-Cola’s target audience is based on age, customer income, and family size. According to the company, employees work on every person over the age of 12 and reduce the possibility of targeted advertising for children under that age (Serodio et al., 2020). A well-developed segmentation model is one of the keys to the company’s success. The company’s strategy completely repeats those mentioned above short-term and long-term plans, that is, refresh the world, inspire moments with optimism and happiness, and make a difference (Gertner & Rifkin, 2018). More specifically, Coca-Cola defines a strategy to provide people anywhere globally with whatever volume of drinks they want. The rest of the tasks are accompanying or bring the company closer to the main goals.

Current research papers are evaluating either the spread of Coca-Cola in Africa (Nyoro, 2017), Asia (Greenhalgh, 2019), or Oceania (Lacy-Nichols et al., 2020) or the dependence of customer behavior on market performance is assessed through mathematical modeling for optimization. Soft drinks (Arinitwe, 2019). In developing countries, both the company itself and the researchers, resources are more often raised. Nyoro discusses enterprise resource planning (ERP) in their work (2017). This system has a positive effect not only on the performance and growth of the company but also on the efficiency and mood within the team.

Coca-Cola’s current marketing strategy includes market segmentation to build better customer relationships, increase financial efficiency and workflow efficiency, and focus on business models and critical challenges (Mayureshnikam & Patil, 2018). The company’s financial statements are assessed annually from scratch for a more detailed analysis and identification of the reasons. At the same time, the company always makes significant investments in advertising and improvement of technological processes, which is communicated with its goals. Hence, the company’s primary strategy is focused on the company’s internal performance and is also customer-oriented.

Compared with the threats and problems of Coca-Cola outlined above, the balance of compliance and loyalty to the chosen path is incomplete. The company, through its actions, confirms its intentions to capture the first place in the market for all non-alcoholic drinks, relying on the needs of customers in different geographic regions, their behavior, and many other aspects of segmentation. However, the issue related to the ecology and the feasibility of resources in developed countries is not raised, so the company is not fully implementing the “refresh the world” strategy. A marketing plan aimed at audiences over 12 years old delicately neutralizes the company’s weakness – the widespread belief about the possible harm of famous drinks – in the context of children’s health. Resources allow the company to fight competitors and get closer to its goal. Moreover, the company’s tasks aim to optimize and develop areas of direct work with resources constantly.

Coca-Cola has recently entered the coffee drinks and kombucha market. The sale of this type of drink is based on the geographical principle of their most significant prevalence and popularity. To achieve this goal, Coca-Cola acquired the companies Costa Coffee and Mojo Kombucha, distributing and implementing its successful strategies and development opportunities in the acquired brands, taking them to the next level (Kim & Adhikari, 2020). Also, the obtained technologies are applied to other brands of the company – a new product appears in America in cans of Coca-Cola with Coffee, represented by five products with three different flavors (Maamoun, 2019). The prevalence of brands and their lines of taste is entirely dependent on the results of customer segmentation methods.

Advertising methods include absolutely all channels of wide distribution that are presented today: television, cinema, radio, billboards, mailing, and the development of social networks. Coca-Cola’s sponsorship of some of the world’s most exciting sporting events brings in the right stream of ad views from potential customers. The company’s current position allows it to engage in image advertising instead of advertising aimed at sales (Sánchez-Porras & Rodrigo, 2017). Brand awareness worldwide is a strong point of the company, which also associates, for example, Christmas Eve with Santa Claus on a vast red truck through advertising.

The company’s pricing strategy is directly dependent on production. One of the company’s tasks is to constantly optimize the financial and technological processes of the company, which is indirectly aimed at reducing the price of the final product for the buyer and reducing the cost of production. Moreover, constant regional collaborations of the brand with vendors are regulators of sales and discounts on the company’s products. Coca-Cola is said to be “pricing competitive” more than six other pricing strategies. (Rekettye & Liu, 2018). Although the company positions itself as different, with many differences from direct competitors, the price of the products should still be affordable.

The research appraisal of the company shows the most common approaches when considering cash flow. The CAPM (Capital Asset Pricing Model) and WACC (Weighted Average Cost of Capital) are applied in terms of fulfilling the DCF (Discounted Cash Flow Model) preconditions and benchmarking the company. A statistical picture is achieved using these models, reflecting the impact of the global pandemic and many other political and social factors (Xu et al., 2020). A detailed analysis of KPIs only confirms the positive dynamics of the company’s growth (Rinaldi, 2018). It can be concluded that the company will continue to grow in the future and the chosen vector of marketing strategies is correct at this stage.

The Capital Asset Pricing Model specifies the expected or required return rate for risky assets such as Coca-Cola Co common stock (Stock Analysis on Net, 2020). The Weighted Average Cost of Capital is the average interest rate across all of a company’s funding sources. The DCF model method, which measures investment for future returns, will be applied in this paper to validate Coca-Cola’s strengths and objectives. Financial strategies are planned based on the size of investments. Therefore, the further possibility of acquisitions of companies and the entry into the market of other types of drinks (still, dairy, coffee) requires precise strategic planning, which is possible only through constant investments that depend on annual income. The figure below shows the results of calculating company discounting using the DCF method, CAPM model, and WACC data. Calculations are given in Appendix A.

DCF model for Coca-Cola Company
Figure 1. DCF model for Coca-Cola Company

The data reflects a downward trend in income, even though the fall is dictated by the economic crisis caused by the global pandemic. The weighted average cost of capital was slightly below the national average but higher than that of competitors (Discounted Cash Flow Analysis Unlevered – FMP, 2021). The data also indicate a relatively high variance and standard deviation of income and all other indicators. Nevertheless, the expected return on ordinary shares of Coca-Cola, despite the fall in revenue, is 7.97%, confirmed by the relatively low risks according to the CAPM model. These indicators make the company’s shares attractive for long-term investments, which will contribute to achieving the company’s goals, providing it with financial resources. An increase in the inflow of investments can not only make up for a possible drop in annual turnover but also continue to impose a struggle on competitors and come out on top in the ranking of sales of non-alcoholic carbonated drinks.

KPI, among other indicators, is based on the segmentation method, and the company has already learned from the experience of integrating into the Indian market to deal with low indicators, offering other approaches, and being open to change. Cash flow is a direct consequence of KPI indicators. Therefore, one of the company’s recommendations will be to use the above methods for assessing turnover and their application and scaling by relative KPI values (Ivanov et al., 2019) cc. In addition, in addition to financial and production, social KPIs are distinguished, which are also analyzed for marketing purposes (Montesinos & Segarra-Saavedra, 2017). However, in assessing this indicator, Coca-Cola’s direct competitor – Pepsi Co.


An in-depth analysis of the Coca-Cola Company revealed its strengths, weaknesses, threats, strategies, and current market position. Even though this company does not follow all the points reflected in its primary goals and is uneven in its geographical location, its overall financial, production and marketing indicators give good results and show positive growth dynamics. The company copes with its straightforward task 100%, but, like any large international company, Coca-Cola needs social and environmental activities in all distribution regions. Avoiding weaknesses in the company’s practice and reducing the risk of threats depends on this activity, which will further the company’s success in the global market.

Reference List

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Kim, J., & Adhikari, K. (2020). ‘Current trends in kombucha: marketing perspectives and the need for improved sensory research’, Beverages, 6(1), p. 15.

Lacy-Nichols, J., Scrinis, G., & Carey, R. (2020). ‘The evolution of Coca-Cola Australia’s soft drink reformulation strategy 2003–2017: A thematic analysis of corporate documents’, Food Policy, 90, 101793.

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Sánchez-Porras, M. J., & Rodrigo, E. M. (2017). ‘Emotional benefits of Coca-Cola advertising music’, Procedia-Social and Behavioral Sciences, 237, pp. 1444-1448.

Serodio, P., Ruskin, G., McKee, M., & Stuckler, D. (2020). ‘Evaluating Coca-Cola’s attempts to influence public health ‘in their own words’: analysis of Coca-Cola emails with public health academics leading the Global Energy Balance Network’, Public health nutrition, 23(14), pp. 2647-2653.

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 Agriculture and Rural Development, ISSN, 2455-4030.

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Appendix A

Calculations of DCF and CAPM models Formula, where Formula

expected rate of return on Coca-Cola Co.’s common stock, Formula rate of return on LT Treasury Composite, Formula systematic risk (β) of Coca−Cola Co.’s common stock and Formula expected rate of return on market portfolio.



All Coca-Cola Company’s financial information was taken from open sources, mentioned in references (Discounted Cash Flow Analysis Unlevered – FMP, 2021; Stock Analysis on Net – Coca-Cola Co, 2020). All calculations are approximate and have been made in Microsoft Excel software.

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