THE COCA-COLA COMPANY

Introduction
The Coca-Cola Company, established in 1886 in Atlanta, Georgia, is the world’s leading non-
alcoholic beverage enterprise with a worldwide production, marketing, and distribution of its
products. The company also produces and sells other soft drinks and citrus beverages. With more
than 2,800 products available in more than 200 countries, Coca-Cola is the largest beverage
manufacturer and distributor in the world and one of the largest corporations in the United States.
Headquarters are in Atlanta, Georgia. While facing stiff competition from other enterprises like
PepsiCo, Coca-Cola has emerged as the world’s best in the sector through proper evaluation of
the external and internal environmental factors. SWOT is a valuable tool for analyzing a
business’ outer and internal environment. It donates the strengths, weaknesses, opportunities, and
threats an organization encounter in its endeavors to achieve its objectives/mission.

SWOT Analysis

SWOT is an abbreviation for Strengths, Weakness, Opportunity, and Threats. Whereas strengths
and weaknesses are considered as internal factors that affect a business’ operations, opportunities
and threats are external factors. According to Johnson & Peppas (2003), Coca-Cola Company is
affected by the four named factors as discussed below:

Strengths
These are organization qualities that propel it towards the set objectives. Coca-Cola Company,
with an object of attaining globalization milestone, has several strengths that facilitate the
achievement of the latter. These include quality and favorite brand, large operation scale, and
vigorous revenue growth.  The company’s original brand, the Coca-Cola, is the world’s leading
according to the international branding consultant firm’s rank in 2006. Moreover, the entity owns
the globe’s top four soft drink brands; Fanta, Sprite, Diet Coke, and Coca-Cola. That presents it
with a greater advantage over its competitors (Johnson & Peppas, 2003).

Besides, a large scale of operations is another of Coca-Cola’s strength. It operates in more than
200 nations, with approximately fifty-two billion of its products consumed daily. Consequently,
the business generates more than $1.4 billion in its global operations. Again, its services are
anchored around modern infrastructure comprising at least 32 high-quality manufacturing plants
across the world alongside 95 bottling plants outside the United States (US). Furthermore, the
entity manufactures juice and water (Johnson & Peppas, 2003). Nonetheless, the corporation has
the strength to increase its revenue and meet the high market demands.

Finally, Coca-Cola Company portrays vigorous revenue growth, doubling its growth in its
market areas including Latin America, Asia, and Pacific Rim. In the year 2006, the company
recorded a revenue growth of 10.6% and 20.4% in Asia/Pacific Rim and Latin America
respectively. Besides, its co-enterprise, the bottling company, generated 34.8% revenue the very
year (Regassa & Corradino, 2011). Therefore, the business has more potential for growth than its
close competitors.
Weaknesses
These are internal factors that act as barriers, preventing an organization from achieving its
goals. Coca-Cola faces several such factors including negative publicity, declining liquidity, and
slow performance in some areas. Concerning negative publicity, the company has been criticized
for the technological weakness in using ingredients which are of health concern to the
consumers. The brands were portrayed to harbor carbon and excess sugar (Johnson & Peppas,
2003).

Besides, the corporation has a weakness of slow performance in some regions where less of its
products are supplied about the market demand. In 2006, for example, North America
experienced product shortages as most of the company’s warehouses/product stores could not
meet the region’s demand threshold (Johnson & Peppas, 2003). Hence, the organization’s
objective to generate more revenue is considerably affected.

Moreover, declining liquidity (cash flow) also affects the company’s operations. As the entity’s
annual report reflected in 2006, cash flow decline from operating activities is a notable
weakness. Whereas about $6,423,000 was generated in 2005, 2006 saw a fall in revenue to
$5,957,000 (7% decline) (Regassa & Corradino, 2011). Consequently, the company may be
subjected to reduced financial investment rate, thus slowing down its growth and establishment.

Opportunities
These are regarded as issues of the external environment that an organization can capitalize on to
improve its profitability while stabilizing customer loyalty and market base. Such opportunities
include rapid population growth, the emergence of bottle water, and company acquisitions.
Coca-Cola, realizing that acquisition of other related industries would boost its operations, has
worked towards such agreements. For example, in 2006, the company acquired China’s Kerry
Beverages and operated as a joint venture to manufacture and distribute its products, attracting
more consumers to the region. The same approach was noted in Germany where the company
used the opportunity of the acquisition of Apollinaris (Sparkling and Mineral Water Company)
to reach out more consumers.
In 2010, the organization acquired North America’s biggest bottling company, thus enhancing
quality packaging to attract more customers (Johnson & Peppas, 2003). Besides, with the modern
world increasingly becoming health-sensitive, Cola-Cola Company commenced the production
of bottle water. Generating as high as $15.6 billion in 2006, bottle water has over the years
become a pivotal revenue earner in the beverage industry (Regassa & Corradino, 2011). In the
US, for instance, Coca-Cola’s bottled water, Dasani, remains among the best-selling water
brands.

Lastly, population growth has also facilitated the company to increase product output for supply
to the larger number of consumers. In particular, the US is recording an increasing Hispanic
population with years, from 11.6 million to an estimated 60 million by 2020 (Johnson & Peppas,
2003). Consequently, the organization is utilizing that opportunity to penetrate the market,
expand its base, supply more beverages and generate more potential gains.

Threats
Threats are external factors that prevent an entity from achieving its desired objectives. Coca-
Cola faces threats of high competition, health issues, and dependence on bottling industries. The
business’ major competitors include PepsiCo, Nestle, and Cadbury among others. Hence, the
company is regularly constrained to monitor innovation, pricing, brand quality and consumer
welfare in an attempt to establish the comparative advantage over its competitors (Johnson &
Peppas, 2003).

Also, the organization has limited control over the bottling companies which package its product.
The partnership constraints Coca-Cola into sharing most of the revenue generated by the partner
company, hence posing a serious threat to its growth (Johnson & Peppas, 2003).

The sensitive health society also threatens the company’s growth. Hence, the nature of
carbonation and sweetening in Coca-Cola brands did propagate a decrease in consumption in
2005 when only $63.9 billion was generated. Such uses are associated with obesity in the United
States, prompting the organization to redefine its brands with less sugar and carbon contents as
observed in Diet Coke (Johnson & Peppas, 2003).
Conclusion
SWOT analysis is a valuable tool for analyzing a business’ external and internal environment. It
donates the strengths, weaknesses, opportunities, and threats an organization encounters in the
course of its operations to achieve its objectives/mission. While environmental aspects such as
strengths and weaknesses are internal, opportunities and threats are external factors that affect a
company’s operations. Using Coca-Cola as a case Corporation, the paper outlines its brands,
service scale, and rapid revenue growth as its strengths. Besides, weaknesses include negative
publicity, slow performance, and declining liquidity. Conversely, opportunities are coined
around company acquisitions, bottle water, and rapid population growth. Finally, antagonizing
threats include high competition, health issues and dependence on bottling companies.

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