Sarah Bowman, Shawn Dyer, Larissa Fuller, Kelsey Gleason, Somer Malott, Drew Mechler

Dr. Michele Kegley

Senior Capstone

19 October 2020

The Coca-Cola Company Case Analysis

Overview

Invented in 1886 by a pharmacist by the name of Dr. John Pemberton in Atlanta, Georgia, The

Coca-Cola Company (Coca-Cola) has spent the past 130 years refreshing the world. In 1960

Coca-Cola acquired the company, Minute Maid, and has since developed or acquired 500+

brands around the world (The Coca-Cola Company, n.d.). Furthermore, the company’s drinks

can be found in over two hundred countries, and it globally employs more than seven hundred

thousand people across the company and bottling partners. Coca-Cola’s website states its vision

is to “Refresh the world. Make a difference” and its vision is “to craft the brands and choice of

drinks that people love, to refresh them in body and spirit. And done in ways that create a more

sustainable business and better shared future that makes a difference in people’s lives,

communities, and our planet” (The Coca-Cola Company, n.d.). Coca-Cola seeks to fulfill this

vision by acting globally and locally, making packaging a circular economy, becoming water

balanced, and reducing the company’s carbon footprint. They strive to achieve all these things

while also delivering returns for their investors. Through a SWOT Analysis, it is our intention to

highlight Coca-Cola’s cultural aspects; leadership and communication, while discussing the

ways in which these attributes might impact the company’s financial sustainability for the future.

         As with most other companies around the world, Coca-Cola has been impacted by the

pandemic that stems from the virus, COVID-19. And like many other companies, it has faced
situations causing the company to refocus their ideas as a business. Over the course of this year,

2020, Coca-Cola has faced several company challenges including worldwide shutdowns or the

long-term closings of many away-from-home establishments the company sells its products to,

forced re-organization of the company’s infrastructure, and flexible marketing strategies given

the dynamic world we now live in. Since the start of the pandemic, Coca-Cola has seen large

fluctuations in profits due to decline in sales in different markets and some supply shortages. Due

to these large fluctuations in sales and profits, the company has had to adapt and change not only

for the present, but since there is no clear answer as to when the pandemic will end, toward the

future as well.

         In our quest to learn about and analyze what Coca-Cola is currently experiencing and the

decisions the company has and are continuing to make in maneuvering a whole new climate, we

turned our research online toward the company’s own website and The Wall Street Journal

(WSJ) for information. Throughout this journey we were able to perform an analysis of the

company’s current standings and conclude our analysis with recommendations of how we feel

the company should proceed further.

SWOT Analysis

         Starting with the strengths of the company, we found that Coca-Cola has a keen product

awareness. The Chief Executive Officer (CEO), James Quincey, has issued “quarterly ‘zombie

lists’ since 2018 to the company’s top markets, which identifies the products that haven’t grown

for 3 years” (Maloney, “Coca-Cola to Close” n.p.). This year, Odwalla is one of the brands that

are being discontinued, which reiterates the fact that Coca-Cola has a strong understanding of

what brands are working and what brands are not, and they are continuously revising the list and

acting accordingly. This also ties into a related strength that Coca-Cola embodies, which is
market awareness. According to the WSJ, the company has 500 fully or partially owned brands

around the world and last month said it is aiming to cut that number by more than half (Maloney,

“Coca-Cola to Discontinue” n.p.). This effort is part of a broader restructuring sparked by the

Coronavirus pandemic, which includes layoffs and a revamped marketing strategy. Zico coconut

water is now being discontinued and other brands such as Coke Life and Diet Coke Feisty

Cherry are under review as well. Coca-Cola continuously reviews what products consumers are

actually buying as well as keeping updated on market changes.

         Which brings us to Coca-Cola’s strength at being consumer focused. An example of this

strength was when the company was assessing whether to discontinue Odwalla, a Coca-Cola

spokeswoman claimed, “the decision was made as a result of consumers changing what they

want so rapidly. By freeing up those assets, we can reinvest those costs in what consumers want

today” (Maloney, “Coca-Cola to Close” n.p.). So, instead of investing in a juice business that

consumers have proven they do not want; the demand simply is not there, Coca-Cola is listening

to the consumer and planning to invest that money in another product that consumers do want.

         Lastly, Coca-Cola has a strong ability to identify issues. Their skills in product awareness

and market awareness leads to the ability to identify problems quickly and accurately, which in

turn allows them the opportunity to make positive business decisions and changes according to

their findings.

         On the other hand, we were also able to uncover weaknesses within the Coca-Cola

company. The first weakness being brand recognition. One of the main reasons the

aforementioned brands (Odwalla, Diet Coke Feisty Cherry and Coke Life) are being

discontinued is because of low brand recognition by consumers. This could be due to relying on

focused advertising strategies. None of us have ever personally heard of the brands before
reading these articles, so perhaps not enough focus is being given to advertising of these specific

brands. If the consumers are not aware of a product, they are not likely to purchase it in a store if

they do not know it exists.

         Comparatively, another weakness we discovered was that certain products are not as

popular amongst consumers. This could be tied to the previous weakness where a specific

product might not be truly less desired, rather simply not known about, or it could also be that

consumers prefer another brand over the one in question.

         The final weakness we were able to identify is the reduction of jobs and work for

employees. With brands being discontinued, that is inevitable going to result in employees losing

their jobs and reducing work overall within the company. The discontinuation of Odwalla alone

will result in the loss of about 300 jobs according to a company spokeswoman. Coca-Cola is also

planning on offering initial voluntary-separation packages to about 4,000 employees in the U.S.

who have a most recent hire date on or before 1 September 2017 (Sebastian, 2020). They will be

pursuing similar moves abroad as well. The company is doing this as a “reorganization” in

response to the Coronavirus pandemic. They expect overall severance programs to incur

expenses of $350million to $550 million (Sebastian, 2020). Any period of change or

reorganization like this can be a very tumultuous time for a company so this would definitely be

considered a weakness at this time.

         Changing directions toward potential opportunities, we found that Coca-Cola has a few

options they can capitalize on in the wake of the Coronavirus pandemic. The first opportunity we

observed was for Coca-Cola to revamp their marketing strategies toward focusing on brands with

high consumer demand. The decision to eliminate low selling brands in early July and then again

in early October is already showing results. Coca-Cola reported “revenue of $8.65 billion in the
(third) quarter, a decline of 9 percent from a year earlier but an improvement over the second

quarter, when its revenue fell by 28 percent” (Maloney, “Coca-Cola Expects Growth” n.p.).

         Another opportunity we found in our research is that Coca-Cola has the ability to gain

financial stability through liquidating assets. The company has already begun implementing this

strategy by selling off its shares in an Australian bottling company. Coca-Cola has recently made

a deal to sell its shares with one of its European affiliates. Journalist Mike Cherney reports this is

Coca-Cola’s “latest move to reduce exposure to costly bottling operations and focus on the more

lucrative concentrate-making business” (Cherney, 2020). This move would allow Coca-Cola to

liquidate this asset and avoid placing more company capital into bottling efforts. Cherney further

states that “Coke still has roughly 19 percent stake in Coca-European Partners,” (2020) which

means that Coca-Cola is merely shifting the capital overhead responsibilities to its affiliate, thus

freeing up Coca-Cola’s own capital. And through the European affiliate, Coca-Cola would still

have access to the Australian bottling company.

         Lastly, we found through our research that Coca-Cola has the opportunity to reinforce its

company vision by reassessing its stance toward the current social climate. Many racial

inequality motivated protests have occurred in the U.S. since the start of the pandemic, most in

part due to the brutal police killing of African American George Floyd. It appears that Coca-Cola

has already taken steps toward initiating this agenda by “pausing social-media advertising for

July to review its policy amid a national reckoning over racial justice” and “the company said it

has committed to spend an incremental $500 million with Black-owned suppliers over the next

five years in the U.S.” (Maloney, “Coca-Cola Sales” n.p.). These actions can resonate a sense of

community and unitedness for the entire nation. Coca-Cola can leverage its national appearance

by supporting and promoting racial equality across the country.

         When we assessed the threats that Coca-Cola faces through our research efforts, we

found that the largest threat was and remains the Coronavirus pandemic. Since the beginning of

the pandemic the company has suffered loss of revenue due to “about half of Coca-Cola’s

business comes from away-from-home venues—the restaurants, bars, movie theaters and sports

stadiums that were shut down around the world” (Maloney, “Coca-Cola Sales” n.p.). Sales from

these establishments out-weigh the sales of take-home products that Coca-Cola produces,

causing a decline in overall revenue, elimination of brands, and employee layoffs.

         Along with the decline in sales comes another threat, competitors such as PepsiCo have

begun to outperform Coca-Cola in sales. According to journalist, Jennifer Maloney, “Pepsi

revenue grew 5.3% for the latest quarter. PepsiCo’s North American beverage division climbed 6

percent to $5.96 billion, bouncing back from a decline of 7 percent in the previous quarter”

(Maloney, “PepsiCo Sales” n.p.). Comparatively, Coca-Cola said “revenue fell 28 percent to

$7.15 billion for the quarter ended June 26, down from $10 billion a year earlier” (Maloney,

“Coca-Cola Sales” n.p.). Coca-Cola’s rival, PepsiCo has started seeing growth in sales, while

Coca-Cola is still trying to bounce back.

         The last threat to Coca-Cola that we uncovered in the wake of the Coronavirus pandemic

are threats to sustainability. These sustainability threats affect Coca-Cola in two ways; delays the

company’s efforts to reduce its carbon footprint and also compromises the company’s ability to

produce products that are actually selling during the pandemic. Coca-Cola has been attempting to

reduce its carbon footprint by producing a greener plastic bottle for its products. However, these

attempts have been thwarted by the pandemic. Journalist Saabira Chaudhuri reports that “several

of those target dates came and went unmet this spring as the new coronavirus led to the

suspension of some recycling programs, reducing the supplies of used PET, the plastic drinks
bottles are made from” (June 2020). Because of these suspensions and the fact that the

production of making virgin bottles costs less than the recycling efforts, Coca-Cola decided to

halt their recycling efforts during the pandemic. The other threat that compromises the

company’s ability to produce products for consumers is an aluminum can shortage caused by the

coronavirus. Claims from another article written by Chaudhuri state “As bars and restaurants

closed across the U.S., consumers rushed to buy large packs of drinks—typically sold in cans—

in supermarkets. Sales of canned food also jumped” (August 2020). The high demand of canned

goods (including sodas, alcoholic beverages, and canned food) during the pandemic has made it

hard for can makers to keep up, thus creating bare shelves in the stores where these items are

sold, causing Coca-Cola, among other companies, to choose which products they should put in

the can supplies they do have available to them.

         Upon further review of our group’s findings from the SWOT analysis, we have compiled

our own recommendations that we feel would best suit The Coca-Cola Company. First, due to

the uncertainty of what the future holds due to the Coronavirus pandemic, we recommend that

Coca-Cola’s leadership should continue to focus on their strengths, which is marketing and

product awareness strategies. By doing so, the company will be able to focus on top selling

brands while also freeing up assets and revenue by eliminating brands that remain on the

“zombie list”. We further recommend that Coca-Cola continue its quest on maintaining financial

stability. The Wall Street Journal reports that Coca-Cola “sold a total of $11.5 billion in debt in

March and April. During that time, Coca-Cola had about $8.8 billion in untapped credit lines”

(Trentmann, 2020). The combination of selling off debt, freeing up capital by nixing low demand

consumer brands, and liquidating assets by selling bottling shares to affiliates demonstrates
sound financial strategies in such a dynamic business climate. We recommend these leadership

strategies continue for the foreseeable future.

         Lastly, we recommend that Coca-Cola continue its communication efforts with the

general public so that consumers are aware of the changes (especially brand changes) that are

being implemented within the company. By doing so, the public gains brand awareness and the

company increases credibility by maintaining their company vision. Since our analysis found

that brand awareness was an area of weakness for Coca-Cola, we feel that increased

communication about such brands will help bolster awareness toward some of the lower selling

brands. Furthermore, we want to recognize that most of the communication we have found in our

research has come from top executives at Coca-Cola rather than through the use of public

relations personnel. We feel this speaks volumes in favor of the company. The fact that Coca-

Cola’s top executives make it a point to communicate with their consumers directly through the

use of media outlets shows how invested they are toward following their company purpose and

vision, by providing consumers with a sense of community with the company.

Conclusion

         Through the use of SWOT Analysis, it was our intention to highlight Coca-Cola’s

cultural aspects; leadership and communication, while discussing the ways in which these

attributes might impact the company’s financial sustainability for the future. Given the times we

live in now, our chosen company is faced with tough decisions. What we have concluded

through our analysis is that Coca-Cola can save money and resources by no longer focusing on

unpopular brands. Instead, cutting that cost and focusing on higher selling brands, allows the

company to shift marketing strategies to match the current business climate. While we

understand there is never a perfect way to fix an issue like this, and Coca-Cola, like many other
companies, find themselves stuck between a rock and a hard place. They have shown that

although tough, they are willing to make the hard decisions; employee layoffs, discontinuing and

eliminating brands, liquidating assets and freeing up capital in preparation for more rough roads

ahead. Keeping the consumers safe and the company prosperous for the future is what matters

most. The Coca-Cola Company has done its best with leadership and communication while

discussing the ways in which their actions during the pandemic will hopefully have a positive

impact on the company’s financial sustainability.

Works Cited

Chaudhuri, Saabira. “Coronavirus Is Causing a Can Shortage”. The Wall Street Journal,

25 Aug 2020. https://www.wsj.com/articles/coronavirus-is-causing-a-can-shortage-

11598356980?mod=searchresults&page=1&pos=1.

Chaudhuri, Saabira. “How Coronavirus Complicated the Quest for a Greener Plastic

Bottle”. The Wall Street Journal. 24 June 2020. https://www.wsj.com/articles/how-the-

coronavirus-complicated-the-quest-for-a-greener-plastic-bottle-11593005945?

mod=searchresults&page=1&pos=17.

Cherney, Mike. “Coca-Cola Backs Away From Bottling in Australia as Deal Bubbles to

Sell Stake”. The Wall Street Journal, 26, October 2020.

https://www.wsj.com/articles/coca-cola-backs-away-from-bottling-in-australia-as-deal-

bubbles-to-sell-stake-11603696903.
Maloney, Jennifer. “Coca-Cola Expects Growth in China Even as Global Sales Slide”.

The Wall Street Journal, 22, October 2020. https://www.wsj.com/articles/coca-colas-

revenue-falls-hurt-by-away-from-home-channels-11603366717.

Maloney, Jennifer. “Coca-Cola Sales Fall 28% but It Says the Worst Is Over.” The Wall

Street Journal, 21 July 2020, www.wsj.com/articles/coca-cola-sales-fall-28-with-fewer-

products-sold-at-bars-restaurants-11595332395?mod=searchresults&page=1&pos=1.

Maloney, Jennifer. “Coca-Cola to Close Odwalla Juice Business”. The Wall Street

Journal, 1 July 2020.https://www.wsj.com/articles/coca-cola-to-close-odwalla-juice-

business-11593619918?mod=searchresults&page=1&pos=2.

 Maloney, Jennifer. “Coca-Cola to Discontinue Zico, May Drop Coke Life.” The Wall

Street Journal, Dow Jones & Company, 4 Oct. 2020, www.wsj.com/articles/coca-cola-to-

discontinue-zico-may-drop-coke-life-11601838341.

Maloney, Jennifer. “Pepsi Sales Snap Back From Pandemic”. The Wall Street Journal, 1,

October 2020. https://www.wsj.com/articles/pepsico-sales-rise-as-beverage-segment-

improves-11601550380.

Sebastian, Dave. “Coca-Cola Plans Layoffs, Offers Buyouts to U.S. Staff.” The Wall

Street Journal, 28 Aug. 2020, www.wsj.com/articles/coca-cola-plans-layoffs-offers-

voluntary-separations-amid-reorganization-11598617149.

The Coca-Cola Company. “Purpose and Vision.” The Coca-Cola Company, n.d.

https://www.coca-colacompany.com/company/purpose-and-vision.
 Trentmann, Nina. “CFOs Using Bond Proceeds to Pay Down Credit Lines, Debt”. The

Wall Street Journal, 28, October 2020. https://www.wsj.com/articles/cfos-using-bond-

proceeds-to-pay-down-credit-lines-debt-11603877403.