SWOT Analysis

Strengths of Coca-Cola
1. Brand Equity – Interbrand in 2011 awarded Coca-Cola with the highest brand
equity award. Coca-Cola with its vast global presence and unique brand
identity is one of the costliest brands with the highest brand equity.
2. Company valuation – One of the most valuable companies in the world, Coca-
Cola is valued at around 79.2 billion dollars. This valuation includes the brand
value, the numerous factories, and assets spread out across the world, and the
complete operations cost and profit of Coca-Cola.
3. Vast global presence – Coca-Cola is present in 200 countries across the world.
Chances are, in any country that you go to, you will find Coca-Cola present in
that market. This vast global presence of Coca-Cola has also contributed to the
building of the mammoth brand name.
4. Largest market share – There are only 2 Big competitors in the beverage
segment – Pepsi and Coca-Cola. Out of these 2, Coca-Cola is the clear winner
and hence has the largest market share. Amongst all beverages, Coke, Thums
Up, Sprite, Diet Coke, Fanta, Limca, and Maaza are the growth drivers for
Coca-Cola.
5. Fantastic marketing strategies – Coca-Cola unlike Pepsi always tries to win
people’s hearts. Where Pepsi’s target is continuously changing and is targeted
towards youngsters, Coca-Cola targets people of all ages. The targeting is also
done by celebrities who are well-liked – for example – Amitabh Bachchan,
Sachin Tendulkar, Aishwarya Rai, Aamir Khan, etc
6. Customer Loyalty – With such strong products, it is natural that Coca-Cola
has a lot of customer loyalty. The products mentioned above like Coca-Cola
and Fanta have a huge fan following. People will prefer these soft drinks over
others. Because of the good taste of Coca-Cola, finding substitutes becomes
difficult for the customer.
7. Distribution network – Coca-Cola has the largest distribution network because
of the demand in the market for its products. On the other hand, due to this
successful distribution network, Coca-Cola has been able to command such a
high market presence.

Weaknesses of Coca-Cola
1. Competition with Pepsi – Pepsi is a thorn in the flesh for Coca-Cola. Coca-
Cola would have been the clear market leader had it not been for Pepsi. The
competition in these two brands is immense and we don’t think Pepsi will give
up so easily.
2. Product Diversification is low – Where Pepsi has made a smart move and
diversified into the snacks segment with products like Lays and Kurkure, Coca-
Cola is missing from that segment. The segment is also a good revenue driver
for Pepsi and had Coca-Cola been present in this segment, these products would
have been an additional revenue driver for the company.
 3. Absence of healthy beverages – If you watch the news, you would know that
obesity is a major problem affecting people nowadays. The
business environment is changing and people are taking measures to ensure that
they are not obese. Carbonated beverages are one of the major reasons for fat
intake and Coca-Cola is the largest manufacturer of Carbonated beverages. The
inference is that the consumption of beverages in developed countries might go
down as people will prefer a healthy alternative.
4. Water management – Coca-Cola has faced flak in the past due to its water
management issues. Several groups have raised lawsuits in the name of Coca-
Cola because of their vast consumption of water even in water-scarce regions.
At the same time, people have also blamed Coca-Cola for mixing pesticides in
the water to clear contaminants. Thus, water management needs to be better for
Coca-Cola.

Opportunities for Coca-Cola

1. Diversification – Diversification in the health and food business will improve
the offerings of Coca-Cola to their customers. This will also ensure that they get
better revenue from existing customers by cross-selling their products.
The supply chain which is distributing their beverages can also distribute these
snacks thereby sharing the load of Supply chain costs.
2. Developing nations – Although developed nations have a high presence of
Coca-Cola, these countries are slowly moving towards healthy beverages.
However, developing countries are still being introduced to the delight of
carbonated drinks and soft drinks. Countries like India which are developing
and have a hot summer, find the consumption of cold drinks almost doubled
during summers. Thus, the higher consumption in developing environments can
be a good opportunity to capitalize for Coca-Cola.
3. Packaged drinking water – With hygiene becoming a major factor in the
consumption of water, Packaged drinking water has found its way into people’s
minds. Coca-Cola has a presence in the packed drinking water segment through
Kinley. Although Kinley’s expansion is slow as of now, Kinley has a huge
potential for expansion. Thus, Coca-Cola as a company should focus on the
expansion of Kinley as a brand and take it up to Bisleri’s level of trust.
4. Supply chain improvement – Supply chain can be a major cost sinkhole with
transportation costs always rising. Coca-Cola’s complete business is based on
transportation and distribution. There will always be possible improvements in
this area. Thus Coca-Cola should keep a strict watch on its Supply chain and
keep improving to bring the cost down.
5. Market the lesser selling products – In the product portfolio of Coca-Cola,
several products have not found acceptance in the market. Coca-Cola needs to
concentrate on the marketing of these products as well. It is understood that
Coca-Cola has made several expenses to launch these products. Thus, the
marketing and subsequent rise of sales of these products will help the revenue
of Coca-Cola.

Threats for Coca-Cola

 1. Raw material sourcing – Water is the only threat to Coca-Cola. The weakness
of Coca-Cola was the suspected use of pesticides or vast consumption of water.
However, the threat here is that water scarcity is on the rise. With the climate
changing, and regions of various countries facing scarcity of water, sooner or
later someone might raise fingers on beverage companies. Thus, Water sourcing
is an ax that can fall anytime on the head of Coca-Cola. If water is limited or
rationed, Coca-Cola can experience a major downfall in its revenue and
capacity of distribution. The same can affect its arch-rival Pepsi as well.
2. Indirect competitors – Coffee chains like Starbucks, Café coffee day, Costa
coffee are on the rise. These chains offer a healthy competition to Coca-Colas’s
carbonated drinks. They might not be a big competition for Coke, but they do
give a dent to its beverage market. Similarly, health drinks like Real
and Tropicana as well as energy drinks like Red Bull and Gatorade are stealing
away the market share indirectly.

Abstract

The case discusses the crisis faced by Coke in Europe when people fell ill after
consuming its products. The case also brings out the ethical dimensions involved
in Coke's exclusive school contracts, which were done to promote soft drink sales
among school children.
The case is designed to help students critically analyze the ethical issues involved
during Coke's European crisis and the exclusive school contracts controversy in
the US. Students must appreciate the role of sound ethics in doing business.  
Issues

The case is structured to achieve the following teaching objectives:

 Understanding the characteristics of ethical issues in business about the sale of soft
drinks, food, and beverages as well as advertising in schools through exclusive
contracts, analyzing them economically, legally, and philosophically, and reaching
the right, just, and proper decision.
 Highlighting the ethical, legal, and economic aspects involved in promoting a harmful
product to schoolchildren through exclusive contracts with schools.
 Discussing the implications of advertising to schoolchildren on moral and social
grounds.
 Exploring the alternatives to the problems associated with selling soft drinks and
other junk foods by corporations.
 Examining the various issues and consequences involved in the campaign for
commercial-free schools.
 Understanding the government's role in regulating the corporate contracts with
schools.
GENERATION OF ALTERNATIVES
 Atmospheric water generation-

Atmospheric water generation (AWG) uses technology to produce potable

water from the surrounding air. This provides the potential to expand water
availability during shortages, contamination events, and other issues that
can interrupt drinking water services. Natural disasters, such as
hurricanes, and public water infrastructure failures, such as pipe corrosion
resulting in contamination issues, have increased the interest in AWG
technology as both emergency and long-term supply solutions.

 Discharged water from water purification processes-

Wastewater treatment, also called sewage treatment, is the removal of impurities

from wastewater, or sewage before it reaches aquifers or natural bodies of water
such as rivers, lakes, estuaries, and oceans. Since pure water is not found in nature
(i.e., outside chemical laboratories), any distinction between clean water and polluted
water depends on the type and concentration of impurities found in the water as well
as on its intended use. In broad terms, water is said to be polluted when it contains
enough impurities to make it unfit for a particular use, such as drinking, swimming, or
fishing. Although water quality is affected by natural conditions, the
word pollution usually implies human activity as the source of contamination. Water
pollution, therefore, is caused primarily by the drainage of contaminated wastewater
into surface water or groundwater, and wastewater treatment is a major element of
water pollution control.

Process
Step 1: Screening and Pumping
The incoming wastewater passes through screening equipment where objects such as rags,
wood fragments, plastics, and grease are removed. The material removed is washed and
pressed and disposed of in a landfill. The screened wastewater is then pumped to the next
step: grit removal.

Step 2: Grit Removal

In this step, heavy but fine materials such as sand and gravel are removed from the
wastewater. This material is also disposed of in a landfill.

Step 3: Primary Settling

The material, which will settle, but at a slower rate than step two, is taken out using large
circular tanks called clarifiers. The settled material, called primary sludge, is pumped off the
bottom and the wastewater exits the tank from the top. Floating debris such as grease is
skimmed off the top and sent with the settled material to digesters. In this step, chemicals
are also added to remove phosphorus.

Step 4: Aeration / Activated Sludge

In this step, the wastewater receives most of its treatment. Through biological degradation,
the pollutants are consumed by microorganisms and transformed into cell tissue, water, and
nitrogen. The biological activity occurring in this step is very similar to what occurs at the
bottom of lakes and rivers, but in these areas, the degradation takes years to accomplish.

Step 5: Secondary Settling

Large circular tanks called secondary clarifiers allow the treated wastewater to separate from
the biology from the aeration tanks at this step, yielding an affluent, which is now over 90%
treated. The biology (activated sludge) is continuously pumped from the bottom of the
clarifiers and returned to the aeration tanks in step four.

Step 6: Filtration
The clarified effluent is polished in this step by filtering through 10-micron polyester media.
The material captured on the surface of the disc filters is periodically backwashed and
returned to the head of the plant for treatment.
Step 7: Disinfection
To assure the treated wastewater is virtually free of bacteria, ultraviolet disinfection is used
after the filtration step. The ultraviolet treatment process kills remaining bacteria to levels
within our discharge permit.

Step 8: Oxygen Uptake

The treated water, now in a very stabilized high-quality state, is aerated if necessary to bring
the dissolved oxygen up to permit level. After this step, the treated water passes through the
effluent outfall where it joins the Oconomowoc River. The water discharged to the river must
meet stringent requirements set by the DNR. Pollutant removal is maintained at 98% or
greater.
Sludge Treatment
The primary sludge pumped from the bottom of the primary clarifiers in step three, along with
the continuous flow of waste-activated sludge from the aeration / activated sludge process in
step four, must be treated to reduce volume and produce a usable end product. The sludge
treatment process involves four steps as described here.

 Desalinated water-

Desalination is a water supply option that is used widely around the world and involves
taking the salt out of the water to make it drinkable. Many countries use desalination as a
way of creating a more reliable water supply that is not dependant on rain.

In reverse osmosis desalination, water is taken from the sea and receives the first
treatment to eliminate impurities, oil, seaweed, rubbish, and so on. Once free of organic
substances, the saltwater can be subjected to reverse osmosis. After the filtering, we
have two streams: one brine and the other freshwater. The brine solution is diluted
before being returned to the sea, avoiding high concentrations of salt which could harm
the ecosystem. The freshwater passes through a remineralization and chlorination
process, after which it is stored in tanks and then sent to the distribution network for
consumption.

Reverse osmosis is not only the most advanced desalination system in the world today,
but it is also the most efficient and beneficial for the planet: it generates up to four-and-a
half-times fewer greenhouse gas emissions than all other technologies, it doesn’t harm
the marine environment, and it’s able to recover a large part of the energy used in the
process.

EVALUATION OF ALTERNATIVES
 Atmospheric water generation