Coca Cola Swot Analysis 2019

The Coca-Cola Company
SWOT analysis 2019
Prepared exclusively for Ivan Yalpachyk (ivanbanan2002@gmail.com) Transaction: 0103827097

Table of Contents
Company overview 3
SWOT analysis 5
Strengths 6
Weaknesses 13
Opportunities 15
Threats 21
Summary 23
Sources 25
The Coca-Cola Company SWOT analysis by Strategic Management Insight

www.strategicmanagementinsight.com 2
Company overview
Name The Coca-Cola Company
Founded May 8, 1886
Industries served Beverage (more than 500 brands)
Geographic areas served Worldwide (more than 200 countries)
Headquarters Atlanta, Georgia, United States
Current CEO James Quincey
Revenue (US$) 35.410 billion (2017) 15.4% 41.863 billion (2016)
Profit (US$) 1.182 billion (2017) 81.9% 6.527 billion (2016)
Employees 61,800 (2018)
PepsiCo Inc., Dr Pepper Snapple Group, Inc., Unilever

Main Competitors Group, Mondēlez International, Inc., Groupe Danone,
Nestlé S.A. and many other beverage companies.
Business description
The Coca-Cola Company business overview from the company’s financial report:
“The Coca-Cola Company is the world's largest beverage company. We own or license
and market more than 500 nonalcoholic beverage brands, which we group into the
following category clusters: sparkling soft drinks; water, enhanced water and sports drinks;
juice, dairy and plant-based beverages; tea and coffee; and energy drinks. We own and
market four of the world's top five nonalcoholic sparkling soft drink brands: Coca-Cola, Diet
Coke, Fanta and Sprite. Finished beverage products bearing our trademarks, sold in the
United States since 1886, are now sold in more than 200 countries.
We make our branded beverage products available to consumers throughout the world
through our network of Company-owned or -controlled bottling and distribution operations
as well as independent bottling partners, distributors, wholesalers and retailers — the
world’s largest beverage distribution system. Beverages bearing trademarks owned by or

licensed to us account for 1.9 billion of the approximately 60 billion beverage servings of
all types consumed worldwide every day.
We believe our success depends on our ability to connect with consumers by providing
them with a wide variety of choices to meet their desires, needs and lifestyle choices. Our
success further depends on the ability of our people to execute effectively, every day.
Our goal is to use our Company’s assets — our brands, financial strength, unrivaled
distribution system, global reach, and the talent and strong commitment of our
management and associates — to become more competitive and to accelerate growth in a
manner that creates value for our shareowners.”[1]

SWOT Analysis
Strengths Weaknesses
1. Dominant market share in the 1. Strong reliance on carbonated soft

beverage industry drinks to generate the majority of the
2. Diversified product portfolio with 21 company’s revenue
billion-dollar brand 2. Criticism over business practices
3. The largest advertising budget among
the competitors
4. The most recognizable beverage
brand in the world
5. Strong partnerships with bottling
companies leading to some of the most
extensive distribution channels in the
industry
6. A partnership with McDonald’s
Opportunities Threats
1. Expansion of ready-to-drink (RTD) 1. Obesity concerns may reduce demand

coffee products in the U.S. market for some of the company’s products
2. Growing tequila market with many 2. Extension of ‘soda tax’ to more cities
smaller brands that can be easily or states in the U.S.
acquired 3. Water scarcity and its poor quality
3. Coconut water market is expected to could negatively impact The Coca-Cola
reach US$8.3 billion by 2023 Company’s production costs and
4. Savory snack market will see capacity
tremendous growth over the next 3 years 4. Increased competition and their
5. The declining U.S. dollar exchange capabilities could hurt The Coca-Cola
rate could positively affect the company’s Company’s business
revenue and profits

Strengths
1. Dominant market share in the beverage industry
The Coca-Cola Company is the largest non-alcoholic beverage company in the world. It
serves 1.9 billion or 3.2% of the total 60 billion beverage servings of all types consumed
worldwide every day.[1] The company owns, distributes and sells over 500 various non-
alcoholic beverage brands in over 200 countries.
Figure 1. Largest beverage companies in the world in 2017
2017 revenue (in US$

Rank Name Beverage segment
billions)
1. Anheuser-Busch InBev 56.444 Alcoholic
2. The Coca-Cola Company 35.410 Non-alcoholic
3. PepsiCo Inc. 29.857 Non-alcoholic
4. Nestlé S.A. 29.109 Non-alcoholic
5. Suntory Holdings Limited 22.057 Alcoholic
6. Heineken N.V. 21.888 Alcoholic
7. Starbucks Corporation 17.650 Non-alcoholic
8. Diageo plc 17.078 Alcoholic
9. Pernod Ricard S.A. 11.132 Alcoholic
10. Molson Coors Brewing Co. 11.002 Alcoholic
Source: Beverage Industry[2]
Only PepsiCo and Nestlé can compare to The Coca-Cola Company’s sheer size and the
market share in the non-alcoholic beverage segment. Being large and having dominant
market share has a few advantages over competitors:
 Economies of scale. Economies of scale allow the company to share its fixed
costs over hundreds of brands and billions of servings, making each drink as cheap
as possible.
 Market power over suppliers and competitors. Due to its size, The Coca-Cola
Company can exercise its market power over suppliers by requiring lower prices

from them. The company can also use its size to affect the competition by
underpricing some of its items, acquiring the smaller competitors or saturating the
market with many of its own products.
 Power over the buyers. Unlike some of its smaller competitors, the Coca-Cola
brand and the company’s other signature drinks have an enormous brand
recognition all over the world. The company can influence consumers’ buying
decisions through its brand power and massive marketing campaigns more easily
than most of its smaller rivals.
 Wide audience reach. The Coca-Cola Company’s distribution network allows the
chain to reach more customers than most of its rivals could reach. According to the
company, the company serves 1.9 billion servings a day, more than any other
competitor in the world. Wide audience reach does not only help the company to
target more customers and increase brand awareness, but also to introduce new
products more easily.
2. Diversified product portfolio with 21 billion-dollar brand
The Coca-Cola Company owns and distributes over 500 different brands, which is the
most extensive beverage brand portfolio in the whole industry. The company offers
beverages for every taste in 7 beverage categories:
 Carbonated Soft Drinks

 Bottled Water
 Juice & Juice Drinks
 Sports Drinks
 Tea & Coffee
 Energy Drinks & Shots
 Alternative Drinks

Figure 2. Largest beverage brand portfolios
500+
56 52
10
The Coca-Cola Company PepsiCo Inc. Dr Pepper Snapple Group Nestlé S.A.
Source: Companies’ financial reports and official websites[3][4][5][6]
The most popular company’s drink is Coca-Cola. Coca-Cola trademark (includes Diet
Coke, Coca-Cola Zero, Coca Cola Life and other beverages bearing Coca Cola name)
accounted for 45 percent of the company’s worldwide unit case volume for 2017.[1] While
Coca-Cola is the most important product, it is only one of the 21 billion-dollar brands that
the business owns. The company’s billion-dollar brands include:
 Coca-Cola
 Fanta
 Sprite
 Diet Coke/Coca-Cola Light
 Coca-Cola Zero
 Minute Maid
 Georgia Coffee
 Powerade
 Del Valle
 Schweppes
 Aquarius
 Minute Maid Pulpy
 Dasani
 Simply
 Vitaminwater

 Gold Peak
 Fuze Tea
 Ice Dew
 smartwater
 I LOHAS
 Ayataka
Figure 3. The Coca-Cola Company’s billion-dollar brands
Source: The Coca-Cola Company[7]
No other business in the beverage industry owns as many billion-dollar brands as The
Coca-Cola Company.
What does a diversified portfolio provide for the company? First, The Coca Cola Company
depends less on one or two of its beverages to generate the majority of its revenue.
Second, with so many beverage drinks in so many flavors, the business can satisfy every
consumer’s needs and tastes. Third, if the demand for one of the company’s beverages
falls sharply (as it is now with Coca-Cola) the business can rely on other beverages to
generate higher sales.
Few of The Coca Cola Company’s rivals can enjoy such a diversified brand portfolio,
which provides strong competitive advantage over the rivals.

3. The largest advertising budget among the competitors
The Coca-Cola Company’s annual advertising spending was US$3.958 billion, US$4.004
billion and US$3.976 billion in 2017, 2016 and 2015, respectively.[1] Advertising expenses
accounted for 11.2% of total revenue last year. In 2017, The Coca-Cola Company was the
largest advertiser in the beverage industry in the world.
Figure 4. The Coca-Cola Company and its competitors’ advertising expenses 2015-2017
(in US$ billions)
Company 2017 2016 2015
The Coca-Cola Company 3.976 4.004 3.499
PepsiCo Inc. 2.4 2.5 2.4
Dr Pepper Snapple Group Inc. 0.547 0.477 0.473

Source: The respective companies’ financial reports [1][4][5]
The company’s large advertising budget provides competitive advantages such as:
 helping to introduce new products to the market;
 promoting the brand;
 informing consumers about the product’s features;
 communicating the brand’s message to the public;
 increasing sales.
In addition, the company’s total marketing expenses reached US$6.2 billion (or 17.5% of
total revenue in 2017), generating US$35.410 billion in revenue. It is one of the largest
marketing budgets in the beverage industry.
With its largest advertising budget and strong marketing capabilities The Coca-Cola
Company is able to attract more customers and generate higher sales than most of its
rivals.
4. The most recognizable beverage brand in the world
The Coca Cola Company sold its first Coca-Cola drink in 1886.[7] Since then, the company
has become the world’s largest non-alcoholic beverage company in terms of revenue with
the most recognizable brand in the industry. According to Interbrand[8] and Forbes[9], Coca-
Cola brand is 4th and 5th most valuable brand in the world, worth US$69.733 billion and

US$56.4 billion, respectively. In addition to the Coca-Cola brand, the company distributes
and markets other recognizable brands, most notably, Sprite. Interbrand[8] values Sprite
brand as the 90th most valuable brand in the world, worth US$4.842 billion.
The brand value is closely related to the brand recognition. Usually, the more valuable a
brand is the better it is recognized worldwide. The Coca-Cola company, which operates in
over 200 countries, where billions of people live, enjoys some of the greatest brand
awareness among all global corporations. Brand awareness also helps to introduce new
products or sell the current ones faster as the company needs to spend less money on
advertising.
Figure 5. The Coca-Cola Company’s brand value 2000-2017
78.4
72.5
70.5
69.7
67.5
2000 2005 2010 2015 2017

Brand Value (in US$ billions)
Source: Interbrand [8][10][11][12][13]
No other Coca-Cola Company’s rival have such a valuable and recognizable beverage
brand strengthening the company.
5. Strong partnerships with bottling companies leading to some of the most

extensive distribution channels in the industry
The Coca-Cola Company emphasizes its franchise leadership and its bottling and
distribution operations as key capabilities and strengths.[1] The company’s business model
relies on partners to bottle its syrups or concentrates into packages and to distribute, sell

and market its products. Usually, only one bottling partner holds a license to sell and
distribute The Coca-Cola Company’s products in a certain geographic area.
On the other hand, the bottling partners rely on The Coca-Cola Company to develop and
introduce new products and to provide promotional and marketing services. If one of the
bottling partners is underperforming in the market, the company usually invests in that
partner to take control. The Coca-Cola Company then uses its expertise and resources to
improve the partner’s performance before returning control back to the partner.
The Coca-Cola Company’s products are distributed and served in more than 200
countries. The company uses its bottling partners to distribute and sell its products
worldwide, via what is known as the ‘Coca-Cola system’. This system sold 29.2, 29.3 and
29.2 billion unit cases (24 eight-ounce servings) of the company’s products in 2017, 2016
and 2015, respectively.
The Coca-Cola Company’s five largest bottling partners (Coca-Cola FEMSA, Coca-Cola
European Partners plc, Coca-Cola Hellenic, Arca Continental and Coca-Cola İçecek)
account for 41% of the company’s total unit case volume. These bottlers distribute the
company’s beverages to over 50 countries.
Except PepsiCo, no other company can match The Coca-Cola Company’s extensive
distribution network.
6. A partnership with McDonald’s
The Coca-Cola Company does business with many restaurants, but its relationship with
McDonald’s is unique. McDonald’s is the only client that has its own division inside The
Coca-Cola Company, making it the most important client for the company. According to
Gelles from the New York Times[17], no restaurant can sell Coca-Cola drinks for a lower
price than McDonald’s, even if that means losing the customer to PepsiCo.
The Coca-Cola Company doesn’t reveal how many of its sales come from McDonald’s
restaurants, but its employees state that sales from McDonald’s are only behind sales from
the U.S., Japan and Germany.[17]
While such a relationship is a weakness during the years when McDonald’s sales decline,
it becomes a strength during growth years. For the last 3 years, McDonald’s Systemwide
sales increased from US$66.226 billion to US$78.191 billion,[35] which means higher sales
for The Coca-Cola Company.

This situation is likely to continue in the near future, making it easier for the company to
grow its sales.
Weaknesses
1. Strong reliance on carbonated soft drinks to generate the majority of the
company’s revenue
In 2017, The Coca-Cola Company earned US$35.410 billion of which at least 70% or over
US$24 billion were earned through selling various carbonated soft beverages. Carbonated
soft drinks (CSD) represented 69 percent, 69 percent and 70 percent of the company’s
worldwide unit case volume for 2017, 2016 and 2015, respectively. Of the U.S. unit case
volume, 62 percent was attributable to CSD and 38 percent to still beverages.
Figure 6. Worldwide unit case volume share by product category
31%
69%
Sparkling beverages Still beverages
Source: The Coca-Cola Company financial report[1]
Currently, the demand for CSD is declining considerably in the U.S., which is the
company’s single largest market. Due to the various studies that stress the negative health
effects from drinking sugary sparkling beverages,[14] consumers’ preferences are shifting
from CSD to low calorie unsweetened beverages, such as water, tea and coffee.

According to Beverage Marketing Corporation data,[15] the market for CSD has been
declining for the past 11 years. In 2006, an average U.S. consumer drank 50.4 gallons of
CSD per year. In 2017, this number declined by 25.6% to 37.5 gallons.[15] The report also
indicates that CSD market will likely continue to decline over the next few years as well.
The declining demand for CSD is the major company’s weakness as it heavily relies on
carbonated soft drinks such as Coca-Cola, Diet Coke, Sprite and Fanta for the majority of
the sales. The company’s rivals, which rely less on CSD for their revenue, are less
affected by the changing customer preferences.
In order to return to growth, The Coca-Cola Company should minimize its dependence on
sparkling beverages and heavily invest into and market still beverages, which are more
profitable for the company and healthier for consumers.
2. Criticism over business practices
The company receives a lot of criticism from various groups, governments and consumers
over its business and environmental practices, such as:
 the impact of its products on obesity

 questionable advertising and marketing practices
 its policies towards the environment
 lobbying and ‘bribing’ government officials and health organizations
 high water usage
 monopolistic business practices
While the Coca-Cola isn’t the only beverage company receiving criticism for its business
practices, it’s size and impact on the industry draws the most attention. In recent years,
The Coca-Cola Company has improved its business and environmental practices and has
seen less criticism for it, but its reputation still suffers from previous scandals.
In 2015, it has been criticized for funding a research, which argued that people should
exercise more instead of cutting their calorie intake.[16] The research was trying to shift the
responsibility away from the various foods and beverages that added to obesity.
Such criticism of a business results in negative publicity, which damages a company’s

brand reputation and its sales.

Opportunities
1. Expansion of ready-to-drink (RTD) coffee products in the U.S. market
According to the Beverage Marketing Corporation Report, the fastest growing liquid
beverage segment in the U.S. during 2013-2017 was RTD coffees.[18][19][20][21] In 2017, RTD
coffees was the fastest growing beverage segment in the U.S. beverage industry, growing
by an impressive 12.3%.[22] The RTD coffee segment grew 6 times faster than the entire
U.S. liquid beverage market, which grew by 2.1% only in 2017.
Figure 7. RTD coffee growth compared to the growth of the whole liquid beverage market
in the U.S.
16.5%
12.3%
10.7% 11.0%
6.2%
3.4%
2.8%
2.2% 2.1%
-0.1%
2013 2014 2015 2016 2017
Ready-to-drink Coffee Whole Beverage Market
Source: Beverage Marketing Corporation[18][19][20][21][22]
While, the beverage industry as a whole grew only by 11.3%, RTD coffees grew by a
staggering 70.7% over the last 5 years.
In 1975, The Coca-Cola Company’s subsidiary in Japan launched RTD coffee brand,
named Georgia, into the market. Georgia became a success in Japan and the company
introduced the brand to the U.S. in 2009. These coffees currently mainly sell to Asians in
the United States. The company also expanded its Gold Peak RTD tea brand, which offers
cold-brew RTD coffee as well. In addition to its own brands, The Coca-Cola Company now
sells Dunkin’ Donuts Iced Coffee beverages across the U.S.

Although the segment is relatively small, The Coca-Cola Company could further promote
its Georgia brand in the U.S. market to establish itself as the RTD coffee leader in its home
country. There are also many smaller growing RTD coffee brands that could be easily
acquired and would increase the company’s RTD coffee portfolio and the market share in
the RTD coffee market.
2. Growing tequila market with many smaller brands that can be easily acquired
The Coca-Cola Company almost exclusively operates only in a non-alcoholic beverage (it
has launched its first alcoholic drink in Japan called “Chu-Hi” in 2018) market, which at the
moment is growing slowly. The company already operates in every segment of the non-
alcoholic beverage industry and faces stiff competition in each product category. There is
little room for Coca-Cola to grow its beverage business and do it fast.
Another growing opportunity for the company is to venture into an alcohol industry (we
suggested this opportunity back in 2015). An alcohol industry grew by 1.7% in the U.S. in
2017.[23] It was an eighth consecutive year of growth in the market. The market is worth
around US$80 billion in the U.S. alone. An alcohol market is huge with many different
segments in the market, including:
 Malts (beer, cider);

 Wines (table wines, champagne, sparkling wines);
 Spirits (vodka, whisky, rum, tequila, brandy, gin).
Currently, one of the fastest growing alcohol industry’s segment is tequila. Tequila sales
grew by 9.9% in 2017 [24] to US$2.7 billion. The market for tequila is expected to be worth
US$8 billion in the Americas (including North and South America) by 2021. [25] There are
many smaller brands in the market that could be acquired easily.

Figure 8. Top-selling tequila brands in the U.S. in 2017
Volume sold (in millions of

Rank Brand
cases)
1. Jose Cuervo 3.515

2. Patron 2.475
3. Sauza 2.247
4. 1800 1.090
5. Familia Camerena 0.785
6. Juarez 0.695
7. Montezuma Tequila 0.630
8. El Jimador 0.516
9. Don Julio 0.357
10. Margaritaville 0.305
Source: Statista[26]
The Coca-Cola Company could expand its product offerings by venturing into the alcoholic
beverages market. By leveraging its expertise in producing and selling beverages the
company could easily increase its revenue and diversify its portfolio.
3. Coconut water market is expected to reach US$8.3 billion by 2023
Consumer trend for healthy beverages have pushed the water market growth to the new
levels. According to Beverage Marketing Corporation, [15] volume sales of bottled water
grew by 7% in 2017. This allowed water to become the most popular beverage category in
the U.S. for the second consecutive year.[15] One of the subcategories that pushed the
bottled water to the No.1 spot in the beverages was a growing demand for plant-based
waters, mostly coconut water.
Consumers, who are looking for the alternatives to healthy hydration often choose plant
based waters, which offer better flavor, natural ingredients and less sugar. Plant-based
water market is dominated by coconut water, which is experiencing a significant growth
both globally and in the U.S. By various estimates, coconut water market is expected to
grow from US$2.4 to US$8.3 billion globally by 2023.[27][28]

The Coca-Cola Company currently owns ZICO coconut water brand, which is the leader in
coconut water market.[29] Nonetheless, PepsiCo is trying to dominate the market with its
own O.N.E. coconut water brand and a potential acquisition of Vita Coco, another leading
coconut water brand.
Therefore, The Coca-Cola Company should try to increase its efforts to dominate this
niche market, which the potential to become a very significant market in 5-10 years.
4. Savory snack market will see tremendous growth over the next three years
Since its inception in 1886, The Coca-Cola Company has been selling only beverages to
its customers. Due to the declining sales of its main carbonates soft drinks, Coca Cola has
little room to grow its beverage business in the current beverage market. The company
has to find new growth venues in other markets. Therefore, it could venture into the market
closest to the beverages – snacks. PepsiCo is selling snacks in addition to the beverages
and sees a significant success due to the ability to cross-sell beverages and snacks. Out
of the 22 billion dollar brands that PepsiCo owns, 7 are savory snack brands.[30]
That’s the market The Coca-Cola Company has an opportunity to invest in. According to
Euromonitor International,[31] the savory snack market was worth US$46 billion in the U.S.
in 2016 and is expected to reach US$50 billion in 2021. That’s US$4 billion growth in just 5
years. The report from Euromonitor International also predicts that global savory snack
market will see even faster growth than the U.S. market.

Figure 9. Comparison of savory snack market share by regions
Savory snack sales by region in 2011
37%
43%
20%
North America Western Europe Rest of the World
Savory snack sales by region in 2021 (forecast)
31%
52%
17%
North America Western Europe Rest of the World
Source: Euromonitor International [31]
The Coca-Cola Company has never sold food or a snack product, but it has many
advantages over the rivals in the market. First, it has the skills in manufacturing,
marketing, managing supply chain and a huge advertising budget. In addition, the
company’s debt isn’t extremely huge and while the capital is still cheap, the company has
many opportunities to acquire smaller but growing savory snack brands.

Coca Cola Company’s move to the savory snack industry would allow to diversify its
portfolio even further and would increase the company’s sales.
5. The declining U.S. dollar exchange rate could positively affect the company’s
revenue and profits
Currency exchange rates affect every multinational company, including The Coca-Cola
Company. In 2017, the company earned US$20.683 billion or 58.4% of its revenue outside
of the U.S.[1]
Figure 10. The Coca-Cola Company’s geographic revenues
47.5%
52.5%
United States International
Source: Company’s financial report[1]
This means that The Coca-Cola Company currently receives the majority of its profits in
currencies other than the U.S. dollar. Other currencies therefore have to be converted to
the U.S. dollar in order for the company to be able to calculate its total revenue and
transfer its profits back to the U.S. This is where a weak U.S. dollar, or in other words, the
currently declining U.S. dollar exchange rate is a financial opportunity for the company.
A weak dollar does not only increase the profits from foreign countries but also makes the
company’s products cheaper and more attractive to the customers abroad. It also provides
an opportunity for The Coca-Cola Company to expand its sales outside of the U.S. and
diversify its geographic revenue.

In 2017, the U.S. dollar declined in value against other currencies for the first time in 5
years. Current forecasts indicate that the U.S. dollar exchange rate is going to continue to
decline against other currencies in 2018 as well. This means that The Coca-Cola
Company’s products will become even cheaper abroad and its revenue and profits from
outside the country are likely to increase when converted to U.S. dollars.
Threats
1. Obesity concerns may reduce demand for some of the company’s products
According to The Coca-Cola Company’s financial report[1], obesity concerns are the no.1
threat that is affecting the company:
“There is growing concern among consumers, public health professionals and government
agencies about the health problems associated with obesity. Increasing public concern
about obesity; other health-related public concerns surrounding consumption of sugar-
sweetened beverages; possible new or increased taxes on sugar-sweetened beverages
by government entities to reduce consumption or to raise revenue; additional
governmental regulations concerning the marketing, labeling, packaging or sale of our
sugar-sweetened beverages; and negative publicity resulting from actual or threatened
legal actions against us or other companies in our industry relating to the marketing,
labeling or sale of sugar-sweetened beverages may reduce demand for or increase the
cost of our sugar-sweetened beverages, which could adversely affect our profitability.”[1]
Obesity concerns are already significantly affecting some of the beverage segments,
mainly carbonated soft drinks segment, which is the largest Coca-Cola’s market. In 2017,
the company sales have decline by 15.4% from US$41.863 billion in 2016 to US$35.410
billion in 2017. The decline is mainly attributed to the consumers’ choice to buy and
consume healthier drinks. This threat is not going away anytime soon and The Coca-Cola
Company will see its sales declining or growing only slowly because of it.
2. Extension of ‘soda tax’ to more cities or states in the U.S.
In 2015, Berkeley was the first U.S. city to pass the sugar-sweetened beverage tax. [34]
The tax, which applies to all the beverages containing sugar is aimed at reducing the
demand for pricier sweetened beverages. The ‘soda tax’ proponents argue that the tax

should result in lower obesity rates or at least, people choosing healthier beverage
options, such as water.
A few studies were done to research the effect ‘soda tax’ had on people’s buying choices
and overall demand. According to the American Journal of Public Health,[33] the demand
for sugar-sweetened beverages in Berkeley declined by 21%, while water consumption
increased by 63%. Other studies confirmed more or less the same results.[32]
Since, the first sugar-sweetened beverage tax was passed in Berkeley, more cities joined
and as of March 2018, the tax is implemented in 6 U.S. cities, with two more cities joining
by the end of the year.[34]
Sugar-sweetened beverage tax may heavily affect The Coca-Cola Company, which still
heavily relies on soft carbonated drinks to generate the majority of its revenue. If the tax
will prove to have positive effects on health, it could gain huge support across the country
and more cities and even states may pass it. This would result in hundreds of millions of
lost revenues for The Coca-Cola Company.
3. Water scarcity and its poor quality could negatively impact The Coca-Cola
Company’s production costs and capacity
Water is the key ingredient in all of The Coca-Cola Company’s products. The company
states that it needs about 3.12 liters of fresh water to make 1 liter of Coke. Water is also
required to grow agricultural products, which are used as ingredients in many of the
company’s beverages.[1]
Water is scarce and is likely to become even more so due to climate change, growing
populations, overexploitation, increasing demand for food products, increasing pollution
and poor management of waste water. Demand for water is increasing everywhere and it
is becoming even harder for The Coca-Cola Company to access clean and cheap supplies
of drinking water, resulting in increased production costs and lower profitability. The
company also receives a lot of criticism and negative publicity over its high use of drinking
water near communities. In the future, water scarcity will become an even more significant
problem that will negatively impact the company’s operations.
4. Increased competition and their capabilities could hurt The Coca-Cola Company’s
business

According to The Coca-Cola Company’s financial report, rivalry is one of the key threats
affecting the company. The beverage industry is a highly competitive industry consisting of
numerous small, large and multinational companies. Businesses in the industry compete
on many factors, including pricing, advertising, sales promotion programs, product
innovation production efficiency and packaging, as well as vending and dispensing
equipment.[1]
Competition in The Coca-Cola Company’s main market intensifies significantly every year.
The carbonated soft drinks market is shrinking each year and the same number of rivals,
including The Coca-Cola Company and PepsiCo, are competing for ever smaller market
share.
In addition, newly growing beverage industry segments such as RTD coffees, RTD teas,
energy drinks and bottled water, are seeing an increasing number of market entrants
experiencing much faster growth than The Coca-Cola Company’s brands.
Summary
In the near future, The Coca Cola Company will experience declining sales and profits
because of its reliance on carbonated sales and the declining demand for sparkling
beverages.
The Coca Cola Company is still the largest non-alcoholic beverage company managing
the largest beverage brand portfolio in the world. The company should continue
strengthening its beverage portfolio by introducing healthier beverages to the market.
Further investing into the partnerships with bottling companies and distribution partners
would also allow the company to reach more consumers worldwide.
Nonetheless, all of the strengths now barely help the Coca Cola Company to outweigh its
major weakness – reliance on carbonated drinks to generate the majority of the revenue.
The demand for sparkling sweetened beverages is declining. Consumers are demanding
healthier beverages and the demand for the company’s main brands, such as Coca Cola,
Pepsi, Fanta and other sparkling beverages, is falling significantly.
The Coca Cola Company hasn’t prepared for this weakness when it was just a threat and
now has to remedy the situation fast. Few of the beverage markets offer significant growth
opportunities, therefore, Coca Cola Company has to venture into other product markets.

The Coca Cola Company could use its expertise in producing and selling beverages in
alcohol market. Snacks’ market would also benefit the company as there are some growth
opportunities in it. The company could easily enter any of these markets by acquiring new
successfully growing brands.
There are also some significant threats that may hurt the business in the future. Soda
taxes, water scarcity and growing obesity concerns could significantly impact the
company’s revenue and margins.

Sources:
1. The Coca-Cola Company (2018). Form 10-K for the Fiscal Year Ended December
31, 2017. Available at: http://www.coca-colacompany.com/investors/investors-info-
sec-filings/ Accessed January 10, 2019
2. Beverage Industry (2018). Top 100 Beverage Companies of 2017. Available at:
https://www.bevindustry.com/top-100-beverage-companies-2017-chart Accessed
January 10, 2019
3. The Coca-Cola Company (2018). All Brands. Available at: http://www.coca-
colacompany.com/brands/the-coca-cola-company Accessed January 10, 2019
4. PepsiCo (2018). Form 10-K for the Fiscal Year Ended December 30, 2017. Available
at: http://www.pepsico.com/Investors/SEC-Filings Accessed January 10, 2019
5. Dr Pepper Snapple Group (2018). Form 10-K for the Fiscal Year Ended December
31, 2017. Available at: http://investor.drpeppersnapplegroup.com/sec-filings?cat=1
Accessed January 10, 2019
6. Nestle (2018). Brands A-Z. Available at:
http://www.nestle.com/brands/brandssearchlist Accessed January 10, 2019
7. The Coca-Cola Company (2018). Coca-Cola at A Glance: Infographic. Available at:
http://www.coca-colacompany.com/our-company/infographic-coca-cola-at-a-glance
8. Interbrand (2018). Best Global Brands 2017. Available at: http://interbrand.com/best-
brands/best-global-brands/2017/ranking/ Accessed January 10, 2019
9. Forbes (2018). World’s Most Powerful Brands. Available at:
https://www.forbes.com/powerful-brands/list Accessed January 10, 2019
14. Harvard T.H. Chan (2016). Soft Drinks and Disease. Available at:
https://www.hsph.harvard.edu/nutritionsource/healthy-drinks/soft-drinks-and-
disease/ Accessed January 10, 2019

15. Beverage Marketing Corporation (2018). Press Release: U.S. Liquid Refreshment
Beverage Market Retail Dollars and Volume Both Grew in 2017, Reports Beverage
Marketing Corporation. Available at: https://www.beveragemarketing.com/news-
detail.asp?id=485 Accessed January 10, 2019
16. O’Connor, A (2015). Coca-Cola Funds Scientists Who Shift Blame for Obesity Away
From Bad Diets. Available at: https://well.blogs.nytimes.com/2015/08/09/coca-cola-
funds-scientists-who-shift-blame-for-obesity-away-from-bad-diets/ Accessed January
10, 2019
17. Gelles, D. (2014). Coke and McDonald’s, Growing Together Since 1955. Available
at: http://www.nytimes.com/2014/05/16/business/coke-and-mcdonalds-working-
hand-in-hand-since-1955.html Accessed January 10, 2019
18. Beverage Marketing Corporation (2014). Press Release: The U.S. Liquid
Refreshment Beverage Market Remained Flat in 2013. Available at:
http://www.beveragemarketing.com/news-detail.asp?id=299 Accessed January 10,
2019
Refreshment Beverage Marketing Enlarged in 2014, Reports Beverage Marketing
Corporation. Available at: http://www.beveragemarketing.com/news-
Refreshment Beverage Market Accelerated in 2015, Reports Beverage Marketing
Corporation. Available at: http://www.beveragemarketing.com/news-
Refreshment Beverage Market Accelerated Again in 2016. Available at:
http://www.beveragemarketing.com/news-detail.asp?id=439 Accessed January 10,
2019
22. Beverage Marketing Corporation (2018). Press Release: U.S. Liquid Refreshment
Beverage Market Retail Dollars and Volume Both Grew in 2017, Reports Beverage
Marketing Corporation. Available at: https://www.beveragemarketing.com/news-
23. Beverage Industry (2018). 2018 State of the Beverage Industry: Premium offerings
continue to drive wine, spirits markets. Available at:
https://www.bevindustry.com/articles/91282-2018-state-of-the-beverage-industry-

premium-offerings-continue-to-drive-wine-spirits-markets Accessed January 10,
2019
24. Hopkins, A. (2018). ‘Banner year’ for US spirits sales in 2017. Available at:
https://www.thespiritsbusiness.com/2018/02/banner-year-for-us-spirits-sales-in-
2017/ Accessed January 10, 2019
25. Business Wire (2017). Global Tequila Market to Witness Growth Through 2021,
Owing to the Introduction of New Flavors: Technavio. Available at:
http://www.businesswire.com/news/home/20170309005955/en/Global-Tequila-
Market-Witness-Growth-2021-Owing Accessed January 10, 2019
26. Statista (2018). Leading brands of tequila in the United States in 2016, based on
volume sales (in 1,000 9 liter cases). Available at:
https://www.statista.com/statistics/463995/us-leading-brands-of-tequila-volume-
sales/ Accessed January 10, 2019
27. Market Research Engine (2018). Coconut Water Market By Product Type (Coconut
water, Natural fruit sugar) and by Regional Analysis - Global Forecast by 2017 -
2024. Available at: https://www.marketresearchengine.com/coconut-water-market
28. Arizton (2018). Packaged Coconut Water Market - Global Outlook and Forecast
2018-2023. Available at: https://www.arizton.com/market-reports/packaged-coconut-
water-market Accessed January 10, 2019
29. Beverage Industry (2018). ZICO Coconut Water offers new entry points for
consumers. Available at: https://www.bevindustry.com/articles/91196-zico-coconut-
water-offers-new-entry-points-for-consumers Accessed January 10, 2019
30. Strategic Management Insight (2018). PepsiCo SWOT Analysis. Available at:
https://www.strategicmanagementinsight.com/swot-analyses/pepsico-swot-
analysis.html Accessed January 10, 2019
31. Roesler, N. (2017). Global savory snack market ripe for growth. Available at:
https://www.foodbusinessnews.net/articles/9167-global-savory-snack-market-ripe-
for-growth Accessed January 10, 2019
32. Lee, B. Y. (2017). In Berkeley, Soda Tax Is Doing What It's Supposed To Do.
Available at: https://www.forbes.com/sites/brucelee/2017/04/18/in-berkeley-soda-
tax-is-doing-what-its-supposed-to-do/#1f771da2cae7 Accessed January 10, 2019
33. American Public Health Association (2016). Impact of the Berkeley Excise Tax on
Sugar-Sweetened Beverage Consumption. Available at:

http://ajph.aphapublications.org/doi/abs/10.2105/AJPH.2016.303362 Accessed
January 10, 2019
34. Bird, B. (2018). What Is the Soda Tax and Which Cities Have One? Available at:
https://www.thebalance.com/soda-tax-and-which-cities-have-one-4151209 Accessed
January 10, 2019
35. McDonald’s Corporation (2018). Form 10-K for the Fiscal Year Ended December 31,
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The Coca-Cola Company

SWOT analysis 2019

Prepared exclusively for Ivan Yalpachyk (ivanbanan2002@gmail.com) Transaction: 0103827097

The Coca-Cola Company SWOT analysis by Strategic Management Insight

Name The Coca-Cola Company

Founded May 8, 1886

Industries served Beverage (more than 500 brands)

Geographic areas served Worldwide (more than 200 countries)

Headquarters Atlanta, Georgia, United States

Current CEO James Quincey

Revenue (US$) 35.410 billion (2017) 15.4% 41.863 billion (2016)

Profit (US$) 1.182 billion (2017) 81.9% 6.527 billion (2016)

Employees 61,800 (2018)

PepsiCo Inc., Dr Pepper Snapple Group, Inc., Unilever

The Coca-Cola Company SWOT analysis by Strategic Management Insight

The Coca-Cola Company SWOT analysis by Strategic Management Insight

1. Dominant market share in the 1. Strong reliance on carbonated soft

1. Expansion of ready-to-drink (RTD) 1. Obesity concerns may reduce demand

The Coca-Cola Company SWOT analysis by Strategic Management Insight

Figure 1. Largest beverage companies in the world in 2017

2017 revenue (in US$

1. Anheuser-Busch InBev 56.444 Alcoholic

2. The Coca-Cola Company 35.410 Non-alcoholic

3. PepsiCo Inc. 29.857 Non-alcoholic

4. Nestlé S.A. 29.109 Non-alcoholic

5. Suntory Holdings Limited 22.057 Alcoholic

6. Heineken N.V. 21.888 Alcoholic

7. Starbucks Corporation 17.650 Non-alcoholic

8. Diageo plc 17.078 Alcoholic

9. Pernod Ricard S.A. 11.132 Alcoholic

10. Molson Coors Brewing Co. 11.002 Alcoholic

Source: Beverage Industry[2]

The Coca-Cola Company SWOT analysis by Strategic Management Insight

2. Diversified product portfolio with 21 billion-dollar brand

 Carbonated Soft Drinks

The Coca-Cola Company SWOT analysis by Strategic Management Insight

Source: Companies’ financial reports and official websites[3][4][5][6]

The Coca-Cola Company SWOT analysis by Strategic Management Insight

Figure 3. The Coca-Cola Company’s billion-dollar brands

Source: The Coca-Cola Company[7]

The Coca-Cola Company SWOT analysis by Strategic Management Insight

Company 2017 2016 2015

The Coca-Cola Company 3.976 4.004 3.499

PepsiCo Inc. 2.4 2.5 2.4

Dr Pepper Snapple Group Inc. 0.547 0.477 0.473

4. The most recognizable beverage brand in the world

The Coca-Cola Company SWOT analysis by Strategic Management Insight

Figure 5. The Coca-Cola Company’s brand value 2000-2017

2000 2005 2010 2015 2017

Source: Interbrand [8][10][11][12][13]

5. Strong partnerships with bottling companies leading to some of the most

The Coca-Cola Company SWOT analysis by Strategic Management Insight

6. A partnership with McDonald’s

The Coca-Cola Company SWOT analysis by Strategic Management Insight

Figure 6. Worldwide unit case volume share by product category

Sparkling beverages Still beverages

Source: The Coca-Cola Company financial report[1]

The Coca-Cola Company SWOT analysis by Strategic Management Insight

2. Criticism over business practices

 the impact of its products on obesity

Such criticism of a business results in negative publicity, which damages a company’s

The Coca-Cola Company SWOT analysis by Strategic Management Insight

2013 2014 2015 2016 2017