Background
The world-renowned company Coca-Cola was established in 1886 by John Stith Pemberton in Atlanta, Georgia. Although it has changed ownership over the years, its mission is “to refresh the world, to inspire moments of optimism and happiness, and to create value and make a difference” (Sharma et al., 2019, p.3). Moreover, its core values are leadership, passion, diversity, quality, collaboration, integrity, and accountability (Afeni, 2017). Today, Coca-Cola offers numerous products across countries with great success. Their products are Diet Coke, Sprite, Fanta, Minute Maid, Powerade, and Dasani (Parco et al., 2018).
Industry Overview
The primary marketing strategy of the Coca-Cola Company is to make customers think about their product. Remembering the songs from the commercials, the soccer, and the red colors, the consumer remembers the popular drink and thinks about buying it. The success of such a strategy can be assessed by using a systematic analysis that allows us to distribute the values of the influence of external and internal factors. Although the Coca-Cola Company has distinct advantages, one should not forget about the potential threats and keep in mind the weaknesses in implementing other business components.
SWOT Analysis
SWOT analysis is a method of evaluation used for the company to have an idea of the potential opportunities it may realize in the current environment. Although the analysis does not guarantee that the organization will be able to change its profits and market status, it can still accurately define the boundaries of the company’s power. A comprehensive assessment of the factors affecting the business is critical in any work, and SWOT analysis allows the company to plan for its future impact. Presenting the analysis results in the form of a table makes it possible to form relationships between each element and determine the weakest aspect that the business has to work on.
Strengths
Coca-Cola’s brand image is associated with recognition and consumer loyalty, which translates to increased sales. Premium pricing enables the firm to make more profit, while competitive advantage makes it difficult to enter new markets (Singaram et al., 2019). As one of the top beverage suppliers in the world, Coca-Cola has significantly developed its distribution network and product diversification. Sharma et al. (2019) support that “Coca-Cola has expanded to over 500 brands in more than 200 countries […] with more than 3,900 beverages” (p.3). This variety of drinks provides a greater array of choices for consumers, ensuring that something is suitable for everyone.
The digitization of marketing and branding has given Coca-Cola a competitive advantage in the market. By harnessing digital marketing channels like social media campaigns, Coca-Cola has reached its target demographic with tailored messaging (Singaram et al., 2019). Coca-Cola has developed a proactive approach to applying product personalization to its customers (Mathis, 2021; Abdel Monem, 2021).
By recognizing regional tastes and trends, Coca-Cola creates reliable products that appeal to local customers’ unique preferences. Similarly, it customizes packaging by producing bottles with local branding and labels in different languages. Customers can have bottles and cans engraved with their names for special occasions and get labels on bottles made with photos and custom designs.
Zero-sugar Coke represents a significant milestone for the Coca-Cola Company. By reducing sugar consumption, Zero-sugar Coke reduces the risk of tooth decay. Not only does the beverage offer a great taste comparable to traditional Coke, but it also has many health benefits. With zero sugar and fewer calories, it promotes a healthy weight and prevents the onset of obesity-related diseases (Gallagher et al., 2021).
Obesity has numerous physical and mental side effects, including shortness of breath, heart disease, type 2 diabetes, high blood pressure, stroke, and anxiety. Alternatively, obesity increases the risk of gall bladder inflammation (Bessell et al., 2021). Due to such adverse effects, it is imperative for those struggling with obesity to manage their conditions by sticking to zero-sugar drinks.
Weaknesses
Over-reliance on carbonated drinks makes Coca-Cola products the target of criticism from health advocates, who argue that other beverages are better for consumers’ health. In 2015, when soda sales decreased to 10.2 billion (0.7%) in the United States, Coca-Cola experienced a 2% loss in sales volume (Afeni, 2017). Moreover, “Coca-Cola has been criticized for the high amount of sugar in its carbonated beverages and blamed for contributing to childhood obesity” (Afeni, 2017, p.7). Additionally, as the company expands into opposing genres, such as coffee, tea, and sports drinks, its iconic syrup concoction is becoming lost in its ever-growing portfolio (Brondoni, 2019). If consumers shift towards these new products over traditional offerings, it affects brand equity.
Opportunities
E-commerce and digital marketing present a significant opportunity for Coca-Cola to engage with customers innovatively and cost-effectively (Coker et al., 2017). By developing an influential online and mobile presence, the company can increase product visibility, generate more leads, and convert those leads into buying customers much faster. Leveraging social media for storytelling campaigns has allowed Coca-Cola to build strong relationships with its target audience and create a unique experience for them that goes beyond purchasing a product (Coker et al., 2017). For example, running giveaways or incentivizing users through rewards programs can foster brand loyalty, ultimately driving more purchases over time. New products would allow the company to attract a new audience and occupy a prestigious niche in the market by increasing its environmental friendliness.
Strategic acquisitions and partnerships can lead to the expansion of their portfolio and brand. Stronczek & Waksmundzki (2020) support this: “[Coca-Cola] was provided by project partners: Costa Coffee, Multikino, Teatr Dramatyczny (Dramatic Theater) and Capitol Theater” (p.135). For example, through partnering with Costa Coffee, Coca-Cola has positioned itself to grow its market share rapidly, “…thanks to this cooperation, business partners obtain not only new eco-customers…” (Stronczek & Waksmundzki, 2020, p.132).
Lastly, in response to consumer demand for healthier beverage options, Coca-Cola has increased its focus on reducing sugar content within its products. This invites innovation, such as Coca-Cola Plus Coffee Zero, which offers added health benefits from natural ingredients while sustaining the world-renowned quality of their product portfolio (Huse et al., 2022).
Threats
Intense competition from other beverage companies, such as PepsiCo and Dr. Pepper, has resulted in an inability for the company to capture market share with its portfolio (Hoi, 2023; Redaccion Opportimes, 2020). In 2014, PepsiCo and Coca-Cola soft drink consumption fell by an average of 1%, while Dr. Pepper maintained (Sharma et al., 2019). In 2017, PepsiCo held 19% of the North American non-alcoholic beverage market share, while Coca-Cola had 22% (Sharma et al., 2019).
Changes in consumer taste have added strain to Coca-Cola’s successful marketing strategies. Coca-Cola soft drink consumption has reduced in China. 96% of the public think that dairy products can improve immunity, and 40% have increased their consumption as a consequence (Access to Nutrition Initiative, 2020, p.14).
PepsiCo is particularly concerned about Coca-Cola’s product mix and worldwide sales growth. While Coca-Cola has stuck with its original print lineup of soft drinks and juices, PepsiCo has diversified into new markets such as snacks, cereals, and foods (Wu, 2017). This gives PepsiCo an advantage when it comes to capturing various demographic groups.
Lastly, Nestle’s and PepsiCo’s global sales continue to outstrip that of Coca-Cola’s bottled water sales. In the bottled water market, Nestle came first with 32.5% market share, PepsiCo followed with 10%, and Coca-Cola at number three with 8.5% (Afeni, 2017). Similarly, “PepsiCo overtook Coca-Cola […] Coca-Cola fell slightly behind at $97.9 billion to PepsiCo’s $98.4 billion” (Afeni, 2017, p.10).
References
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