SWOT Analysis: Coca-Cola

Table of Contents hide

1 What is SWOT Analysis?

2 Where does SWOT analysis come from?

3 SWOT Insights for Managers

4 SWOT Analysis: Coca-Cola

5 SWOT Analysis Software

6 Related Links

6.1 More SWOT Example and Templates

What is SWOT Analysis?

SWOT analysis is the most common market analysis method used in business and academia to evaluate the internal strengths and weaknesses of a company as well as the opportunities and threats of external competitors through brainstorming.

SWOT analysis represents Strength, Weakness, Opportunity and Threat. This analysis framework helps companies to assess their competitive position and formulate strategic plans.

SWOT Analysis template: SWOT Chart (Created by InfoART's SWOT Analysis maker)

Strengths: The areas in which a company excels that differentiate it from its competitors. Examples include a strong brand, a loyal customer base, unique technology, etc.
Weaknesses: What keeps a company from performing at its best, they are the areas where the company needs to strengthen. Examples include weak brand reputation, high debt levels, inadequate supply chain, insufficient capital, etc.
Opportunities: External factors that can give a company a competitive advantage. For example, if a country announces a reduction in tariffs, car manufacturers will be able to export cars to new markets and increase sales and market share.
Threats: These are factors that have the potential to harm a business. Common threats include rising raw material costs, inadequate labor supply, and increased competition.

Where does SWOT analysis come from?

SWOT is a market analysis method proposed by Professor Heinz Weihrich of the University of San Francisco in 1980. SWOT is a four-quadrant grid in which the company’s strengths, weaknesses, opportunities, and threats are summarized and written in a column, and then specific action plans are proposed for the SWOT analysis results.

SWOT Insights for Managers

Managers can build on the basic SWOT analysis by bringing together employees from different departments, including sales, customer service, marketing, and product development, to develop a more in-depth business insight report.

However, since the business world is always changing, it is best for managers to conduct a new SWOT analysis every 6 to 12 months to continuously re-evaluate the direction of strategy development in response to external changes.

SWOT Analysis: Coca-Cola

Strengths

Brand awareness: Coca-Cola is one of the most widely recognized brands in the world and has developed a loyal consumer base. With its large market share, it has very strong financial resources and is able to drive huge marketing initiatives or product innovations to maintain or grow its market share.
Supply Chain Network: Coca-Cola provides beverages to more than 200 countries through a strong supply chain network of company-owned/controlled distributors, independent bottlers, wholesalers and retailers. This network also allows Coca-Cola to quickly introduce new products into different markets to capture market share.

Weaknesses

Water management: Water is a key ingredient in all of Coca-Cola’s products. However, demand for water continues to rise worldwide and water resources are becoming increasingly scarce. The overall quality of available water sources could deteriorate, exposing Coca-Cola to higher costs and negatively impacting profitability.
Exchange rate fluctuations: Because Coca-Cola’s consolidated financial statements are denominated in U.S. dollars, it must translate revenues, expenses, assets and liabilities into U.S. dollars. A sudden and significant depreciation in the currencies of developing countries or emerging markets could have a negative impact on the Company’s earnings, as well as its assets in those markets.

Opportunities

Diversification: Coca-Cola bought Keurig Green Mountain, part of Monster Beverage, a producer of energy drinks, and last year (2018) bought Costa, a British coffee chain (read more: Coca-Cola takes on Starbucks, $5.1 billion for Starbucks rival Costa). (Read more: Coca-Cola takes on Starbucks in a $5.1 billion deal to rival Costa, as the coffee war enters an era of great alliances) Coca-Cola can use these investments to tap into different beverage markets and reach a broader customer base.
Extending the reach: India and China, for example, are seeing increased demand for fruit juices and coffee, while developing countries are facing severe water shortages and a surge in demand for bottled water. These beverage consumption trends could be an opportunity for Coca-Cola.

Threats

Healthy living is on the rise: With more and more consumers turning to natural and organic products and becoming more aware of diet and fitness, this cultural shift does not appear to be abating. Also as a result of the healthy living trend, some experts are calling for the elimination of sugary foods and beverages, which they say put the general public at high risk for obesity, diabetes and heart disease.
Indirect competitors: While companies like Starbucks or Dunkin’ Brands Group do not compete directly with Coca-Cola, they may be undercutting Coca-Cola’s market share by offering healthier alternatives to consumers.

SWOT Analysis Software

Visual Paradigm Online is a top-notch charting tool. Its SWOT analysis editor includes an intuitive list-based data editor that lets you fill out SWOT charts quickly and effortlessly. Visual Paradigm Online also features a large collection of business and technical charts, providing hundreds of chart examples and templates that let you quickly create your own charts. Visual Paradigm Online’s Free version is available for non-commercial use and supports UML, ERD and Organizational Chart Designer.

Free SWOT Analysis