SWOT ANALYSIS OF

COCA-COLA

Fig 2.1 SWOT ANALYSIS OF COCA-COLA

STRENGTHES:

WORLD’S LEADING BRAND

Coca-Cola has strong brand recognition across the globe. The company has a leading brand

value and a strong brand portfolio. Business-Week and Inter-brand, a branding consultancy,

recognize. Coca-Cola as one of the leading brands in their top 100 global brands ranking in

2006.The Business Week-Inter-brand valued Coca-Cola at $67,000 million in 2006. Coca-

Cola ranks well ahead of its close competitor Pepsi which has a ranking of 22 having a brand

THREATSIntense Competition.Dependence on bottling Patners.Sluggish growth of Carbonated beverages.

.

S W O T A N A L Y S I S

value of $12,690 million Furthermore; Coca-Cola owns a large portfolio of product brands.

The company owns four of the top five soft drink brands in the world: Coca-Cola, Diet Coke,

Sprite and Fanta.

Strong brands allow the company to introduce brand extensions such as Vanilla Coke, Cherry

Coke and Coke with Lemon. Over the years, the company has made large investments in

brand promotions. Consequently, Coca-cola is one of the best recognized global brands. The

company’s strong brand value facilitates customer recall and allows Coca-Cola to penetrate

new markets and consolidate existing ones.

LARGE SCALE OF OPERATIONS

With revenues in excess of $24 billion Coca-Cola has a large scale of operation. Coca-Cola is

the largest manufacturer, distributor and marketer of non-alcoholic beverage concentrates and

syrups in the world. Coco-Cola is selling trademarked beverage products since the year 1886

in the US. The company currently sells its products in more than 200 countries. Of the

approximately 52 billion beverage servings of all types consumed worldwide every day,

beverages bearing trademarks owned by or licensed to Coca-Cola account for more than 1.4

billion.

The company’s operations are supported by a strong infrastructure across the world. Coca-

Cola owns and operates 32 principal beverage concentrates and/or syrup manufacturing

plants located throughout the world.

In addition, it owns or has interest in 37 operations with 95 principal beverage bottling and

canning plants located outside the US. The company also owns bottled water production and

still beverage facilities as well as a facility that manufactures juice concentrates. The

company’s large scale of operation allows it to feed upcoming markets with relative ease and

enhances its revenue generation capacity.

ROBUST REVENUE GROWTH IN 3 SEGMENTS

Coca-Cola’s revenues recorded a double digit growth, in three operating segments. These

three segments are Latin America, ‘East, South Asia, and Pacific Rim’ and Bottling

investments. Revenues from Latin America grew by 20.4% during fiscal 2006, over 2005.

During the same period, revenues from ‘East, South Asia, and Pacific Rim’ grew by 10.6%

while revenues from the bottling investments segment by 19.9%.

Together, the three segments of “Latin America”, “East, South Asia” and “Pacific Rim”

bottling investments, accounted for 34.8% of total revenues during fiscal 2006. Robust

revenues growth rates in these segments contributed to top-line growth for Coca-Cola during

2006.

WEAKNESS:

NEGATIVE PUBLICITY

The Coca-Cola Company has been involved in a number of controversies and lawsuits related

to its relationship with human rights violations and other perceived unethical practices. There

have been continuing criticisms regarding the Coca-Cola Company's relation to the Middle

East and U.S. foreign policy. The company received negative publicity in India during

September 2006.The company was accused by the Centre for Science and Environment

(CSE) of selling products containing pesticide residues. Coca-Cola products sold in and

around the Indian national capital region contained a hazardous pesticide residue.

On 10 December 2008, the US Food and Drug Administration (FDA) wrote to Mr. Muhtar

Kent, President and Chief Executive Officer, to warn him that the FDA had concluded that

Coca-Cola's product Diet Coke Plus 20 FL OZ was is in violation of the Federal Food, Drug,

and Cosmetic Act.

In January 2009, the US consumer group the Centre for Science in the Public Interest filed a

class-action lawsuit against Coca-Cola. The lawsuit was in regards to claims made, along

with the company's flavours, of Vitamin Water. Claims say that the 33 grams of sugar are

more harmful than the vitamins and other additives are helpful.

SLUGGISH PERFORMANCE IN NORTH AMERICA

Coca-Cola’s performance in North America was far from robust. North America is Coca-

Cola’s core market generating about 30% of total revenues during fiscal 2006. Therefore, a

strong performance in North America is important for the company.

In North America the sale of unit cases did not record any growth. Unit case retail volume in

North America decreased 1% primarily due to weak sparkling beverage trends in the second

half of 2006 and decline in the warehouse-delivered water and juice businesses. Moreover,

the company also expects performance in North America to be weak during 2007. Sluggish

performance in North America could impact the company’s future growth prospects and

prevent Coca-Cola from recording a more robust top-line growth.

DECLINE IN CASH FROM OPERATING ACTIVITIES

The company’s cash flow from operating activities declined during fiscal 2006. Cash flows

from operating activities decreased 7% in 2006 compared to 2005. Net cash provided by

operating activities reached $5,957 million in 2006, from $6,423 million in 2005. Coca-

Cola’s cash flows from operating activities in 2006 also decreased compared with 2005 as a

result of a contribution of approximately $216 million to a tax-qualified trust to fund retiree

medical benefits.

The decrease was also the result of certain marketing accruals recorded in 2005.Decline in

cash from operating activities reduces availability of funds for the company’s investing and

financing activities, which, in turn, increases the company’s exposure to debt markets and

fluctuating interest rates.

OPPORTUNITIES:

ACQUISITIONS

During 2006, its acquisitions included Kerry Beverages, (KBL), which was subsequently,

reappointed Coca-Cola China Industries (CCCIL). Coca-Cola acquired a controlling

shareholding in KBL, its bottling joint venture with the Kerry Group, in Hong Kong.

The acquisition extended Coca-Cola’s control over manufacturing and distribution joint

ventures in nine Chinese provinces.

In Germany the company acquired Apollinaris which sells sparkling and still mineral water.

Coca-Cola has also acquired a 100% interest in TJC Holdings, a bottling company in South

Africa. Coca-Cola also made acquisitions in Australia and New Zealand during 2006. These

acquisitions strengthened Coca-Cola’s international operations.

These also give Coca- Cola an opportunity for growth, through new product launch or greater

penetration of existing markets. Stronger international operations increase the company’s

capacity to penetrate international markets and also gives it an opportunity to diversity its

revenue stream. On 25 February 2010, Coco cola confirms to acquire the Coca cola

enterprises (CCE) one the biggest bottler in North America. This strategy of coca cola

strengthens its operations internationally.

GROWING BOTTLED WATER MARKET

Bottled water is one of the fastest-growing segments in the world’s food and beverage market

owing to increasing health concerns. The market for bottled water in the US generated

revenues of about $15.6 billion in 2006.

Market consumption volumes were estimated to be 30 billion litres in 2006. The market's

consumption volume is expected to rise to 38.6 billion units by the end of 2010. This

represents a CAGR of 6.9% during 2005-2010.

In terms of value, the bottled water market is forecast to reach $19.3 billion by the end of

2010. In the bottled water market, the revenue of flavoured water (water-based, slightly

sweetened refreshment drink) segment is growing by about $10 billion annually. The

company’s Dasani brand water is the third best-selling bottled water in the US. Coca-Cola

could leverage its strong position in the bottled water segment to take advantage of growing

demand for flavoured water.

GROWING HISPANIC POPULATION IN U.S

Hispanics are growing rapidly both in number and economic power. As a result, they have

become more important to marketers than ever before. In 2006, about 11.6 million US

households were estimated to be Hispanic. This translates into a Hispanic population of about

42 million.

The US Census estimates that by 2020, the Hispanic population will reach 60 million or

almost 18% of the total US population. The economic influence of Hispanics is growing even

faster than their population. Nielsen Media Research estimates that the buying power of

Hispanics will exceed $1 trillion by 2008- a 55% increase over 2003 levels.

Coca-Cola has extensive operations and an extensive product portfolio in the US. The

company can benefit from an expanding Hispanic population in the US, which would

translate into higher consumption of Coca-Cola products and higher revenues for the

company.

THREATS:

INTENSE COMPETITION

Coca-Cola competes in the non-alcoholic beverages segment of the commercial beverages

industry. The company faces intense competition in various markets from regional as well as

global players. Also, the company faces competition from various non-alcoholic sparkling

beverages including juices and nectars and fruit drinks. In many of the countries in which

Coca-Cola operates, including the US, PepsiCo is one of the company’s primary competitors.

Other significant competitors include Nestle, Cadbury Schweppes, Groupe DANONE and

Kraft Foods.

Competitive factors impacting the company’s business include pricing, advertising, sales

promotion programs, product innovation, and brand and trademark development and

protection. Intense competition could impact Coca-Cola’s market share and revenue growth

rates.

DEPENDENCE ON BOTTLING PARTNERS

Coca-Cola generates most of its revenues by selling concentrates and syrups to bottlers in

whom it doesn’t have any ownership interest or in which it has no controlling ownership

interest. In 2006, approximately 83% of its worldwide unit case volumes were produced and

distributed by bottling partners in which the company did not have any controlling interests.

As independent companies, its bottling partners, some of whom are publicly traded

companies, make their own business decisions that may not always be in line with the

company’s interests. In addition, many of its bottling partners have the right to manufacture

or distribute their own products or certain products of other beverage companies.

If Coca-Cola is unable to provide an appropriate mix of incentives to its bottling partners,

then the partners may take actions that, while maximizing their own short-term profits, may

be detrimental to Coca-Cola. These bottlers may devote more resources to business

opportunities or products other than those beneficial for Coca-Cola. Such actions could, in

the long run, have an adverse effect on Coca-Cola’s profitability.

In addition, loss of one or more of its major customers by any one of its major bottling

partners could indirectly affect Coca-Cola’s business results. Such dependence on third

parties is a weak link in Coca-Cola’s operations and increases the company’s business risks.

SLIGGISH GROWTH OF CARBONATED BEVERAGES

US consumers have started to look for greater variety in their drinks and are becoming

increasingly health conscious. This has led to a decrease in the consumption of carbonated

and other sweetened beverages in the US. The US carbonated soft drinks market generated

total revenues of $63.9 billion in 2005, this representing a compound annual growth rate

(CAGR) of only 0.2% for the five-year period spanning 2001-2005. The performance of the

market is forecast to decelerate, with an anticipated compound annual rate of change (CAGR)

of -0.3% for the five-year period 2005-2010 expected to drive the market to a value of $62.9

billion by the end of 2010.

Moreover in the recent years, beverage companies such as Coca-Cola have been criticized for

selling carbonated beverages with high amounts of sugar and unacceptable levels of

dangerous chemical content, and have been implicated for facilitating poor diet and

increasing childhood obesity. Moreover, the US is the company’s core market. Coca-Cola

already expects its performance in the region to be sluggish during 2007. Coca-Cola’s

revenues could be adversely affected by a slowdown in the US carbonated beverage market.

RESEARCH METHODOLOGY

OBJECTIVES OF THE STUDY

The main objective of the project is to analyze and study in efficient way the current

position of Coca- Cola Company.

To perform PESTLE and SWOT analysis of Coca-cola globally as well as locally.

This would help us identify areas of potential growth.

The study was aimed to perform Market Analysis of Coca-Cola Company & find out

different factors effecting the growth of Coca-Cola.

Another objective of the study was to perform Competitive analysis between Coca-

Cola and its competitors.

To understand the reasons behind the purchase of Coca-Cola products.

SCOPE OF THE STUDY:-

This study basically tries to discover the current position of Coca-cola in the market. It

also tries to discover the preferences of the customers when posed with a choice between

Coca-Cola and Pepsi. It is primarily directed to the general public but was done only in

North delhi,

RESEARCH DESIGN

A research design is the specification of methods and procedures for acquiring the needed

information. It is overall operational pattern or framework of the project that stipulates what

information is to be collected from which source by what procedure.

There are three types of objectives in a marketing research project:-

Exploratory Research.

Descriptive Research.

Casual Research.

1. Exploratory Research:-

The objective of exploratory research is to gather preliminary information that will help

define problems and suggest hypothesis.

2. Descriptive Research:-

The objective of descriptive research is to describe things, such as the market potential for

a product or the demographics and attitudes of consumers who buy the product.

3. Casual Research:-

The objective of casual research is to test hypothesis about casual and effect relationships.

Based on the above definitions it can be established that this study is a Descriptive Research

as the attitudes of the customers who buy the products have been stated. Through this study

we are trying to analyze the various factors that may be responsible for the preference of

Coca-Cola products.

SOURCES OF DATA

The data has been collected from both primary as well as secondary sources.

SECONDARY DATA:-

It is defined as the data collected earlier for a purpose other than one currently being pursued.

As a researcher I have scanned lot of sources to get an access to secondary data which have

formed a reference base to compare the research findings. Secondary data in this study has

provided an insight and forms an outline for the core objectives established.

The various sources of secondary data used for this study are:-

News papers.

Magazines.

Text books.

Marketing reports of the company.

Internet.

PRIMARY DATA:-

The primary data has been collected simultaneously along with secondary data for

meeting the established objectives to provide the solution for the problem identified in

this study.

The methods that have been used to collect the primary data are:-

Questionnaire.

Personal Interview.

RESEARCH MEASURING TOOLS & TECHNIQUES

The primary tool for the data collection used in this study is the respondent’s response to the

questionnaire given to them. The various research measuring tools used are:-

Questionnaire.

Personal interview.

Tables.

Percentages.

Pie-charts.

Bar-charts.

Column charts.

SAMPLING DESIGN

An integral component of a research design is the sampling plan. Especially it addresses three

questions: Whom to survey (sample Unit), how many to survey (Sample Size) and how to

select them (sampling Procedure). Making the census study of the entire universe will be

impossible on the account of limitations of time and money. Hence sampling becomes

inevitable. A sample is only his portion of population. Properly done, sampling produces

representative data of the entire population.

FIELD WORK:-

The study was conducted in North delhi, Noida and .

The questionnaires were given to the respondents to fill in order to get their feedback.

Questions were read out to the respondents and the answers were noted.

LIMITATIONS OF THE STUDY:-

The main purpose of this study is get idea about the preference of the customers towards

various Coca-Cola products. But there are certain factors which affects this study they are as

follow:

Since the sampling procedure was judgmental, the sample selected may not be true

representative of the population.

Economic and market conditions are very unpredictable (Present and future).

The project duration is limited to 4 weeks so it limits the area of study.

The study was confined to North delhi, Noida and due to which the result cannot be

applied universally.

DATA ANALYSIS

Below 20 20-30 30-40 40-50 above 50

Number of respon-dents

10 159 6 1 1

1030507090

110130150170

Respondents based on age group

Num

ber o

f res

pond

ents

Fig 2.4

63%

37%

Respondents based on gender

MaleFemale

Fig 2.5

AGE GROUP & GENDER:

From Fig 2.4, we can comprehend that 90% of total respondents belong to the age group of

20-30. This is because most of the consumers that prefer or consume Coca-Cola products

belong to this age group. About 6% belong to age group below 20 and 3% belong to age

group of 30-40.Form Fig 2.5, we come to know that the gender ratio of the total respondents

is almost 2:1 (male: female).

Once a week Twice a week Thrice a

weekEveryday Rarely

05

101520253035404550

Frequency of soft drink consumption

Series1

Fig 2.6

81%

12%4%3%

Weekly expenditure of coca-cola products (INR)

50-100100-150150-200Above 200

Fig 2.7

SOFT DRINK CONSUMPTION & EXPENDITURE:

From Fig 2.6, we interpret that about 48% of the total respondents consume soft drinks rarely

or once a week. About 35% respondents consume soft drinks twice or thrice a week and only

18% consumes soft drinks every day.

From Fig 2.7, we interpret that about 81% of the respondents spend only Rs. 50-100 a week

on Coca-Cola products, which is very low as compared to the global scenario. This creates a

potential growth market for Coca-Cola India. About 12% spends from 100-150 a week & 7%

spend above 150.

Supermarkets Retails Vendor Ma-chines

Pubs & Restau-rant

Multiplexes

Series1 26 103 8 20 20

10

30

50

70

90

110

Purchasing Portal Preference

Fig 2.8

PURCHASING PORTAL PREFERENCE:

From the above data, we have ascertained that preferred portal for purchase of Coca-Cola

products is the retail shops i.e. 58%. This is probably because not all communities in India

have supermarkets and other purchasing channels present nearby, whereas, we can find retail

shops in every corner.19% prefer to purchase from Supermarkets and Vendor machines. 23%

prefer to purchase from Pubs, Restaurants and Multiplexes.

Festivals

Picnics

Cinemas

Parties

Just like that

10 30 50 70 90 110Festivals Picnics Cinemas Parties Just like that

Series1 3 4 26 40 104

Occasions/Reasons for consumption

Number of respondents

Fig 2.9

REASON FOR CONSUMPTION:

From this graph, we infer that there is no specific occasion why people purchase Coca-Cola

products. Although some of the advertising campaigns target special occasion or festivals.

From Fig 2.9 it is concluded that 59% respondents purchase Coca-Cola without any specific

reason. About 23% purchase for the purpose of parties, 15% purchase while watching movies

in the cinemas and only about 4% purchase during festivals and for picnic purposes.

Coca-Cola Pepsi Other products of Coca-Cola

Other products of Pepsi

Other drinks

Series1 72 34 52 7 12

5

15

25

35

45

55

65

75

Soft drink preferenceN

umbe

r of r

espo

nses

Fig 2.10

SOFT DRINK PREFERENCE:

From the above graph we interpret that about 70% of the respondents, prefer consuming

Coca-Cola product over Pepsi and other drinks. This clearly states why Coca-Cola is market

leader with almost 60% of market share. 23% prefer Pepsi Products and only 75 prefer other

drinks.

Excellent

Good

Satisfactory

Below Satisfactory

Bad

0 20 40 60 80 100 120

Opnion About Coca-Cola Products

NO. OF RESPONDENTS

Fig 2.11

14%

40%27%

20%

Products expected by consumers from Coca-Cola

Fizzy drinks Fruit drinks Energy drinks Alcoholic drinks

Fig 2.12

OPINION ABOUT COCA-COLA PRODUCTS

& PRODUCTS EXPECTED BY CONSUMERS:

From Fig 2.11, we infer that though the respondents are more than satisfied by the Coca-Cola

product range they would still like the company to introduce new drinks. From Fig 2.12, we

conclude that about 40% would like to see a new fruit drink being added to the product

basket, 26% want energy drinks, 20% alcoholic drinks and only 14% want another fizzy

drink. Majority of the people wanting to see a fruit drink is mainly because people are more

health conscious now and want to manage their calorie intake.

200-250 ml Glass bottle

300 ml Can 500 ml Pet bottle

1 litre 2 litre

Series1 47 33 83 5 9

5

15

25

35

45

55

65

75

85

Quantity preferenceN

umbe

r of r

espo

nses

Fig 2.13

QUANTITY PREFERENCE:

From Fig 2.13, we infer that about 47% of respondents prefer to purchase PET bottle of

Coca-Cola Products. About 27% prefer to purchase glass bottles, 19% prefer Can of 300ml

and only 8% prefer 1 & 2 litre bottles of Coca-Cola.

Coca-Cola products

Pepsi products

10 30 50 70 90 110Coca-Cola products Pepsi products

Series1 109 68

Branding

NO. OF RESPONDENTS

Fig 2.14

Coca-Cola products Pepsi products0

20406080

100120

Pricing

Series1

Fig 2.15

BRANDING & PRICING:

From Fig 2.14, it is concluded that respondents find Coca-Cola products better than that of

Pepsi products. About 62% respondents said that they find Coca-cola products better than

Pepsi and only 38% supported Pepsi products.

From Fig 2.15, we infer that about 62% of the respondent considers the pricing of Coca-Cola

much more reliable than that of Pepsi. About 38% respondents think that Pepsi have better

pricing than that of Coca-Cola.

Coca-Cola products Pepsi products0

20

40

60

80

100

120

140

Quality

Series1

Fig 2.16

Coca-Cola products

Pepsi products

10 30 50 70 90 110 130Coca-Cola products Pepsi products

Series1 130 47

TASTE

NO. OF RESPONDENTS

Fig 2.17

QUALITY & TASTE:

From Fig 2.16 & 2.17, it’s clear that Coca-Cola products have better taste and quality than

that of Pepsi. About 73% respondents consider that Coca-Cola products have very good

quality and taste. 27% respondents consider Pepsi products have better taste and quality.

Coca-Cola products

Pepsi products

85.75 86.25 86.75 87.25 87.75 88.25 88.75 89.25 89.75Coca-Cola products Pepsi products

Series1 90 87

Availability

Number of respondents

Fig 2.18

Coca-Cola products

Pepsi products

0 20 40 60 80 100 120 140

Satisfaction

Series1

Fig 2.19

AVAILABILITY & SATISFACTION:

From Fig 2.18, it’s clear that there is slight difference between the availability of products of

Coca-Cola and Pepsi. About 51% respondents think that Coca-Cola products are much easily

available in the market.49% consider that availability of Pepsi products is more in the market.

About 70% of respondents are satisfied with the Coca-Cola products while as 30%

respondents are satisfied with the Pepsi products as shown in Fig 2.19.

SUGGESTIONS

AND

CONCLUSION

SUGGESTIONS

The suggestions made in this section are based on the market study conducted as part of

“Coca-Cola India”. The suggestions are arranged in order of priority, highest first.

Perform a detail demand survey at regular interval to know about the unique needs

and requirements of the customer.

The company should make hindrance free arrangement for its customers/retailers to

make any feedback or suggestions as and when they feel.

The company should focus to bring some more flavors like health drinks and other

low-calorie offerings. Coca-Cola India can also introduce some fruit based drinks, as

it has already entered the energy drink arena with “Burn”.

Coca-Cola’s distribution channel is mostly through retail. Whereas the competitors

also concentrates more on the multiplexes, pubs and restaurants. Coca-Cola should try

to increase their distribution in these areas.

The company must keep a watch on its primary competitors in market in order to be

able to compete with them.

The company should use new attractive system of word of mouth advertisement to

keep alive the general awareness in the whole market as a whole.

The company should be always in a position to receive continuous feedback and

suggestions from its customers/ consumers as well as from the market and try to

solve it without any delay to establish its own good credibility.

A strong watch should be kept on distributors so that the goodwill of the BRAND

doesn’t get affected.

CONCLUSION

Though there were certain limitations in the study that was conducted. The sample allowed

for some conclusions to be drawn on the basis of analysis that was done on the data collected.

The data has clearly indicated that Coca-Cola products are more popular than the products

of Pepsi mainly because of its TASTE, BRAND NAME, INNOVATIVENESS and

AVAILABILITY, thus it should focus on good taste so that it can capture the major part of

the market. The study also indicated that the consumers are satisfied with the Coca-Cola

products and purchase them without any specific occasions.

In today’s scenario, customer is the king because he has got various choices around him. If

you are not capable of providing him the desired result he will definitely switch over to the

other provider. Therefore to survive in this cutthroat competition, you need to be the best.

Customer is no more loyal in today’s scenario, so you need to be always on your toes.

About the Project

The fourty days internship project at Moon Beverages Private Limited involved survey on consumer buying preferences of beverages perceived by retailers in Delhi and RTM processes(Road to market), thereby improving customer satisfaction.

The following observations were made during the delivery route visits:

• Total number of outlets visited (across 5 routes): 80

• Average time spent per outlet: 15 min (avg)

• Range of outlets covered per day for order taking: 10 to 24

• Range of start time for daily order taking activity: 8 am – 10 am

• Range of end time for daily order taking activity: 5 pm to 7 pm