The Coca-Cola Company (TCCC) is a producer, retailer, and marketer of non-alcoholic drink concentrates and syrups operating globally. It is registered in the US with its headquarters in Atlanta, Georgia. In May 1886, Dr. John Smith Pemberton developed Coca-Cola in his patio (Jurevicius para. 1). Dr. Pemberton’s clerk, Frank Robinson, composed its name, “Coca Cola”. Robinson also scripted the “Coca Cola” logo. In 1887, Asa Griggs Candler obtained the blueprint at $2,300 from Dr. Pemberton (Jurevicius para. 1). Bottlers holding exclusive territory worldwide buy syrup concentrate from TCCC whose only work is its production. April 23, 1985, saw the release of the “New Coke” formula. Today, among the companies in the beverage business, it is the largest in the world with a presence in over 200 countries and offering over 500 brands (Jurevicius para. 1).
TCCC is the world’s leading brand and its logo is easily identified globally. It is worth $77,839 billion making it the most appraised brand worldwide as claimed by Interbrand. In the beverage business, it has the biggest market share globally (about 40%). Their expensive (used more than $3 billion in 2012) yet catchy advertisements have managed to continue increasing the firm’s sales and brand recognition (McWhorter 10). Its distribution channel is vast. Research shows that the company has one of the most loyal customer groups. Since it is the largest beverage producer, it has significant bargaining power over its suppliers, therefore receives the lowest prices. It has diversified beverage products i.e. water, juices, soft drinks, and sports drinks (McWhorter 10).
Its hub is carbonated drinks. This strategy may work in the short run as consumption of these beverages increases in the emerging economies; however, people globally are focusing on taking healthier drinks and food to avoid obesity. The company’s attention is on selling beverage products (McWhorter 11). With a decline in the general consumption of soft drinks, in the future, it may be difficult for TCCC to exploit other markets (selling food) to maintain its present growth as it is well known for beverages. TCCC has a high debt level due to acquisition. It obtained $8 billion debt from the procurement of Coca-Cola Enterprises (CCE) increasing its debt (McWhorter 11). The firm experiences negative publicity as it has often been associated with excessive water consumption in water-stricken regions, and using dangerous elements in manufacturing drinks. Some of its brands have failed and have come up with brands with insignificant amounts of revenues. With it selling over 500 brands, there are only a few brands, which yield over $1 billion in sales. The new drinks introduced are weak and many have failed e.g. C2 drink (McWhorter 11).
Consumption of bottled water is expected to grow worldwide. The demand for healthy eating gives TCCC room for expansion for its product range by producing low sugar and calories beverages. In the BRIC countries, soft drinks have a significant market share; therefore, TCCC could increase and maintain it. TCCC may find it difficult to retain its contemporary growth and transpierce fresh markets using the current product portfolio, but can easily grow through acquisitions (McWhorter 11).
Healthy consumption is the current motto around the world. Carbonated drinks have large amounts of sugar, calories, and fat, which is the most serious threat as TCCC mainly, serves carbonated drinks. With an increase in water scarcity globally, TCCC’s cost and disapproval over the use of immense amounts of water in production have increased too. Due to strong dollar performance against other currencies, its overall income may fall with over 60% of its income coming from outside the US (McWhorter 11). Many governments are considering passing legislation that requires disclosing information on product labels due to adverse health consequences caused by some of its carbonated drinks. Products containing such information may be perceived negatively and lose their customers. Increased water and other raw material costs have caused a decrease in TCCC’s gross profit and net profit margin over the past few years and it may prevail. Its competitor, PepsiCo, is viciously competing over market share in BRIC countries, especially India (McWhorter 12).
Jurevicius, Ovidijus. “SWOT analysis of Coca Cola.” Strategic Management Insight, 23 Feb. 2013. Web. 28 Mar. 2014.
McWhorter, Charis. “Marketing Study of the Coca-Cola Company.” Weebly, 6 May 2013. Web. 28 Mar. 2014.