09/06/2017 Coca Cola SWOT analysis 2017 - Strategic Management Insight

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Coca Cola SWOT analysis 2017

Ovidijus Jurevicius | January 8, 2017 Print

Company Background

Key Facts

Name The Coca-Cola Company

Logo

Industries
Beverage (more than 500 brands)
served

Geographic
Worldwide (more than 200 countries)
areas served

Headquarters Atlanta, Georgia, United States

Current CEO Muhtar Kent

Revenue US$44.294 billion (2015) 3.7% decrease over US$45.998 billion (2014)

Profit US$7.351 billion (2015) 3.6% increase over US$7.098 billion (2014)

Employees 123,200 (2016)

Main PepsiCo Inc., Dr Pepper Snapple Group, Inc., Unilever Group, Mondlez
Competitors International, Inc., Groupe Danone, Kraft Foods Inc., Nestl S.A. and
many other companies in the beverage industry.

The Coca-Cola Company business overview from the companys financial report:

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"The Coca-Cola Company is the worlds largest beverage company. We own or license and
market more than 500 nonalcoholic beverage brands, primarily sparkling beverages but also a
variety of still beverages such as waters, enhanced waters, juices and juice drinks, ready-to-
drink teas and coffees, and energy and sports drinks.

We own and market four of the worlds top five nonalcoholic sparkling beverage 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 worlds
largest beverage distribution system.

Beverages bearing trademarks owned by or licensed to us account for 1.9 billion of the
approximately 57 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 Companys 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.

Coca Cola SWOT Factors

Strengths

1. Advertising and marketing capabilities. The Coca-Cola Companys annual advertising

spending was US$3.976 billion, US$3.499 billion and US$3.266 billion in 2015, 2014 and
2013, respectively.[1] Advertising expenses accounted for 6.9% of total revenues each year. In
2015, The Coca-Cola Company was the largest advertiser in the beverage industry in the
world.

Figure 1. The Coca-Cola Company and its competitors advertising expenses 2013-2015
(in US$ billions)

Company 2015 2014 2013

The Coca Cola Company 3.976 3.499 3.266

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The Coca Cola Company 3.976 3.499 3.266

PepsiCo Inc. 2.4 2.3 2.4

Dr Pepper Snapple Group Inc. 0.473 0.473 0.486

Source: The respective companies financial reports[1][3][4]

The companys large advertising budget provides competitive advantages such as:

helping to introduce new products to the market

promoting the brand
informing consumers about the products features
communicating brands message to the public
increasing sales.

In addition, the companys total marketing expenses reached US$6.8 billion (or 15.4% of total
revenue in 2015), generating US$44.3 billion in revenue. It is one of the largest marketing
budgets in the beverage industry and it is used very effectively. Only PepsiCo uses its
marketing budget more effectively, spending just US$3.9 billion to generate US$63 billion in
revenue.

Figure 2. The Coca-Cola Company and its competitors advertising expenses in 2015 (in
US$ billions)

Company Marketing Total % of total revenue

expenses revenue

The Coca-Cola Company 6.8 44.294 15.4%

PepsiCo Inc. 3.9 63.056 6.2%

Dr Pepper Snapple Group 3.8 6.282 61.2%

Inc.

Company Marketing Total % of total revenue

expenses revenue

Nestl S.A. 20.3 89.772 22.6%

Source: The respective companies financial reports[1][3][4][5]

With its largest advertising budget and strong marketing capabilities the Coca-Cola Company
is able to attract more customers and do so more effectively than most of its rivals.

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2. Extensive and diversified product portfolio.

The Coca-Cola Company offers more than 500 brands to consumers in over 200 countries.[2]
It has the most extensive beverage product portfolio in the industry. The company offers diet
and regular beverages, juices, water, tea, coffee and energy drinks. The Coca-Cola Company
has been strengthening its product portfolio over the years and now owns 4 of the worlds top
5 non-alcoholic sparkling beverage brands: Coca-Cola, Diet Coke, Fanta and Sprite.[1]

The company also owns 13 other brands that each annually earn at least US$1 billion:[6]

Coca-Cola Zero
Minute Maid
Minute Maid Pulpy
Dasani
Aquarius
Powerade
Schweppes
Georgia
Simply
Glaceau Vitamin Water
Del Valle
I LOHAS
Ayataka.

No other company has as many beverage brands which annually earn at least US$1 billion,
as The Coca-Cola Company.

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Published: January 8, 2017

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