COCA-COLA SWOT ANALYSIS 5
Itis imperative for organizations to carry out SWOT analysis in thecurrent competitive world. SWOT is a model used in the evaluation ofan organization’s strengths, weaknesses, opportunities, andthreats. An organization`s strengths and weaknesses represent theinternal aspects within the control of the management. Opportunitiesand threats represent the external factors that the management do nothave control, however, the management can take actions to reduce theeffects of such factors on the competitive as well profitabilitycapacity of an organization. The management is expected to realizethe organization’s strengths and use them to reduce the effect ofthe weaknesses. Besides, the management should work towards utilizingthe opportunities facing an organization as well as reducing theimpact of threats (Dodds, 2008).
Thefirst strength of the sustainability initiative for the Coca-ColaCompany is the ability for the management to increase the marketingapproaches of the company. In Asia, Coca-Cola has initiated arecycling program that converts empty plastic bottles into new items.The company recycles empty bottles to make new products such aslamps, pencil sharpeners, paintbrushes as well as water squitters.The new look of the coca cola bottles serves as a marketing strategythat attracts more sales and increases the profitability of thecompany (Coca-Cola: Into the 21st century, 1993).
Theinitiative serves as a strategy for management to increase sales. InVietnam, the new bottle caps are targeted to increase sales by 25%since the new items are offered for any additional soda purchases.Consequently, the company expects to extend the new marketingcampaign to Thailand and later to Indonesia (Bell, 2004).
Thesustainability project serves as motivation to increase theinnovation capability of the management. It has challenged themanagement of the company to expose their innovative strength. Consequently, the company has created recyclable products to replacebiodegradable products. Specifically, the company aims atimplementing a plant bottle packaging strategy composed of 30% plantbased material. The plant material shall replace a third of currentlyused petroleum-based raw materials that have historically beenemployed in the production of PET plastic bottles (Senker & Foy,2012).
Theinitiative has initiated the management`s strengths to design costsaving strategies. The approach increases the recyclability of useditems and reduces the cost of raw materials used by the company. Thereduction in costs is expected to contribute to the profitability ofthe Coca-Cola Company. Besides, increased profitability shall serveas motivation to beat the competition by availing more funds toconduct research and development activities as well as marketing(Doeg,2005).
Thekey weakness of the Coca-Cola Company emanates from its watermanagement processes. The company had faced flakes in the past whenseveral groups raised lawsuits due to the company’s massiveconsumption of water especially in areas with water scarcity. Themanagement should use the company’s financial resources to developeconomical water production processes. Besides, the management shouldsolicit for the company to dig wells in areas with water scarcity toreduce the complaints from surrounding communities (Doeg,2005).
Besides,the company has faced criticism from people claiming that it usespesticides to eliminate contaminants in water. The criticism poses aserious problem to the image of the products if unmanaged it cancause serious effects on the consumption of Coca-Cola products. Consequently, the management should take control of such criticism byexplaining the misunderstanding behind such criticism (Senker &Foy, 2012).
Thesustainability project by the Coca-Cola Company provides a range ofopportunities. First, the project serves as an entry strategy in newmarkets. For example, Coca-Cola has launched a sustainability projectin China. The aim is to provide socially responsible bottled waterbrand in China. The project seeks to fund the provision of cleandrinking water for children schooling in rural areas in China.Although the bottled water concept has been viewed as eco-unfriendlyin the United States, the approach is effective in China due to thewater pollution affecting the nationals. China’s oil company isblamed for a leak that led to the contamination of tap water for morethan 2.4 million people in the northwestern part of China.Consequently, the bottled water is growing at a fast rate. Accordingto Euro Monitor International, the company’s sales increased by 86%from the year 2008 to 2013 (Bell, 2004).
Thesustainability initiatives provide an opportunity for Coca-Cola topartner with various institutions that support eco-friendlyinitiatives. The support from governmental as well asnon-governmental to establish eco-friendly packaging of the company’sbeverages can help to reduce the costs of the initiative. Besides,the company shall benefit from the influential capabilities of thevarious institutions that shall go a long way in ensuring theeffectiveness of the initiative in attaining its objectives (Dodds,2008).
Theprincipal threats of the initiative entail the prevailing competitionfrom other beverage companies such as Soda Stream and PepsiCo. SodaStream is a corporation that markets home making soda machines. Thecompany has criticized Coca-Cola for its massive over-reliance on theuse of plastic bottles. Besides, the introduction of home-based sodamaking machines serves as a threat to the company’s sustainabilitycampaigns. The ability of people to make soda from home has thepotential to reduce the consumption of Soda for people against thepollution caused by the use of plastics. The management shouldaddress the situation through aggressive market strategies by takingadvantage of Coca-Cola sponsored events. Through such incidents, themanagers shall appeal to a broad range of customers (Bell, 2004).
Bell,L. (2004). Thestory of Coca-Cola.North Mankato, MN: Smart Apple Media
Coca-Cola:Into the 21st century.(1993). Great Neck, NY: Beverage World
Dodds,A. (2008). Promotingimmune health and vitality emerging opportunities, ingredients andinnovations in food and drinks.London, U.K.: Business Insights.
Doeg,C. (2005). Crisismanagement in the food and drinks industry: A practical approach.New York: Springer
Senker,C., & Foy, D. (2012). CocaCola: The story behind the iconic business.London: Wayland