Swot Analysis for Coke

Strengths Weaknesses/Limitations, Opportunities, and  Threats involved in the business Coca Cola SWOT ANALYSIS The Coca-Cola Company (Coca-Cola) is a leading  manufacturer, distributor and marketer of  Non-alcoholic beverage concentrates and syrups, in the world. Coca-Cola has a strong brandname and brand  portfolio. Business-Week and Interbrand, a branding consultancy, recognizeCoca-Cola as one of the leading brands in their top 100  global brands ranking in 2006. TheBusiness Week-Interbred valued Coca-Cola at $67,000 million in 2006.Coca-Cola ranks wellahead of its close competitor Pepsi which has a ranking of 22  having a brand value of $12,690million The Company’s strong brand value facilitates customer recall and allows  Coca-Cola topenetrate markets. However, the company  is threatened by intense competition which could  havean adverse impact on the company’s market share. Strengths Weaknesses World’s leading brand Large scale of operation s Robust revenue growth in three segment Negative publicity Sluggish performance in  North America Decline in cash from operating  activities Opportunities ThreatsAcquisitions Intense competition Growing bottled water market Growing Hispanic population in USIntense competition. Dependence on bottling partners Sluggish growth of carbonated beverages Strengths 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 Interbrand, a branding  consultancy, recognize. Coca-Cola as one of the leading brands in their top 100  global brands ranking in2006. The Business Week-Interbrand valued Coca-Cola at $67,000 million in 2006.Coca-Colaranks well ahead of its close competitor Pepsi which has a ranking of 22  having a brand 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, CherryCoke 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. Strengths World’s leading brand Coca-Cola has strong brand recognition across the globe. The company has a leading brandvalue and a  strong brand portfolio. Business-Week and Interbrand, a branding  consultancy,recognize. Coca-Cola as one of the leading brands in their top 100  global brands ranking in2006. The Business Week-Interbrand valued Coca-Cola at $67,000 million in 2006.Coca-Colaranks well ahead of its close competitor Pepsi which has a ranking of 22  having a brand value of  $12 ,690 million Furthermore, Coca-Cola owns a large portfolio of  product brands. The companyowns 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, CherryCoke and Coke with Lemon. Over the years, the company has  made large investments in brandpromotions. Consequently, Coca-cola is one  of the best recognized  global brands.Thecompany’s strong brand value facilitates customer recall and  allows Coca-Cola to penetrate newmarkets and consolidate existing ones. Coca-Cola Company, The SWOT Analysis 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  nonalcoholic 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 52billion  beverage  servings  of  all  types  consumed  worldwide  every  day,  beverages  bearingtrademarks 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 plantslocatedthroughout the world. In addition, it owns or has interest in 37 operations with 95 principalbeverage bottling and  canning  plants  located outside the  US.The  company  also owns bottledwater  production  and  still  beverage  facilities  as  well  as  a  facility  that  manufactures  juiceconcentrates. The  company’s large  scale  of operation allows it  to  feed upcoming  markets withrelative ease and enhances  its revenue generation capacity. Robus t revenue growth in three segments Coca-cola’s revenues recorded a double digit  growth, in three operating segments. These threesegments are Latin America, ‘East, South Asia, and  Pacific Rim’ and Bottling investments. Revenues from Latin America grew by 20. % during fiscal 2006,  over 2005. During the  sameperiod, revenues from ‘East, South Asia, and Pacific Rim’ grew by 10. 6% while revenues from  thebottling investments segment by  19. 9%. Together, the  three segments of  Latin America, ‘East,South Asia, and Pacific Rim’ and bottling investments, accounted for 34. 8% of total revenuesduring fiscal 2006. Robust revenues growth rates in these segments  contributed to top-linegrowth for Coca-Cola during 2006. Weaknesses Negative  publicity The company  received negative publicity  in  India  during  September 2006.The  company  wasaccused  by  the  Center  for  Science  and  Environment  (CSE)  of  selling  products  containingpesticide residues. Coca-Cola products sold in and around the Indian national capital regioncontained  a  hazardous  pesticide  residue. These  pesticides included chemicals which  couldcause cancers, damage the nervous  and reproductive systems and reduce bone  mineral density. Such negative publicity could adversely impact the company’s brand image and the demand for  Coca-Cola products. This could also have an  adverse impact on the company’s growth prospectsin the international markets.Sluggish performance in North America Coca-Cola’s performance in North America was far from robust. North America is Coca-Cola’score market generating  about 30%  of total  revenues during  fiscal  2006. Therefore, a  strongperformance in North America is important for the company. Coca-Cola Company, The SWOT AnalysisIn North America the sale of unit cases did not record any growth. Unit c ase retail volume inNorth 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,  thecompany also expects performance in  North America to be  weak during 2007. Sluggish performance in North America could impact the company’s future growth prospects andprevent 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 fromoperating activities decreased 7% in 2006 compared to 2005. Net cash provided by  operatingactivities reached $5,957 million in 2006, from $6,423 million in 2005.Coca-Cola’s cash flowsfrom operating activities in 2006 also decreased compared with 2005 as a result of a contributionof  approximately $216  million to  a  tax-qualified trust  to  fund retiree m edical benefits. Thedecrease 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 investingand financing activities, which, in turn, increases the  company’s exposure to debt markets andfluctuating interest rates. Opportunities AcquisitionsFor the last one year, Coca-Cola has been aggressively adopting the inorganic growth path. During  2006,  its  acquisitions  included  Kerry  Beverages,  (KBL),  which  was  subsequently,reappointed Coca-Cola China Industries (CCCIL). Coca-Cola acquired a controlling shareholdingin KBL, its bottling joint venture with the Kerry Group, in Hong Kong. The acquisition extendedCoca-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 inGermany.Coca-Cola has also acquired a 100 % interest in TJC Holdings, a bottling company inSouth 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 existingmarkets. Stronger  international  operations  increase  the  company’s  capacity  to  penetrate  internationalmarkets and also gives it an opportunity to diversity its revenue stream.Coca-Cola Company, The SWOT Analysis Growing bottled water market Bottled water is one of the fastest-growing segments in the world’s food and beverage marketowing to increasing health concerns. The market for bottled water in the US generated revenuesof about $15. 6 billion in 2006. Market consumption volumes were estimated to be 30 billion litersin 2006. The market's consumption volume is expected to rise to 38. 6 billion units by the end of  20 10. 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, therevenue  of  flavored  water  (water-based, slightly sweetened  refreshment  drink)  segment  isgrowing by about  $10 billion annually. The company’s Dasani brand water is  the third best-sellingbottled water in the US. Coca-Cola could leverage its strong position in the bottled water segment to take advantage of  growing demand for  flavored water. Growing Hispanic population in US