Coca-Cola Company Analysis

This solved assignment delves into a comprehensive analysis of The Coca-Cola Company. It utilizes SWOT analysis to identify the company's internal strengths, weaknesses, external opportunities, and threats. Further, it applies Porter's Five Forces framework to examine the competitive dynamics within the industry, considering factors like bargaining power of buyers and suppliers. Additionally, a PESTLE analysis is conducted to assess the impact of political, economic, social, technological, legal, and environmental factors on Coca-Cola's operations.

Running head: THE MARKET OF COCA COLA AND THE UNITED STATES
The Market of Coca Cola in the US
Name of the Student:
Name of the University:
Author Note:

1
THE MARKET OF COCA COLA AND THE UNITED STATES
Executive Summary:
Coca Cola Company is the leading multinational beverage manufacturing and marketing
company in the whole world. The company own brands like Sprite, Coca Cola and Minute Maid
Orange drink worth billions of dollars. The assignment delves into the external and internal
analysis of the company. Several graphs and figures have been provided to make the study more
lucid.

2
THE MARKET OF COCA COLA AND THE UNITED STATES
Table of Contents
Introduction:....................................................................................................................................4
Step 1: Porter’s Five Forces model of Coca Cola:..........................................................................4
Threats of new entrants:...............................................................................................................4
Threats of substitutes:..................................................................................................................5
Bargaining power of consumers:.................................................................................................6
Bargaining power of suppliers:....................................................................................................6
Industry rivalry:...........................................................................................................................7
Step 2: PEST analysis of Coca Cola Company:..............................................................................8
Political:.......................................................................................................................................8
Economic:....................................................................................................................................9
Social:........................................................................................................................................10
Technological:...........................................................................................................................11
Step 3: Summary of PEST and Porter’s model:............................................................................11
PEST Summary:........................................................................................................................11
Porter’s model:...........................................................................................................................12
Step 5: SWOT analysis of Coca Cola Company:..........................................................................12
Strengths:...................................................................................................................................12
Weaknesses:...............................................................................................................................13
Step 5: Strengths and Weaknesses of Coca Cola Company-Summary:........................................13

3
THE MARKET OF COCA COLA AND THE UNITED STATES
Step 6: Recommendations from SWOT analysis(Appendix):.......................................................13
Conclusion:....................................................................................................................................14
References:....................................................................................................................................15
Appendix:......................................................................................................................................17

4
THE MARKET OF COCA COLA AND THE UNITED STATES
Introduction:
The aim of the assignment is to conduct external and internal market research of a
company. The paper takes into account Coca Cola as an example and conducts it external market
research to find out the political, economic, social and technological factors under which the
company operates. The internal factor analysis conducted after this shows the strengths and
weaknesses of Coca Cola. The paper ends with recommendations for the company to improve its
business in the market.
Step 1: Porter’s Five Forces model of Coca Cola:
Threats of new entrants:
Coca Cola is the leading manufacturer and marketer of soft drinks and faces threats of
new entrants because the profitability of international soft drinks market attracts new entrants.
The company markets carbonated soft drinks brands like Coca Cola, Sprite, hot beverages like
Honest Tea, fruit drinks like Minute Maid and packaged water like Kinley(coca-
colacompany.com, 2017). The company’s products face threats from new products like Diet
Pepsi by its biggest competitor, PepsiCo. The mineral water product of Coca Cola, Kinley, the
hot beverage product, Honest Tea and the Fruit drinks range Minute Made face threats from local
bottled water manufacturers, tea manufacturers and fruit drink marketers who introduce new low
priced products of same category in the United States of America(Herbet et al., 2014). This
analysis shows that Coca Cola in order to counteract the threats of new products by the
international and local companies adopts aggressive strategies like massive marketing activities

5
THE MARKET OF COCA COLA AND THE UNITED STATES
and vast supply chains to maintain its supremacy over the America beverage market(Lu &
Swaminathan, 2015)..
Threats of substitutes:
The products of Coca Cola Company can be categorised into carbonated beverages like
Coca Cola, hot beverages like Honest Tea, mineral water products like Kinley and ready to serve
fruit drinks products like Minute Maid. The products of the company faces threats from
substitute drinks like soft drinks and beverages of other companies and companies manufacturing
alcoholic drinks(E. Dobbs, 2014).
Figure 1. Graph showing falling consumption of soft drinks in America
(Source: Holodony, 2017)

6
THE MARKET OF COCA COLA AND THE UNITED STATES
The figure above shows the decreasing consumption of soft drinks among the Americans.
This reduction in consumption of carbonated drinks would mean fall of revenue for Coca Coal in
the United States. The company in order to counteract this threat of decreasing sale of soft drinks
and threats from substitutes like alcohol marketers promotes its products aggressively using the
print and digital media like newspapers and social networking websites(Porter & Heppelmann,
2014).
Bargaining power of consumers:
The consumers gain power when a multiple products of same categories are available in
the market from multiple sellers at almost same prices. The power of buyers also increases when
they have a lot of information about related products and there are substitute products available
in the market at same prices. Coca Cola and its biggest competitor Pepsi sell same types of
products in the American market like carbonated drinks and packaged mineral water. This allows
the consumers to choose between these two products(Fabbri and Klapper, 2016). Moreover the
American market also experience presence of premium alcoholic products like premium beer
which competes with Coca Cola. This analysis shows that the consumers in the United States
have great bargaining powers owing to presence of substitute of Coca Cola products in the
American market.
Bargaining power of suppliers:
The bargaining powers of suppliers are more when there are few alternatives available to
the consumers to choose from. As a result the sellers are able to compel the consumers to pay
high prices for their products. The figure below shows the market of Coca Cola compared to its
competitors in the year 2015. It shows that Coca Cola enjoys more than 40 percent of the market,
followed by its deadliest rival Pepsi and while the other smaller soft drinks marketers have total

7
THE MARKET OF COCA COLA AND THE UNITED STATES
combined market share of 30 percent. This analysis shows that though there are several soft
beverages products in the market, there are virtually two manufacturers who sell these drinks
namely, Coca Cola and PepsiCo. This allows these two companies charge high prices from the
consumers for their products which account for their huge profits(Sheu & Gao, 2014).
Figure 2. Graph showing market share of major soft drink brands in 2015
(Source: Author)
Industry rivalry:
The soft drink market experiences a high degree of industry rivalry owing to presence of
strong contenders like Coca Cola and PepsiCo. The two companies dominate the international
soft drink industry and manufacture almost similar products. Thus, there exists a high degree of
rivalry in the market which requires Coca Cola to form aggressive marketing strategies to
maintain its hold over the soft drink market particularly in the United States of America. The
financial chart below shows the rising share prices of Coca Cola on NASDAQ in the past 5

8
THE MARKET OF COCA COLA AND THE UNITED STATES
years. The graph shows that the share price of the company on average remains high which
proves its power to counteract challenges from rival companies like Pepsi Co and maintain its
dominance over the American market. Finally, it can be inferred that the investors invest in the
shares of Coca Cola Company due to its power to maintain dominance over the American soft
drink industry and give high returns on investments(Gupta, 2013).
Figure 3. Graph showing risisng stock index of Coca Cola in 5 years
(Source: Coca-Cola Company Stock Chart, 2017)
Step 2: PEST analysis of Coca Cola Company:
The PEST analysis of the Coca Cola Company is as follows:

9
THE MARKET OF COCA COLA AND THE UNITED STATES
Political:
Coca Cola Company is a multinational company and comes under the influence of
various political factors like government laws and policies framed by the governments of the
countries it operates in particularly, the United States of America. It must be noted that Coca
Cola uses the open market policy of the American government to expand its business outside the
boundaries of the United States of America. The company must also abide by the agreements the
government of the United States has with its trading partner nations and the international
organisations like the European Union(Gilpin, 2016).
Economic:
The economic factors influencing Coca Cola Company are the GDP, per capital income,
availability of raw materials, supply of labour and financial resources. The United States of
America is a developed market and enjoys the highest GDP in the whole world around $18.57
trillion. This economic strength of the United States, technological advancement, supply of
skilled labour, huge investor base and the country’s strong network of financial institutions
providing ready capital have led to the growth of Coca Cola into a leading multinational
beverage seller. The company open market policy of the United States has allowed the company
to expand globally and sell its products all across the world, thus generating huge
revenue(Kelsey, 2015). This global expansion allows Coca Cola to employ talents from all round
the world which accounts for its high standard of market performance. The company has put up
bottling plants and established its own supply chains to ensure supply of raw materials at low
prices. The company also has a global distribution chain which allows the Coca Cola products to
reach the customer at low prices. This analysis shows that Coca Cola Company is influenced by

10
THE MARKET OF COCA COLA AND THE UNITED STATES
and exploits the economic factors to dominate the beverage market both internationally and
within the United States.
Social:
The social factors impacting the business of Coca Cola are preferences among
consumers, their life style and their preferences for its substitute products like alcohol and milk
shakes(Sherif, 2017). The growing awareness among the consumers about the negative effects on
soft drinks on the human body has brought about reduction in the per capital consumption (figure
4) of aerated drinks in the market which has affected the revenue generation of Coca Cola
Company. The company has introduced low sugar healthier variant of Coca Cola called ‘Diet
Coke’ to attract health conscious consumers. This change in the preferences for beverage in the
society has led Coca Cola to strengthen the marketing of Minute Maid, its fruit drink product to
earn huge revenue by selling it to the Americans. This analysis shows that the social factors like
changing preferences among consumers has deep impact on Coke.

11
THE MARKET OF COCA COLA AND THE UNITED STATES
Figure 4. Graph showing decreasing consumption of soft drinks
(Source: nasdaq.com, 2017)
Technological:
The technological factors like availability of advanced bottling plants and use logistics
facilities like delivery trucks with freezing facilities have impact on the business of Coke in the
United States and its international market. Coca Cola Company sources its products from several
independent bottling plants which use modern bottling technology to ensure mass production of
Coca Cola bottled drinks. This helps the company to make Coca Cola products available to
consumers at low prices which ensures huge market penetration and revenue generation. Thus it
can be inferred from the discussion that technology plays a very important to ensure the market
leadership and high revenue generation of Coca Cola(Kashyap Xiang & Heiden, 2015).

12
THE MARKET OF COCA COLA AND THE UNITED STATES
Step 3: Summary of PEST and Porter’s model:
PEST Summary:
The PEST analysis of Coca Cola shows that the political stability and international trade
relationship of the US help Coca Cola to dominate its home and international markets. The
economic factors like high GDP of the US and its economic stability helps Coca Cola establish a
strong market position. The factors like availability of raw materials, financial resources and
human resources encourage high market performances of the company. The social factors like
rising awareness among the people about ill effects of soft drinks on human health and changing
preferences among consumers towards consumption of non carbonated drinks have led Coca
Cola to introduce healthier products like Diet Coke. The technological factors like availability of
modern bottling plants and logistics facilities have led Coke to provide its products at lower
prices to global consumer base and earn huge revenue.
Porter’s model:
The Porter’s model analysis of Coca Cola Company shows that it faces a severe
competition from rival and substitute companies producing same products like fruit drinks and
carbonated beverage. The company also faces challenge from firms manufacturing substitute
products like alcohol and milk shakes. The consumers in the soft drinks market enjoy huge
bargaining power owing to available of multiple products like Thumps, 7Up and Coca Cola at
almost similar prices. There are two big companies Coca Cola and PepsiCo which dominate the
beverage market and have the power to control the prices at which products are offered to the
buyers.

13
THE MARKET OF COCA COLA AND THE UNITED STATES
Step 5: SWOT analysis of Coca Cola Company:
Strengths:
1. Coca Cola Company is the leading beverage manufacturer and marketer operating globally.
2. Provides goods and serves a global base of customers and earns huge revenue.
3. Vast product line consisting of carbonated drinks, ready to serve fruit juices and beverages
like tea.
4. It is a global employer and is able to attract talents from all around the world.
5. The company due earns huge profit by selling products and obtaining capital from investments
of global base of investors. The first source of finance earns huge revenue while the second one
generates huge capital from share market, which combine to make the company extremely strong
financially.
Weaknesses:
1. Coca Cola faces a lot criticism and scrutiny by the various government bodies being a private
company which effects its operations.
2. The company faces a lot of criticisms from various health groups owing to the detrimental
impact of soft drinks on the health of the consumers.
3. The shift in the customer preferences to avoid consuming soft drinks have resulted in fall of
revenue which is the impacting the financial strength of the company.

14
THE MARKET OF COCA COLA AND THE UNITED STATES
Step 5: Strengths and Weaknesses of Coca Cola Company-Summary:
It can be summarised from the above discussion that Coca Cola is the leading
multinational manufacturer of beverages worldwide. This strength helps it to sell its products all
over the world and generate huge revenue. The company is able to attract investments from all
over the world. These two factors render the company its enviable financial strength. However,
the criticisms the soft drink industry faces worldwide and the changing preferences of consumers
away from Coca Cola drinks effect the company’s financial base.
Step 6: Recommendations from SWOT analysis(Appendix):
1. Coca Cola Company must diversify its product line like Pepsi has acquired Quaker to enter the
breakfast cereal market. This will help it to compensate the loss incurred by fall sale of soft
drinks and diversify its losses.
2. The company must introduce healthier products in the market to attract more customers. This
will help it earn more revenue and maintain its competitive market position.
Conclusion:
It can be concluded that Coca Cola is the leader in the beverage market and must
introduce healthier products to attract new consumers. The company must lower the sugar
content in its products.

15
THE MARKET OF COCA COLA AND THE UNITED STATES
References:
.Kelsey, J. (2015). Reclaiming the future: New Zealand and the global economy. Bridget
Williams Books.
Coca-Cola Company (The) (KO) Stock Chart. (2017). NASDAQ.com. Retrieved 29 August 2017,
from http://www.nasdaq.com/symbol/ko/stock-chart?
intraday=off&timeframe=5y&splits=off&earnings=off&movingaverage=None&lowerstu
dy=volume&comparison=off&index=&drilldown=off
Coca-Cola Journey Homepage. (2017). The Coca-Cola Company. Retrieved 29 August 2017,
from http://www.coca-colacompany.com/
Coke Vs. Pepsi: By The Numbers. (2017). NASDAQ.com. Retrieved 29 August 2017, from
http://www.nasdaq.com/article/coke-vs-pepsi-by-the-numbers-cm337909
E. Dobbs, M. (2014). Guidelines for applying Porter's five forces framework: a set of industry
analysis templates. Competitiveness Review, 24(1), 32-45.
Fabbri, D. and Klapper, L.F., 2016. Bargaining power and trade credit. Journal of Corporate
Finance, 41, pp.66-80.
Gilpin, R. (2016). The political economy of international relations. Princeton University Press.
Gupta, A. (2013). Environmental and pest analysis: An approach to external business
environment. Merit Research Journal of Art, Social Science and Humanities, 1(2), 13-17.

16
THE MARKET OF COCA COLA AND THE UNITED STATES
Herbet, G., Lafargue, G., De Champfleur, N. M., Moritz-Gasser, S., Le Bars, E., Bonnetblanc,
F., & Duffau, H. (2014). Disrupting posterior cingulate connectivity disconnects
consciousness from the external environment. Neuropsychologia, 56, 239-244.
Holodony, E. (2017). Americans are drinking way less soda than they used to. Business Insider.
Retrieved 29 August 2017, from http://www.businessinsider.in/Americans-are-drinking-
way-less-soda-than-they-used-to/articleshow/51348465.cms
Kashyap, P. L., Xiang, X., & Heiden, P. (2015). Chitosan nanoparticle based delivery systems
for sustainable agriculture. International journal of biological macromolecules, 77, 36-
51.
Lu, L. X., & Swaminathan, J. M. (2015). Supply chain management.
Porter, M. E., & Heppelmann, J. E. (2014). How smart, connected products are transforming
competition. Harvard Business Review, 92(11), 64-88.
Sherif, M. (2017). Social interaction: Process and products. Routledge.
Sheu, J. B., & Gao, X. Q. (2014). Alliance or no alliance—Bargaining power in competing
reverse supply chains. European Journal of Operational Research, 233(2), 313-325.
United States | Data. (2017). Data.worldbank.org. Retrieved 29 August 2017, from
http://data.worldbank.org/country/united-states

17
THE MARKET OF COCA COLA AND THE UNITED STATES
Appendix:
Figure 5. SWOT analysis of Coca Cola Company
: