Coca-Cola Business Strategy: PESTLE, SWOT, & Strategic Action Plan

This report provides a comprehensive analysis of Coca-Cola's business strategy, exploring its success factors, challenges, and strategic planning. It begins with an overview of the company, highlighting its history and statistical review. The report then delves into the reasons for Coca-Cola's success, including its licensed bottlers and brand recognition. It identifies challenges such as declining demand and water scarcity. The analysis includes PESTLE and Porter's Five Forces frameworks, SWOT analysis, and strategic recommendations, emphasizing a differentiation strategy. Finally, it outlines a strategic action plan for Coca-Cola, discussing various strategies and strategic management approaches. Desklib provides access to this and other solved assignments to support student learning.

Running Head: BUSINESS STRATEGY PLAN OF COCA-COLA
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COCA-COLA
BUSINESS STRATEGY OF COCA-COLA
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8/12/2019

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Contents
Executive Summary...................................................................................................................3
About the company Coca-cola...................................................................................................4
Reasons of success of Coca-cola/ Success factors of the company...........................................4
There are many challenges faced by Coca-cola some of the challenges currently faced by the
company are:..............................................................................................................................5
Pestle analysis of Coca- cola:.....................................................................................................5
Social factors..........................................................................................................................5
Technological factors:............................................................................................................6
Environmental factors:...........................................................................................................6
Porters five force analysis of Coca-cola.....................................................................................7
Bargaining power of the suppliers:........................................................................................7
Bargaining power of the buyers:............................................................................................7
Threat of new entrants:...........................................................................................................8
Threat of substitute:................................................................................................................8
Competitive rivalry among the existing companies...............................................................8
Swot analysis of Coca –Cola......................................................................................................9
Strengths:................................................................................................................................9
Weakness of Coca-cola........................................................................................................10
Opportunity of Coca-cola.....................................................................................................10
Threats of Coca- Cola..........................................................................................................11

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Strategies for Coca-cola...........................................................................................................12
Strategic action plan for Coca-cola..........................................................................................13
Conclusion................................................................................................................................14
REFRENCES...........................................................................................................................16

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Executive Summary
This essays the following things The Coca –Cola Company is an Australian
multinational firm. The enterprise is a manufacturer, trader, and dealer of non-alcoholic
drinks. The business is well- known for the product Coke which was invented in the year
1889. Reasons for the achievement of Coca-cola/ Success factors of the company. There are
various success factors for Coca-cola. The first thing is licensed bottlers, the bottling
structure of coke provides the company with the opportunity to grow all over the world and
this thing also helps the company to serve large and diverse areas of the geographic market.
Another thing is brand recognition which one of the most important features affecting the
competitiveness of the company. The product Coca-cola is sold at a global level and
recognized as the best brand. Apart from this the issues with the company are demand loss
and water scarcity.
After this the external and internal analysis of Coca-cola is done which shows that in
the internal analysis one of the main issues that the company will face will be due to scarcity
of water and in the internal analysis the main issue would be the competition from the
company Pepsi as the taste is same along with the market share of both the companies. After
this, the company also discusses the strength, weakness, opportunity, and threats of the
company. Moving ahead the report discusses the strategy that the company should use in
order to be successful the company should use the differentiation strategy. Coca-cola should
follow the differentiation strategy lastly the report discusses the action plan of the company,
where several strategies and strategic management ways are discussed.

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About the company Coca-cola
The Coca –Cola Company is an Australian multinational firm; the company is a
manufacturer, trader, and dealer of non-alcoholic drinks. The company is well- known for the
product Coke which was invented in the year 1889. The headquarter of the company is in
Atlanta and it has functioned its arrangement of franchising since 1889. The company mainly
creates syrup concentrate, which is then vended to numerous bottlers through the globe who
hold high-class territories (Orlitzky, Siegel, & Waldman, 2011).
Statistical review of Coca-Cola: Everyone has caught of Coca-Cola, there are various
foundations that cite Coca-Cola as a billion-dollar product and that is not surprising when one
reflects it was rated by Interbrand as one of the most valued brands in 2017, based on a brand
worth amounting to 69.73 billion U.S. dollars. Coca Cola has a 42.8% market share of the US
carbonated drinks market. 3.1%. That’s the percentage of drinks that are consumed each day
that cascades within the Coca Cola brand. Coca Cola’s average revenue of $35.1 billion
places it as the world’s 84th major economy, having more worth than the whole populace of
Costa Rica. $74 billion. That’s the projected brand price of Coca Cola. In contrast, combining
PepsiCo, Starbucks, Red Bull, and Budweiser would bring a mutual brand worth of $50
billion. PepsiCo had 38% more revenue than Coca Cola, but Coca Cola produced $16 billion
more in carbonated drink incomes. The number of Coca Cola vending machines that are
projected to be on the planet today: 2.8 million. Coca Cola Company’s revenue share in
North America is 15.4% (Business Insider, 2017).
Mission: to revive the world in mind, body, and spirit. To stimulate moments of optimism
and happiness through action and brands. To generate value and make a change.

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Vision: Inspiring each other to be the best and providing a great place to work and great
services
Goal: The Coca-Cola Company's promise is to empower five million females entrepreneurs
by the year 2020.
Reasons for the success of Coca-cola/ Success factors of the company
There are various success factors for Coca-cola. The first thing is licensed bottlers,
the bottling structure of coke provides the company with the opportunity to grow all over the
world and this thing also helps the company to serve large and diverse areas of the
geographic market. Another thing is brand recognition which one of the most important
features affecting the competitiveness of the company. The product Coca-cola is sold at a
global level and recognized as the best brand. The brand provides around a large number of
margins to the retailers in order to make the retailers keep the product also Coca- Cola has a
very strong network of fast food fountain, food stores, vending and etc. globally. The
company offers various product lines as they take special care about the needs, preferences,
and tastes of the customers, Coca-cola vanilla, zero and cherry, etc. the organization has
launched various other cola drinks under its brand name. Few of the most known brands are
Diet coke with supplements which include special and new versions with lemon and coffee.
The company has different franchises in different countries and with different product lines,
all these things make it different and successful from the other companies (Gold, Seuring, &
Beske, 2010).

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There are many challenges/issues faced by Coca-cola some of the
challenges currently faced by the company are:
Reduce in demand for coke: Nowadays people and government have a large focus on health
and they make people aware of it. There are various press reports that indicates the company
has been misleading the consumers and it sells the soft drinks in schools which is not
allowed and the consumers are very much aware of all these problems and issues and also
apart from this the company Coca-cola have been through a lot of bad publicity in the media
which has reduced its sales (Langley, Smallman, Tsoukas, & Van 2013).
Other issues are the upsurge in competition as the non-beverage industry is very much
competitive and Coca-cola has to covenant with various international companies and as well
as the local companies. In numerous countries, Coca-cola operates however in the same
countries Pepsi also operates which a primary competitor of the market. Coca-cola has very
less share of sales in the worldwide market as there are a lot of competitors of the company.
Another main issue is the scarcity of water and poor quality. One of the main ingredients of
the company is water. The world is leading to have very limited resources. The company
consumes a very large amount of water every year and the demand for water is increasing day
by day and the quality of water is also declining which will lead to increase in the cost of
production of the company and lastly it will affect the profit as well for the company Coca-
cola and hence this will lead to the loss of the company (Hitt, Ireland, & Hoskisson, 2012).

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Pestle analysis of Coca-cola:
Social factors
Coca-cola allocates a lot of produces in various cultured republics and they meet the
strains of the customers in the country of Japan. They have shaped around 30 alternatives in
order to plea to the consumers of japan. Apart from this, they are also making very
comparable hard work in china as well (Stark, 2015).
But if seen in America the people are more attentive towards their health and they are
slightly moving away from these drinks and are choosing more waters and teas as they
believe that such drinks are better for their health. For the success of Coca-cola, it will have
to respond to such needs of customers by providing them with products that the healthy
public of America will answer (Rumelt, 2012).
Technological factors:
The new machines have really aided the company Coca-cola to manufacture the
produces in a higher quantity and in a better way. Coca-cola has various factories in Britain
with the top of the designation machinery in order to make sure that they are delivered fast
and also to make sure that the quality of the product is good
Coca-cola has used various social media technologies that help in connecting with
the audience. When the company hurled their name campaign with other audiences like
putting real designations on the bottles the customers really got attracted to the company and
took various photos of the bottle and it trended on the social media sites like on Facebook, all
of these things encouraged the deals of the company (Nickols, 2016).

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Environmental factors:
The company is very much precious due to the convenience of water. Water is one of
the main supplies for making soft drinks. This interrupts their opponent, Pepsi, as well. But
meanwhile Coca-cola’s produces are mostly soft drinks, with a water convenience problem,
the company will agonize losses. Coca-cola has to tail environmental laws as they building
their produces. If anything is incorrect, it can disturb how they allocate products — or stop
manufacture totally.
Porters five force analysis of Coca-cola
Bargaining power of the suppliers:
The power of bargaining is weak for the dealers of Coca-cola. The reason behind this
is the amount of suppliers is high and the swapping cost of the company Coca-cola is low.
Coca-cola Company can easily switch from one supplier to others but the suppliers cannot
shift away from Coca-cola that easily as it can principal to fatalities for the suppliers. There
are various dealers for Coca-cola, but there are very less small suppliers. For example, there
is no substitute for the raw material sugar however the number of dealers is still very high
(Hambrick, 2015).
Bargaining power of the buyers:
The bargaining control of the buyer is low. As the customers nowadays buy very low
volume and they are focused in the specific markets as well. It can also be seen that people
cannot easily differentiate among Coca-cola, and Pepsi as the flavor of the two drinks is the
same. The cost of switching is not so high for the clienteles and both the brands have high
brand loyalty. The customers of this company are not subtle to its price. Apart from this even
backward integration is not possible for the retailer or the consumers and hence the buying

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power of customers is weak (Vestbo, Hurd, Agustí, Jones, Vogelmeier, Anzueto, & Stockley,
2013).
The threat of new entrants:
In the industry of beverage, a lot of factors are there that discourages the new brand
from entering into the market. Growing the brand overnight is unbearable. There are various
investments made. Be it operations or marketing, all the parts need a large amount of
investment. Some of the brands that are local can start it on a small scale and can still market
better and higher-skilled staff, however in order to do so the company needs to capitalize a
lot. The customer loyalty in the market is very moderate and it can be difficult for the new
companies to build brand loyalty (Goetsch, & Davis, 2014).
The threat of substitute:
Some of the main alternates of Coca-cola are Pepsi and juice companies and some of
the other beverages. There are high figures of substitutes Coca-cola. The cost of switching is
low for the customers; apart from this the quality of substitute product is also good and better
than Coca-cola and that is the reason the threat from substitute product is high (Hesterly, &
Barney, 2010).
The competitive rivalry among the existing companies
There are two key players in the industry of soda and two of them are Coca-cola and
Pepsi, there is a very bog rivalry among these two companies. There some small players as
well in the market but they are not considered as a threat in the market. The two companies
Pepsi and Coca-cola are of the same size and have the same strategies and products. The
differentiation level among the two brands is very low and that is the reason the price
competition is also competitive so, the side by side of competitive rivalry between the current
firms is a strong force (Rosenbloom, 2012).

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Swot analysis of Coca –Cola
Strengths:
Brand equity: Coca-cola was awarded the honour for the highest equity award; Coca-cola has
a very business attendance and also a very unique brand identity. Hence it is one of the best
and a top brand with the best brand equity. Company valuation: it is one of the most valuable
companies in the world. The value of Coca-cola is around 79.2 billion dollars. The brand
value includes various sweatshops and possessions that are spread crossways the world and
also the profit and cost of the business (Tarique, & Schuler, 2010). Vast attendance globally:
the company is present in around 200 republics across the globe This vast global attendance
of Coca-cola has also donated to the building of the enormous brand name. Large market
share: there are mainly 2 competitors in the segment of the beverage industry. But Coca-
cola. Is a clear champion as it has the largest market share. Amongst all beverages, Coke,
Thumbs up, Sprite, Diet Coke, Fanta, Limca, and Maaza are the growth drivers for Coca-cola
(Lovelock, & Patterson, 2015). Good marketing strategies: unlike the company Pepsi, Coca-
cola always tries to win the hearts of people. On the other hand, the target of Pepsi changes
continuously and is targeted towards youngsters. Coca-cola targets all age groups. Customer
loyalty: With such strong merchandises, it is usual that Coca-cola has a lot of customer
loyalty. The products stated above like Coca-cola and Fanta have a huge fan following.
People will favor these soft drinks over others. Because of the good flavor of Coca-cola,
discovering substitutes turn out to be difficult for the customer. Distribution network: Coca-
cola has a prevalent distribution network because of the mandate in the market for it
produces. On the other hand, due to this positive distribution network, Coca-cola has been
able to expertise such a high market occurrence (Child, Elbanna, & Rodrigues, 2010).