Comprehensive Situation Analysis of Coca-Cola in the Australian Market

This report presents a comprehensive situation analysis of Coca-Cola in the Australian market, focusing on the introduction of healthier beverages like Kombucha. The analysis begins with a company background, tracing Coca-Cola's history and its expansion into Australia. It then delves into a market analysis, highlighting the growth of the Kombucha market and consumer preferences for health-conscious products. The report examines the macro-environment, including political, economic, social, technological, and legal factors influencing the market. It also includes a micro-environment analysis, assessing Coca-Cola's strengths, weaknesses, and competitor analysis, focusing on companies like MOJO and Kombucha Remedy. Consumer analysis identifies the target market for Kombucha and their purchasing behaviors. The report concludes with a SWOT analysis and recommendations for Coca-Cola to successfully enter and thrive in the Australian healthy beverage market, leveraging its brand recognition and distribution network.

Situation Analysis For Coca-Cola, Australia 1
SITUATION ANALYSIS FOR
COCA-COLA, AUSTRALIA
Author XXXXXXXXXXXXXXXXX
SID XXXXXXXXXXXXXX
1003MKT – Introduction to Marketing
Tutor:
Trimester 1, 2018
Word Count: (2000+/- 10%)
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Situation Analysis For Coca-Cola, Australia 2
Table of Contents
<Change the below page numbers to reflect your opportunity analysis.>
Table of Contents............................................................................................................... 2
Introduction and Company Background.............................................................................3
Introduction.................................................................................................................... 3
Company Background..................................................................................................... 3
Situation Analysis............................................................................................................... 4
Market Analysis............................................................................................................... 4
Macro Environment Analysis........................................................................................... 4
Political Analysis.......................................................................................................... 4
Economic Analysis....................................................................................................... 5
Social Analysis............................................................................................................. 5
Technological Analysis................................................................................................. 5
Legal Analysis.............................................................................................................. 5
Micro Environment Analysis (Baines, Fill & Rosengren 2017).........................................6
Company Analysis....................................................................................................... 6
Competitor Analysis (Armstrong 2019).....................................................................6
Competitive market Summary.....................................................................................7
Consumer Analysis...................................................................................................... 7
SWOT Analysis (Pickton, Masterson, & Kavanagh 2003)..............................................7
Recommendations/conclusion............................................................................................ 8
Reference List.................................................................................................................... 9
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Situation Analysis For Coca-Cola, Australia 3
Introduction and Company Background
Introduction
There is a global shift in favour of healthy living especially in the industrialised countries which is
spurred by an increase in consumer’s awareness of the relationship between the health and lifestyle.
Also, a spike in lifestyle-related illnesses has lead people to search for healthier alternatives to their
usual foods and drinks. The health beverage market has embraced the change and is one of the
fastest growing sectors in the Australian economy, and by entering the market, Coca-Cola aims at
leveraging its huge presence in the country to bring a variety of healthier beverages to the consumers.
Company Background
<Who is the company. Begin by searching the company’s website and other relevant sites for
this information>. The Coca-Cola Company started in Atlanta by a pharmacist John Pemberton.
From the humble beginnings of selling nine glasses of the drink to a few of his friends, Pemberton
grew the company to become a household beverage brand across the globe. The Coca-Cola
Company is a beverage business dealing with the production and sale of a variety of soft drinks
including Coca-Cola, Fanta and even drinking water.
<History of the company>.
Asa Griggs Candler acquired the rights to the Coca-Cola brand three years after the
company started producing the beverage. He was able to turn the bottling company to a
multibillionaire enterprise with footprints in most parts of the world. Asa Candler turned out
to be an adept salesperson and marketer and through various marketing strategies to position his
business in such a way that people noticed it everywhere. He was aggressive in promoting the brand
including issuing out coupons to people who could taste his drinks to ensuring that every scale, clock
calendar distributed by pharmacists bore the Coca-Cola brand. People paid attention as the
company’s name was everywhere making its products the most consumed in the area. The Coca-
Cola Company gained momentum and was able to expand to other US territories and later to other
countries across the world (Pendergrast 2013).
The idea to start Coca-Cola, Australia took root in 1917 when an accountant in Perth applied for rights
to start a Coca-Cola company, but the dream came true with the establishment of the first bottling
plant in Sydney. In 1937. The breakthrough for the company happened when the Woodruff, the Firm’s
president decided to supply the US troops with Coca-Cola products. After the world war, the company
issued franchises and became the gradually became the behemoth it is with over 240 varieties of
beverages and a huge revenue base (Journey Australia Staff 2017).
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Situation Analysis For Coca-Cola, Australia 4
Situation Analysis
Market Analysis
<Indicate what is happening in the marketplace – use statistics as well>
The US market for the Kombucha health beverage in 2017 was estimated to be worth USD 1.5 billion,
and it was expected to grow with at least 17.5% between the periods 2018 to 2023. The market is
competitive following the increased consumer awareness and preference for healthy living. People
across the industrialised world have realised that unhealthy lifestyles including consumption of junk
food and dependence on chemicals to treat ailments are some of the factors contributing to a spike in
the prevalence of lifestyle diseases. The increase in demand for healthy products like Kombucha has
seen the entrance of various producers and marketers of the products to supply the products making
the market for these products very competitive. Japan and China are the leading lights in the
production and consumption of probiotics such as Kombucha, raking in the lion’s share of the USD
14.1 billion worth of revenues from the products (Whithead 2018).
In Australia, the market for Kombucha has grown in leaps and bounds chiefly because Australia is
one of the most health-conscious cultures in the industrialised world. Due to the Australians’
obsession with all things health and wellness, the market for probiotics and healthy tea like Kombucha
has expanded rapidly. The same love for a healthy living has contributed to the development of a
complex and sophisticated health system with top of the range technology. The first company to
produce Kombucha commercially was MOJO followed closely by other companies selling their brands
of the product. Kombucha Remedy is a household brand name in the Australian Kombucha market. It
is a product by a couple, Emmet and Sarah, who ran into the product while fermenting their daily
provisions and took it to the global market. From hawking one bottle a day to local health shops, the
product is now sold in most of the major retail outlets in Australia and has even found its way into the
UK (Avery 2016).
Macro Environment Analysis
Political Analysis
<Identify major political influences on the marketplace, if any. Use bullet points and make sure
to reference your facts>
 Favourable government health policies which recognise and support the growth of the healthy
living sector
 A stable government which enables businesses to thrive
 No protectionist policy which encourages the entrance of new players into the market (Aaker
2014).
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Situation Analysis For Coca-Cola, Australia 5

Economic Analysis
<Identify major economic influences on the marketplace, if any. Use bullet points and make
sure to reference your facts>
 Australia has one of the countries in the world with high GDP meaning that citizens have the
disposable income to spend on health and wellness products
 The stable economy allows for the growth of businesses (Palmer 2012).
 Having a high GDP and a stable economy sustains a stable Australian currency which
reduces risk to businesses which might result from currency fluctuations
 Bilateral trade agreements between Australia and other countries boost economic
development leading to high GDP with its attendant benefits to the business community
(Russo & Confente 2018)
Social Analysis
<Identify major economic influences on the marketplace, if any. Use bullet points and make
sure to reference your facts>
 Australians are some of the most health-conscious people in the world which encourages the
growth of businesses engaged in health enhancing products (Australia 1989).
Technological Analysis
<Identify major technological influences on the marketplace, if any. Use bullet points and
make sure to reference your facts>
Technology affects the way a business communicates with the world, and it is one of the touchpoints
with the consumers (Mcdaniel, Lamb, & Hair 2013).
 Communication technology advancement in Australia allows consumers to interact with the
brand online thus increasing the product’s visibility.
 The Internet also enables consumers to order products from across the world increasing
businesses revenue (Fleisher & Bensoussan 2015).
Legal Analysis
<Identify major legal influences on the marketplace, if any. Use bullet points and make sure to
reference your facts>
 The legal regime in Australia is conducive to entry and flourishing of businesses (Leeds
Metropolitan University 2010).
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Situation Analysis For Coca-Cola, Australia 6
Micro Environment Analysis (Baines, Fill & Rosengren 2017)
Company Analysis
<What are three major positives regarding the company/brand. Use bullet points>
 The Coca-Cola company has strong brand recognition
 The company has a presence all over the content
 The company has the financial muscle necessary to enter the new business niche
<What are three major negatives regarding the company/brand >
 The Coca-Cola Company is known for producing sugary beverages which are considered
harmful to health
 The company has various legal issues regarding false advertising and customers may be
wary of its products
 The company sometimes uses unethical practices in its bid to get a foothold in the market
<One-two sentence summary of the company> The Coca-Cola Company is one of the biggest
beverage companies in the world with presence in many countries across the globe. The company
specialises in the production of and distribution of soft drinks across the world, and it would be easy to
incorporate healthy beverages like Kombucha in its ranks. Using its presence in the Australian
market, the company would use its existent distribution network to reach the prospective consumers.
Competitor Analysis (Armstrong 2019)
The market for Kombucha has grown in recent mainly because Australia is one of the most health-
conscious cultures in the industrialised world (Evans, 2018). Due to the Australians’ obsession with all
things health and wellness, the market for probiotics and healthy tea like Kombucha has expanded
rapidly. The same love for a healthy living has contributed to the development of a complex and
sophisticated health system with top of the range technology. The first company to produce
Kombucha commercially was MOJO followed closely by other companies selling their brands of the
product. Kombucha Remedy is a household brand name in the Australian Kombucha market. It is a
product by a couple, Emmet and Sarah, who ran into the product while fermenting their daily
provisions and took it to the global market. From hawking one bottle a day to local health shops, the
product is now sold in most of the major retail outlets in Australia and has even found its way into the
UK.
The two companies, MOJO and Kombucha Remedy are current indirect competitors to the Coca-Cola
Company beverage products, but once it decides to get in the Healthy beverage products niche, they
will turn to be direct competitors.
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Situation Analysis For Coca-Cola, Australia 7
Competitive market Summary
Competitor Target
Market
Product Price Promotional Distribution Strength/
Weakness
Competitor A
MOJO
Primary Target
Market
Kombucha
beverages
Primary Product
Attribute
Healthy beverage
products
Price Primary
Promotional
Strategy
Online
Word of mouth
Traditional
media
Distribution
Strategy…
Through retail
outlets
including
Walmart
Main Strength
Early head
start in the
beverage
market
Main
Weakness/s
It does not
have a big
budget to
spend on
advertising
Competitor B
Kombucha
Remedy
Primary Target
Market
Healthy
beverage
market
Primary Product
Attribute
Healthy
alternatives to
carbonated and
sweetened drinks
Price Primary
Promotional
Strategy
Social media
Word of mouth
Traditional
media
Distribution
Strategy…
Through
retailers like
Walmart
Main Strength
Has made a
breakthrough
in the health
beverages
sector
Has been able
to venture
abroad
Main
Weakness/s
Has only one
line of
products
Competitor C Primary Target
Market
Primary Product
Attribute
Price Primary
Promotional
Strategy
Distribution
Strategy…
Main Strength
Main
Weakness/s
Competitor D Primary Target
Market
Primary Product
Attribute
Price Primary
Promotional
Strategy
Distribution
Strategy…
Main Strength
Main
Weakness/s
Competitor E Primary Target
Market
Primary Product
Attribute
Price Primary
Promotional
Strategy
Distribution
Strategy…
Main Strength
Main
Weakness/s
Consumer Analysis
The main consumers of Kombucha tea are the vegetarians and other health-conscious
individuals. Kombucha tea is one of the health products touted to have many benefits to the
consumers including treatment of some ailments and boosting the immune system. Other
groups that consume the product are the older generation and people who are unwell. The old
and the ailing use the tea as medication and for boosting their immune system. The young
consumers mainly purchase the Kombucha tea both as natural remedies for their ailments or
as stimulants. Most of the consumers browse the internet to search for the availability of the
product and may also order for the products online. The older generation mainly purchases
the tea through the various retail outlets such as Walmart (Boag 2008).
SWOT Analysis (Pickton, Masterson, & Kavanagh 2003).
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Situation Analysis For Coca-Cola, Australia 8
Recommendations/conclusion
What are the key recommendations you would make for this company or brand
after analysing the market, competitors and consumer? What are the key
opportunities you have identified?
The Coca-Cola Company has various Strengths which it can leverage to have a firm foothold in the
healthy beverage market in Australia. First, the company has a dormant market share in the beverage
market. Out of the 600 billion consumed daily across the world, it supplies 3.2% of it. Secondly, the
firm has a diversified Product portfolio and produces and distributes over 500 different products
including drinking water, carbonated drinks, Tea and coffee and energy drinks. Third, it has the largest
advertising budget in the beverage industry. In 2017, the Coca-Cola Company spent USD 3.958
billion which was more than any other beverage company. Weaknesses. With all these strengths, the
company can easily overcome its weaknesses including the fact that it depends on beverages alone
which essentially means that it lacks in diversification. The one weakness that the company can
struggle to overcome is the fact that it mainly produces sweet carbonated drinks and it is yet to find
healthy alternatives. At the same time, the company is in a position to exploit the opportunities
available to push its health beverages. Coca-Cola Company global presence and brand identity give it
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Strengths
Dominant market share in the beverage
market. Out of the 600 billion consumed
daily across the world, it supplies 3.2% of it.
Diversified Product portfolio. The company
produces and distributes over 500 different
products including drinking water,
carboanted drinks, Tea and coffee, and
energy drinks.
Largest advertising budget. In 2017, the
Coca-Cola Company spent USD 3.958 billion
which was more that any other beverage
company
Weaknesses
It depends on beverages alone which
essentially means that it lacks in
diversification.
the company mainly produces sweet
carbonated drinks and it is yet to find
healthy alternatives
Opportunities
Its global presence and brand identity gives
it a good platform for introducing new
products in ts ranks
The company is highly profitable allowing it
to maintain its market share through
advertising.
Threats
Healthy beverage alternatives are gradually
eating into the Coca-Cola marketshare
Climate change is affecting the supply of
water which threatens the company as it is
water intensive in its production processes

Situation Analysis For Coca-Cola, Australia 9
a good platform for introducing new products in its ranks. Also, the company is highly profitable
allowing it to maintain its market share through advertising.
On balance, the Coca-Cola Company is well positioned to enter the healthy beverage industry in
Australia either by producing its variety of Kombucha tea or partnering with the firms already
producing the same in Australia. It would be advisable for the company to get into a business
arrangement with an existing beverage company rather than producing its brand, which would be
viewed with suspicion as the company is not known for producing healthy products.
Reference List
Aaker, D. A. (2014). Strategic market management. Hoboken, New Jersey : Wiley
Armstrong, G. (2019). Marketing: an introduction. Harlow, England ; New York : Pearson
Australia. (1989). Composition of foods, Australia. Canberra: Australian Government Pub. Service.
Avery, L. (2016). Living tea: healthy recipes for naturally probiotic kombucha. London : Ryland, Peters
& Small.
Baines, P., Fill, C., & Rosengren, S. (2017). Marketing. Oxford : Oxford University Press,
Boag, S. (2008). Personality down under: perspectives from Australia. New York, Nova Science
Publishers. http://public.eblib.com/choice/publicfullrecord.aspx?p=3018290.
Evans, F. (2018). Fermented probiotic drinks at home: make your own kombucha, kefir, ginger bug,
jun, pineapple tepache, honey mead, beet kvass, and more.
http://public.eblib.com/choice/publicfullrecord.aspx?p=5321187.
Fleisher, C. S., & Bensoussan, B. E. (2015)Business and competitive analysis: effective application of
new and classic methods. Upper Saddle River, New Jersey: Pearson
Journey Australia Staff. (2017). One Small Idea: How Coca-Cola Became an Aussie Phenomenon.
[Online] The Coca-Cola Company. Available at:
https://www.coca-colajourney.com.au/our-company/coca-cola-australia
Leeds Metropolitan University. (2010). PESTEL analysis.
http://repository-intralibrary.leedsmet.ac.uk/IntraLibrary?command=open-
preview&learning_object_key=i04n176407t.
Mcdaniel, C., Lamb, C. W., & Hair, J. F. (2013). Introduction to marketing. Australia,
South-Western/Cengage Learning.
Palmer, A. (2012). Introduction to marketing: theory and practice. Oxford : Oxford University Press
Pendergrast, M. (2013). For God, country and Coca-Cola the definitive history of the great American
soft drink and the company that makes it. New York, NY, Basic Books.
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Situation Analysis For Coca-Cola, Australia 10
Pickton, D., Masterson, R., & Kavanagh, M. (2003). Introduction to marketing. Maidenhead, McGraw-
Hill Education.
Russo, I., & Confente, I. (2018). Customer loyalty and supply chain management business-to-
business customer loyalty analysis. New York: Routledge.
Schaefer, A. (2011). An introduction to business studies. Book 4, Book 4.
http://search.ebscohost.com/login.aspx?direct=true&scope=site&db=nlebk&db=nlabk&AN=620801.
Whitehead, R.J. (2018). Brands queue to enter Australia’s Kombucha crazy market but where are the
globals? [Online] Food Navigator. Available at:
https://www.foodnavigator-asia.com/Article/2017/12/14/Brands-queue-to-enter-Australia-s-kombucha-
crazy-market-but-where-are-the-globals
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