Coke Cola Situation Analysis


CokeCola SituationAnalysis





CokeCola SituationAnalysis

GeneralEnvironmental Analysis

Onthe environmental analysis of Coca-Cola Company, there is the macroand micro environment. The company targets all ages from five yearson the demographic aspect. Regarding the sociocultural aspect, thecompany is facing challenges in the longevity of the brand because ofthe negative labeling by the media. On the political side, there isthe increase in minimum wage which will, in turn, affect the staffcosts of Coca-Cola . There are also increased requirements by theFood and Drug Authority. Technology is also expected to change in thefuture. Economically, the interest rates are still low, and inflationadversely affects Coke since it leads to increase in the prices ofthe beverages [CITATION Meg14 l 1033 ].


Manybrands are under the Coca-Cola Company, and they are all beverages.The company has over 43% market share while followed closely by Pepsiwith 32% market share. In 2004, there was a rise in the volume ofsoft drinks in Canada. However, the sales of soft drinks havedecreased because of the negative publicity where the beverages arelinked to health issues like obesity. Also, the company is venturinginto the tea/coffee industry but is facing stiff competition fromestablished brands (Meghan et al., 2014).


Coca-Colaexperiences competition from both direct and indirect competitors.The indirect competitors include coffee chains such as Starbucks,CaféCoffee Day, and Costa Coffee which are well established. These chainsoffer competition because they offer healthy drinks as compared toCoca-Cola’s carbonated drinks. On the direct competitors, Pepsi isthe major competitor for Coca-Cola (Karnani,2013).


Inthe internal analysis, there are the strengths and weaknesses of cocacola. One of them is the advertising and marketing capability. Thecompany spends over US$3 billion on marketing annually, and thisenables the company to reach many customers as compared to thecompetitors. Secondly, Coca-Cola Company has extensive anddiversified product portfolio with Coke as the leading brand among500 others. The company also has a high valuation of around 79.2billion dollars. There is also the vast global market and significantmarket share (Karnani,2013).

Thereare also weaknesses in the company, and one of them is employeeturnover that disrupts business relationships. The decentralizationof operations weakens internal controls of the company. There is alsothe health issue that has elicited criticism. The company`s products,especially Coke, has been deemed to have adverse health effects.There is also water management issue because of the lawsuits raisedagainst the company (Meghan et al., 2014).


Karnani,A. G. (2013). Corporate Social Responsibility Does Not Avert theTragedy of the Commons–Case Study: Coca-Cola India.&nbspRossSchool of Business Paper,(1210).

Meghan, D., Meghan, E., Emily, K., Leslie, P., &amp Kelly, Z. (2014, February 22). Industry Analysis: Soft Drinks. Canada.