Coca Cola Internal and External Analysis - Coursework Example

 Coca Cola Internal and External Analysis Executive Summary This report aims to focus on the various strengths, weaknesses, opportunities and threats that the Coca Cola Company faces today. The Coca Cola Company has various strengths, namely, high brand recognition, revenue growth and large scale operations, but is weak at the North American side where it does not have substantial market share. Likewise, it has the opportunity to acquire the competition business and benefit from the growth of Hispanics and bottled water market. On the contrary, it is threatened by the growing competition, weak demand for carbonated drinks and overdependence on the bottled licensees. In order to avoid the threats that the Coca Cola Company is facing these days, it has to focus on the development of new products and diversification strategies. Furthermore, it should focus on the acquisition of new competition to eliminate the small businesses, as well as to reduce its overdependence on the bottlers by setting up its own bottling infrastructure and people. Introduction Coca Cola is a soft carbonated drink that was initially introduced by John Pemberton in 1886 in Columbus, Georgia. Pemberton was inspired by the European Mirani that was a coca wine famous at that time (Coca Cola, 2012). He created coca cola original recipe that was alcoholic while in a chemical drugstore and invited guests to enjoy the new carbonated drink. With gradual popularity of the drink and passing of a prohibition legislation, Pemberton created non-alcoholic version of the coca cola recipe. This one founded the basis of hundreds of colas that exist today. However, none of them are close to the actual coca cola formula developed by John Pemberton (Heritage, 2012). This is due to the extreme measures undertaken by Coca Cola Company in protecting the actual coca cola recipe which is a trade secret. Even the exclusive licensed bottlers around the world are unaware of the secret recipe. As a result, the Coca Cola Company is still in business. Nonetheless, there are continuous internal and external threats that jeopardize the business situation of the Coca Cola Company. Being the largest and original developer of the coca cola recipe, the company has to undertake regular analysis of its internal and external environment to remain alert of any emerging threats to its business. This report aims to focus on the various strengths, weaknesses, opportunities and threats that the Coca Cola Company faces today. In order to achieve this aim, the report will critically evaluate the internal and external factors of the company and provide succinct and practical recommendations to overcome the weaknesses and avoid the threats that the Coca Cola Company faces. Internal Analysis (Strengths and Weaknesses) In 2007, Business Week published a report in which Coca Cola Company was ranked as Number One in terms of its brand value worth amounting to $65,324 million. This shows that the company has the highest level of brand recognition and goodwill around the world that is unmatchable by any other company. The list included 500 Fortune Companies that are the top businesses around the world. Pepsi Co. which is the first and largest competitor of Coca Cola Company was ranked in the same list as 22nd with its brand worth amounting to $12,888 million only. In 2011, Coca Cola was awarded the best global brand of the year making it the most valuable corporate brand around the world. Thus, Coca Cola has maintained its leading position in terms of brand which is its primary strength. None of the competitors are able to reach this top position for the last century. The primary reason for achieving this position is due to the large scale operations of Coca Cola Company that are the reflection of the highest number of sales of the Coca Cola brand every day (Rogers, 2012). The company has to grant exclusive licenses to numerous bottlers around the world to meet the highest demand for their soft drink. Furthermore, they have launched dozen of new brands that have increased their overall product demand in the world. These large scale operations also act as Coca Cola’s major strengths which are unparalleled by its competitors. Likewise, the company is able to maintain a strong revenue growth in the market making it stronger in the carbonated drink industry. At the same time, Coca Cola Company is also subject to sluggish and weak performance in the North America which adversely affects its overall operations. Its competitors have a strong hold in the North America region which cut down the expected growth of the company. This is the major weakness of the company and needs to be catered too. External Analysis (Opportunities and Threats) In the external marketplace, the Coca Cola Company has numerous opportunities that it can avail for its benefit in the future. For instance, the bottled water industry is booming and requires the Coca Cola Company to continue providing more advanced and hygienic water in bottled form to its global market. The competitors are also taking up the similar path and providing bottled water to the continuously growing market. However, the strong brand image provides an advantage to the Coca Cola Company to retain its market share in the bottled water market too. Likewise, the ever growing Hispanic population in the United States also stands as a golden opportunity for the Coca Cola Company and should ensure that it has to focus on them and encourage the Hispanics to taste the new products. Another important emerging opportunity that the Coca Cola Company has is the increasing focus on the acquisitions side. In order to reduce the competition, it can acquire the small competitors at a low price, thus, eliminating the ever rising and threatening competition. At the same time, the Coca Cola Company is threatened by the intense competition that it is facing due to the easy way for the new entrants to enter the market. The basic idea of developing carbonated drinks is simple and can be adopted by anyone. Thus, the smaller competitors are entering into the carbonated market. Another important threat to Coca Cola Company is the increasing dependence on its global bottlers. These bottlers can pose a serious threat to the company either by defaulting or mismanagement of the bottling operations any time. Furthermore, the weak growth of the carbonated drinks in global market also threatens the very existence of the Coca Cola Company. Conclusion The Coca Cola Company has numerous strengths, namely, high brand recognition, revenue growth and large scale operations, but is weak at the North American side where it does not have substantial market share. Likewise, it has the opportunity to acquire the competition business and benefit from the growth of Hispanics and bottled water market. On the contrary, it is threatened by the growing competition, weak demand for carbonated drinks and overdependence on the bottled licensees. Recommendations In order to avoid the threats that the Coca Cola Company is facing these days, it has to focus on the development of new products and diversification strategies. Furthermore, it should focus on the acquisition of new competition to eliminate the small businesses and to reduce its overdependence on the bottlers by setting up its own bottling infrastructure and people. Works Cited Coca Cola Company, 2012. Web. 26 March 2012. http://www.coca-cola.com/en/index.html Coca Cola Timeline. Heritage, 2012. Web. 26 March 2012. http://heritage.coca-cola.com/ Rogers, Katie. 'This American Life' bursts Coca-Cola's bubble: What's in that original recipe, anyway? Washington Post, 2012. Web. 26 March 2012. http://voices.washingtonpost.com/blog-post/2011/02/this_american_life_bursts_coca.html Read More