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Chapter 4:

Corporate Social Responsibility

Chapter 5

SWOT Analysis about Corporate Social Responsibility (Programs)

Strengths in the SWOT of Coca Cola


1. Brand Equity – Interbrand in 2011 awarded Coca cola with the highest brand equity
award. Coca cola with its vast global presence and unique brand identity is definitely one
of the costliest brands with the highest brand equity.
2. Company valuation – One of the most valuable companies in the world, Coca cola is
valued around 79.2 billion dollars. This valuation includes the brand value, the numerous
factories and assets spread out across the world and the complete operations cost and
profit of Coca cola.
3. Vast global presence – Coca cola is present in 200 countries across the world.
Chances are, any country that you go to, you will find coca cola present in that market.
This vast global presence of coca cola has also contributed to the building of the
mammoth brand name.
4. Largest market share – There are only 2 Big competitors in the beverage segment –
Pepsiand Coca cola. Out of these 2, coca cola is the clear winner and hence has the
largest market share. Amongst all beverages, Coke, Thums up, Sprite, Diet coke, Fanta,
Limca and Maaza are the growth drivers for Coca Cola.
5. Fantastic marketing strategies – Coca cola unlike Pepsi always tries to win peoples
heart. Where Pepsi’s target is continuously changing, and is targeted towards
youngsters, Coca cola targets people of all ages. The targeting is also done by
celebrities who are well liked – for example – Amitabh Bacchan, Sachin tendulkar,
Aishwarya Rai, Aamir Khan etc
6. Customer Loyalty – With such strong products, it is natural that Coca cola has a lot
of customer loyalty. The products mentioned above like Coca cola and Fanta have a
huge fan following. People will prefer these soft drinks over others. Because of the good
taste of Coca cola, finding substitutes becomes difficult for the customer.
7. Distribution network – Coca cola has the largest distribution network because of
the demand in the market for its products. On the other hand, due to this successful
distribution network, Coca cola has been able to command such a high market
presence.

Weaknesses in the SWOT of coca cola


1. Competition with Pepsi – Pepsi is a thorn in the flesh for Coca cola. Coca cola would
have been the clear market leader had it not been for Pepsi. The competition in these
two brands is immense and we don’t think Pepsi will give up so easily.
2. Product Diversification is low – Where Pepsi has made a smart move and diversified
into the snacks segment with products like Lays and Kurkure, Coca cola is missing from
that segment. The segment is also a good revenue driver for Pepsi and had Coca cola
been present in this segment, these products would have been an additional revenue
driver for the company.
3. Absence in health beverages – If you watch the news, you would know that obesity is
a major problem affecting people nowadays. The business environment is changing and
people are taking measures to ensure that they are not obese. Carbonated beverages
are one of the major reasons for fat intake and Coca cola is the largest manufacturer of
Carbonated beverages. The inference is that the consumption of beverages in
developed countries might go down as people will prefer a healthy alternative.
4. Water management – Coca cola has faced flak in the past due to its water
management issues. Several groups have raised lawsuits in the name of Coca cola
because of their vast consumption of water even in water scarce regions. At the same
time, people have also blamed Coca cola for mixing pesticides in the water to clear
contaminants. Thus water management needs to be better for Coca cola.

Opportunities in the SWOT of coca cola


1. Diversification – Diversification in the health and food business will improve the
offerings of Coca cola to their customers. This will also ensure that they get better
revenue from existing customers by cross selling their products. The supply chain which
is distributing their beverages can also distribute these snacks thereby sharing the load
of Supply chain costs.
2. Developing nations – Although developed nations have a high presence of Coca cola,
these countries are slowly moving towards healthy beverages. However developing
countries are still being introduced to the delight of carbonated drinks and soft drinks.
Countries like India which are developing and have a hot summer, find the consumption
of cold drinks almost doubled during summers. Thus the higher consumption in
developing environment’s can be a good opportunity to capitalize for Coca cola.
3. Packaged drinking water – With hygiene becoming a major factor in the consumption
of water, Packaged drinking water has found its way into peoples mind. Coca cola has a
presence in the packed drinking water segment though Kinley. Although Kinleys
expansion is slow as of now, Kinley has a huge potential of expansion. Thus Coca cola
as a company should focus on the expansion of Kinley as a brand and take it up
to Bisleri ‘s level of trust.
4. Supply chain improvement – Supply chain can be a major cost sink hole with the
transportation costs always rising. Coca cola’s complete business is based on
transportation and distribution. There will always be possible improvements in this area.
Thus Coca cola should keep strict watch on its Supply chain and keep improving to bring
the cost down.
5. Market the lesser selling products – In the product portfolio of Coca cola, there are
several products which have not found acceptance in the market. Coca Cola needs to
concentrate on the marketing of these products as well. It is understood that Coca cola
has made several expenses to launch these products. Thus, the marketing and
subsequent rise of sale of these products will help revenue of Coca cola.

Threats in the SWOT of coca cola


1. Raw material sourcing – Water is the only threat to Coca cola. The weakness of Coca
cola was the suspected use of pesticides or vast consumption of water. However, the
threat here is that water scarcity is on the rise. With the climate changing, and regions of
various countries facing scarcity of water, sooner or later someone might raise fingers
on beverage companies. Thus, Water sourcing is an axe which can fall anytime on the
head of Coca cola. If water is limited or rationed, Coca cola can experience a major
downfall in their revenue and capacity of distribution. The same can affect its arch rival
Pepsi as well.
2. Indirect competitors – Coffee chains like Starbucks, Café coffee day, Costa coffee are
on the rise. These chains offer a healthy competition to Coca colas carbonated drinks.
They might not be a big competition for Coke, but they do give a dent to its beverage
market. Similarly, health drinks like Real and Tropicana as well as energy drinks like
Red bull and Gatorade are stealing away the market share indirectly.

Strengths
 The refranchising efforts of Coca-Cola and other structural changes, although initially causing
uncertainty and resulting in as much as an 18 to 19 per cent headwind to the top line, with the
expected stable growth for the firm's core business remaining strong (Forbes, 2017b).
 Organic revenue for Coca-Cola is predicted to grow by a further 3% in 2017, and a strong
operating performance is further expected to drive a 7% to 8% growth in comparable currency
neutral income prior to taxes (Forbes, 2017b).
 Coca-Cola is a global brand that is recognised in virtually every country of the world, and which is
recognised by 94% of the world's population (Coca-Cola, 2016).
 Coca-Cola is ranked in the list of the top organisations in terms of multicultural opportunities, which
is important in a globalised and internationalised world, as well as being named on the top
corporations for women's business enterprises list (Coca-Cola, 2016).
 Along with their bottling partners, Coca-Cola ranks in the top ten private employers holding more
than 700,000 system employees across the globe (Coca-Cola, 2016).
 The organisation has a massive operational reach, which includes over 200 countries worldwide,
and spans across five operating regions; namely Europe, Middle East and Africa Asia Pacific; Latin
America; North America and Bottling investments (Coca-Cola, 2016).

Weaknesses
 While the core performance of Coca-Cola remains solid in the second quarter results of the firm,
the top line and earnings per share took hits as a result of the refranchising of the organisations
bottling operations across geographies (Forbes, 2017b). The company's first quarter results were
also affected negatively by this refranchising, with net revenue falling 11% year on year (Forbes,
2017b).
 Coca-Cola is currently in a time of structural change which has resulted in the uncertainty of the
organisations stability and a fall in sales growth, due to the transition from being a capital-intensive
organisation with refranchising plans aimed at China and North America, and structural changes in
Africa and Europe (Forbes, 2017b).
 Across the globe, a number of popular supermarkets and fast food outlets which have traditionally
been served by Coca-Cola are terminating contracts and severing their ties with the brand. This
can be seen by the decision of Dominos Australia to ditch Coca-Cola in favour of their rivals Pepsi,
and retailer Woolworths refusing to stock Coke's newest zero sugar soft drink (Devlin and Davis,
2017).

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Opportunities
 Coca-Cola have recently expresses their intent to become a business which is more growth-
orientated, and is able to adapt more quickly to changes in consumer behaviour (Roderick, 2017).
Where the first instances of innovation within the brand have been successful, in terms of the
double-digit revenue growth experienced with Coca-Cola's Innocent smoothies brand in Europe,
and the Coca-Cola Zero sugar soft drink, focusing on innovation will enable the brand to remain
successful and maintain its competitive advantage in an increasingly changing and complex world
(Teece, 2010).
 With Coca-Cola already taking the first steps to make their products more sustainable, an
opportunity for the organisation to consider in the future is a new business model focused on the
circular economy, whereby resources are kept in a perpetual and benign cycle as opposed being
sent to landfill or dumped after first use (Boyd, 2017).
Threats
 While Coca-Cola are attempting to improve the sustainability of their product design by utilising
recycled materials in their production of bottles, critics warn that this is a half-hearted response at
rectifying the organisations brand image when a lot of the time, it is the distinctive bottles of Coca-
Cola that wash up on the beaches (Sauven, 2017). In this case, a threat is presented to Coca-Cola
in that should consumers sense that the organisations attempt at sustainability are just
'greenwashing', as in trying to cover up their non-environmentally friendly behaviour, then a boycott
might be likely (Mahoney et al., 2013).
 While Coca-Cola continue to work on their brand, their main competitor Pepsi do the same, with
Pepsi currently working to prioritise its premium products and establish a larger ecommerce
presence; a considerably different strategy to Coca-Cola which may be more successful with the
increased visibility that ecommerce will bring the brand (Gee, 2017).