Key Internal Factors Weight Rating Weighted

Score

Strengths

1. Broad variety of products. 0.15 4 0.60

2. Coke receives annual awards as the favorite drink 0.07 3 0.21

in South Africa.
3. Coke’s net income and total revenue increase 4.3 0.08 3 0.24
percent.
4. Coke products comprise 70 percent of the sodas 0.12 3 0.36
drunk in Mexico.
5. Geographical expansion. 0.14 4 0.56

Weaknesses

6. Discontinued many products. 0.06 2 0.12

7. Products restricted to beverages. 0.13 1 0.13
8. Declining coke sales in East and South Asia and 0.08 2 0.16
Pacific Rim.
9. Coke’s net income and total revenue are only 0.07 2 0.14
$5.08B and $24.09B compared to PepsiCo which
are $5.63B and $35.14B.
10. Some ingredients in Coke products may be 0.10 1 0.10
hazardous to one’s health and regulation may soon
require warning labels.

Total 1.00 2.62

 Internal Factor Evaluation (IFE) Matrix is a strategic-management tool
summarizes and evaluates the major strengths and weaknesses in the functional areas of a
business, and it also provides a basis for identifying and evaluating relationships among
those areas. The functional areas may include management, marketing,
finance/accounting, production/operations, research and development and management
information systems.

Strengths
(1) Weight: 0.15 Rate: 4
Noted that, the most important factor of Coca-Cola Company to be successful in
the beverage industry is “broad variety of products”. Coca Cola Company (Coke) is the
world’s largest beverage company. Along with Coca-Cola which recognize as the world’s
most valuable brand, Coca-Cola Company market a portfolio of more than 3000 beverage
products with four of the world’s top five nonalcoholic beverage brands, inclusive of Diet
Coke, Sprite, and Fanta and a wide range of other beverages, including waters, juices and
juice drinks, sport drinks, energy drinks, teas and coffee. Through the world's largest
beverage distribution system, consumers in more than 200 countries enjoy the Company's
beverages at a rate exceeding 1.4 billion servings each day.
Although Coca Cola Company is the world’s largest beverage company, but it
should always expand its business continuously to maintain its strength as the largest
beverage company. Coke should always focus on beverage creation and marketing in
order to meet the diverse and ever-changing beverage needs and desires of the consumers
around the world. Frequently review their market performance play a vital role too. This
is because they can recognize which brands are performing well and which are not and
hence, they can implement strategy planning to keep their strengths ahead and minimize
profit lost. For instance, those receive good feedbacks form consumers, Coke can
consider to extend the product line. On the contrary, those did not perform well should be
reform or just drag out from the market.
(2) Weight: 0.13 Rate: 4
As the Africa’s largest private-sector employer with 55000 employees, coke
receives annual awards as the favorite drink in South Africa. South Africa is by far coke’s
largest market in Africa. It makes up about 40% of the company’s African revenue.
Despite Africa’s poverty, raging civil wars and incredible health problems, Coke is sold
throughout the continent and able to position itself as the South africa’s most admired
brand name. Thus, what makes Coke so successful in South Africa? According to an
article on brandchannel.com title Painting South Africa Red, Ron Irwin commented that
Coke’s success in Africa is due to its savvy advertising as well as its ubiquitous
involvement in local community life. Coke not only installed the Coke sign in every shop
and roadside stand to attract city dwellers sight but also took the initiative to target poorer
South Africans in rural areas too. This action has help Coke to cultivate its company
image, reputation and respect of Africans.
 Since the ad campaign in Africa is so success, Coke should produce more creative
and interactive ad campaign to promote its products effectively. The most important
element is to show and relate Coke with happy, enjoy and meaningful moments with the
consumers. Other than that, Coke should partner with local company in order to produce
the products which is more meets the demands and needs of the market. Also,
sponsorship to local sports games, celebrities and school can help Coke to build it brand
image meanwhile, connecting with more people.
(3) Weight: 0.13 Rate: 4
Coke’s revenue and net income are both increase by 4.3 percent. The worldwide
business expansion contributed a big portion of profits to the company. All of the
operating divisions have reported a good performance and result in terms of revenue and
operating income. One of the reasons of the increases of revenue and net income are
because Coke has implemented its marketing strategies effectively. This growth in worth
and in terms of market share has been attributed to advertisement strategies that the
company has adopted over time. For instance, Coke is periodically launching new ad
campaign to link consumer’s daily life with Coke has receive a positive feedbacks from
consumers.
Although Coke is performing well over the years, they still have to continually do
research and development in terms of their brands and products. For instance, the
extension of product’s line and/ or adding new brand is important. Furthermore, Coke did
not emphasis more in the market segmentation. Therefore, it is time for Coke to
implement market segmentation (demographically, social class, culture and etc.) to
expand and target more consumers.
(4)Weight: 0.12 Rate: 3
Another important strength of Coca Cola Company is Coke products comprise 70
percent of the sodas drunk in Mexico. Mexico is the largest consumer of Coca Cola per
capita in the world. It is just behind the United Stated in overall consumption. Why does
Coke sell so well in Mexico? High sales are based on a combination of consumption
patterns - availability, cost, safety, energy, social prestige, integration with local culture,
appeal, and addiction – that are exploited and incorporated into marketing strategies by
cola companies.
In the United States, Coca-Cola is made with cheap corn syrup but in Mexico
Coke is still made with cane sugar. Experiences of taste have always been at the heart of
the beverage business. Coca Cola, as the world’s largest beverage company should
always offer the distinctive buying experience towards customers. Distinctive buying
experience should include the quality of the product. For continue maintain its strength as
the world’s largest beverage company, Coca Cola should always maintain and enhanced
its product quality. Product quality will affect the purchase intention of the consumers.
(5) Weight: 0.09 Rate: 3
Coca-Cola Company has performing well in their geographic expansion too. Coca
Cola’s operating segments include Africa, East and South East Asia and Pacific Rim,
European Union, Latin America, North America, North Asia Eurasia, and the Middle
East. During year 1893, Coca Cola is distributed in United State only. However, Coca
Cola is now employing about 71,000 people worldwide in over 200 countries. It shows its
power of geographical expansion that allowed Coke to serve a large and diversity
consumers world widely.
Coca-Cola can continue expanding its business and promote its products to even
every small and poor country. Coke should create a concept that wherever there is a
human, there will be Coke’s products available there. It is vital that Coke understand
different country may have different need and demands. Therefore, they may put efforts
in the availability of new products in every region, distinctive packaging and price and
etc.

Weaknesses
(6) Weight: 0.06 Rate: 2
Discontinued products mean stop to produce the products. Coca Cola Company
always discontinued many of its products. For example, Coca Cola has discontinued
its many products after few years of launching such as New Coke, Coca Cola with
Lemon, Coca Cola with Lime and Coca-Cola Blak. Coca Cola Company discontinued
of those products may due to the bad sales of them and also bad image of them.
However, even those products do not grab good sales for increase coca cola revenues,
but at the same time, there will be the loyal customer who prefers those products. For
example, when Coca Cola Company stop its product line for Cherry Coke, consumers
that prefer the Cherry Coke flavor start to complaint in the social media, Facebook.
Besides that, Coca Cola Blak, where the Coke Company spent two years developing
Coca-Cola Blak in hopes of making inroads into consumers' growing taste for coffee
and a booming premium beverage market, has discontinued U.S. sales of the blended
Coca-Cola and coffee concoction it introduced 17 months.
For cover this problem, Coca Cola Company should have a deep research and
survey before they launch a new products. Company should target and segment the
customers, and make sure there will be the potential customer and expectation sales.
Furthermore, Company should not discontinue the products easily; this will bring the bad
image of the company.
(7) Weight: 0.07 Rate: 1
Coca Cola Company is the world’s largest beverage company. At the same time,
it faced the problem that products restricted to beverages only. Coca Cola Company’s
products include Coca-Cola, Diet Coke, Sprite, and Fanta. Coke Produces about 400
brands consisting of over 3000 beverage products, such as water, juice and juice drinks,
sport drinks, energy drinks, teas and coffee. By comparing to its major competitor,
PepsiCo, PepsiCo did not focus on it beverage business but also enter the snack market as
well. it show that PepsiCo is very successful as they obtain 60 percent of its revenues
from its snack division.
As the Coca Cola Company becoming stable in the beverage industry, it should
expand its business to other industry. For example, Coke can enter the food and snack
industry which its competitor, PepsiCo had involved itself since earlier. In order to
successfully enter the new division, Coke should strive to obtain talented marketing
people and nutritionists to help them. Otherwise, Coke can apply partnership with other
company to produce new brands of foods and snacks. By the helping of other companies’
techniques and knowledge, Coke can save its cost and time to explore the new market.

(8) Weight: 0.09 Rate: 2

Another problem that Coke faced is “Declining coke sales in East and South Asia
and Pacific Rim”. The main losses for Coke will most likely come from India and
Philippines. This is not to say that this loss will be substantial compared to other
segments of loss. The main reason for loss in East and South Asia and Pacific Rim could
be due to the affordability and availability of Coke products. This is what hurt the
business in the Philippines. The Coca-Cola Company has been involved in a number of
crime controversies and lawsuits related to its relationship with human rights violations
and other alleged unethical practices both in India and Philippines.
Those issues has create crisis for Coke as the sales are continually drop and
Coke’s brand image has been ruined. First and foremost, is to reduce the tension and
panic of consumers by publicize the production process to assure that the process is meet
the legal requirements and is safe to drink. Then, launch a series of promotions and ad
campaigns to gain consumers’ confidence. Also, improve their technologies in production
process and showing that Coke is an environment-friendly company.
(9) Weight: 0.05 Rate: 2
Coke’s net income and total revenue are only $5.08B and $24.09B compared to
PepsiCo is $5.63B and $35.14B. It is noted that, PepsiCo currently generates over 30%
more revenues than Coca Cola. Analysts also expect that this gap will widen further in
2011 while PepsiCo sales grow to more than double Coca Cola’s revenue growth. It’s
also important to note that there is less risk to Pepsi’s revenues given their more
diversified product portfolio. This will definitely weaken the Coke market power.
Despite Coke is recognized as the world valuable brand, its revenue and net
income still cannot outrun PepsiCo. Therefore, it’s time for Coke to look into the problem
and solve it. Apparently, PepsiCo revenue and net income is bigger than Coke is because
PepsiCo is not all about drinks. Some 60 percent of its profits come from its snack
business where Pepsi has a virtual monopoly, with no competition from Coke. Since
Coke is competing intensively in the beverage market, Coke should reconsider about
enter into snack market too as PepsiCo has earned lot of profit from that particular
market.
10) Weight: 0.05 Rate: 1
Some ingredients in Coke products may be hazardous to one’s health and
regulations may soon require warning labels. The rumors said that Coca-cola consist the
ingredient of phosphoric acid and citric acid that may affects body functions. If the
warning label is really implement, it must bring a certain effect to the product’s sales as it
will create panic and scare the consumers from buying Coke.
What can Coke to do is try their best to replace those hazardous ingredients with
healthier ingredients. Otherwise, try to minimize the uses of the ingredients may help to
ease the panic of consumers. Apart from that, Coke can also invite scientists to determine
whether the ingredients are really hazardous to human body.