Coca-Cola SWOT and PEST analysis Essay
In today’s society, there are many different firms that make up the business world. One company in particular that is of interest to me is Coca-Cola. Coca-Cola is a global business that operates on a local sale in every community that is does business in. In order to fully understand the specifics of this company, one must conduct a thorough analysis of the company by using the SWOT and PEST methods. To begin with, the first part of the SWOT analysis includes the strengths and weaknesses of the company.
The first strength of this company is that is it geographically diverse. This basically means that the company is spread across a wide variety of regions of the world. This helps to protect the company from shocks in any one part of the business. Another thing to consider is that different places in the world have different characteristics which give the company a lower risk of loss. Another strength that this company has is that it has loyal customers that keep coming back to buy their product.
They have a great reputation and coke products are a great source of supply for many events around the world. On the other hand, the company does have some weaknesses that need to be considered such as the amount of concentration that they put on their products. Coca-Cola is a multi-billion corporation and makes accumulates large amounts of revenue each year but the problem is that they are solely focused on the few products that they make and receives revenue from only those one or two products. They could be even more successful if they expanded their production. Moving on, the next segment of the SWOT analysis consists of the company’s opportunities and threats. Coca-Cola along with many other firms have many new opportunities to become a better corporation that they still have yet to realize. One opportunity that Coca-Cola has is to expand its company more than it already is. Expanding to more regions of the world will result in more income and revenue for the company and will benefit the company overall.
Expansion of the company will also lead to a larger customer base which would make the company more popular. In addition, the expansion of the company would lead to better financial stability because some regions might be able to make more profit than other regions so that they can pick up the slack for them. On the other hand, Coca-Cola does face some threats that could potentially harm the company such as competition with other companies and health related factors of Coca-Cola products. Coca-Cola is a very popular company, but it is not the only one out in the market right now. There are other companies that compete with them such as Gatorade. Gatorade isn’t quite as big as Coca-Cola, but there is still definitely a big amount of competition between these firms because both companies are doing whatever they can to appeal to the customer the best that they can in order to maximize their profits. Another threat to Coca-Cola are their health related factors that could potentially lower their profits. Many families are striving to be as healthy as possible by not drinking coke products. Many people are worried that coke products have too much caffeine and sugar in them.
This is a problem for the company because they are missing out on all of that lost profit from the people that don’t buy their product. The bottom line is that Coca-Cola must find a way to appeal to their customers without them focusing on the bad health related factors of their products. The next method that I used to analyze the company was the PEST analysis. The first two parts of this method consist of the companies political and economic factors. To begin with, Coca-Cola has number of political factors that affect its business. One of the biggest political factors that can affect this company is when there are changes in laws and regulations that the company can’t control. This includes a number of different restrictions such as changes in accounting, taxation requirements, and new environmental laws. All of these things affect the political background of the company because all of them can change the overall atmosphere of the business.
Another political factor that affects this business is that the Food and Drug Administration along with the federal government have control over the manufacturing of the products that coke makes. Also, there are many different kinds of economic factors that affect this company. One of the greatest examples of this is what occurred in 2001. There was a recession which influenced the company to conduct their operations as smoothly as possible but since the economy was being very aggressive it had estimated to have a positive growth in the next year. This is why Coca-Cola is able to borrow capital and invest in other products in the present day because the interest rates were lowered. Next, the other part of the PEST analysis includes the social and technological factors that affect the company. Many people these days are aiming towards a healthier lifestyle and cutting out coke products from their diet. This can be a problem for the company because people will tell other people and their friends to cut coke products out of their lives which loses the company money. Moving on, there are some technological factors that have a great impact on the company’s performance.
First off, advertising and marketing techniques are what can make or break a company. Coca-Cola can get ahead of the game by using the most up to date methods of technology when it comes to advertising their products. Another important factor to consider is the material that they use for their products. By switching to canned and plastic bottles they are able to increase their profits by making it easier for the customer to buy and handle. In conclusion, Coca-Cola is a very successful company that is well respected across the world. We are able to better understand the company by analyzing them through the SWOT and PEST methods. Coca-Cola is a large corporation that makes billions of dollars and will continue to keep growing in the future.