External Factor Analysis Summary Table for Coca Cola Company

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Products such as Coke, Sprite, Fanta, and Diet Coke have been the growth drivers for Coca Cola for decades down. However, there is an opportunity for improving non-performing brands, for instance, the juice segment to increase revenue base.

Increase market share in Emerging markets

.15

3.0

0.45

Emerging markets such as India and China have a high population, but the company's extent of expansion in such markets does not reflect the current populace.

Exploit changes in consumer preferences

.05

3.5

0.175

As part of new product development, Coca Cola can evaluate the unique tastes and preferences of its consumers to ensure the products are responsive to the market needs.

Exploit economies of scale

.2

3.5

0.7

Coca Cola's financial strength is mostly affected by the cost of operations; however, the company can exploit economies of scale to reduce production cost.

Growth through acquisition

.05

1

0.05

In the past, Coca Cola has used the acquisition to increase its market share. Nonetheless, there is still a huge potential of growing global presence through acquisition.

Extensive worldwide channel

.1

2

0.2

The company has vast global channels, which could be an opportunity to introduce new product and increase market share.

Threats

Foreign exchange rate fluctuation

.1

3.5

0.35

The company has employees from different states whose remunerations are issued in local currencies. Therefore, any fluctuations in the foreign exchange rate will pose a threat to Coca Cola’s bottom line.

Shift healthy living

.05

2

.1

Currently, Coca Cola does not manufacture a wide range of healthy beverages, yet the market is in high demand for more nutritious and healthy drinks.

Competition

.1

4

0.4

The firm has been facing intense competition from major players in the industry such as Pepsi.

Legal requirements and issues

.05

3.5

0.175

In the past, several lawsuits have been filed against Coca Cola regarding ethical, healthy, and safe production. Additionally, the company is expected to provide specific information that may expose its trade secret.

Cultural differences

.05

3

0.15

The company has in the past focused on producing standardized products. However, cultural differences regarding food choices make it challenging to meet the needs of different consumers.

Availability of water

.05

.35

0.0175

The fact that water scarcity is increasing poses a threat to the company.

Total

1.0

3.1675

Concerning the EFAS analysis, Coca Cola is doing better than the other players in the soft drinks industry are. The company has realized immense growth but can improve its bottom line by exploiting the many opportunities it has. For instance, it can enhance its non-performing brands such as the juice sector to increase its revenue base. However, it has to consider the unique and dynamic customer preferences in its product development process. Coca Cola has the opportunity of expanding its presence in emerging markets such as Asia. However, it has to consider the cultural differences regarding beverage choice considering that it has a diverse pool of clients. According to Nicolopoulos, one of the significant trends in the industry is that more firms will merge and acquire new businesses to develop new product lines and introduce healthier goods. Coca Cola also has an opportunity to join or acquire other companies to improve its range of products and brand. Therefore, to maintain or enhance its bottom line, Coca Cola has to exploit the opportunities it has maximally.

Work Cited

Nicolopoulos, John. "Top 5 trends for food and beverage industry businesses in 2018 (Video)." Boston Business Journal, 29 Jan. 2018, www.bizjournals.com/boston/news/2018/01/29/top-5-trends-for-food-and-beverage-industry.html. Accessed 19 Mar. 2018.

January 19, 2024
Category:

Business

Subcategory:

Corporations Marketing

Subject area:

Company

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