Coca-Cola market decline and competitive challenges

Coca Cola: Gone Flat

The future of Coca-Cola seems quite bleak from where it stands today. The company has recently asked former executive E. Neville Isdell to step out of retirement and come back to the organization so it can progress in the market. Unfortunately, the article depicts Coca-Cola as a company that still relies on marketing itself as a carbonated soda brand, and refusing to branch outside like PepsiCo has and continues to do. It seems the regression of Coca-Cola is because it refuses to evolve and morph its brand name to involve other products like food, tea, and other grocery items that would help the company grow. The company is fixated on still being a carbonated drink company with limited changes, and as Isdell said, "we are not talking about radical change in strategy…we are talking about a dramatic change in execution." Isdell plans to involve itself in the launching of an energy drink in January, but still keeping within the realm of beverage because he recognizes people are moving away from soda to other drinks. Although PepsiCo is dominating in various aspects of the market like vitamin waters and teas and snacks, Coca-Cola is still a respected brand that generates an excess amount of profits, for example, $5 billion dollars in 2004. Despite the want and desire in keeping the old ways, Coca-Cola are manufacturing new methods in keeping the brand with respect to carbonated drinks as much as possible, with hopes of success and retaining consumer loyalty.

The SWOT analysis includes the strengths, weaknesses, opportunities, and techniques in revitalizing the Coca-Cola organization. The strengths are the company is still one of the most powerful brands recognized today, and it still generates numerous amounts of profit a year; still a "cash cow." Despite its conservative strategies and methods in terms of diversifying the brand's market, they are heading towards the right direction in terms of expanding beverage options. Isdell has and is looking into different drinks, aside from soda, such as the energy drink launched in January known as Full Throttle. Despite the downward spiral of the Coca-Cola company in terms of ambition and creativity, the brand still has numerous loyalists who continue to enjoy the carbonated beverage, and believe in the product. An additional strength is the organization's classic soda makes up 82% of market sales on a worldwide level, which is more than Pepsi. Due to the experience Isdell has prior with Coca-Cola, he brings to the table experience and innovation, which he showed in the 1980s. No company is without any weaknesses and the Coca-Cola company has quite a number. First, it is the unwillingness of the organization to modify the way it conducts business and its beliefs to cater to the consumers. The company refuses to bend to the consumers need for other things than soda, like coffee and tea and juice. The model of Coca-Cola needs to be rethought and altered but the company refuses to do that. The organization refuses to progress as a company like PepsiCo has to include snacks and other related foods other than soda, so Coca-Cola fails to be as valuable as its rivals. The opportunities of Coca-Cola company include Isdell looking for new beverage options that consumer demand. However, Isdell strongly believes there's still growth for carbonated drinks. The threats the company may face are first, because of the poor relationship Coca-Cola has with its bottlers, it may impede progress. It was in the late 1990s when Ivester has imposed a tremendous price increase on its bottlers in order to sustain a profit. The bottlers were outraged and refused to carry some of Coca-Cola's new beverages. Although relations have improved, the relation between bottlers and the company has never quite reached what it was before. Therefore, this is a threat when Coca-Cola is looking to expand and promote their drinks but bottlers are skeptical and refuse to do so. Another threat is although the efforts of Coca-Cola's willingness to explore new beverage markets, they are a little late to the game. PepsiCo has begun such expansion years before and has dominated the market, and has proven to be a dominant force. In the realm of sports drinks like Gatorade, PepsiCo is the winner for having a hold of 81% of the market share while Coca-Cola's Powerade only commands a 17% share of the market. In terms of energy drinks, PepsiCo owns Red Bull and has a 58.5 share of the market vs. Coca-Cola's 2.8% share. Furthermore, another threat is the intense involvement of Coca-Cola's board members and their denial to enter other food markets. They are the threat that sits on the company and causes the organization to regress while other companies are progressing. They threaten the livelihood and advancement of Coca-Cola because as the taste and interest of consumers move on, the company is refusing to do so.