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Weaknesses
In SWOT Analysis, the alphabet W represents the shortcut for the term o f weaknesses . It is define as internal factors or characteristics that place the business or project of an organization at a disadvantage relative to others. There are several weaknesses that hide under the Coca-Cola Company.
The first weakness is the Coca-Cola Company only emphasize on carbonated d rinks. drinks . The business is still focusing on selling Coke, Fanta, Sprite and other carbonated drinks. This is not a good strategy because it works in short term only as consumption of carbonated drinks will grow in emerging economies. For example, ex ample, this strategy may be prove weak as the world is fighting obesity and is moving towards consuming c onsuming healthier food and drinks although the company has come out with low or no calories carbonated drinks.
The second weakness is the Coca-Cola Company is in high debt level due to acquisition. For example, as a result of the CCE transaction, the Coca-Cola Company Compan y was assumed has approximately $7.9 billion of debt from CCE. As a result of the substantial increase in our indebtedness, the company borrowing costs and interest i nterest expense in future periods will be higher than in the past. The increased indebtedness and higher borrowing costs and interest expense may reduce amounts available for dividends, stock repurchases, capital expenditures and acquisitions, and may cause rating agencies to downgrade the company debt, all of which could have adverse effects on the company future financial performance.
The Coca-Cola Company also facing the negative publicity , which is the third weakness. For instance, since water is the main ingredient in substantially all of the company products, the firm is often criticized for the high water consumption issue due to water is a limited resource in many parts of the world. As demand for water continues to increase around the world, and as water becomes scarcer and the quality of available water deteriorates, their system may incur increasing production costs or face capacity constraints which could adversely affect the company profitability or net operating revenues in the long run.
Water Scarcer
The last weakness is the brand failures or many brands with insignificant amount of revenues by the Coca-Cola Company. For example, the Coca Cola Compan y currently sells
more than 500 brands but only 17 of the brands result in more than $1 billion sales such as CocaCola, Sprite and others. Moreover, the firm’s success of introducing new drinks is weak. Man y of its introduction result in failures such as C2 drink.
