Coca-Cola in 2011: In Search of a New Model SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Strategy & Execution
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Case Study SWOT Analysis Solution
Case Study Description of Coca-Cola in 2011: In Search of a New Model
Muhtar Kent, CEO of the Coca-Cola Company, faced a critical decision in 2011 after closing a $12 billion deal to buy its troubled North America bottling operations from its biggest bottler, Coca-Cola Enterprises. The decision was prompted by several changes in the U.S. market, including the bottler's inability to make crucial investments, the growth of alternative, non-sparkling drinks, and the growing power of national accounts, such as Wal-Mart. Now that Coke owned most of its North American bottling network, Kent had to decide whether keeping the labor and capital-intensive side of the bottling business was in Coke's long-term strategic interest. If not, should he re-franchise the bottling business, again, as Coke had done in the past? Or was there a third path? For one of the most successful companies in the world over the last 100 years, Kent's answers to these questions had the potential to redefine Coke's business model for the next century.
Swot Analysis of "Coca-Cola in 2011: In Search of a New Model" written by David B. Yoffie, Renee Kim includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Bottling Coca facing as an external strategic factors. Some of the topics covered in Coca-Cola in 2011: In Search of a New Model case study are - Strategic Management Strategies, Competition, Entrepreneurship, Marketing, Mergers & acquisitions, Operations management, Strategy execution and Strategy & Execution.
Some of the macro environment factors that can be used to understand the Coca-Cola in 2011: In Search of a New Model casestudy better are - – wage bills are increasing, competitive advantages are harder to sustain because of technology dispersion, there is backlash against globalization, cloud computing is disrupting traditional business models, increasing inequality as vast percentage of new income is going to the top 1%, increasing energy prices, increasing transportation and logistics costs,
banking and financial system is disrupted by Bitcoin and other crypto currencies, supply chains are disrupted by pandemic , etc
Introduction to SWOT Analysis of Coca-Cola in 2011: In Search of a New Model
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Coca-Cola in 2011: In Search of a New Model case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Bottling Coca, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Bottling Coca operates in.
According to Harvard Business Review, 75% of the managers use SWOT analysis for various purposes such as – evaluating current scenario, strategic planning, new venture feasibility, personal growth goals, new market entry, Go To market strategies, portfolio management and strategic trade-off assessment, organizational restructuring, etc.
SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix
SWOT analysis of Coca-Cola in 2011: In Search of a New Model can be done for the following purposes –
1. Strategic planning using facts provided in Coca-Cola in 2011: In Search of a New Model case study
2. Improving business portfolio management of Bottling Coca
3. Assessing feasibility of the new initiative in Strategy & Execution field.
4. Making a Strategy & Execution topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Bottling Coca
Strengths Coca-Cola in 2011: In Search of a New Model | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Bottling Coca in Coca-Cola in 2011: In Search of a New Model Harvard Business Review case study are -
Ability to recruit top talent
– Bottling Coca is one of the leading recruiters in the industry. Managers in the Coca-Cola in 2011: In Search of a New Model are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Effective Research and Development (R&D)
– Bottling Coca has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in, as mentioned in case study Coca-Cola in 2011: In Search of a New Model - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Operational resilience
– The operational resilience strategy in the Coca-Cola in 2011: In Search of a New Model Harvard Business Review case study comprises – understanding the underlying the factors in the industry, building diversified operations across different geographies so that disruption in one part of the world doesn’t impact the overall performance of the firm, and integrating the various business operations and processes through its digital transformation drive.
Low bargaining power of suppliers
– Suppliers of Bottling Coca in the sector have low bargaining power. Coca-Cola in 2011: In Search of a New Model has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Bottling Coca to manage not only supply disruptions but also source products at highly competitive prices.
Successful track record of launching new products
– Bottling Coca has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Bottling Coca has effective processes in place that helps in exploring new product needs, doing quick pilot testing, and then launching the products quickly using its extensive distribution network.
Ability to lead change in Strategy & Execution field
– Bottling Coca is one of the leading players in its industry. Over the years it has not only transformed the business landscape in its segment but also across the whole industry. The ability to lead change has enabled Bottling Coca in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Diverse revenue streams
– Bottling Coca is present in almost all the verticals within the industry. This has provided firm in Coca-Cola in 2011: In Search of a New Model case study a diverse revenue stream that has helped it to survive disruptions such as global pandemic in Covid-19, financial disruption of 2008, and supply chain disruption of 2021.
Learning organization
- Bottling Coca is a learning organization. It has inculcated three key characters of learning organization in its processes and operations – exploration, creativity, and expansiveness. The work place at Bottling Coca is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Coca-Cola in 2011: In Search of a New Model Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Training and development
– Bottling Coca has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Coca-Cola in 2011: In Search of a New Model Harvard Business Review case study by analyzing – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
High brand equity
– Bottling Coca has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Bottling Coca to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Digital Transformation in Strategy & Execution segment
- digital transformation varies from industry to industry. For Bottling Coca digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Bottling Coca has successfully integrated the four key components of digital transformation – digital integration in processes, digital integration in marketing and customer relationship management, digital integration into the value chain, and using technology to explore new products and market opportunities.
Cross disciplinary teams
– Horizontal connected teams at the Bottling Coca are driving operational speed, building greater agility, and keeping the organization nimble to compete with new competitors. It helps are organization to ideate new ideas, and execute them swiftly in the marketplace.
Weaknesses Coca-Cola in 2011: In Search of a New Model | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Coca-Cola in 2011: In Search of a New Model are -
Low market penetration in new markets
– Outside its home market of Bottling Coca, firm in the HBR case study Coca-Cola in 2011: In Search of a New Model needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Slow decision making process
– As mentioned earlier in the report, Bottling Coca has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the industry over the last five years. Bottling Coca even though has strong showing on digital transformation primary two stages, it has struggled to capitalize the power of digital transformation in marketing efforts and new venture efforts.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Coca-Cola in 2011: In Search of a New Model HBR case study still accounts for major business revenue. This dependence on star products in has resulted into insufficient focus on developing new products, even though Bottling Coca has relatively successful track record of launching new products.
Capital Spending Reduction
– Even during the low interest decade, Bottling Coca has not been able to do capital spending to the tune of the competition. This has resulted into fewer innovations and company facing stiff competition from both existing competitors and new entrants who are disrupting the industry using digital technology.
Lack of clear differentiation of Bottling Coca products
– To increase the profitability and margins on the products, Bottling Coca needs to provide more differentiated products than what it is currently offering in the marketplace.
Skills based hiring
– The stress on hiring functional specialists at Bottling Coca has created an environment where the organization is dominated by functional specialists rather than management generalist. This has resulted into product oriented approach rather than marketing oriented approach or consumers oriented approach.
Interest costs
– Compare to the competition, Bottling Coca has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.
High dependence on existing supply chain
– The disruption in the global supply chains because of the Covid-19 pandemic and blockage of the Suez Canal illustrated the fragile nature of Bottling Coca supply chain. Even after few cautionary changes mentioned in the HBR case study - Coca-Cola in 2011: In Search of a New Model, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Bottling Coca vulnerable to further global disruptions in South East Asia.
Need for greater diversity
– Bottling Coca has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.
High operating costs
– Compare to the competitors, firm in the HBR case study Coca-Cola in 2011: In Search of a New Model has high operating costs in the. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Bottling Coca 's lucrative customers.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Coca-Cola in 2011: In Search of a New Model, is just above the industry average. Bottling Coca needs to redesign the compensation structure and incentives to increase the revenue per employees. Some of the steps that it can take are – hiring more specialists on project basis, etc.
Opportunities Coca-Cola in 2011: In Search of a New Model | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities highlighted in the Harvard Business Review case study Coca-Cola in 2011: In Search of a New Model are -
Identify volunteer opportunities
– Covid-19 has impacted working population in two ways – it has led to people soul searching about their professional choices, resulting in mass resignation. Secondly it has encouraged people to do things that they are passionate about. This has opened opportunities for businesses to build volunteer oriented socially driven projects. Bottling Coca can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Buying journey improvements
– Bottling Coca can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Coca-Cola in 2011: In Search of a New Model suggest that firm can provide automated chats to help consumers solve their own problems, provide online suggestions to get maximum out of the products and services, and help consumers to build a community where they can interact with each other to develop new features and uses.
Leveraging digital technologies
– Bottling Coca can leverage digital technologies such as artificial intelligence and machine learning to automate the production process, customer analytics to get better insights into consumer behavior, realtime digital dashboards to get better sales tracking, logistics and transportation, product tracking, etc.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Bottling Coca can build a diversified supply chain model across various countries in - South East Asia, India, and other parts of the world. This reconfiguration of global supply chain can help, as suggested in case study, Coca-Cola in 2011: In Search of a New Model, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Bottling Coca is facing challenges because of the dominance of functional experts in the organization. Coca-Cola in 2011: In Search of a New Model case study suggests that firm can utilize new technology to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Learning at scale
– Online learning technologies has now opened space for Bottling Coca to conduct training and development for its employees across the world. This will result in not only reducing the cost of training but also help employees in different part of the world to integrate with the headquarter work culture, ethos, and standards.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Bottling Coca to expand its talent hiring zone. According to McKinsey Global Institute, 20% of the high end workforce in fields such as finance, information technology, can continously work from remote local post Covid-19. This presents a really great opportunity for Bottling Coca to hire the very best people irrespective of their geographical location.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Bottling Coca can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Strategy & Execution industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Bottling Coca can take advantage of these changes in consumer behavior to build a far more efficient business model. For example consumer regular ordering of products can reduce both last mile delivery costs and market penetration costs. Bottling Coca can further use this consumer data to build better customer loyalty, provide better products and service collection, and improve the value proposition in inflationary times.
Low interest rates
– Even though inflation is raising its head in most developed economies, Bottling Coca can still utilize the low interest rates to borrow money for capital investment. Secondly it can also use the increase of government spending in infrastructure projects to get new business.
Developing new processes and practices
– Bottling Coca can develop new processes and procedures in Strategy & Execution industry using technology such as automation using artificial intelligence, real time transportation and products tracking, 3D modeling for concept development and new products pilot testing etc.
Loyalty marketing
– Bottling Coca has focused on building a highly responsive customer relationship management platform. This platform is built on in-house data and driven by analytics and artificial intelligence. The customer analytics can help the organization to fine tune its loyalty marketing efforts, increase the wallet share of the organization, reduce wastage on mainstream advertising spending, build better pricing strategies using personalization, etc.
Use of Bitcoin and other crypto currencies for transactions
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Bottling Coca in the consumer business. Now Bottling Coca can target international markets with far fewer capital restrictions requirements than the existing system.
Threats Coca-Cola in 2011: In Search of a New Model External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Coca-Cola in 2011: In Search of a New Model are -
Environmental challenges
– Bottling Coca needs to have a robust strategy against the disruptions arising from climate change and energy requirements. EU has identified it as key priority area and spending 30% of its 880 billion Euros European post Covid-19 recovery funds on green technology. Bottling Coca can take advantage of this fund but it will also bring new competitors in the Strategy & Execution industry.
Capital market disruption
– During the Covid-19, Dow Jones has touched record high. The valuations of a number of companies are way beyond their existing business model potential. This can lead to capital market correction which can put a number of suppliers, collaborators, value chain partners in great financial difficulty. It will directly impact the business of Bottling Coca.
Stagnating economy with rate increase
– Bottling Coca can face lack of demand in the market place because of Fed actions to reduce inflation. This can lead to sluggish growth in the economy, lower demands, lower investments, higher borrowing costs, and consolidation in the field.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Bottling Coca with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Instability in the European markets
– European Union markets are facing three big challenges post Covid – expanded balance sheets, Brexit related business disruption, and aggressive Russia looking to distract the existing security mechanism. Bottling Coca will face different problems in different parts of Europe. For example it will face inflationary pressures in UK, France, and Germany, balance sheet expansion and demand challenges in Southern European countries, and geopolitical instability in the Eastern Europe.
New competition
– After the dotcom bust of 2001, financial crisis of 2008-09, the business formation in US economy had declined. But in 2020 alone, there are more than 1.5 million new business applications in United States. This can lead to greater competition for Bottling Coca in the Strategy & Execution sector and impact the bottomline of the organization.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Bottling Coca can face downward pressure on margins from increasing competition from international players. The international players have stable revenue in their home market and can use those resources to penetrate prominent markets illustrated in HBR case study Coca-Cola in 2011: In Search of a New Model .
Increasing wage structure of Bottling Coca
– Post Covid-19 there is a sharp increase in the wages especially in the jobs that require interaction with people. The increasing wages can put downward pressure on the margins of Bottling Coca.
Technology acceleration in Forth Industrial Revolution
– Bottling Coca has witnessed rapid integration of technology during Covid-19 in the Strategy & Execution industry. As one of the leading players in the industry, Bottling Coca needs to keep up with the evolution of technology in the Strategy & Execution sector. According to Mckinsey study top managers believe that the adoption of technology in operations, communications is 20-25 times faster than what they planned in the beginning of 2019.
Consumer confidence and its impact on Bottling Coca demand
– There is a high probability of declining consumer confidence, given – high inflammation rate, rise of gig economy, lower job stability, increasing cost of living, higher interest rates, and aging demography. All the factors contribute to people saving higher rate of their income, resulting in lower consumer demand in the industry and other sectors.
Shortening product life cycle
– it is one of the major threat that Bottling Coca is facing in Strategy & Execution sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Backlash against dominant players
– US Congress and other legislative arms of the government are getting tough on big business especially technology companies. The digital arm of Bottling Coca business can come under increasing regulations regarding data privacy, data security, etc.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Bottling Coca in the Strategy & Execution industry. The Strategy & Execution industry is already at various protected from local competition in China, with the rise of trade war the protection levels may go up. This presents a clear threat of current business model in Chinese market.
Weighted SWOT Analysis of Coca-Cola in 2011: In Search of a New Model Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers in the HBR case study Coca-Cola in 2011: In Search of a New Model needs to zero down on the relative importance of each factor mentioned in the Strengths, Weakness, Opportunities, and Threats quadrants.
We can provide the relative importance to each factor by assigning relative weights. Weighted SWOT analysis process is a three stage process –
First stage for doing weighted SWOT analysis of the case study Coca-Cola in 2011: In Search of a New Model is to rank the strengths and weaknesses of the organization. This will help you to assess the most important strengths and weaknesses of the firm and which one of the strengths and weaknesses mentioned in the initial lists are marginal and can be left out.
Second stage for conducting weighted SWOT analysis of the Harvard case study Coca-Cola in 2011: In Search of a New Model is to give probabilities to the external strategic factors thus better understanding the opportunities and threats arising out of macro environment changes and developments.
Third stage of constructing weighted SWOT analysis of Coca-Cola in 2011: In Search of a New Model is to provide strategic recommendations includes – joining likelihood of external strategic factors such as opportunities and threats to the internal strategic factors – strengths and weaknesses. You should start with external factors as they will provide the direction of the overall industry. Secondly by joining probabilities with internal strategic factors can help the company not only strategic fit but also the most probably strategic trade-off that Bottling Coca needs to make to build a sustainable competitive advantage.
