Coca-Cola Zero Sugar: The Value Cycle During a Relaunch SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Global Business
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Coca-Cola Zero Sugar: The Value Cycle During a Relaunch
A 2016 consumer survey in the United Kingdom revealed that five out of 10 people did not know that Coca-Cola Zero (Coke Zero) contained no sugar. Many respondents also expected Coke Zero to taste more like Coca-Cola Classic, but found the taste not similar enough. Therefore, Coca-Cola relaunched the product with an ambitious multimillion-dollar marketing campaign that followed a three-dimension value management cycle encompassing value creation, value communication, and value capture. To successfully relaunch Coke Zero and achieve the company's objectives, Coca-Cola would need to both anticipate the challenges in each of these three phases and manage them effectively. Gaganpreet Singh is affiliated with National Institute of Industrial Engineering. Sandeep Puri is affiliated with Institute of Management Technology, Ghaziabad. Sharad Sarin is affiliated with XLRI-Xavier School of Management.
Swot Analysis of "Coca-Cola Zero Sugar: The Value Cycle During a Relaunch" written by Gaganpreet Singh, Sandeep Puri, Sharad Sarin includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Coca Cola facing as an external strategic factors. Some of the topics covered in Coca-Cola Zero Sugar: The Value Cycle During a Relaunch case study are - Strategic Management Strategies, Manufacturing, Pricing and Global Business.
Some of the macro environment factors that can be used to understand the Coca-Cola Zero Sugar: The Value Cycle During a Relaunch casestudy better are - – increasing commodity prices, supply chains are disrupted by pandemic , increasing inequality as vast percentage of new income is going to the top 1%, geopolitical disruptions, increasing household debt because of falling income levels, cloud computing is disrupting traditional business models, central banks are concerned over increasing inflation,
there is increasing trade war between United States & China, there is backlash against globalization, etc
Introduction to SWOT Analysis of Coca-Cola Zero Sugar: The Value Cycle During a Relaunch
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Coca-Cola Zero Sugar: The Value Cycle During a Relaunch case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Coca Cola, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Coca Cola 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 Zero Sugar: The Value Cycle During a Relaunch can be done for the following purposes –
1. Strategic planning using facts provided in Coca-Cola Zero Sugar: The Value Cycle During a Relaunch case study
2. Improving business portfolio management of Coca Cola
3. Assessing feasibility of the new initiative in Global Business field.
4. Making a Global Business topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Coca Cola
Strengths Coca-Cola Zero Sugar: The Value Cycle During a Relaunch | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Coca Cola in Coca-Cola Zero Sugar: The Value Cycle During a Relaunch Harvard Business Review case study are -
Effective Research and Development (R&D)
– Coca Cola 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 Zero Sugar: The Value Cycle During a Relaunch - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Cross disciplinary teams
– Horizontal connected teams at the Coca Cola 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.
Training and development
– Coca Cola has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Coca-Cola Zero Sugar: The Value Cycle During a Relaunch 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 switching costs
– The high switching costs that Coca Cola has built up over years in its products and services combo offer has resulted in high retention of customers, lower marketing costs, and greater ability of the firm to focus on its customers.
Operational resilience
– The operational resilience strategy in the Coca-Cola Zero Sugar: The Value Cycle During a Relaunch 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 Coca Cola in the sector have low bargaining power. Coca-Cola Zero Sugar: The Value Cycle During a Relaunch has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Coca Cola to manage not only supply disruptions but also source products at highly competitive prices.
Analytics focus
– Coca Cola is putting a lot of focus on utilizing the power of analytics in business decision making. This has put it among the leading players in the industry. The technology infrastructure suggested by Gaganpreet Singh, Sandeep Puri, Sharad Sarin can also help it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.
Highly skilled collaborators
– Coca Cola has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive segment. Secondly the value chain collaborators of the firm in Coca-Cola Zero Sugar: The Value Cycle During a Relaunch HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Sustainable margins compare to other players in Global Business industry
– Coca-Cola Zero Sugar: The Value Cycle During a Relaunch firm has clearly differentiated products in the market place. This has enabled Coca Cola to fetch slight price premium compare to the competitors in the Global Business industry. The sustainable margins have also helped Coca Cola to invest into research and development (R&D) and innovation.
Organizational Resilience of Coca Cola
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Coca Cola does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Ability to lead change in Global Business field
– Coca Cola 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 Coca Cola in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Successful track record of launching new products
– Coca Cola has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Coca Cola 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.
Weaknesses Coca-Cola Zero Sugar: The Value Cycle During a Relaunch | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Coca-Cola Zero Sugar: The Value Cycle During a Relaunch are -
Workers concerns about automation
– As automation is fast increasing in the segment, Coca Cola needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
Interest costs
– Compare to the competition, Coca Cola 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.
No frontier risks strategy
– After analyzing the HBR case study Coca-Cola Zero Sugar: The Value Cycle During a Relaunch, it seems that company is thinking about the frontier risks that can impact Global Business strategy. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.
Low market penetration in new markets
– Outside its home market of Coca Cola, firm in the HBR case study Coca-Cola Zero Sugar: The Value Cycle During a Relaunch needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Capital Spending Reduction
– Even during the low interest decade, Coca Cola 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.
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 Coca Cola supply chain. Even after few cautionary changes mentioned in the HBR case study - Coca-Cola Zero Sugar: The Value Cycle During a Relaunch, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Coca Cola vulnerable to further global disruptions in South East Asia.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Coca-Cola Zero Sugar: The Value Cycle During a Relaunch, is just above the industry average. Coca Cola 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.
Increasing silos among functional specialists
– The organizational structure of Coca Cola is dominated by functional specialists. It is not different from other players in the Global Business segment. Coca Cola needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Coca Cola to focus more on services rather than just following the product oriented approach.
Lack of clear differentiation of Coca Cola products
– To increase the profitability and margins on the products, Coca Cola needs to provide more differentiated products than what it is currently offering in the marketplace.
Slow to strategic competitive environment developments
– As Coca-Cola Zero Sugar: The Value Cycle During a Relaunch HBR case study mentions - Coca Cola takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the industry in last five years.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Coca-Cola Zero Sugar: The Value Cycle During a Relaunch, in the dynamic environment Coca Cola has struggled to respond to the nimble upstart competition. Coca Cola has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Opportunities Coca-Cola Zero Sugar: The Value Cycle During a Relaunch | 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 Zero Sugar: The Value Cycle During a Relaunch are -
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 Coca Cola in the consumer business. Now Coca Cola can target international markets with far fewer capital restrictions requirements than the existing system.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Coca Cola can use these opportunities to build new business models that can help the communities that Coca Cola operates in. Secondly it can use opportunities from government spending in Global Business sector.
Creating value in data economy
– The success of analytics program of Coca Cola has opened avenues for new revenue streams for the organization in the industry. This can help Coca Cola to build a more holistic ecosystem as suggested in the Coca-Cola Zero Sugar: The Value Cycle During a Relaunch case study. Coca Cola can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Using analytics as competitive advantage
– Coca Cola has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in the sector. This continuous investment in analytics has enabled, as illustrated in the Harvard case study Coca-Cola Zero Sugar: The Value Cycle During a Relaunch - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Coca Cola to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Learning at scale
– Online learning technologies has now opened space for Coca Cola 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Coca Cola 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 Zero Sugar: The Value Cycle During a Relaunch, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Better consumer reach
– The expansion of the 5G network will help Coca Cola to increase its market reach. Coca Cola will be able to reach out to new customers. Secondly 5G will also provide technology framework to build new tools and products that can help more immersive consumer experience and faster consumer journey.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Global Business industry, but it has also influenced the consumer preferences. Coca Cola can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Loyalty marketing
– Coca Cola 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Coca Cola in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Global Business segment, and it will provide faster access to the consumers.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Coca Cola is facing challenges because of the dominance of functional experts in the organization. Coca-Cola Zero Sugar: The Value Cycle During a Relaunch 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.
Building a culture of innovation
– managers at Coca Cola can make experimentation a productive activity and build a culture of innovation using approaches such as – mining transaction data, A/B testing of websites and selling platforms, engaging potential customers over various needs, and building on small ideas in the Global Business segment.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Coca Cola 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 Coca Cola to hire the very best people irrespective of their geographical location.
Threats Coca-Cola Zero Sugar: The Value Cycle During a Relaunch 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 Zero Sugar: The Value Cycle During a Relaunch are -
Aging population
– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.
Consumer confidence and its impact on Coca Cola 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.
Easy access to finance
– Easy access to finance in Global Business field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Coca Cola can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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 Coca Cola.
Regulatory challenges
– Coca Cola needs to prepare for regulatory challenges as consumer protection groups and other pressure groups are vigorously advocating for more regulations on big business - to reduce inequality, to create a level playing field, to product data privacy and consumer privacy, to reduce the influence of big money on democratic institutions, etc. This can lead to significant changes in the Global Business industry regulations.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Coca Cola 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 Zero Sugar: The Value Cycle During a Relaunch .
Increasing wage structure of Coca Cola
– 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 Coca Cola.
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. Coca Cola 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Coca Cola with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Coca-Cola Zero Sugar: The Value Cycle During a Relaunch, Coca Cola may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Global Business .
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 Coca Cola in the Global Business sector and impact the bottomline of the organization.
Technology acceleration in Forth Industrial Revolution
– Coca Cola has witnessed rapid integration of technology during Covid-19 in the Global Business industry. As one of the leading players in the industry, Coca Cola needs to keep up with the evolution of technology in the Global Business 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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Coca Cola in the Global Business industry. The Global Business 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 Zero Sugar: The Value Cycle During a Relaunch 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 Zero Sugar: The Value Cycle During a Relaunch 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 Zero Sugar: The Value Cycle During a Relaunch 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 Zero Sugar: The Value Cycle During a Relaunch 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 Zero Sugar: The Value Cycle During a Relaunch 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 Coca Cola needs to make to build a sustainable competitive advantage.