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Coca Cola: Strengths, Weaknesses, Opportunities and Threats
By William Bias - October 31, 2012 | Tickers: KO, CCE, PEP | 0 Comments
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William is a member of The Motley Fool Blog Network -- entries represent the personal opinion of the blogger and are not formally edited.
Coca-Cola (NYSE: KO), a company best known for its flagship soda product, manufactures “liquid refreshment beverages” of multiple varieties. Overall the company sells its beverages either as syrups to be blended at Coca-Cola’s vast network of global bottlers or as a completed product in a container. Over the years Coca-Cola has performed well for long-time investors such as billionaire Warren Buffett; however, the past gives you 20/20 hindsight. It’s the future that should concern investors especially those who are considering an investment in Coca-Cola. I decided to evaluate this company from the angle of Strengths, Weaknesses, Opportunities and Threats.
Technology: I am not referring to Coca-Cola’s ability to make computer chips but rather the company’s definition of technology such as know-how, trade secrets such as recipes and software that aids in the logistics of getting its products to market.
Bottling Network: Coca-Cola partnerships with 275 bottling companies allow it to distribute products all over the world. The network also allows companies to cater to varying consumer tastes in different cultures, regions and countries. For example, if a local market prefers tea then the local bottler can mix and package the beverage for distribution. It has relationships with local retailers and final consumers to make that happen.
More bottling: Coca-Cola’s gross profit margins declined from 64% in 2009 to 60% in 2011.
Concentrates, which until 2010 comprised the majority of Coca-Cola’s revenue, commanded a higher margin....