Coca-Cola European Partners SWOT Analysis / Matrix

Essays, Term Papers & Research Papers

SWOT analysis is a vital strategic planning tool that can be used by Coca-Cola European Partners managers to do a situational analysis of the company . It is an important technique to evalauate the present Strengths (S), Weakness (W), Opportunities (O) & Threats (T) Coca-Cola European Partners is facing in its current business environment.

The Coca-Cola European Partners is one of the leading organizatations in its industry. Coca-Cola European Partners maintains its prominent position in market by carefully analyzing and reviewing the SWOT analysis.  SWOT analysis an immensenly interactive process and requires effective coordination among various departments within the organization such as – marketing, finance, operations, management information systems and strategic planning.

The SWOT Analysis framework enables an organization to identify the internal strategic factors such as -strengths and weaknesses, & external strategic factors such as - opportunities and threats. It leads to a 2X2 matrix – also known as SWOT Matrix.

The Strengths-Weaknesses-Opportunities-Threats (SWOT) Analysis / Matrix enables the managers of the Coca-Cola European Partners to develop four types of strategies:

• SO (strengths-opportunities) Strategies
• WO (weaknesses-opportunities) Strategies
• ST (strengths-threats) Strategies
•  WT (weaknesses-threats) Strategies

SWOT Matrix Strategies Objective

The primary purpose of SWOT matrix is to identify the strategies that an organization can utilize to exploit external opportunities, counter threats, and build on & protect Coca-Cola European Partners strengths, and eradicate its weaknesses.

Step by Step Guide to Coca-Cola European Partners SWOT Analysis

Strengths of Coca-Cola European Partners – Internal Strategic Factors

As one of the leading organizations in its industry, Coca-Cola European Partners has numerous strengths that enable it to thrive in the market place. These strengths not only help it to protect the market share in existing markets but also help in penetrating new markets. Based on Fern Fort University extensive research – some of the strengths of Coca-Cola European Partners are –

• Highly skilled workforce through successful training and learning programs. Coca-Cola European Partners is investing huge resources in training and development of its employees resulting in a workforce that is not only highly skilled but also motivated to achieve more.
• Highly successful at Go To Market strategies for its products.
• Strong Free Cash Flow – Coca-Cola European Partners has strong free cash flows that provide resources in the hand of the company to expand into new projects.
• Strong Brand Portfolio – Over the years Coca-Cola European Partners has invested in building a strong brand portfolio. The SWOT analysis of Coca-Cola European Partners just underlines this fact. This brand portfolio can be extremely useful if the organization wants to expand into new product categories.
• Successful track record of developing new products – product innovation.
• Automation of activities brought consistency of quality to Coca-Cola European Partners products and has enabled the company to scale up and scale down based on the demand conditions in the market.
• Successful track record of integrating complimentary firms through mergers & acquisition. It has successfully integrated number of technology companies in the past few years to streamline its operations and to build a reliable supply chain.
• Superb Performance in New Markets – Coca-Cola European Partners has built expertise at entering new markets and making success of them. The expansion has helped the organization to build new revenue stream and diversify the economic cycle risk in the markets it operates in.

Weakness of Coca-Cola European Partners – Internal Strategic Factors

Weakness are the areas where Coca-Cola European Partners can improve upon. Strategy is about making choices and weakness are the areas where an organization can improve using SWOT analysis and build on its competitive advantage and strategic positioning.

• High attrition rate in work force – compare to other organizations in the industry Coca-Cola European Partners has a higher attrition rate and have to spend a lot more compare to its competitors on training and development of its employees.
• The company has not being able to tackle the challenges present by the new entrants in the segment and has lost small market share in the niche categories. Coca-Cola European Partners has to build internal feedback mechanism directly from sales team on ground to counter these challenges.
• The profitability ratio and Net Contribution % of Coca-Cola European Partners are below the industry average.
• Limited success outside core business – Even though Coca-Cola European Partners is one of the leading organizations in its industry it has faced challenges in moving to other product segments with its present culture.
• Not very good at product demand forecasting leading to higher rate of missed opportunities compare to its competitors. One of the reason why the days inventory is high compare to its competitors is that Coca-Cola European Partners is not very good at demand forecasting thus end up keeping higher inventory both in-house and in channel.
• Investment in Research and Development is below the fastest growing players in the industry. Even though Coca-Cola European Partners is spending above the industry average on Research and Development, it has not been able to compete with the leading players in the industry in terms of innovation. It has come across as a mature firm looking forward to bring out products based on tested features in the market.
• The marketing of the products left a lot to be desired. Even though the product is a success in terms of sale but its positioning and unique selling proposition is not clearly defined which can lead to the attacks in this segment from the competitors.

Opportunities for Coca-Cola European Partners – External Strategic Factors

• New environmental policies – The new opportunities will create a level playing field for all the players in the industry. It represent a great opportunity for Coca-Cola European Partners to drive home its advantage in new technology and gain market share in the new product category.
• The market development will lead to dilution of competitor’s advantage and enable Coca-Cola European Partners to increase its competitiveness compare to the other competitors.
• Decreasing cost of transportation because of lower shipping prices can also bring down the cost of Coca-Cola European Partners’s products thus providing an opportunity to the company - either to boost its profitability or pass on the benefits to the customers to gain market share.
• Lower inflation rate – The low inflation rate bring more stability in the market, enable credit at lower interest rate to the customers of Coca-Cola European Partners.
• Government green drive also opens an opportunity for procurement of Coca-Cola European Partners products by the state as well as federal government contractors.
• Stable free cash flow provides opportunities to invest in adjacent product segments. With more cash in bank the company can invest in new technologies as well as in new products segments. This should open a window of opportunity for Coca-Cola European Partners in other product categories.
• The new technology provides an opportunity to Coca-Cola European Partners to practices differentiated pricing strategy in the new market. It will enable the firm to maintain its loyal customers with great service and lure new customers through other value oriented propositions.
• Opening up of new markets because of government agreement – the adoption of new technology standard and government free trade agreement has provided Coca-Cola European Partners an opportunity to enter a new emerging market.

Threats Coca-Cola European Partners Facing - External Strategic Factors

• Rising raw material can pose a threat to the Coca-Cola European Partners profitability.
• Shortage of skilled workforce in certain global market represents a threat to steady growth of profits for Coca-Cola European Partners   in those markets.
• Intense competition – Stable profitability has increased the number of players in the industry over last two years which has put downward pressure on not only profitability but also on overall sales.
• Rising pay level especially movements such as $15 an hour and increasing prices in the China can lead to serious pressure on profitability of Coca-Cola European Partners
• New technologies developed by the competitor or market disruptor could be a serious threat to the industry in medium to long term future.
• The company can face lawsuits in various markets given - different laws and continuous fluctuations regarding product standards in those markets.
• Imitation of the counterfeit and low quality product is also a threat to Coca-Cola European Partners’s product especially in the emerging markets and low income markets.
• Increasing trend toward isolationism in the American economy can lead to similar reaction from other government thus negatively impacting the international sales.

Limitations of SWOT Analysis for Coca-Cola European Partners

Although the SWOT analysis is widely used as a strategic planning tool, the analysis does have its share of limitations.

• Certain capabilities or factors of an organization can be both a strength and weakness at the same time. This is one of the major limitations of SWOT analysis . For example changing environmental regulations can be both a threat to company it can also be an opportunity in a sense that it will enable the company to be on a level playing field or at advantage to competitors if it able to develop the products faster than the competitors.
• SWOT does not show how to achieve a competitive advantage, so it must not be an end in itself.
• The matrix is only a starting point for a discussion on how proposed strategies could be implemented. It provided an evaluation window but not an implementation plan based on strategic competitiveness of Coca-Cola European Partners
• SWOT is a static assessment - analysis of status quo with few prospective changes. As circumstances, capabilities, threats, and strategies change, the dynamics of a competitive environment may not be revealed in a single matrix.
• SWOT analysis may lead the firm to overemphasize a single internal or external factor in formulating strategies. There are interrelationships among the key internal and external factors that SWOT does not reveal that may be important in devising strategies.

Weighted SWOT Analysis of Coca-Cola European Partners

In light of the above mentioned limitations of the SWOT analysis / matrix, corporate managers decided to provide weightage to each internal strength and weakness of the firm. Organizations also assess the likelihood of events taking place in the coming future and how strong their impact could be on company's performance.

This method is called Weighted SWOT analysis. It is better than doing simplistic SWOT analysis because with Weighted SWOT Analysis Coca-Cola European Partners managers can focus on the most critical factors and discount the non-important one. It also solves the long list problem where organizations ends up making a long list but none of the factors deemed too critical.

Limitation of Weighted SWOT analysis of Coca-Cola European Partners

This approach also suffers from one major drawback - it focus on individual importance of factor rather than how they are collectively important and impact the business holistically.

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SWOT Worksheet & Template

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References / Citations & Bibliography

• M. E. Porter, Competitive Strategy(New York: Free Press, 1980)
• A. D. Chandler, Strategy and Structure (Cambridge, Mass.: MIT Press, 1962)
• O. E. Williamson, Markets and Hierarchies(New York: Free Press, 1975);
• L. Wrigley, Divisional Autonomy and Diversification (PhD, Harvard Business School, 1970)
• R. E. White, Generic Business Strategies, Organizational Context and Performance: An Empirical Investigation, Strategic Management Journal7 (1986)