Coca-Colas Re-entry into China Market S.W.O.T.

Analysis
Strengths

Weaknesses

Brand recognition - Coke is a famous carbonated beverage that is recognised worldwide. Great financial capacity - Profitable in the global beverage market. Advantage in technological capabilities - Coke as a corporation is more technologically advanced in setting up plants, machineries and has more understanding in the line. Effective marketing & advertising strategies - Integrating colour, music & arts into local Chinese culture, celebrations & sports. - E.g.:- Cokes benchmark colour of red is the cultures colour of prosperity. - Heavy promotions and sponsorships on Chinas national football team. - Huge interactions with mobile phone users.

Cultural & communication Barrier - Cultural & language differences would be a communication barrier in localizing their system. Peoples perception of Coca-Cola product - Cokes main speciality is their carbonated cola. - Many beverage consumers associate Coke brand with only carbonated cola, not non-carbonated beverages. Bottling and inputs depends on other enterprises; local and regional based - Initially formed local partnerships with key bottlers (Kerry or Swire) and state-owned companies, due to restrictions. - No ownership of companies supplying inputs. Distribution must depend local bottlers wholesales - Cokes main distribution of direct store delivery not enough to reach all retail outlets within turnaround time.

Opportunities

Threats

Setting China as biggest market in Asia - Coke can target its biggest market in Asia which could be quite profitable considering the large population per capita in China. Develop & improve its distribution line - Due to lack of infrastructure outside major cities - Coke have to implement other system than their direct store delivery system. - Wholesalers networking distribution is then developed to be main distribution system.

Local and global competitors - There are a huge number of local competitors in the beverage market. Restrictive government policies - As China has just begun to implement open door policy, there are a lot of regulations. - Examples; Specified plant locations, Antimonopolization to protect local players, etc... Vast geographical area of China - Hard to reach out to all retail outlets in various provinces and secluded areas. Lack of infrastructure - During that time, China is lacking of insufficient infrastucture (roads, railways). - Creates difficulties for distribution. Non-carbonated beverages - Cokes main speciality is their carbonated cola. - Many local consumers preferred non-carbonated beverages with local flavours i.e. fruit juices & teas.

New product lines and development - Coke have to come up and expand new products to suit local consumer preferences. - Non-carbonated beverages with local flavours such as fruit juices and teas would increase sales. Expand other business ventures in various lines - Have to engage more with local firms for other businesses; legal, financial, accounting, advertising and most importantly construction of new plants.