Coca-Cola BCG Matrix Analysis

Introduction

BCG matrix of Coca-Cola is seen as a tool used for planning and utilizes graphical representation of Coca-Cola services and products to help them make informed decisions. It is mainly a tool to help with long-term strategic planning and help a business consider growth opportunities. To do this, it reviews its portfolio of products and decides on where to invest, discontinue, or develop products. Additionally, it is also known as the Growth/Share Matrix.

In general, the BCG matrix is a planning tool that uses graphical representations of a company’s services and products to help the company decide what it should sell, keep, or invest in.

Below, we shall learn about the Coca-Cola BCG Matrix and more. 

Background of Apple

The Coca-Cola Company, incorporated under Delaware's General Corporation Law, is a multinational beverage corporation headquartered in Atlanta, Georgia. The company is interested in retailing, manufacturing, and marketing non-alcoholic and alcoholic beverage concentrates and syrups. The company produces Coke, the sugary drink it is best known for and was invented in 1886 by pharmacist John Stith Pemberton. 

At the time of production, Coca-Cola used kola nuts, which added caffeine, and coca leaves, that brought in an amount of cocaine to the drink. The coca and the kola together provided a stimulative effect. However, this stimulative effect is the main reason the drink was sold to the public as a healthy "tonic," and the coca and the kola are also the sources of the product's name and the company.  

Coca-Cola BCG Matrix

The Coca-Cola BCG matrix shows the different Coca-Cola products in four quadrants: the Dogs, Stars, Cash Cows, and the Question Mark. This matrix will analyze its slow growth, low growth, high growth, high selling, and high predictive selling products.

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Dogs

Dogs are referred to as a company's products with no chances of promising growth and low growth and market share. Additionally, management does not show any interest in these products and does not invest in these products due to low chances of benefits or profit.

In the BCG matrix of Coca-Cola, you can see declining demand for carbonated soft drinks in favor of increasing demand for low-calorie beverages or healthier options. However, if these factors keep increasing, Coke and the cash cow can become a low market share product.

Stars

The Star of a business is the products or business units having a high market share in a high-growth industry. In the BCG matrix of Coca-Cola, the segment of bottled water is its star product. There are two leading bottled water brands from the house of Coca-Cola called Kinley and Dasani, operating in separate geographical locations. 

The Kinley brand is offered in European markets, while Dasani is dominant in the US. However, as the demand for healthy drinks and bottled water keeps expanding, this segment of Coca-Cola is expected to attain a more significant market share and a better opportunity for further investment. Thus, the primary reason why Coca-Cola invests in more brands such as flavored and sparkling water.

Cash Cows

Cash Cows, in simple terms, are products with high market share but low growth markets. However, the forecasts suggest low chances of significant growth in the future, and they have a high market share in the industry. Also, you can get maximum revenue from these products with meager investment to sustain profitability.

In the Coca-Cola BCG matrix, you can see that Coke has been the market leader and a significant revenue generator in the carbonated soft drink industry. It has been an established brand for years and has a global presence, making Coke a cash cow for the Coca-Cola company.

Question Mark

As you can guess, Question Marks are the products currently in the development stage. Also, the market's response to these products is still not very well established. In addition, these products would have achieved a small market share but a risky investment decision. Thus, the outcome could either turn into stars or cash cows.

In the BCG matrix of Coca-Cola, you can refer to the newly launched brands and lines of products, including; Honest Tea, Diet Coke, Minute Maid, Smartwater, and Sparkling Water. These products focus on healthy lifestyles and are part of the growing healthy non-carbonated drinks category. Additionally, Coca-Cola focuses on investing in new products and raising awareness about these products, making the product a question mark for the company.

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Key Takeaways

The BCG matrix for Coca-Cola is a business planning tool that can help companies assess their products' growth potential and investment options based on growth predictions and market share. In this article, we explained the Coca-Cola BCG matrix using four scenarios: Cash Cow, Dog, Star, and Question Mark.

Lastly, we also explained the best PDF software, called PDF Agile, that you can use for displaying BCG matrices reports in different formats. 

References

Reading the BCG Growth-Share Matrix. (n.d.). Investopedia. Available at: https://www.investopedia.com/terms/b/bcg.asp (Accessed March 14, 2022).

Wondershare EdrawMax. Available at: https://www.edrawmax.com/article/coca-cola-bcg-matrix-analysis.html