By foregoing the complex logistical task of bottling and distributing its own products, Coca-Cola loses out on a significant portion of potential revenue. By having bottling partners that it helps to do well and succeed, the company’s contract terms with these partners aren’t as favorable to Coca-Cola as they could be. Two of Coca-Cola’s largest bottling partners, Coca-Cola Enterprises and Coca-Cola Hellenic Bottling, are each massive operations with market value of roughly $9 billion each. By taking only minority equity stakes in these bottlers, and no equity stake in most of its other bottling partners, Coca-Cola is missing out on a major portion of revenue.
Another major weakness that the Coca-Cola alliance portfolio faces has to do with the brands the company owns. Many of the company’s brands, such as Coca-Cola Classic and Barq’s Root Beer, are sugary soda drinks that are generally thought to be unhealthy. In recent years, Coca-Cola has face consumer push-back, particularly from school districts around the United States, with regard to the sugary drinks that many critics claim are contributing to the country’s obesity problem.
Other posts on Coca-Cola's brand and strategy:
Coca-Cola: Company Strategic Alliance Objectives with Suppliers
Coca-Cola: Company Strategic Alliance Objectives with Bottlers
Coca-Cola: Company Strategic Alliance Objectives with Brands
Coca-Cola: Life-Cycle Model of Evolving Strategic Alliance Strategy Early Days
Coca-Cola: Current Strategic Alliances – Major Strengths
Coca-Cola: Life-Cycle Model of Evolving Strategic Alliance Strategy
Coca-Cola: Current Strategic Alliances – Major Weaknesses
Coca Cola: Future Strategic Alliance Objectives and Strategy Overview Recommendations
Works Cited Page for Coca-Cola Analysis of Alliances Portfolio