Coca-Cola verses Pepsi-Cola and The Soft Drink Industry
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Contents
Introduction
Industry Analysis
Porter's Five Forces
Bargaining power of Buyer-High
Bargaining power of Supplier-Moderate
Threat of new entry-Low
Threat of Substitutes-High
Industry rivalry-High
SWOT Analysis
Strengths
Weaknesses
Opportunities
Threats
Pestle Analysis
Political Factor
Economical Factor
Social Factor
Technological Factor
Legal Factor
Environmental Factor
Recommendations
Exhibits
Introduction
The case describes the competitive rivalry between two of the most successful brands in the history of soft drink industry. Where Coca-Cola was named to be the oldest brand to serve today and still considered to be the dominant force to step up in the soft drink industry. In the other side, PepsiCo looked more aggressive regarding marketing, prices and promotions than Coca-Cola.
However, the size of market share for PepsiCo is lower than Coca-Cola due to the less operational size and uses of funds for research and development activities. In the case, whatever the certain situation shows that there was a huge competition among these two companies from the day of inception, and both implemented different decisions to beat the opposite party and to stand in a competitive position within a market.
It has also been analyzed that both companies were engaged in a heavy process to develop the differentiated product lines and to maintain their position over the long-term in order to increase the market share constantly. However, the case illustrates historical changes of both the companies and shows that what was the impact and conclusion of the sudden changes.
Before the development of the product line, there were three types of processing activities to finalize the product for Coca-Cola as well as PepsiCo. The first one are the concentrators which the company would produce itself in order to avoid the additional cost, the second are the bottlers who purchased concentration and insert with the sweetener into the given bottle, this process contributed the major stack of capital expenditures and also incur a heavy cost to recover regarding large revenues.
The final process included the selected retailors consist of grocery stores, gasoline stores and other general stores in major areas of the county. So the whole process was performed by both rivalries in order to maintain the position and to beat out the opposite party.
Therefore it shows that whatever Coca-Cola and PepsiCo looked into the revenue and profit side of their operations, the special focus was always to beat down the competitor regarding unique product features and services. The other important part of the case was the level of risk each company hold to perform better than other.
So it shows that in order to stand in a competitive position, the company should always manage the risk and to control the operations in the best way possible for the long-term growth. It is identified that the aggression would not always count towards the achievement because, in the case of PepsiCo, the company was threatened towards bankruptcy so many times due to the aggressive marketing strategy that failed because of the dominated rival that not allowed to make them successful. It is concluded that Coca-Cola is still in a better position than PepsiCo due to the large operations and company-owned bottlers that not allowed PepsiCo to outflanked Coca-Cola.