Saltzman, At the beginning of the case study, the author has also stated that Coke has played a critical role that motivated Pepsi to become as success as it is nowadays Strong Essays words 3. In , Pepsi jump-started its marketing efforts by adding two brands to its portfolio: Crystal Pepsi and Pepsi Max. Crystal Pepsi, which was initially offered in the United States, failed to earn the company more than 2 percent volume share Free Essays words 4.
John Stith Pemberton in Atlanta in Over time the Coca-Cola Company has become the leading producer of soft drinks in marketplace and is ranked number one in carbonated soft drinks and juice drinks, number two in sports drinks, and number three in bottled water in Today, it has already marketed beverage products in more than countries around the world The Coca-Cola Company, Although the Coca-Cola Company is strong enough in the soft drinks market, it still has to face the challenge of Pepsi, which is its major competitor in the global market Free Essays words 5.
This joint venture marketed and sold Lehar Pepsi until when the use of foreign brands was allowed; PepsiCo bought out its partners and ended the joint venture in Strong Essays words 2. Introduction Nowadays a trend of shape concerned is very popular globally.
Comparative analysis of Coca-Cola Company and PepsiCo Research Paper
Not only shape concerned but some of a dangerous disease also cause from consuming sweet and high fat foods. Therefore marketers see this opportunity in the market and try to invent any goods that can fulfill the demand of consumers in the market The company follows the latest strategic research and evaluation methods to formulate such strategic policies that helps in not only meeting the customer expectations and desires but also achieving various organizational goals and objectives.
The main threat of the company is not from the local producers but from the global producer Pepsi Co that has similar product line and methods of manufacturing and distribution Strong Essays words 6. One of the ways to see how a company is doing is to look at how much EVA Economic Value Added that company is producing. EVA is better than conventional ways because it takes into account the total cost of the operating capital. EVA is simply the after-tax operating profit minus the total annual cost of capital. Using EVA has advantages as well as disadvantages Using it as a strategy, Coca-Cola is presented with a rare opportunity to serve a large geographical base SWOT analysis, n.
Initially competition seemed a major threat, but as time went by, this proved less substantial.
What Can the Cola Wars Teach Us about Brand Loyalty?
Substitutes such as products from PepsiCo pose real threats. There is no doubt that the sector of soft drinks has a strong foundation. The only problem is that customers are not totally bound to it. This is because the sector has many possible substitutes that threaten its strong base. These drinks have continuously piled pressure on the soft drink industry thereby threatening not just the existence of Coca-Cola, but also PepsiCo.
In recent times, consumers of these products are becoming increasingly health conscious.
This posses a major threat because consumers will become more selective as they look at the health effects that have, on some occasions, been associated with soft drinks. The buying power of consumers is another possible threat. Coca-Cola and PepsiCo have faced continuous rivalry from each other. This has often slowed the movement forward in this industry as stakeholders are always forced to respond to never ending changes in the attitudes and demands of their customers to avoid losing out on competition.
Consumers in this industry can also switch to another beverage brand without facing any consequence SWOT analysis, n. A look at PepsiCo shows that the company enjoys the advantage of having a very experienced management team that helps in the manufacturing of a very competitive product line that has enabled it to find its place on the wide global market despite having come in late.
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This experienced team has helped in researching into the trends of the industry and results have been seen as they exploited the trends to their advantage and emerged top in The growing needs for specialized cultural foods and the changing trend towards healthier foods has offered PepsiCo an opportunity to thrive in this sector. Changing trends in the consumer income have also made consumers to less sensitive to price and their consumers are not using price as a reference point when choosing between Coca-Cola and PepsiCo.
PEST CASE STUDY
People are changing to convenience more than price and this has boosted Pepsi sales. The only threat is the size of the company. This can lead to a loss of focus or internal conflicts if not properly managed. The ease of reliability of PepsiCo product line is a threat that the company should watch keenly. The company also has an almost pure competition in the way it prices its products is also a threat. And lastly, the company should check on its taster technological advances because they tend to overshadow existing products making them less advanced SWOT analysis, n.
This basically looks at the changes that happen in the market due political, Economical, Social and Technological parameters. It has already been mentioned that these two companies deal with the business of non-alcoholic beverages categorized among foods under the FDA statutes. This means that their production is regulated by the government. If the required standards are not followed, then the company can face disciplinary action in form of fines that are set for violators.
Changes in the laws and regulations can therefore, disrupt the operations at Coca-Cola and PepsiCo. Prevailing political conditions in the international markets also play a role in determining market trends. Trends in the economy have also affected Coca-Cola over the years. For instance, the company was doing so well, until recession set in. Social change is another factor that is analyzed in the PEST analysis. Many customers, especially those in the US have become more concerned with healthier lifestyles. Many are therefore, abandoning alcoholic drinks and resorting to healthier drinks such as diet colas and bottled water.
This affects the non-alcoholic industry by increasing the demand for the non-alcoholic and healthier beverages. The last element to be looked at is Technology. Technology has helped in the area of advertising, marketing and other programs of promotion. Internet and television technology has evolved to the extent that special effects can be used. These make products more attractive and therefore, attracting more sales. Bottles and cans have increased Coca-Cola sales because they are portable and also easily disposed off. Technology has also been felt in the production line. New machines have increased production of Coca-Cola products.
Technology has also led automatic serving machines that have increased efficiency when serving customers PEST Case study, n. Both companies know that these factors exist and therefore, both strive to ensure that they meet the highest standards possible in everything they do.
Coca Cola Case Study
Strict quality controls are adhered to meet high quality expectations from consumers. PepsiCo beats Coca-Cola in the area of authority. As already mentioned, Coca-Cola has a central body that sets out what products should be produced, but PepsiCo allows local bottlers to determine the products they pack and sell to their customers basing on their assessment of the demands of the local customers and market factors. This gives PepsiCo an upper hand when it comes to making essential figures as compared to Coca-Cola which is making superior figures. In other words, PepsiCo seems to be winning the game in terms of making revenues and also in creating profit margins.
This has drawn more investors to PepsiCo who see a promising future with the company Kevin, Since its launch, PepsiCo has been growing constantly in a pattern that is stable and therefore, it has room for more expansion in future. In general, PepsiCo has outpaced Coca-Cola in revenues. Reports in showed that Coca-Cola was making minimal gains, a consequence that was attributed to the sluggish growth in the industry of soft drinks.
As already mentioned, customers may not like the speed in which PepsiCo is growing, but this is the exact reason why long term investors prefer PepsiCo over Coca-Cola. PepsiCo has reached its maturity stage and therefore, its products are enjoying maximum economies of scale. This trend can go on for years only if the right strategies are used.
PepsiCo promises its investors more improvements in terms of profit margins in the coming years. Coca-Cola does not seem to be giving investors this assurance. Coca-Cola only promises fixed incomes, which for sometime has not been increasing. This means that the company is making profits but not expanding.
This paints a bleak future where Coca-Cola may experience diseconomies of Scale. As a marketing strategy, PepsiCo has embarked on hiring CEOs from different cultural backgrounds to make sure that they satisfy customers in its wide market. To match the measures that PepsiCo has taken, Coca-Cola will also have to employ different strategies in order to gain popularity that PepsiCo is enjoying Cola Wars, The process of decision making at Coca-Cola Company does not fit in its structure and also does not reflect its roadmap as outlined in the mission, vision and values.
What happens on the ground does not fit in its centralized structures; this is one reason why other companies like PepsiCo are beating it in this area. This will also help ease the process of problem solving. It has been shown that the strong bottling systems used by Coca-Cola give it an infinite market growth.
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