This analysis takes a look at the carbonated soft drink industry and competitive strategy of Coca-cola and Pepsi. This was a very attractive market at the time as Americans were consuming carbonated soft drinks more than any other beverage. Both companies needed to find ways to boost flagging domestic cola sales and generate diverse sources of revenue. Both firms modified their production strategies including their bottling, pricing, and brand strategies. They looked to emerging international markets to stimulate growth and broaden their brand portfolios to include noncarbonated beverages like tea, juice, sports drinks, and bottled water.
As a result, many of the ... ... middle of paper ... ...ke its decision to change the formula of Coke in 1980s but its overall performance has been quite impressive. At present, the company has adopted some new strategies in order to increase its market share in the international market and is rapidly expanding its operations worldwide. It is obvious from the above study, that the management of Coca Cola has been successful enough in devising its marketing and promotional strategy and this is the reason that Coca Cola is one of the well-known brands in the world. However, there are still some areas in which the company needs to bring improvements. For instance, in some countries where Pepsi has a market leadership, Coca Cola needs to improve its promotional strategies and offer more value to the consumers so that it may outperform Pepsi.
The Porter’s model of competitive advantage of nations is based on four key elements including factor endowments, demand conditions, related and supporting industries and firm strategy, structure and rivalry. This makes it suitable in understanding the competition existing in the soft drinks industry in the Asian markets. The factor conditions identify the natural resources, climate, location, and demographics. Coca cola and Pepsi enjoy the growing population in the Asian markets (Yoffie, 2002). A higher population guarantees the two companies adequate revenues.
The case study "Cola Wars Continue: Coke and Pepsi in the Twenty-First Century" focuses on describing Coke and Pepsi within the CSD industry by providing detailed statements about the companies’ accounts and strategies to increase their market share. Furthermore, the case also focuses on the Coke vs. Pepsi goods which target similar groups of costumers, and how these companies have had and still have great reputation and continue to take risks due to their high capital. This analysis of the Cola Wars Continue case study will focus mainly on the profitability of the industry by carefully considering and analyzing the below questions: Why is the soft drink industry so profitable? Compare the economics of the concentrate business to the bottling business: Why is the profitability so different? How has the competition between Coke and Pepsi affected the industry’s profits?
The reason is because non-colas have above-average caffeine level, and will be aimed at the 12-to 21-year-old market. Obviously, management sees this product as an opportunity to more fully participate in the growing popularity of non-colas. The main external threats to Cadbury-Schweppes are competition from Coca-Cola and Pepsi and changing consumer tastes. External opportunities include increasing sales internationally and development of new products. Cadbury-Schweppes has many internal strengths and weaknesses in its organizational, marketing, operational, and financial activities.
Competition in Energy Drinks, Sports Drinks, and Vitamin – Enhanced Beverages Identification Overview of Industry’s Situation Alternative beverages such as energy drinks, sport drinks and vitamin-enhanced beverages experienced rapid growth in mid-2000s. Each types of alternative beverage capture different customers profile and have different distribution channel. Since the carbonated soft drinks already in maturity stage, global beverage companies tries to compete on alternative beverages because its offer high profit margins and can boost overall volume sales. Due to poor economic conditions in the United States, the sales of overall beverages industry was declined. Beverage producers try to increase their sales by entering new geographic markets and expand their products selection.
It strives not to be too far behind or too far ahead of its time; the product has ... ... middle of paper ... ... strategies in order to increase their sales growth. The rivalry between the two soda giants required new strategies to be continuously implemented. The new strategies devised by Pepsi and Coke to deal with the changing environment could not have been effectively implemented without changing their distribution system from networks of independent bottlers to company-owned bottling systems. This transformation has been essential to both companies' introduction of new products and new forms of pricing, promotion, and advertising. The U.S. Department of Justice has brought many price-fixing cases against CSD bottlers, the vast majority of which led to guilty pleas.
In recent years, the soft drinks Industry has expanded tremendously to incorporate a multitude of different flavors and more advantageous choices. Soft Drink such as Coca-Cola (Coke), Pepsi and Dr. Pepper are front-runners in this industry. People around the world incorporated soft drink as one of the major food groups in their day-to-day life. Be that as it may, various aspects can influence the general consumption of soft drinks. Though several of these factors are out of the control of the soft drink producers, these businesses must comprehend and adapt to the changing needs of consumers to keep up their net profits.
Case Analysis of Coca Cola 1. In the 1980s, under CEO Roberto Goizueta, Coca-Cola was a global brand with a growing presence in global-emerging markets like Europe, Russia, and South East Asia. It beat back its main rival Pepsi to be a leader in the carbonated beverage market with a 70% market share. During the 1990s however, under new CEO M. Douglas Ivester, the company’s market share started declining due to political (regulatory), economic, social (consumer), and technological (operations) challenges in the marketplace. While Coca-Cola was trying to consolidate its position in it’s core cola market, there was an increasing shift in consumer tastes in favor of non-carbonated beverages such as juice, tea, and bottled water.
The growth of the soft drink industry will be based on staple products, like bottled water and carbonates. In the developed and the new markets is the competition increased, so it is n... ... middle of paper ... ...ry critical. So Coca-Cola have to invest a lot of money in the differentiation in the products. An advantage of this market: the distribution is all via the supermarkets and hypermarkets. The economic crisis hit this market the most, because consumers are more critical.