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. Works Cited Coke Says Cheers, http://www.fool.com/News/Take/2003/take030320.htm
A higher population guarantees the two companies adequate revenues. Other factors include communication infrastructure and availability of skilled workers. Most of the Asian countries are embracing new technologies that grow much knowledge of the diverse beverage drinks. Secondly, the demand conditions play a significant role in enhancing competitiveness for the firms. Both Coca cola and Pepsi are an
revenue from the existing consumers by buying their products (Böhm, 2009). Supply Chain Development As we talked about earlier, Coca Cola is the biggest supply franchise in the world. Supply chain can boost the organization cost and operation. The business can have developments in these areas to improve their differentiation plan. Threats Raw Material Sourcing H2O is a raw material that is important in the making of Coca Cola products.
The brand consumers required huge investments, so the Company intends to invest appropriately in promotions and maintain the business relative strength and revenue. The good shape segment of Coca Cola provide negative cash flows, despite the market is growing hence putting more efforts to overcome the issues related. Coca Cola has improved the market attractiveness and relative business strength, by introducing the Coca-Cola tea product. The light on the pocket segment experienced low market growth and relative market share initially.
Being that Coca-Cola is a normal good, if there is an increase in income of the consumer the demand will increase. Taste and preference of the consumer also influences the demand. Consumers wanted healthier options so Coca-Cola provided its own alternatives to hold onto that market share. In the case of Coca-Cola, if their loyal consumers prefer the taste of Coca-Cola even if the price increases over its competitor the demands will remain the same. However, if the consumer has no taste preference or brand loyalty to Coca-Cola and if the price increases the demand decreases.
• There are higher exit barriers for the bottlers. • The advertisement budgets have become much higher and getting influenced from perception of customers. Coca cola got positioned itself in market by creating a sustainable business model with better modifications in taste of its products, packing strategy and promotional activities. Coca cola is trying its best to deal with its competitors like Pepsi and juice manufacturing companies by producing low sugar content soft drinks by considering health and safety related factors of customers. Some recommendations, I would like to give to the management of coca cola Company for improving position with respect to porters five force models are listed below.
Its ability for continuous development of new products and reinventing new ones has positioned it competitively. The Coca-Cola Company follows the differentiation strategy by spending enormous amounts of money in advertising campaign to differentiate and create a unique image for their products. It provides different products to the customers and has been successful in gaining a leading position among the competitors. Also, the company has settled up the Coca-Cola Freestyle machine allowing customers to mix and match their classic Coca-Cola beverages with many different flavours. In addition, Coca Cola has been focused on the internationalization of is brand by taking advantage of the globalization that allowing it to expand their operations globally.
This style and approach is what makes Pepsi-Cola and Coca-Cola distinguishable. The objective of Coca-Cola’s advertisements was to strategically position their product in people’s mind in order to maximize its acceptance. This strategy would in some way or another have a correlation to the changing social values of the period. “Trying to keep step with each generation and era has been an important factor in advertising for Coke. 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.
This will put more pressure on new competitors or new entrants. For any new entrants or corporation needs to spend more money which is not possible in early years of product launch. People who consume sugary drinks regularly: 1 to 2 can a day or more have more 26% chance of type 2 diabetes than people who rarely have such drinks. Risks are even greater in young children, adults. Due to awareness demand of healthy beverages and health awareness the competition from the health drinks provider has increased day by
How has the competition between Coke and Pepsi affected the industry’s profits? Can Coke and Pepsi sustain their profits in the wake of flattening demand and the growing popularity of non-carbonated drinks? The soft drink industry is a highly profitable industry and its success is due to the large consumption of non-alcoholic beverages through which both concentrate producers and bottlers are profitable. Given the U.S. Industry consumption Statistics, Exhibit 1, it is clear that, after deducting beer and wine, soft drinks account for about 90 % of the total liquid consumption, while Coke and Pepsi account for about 75 % of the soft drink industry. The high consumption of CSDs is related to the soft drink industry selling to consumers through five principal channels: food stores, convenience stores, vending, fountain and other.