It is important for managers and CEOs to evaluate their industry, market, and competitors to develop strategies that cater to the changing tastes, demands, and value requirements of consumers.
Industry
Coca-Cola’s industry analysis must include trends and characteristics of the industry and the company’s operating practices (Cravens & Piercy, 2009). The key products produced by companies in the beverage industry are beer, fruit juice, vegetable juice, spirits, soft drinks, and natural beverages. The beverage industry is still growing despite consumer’s shift in tastes from sugary drinks to healthier drink choices (Forbes, 2014). The beverage industry includes companies such as Coca-Cola, PepsiCo, Dr. Pepper Snapple Inc, and Nestle.
The projected growth rate per year for the world beverage market between 2010 and 2015 is less than 2% with a market totaling $1,900 billion (Report Linker, 2014). The beverage market including soft drinks is expected to see growth during the next four years. The demand for healthier beverage options pushes companies to diversify their product portfolio to include more noncarbonated, organic, diet, and sugar-free drinks. The expansion of the world market for soft drinks would result in market totaling almost $586 billion by the end of 2015 (Report Linker, 2014).
Market
Managers and CEOs who neglect to understand their markets and the future movement of the market may have inadequate strategies as consumers’ desire new products and their value requirements change (Cravens & Piercy, 2009). Coca-Cola, once the leader in the beverage market, lost its place as the number one in the beverage market to PepsiCo. The company provides consumers with more than 3500 products in more than 200 countries;...
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... Piercy, 2009). Coca-Cola must find a way to diverse its product portfolio if the company hopes to regain control of the world’s beverage market.
Works Cited
Coca-Cola Company. (2014). Infographic: Coca-Cola at a glance. Retrieved from http://www.coca-colacompany.com/our-company/infographic-coca-cola-at-a-glance#TCCC
Cravens, D., & Piercy, N. (2009). Strategic Marketing (9th ed.). New York, NY: McGraw-Hill Irwin.
Forbes. (2014, April 16). Coca-Cola earnings review: Still beverages offset decline in sparkling, restructuring impacts margins. Retrieved from http://www.forbes.com/sites/greatspeculations/2014/04/16/coca-cola-earnings-review-still-beverages-offset-decline-in-sparkling-restructuring-impacts-margins/
Report Linker. (2014). Beverage industry: Market research reports, statistics and analysis. Retrieved from http://www.reportlinker.com/ci02013/Beverage.html
The soft drink industry in the United States is a highly profitably, but competitive market. In 2000 alone, consumers on average drank 53 gallons of soft drinks per person a year. There are three major companies that hold the majority of sales in the carbonated soft drink industry in the United States. They are the Coca Cola Company with 44.1% market share, followed by The Pepsi-Cola Company with 31.4% market share, and Dr. Pepper/Seven Up, Inc. with 14.7% market share. Each company respectively has numerous brands that it sales. These top brands account for almost 73% of soft drink sales in the United States. Dr. Pepper/Seven Up, Inc. owns two of the top ten brands sold. Colas are the dominant flavor in the U.S carbonated soft drink industry; however, popularity for flavored soft drinks has grown in recent years. The changing demographics of the U.S population have been an important factor in the growing popularity of these flavored soft drinks. The possible impact of this factor will be addressed later in the case.
aspects: Carbonated soft drinks industry's structure, evaluation of driving change factors in this industry and finally analysis of key strategic factors it is faced with.
This is all thanks to the company's ability to stay competitive in the world marketing competitive environment. "The competitive environment, also known as the market structure, is the dynamic system in which your business competes. The state of the system as a whole limits the flexibility of your business."-Stan Mack(CHRON) The ability to stay flexible in todays market has enabled company to create revenue through adapting to changing views of the consumers. Although the first thought when hearing the Coca Cola name is still soda, the trend of non-carbonated and sugary drinks is the most revenue producing products of the company today. Don't get it wrong, the company still has 4 name brand sodas that bring in over $1 billion apiece in revenue annually, but the most substantial revenue is the companies investment in non-carbonated and sugar-based drinks. Products such as Smart Water, Vitamin Water, and Fairlife Superkids(milk) are among the nearly 400 products produced by the company that are not soda-related.(Fortune) So even with soda sales at the 30-year low, The Coca Cola Company continues to adapt to the ever-changing competitive market environment and sustain its household name and
As we have seen, international marketing can be very complex. Many issues have to be resolved before a company can even consider entering uncharted foreign waters. This becomes very evident as one begins to study the international cola wars.
Control of market share is the key issue in this case study. The situation is both Coke and Pepsi are trying to gain market share in this beverage market, which is valued at over $30 billion a year. Just how is this done in such a competitive market is the underlying issue. The facts are that each company is coming up with new products and ideas in order to increase their market share.
Coco-cola has dominated any market anywhere and keeps on maintaining a strong position (). Looking at how Coco-cola achieved their goal brings attention
Many large companies in the world is known around the world adopted this strategy, recognizing the global market segment needs, take appropriate marketing actions to create a market . The Coca-Cola Company is the successful use of a model of global marketing, today became the world’s largest and most successful soft drink companies. The Coca-Cola Company's products to anyone who is not required, but because of the company's marketing operations , making today the per capita consumption of soft drinks in some countries over the demand f
The beverage industry is highly competitive and presents many alternative products to satisfy a need from within. The principal areas of competition are in pricing, packaging, product innovation, the development of new products and flavours as well as promotional and marketing strategies. Companies can be grouped into two categories: global operations such as PepsiCo, Coca-Cola Company, Monster Beverage Corp. and Red Bull and regional operations such as Ro...
These external factors can be overcome by possible “product innovation” (Gregory 2015). If McDonald’s can use new products to help stand up against their rivals, it may help to push them further ahead of industry than what they already are. McDonald’s has a large amount of competition as the “market is already saturated” (Gregory 2015). They also have to deal with the fact of customers providing the primary source of power for the firm. This power is derived from the idea that they want to be continued customers of McDonalds. The customer can easily switch to another fast-food chain, such as Wendy’s, Burger King, and “food outlets, artisanal bakeries, as well as foods that one could cook at home” (Gregory 2015). “Customer loyalty” (Gregory 2015) is a huge part of McDonald’s
PepsiCo was founded in 1919 and has their primary industry considered ‘Soft Drink Manufacturing.’ Going back to Hoovers, PepsiCo surpassed $66 billion in 2013 with a net income of $6.74 billion (Hoovers.com). PepsiCo relies heavily on their marketing skills and the ability to advertise their product and make their product the go to for consumers, “To promote its products, PepsiCo uses a combination of sales incentives, discounts, advertising, and other marketing activities. Advertising and other marketing activities totaled $3.7 billion in 2012 vs. $3.5 billion in 2011” (Hoovers.com). On Hoover, it went on further to state what PepsiCo’s strategy is, “Key to PepsiCo's growth strategy is to drive snack brands to new markets as it bolts on new and more nutritious foods categories through small acquisitions and alliances.”
Learning from experience Coca-Cola has had some fierce competition over the years but nothing in the form of an entire health market shift like now. As well as mounting political persecution of its products like they are facing today. They must rely on past experiences to get through but likely will need to start studying the new trends to stay relevant.
One of the strengths that research and development at PepsiCo has is their ability to keep improving their product lines. Whether it is slight changes to a recipe or developing a new flavor profile, PepsiCo has the ability to keep up with flavor trends and are still able to appeal the ever changing taste of the public. With PepsiCo being a global company, their research and development centers are located throughout the world, including China, Germany, and India (to name a few), in order to appeal to that particular demographic (“PepsiCo.” 7).
The Coca Cola Company has been among the world’s top companies that have been able to perform well in all the areas of the world. 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.
Cravens, D. W., & Piercy, N. F. (2009). Strategic marketing (9th ed.). New York, NY: McGraw-Hill.
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, fountains and others.