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coca cola vs pepsi strategy
coca cola vs pepsi strategy
strategy from coca cola versus pepsi
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Pepsico in Mexico Business Analysis
This case describes the complexity of PepsiCo's competitive position in the Mexican soft-drink market during the late 1990's. Between 1993 and 1996 PepsiCo and Coca-Cola waged a classic cola war in Latin America. The goal for both companies was to gain market share and by the end of 1996, Coca-Cola had clearly won the Latin America cola war. In 1993 PepsiCo enjoyed a 42% market share in Venezuela thanks to the success of its bottling partner, the Cisneros Group but by the end of 1996, PepsiCo held less than 1% of the Venezuelan cola market. Following PepsiCo's anchor bottler in Mexico, Gemex, the case details the strategies employed by PepsiCo's senior management beginning in 1993 to expand its market share versus Coca-Cola. The various dimensions of PepsiCo's strategy -- marketing, management, financial, strategic - seemed to have deteriorated in the aftermath of the unexpected fall in the Mexican peso in December 1994. Focusing on the financial implications of the peso devaluation, the case then describes PepsiCo's response, which only seemed to increase the financial burdens imposed on the faltering Pepsi market share.
Critical Analysis of the Issues
In 1993 PepsiCo was the second largest soft-drink company, after the leader Coca-Cola. That was the year when the "Latin Cola War" broke out. Both companies felt the Latin American market was under developed and saw many opportunities to succeed. In the beginning it seemed PepsiCo would be the winner of the competition, but after the depression in Mexico, and lack of capital problems in other countries, PepsiCo's market share fall. They lost their Venezuelan partner and their partner in Mexico was experiencing significant losses.
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...t of sales. Also, an implementation of corporate owned/controlled bottling facilities that would act as recruiting agents for other regional and local bottlers is critical to PepsiCo's success in this market.
Based on my recommended solutions above and some well thought out strategies by PepsiCo management, they would see its market share return. Once these strategies are implemented and successful, PepsiCo should then concentrate on gaining share in the Latin American market from share leader Coca-Cola.
References
"Coke v Pepsi", January 29, 1994, The Economist, pp. 67-68.
DeNitto, Emily. (1994) "Pepsi, Coke think international for future growth", Advertising Age, p. 44.
Moffett, M., & Soto, T. (1996). PepsiCo in Mexico: Anatomy of an Affiliate's Exposure (Case Study A06-97-0003). Thunderbird. The American Graduate School of International Management.
Pepsi needed a strong regional partner. Pepsi had been falling behind to Coke in Mexican market. However, changes in the regulatory environment had cut Coke’...
Pepsi vs. Coke the epic battle that every American and from the looks of their financial statements possibly everyone in the world must deal with does it have a winner. For the fiscal year 2005 it certainly does through analyzing financial statements with vertical, horizontal, and ratio analysis investors are able to clearly decide who the better choice for their investment is. By careful scruitiny and attention to detail any investor can safely put their money in a buiseness as an investment so long as they are adhering to rules and regulations of the GAAP. Using the tools for financial analysis and the information given I will determine the winner of that battle for 2005 at least from the investors point of view.
Coca cola has always dominated the markets outside United States unlike Pepsi’s internationalization strategy that took too long. Therefore, the long-term brand of Coca cola and better pricing strategies would help in competing with Pepsi. Unlike, Pepsi, Coca cola had targeted entering into partnership and alliances with local distributors and firms. This helps to develop strong relationship within the domestic firms to reduce the domestic barriers and thus, enhance the company’s competitiveness (Thabet, 2015). Lastly, the Asian markets consist of related and supporting industries to the soft drink industry that helps the companies in gaining a strong competitive position in the markets. Based on the competitive advantage of nation’s model, Coca cola has more home based advantages to develop a competitive advantage in relation to other countries on a global
Pepsi was created and developed in 1893 by Caleb Bradham in New Bern, North Carolina. It was originally called Brad’s Drink, but in 1898 the drink’s name was changed to Pepsi-Cola. Ultimately, in 1961 it was called Pepsi. Bradham wanted to create a fountain drink that would help with digestion as well as provide an energy boost. During the Great Depression was when the fountain drink became increasingly popular. PepsiCo Inc., founded by Donald Kendall and Herman Lay, is the corporation where Pepsi is produced. It was first introduced in the Canadian market in 1934 and is currently the market leader due to its strong legacy in the community. PepsiCo’s main competitors are Coca Cola. The competition for soft drinks in Canada is very strong; PepsiCo and Coca Cola share most of the market. Most of Pepsi’s consumers are loyal and maintain their consumption of the fountain drink.
For well over a century, both Coca-Cola and Pepsi have been battling it out for the top spot in the soft drink market. For the first 12 years after Coke’s creation, it reigned supreme, having no competition until Pepsi’s creation in 1898. As Pepsi was taking its first steps as a company, Coca-Cola was already selling a million gallons of Coke
PepsiCo is a worldwide corporation that mainly produces refreshments and focuses on the food market. According to PepsiCo “Pepsi was introduced as ‘Brad's Drink’ in New Bern, North Carolina, United States, in 1893 by Caleb Bradham, who made it at his drugstore where the drink was sold. It was renamed Pepsi Cola in 1898” (par. 1). Pepsi is one of the favorite companies of American Citizens because it has merged with other products, it is one of the most profitable organizations in America, and their products are popular amongst the American population.
Pepsi Cola, which has a broad range of products that it distributes throughout the world, is an oligopoly market structurer that has been in business for years. How was Pepsi Cola established? In which of the four economic market structures does the firm operate? What are the factors that determine the demand and supply for its products? Are there substitutes or compliments for its goods? How does demand for its products perform in terms of elasticity in the short and long run? This paper answers these questions through examination and detailed analysis.
PepsiCo Inc. is an American food and beverage corporation that is based in Purchase, New York that manufactures, markets, and distributes of snacks and sodas. They originally only sold the product Pepsi, but since then they have expanded to other food and beverages such as Mountain Dew, Brisk and Starbucks bottled drinks. They have multiple divisions in many different countries such as Europe, Asia, and Africa. Each specifying in manufacturing a certain product to be sold in their designated region. For example, PepsiCo Europe not only manufactures and markets unique products to that region such as Copella, Snack-a-Jack, and Paw Ridge, but as well Pepsi-Cola beverages, Frito-Lay snacks, and Quaker food products. Moreover; PepsiCo Asia, Middle East and Africa has used many techniques such as licensing, contract manufacturing, joint ventures and affiliate programs to obtain a number of products in certain regions. Which has helped them with production of their many different unique products being sold in designated areas. Recently, PepsiCo has decided to invest over $5.5 million dollars in India by 2020, and with the help of a web developer; PepsiCo will be able to know more about that regions consumers so that they can market and advertise accordingly in that designated area.
Started in 1916, PepsiCo, Inc. has grown substantially over the past 98 years. PepsiCo started with a formula for a carbonated beverage and has expanded its product line to include snacks products, other non-carbonated beverages, and food products. Pepsi is one of the most globally recognized brands and its other products lines are just as popular as the beverage. PepsiCo has been able to maximize their strengths and minimize their weaknesses from within the company in their research and development and marketing divisions. Using financial ratios, an in-depth look into the financial accounting of PepsiCo will determine if the company is as successful as it seems.
Frito-Lay controlled 40% of the USA-market assuring high volume production by increasing internal coordination with PepsiCo developing the Power of One strategy consisting in mixing snacks with beverages and sauces produced by Peps...
Bottling Network: Both Coke and PepsiCo have franchisee agreements with their existing bottler’s who have rights in a certain geographic area in perpetuity. These agreements prohibit bottler’s from taking on new competing brands for similar products. Also with the recent consolidation among the bottler’s and the backward integration with both Coke and Pepsi buying significant percent of bottling companies, it is very difficult for a firm entering to find bottler’s willing to distribute their product.
...ind areas for product improvement, as well as create solutions for potential problems and pitfalls facing the brand. Among PepsiCo’s strengths are brand recognition and loyalty, as well as product diversification. The company can build on these strengths to confidently introduce into the market that are innovative and health-conscious. PepsiCo will also continue to grow our in commitment in environmentally responsible manufacturing. Challenges facing the company are varied, not insurmountable. PepsiCo has had problems with employee/management relations, and discrimination. There have also been some marketing issues, including controversial ads and poor logo redesign. PepsiCo will need to make sure it gains control over the image it wants to portray to its target market, stay on top of PR issues, and ensure that there is no over-reliance on any single retail outlet.
Pepsi-Cola was introduced during the new culture of consumption era (1880-1920). At this time a new consumer society emerged as goods that once had been affordable to a few became available to many. (Sivulka, 2012, p.42) The drink we know today as Pepsi was first created in 1898 by Caleb Bradham and was known as “Brad’s Drink” and the drink was sold at the drugstore he owned. It was later called Pepsi-Cola, after the digestive enzyme pepsin and kola nuts used in the recipe. Bradham’s goal was to create a fountain drink that tasted good and would help with digestion and boost energy. The first celebrity to endorse Pepsi-Cola was Barney Oldfield who was an automobile racer. Oldfield described the drink as a, “A bully drink...refreshing, invigorating, a fine bracer before a race.” In the early 1930s Pepsi-Cola hit rock bottom filing bankruptcy due to the Great Depression. Roy C. Megargel, who was a Wall Street broker, bought the Pepsi trademark, business and good will from Craven Holding Corporation for $35,000, and it was named the Pepsi-Cola Corporation (Pepsistore, n.d.).
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.
The purpose of this report is to compare financial reports from the two largest soft drink manufacturers in the world. The Pepsi Co. and Coca Cola have been the industry's leaders in their market since the early 1900's. I will use relevant figures to determine profitability, and break down key ratios in profitability, liquidity, and solvency. By breaking down financial statements, and converting them to percentages and ratios, comparisons can be made between competitors regardless of size.