pepsi and coca-cola battle
Post on 17-Oct-2014
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Principle of management
LIEW SOOK MUNCEB130025
ENDORSED BY DR. MOHAMMED NAZRI
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Dealing with
competition
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COMPANY BACKGROUND
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CASE STUDY
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How much do you know about the companies?
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To be or not to be?That is the question.
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We’ve promised America’s parents
that we would change the drinks
we’re selling in schools.
As the consequences, we are the
FIRST among the competitors to
remove full calories beverages from
all schools over 200 countries.
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Coca-Cola
YES for primary
schools upon request
YES for secondary &
high schools
Pepsi
NO for primary
school
NO for secondary &
high schools
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Don’t take my competitive advantage!!
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QUESTION I
Map the soft drink industry by using
Porter's five industry forces
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QUESTION II
What are the
risks and opportunities
of the strategies
followed by
Pepsi? Or Coca-cola?
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SWOT Analysis (STRENGTH)
PEPSI COCA- COLA-Strong market position
-Solid brand portfolio
-Product diversity
- Adapting market trends and social changes
-Corporate Social Responsibility (CSR) projects
-World’s largest market share
-High sales revenue
-High sale growth
-Large capital base
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SWOT Analysis (WEAKNESS)
PEPSI COCA- COLA-Conflicting interests
-No existing customers for new products
-Much weaker brand awareness and market share in the world market
-High expenses, may have trouble balancing cash-flows
-Global awareness of issue for health care may lead to boycotts
-Intrapreneurship may not be welcomed
- Undiversified product portfolio
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SWOT Analysis (OPPORTUNITY)
PEPSI COCA- COLA-No government interference such as FDA & ABA
-Acquisitions & alliances
-Service
-Huge and growing market in the healthy products
-Brand recognition
-Monopolize the competitive advantage
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SWOT Analysis (THREAT)
PEPSI COCA- COLA -Product recalls
-Intense competition
-Face losing market share to the competition
-Not entirely patentable, constant replicated by competitors
-Decline in Carbonated Drink Sales worldwide
-Very elastic demand, almost pure competition
-hanging health-consciousness of the market could have a serious affect
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QUESTION IIIHow would you respond to coca-cola's change in sales
policy?
How would you ensure Pepsi's board that this response will
allow you to remain competitive and profitable?
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Suggested Strategies
Attack
Emphasize the slogan
“Why you have to gain fat if you can
be slim”
Use artificial and natural sweetener
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Suggested Strategies
Response
Collaborate with all schools
Employ spokesperson
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Rebuilding healthierbrand image
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So as to convince the Pepsi’s board…
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We might lose to coca-cola in short terms of revenue.
But as long as we are the one who have sustainable competitive advantage, the victory belongs to us.
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Conclusion
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This,
is a
neverending
WAR.
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REFERENCE• www.pepsico.com
• www.ameribev.org/files/240_School%20Beverage%20Guidelines%20Final%20Progress%20Report.pdf
• http://www.caloriecontrol.org/articles-and-video/feature-articles/what-the-labels-mean
• http://www.livestrong.com/article/407494-definition-of-low-fat-low-calorie-low-sodium/
• http://m.cdc.gov/en/HealthSafetyTopics/HealthyLiving/HealthyWeight/HealthyEating/CuttingCalories/rethinkDrink
• http://www.ameribev.org/nutrition--science/school-beverage-guidelines/progress-reports/
• Business And Competitive Analysis by C.S. Fleisher & B.E. Bensoussan
• Letting Go Without Losing Control by J.. Payne & S. Payne
• Principle of Management by C. Williams
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THANK YOU for your time