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  • Coke and Pepsi in 2010

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    Pepsi and Coca-Cola face competition in the carbonated soft drink industry. To boost sales, they must consider Porter's five competitive forces: the threat of new entrants, the power of suppliers and buyers, the threat of substitutes, and rivalry among existing competitors. Both companies have strong brand images and consolidated bottlers, giving them competitive advantages. To ensure sustainable growth and profitability, Pepsi and Coke must seek new markets, increase consumption internationally and in non-soft drink beverages, improve costs, and acquire growing brands. Leveraging their recognized brands and resources will help them maintain competitive advantages.

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    Could Pepsi and Cola boost flagging domestic CSD (Carbonate Soft Drink) Sales?

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    Pepsi and Coca-Cola face competition in the carbonated soft drink industry. To boost sales, they must consider Porter's five competitive forces: the threat of new entrants, the power of suppliers and buyers, the threat of substitutes, and rivalry among existing competitors. Both companies have strong brand images and consolidated bottlers, giving them competitive advantages. To ensure sustainable growth and profitability, Pepsi and Coke must seek new markets, increase consumption internationally and in non-soft drink beverages, improve costs, and acquire growing brands. Leveraging their recognized brands and resources will help them maintain competitive advantages.

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    341 views4 pages

    Coke and Pepsi in 2010

    Uploaded by

    nesninis
    Pepsi and Coca-Cola face competition in the carbonated soft drink industry. To boost sales, they must consider Porter's five competitive forces: the threat of new entrants, the power of suppliers and buyers, the threat of substitutes, and rivalry among existing competitors. Both companies have strong brand images and consolidated bottlers, giving them competitive advantages. To ensure sustainable growth and profitability, Pepsi and Coke must seek new markets, increase consumption internationally and in non-soft drink beverages, improve costs, and acquire growing brands. Leveraging their recognized brands and resources will help them maintain competitive advantages.

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    © All Rights Reserved
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    of 4

    COMPETITIVE AND CORPORATE STRATEGY

    COLA WARS CONTINUE : COKE AND PEPSI IN 2010

    TEAM:

    Daniela Tello Rioja

    041314353058

    Wisnu Harimurti

    041324353024

    Ryzkiya Noor Annisa

    041324353013

    MAGISTER MANAGEMEN ECONOMICS AND


    BUSINESS FACULTY OF
    AIRLANGGA UNIVERSITY

    COLA WARS CONTINUE : COKE AND PEPSI IN 2010


    Could Pepsi and Cola boost flagging domestic CSD (Carbonate
    Soft Drink) Sales?
    Pepsi and Coca Cola could boost the Flagging Domestic CSD with consider
    with Porters five key competitive on exhibit 1.
    The Threat of new Entrants
    Particularly when new entrants are diversifying from other markets, they
    can leverage existing capabilities and cash flows to shake up competition,
    as Pepsi did when it entered the bottled water industry and gained cola
    (Porter,2008).
    The Power Of Supplier
    Pepsi and cola is Already consolidate with the bottler, it is mean that the
    can decrease their cost. Its one of tehir competitive advantage to stay.
    The Power of Buyer
    can capture more value by forcing down prices, demanding better quality
    or more service (thereby driving up costs), and generally playing industry
    participants off against one another, all at the expenseof industry
    profitability. (Porter,2008)
    The threat of Subtitutes
    Subtitute can be non Carbonated product or carbonated product with
    different charactheristic. But Pepsi and Coke, both have strong brand
    images that difficult to immitated.
    Rivalvy Among Existing
    High intensity of rivalry due to slow industry growth and two equal sized,
    highly committed rivals Pepsi and Coca-Cola that strive for leadership, is
    questioning the existence of smaller players.
    As we know from the case that the consumption of CSD is grew up by 3%.
    To maintain this condition especially on sales Cola and Pepsi have to:
    Product innovation
    It is need because buyer always want something more, cola and pepsi
    have to make an innovation gradually to fullfill the need of buyer.
    Aggressive Marketing and Promotion
    The case noted that Gallon per capita for U.S market is 48.9 and gallons
    per capita is less than 10 for most of the potential international markets
    ( Exhibit 8). This forces the Coke and Pepsi to pursue a different kind of
    marketing strategy in domestic and these international markets. Initially
    the marketing strategy is to boost the soft drink consumption in these
    untapped markets. Advertisement create great relationship with their
    consumers to make them feel relax to use these brands.

    Diversivication
    Diversivication is need to keep the brand uniq and variative.
    How could they compete in in the growing non-CSD category that
    demanded different bottling, pricing and Brand Strategies?
    Cola and Pepsi are already growing in the non-CSF category. Cola
    purchased Minutes Maid (Fruit Juice) and Duncan Foods (Coffee, tea, hot
    chocholate). Pepsi also diversivified with snack-food giant Frito-Lay.
    It is very possible to compate in non CSD category. Cola and pepsi are
    already have great resource, core competency and capabilities to run their
    bisnis. They also need to maintain their competitive advantage to catch
    the superior firm performace. (see exhibit 2)
    What had to
    profitability?

    be

    done

    to

    ensure

    sustainable

    growth

    and

    The challenge sustain their profit is to sustain their historical rate of


    growth. To do so, they need to seek out new markets and increase
    consumption. They also can Grow in the International Markets and Enter
    into growing non- soft drink but beverage industry, Improve their cost
    structure, Acquire growing brands in the soft drink industry.
    The VRIO Framework
    Valuable
    The consolidate bottlers > may lowering the cost. Both brand are known
    as great brand in US.
    Rare
    The strong and unique promotion will capture Coke and Pepsi as the
    greatest brand. But if they are not rare there would be little power of the
    supplier because there will be any subtitutes that excactly the same.
    Costly to Imitate
    The network and product availability in Supermarket as well as vending
    machine make this company was Costly To Imitate.
    Organized to Capture Value
    Both company are organize to capture value especially from the customer
    by maintaning the quality and performance of their brand.

    Exhibit 1
    Porter Five Force based on CSD industry:

    Already
    consolidate
    with the
    bottler
    --> Decrease

    The
    The
    Competitio
    Competitio
    n
    in CSD
    CSD
    n in
    for new
    new
    for
    Brand
    Brand

    The new
    competitors from
    dr pepper group

    High
    Rivalry
    Due
    Industry
    didnt
    growth

    The
    Bottler
    The Bottler
    Consolidati
    Consolidati
    on
    on

    Strong
    Strong
    Brand
    Brand
    Hard
    to
    Hard to
    subsitute
    subsitute

    Powerful
    Powerful
    Buyers
    Buyers

    Pepsi and Coke,


    both have strong
    brand images that
    difficult to
    immitate

    Exhibit 2

    Resources
    Core
    Competenci
    es

    Reinvest, Home, Upgrade

    Firm
    Activities

    Competitiv
    e
    Advantage

    Capabilities
    Reinvest, Home, Upgrade

    Both may leveraging their recognized


    brand

    Superior
    Firm
    Performanc
    e

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