We chose to make a strategic analysis of the two evergreen giants of the cola industry Coca Cola and Pepsi. These two protagonists of the cola market make for an interesting study as they pursue different strategies in their operations.
Initially, we present the two companies and the market in which they are located through external diagnosis. Next, we analyze the strategy of each company and finally, we present a comparative analysis of these strategies.
The paper's first objective is to analyze the external environment of the two groups. Before presenting the history of both groups, a brief review of the cola market in general will be discussed.
After exploring these general aspects, the international cola market will be addressed in this study.
Then strategic analysis tools will be implemented in order to highlight the strengths and environmental influences on the cola market and the attractiveness of this competitive market. Information regarding the soft drinks market: To perform an external analysis of the soft drinks market, it is important to be aware of elements attached to the cola market.
The market for carbonated soft drinks (also known as CSD) has witnessed steady growth since the 1970s. However, the market is now stagnating. Competition in this market is oligopolistic: a few large companies such as Coke, Pepsi and Cadbury Schweppes enjoy the lion's share of the market. In 2007 in the U.S., Pepsi and Coke alone represented 80% of sales volume.
Internationalization and communication /advertising are key elements to consider in this market. As Pepsi and Coke are the two leading companies in this industry, we will analyze each of them separately and then compare their strategies.
Pepsi-Cola, as it was originally known, was formulated by pharmacist Caleb D. Bradham, born in New Bern, North Carolina, USA, and who in 1893, invented a potion from kola nut to treat dyspepsia and other digestive disorders. Mixed with seltzer water , "Brad's Drink", as it was then called, proved very refreshing and attracted hordes of customers to the soda fountain of the drugstore.
In 1898, "Brad's Drink" was renamed Pepsi-Cola and the new name was trademarked on June 16, 1903, by Caleb D. Bradham. In 1923, Pepsi Cola went bankrupt following Bradham's erroneous gambling on the fluctuations of sugar prices during the First World War. Subsequently, the company assets were snapped up for $30,000 by Craven Holding Corporation. Wall Street broker Roy C. Megargel purchased the Pepsi trademark from this North Carolina company, thus forming the Pepsi Cola Corporation.
In 1931, Charles G. Guth, president of the Loft Candy Company, purchased Pepsi Cola and reformulated the beverage. During the economic crisis spanning from 1936 to 1938, the company witnessed its profits growing twofold. The year 1940 emerged a landmark year as Pepsi aired its first advertising jingle nationwide featuring the slogan "Twice as Much For a Nickel", a reference to the fact that Pepsi was selling 12-ounce bottles for five cents, the same price charged by its competitors for a six-ounce bottle.
Although the company began its manufacturing operations in the Soviet territory only in 1973, it was the first American brand to cross the Iron Curtain and enter Soviet territory in 1965.In 1975, Pepsi introduced the two-liter Plastishield bottle. Nine years down the road, in 1984, Pepsi launched its Pepsi - The Choice of a New Generation campaign, which featured pop legend Michael Jackson, thus laying the groundwork for a long series of association with personalities from the world of music, sport and cinema.
From its introduction, PepsiCo has constantly implemented a policy of permanent innovation, a desire to listen to consumer expectations, a willingness to continuously strengthen the quality of its partnerships with distributors and a human resources policy focused on talent development and respect for diversity.Today, Pepsico France can be counted among the major players in the French food industry.
Tags: Coca Cola, Pepsi, North Carolina company, economic crisis, Soviet territory, partnerships, New Bern, North Carolina, USA, Cadbury Schweppes.
[...] History and presentation of the Coca Cola group The story of the Coca-Cola Company commenced on May when American druggist John Stith Pemberton formulated a syrup as a cure for morphine and opium addictions. Named Coca-Cola by Frank Mason Robinson, Pemberton's accountant, who also designed the logo in Spencerian script, the latter moved to Jacob's Pharmacy to sell the concoction for five cents a glass at soda fountains. In 1888, following the selling of the company stakes to Asa Griggs Candler, who subsequently incorporated it as the Coca Cola Company, Pemberton passed away in the August of the same year. [...]
[...] Many types of “altercola” that Many sub-segments exist on the offer local an alternative to market (energy drinks for the counter the market leaders in the younger crowd etc ) cola sector, Pepsi and Coca Cola. The cola market seems to have reached its maturity (relative stagnation of sales) Costs ever higher in terms of promotion, advertising Supermarkets are developing their own brands of non-alcoholic soft drinks as they are one of the main distributing channels. Porter's Five Forces: According to this framework developed by Michael E. [...]
[...] implemented in order to highlight the strengths and environmental influences on the cola market and the attractiveness of this competitive market. Information regarding the soft drinks market To perform an external analysis of the soft drinks market, it is important to be aware of elements attached to the cola market. The market for carbonated soft drinks (also known as CSD) has witnessed steady growth since the 1970s. However, the market is now stagnating. Competition in this market is oligopolistic: a few large companies such as Coke, Pepsi and Cadbury Schweppes enjoy the lion's share of the market. [...]
[...] Comparison of global strategies Pepsi's strategy: Pepsi has chosen to move towards a diversification of products unlike Coca Cola, which focuses on its flagship product. The company manages to benefit from its competition with Coca Cola in the sense that it is obliged to offer alternatives to the brand leader, and is compelled to target Coke's consumer base. Pepsi has diversified into other products in the non-alcoholic beverage sector (eg. Tropicana, Gatorade), as well as in the snacks market (Pizza Hut, Taco Bell). [...]
[...] The strengths and weaknesses of Coca Cola Forces Weaknesses Coke enjoys a strong competitive A slowdown in revenue growth since advantage due to its heavy 1997, investments in communications ( 29.1 particularly in the soft drinks Million in 2004). In the U.S., the market. group advertises even in schools. Coca Cola has a very loyal Coca Cola no longer holds its clientele (many customers say they quasi-monopolistic position; only drink Coke and do not love the PepsiCo has eaten into a major taste of other cola drinks.) portion of its market shares. [...]
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