Coca-Cola`s competitor analysis Pepsi Unit

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COMPETITOR ANALYSIS

Coca-Cola’scompetitor analysis: Pepsi

Unit

Coca-Cola is one of the most recognized brands globally. As asoft-drinks manufacturer, the firm faces stiff competition fromanother global soft-drinks manufacturer, PepsiCo. PepsiCo controls afair share of the world’s fizzy drinks market and is stiffcompetitor for Coca-Cola. PepsiCo was established in 1965 after themerger of Pepsi-Cola and Frito-Lay has continued to grow throughacquisition to expand into the larger food and beverages industry tobecome the largest firm in the food industry in North American by netrevenues that are in excess of $63 billion annually.

ACTIONS

MOTIVATIONS

Financial: Strive to deliver superior long-term financial performance and sustained shareholder value.

Culture: improved environmental responses

Values: Strong organizational culture with values engraved therein

Investments: Climate change and R&ampD

COMPETITORS FUTURE STRATEGY

Management assumptions

Growth in healthy concerns among customers

Growth in social media use

Stronger cultural ties

Marketing skills

High advertising budget

Numerous patents on systems and deigns

Strong leadership

Highly skilled staff

Motivation

Finance: As apublicly listed company and as a for-profit business entity, the firmis guided by the need to grow investor returns and shareholder value.To achieve this, the firm has been expanding aggressively throughacquisition to increase its market share globally (Alam 2015).

Culture: over theyears, PepsiCo has developed one of the strongest and mostrecognizable corporate cultures founded on developing a talentedgroup of employees to power innovation. Diversity and inclusion aresome of the key aspects of the firm’s culture that enables it torespond aptly to globalization and a global market (PepsiCo2016).

Structure: PepsiCo’sglobal operations have been increasing as the firm expands itsproduct range. In order to offer localized approach in the market,the firm had divided its global operations geographically intoregional offices in North American, Europe, and Asia, Middle East andAfrica. Other divisions are based on country and product categories.

Business philosophy:The firm’s philosophy is guided by six principles that reflect uponthe firm’s identity as a socially and environmentally responsiblecompany. The values include: caringfor the consumers and the world at large, being truthful, balancingboth short and long term goals as well as supporting diversity andinclusion (PepsiCo 2016).

Leadership &ampteam background: PepsiCo hires some of the best talents in the globalmarket through a comprehensive recruitment program. The firm hasstrategic partnerships with learning institution across the world toprovide internship programs and also offer customized courses for thefirm’s employees e.g. the partnershipwith Chicago Booth for Custom Executive Education Program targetstop and mid-level managers. As for the top leadership, the currentchairman and CEO of PepsiCo, Indra Nooyi, has immense experience inleadership positions that spans over 50 years and she has provenherself more than capable of steering the firm ahead (PepsiCo2016).

Actions: currentstrategy

Creation of value:The firm has created a wider product range and diversified beyond thecarbonated drinks market into the larger food market.

Investing: Since2011, PepsiCo has increased its R&ampD budget by 25% with about $718million alone being directed towards product innovation especially inhealthy food and beverage alternatives (PepsiCo 2016)

Relationshipnetworks: as a global operator, the firm’s availability of majorityof its product is achieved through enhanced relationships with globaldistributors. Furthermore, minority business relationships as a partof PepsiCo`s diversity programs are well entrenched.

Management’sAssumptions

Strengths &ampweaknesses: Increased demand for healthy food and beveragealternatives. Larger investment in this direction puts the firm at astronger position. However, health concerns raised of fizzy drinksand snacks could shrink the market.

Social media usewill increase globally and thus the medium will play a greater rolein building customer relationships and also marketing.

Cultural traits: Thefirm’s diversity program and global expansion will not in any waywater down the firm’s strong organizational culture. The firm’sorganziationsl culture should be stronger that the sum total ofcultures represented by all workers and stakeholders.

Perceived industrialforce. Better shielded from competition from Coca-Cola as a result ofdiversification

Competitor goals:Assumes that Coca-Cola has invested less in R&ampD and has anarrower product range to compete in various market segments andprotect herself from market volatilities.

Capabilities

Marketing skills:The brand is globally recognizable and has been a proud sponsor ofmajor sporting events globally such as the super bowl and World cupwhich makes its recognizable.

Service channels.The firm has strong relationships with her suppliers boundedcontractual agreements in supplying raw materials or distributingproducts.

Financial strength:With net revenues of over $63 billion and incomes in excess of $500million as of 2015 data, then the firm is a strong position to expandand increase shareholder value.

Skills andworkforce. Superior recruitment processes target best talents andalso partnerships with learning institutions improves skills levelsand help develop relevant courses.

Patents andcopyrights: The Company possesses numerous patents from its intensiveR&ampD. Some web estimates place the number of patents assigned tothe firm at 2156 utility patents and patent applications while designapplications stand at 970 2156 patents and patent applications(Stellarix 2015)

Leadership: The CEOcommands great respect in the financial world and has the neededexperience to steer the firm to greater heights. She is alsosupported by a dedicated team of leaders with immense experience andknowledge in the field to support growth and diversification in othermarkets.

Conclusion

The brief analysis shows that PepsiCo is in a great positiongenerally. The firm is rapidly expanding its product offering throughacquisitions and new product development. This will help the firmaddress the issue of overreliance on the US market and help herexpand her market globally. Thus, PepsiCo is a worthy and seriousthreat to Coca-Cola in terms of competition on various aspectsexamined.

References

Alam S. (2015).International Marketing Case Study of PepsiCo. Retrieved from,

http://www.academia.edu/14396449/International_Marketing_Case_Study_of_PepsiCo

Strategic analysistools. Cima. Retrieved from

http://www.cimaglobal.com/Documents/ImportedDocuments/cid_tg_strategic_analysis_tools_nov07.pdf.pdf

Stellarix. Retrievedfrom

Pepsico’s technology trends and innovation strategies: A brief walkthrough