There are two basic types of competitive advantage:(1-2) 1. While Coca-Cola determines entertainment, optimism, and passion as the main concepts to promote the product, PepsiCo focuses on the other segment of the target audience, emphasizing the idea of the healthy lifestyle and high-quality nutrition. There have been many news which reported that Pepsi tried to hijack the FIFA World Cup sponsorship owned by Coke. Pepsi’s advertising is a major strength. There are of course many other factors that make Coke dominant over Pepsi such as its pricing strategies, marketing, product design etc. Competitive advantage gives customer advantage for example if Coca Cola deliver its product better than any other competitors then customers will choose Coca Cola over … The price war between Pepsi and its competitors has been continual for decades. Coke and Pepsi have long been chief rivals. May 1, 2016 ... the marketing tagline of “Live for Now” associated with Pepsi brand has been modified as “Yalla Now” and “Oh Yes Abhi” for Middle East and Indian markets respectively taking into account cross-cultural differences associated with these markets. With the Indian markets, Pepsi had the first-mover advantage over Coke. Coke and Pepsi are huge players not just in following brand design trends but in setting them. Coca Cola is also known as a Coke. Because Coke has primarily stuck with beverages and Pepsi has had a very lucrative foray into the snack food business, Pepsi has a slight advantage with stock values. Yet Coke re-entry into India was a great threat to the company. Pepsi is also characterized by a citrusy flavor burst, unlike the more raisiny-vanilla taste of Coke. Dr Pepper Snapple is the perpetual third behind The Coca-Cola Company and PepsiCo in the U.S. carbonated soft drinks market, which has been shrinking for 10 … A competitive advantage is simply what a company excels best at. The American companies have jostled for consumer attention with pointed ads over the decade. The Cola Wars between the two industry giants Coca-Cola Company and PepsiCo continues today after over 100 years of rivalry. TYPES OF COMPETITIVE ADVANTAGE When a firm sustains profits that exceed the average for its industry, the firm is said to possess a competitive advantage over its rivals. Did you know that Coke was the leading soft drink in 1896 just as it is today? Each evolution of a brand can either result in neutrality, which seems like a waste of money, improvement or a decline in the eyes of the public. In response, Pepsi had to cut its advertising and drop its selling price, decreasing its cost advantage (Coke and Pepsi’s uncivil). Pepsi’s range of healthy products has grown in recent years. However, Coke secured a huge contract with Burger King in 1999, but because of a heated bidding war with Pepsi, Coke had to make a large concession by doubling $25 million in rebates to Burger King. A comprehensive research and analysis of competition is one of the most significant elements of an in-depth market analysis. To have a competitive advantage in a particular market, […] Consider the purchase of a Pepsi can. The company has a great portfolio of food and beverage which provides more choice to the customers. Marketing :-Pepsi’s marketing strategy is a key strength. A company must have a sustainable competitive advantage because it benefits the company in longer runs. The packaging itself is enough to gather the attention of the market and become the preferred one. It generates over 60% of its revenue and 80% of its operating profit from outside the United States. Pepsi, in short, is a drink built to shine in a sip test." A competitive analysis enables you to assess the strengths and weaknesses of your competitors. Strong Brand Image: Coca-Cola has maintained a very strong brand over the years. Coke followed in 1999 with Dasani. Now you do. The products are available worldwide and they have about 22 brands. The company, PepsiCo manufactures Pepsi which is a carbonated soft drink was developed in the year 1893 by Caleb Bradham. Also, Coke earns about $35 billion in revenue annually, while Pepsi generates nearly $60 billion annually – again, largely because of an expansion beyond the beverage market. More importantly, PepsiCo isn't just a beverage company. Fares Ben Ghorbal Coke and Pepsi Assignment 1-Pepsi would be interested in Coke's confidential information in order to gain a competitive advantage over coke and use such information against them. Sources of competitive Advantage for Coca Cola. However, it is necessary to focus on three ways which the companies use to compete within the market and take the leading positions. The Coke Pepsi Rivalry : When the cola giants, Pepsi and Coke, entered the Indian market, they brought with them the cola wars that had become part of global folklore. In 2010, for the first time, both Coke and Diet Coke surpassed Pepsi’s sales, leading the Wall Street Journal to run a headline declaring Diet Coke the winner in the Cola Wars. Pepsi’s Aquafina went national in 1998. Coca-Cola exceeds the vision, by selling a variety of beverages daily. PepsiCo Business Strategy and Competitive Advantage By John Dudovskiy. Pepsi uses franchise system for international expansion. However, it is most difficult to change the culture of a company. This was renamed as Pepsi-Cola during the year 1898 and then to Pepsi in 1961. When looking at the Pepsi group, both Ica and Pepsi were rated the same, “much tasty”, with as much as 44.8 percent respectively, while only 10.3 percent thought Coca-Cola was the tastiest. PepsiCo had coined its own special slogan for the Indian market too that became quite popular with the crowd. In the local supermarket the consumer considers buying the drink as part of a 6-pack for the smallest price available. This case study details the various battles fought in India by the two rivals with its focus on the publicity campaigns where the two sought to steal each other's fizz. Competitive Advantage Does Coca-Cola have a competitive advantage? By the late 1990s to early 2000s, Coke began to lose the competitive advantage that it had on Pepsi in profit in the United States. In the quest for creating competitive advantage, companies struggle to build unique capabilities and to acquire the means to protect these capabilities. Further, branding is a dangerous game. Sources of Competitive Advantage: PepsiCo has competitive advantage in terms of worldwide distribution & the company is able to produce all its products in the country where they are consumed. Apart from juices and waters, Pepsi has also brought more low and zero calories foods. It offers its drinks in an identically shaped bottle which is unique than everyone else in the market. In the 21st century with the level of competition very high, it is imperative for every brand to have more than one sources of competitive advantage. The goal of much of business strategy is to achieve a sustainable competitive advantage. Pepsi's Diversified Revenue Stream Gives It an Advantage over Coke email@example.com (Jacob Wolinsky)via The Motley Fool Jan. 22, 2013 Updated: Jan. 22, 2013 10:23 p.m. And Coca-Cola is superior in this thing. Recently Coca-Cola has made a major investment to win over customers. PepsiCo Diversification beyond Drinks. This has happened due to the below competitive advantages that it has kept since the company was started. It also markets and distributes these products. But that burst tends to dissipate over the course of an entire can. The competitive strategies of Coca-Cola and PepsiCo have been examined, and even though they are different, both seemed to have been successful to become the first and second companies in the soft drink industry. Moreover, management strategies have raised concern over its reaction to criticism on health and environmental issues. Conclusion. Therefore as more businesses stock Coke instead of Pepsi it amplifies the convenience advantage, and thus creates Coke’s Dominance Chain, shown above. Pepsi is seen as having occupied that market more successfully than Coke with products like Lipton, Pure Leaf and its organic drinks. Coca Cola Competitive Advantages Over Pepsi: Coca Cola soft drink is being used all around the world. "Pepsi is sweeter than Coke, so right away it had a big advantage in a sip test. PepsiCo is a multinational company that deals in snack food manufacturing and beverages, among others. As a result, PepsiCo is enjoying competitive advantages regionally with the assistance of big companies. PepsiCo’s intensive growth strategies enable the company to effectively use its generic strategy to maintain strong competitive advantage.PepsiCo’s success is an indicator of the appropriateness of these strategic directions, especially how … Cost advantage 2. Competitive benefits is the benefit a company or product has over other companies in terms better attributes such as cost edge, differentiation advantage, network circulation, and customer care that will help the business gain better sales in comparison to other companies (Hao, Ma 1999). Though Pepsi and Coke sold reverse-osmosis purified water instead of spring water, they had a distribution advantage over competing water brands.26 Coke and Pepsi launched other PepsiCo has an extensive portfolio of food and drinks with 100 brands serving. And it continually uses diversification into snacks over soft drinks. A long lasting and sustainable competitive advantage is not possible without having some critical strengths. It is famous all over the world for its excellent marketing. But why is a competitive analysis an important part of your business plan? This tremendously affected and cost advantage of Pepsi, thus reducing the company’s competitive advantage. In the year 2010, Coke’s publicity was again attempted to be hijacked. Over time, managers are making effective policies to promote their organization. Pepsi has a competitive advantage over Coke because of its brand image & good word of mouth. This soft drink was introduced in the nineteen century. It’s a surprise that something can keep its value for so long. Pepsi ran its Pepsi Max World Challenge in 2006 so that it could take over the presence of Coca Coke in the World Cup 2006 being held in Germany. While cool-drink consumption has declined in recent years as people ditch sugary drinks, Coca-Cola found success advertising its cola brands under the "One Coke" umbrella and in its Diet Coke relaunch earlier this year.
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