Overview of Pepsi and Coca-Cola Companies - Essay Example

Pepsi and Coca-cola are two companies that are competing in the same industry. The two companies deals with soft drinks. Both are involved in the production and supply of soft drinks. Overview of Pepsi Company The company produces convenient food and beverages and it has been regarded to be leading in production of these products. The company has revenue of approximately $38 billion annually with over 140,000 employees worldwide. The company has gained a lot of fame from the snack business it operates such as Frito-ay North America and Frito-Lay International. The later comprises of Pepsi Cola North America, Tropicana North America and PepsiCo Beverages International. The company has expanded enormously and it is available in more than 200 countries around the world at the moment. Even though the corporation sounds quite young, most of its brand names are over 100 years old. The company was first established in 1965 through the merger of Pepsi-Cola and Frito-Lay. The company offers superior products that are of high quality. High standards of performance, competitive strategies and high integrity of people have fostered the success of the company (Stoddard, 2008). Overview of Coca-Cola Company It is the largest manufacturer and distributor of beverages and other syrups and it is the largest corporation in the U.S.A. Coca-Cola was invented by John Stith Pemberton. The product WAS later bought by Asa Candler who incorporated the company in 1892. The company offers more than 400 brands in more than 200 countries. The product has over 1.5 billion customers every day. According to annual reports, the company sells over 400 brands which include diet coke, diet coke caffeine free, diet cherry coke, coke with lemon, diet coke with lemon, diet vanilla coke, Aquarius Mineral Water, diet coke with lime, coca-cola C2, diet coke plus among others. The companies’ products are sold in more than 200 countries around the world. It has achieved this expansion through 4 P’s of the marketing mix which is: Product The company offers wide range of products such as AMP Energy, diet mountain screw, mug root beer, propel, sierra mist, sobe, no fear, pepsi max, sobe life water, starbucks coffee drinks and tava among others. The company adopted one quality standard in all branches around the globe. It is very committed to satisfy and protect the interest of the consumers since they are the bedrock for the success of the company. The products carry a quality assurance seal which enable the consumers to know the global quality of items. On the other hand, Coca-Cola Company offers a wide range of products including beverage concentrates and syrups. The company uses marketing strategies and product differentiation to achieve it’s of objectives of customer satisfaction. It has good reputation all over the worlds due to quality products that the company offers. It extended the products of coke and developed new products such as vanilla coke and coke with lemon (Fredrick, 2008). Promotion It is key element of marketing program in any company. It is concerning with influencing the target customers through effective and efficient communication of the marketing decisions strategy. Influencing the perceptions of the customer is the prime function of marketing. Advertising has been used by the company to promote its goods and services. This is done through identified sponsor. Products have been advertised through TV especially for products such as Pepsi or dew as witnessed by many. It targets the most favorite TV programs such as sports and other series. The company established Pepsify Karogey in most TV stations to promote its products. The company has also advertised its products through newspapers. Coca-Cola Company also uses advertising as a way of reaching the target consumers. It has adopted advertising as the main source of creating awareness among the consumers. It is very common product to all people around the world due the advertising strategies that the company has adopted. TV has been used by the company as a media of advertisement. This enables the products of the company to reach large number of people. The latest advertisement are; You know you want it, If you drink it, you get better of life. The company has involved itself in games such as Olympics and the FIFA World Cup. This enables the company to reach millions of people whom are watching (Fredrick, 2008). Place Product availability is very crucial to company’s success. Decisions to be made concerning the location of the company are affected by whether the product will reach the targeted customers or not. Pepsi Company has strived to ensure that products are available to the customers in large quantities. Both direct and indirect distributions have been adopted by the company in order to increase the chances of product accessibility by customers. On the other hand, Coca-Cola Company has had very convenient distribution channels. It sells its products to bottling and canning operations, fountain wholesalers, and other distributors. Price Decisions on prices are made after thorough consultations with marketing management. This is a variable that can be altered. The development of marketing strategy is affected price variables such as retail price, dealer price allowances and discounts. Customers tend to relate the quality and price of the product hence right decisions should be made. Pepsi Company is focused on product quality sells and it has been selling products with prices ranging from moderately low to high school basing on the use of the product and targeted customers. Coca-Cola prices their products according to brand and size. The products of the company are sold in retail stores, petrol stations and other convenient stores. Coca-Cola products are sold at fixed prices (Bonifant, 2009). Competitive advantages of supply chain of Pepsi Company The company adopted the ILOG system that could enable the company to optimize the production sourcing. The system enables the company to keep up with consumer needs since the process of static sourcing is avoided. Purchases and sale will be real-time. This reduces costs, optimizing of inventories and increasing sales. When cost of the company’s operations reduces, then the company will have competitive advantage over its competitors. The company, through ILOG system, has responded to ever evolving economic environment. The company has had well managed supply chain which is very paramount to the competitive environment. The company has also concentrated so much logistics and warehouse automation. The process enhances company’s operations and at the same time offering the company competitive advantage in the international market. The company will receive preferred treatment from the consumers hence outwitting its competitors. The automation supply chain enables the company to achieve very accurate loads, reduce the manual loading and uploading hence reduced number of laborers. This in turn reduces costs (Fredrick, 2008). Competitive advantage of supply chain for Coca-cola Coca-Cola Company has taken a step of initiating warehouses in delivering its products. According to Wall Street Journal, the old system of bottlers supplying individuals was quite ineffective since many shelves remain empty for a length of time. The company has changed its supply by delivering directly to the warehouses and it has affected distribution across the world. The company has adopted the collaborative approach by working together with suppliers in order to green the supply chain. Starbucks has collaborated with the company to enhance strong business relationship. The company buys supplies from the suppliers in the location of the business or where the company has its extensions. This enables the company to develop the suppliers in terms of technology as they may lack the size and the technology required (Bonifant, 2009). Alternatives to lower the impact of any competitive advantage from the competition If a company wants to improve the market share, it must go on defensive and offensive strategies or alternatives. The company should initiate ways of exceeding the strengths of the competitors. The company has to attack powerful strengths of the competitor especially when the product offered by the competitor is quite superior. This alternative can also be used when the competitor has substantial resources and capabilities which have boosted competitor effectiveness and efficiency. Another alternative is capitalizing on the weakness of the competitor (Simms, 2009).This is considered better alternative as it stand to offer the company opportunity to succeed. The company can capitalize on competitor’s weakness by going after the customers of the competitors who consider the products of the competitor to below the standards. The company can simultaneously initiates on many fronts as another alternative to outwit the competitor. This is done through multiple initiatives such as price cuts, increased advertisement, new models and styles and improved customer service among others (Bonifant, 2009). SWOT analysis of Pepsi Strength: has a broader product line and outstanding reputation Is experiencing a lot of revenues. Capital constrains Merger of Quaker Oats produced synergy across the board (La Monica, 2008) Weaknesses Inability to inspire vision in the large global economy Different names are used for different Pepsi products Far much behind from leader Coca-cola in the international market Opportunities Food division should be encouraged and expanded internationally The global market tends towards healthy foods Non carbonated drinks which is offered by the company is growing very fats in the industry Threats The size of the company is growing which calls for various marketing programs which might be very difficult to achieve The residues have polluted the environment High competition from Cadbury Schweppes, Coca-Cola, and Kraft foods SWOT analysis for Coca-Cola Company Strengths The company is world leading brand Large scale operations A lot of revenues Weaknesses The company has negative publicity There are reluctant and inefficient performance in parts North America Decreased in cash resulting from operating activities Opportunities The company is experiencing growth in bottling market water Growing Hispanic population in parts of U.S.A where major of its operations are situated Many companies have merger hence intensifying competition Threats Intense competition from other companies such as Pepsi High dependencies on bottling partners The company is experience poor growth of carbonated products. Conclusion Both companies have grown substantially hence increasing market share. This is attributed to the efficient and effective operations in the two companies. Even though, both compete in the same industry, Coca-cola products have many consumers as compared to Pepsi products. Pepsi Company offers wide range of products more than Coca-Cola Company. In general, Coca- Cola Company outwits the other company in the market and it is experiencing enormous revenues as compared to Pepsi Company References Lists: Bonifant, C. (2009). Gaining competitive advantage. Management Institute for Environment, Washington, USA. 120-156. Fredrick, L. (2008). Advantages of Effective Supply Chain. Management Institute for Environment, Washington, USA. Pages 100-146. Jevinson, J. (2008). Competitive Advantages of Supply Chain. Findings from Sweden. J Market 56(July): 50-78 Karolefski, J. (2008). Pepsi Successful Bottling. Journal of Business Management, Vol. 5(2), pages 200-245. Stoddard, B. (2008). Pepsi-Cola - 100 Years. General Publishing Group, Washington DC, USA. Pages 20-78. Simms, J. (2009). Greening of Supply Chain. Journal of World Business, pp. 120-164. La Monica, R. (2008). Strength and Weaknesses of Pepsi Company. Journal of World Business, pp. 100-132. Read More