Producing soft drinks for a wide market would require a significant investment in production equipment, brand material, and advertising. The high cost of operating in this industry prevents many companies from entering the competitive arena. Last, these two companies engage in non-price product differentiation. Rarely will you see Pepsi attempt to undercut Coca-Cola in price. Instead, you see these companies use creative advertisements to compete (Neary
They also have their own well-managed distribution channels, suppliers and bottlers. Most importantly, Coke and Pepsi are the two main dominants that serve the entire market so they will get a large sales volume. Thus, they gain supernormal profits and experience significant economies of scales over the years. When new rivals enter the market, they will lower the price and new rivals have to follow. After a period of time, even though they are making loss, they tend to survive; but new rivals will unable to survive due to the loss and quit.
Since both the company’s market share so large, the market is very close to a duopoly (other players having a very small impact on the market). Hence we assume this to be a situation of duopoly. The 2 companies sell products which are very close substitutes and are constantly fighting for greater market share. A person may buy a Coke product instead of a Pepsi one, and vice versa. The objective of both is to maximize their profit.
This means that they have more pricing power compared to perfect market. Their pricing is highly influenced by competition, as both Coke and Pepsi are substitutes for each other and therefore, if Coca-Cola increases its price, many of its consumers will switch to Pepsi . In US coca cola pricing strategy differs from its rival in the sense that it pricing is based on the value it creates for different situations. This is why Coca cola 's price per liter can vary depending on factors like packaging, location etc. Pepsi takes this value based pricing strategy a bit further with their model.
This is because the product is known as the leaders of an organisation in the marketplace and company take out little fund when investing . Limca and Coca Cola are the cash cows of Coca Cola, which has low growth and high share in the market. These products may not be dominant in the marketplace but is able to grow with the support of loyal customers or those who are a fan of
COMPETITIVE REVIEW-Describe the general competitive landscape: In this part, first competitors of Coca-cola will be mentioned, and then advantages of being in the competitive landscape for a company. Detailed information about Coca-Cola’s cokes are mentioned in the marketing mix strategy part. Soft drink industry is one of the most competitive one over other industries. Also, in soft drink industry, it can be considered that Coca-Cola is known as the number one over the nonalcoholic beverages companies. It is also true that Coca-Cola’s competitors do not only include soft drink beverages companies but also some alcoholic beverages companies.
Being the largest company in the world comes with both advantages and disadvantages that, as a large public company influences the United States of America’s people, economy and country as a whole. (Advantage) Wal-Mart, as many other companies, is known for their advertising slogan or mission statement. Wal-Mart’s evolving mission statement’s main purpose is to promote their low prices in an attempt to attract customers to the idea of saving money by shopping at Wal-Mart. It began with “Always low prices, Always” which 19 years later became “Save Money, Live Better.” The large corporation claims that it produces products that consumers want to buy (at always low prices) creating the epitome of one stop shopping. This idea of low prices is the product of Wal-Mart’s foreign importers.
It’s more likely that companies will bring out new products under the same brand. The best market to bring out new products is the non-carbonated drinks sector, due to the fact that consumers’ interest have changed to healthier alternatives. Red Bull can use its strong brand awareness to promote new
It is really important nowadays to concern about the corporate social responsibility activities and the benefits after providing different CSR programs in the globe. CSR will improve in all aspects in terms of social, environmental, and economical performance with making sure in terms of the sustainability. In addition, the corporate social responsibility will enhance the quality of life in terms of workforce, families and community as whole. The company will create value for stakeholder and shareholders through protecting the environment, creating the economic and social value. The coca cola company India had several initiatives such as water conservation management.
• Concentrating on core process rather than the supporting ones: Outsourcing process allows the company or the organization to give more time and attention to their core business processes thus in a way strengthening the company. • Risk-sharing: This is also one of the most crucial factors resulting in the outcome of a project. Once the company outsources its components, the vendor becomes responsible. Since the vendor is mostly a specialist, he will work on risk management and plan the risk mitigating factors better. • Reduced operational and recruitment costs: The process of outsourcing cuts the recruitment of in-house professionals and hence cuts down largely on the operational costs too.