Although Coca-Cola biggest competitor, PepsiCo. has an almost similar product as its product, but it still has some differences in taste (Dawar, 2014). In nutritional content, Pepsi has slightly more sugar, calories, and caffeine. Coke has slightly more sodium (Lubin, 2012). Besides, Coca-Cola is also successful due to its supply chain function.
Pepsi The company was founded in 1965 by the merger of Pepsi- Cola and Frito-lay with the acquisition of Tropicana in 1998 and merging with Quaker Oats Company in 2001. In this consideration, Pepsi remains a global leading company in beverages, snacks and foods. Though it was started in United States the company has extended its production in Asia with Laos being one of the countries it has been stationed. Despite its dominance in Laos Coca-Cola another beverage company has been established in the country and thus high competition is expected as the company focus to maintain the market share and Coca-Cola aiming to increase sales in a new market. Competition of the market share by the two companies demands new strategies and mechanisms to ensure
The objective of both is to maximize their profit. Hence, we can say that these 2 players are involved in a non-cooperative game, the objective being to garner the most profit, and capturing market share being the most effective way to do so. Since Coke and Pepsi are perfect substitutes, the price elasticity of demand should be perfect elastic. However, there are some factors that results in a fairly elastic demand. When Coke increases its price, most of its customers that are highly sensitive to price changes will switch to Pepsi due to the similarity of the taste.
People can easily choose a suitable pack based on their family size Coca-Cola segments different income levels by packaging. For example, for people with a low level of income, the company has small returnable glass bottle; for the mediocre class it has non-returnable bottle, and for people with a high level of income it has Coke tin. Social class has a strong influence on preference in food and drinks. Coca cola design products for specific social
In their constant battle with Pepsi over market share, Coca Cola puts a lot of emphasis on brand recognition in and attempt to increase the sales of existing products in existing markets. Finally, the use of the market development model is evident by the fact that Coca Cola is the world’s most recognized brand. Coca Cola, unlike Ruth’s Chris, enters into markets that are undeveloped. They provide a highly commoditized product for a very low price. This allows them to have a larger geographical footprint than Ruth’s Chris.
Coca-Cola wins big contract with global QSR players likes McDonald’s, Subway and Burger King. Figure 1 Coca-Cola System PepsiCo’s products reach the market through direct store delivery (DSD), customer warehouse, and third-party distributor networks. Under DSD system, PepsiCo delivers their company’s products directly to retail stores. Thus, customer warehouse system is known as a less expensive
Fligstein explains the four threats to a firm's stability. The first threat is a supplier. THey can control a lot of aspects like “inputs, raise prices, and make firms who require their inputs unprofitable” (17). The second, competitors, engage in price competition. For example Coke and Pepsi, they are both really popular companies and have a wide range of consumers.
THE IMPACT OF MERGERS ON THE COMPANY AND THE SHARE PRICE Introduction: The most of the businesses across globe try to increase their financial stability and strengthen themselves by expansion. There are two ways of expansion been widely recognised to increase their operational excellence and gain substantial profits. Internal Expansion, by implementing new technologies, altering the course of operations, raising work performance, and launching new lines of products or services. Business expansion via internally will grow gradually, however the other method of External Expansion has greater impact than the other. The powerful external expansion occurs through merger, acquisitions, takeovers, amalgamations and dramatically supporting the globalization
• Diet Products Cannibalising standard variants: Rising awareness of soft drinks-related health issues, in particular sugar levels, has sparked a trend for “better for you” beverages globally. As for Coca-colas’ carbonates, some countries saw standard cola are being cannibalised by low calorie colas and this represents a challenge. Coca-cola must continue to sustain growth in standard cola and expand low calorie
Firstly, by doing export process sales for that country will increase. Exporting process is a one way to expand business and increase company sales potential. It can help expand product or services that the company earn money form, otherwise the company stuck trying to make a money only in the local market. As example ‘The Tarik’, the Tarik one of the famous beverages in Malaysia but people from other country can get it at their own country. In this case we can see that globalization give an idea for local business to expands and sell the product to other country by doing export process and its became well known for a few country which Singapore, Indonesia, Europe and